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Yamato

The US Dollar vs. The Gold Standard

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as that's how we define how much our money is worth.

No it's not. For some time now. Another person living in the past.

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It's a fiat currency. It's based on the net worth of the economy. Gross domestic product etc.

Many countries have the same system.

With the catastrophic economic global environment of recent years, some countries have been buying gold. China and India have been buying staggering amounts in recent years.

China, owns our butts anyway...they're buying up gold to make sure it stays that way.

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I know it has not been for a while now. However, look at the inflation of regular items you buy at the grocery store. By the way, I'm not nostalgic.

There have been many times in many countries when inflation has been far higher than anything seen since the fiat system was adopted. Inflation has been going on since humans first develped currency.

The inflation of recent years is nothing new, if fact it's pretty damn good compared to what I've seen in my lifetime.

Read up on the Oil Embargo and the Energy Crisis of the 70's. Look up the interest rates/inflation rates of the 79's and 80's.

Edited by synchronomy
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There have been many times in many countries when inflation has been far higher than anything seen since the fiat system was adopted. Inflation has been going on since humans first develped currency.

The inflation of recent years is nothing new, if fact it's pretty damn good compared to what I've seen in my lifetime.

Read up on the Oil Embargo and the Energy Crisis of the 70's. Look up the interest rates/inflation rates of the 79's and 80's.

I remember it well. It was an absolute choke hold on economic activity. It seems we are well on the way back to the past.
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yeah... just keep pumping the money supply and everything will be fine........ moron talk

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yeah... just keep pumping the money supply and everything will be fine........ moron talk

Simply pointing out the problem isn't a solution, and the Gold standard is just an appealing but naive solution to the problem.

Robert Anton Wilson talks about the true nature of money;

Br Cornelius

Edited by Br Cornelius
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Simply pointing out the problem isn't a solution, and the Gold standard is just an appealing but naive solution to the problem.

Robert Anton Wilson talks about the true nature of money;

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Br Cornelius

Wilson has the truth of it. You're arguing with the wrong people. You should tell questionmark that Federal Reserve Notes aren't money immediately because that's the only example of money he's got. Explain how the gold standard is appealing. Please explain how it's naive.

We're way past done with problem recognition. Let's enter the solutions phase. I am providing the solution and you're not explaining, other than making a lot of empty statements, what's wrong with it. What's the problem for the hundred years before the Fed was created and the dollar was stable? What's the alternative to magic wands and magic zero percent interest rates?

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You simply choose to believe that your pet fiction has more intrinsic value than the feds. That naive.

Br Cornelius

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Wilson has the truth of it. You're arguing with the wrong people. You should tell questionmark that Federal Reserve Notes aren't money immediately because that's the only example of money he's got. Explain how the gold standard is appealing. Please explain how it's naive.

We're way past done with problem recognition. Let's enter the solutions phase. I am providing the solution and you're not explaining, other than making a lot of empty statements, what's wrong with it. What's the problem for the hundred years before the Fed was created and the dollar was stable? What's the alternative to magic wands and magic zero percent interest rates?

I don't get why you are beating the dead horse gold. We know that gold is limited and that there is not enough of it to even guarantee the money in circulation.

What you are advocating is a state directed economy where companies are told: "Yo, when you reach 2% growth this year you have to stop because we are not mining enough gold to cover it or there won't be enough money to sell your stuff."

If you want a commodity backed currency the minimum you have to do is to find one that can be expanded to cover 88 million new people every year. And that gold can not.

It is naive to base currency on something that does not even cover the current need of money in circulation.

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To illustrate the point that there is nothing magical about Gold and that a Gold based economy shares almost all of the flaws of Fiat currency;

THE MONETARY SYSTEM we have inherited is more than 2,000

years old. The German word for money, which is "Geld,"

links it rather precisely to its origin which was gold. Gold,

a fairly useless metal except for jewelry and ornaments,

became the preferred exchange medium around 700

B.C. in the Roman Empire. Money always meant

coinage. This was the concept which was incorporated in

the U.S. Constitution. Gold and silver coins (or their

depository receipts) were the only fully legal tender in the

U.S.A. until 1934. To this day, many people - mainly

those who see the disadvantages of the practically

unlimited possibilities for creating paper money- favor a

return to the gold standard for money.

