Stable Economy

[BillSPrestonEsq]

I can't imagine a more stable economy that one that is based on these three rules:

1. Currency is a number, a dollar, whatever. It is not backed by gold or silver or anything tangible.

2. The number of dollars let's say, only changes with increases or decreases in population. For example the federal reserve could become a branch of the treasury that maintains the security, quality and quantity of paper money in circulation.

3. Banks are required to hold 100% of their on demand accounts. You could still have savings in the form of cds or bonds but checking accounts would have to be held in the reserves.

I don't think most people agree or even have thought about it. I think that it's the biggest mistake we can make to ignore the flaws of our current system. I think it is the root of most of our problems economically today. The ability for government to create money has historically turned out badly. I think that people have to talk about this more.

 

[georgephillip]

Do you see the money creation process in public or private hands?

 

[EdwardBaiamonte]

2. The number of dollars let's say, only changes with increases or decreases in population.

a little Econ 101 for you: with economic progress comes more GDP or more goods and services. Without a rising money supply you would have deflation and depression. These are bad things, but you have to have taken Econ 101 to know that.

 

[EdwardBaiamonte]

checking accounts would have to be held in the reserves.

if you did that banks would have to charge you a fixed fee to cover their costs; the checking savings that is turned into investment would be diminished a great deal and then so would economic growth.

More Econ 101 for you. The Depression was caused by bank runs, the Carter inflation was caused by too much money, and the current bubble and depression was caused by Fed Fan Fred CRA FHA HUD, etc etc all subverting the Republican free market to get people into homes the free market said they could not afford.

IF we avoid these in the future, which is easy now that we have seen them, we'll be fine.

 

[usmcstinger]

You are right. The problem is making sure that Congress and the President know this. There are too many members of Congress that do not understand basic economics. The Dems have no idea that they are supporting Keynesian Economics which is the President's Economic Plan.

 

[EdwardBaiamonte]

You are right. The problem is making sure that Congress and the President know this. There are too many members of Congress that do not understand basic economics. The Dems have no idea that they are supporting Keynesian Economics which is the President's Economic Plan.

I think the heart of Keynes is here in his advice to FDR in 1934:

"The object is to start the ball rolling[ with Federal spending to rehabilitate the railroads]. The United States[ in 1934] is ready to roll towards prosperity, if a good hard shove can be given in the next six months."-JM Keynes

Keynes simply did not know at the time that libturd guessing about where temporary money ought to be spend was merely mal-investment and so not as good as individual people carefully spending their own hard earned money in sustainable ways.

 

[georgephillip]

"Americans are understandably upset about profits without prosperity. Corporate executives seem to be the big winners, while the middle class is declining and young people face a bleak economic future. How did this happen?

"It's easy to blame technology, especially the automation that supposedly displaces workers. But that's not the real story.

"The fact is that automation creates jobs.

"It's the misuse of corporate profits that is destroying them."

William Lazonick: Robots Don't Destroy Jobs; Rapacious Corporate Executives Do

 

[eflatminor]

...a dollar...is not backed by gold or silver or anything tangible.

The ability for government to create money has historically turned out badly.

Unless I'm missing something, that is a massive contradiction. If you understand that our never ending printing press is bad, which it is, then the answer is money backed by something real. Gold will do fine.

 

[georgephillip]

...a dollar...is not backed by gold or silver or anything tangible.

The ability for government to create money has historically turned out badly.

Unless I'm missing something, that is a massive contradiction. If you understand that our never ending printing press is bad, which it is, then the answer is money backed by something real. Gold will do fine.

Who controls the gold...Rockefeller or Rothschild?

 

[uscitizen]

...a dollar...is not backed by gold or silver or anything tangible.

The ability for government to create money has historically turned out badly.

Unless I'm missing something, that is a massive contradiction. If you understand that our never ending printing press is bad, which it is, then the answer is money backed by something real. Gold will do fine.

Who controls the gold...Rockefeller or Rothschild?

Me.

 

[eflatminor]

...a dollar...is not backed by gold or silver or anything tangible.

The ability for government to create money has historically turned out badly.

Unless I'm missing something, that is a massive contradiction. If you understand that our never ending printing press is bad, which it is, then the answer is money backed by something real. Gold will do fine.

Who controls the gold...Rockefeller or Rothschild?

The price of gold is determined by the market. Simple. It's not about the amount of gold any one guy owns, it's about the price on the open market. What we have now is a centrally planned price control on the price of money (the interest rate). Price controls never work in the long run.

 

[Wonky Pundit]

checking accounts would have to be held in the reserves.

if you did that banks would have to charge you a fixed fee to cover their costs;

Totally asinine. You've made it painfully clear that your knowledge of economics is limited to Newsmax talking points (and you usually misunderstand even those).

