Does anyone think we need the Fed?

[Paulie]

No, that was not me.

I believe that gold production was actually down last year.

Well if production sometimes drops YoY, that's not necessarily bad.

But what's the average yearly rate of discovery over, say, the last 50 years?

I found a website that had the info, the ONLY website that did, and they wanted a paid subscription to read the report. I figure you're privy to that kind of info on a daily basis.

You are right, it is not always bad. It would be bad now though.

I have had a subscription to GFMS in the past. Gold production may have grown 1%-2% over the past decade. That sounds reasonable.

So then why not go with a Friedman-like approach and let the money supply expand by that much, only instead of via fiat thin-air creation like he would have advocated, it would be via gold production instead?

Is the ONLY hang-up the ensuing deflation after the Dollar is officially re-pegged to gold?

 

[The Rabbi]

Because putting the economy in a strait jacket is really really stupid.

 

[Toro]

So then why not go with a Friedman-like approach and let the money supply expand by that much, only instead of via fiat thin-air creation like he would have advocated, it would be via gold production instead?

Is the ONLY hang-up the ensuing deflation after the Dollar is officially re-pegged to gold?

Because the gold standard does not allow you to expand the money supply beyond the rate of gold production.

The other problem is that it is virtually impossible to maintain if your trading partners are also not on the gold standard.

 

[Mike Mitrosky]

Because putting the economy in a strait jacket is really really stupid.

I like to think of it as really putting politicians & bankers in a straightjacket.

 

[The Rabbi]

Because putting the economy in a strait jacket is really really stupid.

I like to think of it as really putting politicians & bankers in a straightjacket.

I think you ought to be in a straitjacket.
But that's beside the point. The point is that an economy needs capital to invest and expand. The gold standard basically won't allow that.
And as pointed out, if other nations aren't on it it wont work.

 

[Neubarth]

Because putting the economy in a strait jacket is really really stupid.

I like to think of it as really putting politicians & bankers in a straightjacket.

I think you ought to be in a straitjacket.
But that's beside the point. The point is that an economy needs capital to invest and expand. The gold standard basically won't allow that.
And as pointed out, if other nations aren't on it it wont work.

ShitFaceMan, you are most correct. We all need capital and I do not want to cart around a wagon full of metal to make my purchases. If we were on a metal standard, then runs on that metal would be impossible to deal with as there just is not enough to go around.

As I have said before, I favor using corn if we are forced to chose a commodity.

At least with corn, you can brew up some damn good hooch.

 

[Paulie]

I like to think of it as really putting politicians & bankers in a straightjacket.

I think you ought to be in a straitjacket.
But that's beside the point. The point is that an economy needs capital to invest and expand. The gold standard basically won't allow that.
And as pointed out, if other nations aren't on it it wont work.

ShitFaceMan, you are most correct. We all need capital and I do not want to cart around a wagon full of metal to make my purchases. If we were on a metal standard, then runs on that metal would be impossible to deal with as there just is not enough to go around.

As I have said before, I favor using corn if we are forced to chose a commodity.

At least with corn, you can brew up some damn good hooch.

I can live with that. At least the supply of currency depends on a necessary commodity.

But, on the flip, then you'd have to regulate who can grow corn. Becuase the back yard corn grower now becomes a counterfeiter, in essence.

 

[Neubarth]

I think you ought to be in a straitjacket.
But that's beside the point. The point is that an economy needs capital to invest and expand. The gold standard basically won't allow that.
And as pointed out, if other nations aren't on it it wont work.

ShitFaceMan, you are most correct. We all need capital and I do not want to cart around a wagon full of metal to make my purchases. If we were on a metal standard, then runs on that metal would be impossible to deal with as there just is not enough to go around.

As I have said before, I favor using corn if we are forced to chose a commodity.

At least with corn, you can brew up some damn good hooch.

I can live with that. At least the supply of currency depends on a necessary commodity.

But, on the flip, then you'd have to regulate who can grow corn. Becuase the back yard corn grower now becomes a counterfeiter, in essence.

Naaah! Let everybody contribute free coin to the realm. And we would allow everybody to brew their own hooch for family use, just like George Washington used to do.

 

[Toro]

I like to think of it as really putting politicians & bankers in a straightjacket.

I think you ought to be in a straitjacket.
But that's beside the point. The point is that an economy needs capital to invest and expand. The gold standard basically won't allow that.
And as pointed out, if other nations aren't on it it wont work.

ShitFaceMan, you are most correct. We all need capital and I do not want to cart around a wagon full of metal to make my purchases. If we were on a metal standard, then runs on that metal would be impossible to deal with as there just is not enough to go around.

As I have said before, I favor using corn if we are forced to chose a commodity.

At least with corn, you can brew up some damn good hooch.

As much as an alcohol-back currency really appeals to me, regulating who can grow what isn't a free market solution.

The two reasons why gold was used as currency for a long time was because it lasted forever and its all shiny and pretty. From our modern-day perspective, the former is what is important. Money that can be eaten by bugs isn't a particularly stable system.

 

[Neubarth]

I think you ought to be in a straitjacket.
But that's beside the point. The point is that an economy needs capital to invest and expand. The gold standard basically won't allow that.
And as pointed out, if other nations aren't on it it wont work.

ShitFaceMan, you are most correct. We all need capital and I do not want to cart around a wagon full of metal to make my purchases. If we were on a metal standard, then runs on that metal would be impossible to deal with as there just is not enough to go around.

As I have said before, I favor using corn if we are forced to chose a commodity.

At least with corn, you can brew up some damn good hooch.

As much as an alcohol-back currency really appeals to me, regulating who can grow what isn't a free market solution.