When Silvio Gesell published his book "Die Natürliche

Wirtschaftsordnung" (The Natural Economic Order) in

1904, about three-quarters of the book dealt with this issue.

(26) Against all the established economists of his time he tried

to prove theoretically and with practical examples that the gold

standard was not only unnecessary but detrimental

to a well-functioning monetary system based on interest

free money.

Today, we know that the gold standard is not a nec-

essary precondition. There is no money system in the world

now which is based on the gold standard. John Maynard

Keynes, who was well acquainted with Silvio Gesell's work,

helped to eliminate this barrier to a well-functioning

economy in the 1930s. What he forgot to advocate, how-

ever, was the other essential ingredient: the replacement

of interest by a circulation fee. This is largely why we are

in trouble now and will be at regular intervals until we

have learned the lesson.

http://userpage.fu-b...glish/chap4.htm

I see the flaws in the Fed system but don't want a barely better solution to replace it.

This site offers a wealth of suggestion for alternatives to the Fed vs Gold false dichotomy.

Br Cornelius

Edited by Br Cornelius

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To illustrate the point that there is nothing magical about Gold and that a Gold based economy shares almost all of the flaws of Fiat currency;

http://userpage.fu-b...glish/chap4.htm

I see the flaws in the Fed system but don't want a barely better solution to replace it.

Br Cornelius

The biggest flaw is that, to the contrary of the intention, the FED is not as independent as once was intended and that those who have the political oversight of the FED, as a rule, know as much about economy as I know about being pope (which is quite a distance away from an apostate Jew like me).

The second biggest flaw of the fed is that it seems to recruit its personal from the same old Harvard Good Boys Club. I can't recall an outsider ever getting into a meaningful position there. That in itself creates a interest felting that makes it incompatible with its independence.

But those problems are not resolved by introducing some kind of restrictive standard or by putting it under direct supervision of politicians (i.e. Audit the FED), that would just elevate the goat to the position of grounds caretaker.

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Solutions are needed, but returning to a system that can't support the economy in any way is no solution. Gold isn't some magically cure all and it can have many of the same problems paper money can. Just look at the Spanish Empire. They found huge amounts of gold and silver in Latin America and what happened? Massive inflation which caused their economy to tank. Trying to turn back the clock to some mythical golden age of America isn't the answer.

Maybe we should just go back to the bartar system. Now who has change for a goat? :P

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Maybe we should just go back to the bartar system. Now who has change for a goat? :P

You might have intended it as a joke, but certainly growing your own food is the best insurance against hyperinflation or economic collapse. Much better than any Kruger Rands you can buy.

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You might have intended it as a joke, but certainly growing your own food is the best insurance against hyperinflation or economic collapse. Much better than any Kruger Rands you can buy.

Can I have ketchup with my Kruger Rands :w00t:

Br Cornelius

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I know it has not been for a while now. However, look at the inflation of regular items you buy at the grocery store. By the way, I'm not nostalgic.

What inflation. The inflation rate for the last several years is very low. Food prices have gone up and down based on supply/demand as they should. Did you think that the devastation caused by climate change bringing a huge drought to the midwest that killed dry land corn was not going to have an effect on gas and a million other foodstuffs?

Edited by ninjadude

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To illustrate the point that there is nothing magical about Gold and that a Gold based economy shares almost all of the flaws of Fiat currency;

http://userpage.fu-b...glish/chap4.htm

I see the flaws in the Fed system but don't want a barely better solution to replace it.

This site offers a wealth of suggestion for alternatives to the Fed vs Gold false dichotomy.

Br Cornelius

from your link:

The German word for money, which is "Geld,"

links it rather precisely to its origin which was gold. Gold,

a fairly useless metal except for jewelry and ornaments,

became the preferred exchange medium around 700

B.C. in the Roman Empire.

