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If we went on a gold standard again
- Thread starter Ricter
- Start date
Really all you are saying is that there is some fixed value to currency.
No one can tell me now that the price of gold isn't higher than it should be due to speculation and market manipulation right now.
Fixing the value of all currencies right now would implode the world economy into the greatest depression known to man, it would bring world wars, etc.
All we would have to do is to cut our defense spending by half, and the problems go away...we could do that easily by reducing waste and bloat by defense contractors.
We would see the mother of all stock market rallies, gold and oil would plummet, bonds would rally, etc.
No one can tell me now that the price of gold isn't higher than it should be due to speculation and market manipulation right now.
Fixing the value of all currencies right now would implode the world economy into the greatest depression known to man, it would bring world wars, etc.
All we would have to do is to cut our defense spending by half, and the problems go away...we could do that easily by reducing waste and bloat by defense contractors.
We would see the mother of all stock market rallies, gold and oil would plummet, bonds would rally, etc.
Quote from Tresor:
Hi OPTIONAL777,
With the gold standard / copper standard / silver standard / whatever tangible asset standard you would still have paper money and you would still use electronic money.
Tresor - - - monetary policy is determined by the Federal Open Market Committee (FOMC) Here's the link to the Fed website with the official version of the 'story':
http://www.federalreserve.gov/monetarypolicy/fomc.htm
In fact, the Fed regional banks were created only for the purpose of selling the American public which has been quite skeptical when it comes to a central bank since the nation's founding. The real power of the Fed has been exerted out of New York and Washington. (And as you may know the current Fed chairman, who was in charge of watching things before the crash - Geithner, ran the NY Fed first.)
If you go to the mises.org website you will find any material you would like about the details of the Fed history and operations. It is offered at a level appropriate for lay people, all the way up to those who are professional economists. www.mises.org Most of the material is offered free of charge.
Best regards, - -
http://www.federalreserve.gov/monetarypolicy/fomc.htm
In fact, the Fed regional banks were created only for the purpose of selling the American public which has been quite skeptical when it comes to a central bank since the nation's founding. The real power of the Fed has been exerted out of New York and Washington. (And as you may know the current Fed chairman, who was in charge of watching things before the crash - Geithner, ran the NY Fed first.)
If you go to the mises.org website you will find any material you would like about the details of the Fed history and operations. It is offered at a level appropriate for lay people, all the way up to those who are professional economists. www.mises.org Most of the material is offered free of charge.
Best regards, - -
Quote from Ricter:
So... electronic money would represent paper money which would represent the tangible asset which would represent something with inherent value??
Check out the link earlier with the free book "What Has the Govt Done to Our Money ? " by Murray N. Rothbard
And also you might want to check out that long post of mine earlier in this thread.
Boiling things down - - - real money is a commodity used as a medium of exchange. (I used the example of using butter, so you could trade it for shoes and other goods.) Over time, it was found that the best form of medium of exchange were the precious metals gold and silver. They have intrinsic value for jewelry and ornament, and also have value in filling the role as a medium of exchange(thus permitting trade beyond just inefficient barter). - - - In the past it was known that Gold IS money. It was a valued commodity that was traded according to weight. And, various money units throughout the world, were nothing more than various names for particular quantities of these metals. Thus, a 'dollar' Was 1/20 ounce of gold. A British 'pound' Was 1 pound of silver.