The two reasons why gold was used as currency for a long time was because it lasted forever and its all shiny and pretty. From our modern-day perspective, the former is what is important. Money that can be eaten by bugs isn't a particularly stable system.

Why have regulation? Do away with it then Corn alcohol will have to be our new currency. Just like the banks and states can print their own coin, anybody could produce alcohol. Damn, I like that idea. The friggin Arabs would all have to convert away from Radical Islam if they wanted to be rich. Iran would go bankrupt and all their people would probably become atheists after their deluge of Radical Islam. How else do you escape from too much religion? Get drunk and deny God. How else?

 

[rubberhead]

Exactly. He's trying to discredit me because instead of taking econ courses at a college where I'm only being taught ONE school of thought, I instead choose to learn ALL schools of thought and come to my own informed opinion.

I took a business class last year at an accredited university, and what do you know...the information they taught us about the Fed was the same old tired bullshit you learn anywhere else where Keynesianism is the basis of the cirriculum.

They don't teach you about Fed shareholder structure, they don't teach you exactly how the FOMC operates and the exact amount of control that each member has, and where they acquired that particular position of control within it. They DAMN WELL don't teach you the reasons WHY it's public/private.

Rabbi obviously isn't a Keynesian, that much is true considering his rhetoric here. He's also not an Austrian because he supports the Fed's role in some way. I'm guessing he's a Friedmanite, which I suppose is worth at least settling for over Keynesian.

If so, at least he doesn't support printing endless amounts of money to cover bills.

Here's some logic for the Friedmanites to ponder though...

The rate of gold discovery in the world tends to average 1-2% per year. Friedman suggested that we increase the money supply 1-2% per year to keep pace with what should be modest growth. Why could a gold standard not exist in an economic environment where the rate of growth of money would be virtually equal, compared to Friedmanism?

Trying to tie the value of money to a commodity is insane. If we absolutely had to, I;d prefer that it be tied to the price of corn. Anything that you can make corn liquor from has to have lasting value.

You didn't address the entire premise of the proposal though.

If Friedman suggested that we increase the supply of money 1-2% per year for normal monetary growth, and gold discoveries are nearly the same percentage rate per year, how is the gold standard so horrible? It still allows for growth in the supply of money at 1-2% per year.

By the way, I'm not stuck on just gold. I'd take ANYTHING that had perpetual value/demand to back our currency at this point. Silver, gold, corn, soy beans, copper, ******* PORK BELLIES for christ's sake.

ANYTHING except what we have right now would be a great and welcome change.

The government will never do it though, because to limit their ability to print limitlessly would end their entire ball game.

Transient commodities seem to have inherent problems. Fluctuations in the supply would make a fixed value of currency difficult. It would have to be a commodity that: a) does not physically decompose, b) supply only increases.

 

[rubberhead]

Because putting the economy in a strait jacket is really really stupid.

What about giving it daddy's credit card and pumping it full of Wellbutrin? Is that a bad idea?

 

[rubberhead]

Because putting the economy in a strait jacket is really really stupid.

I like to think of it as really putting politicians & bankers in a straightjacket.

I think you ought to be in a straitjacket.
But that's beside the point. The point is that an economy needs capital to invest and expand. The gold standard basically won't allow that.
And as pointed out, if other nations aren't on it it wont work.

If this "capital" that you're talking about is monopoly money, then the value it creates is a lie. Just because it seems to be working doesn't mean it always will. Eventually the truth comes out, and how much it hurts is proportional to how long the lie is perpetuated.

 

[rubberhead]

ShitFaceMan, you are most correct. We all need capital and I do not want to cart around a wagon full of metal to make my purchases. If we were on a metal standard, then runs on that metal would be impossible to deal with as there just is not enough to go around.

As I have said before, I favor using corn if we are forced to chose a commodity.

At least with corn, you can brew up some damn good hooch.

As much as an alcohol-back currency really appeals to me, regulating who can grow what isn't a free market solution.

The two reasons why gold was used as currency for a long time was because it lasted forever and its all shiny and pretty. From our modern-day perspective, the former is what is important. Money that can be eaten by bugs isn't a particularly stable system.

Why have regulation? Do away with it then Corn alcohol will have to be our new currency. Just like the banks and states can print their own coin, anybody could produce alcohol. Damn, I like that idea. The friggin Arabs would all have to convert away from Radical Islam if they wanted to be rich. Iran would go bankrupt and all their people would probably become atheists after their deluge of Radical Islam. How else do you escape from too much religion? Get drunk and deny God. How else?

All corn is not created equal.

 

[rubberhead]

Has anyone heard about the effort to derail S. 604? The senate is trying to water it down so that the GAO can only audit the Fed during a crisis. I hope they don't succeed.

 

[Kevin_Kennedy]

Has anyone heard about the effort to derail S. 604? The senate is trying to water it down so that the GAO can only audit the Fed during a crisis. I hope they don't succeed.

Yes. It's called the Federal Reserve Accountability Act, which essentially allows them to audit the TARP funds. But it wouldn't allow for as thorough an audit as 1207/604, and should therefore be opposed.

 

[Mike Mitrosky]

no compromise on the fed audit.. no quarter.

 

[Neubarth]

Ifall of those companies can not pay the TARP funds back does that mean they are bankrupt but have not filed?

 

[rubberhead]

Interesting question... I wonder what their obligations to repay the TARP money are. I'm looking into it.

 

[rubberhead]

TARP watchdog: Full repayment 'unlikely' - Washington Times

Looks like repayment is unlikely... I still don't know what the TARP recipients' obligations are. They seem really ill-defined if at all.