Reeeeeallllllly?

Nothing else on the planet other than gold protects an individuals self worth better. The money supply around the world is overly inflated. Interest payments were nothing more than banking scams to cover losses..... read some monetary history. Gold is under valued as are other metals but gold is special. There is a reason it's the most sought at metal on the market in abundance with due regard to other precious metals. Our current global money is based on the Petrol Dollar(the US$) It's based upon a product that is engineered to vanish. It's almost magical how they managed to pull that one off. One day all the fossil fuels will be gone from earth but I'll guaran ****in tee you that Gold will still exist. And in abundance. It's an unique metal unlike all the rest.

Anybody who tries to CON vince you other wise is nuts.

Edited by acidhead
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Sentiment is the only thing that gives Gold value. It doesn't make it a good money system in the modern world.

Why can't anyone seem to understand that we placed the value in Gold - no one else.

People seem to think that a return to old certainties will solve all our problems, but if it doesn't actually work its not going to help. How do you account for growth in real wealth in a fixed and invariant money supply ? If you allow for growth then you have circumvented the main claimed benefit of Gold which is its invariant value. Then if you have a fractional Gold standard (as you would have to have) who controls the fractional leverage - and what is to stop Bankers from manipulating that rate to increase the money supply - as has happened historically. Also - are you advocating a Global reserve currency of fixed value - or will each country have their own currency - who will police the system??

Since Gold cannot be used as an actual currency on a day to day basis (not enough) its just replacing one form of paper with another - the only difference is your perceived confidence in the value of that paper.

PS-What we have now is what capitalism always gravitates to. I don't actually believe in the utopia of perfect capitalism and I base this belief on the fact that it has never existed. I use the failure of theocracy throughout history as the basis of my extrapolation. Utopian dreams are just that - DREAMS. I prefer to live reality.

Br Cornelius

Edited by Br Cornelius
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I suspect that when the Dollar does eventually implode there will be an attempt to go back to a Gold standard.

However it will inevitably fail as it has done in the past - and it will represent a huge missed opportunity to re-frame the meaning and purpose of Money to fit the needs of modern society.

Maybe it will take a failed attempt to re-invent the square wheel before we will look to better alternatives.

Br Cornelius

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from your link:

Reeeeeallllllly?

Nothing else on the planet other than gold protects an individuals self worth better. The money supply around the world is overly inflated. Interest payments were nothing more than banking scams to cover losses..... read some monetary history. Gold is under valued as are other metals but gold is special. There is a reason it's the most sought at metal on the market in abundance with due regard to other precious metals. Our current global money is based on the Petrol Dollar(the US$) It's based upon a product that is engineered to vanish. It's almost magical how they managed to pull that one off. One day all the fossil fuels will be gone from earth but I'll guaran ****in tee you that Gold will still exist. And in abundance. It's an unique metal unlike all the rest.

Anybody who tries to CON vince you other wise is nuts.

Acid, you would not work, by chance, for Doyon?

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Ok...I am going to put my ignorance on my sleeve here so everyone can see it.

Br Cornelius is correct on the line of thought...gold is only valuable because we assign it value. It, for all practical purposes (outside of electronics), is just a pretty soft metal...In theory, you could set the monetary standard to anything that is desirable but that still makes no sense to me.

Why not set the monetary standard to something that actually is valuable and needed...like wheat or grain...beef, pork, chicken, etc. Things that could actually measure the value of a good days work. I recall reading somewhere that once upon a time, the value of wages was set based upon the ability to eat and be sheltered (it was years ago and no I do not have a source). One days work = XX days of food and shelter. Somehow, through the ages, that has spiraled completely out of control....probably because of just flat out greed.

Again, this is a weak place for me. I don't have a firm grasp on economics from a monetary perspective and I have never understood why we lust for gold, diamonds and other worthless shiny things. Well I take that back, at least diamonds can be used as a tool for cutting...gold, silver and platinum, to me, are not worth the value we attach to them...