Kings have an unquenchable appetite for money to finance their various ventures and foreign adventures. After a time, they got their citizens to buy into the idea that it was the Names rather than the quantity of precious metal that was important. Periodically they had people turn in their gold and silver coins so that they could mint a new coin, (say with the new monarch who took over from his recently deceased father). The new king would cut the quantity of gold from the coin, either mixing it with another metal or just making the coins smaller. The citizens got the same number of Named units back ('pounds', 'shillings', 'marks', or whatever) but they got cheated out of their real precious metal money. The king then went ahead and used the precious metal he stole to mint up more money. (Quite a trick, huh ?) - - - Well people aren't dumb. They figured out that they were being cheated. A 'law' of economics says that people will hold on to the good full value money, and use the cheap stuff. They may not even accept the watered down money at all. - - So, the king would make it a law that citizens had to do so under severe penalty (and that could get damned serious in those days). - - - -
This is a long reply - - - bottomline is that gold and silver, through the test of the centuries Is real money (the valued medium of exchange that allows more than just inefficient barter). It can't just be 'printed up' so it can't be easily manipulated. - - - Your Yukon buddy wouldnt 'print' money; he would be producing it. Its damned hard work, and not easy to do at all. That's one reason it has real value. - - If he is particularly well heeled or has a big investor, I suppose he could mint his own coins. But this was done in order to provide convenient uniform units of precious metals so that people didn't have to weigh each quantity. There were gold coins minted in various places in Europe that were so regarded for their uniformity and purity that they served as money throughout large regions over many years. Just check out the Italian gold Florin -
http://en.wikipedia.org/wiki/Florin_(Italian_coin) You'll need to go down the 'florin' list till you see the Italian version first minted in the 1500s.
- - Regards, - -
P.S. - - since we have been raised in a funny money fiat paper world, these ideas - - well known through thousands of years, aren't readily apparent right away. As a matter of fact, it could very well 'blow your mind' when you dive into this. Fascinating stuff. Again at www.mises.org you will find anything you'd like to know on this subject in written, audio, and video formats - - and for free.
Fiat money is intentionally inflated continuously, so the price of gold should increase over time.Quote from OPTIONAL777:
Really all you are saying is that there is some fixed value to currency.
No one can tell me now that the price of gold isn't higher than it should be due to speculation and market manipulation right now.
Fixing the value of all currencies right now would implode the world economy into the greatest depression known to man, it would bring world wars, etc.
All we would have to do is to cut our defense spending by half, and the problems go away...we could do that easily by reducing waste and bloat by defense contractors.
We would see the mother of all stock market rallies, gold and oil would plummet, bonds would rally, etc.
Quote from loik:
Fiat money is intentionally inflated continuously, so the price of gold should increase over time.
liok - - yes, that's right of course.
Many, like the fellow you quoted, have a problem with these concepts because they don't really understand the nature of money.
They get tangled in all sorts of notions of 'fixed values' etc, etc, etc. - - - but of course there is no such thing. Real money is a measure by which goods are compared in terms of their value to human beings (the pricing function). The way people value goods varies according to supply and demand, so that through time any good (say a pair of shoes) can be traded for different quantities of money (say ounces of silver). If there is a huge supply of shoes, people will be able to trade fewer ounces of their commodity silver in exchange for it. Similarily, if there are very few shoes, they'll have to give up more of their universally desired silver to cover their feet. Of course, the shoemaker doesn't have to trade his wares for silver. He could trade them for apples, or chickens, or whatever. The precious metals gold and silver have been found through the centuries to be the best mediums of exchange most universally accepted by people. Gold and silver have intrinsic value for jewelry and ornament, and as a medium of exchange. Gold in particular, has physical properties that have made it desireable, discoverd by people after centuries of trial & error.
- - Similiarly some people see gold rise in price, but mistakenly dont see that it is only because more dollars have been printed through the years so that now it takes more of them to buy an ounce of gold. Of course, if they try to fit all this within their own preconceived notions - - they will never be able to see or understand this. Regards, - -
Only if gold supply stays absolutely constant, and demand for gold stays absolutely constant...neither one of which happens...
More gold has been mined than destroyed since the invention of fiat money...
This concept that gold stays at a constant value is madness actually...
Nothing stays at a constant value.
In a crisis, water may be worth more than gold...
More gold has been mined than destroyed since the invention of fiat money...
This concept that gold stays at a constant value is madness actually...
Nothing stays at a constant value.
In a crisis, water may be worth more than gold...
Quote from loik:
Fiat money is intentionally inflated continuously, so the price of gold should increase over time.
Quote from OPTIONAL777:
Only if gold supply stays absolutely constant, and demand for gold stays absolutely constant...neither one of which happens...
More gold has been mined than destroyed since the invention of fiat money...
This concept that gold stays at a constant value is madness actually...
Nothing stays at a constant value.
In a crisis, water may be worth more than gold...
I must be stupid because I don't seem able to fathom the depths of your misunderstanding
Could it be you are attached to being the village idiot?