Paper money

[eflatminor]

Do we have to take gold standard folks here seriously or can we just laugh and ignore them?

You don't have to do anything. However, if you want to be taken seriously as a grown up capable of debating with logic, reason and specificity, you'll have to do better than your childish little taunt.

Please, tell us why standing for a sound money should not be taken seriously.

The floor is yours...

 

[william the wie]

Ne he didn't. Nixon did. Pick up a damn book.

Now that is asking entirely too much of Pattycake.

It makes no difference to me WHO took us off the gold standard. Nixon or FDR.
That we should be on it is the important issue.
Bripat believes, correctly, that our money should be backed by something on concrete value.
And you?

A lost cause. Explaining how short run stabilization leads to catastrophic long run results as it did 1929-47 and again 1968-? is a hopeless task. Also an investment rate of 20-50% of GDP, what can be expected without stabilizers, during globalization would replace nearly all labor generating less than roughly $20 GDP/hour worldwide within 10 years. That would create huge foreign policy problems as well as domestic political problems.

If you study the minarchal Austrians such as Schumpeter and Popper or the more adventurous members of the Chicago School such as the Freakonomics series you will quickly see omissions in the an-cap schema:

No mention of addicts. psychopaths and psychotics who comprise upto 15% of any population. These are not rational actors and while the level of threat and therefore degree of control needed are often magnified beyond contact with reality this is an issue that needs to be addressed but is not by hardcore an-cap theorists.

No mention of contagious and infectious threats. This too cannot be ignored.

More than half of the World is kleptocratic sometimes mildly as with India, sometimes insanely so as with Somalia. This too cannot be ignored.

Let's go for clearly rational actions. Trying to explain to a mostly innumerate population that going with stabilizers is like requesting a 20mm procto exam without anesthesia or lubricant requires an inordinate amount of education and refresher courses. Let us first try to achieve at least semi-libertarian solutions to the first three problems.

 

[Rshermr]

Do we have to take gold standard folks here seriously or can we just laugh and ignore them?

Just laugh and ignore them. Really, it is not their fault. It is simply a mental illness. Technically, being a congenital idiot. I am torn, actually. Laugh or pity. Or maybe both.

 

[Rshermr]

The US govt also makes money in it's investments.

How much did the gov. make on its subsidies (please don't call them "investments") to the auto, solar, farming, and financial companies?

Billions. No, trillions. No, gazillions.

 

[Rshermr]

Do we have to take gold standard folks here seriously or can we just laugh and ignore them?

You don't have to do anything. However, if you want to be taken seriously as a grown up capable of debating with logic, reason and specificity, you'll have to do better than your childish little taunt.

Please, tell us why standing for a sound money should not be taken seriously.

The floor is yours...

You need not tell anyone not to take you seriously. You are a simple con tool who simply posts bat shit crazy con ideas and expects folks too listen. Sorry you missed it, but your concept of gold backed currency is about as popular as a fart in church among the vast majority of people, and economists. Enjoy your solitude.

 

[oldfart]

So, what economics background did you think that ayn rand had?? She is simply another opinion maven, with no concept of economics at all. Proposing an economic system that never has nor never will work.

There are more than a few actual economists that would disagree with you, whose opinions mirror those of Rand. Friedman, Mises, Williams and plenty of others:

First, Wikipedia is not a substitute for a working knowledge of history of economic thought. Second, Wikipedia does not say what you represent it as saying. I am one of the Wikipedia editors on articles on history of economic thought. You clearly have no clue as to Milton Friedman's writings, and comparisons to von Mises is a stretch.

So what economics background do you have?

I suggest you stay away from this argument. It's an appeal to authority which is the weakest argument of the feeble-minded.

 

[Doubletap]

Do we have to take gold standard folks here seriously or can we just laugh and ignore them?

You don't have to do anything. However, if you want to be taken seriously as a grown up capable of debating with logic, reason and specificity, you'll have to do better than your childish little taunt.

Please, tell us why standing for a sound money should not be taken seriously.

The floor is yours...

Eflatminor,
Bombur must be an Obama drone. They specialize in their refusal to think.