Ok...ignorance exposed....you can laugh now.

Edited by Jeremiah65
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Ok...I am going to put my ignorance on my sleeve here so everyone can see it.

Br Cornelius is correct on the line of thought...gold is only valuable because we assign it value. It, for all practical purposes (outside of electronics), is just a pretty soft metal...In theory, you could set the monetary standard to anything that is desirable but that still makes no sense to me.

Why not set the monetary standard to something that actually is valuable and needed...like wheat or grain...beef, pork, chicken, etc. Things that could actually measure the value of a good days work. I recall reading somewhere that once upon a time, the value of wages was set based upon the ability to eat and be sheltered (it was years ago and no I do not have a source). One days work = XX days of food and shelter. Somehow, through the ages, that has spiraled completely out of control....probably because of just flat out greed.

Again, this is a weak place for me. I don't have a firm grasp on economics from a monetary perspective and I have never understood why we lust for gold, diamonds and other worthless shiny things. Well I take that back, at least diamonds can be used as a tool for cutting...gold, silver and platinum, to me, are not worth the value we attach to them...

Ok...ignorance exposed....you can laugh now.

Even that can be corrupted though. Think about miners in the US that were actually working for basically nothing, had to pay exorbitant fees for lodging and equipment. They had some food to eat and a roof over their heads, but they couldn't quit or they would owe money to the company they were working for. It was hardly better than slave labor.

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Acid, you would not work, by chance, for Doyon?

as much as I can

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What inflation.

What inflation?

inflationpic.jpg

Inflated gold prices is inflation, that's another way of explaining some of your comments above and nobody is contesting that. The price of gold was stable for 100 years when the dollar was pegged to it. Your thinking causes gold to go to the moon and then you don't even want it? Put some savings into competing currencies or natural gas if you want to protect yourself. For instance, the New Zealand dollar is better than the US dollar. The Canadian dollar is better than the US dollar too. The jury is in ninjadude, and the dollar can't compete with gold on the world market. And it never will with heroes like Helicopter Ben at the switch printing digital money not worth the paper it's not printed on. ;)

Food prices going up and down due to demand is just fine. (and that applies to everything else besides food too, don't forget).

But the stability of food prices is important. Wild swings higher take a physical toll on people and will mean the difference between life and death to some.

caldwell_chart1-2.jpg

Populations can't withstand this kind of price instability. Food supply in the future is going to be a huge problem; just Google it and read some articles. Add endless money printing and it means that even if massive initiatives like a 'Manhattan Project' of food supply is put into action, and even if the global demand for food is met in the coming years, we're still devaluing our money. What do you think this does to the poor? It's prohibitively expensive already to eat healthily in the US (I don't even want to think about the rest of the world because I feel guilty). The bottom of our society can eat beef burritos at Taco Bell and double cheeseburgers and french fries at McDonalds or nasty little meat pizzas from the grocery store. Food-price bang for the buck champions like these are the protein that the poor run on to mow our lawns, paint our houses, clear our brush, pick our onions, and build our homes. Like it's difficult to see why we have an obesity epidemic! ;)

Do you buy groceries? I notice even when food prices appear to remain the same, the serving sizes we get in the packages we're buying have gone down, being filled with air, being hollowed out with dome shaped bottoms, dropping a half gallon of ice cream down to 1.75 quarts and so on. Some of the increase is hidden from us by the food companies and we don't even know it. Government's tricks with the CPI adds mirrors to the smoke.

How can people seriously sit back and not care about health care prices? This has a massive moral component to it; that's what motivates me to make sure that gold, health care, insurance, education, energy and food prices (everything that government has its grubby nubbies into) stay stable next to the value of our money.

Edited by Yamato
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You might have intended it as a joke, but certainly growing your own food is the best insurance against hyperinflation or economic collapse. Much better than any Kruger Rands you can buy.

Make sure you have your shotgun locked and loaded when the good neighbors come storming into your property and wiping your insurance out.

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