Banks are perfectly capable of not only covering their costs, but making very healthy profits on the mortgages and other loans they make.

 

[georgephillip]

Unless I'm missing something, that is a massive contradiction. If you understand that our never ending printing press is bad, which it is, then the answer is money backed by something real. Gold will do fine.

Who controls the gold...Rockefeller or Rothschild?

The price of gold is determined by the market. Simple. It's not about the amount of gold any one guy owns, it's about the price on the open market. What we have now is a centrally planned price control on the price of money (the interest rate). Price controls never work in the long run.

So, does Rockefeller or Rothschild control the market?
Or do you think the idle rich compete on a level playing field?

 

[georgephillip]

checking accounts would have to be held in the reserves.

if you did that banks would have to charge you a fixed fee to cover their costs;

Totally asinine. You've made it painfully clear that your knowledge of economics is limited to Newsmax talking points (and you usually misunderstand even those).

Banks are perfectly capable of not only covering their costs, but making very healthy profits on the mortgages and other loans they make.

How would you assess the accuracy of this analogy?

"The situation is akin to that of medieval Europe in the wake of the Nordic invasions.

"The supra-national force of Rome in feudal times is now situated in Washington, with Christianity replaced by the Washington Consensus wielded via the IMF, World Bank, WTO and its satellite institutions such as the European Central Bank, backed by the moral and ideological role academic economists rather than the Church.

"And on the new financial battlefield, Wall Street underwriters have used the crisis as an opportunity to press for privatization..."

"The class war is back in business, with financial tactics playing a leading role barely anticipated a century ago."

The Ideological Crisis Underlying Today

 

[eflatminor]

Who controls the gold...Rockefeller or Rothschild?

The price of gold is determined by the market. Simple. It's not about the amount of gold any one guy owns, it's about the price on the open market. What we have now is a centrally planned price control on the price of money (the interest rate). Price controls never work in the long run.

So, does Rockefeller or Rothschild control the market?
Or do you think the idle rich compete on a level playing field?

It's not a Rockefeller that could launch a speculative attack, but a central bank. Fortunately, a gold standard requires no central bank. With decentralized private money issue, there is no institution capable of devaluing, so there is no danger of speculative attacks on the parity.

http://www.cato.org/sites/cato.org/files/pubs/pdf/bp100.pdf

 

[georgephillip]

The price of gold is determined by the market. Simple. It's not about the amount of gold any one guy owns, it's about the price on the open market. What we have now is a centrally planned price control on the price of money (the interest rate). Price controls never work in the long run.

So, does Rockefeller or Rothschild control the market?
Or do you think the idle rich compete on a level playing field?

It's not a Rockefeller that could launch a speculative attack, but a central bank. Fortunately, a gold standard requires no central bank. With decentralized private money issue, there is no institution capable of devaluing, so there is no danger of speculative attacks on the parity.

http://www.cato.org/sites/cato.org/files/pubs/pdf/bp100.pdf

Are you saying the Federal Reserve will disappear if we return to a gold standard?
What will the New York Fed do with all this gold?

 

[eflatminor]

So, does Rockefeller or Rothschild control the market?
Or do you think the idle rich compete on a level playing field?

It's not a Rockefeller that could launch a speculative attack, but a central bank. Fortunately, a gold standard requires no central bank. With decentralized private money issue, there is no institution capable of devaluing, so there is no danger of speculative attacks on the parity.

http://www.cato.org/sites/cato.org/files/pubs/pdf/bp100.pdf

Are you saying the Federal Reserve will disappear if we return to a gold standard?
What will the New York Fed do with all this gold?

There is no need for a central bank with a gold standard. Whoever owns gold can do with it what they like. Hold it, sell it, make jewelry...your choice.

 

[georgephillip]

Do you know who owns the gold in the New York Fed's vault?

 

[eflatminor]

Do you know who owns the gold in the New York Fed's vault?

I suspect much of it is owned by banks. Probably a lot of foreign central banks. So what?

 

[EdwardBaiamonte]

It's not a Rockefeller that could launch a speculative attack, but a central bank. Fortunately, a gold standard requires no central bank. With decentralized private money issue, there is no institution capable of devaluing, so there is no danger of speculative attacks on the parity.

http://www.cato.org/sites/cato.org/files/pubs/pdf/bp100.pdf

Are you saying the Federal Reserve will disappear if we return to a gold standard?
What will the New York Fed do with all this gold?

There is no need for a central bank with a gold standard. Whoever owns gold can do with it what they like. Hold it, sell it, make jewelry...your choice.

there are many many versions of a gold standard. We had a central bank and a gold standard till Nixon. They all require a lot of government management so for me it doesn't matter what system we have so long as the goal is short term and long term price stability.