 

[Rshermr]

In a free economy, where no man or group of men can use physical coercion against anyone, economic power can be achieved only by voluntary means: by the voluntary choice and agreement of all those who participate in the process of production and trade. In a free market, all prices, wages, and profits are determined—not by the arbitrary whim of the rich or of the poor, not by anyone’s “greed” or by anyone’s need—but by the law of supply and demand. The mechanism of a free market reflects and sums up all the economic choices and decisions made by all the participants. Men trade their goods or services by mutual consent to mutual advantage, according to their own independent, uncoerced judgment. A man can grow rich only if he is able to offer better values—better products or services, at a lower price—than others are able to offer.

Wealth, in a free market, is achieved by a free, general, “democratic” vote—by the sales and the purchases of every individual who takes part in the economic life of the country. Whenever you buy one product rather than another, you are voting for the success of some manufacturer. And, in this type of voting, every man votes only on those matters which he is qualified to judge: on his own preferences, interests, and needs. No one has the power to decide for others or to substitute his judgment for theirs; no one has the power to appoint himself “the voice of the public” and to leave the public voiceless and disfranchised.--Ayn Rand

So, what economics background did you think that ayn rand had?? She is simply another opinion maven, with no concept of economics at all. Proposing an economic system that never has nor never will work.

There are more than a few actual economists that would disagree with you, whose opinions mirror those of Rand. Friedman, Mises, Williams and plenty of others:

Category:Libertarian economists - Wikipedia, the free encyclopedia

So what economics background do you have?

If you love her so much, perhaps you can name an actual Libertarian economy that exists in the world.

As has been discussed here so many times before, everyone knows that there has never been a 100% pure libertarian economy anymore than there has been a perfect example of a socialist economy. We look at trends and examine results from economic and social experiments over time. There, we see that the American experience, especially prior to the Progressive era, most closely resembled that of free markets and free minds. It also happened to be a time during which more poor become middle class and more middle class become rich than at any time in human history, while the country came to dominate the world economically and socially, despite representing a tiny portion of the population. Even in today's economic malaise, countries that embrace economic freedom are thriving as the US heads down the path of central planning. It would appear we have not learn from past lessons. Ironically, you look to those central planners to fix the problems they've caused in the first place. Amazing.

Or do you simply love fantasy. I mean, really, most boys quit believing in Libertarianism by the time they reach puberty. Sorry about you.

An ad hominem attack does not help you case.

That would be 56 libertarian economists out of thousands and thousands of economists. Or would be, except, Uh, dead economists do not count. So, maybe actually 40 or so. Nice. And they have become, over the past few years, about as popular as a fart in church. Nice, me boy. Good luck next time.
I mean, really, dead and mostly old (I am old, but these guys make dirt look young for the most part.)

By the way, it was not an ad hominem attack. Truth never is. Most libertarians get over it with age. Most of those that do not are simply paid shills. If they are capable.

How much economics background do I have?? Way more than Ms. Rand. Who had NONE.

 

[Politico]

The US govt also makes money in it's investments.

How much did the gov. make on its subsidies (please don't call them "investments") to the auto, solar, farming, and financial companies?

They were buying votes. That is an investment.

 

[eagle1462010]

85 BILLION a month from the Federal Reserve to prop up the markets where they are now borrowing from the Reserve to make Margin Calls.

16.1 TRILLION in loans at the discount window to the TOO BIG TO FAIL Banks after the crash of 2008 at virtually 0% interest. Brought to you by the same Banks who have people who are primary stock holders of the Federal Reserve.

Who create money, with the enter key, we pay a fee and interest to create our own currency to pay the bills. Which is part of the Constitution to allow us to Coin money. Now we pay banks to do the same damn thing, being charged interest, while they lend it to themselves for 0%...........

How about they give the U.S. Gov't a 0% interest loan or 1/4 % rate on our entire debt as they do for themselves............under Congressional approval by the Status Quo who are bought and paid for...............

Then call it a derivative and thus doesn't matter to our debt anyway, and doesn't make the value of our dollar go down and prices go up........................

After 2008 these banks should have had their ASSETS SEIZED.............for FAILING IN THE MARKETS....................and their sorry butts thrown into prison.............

BTW.........the crash had nothing to do with the over 1200 TRILLION in Derivatives created OUT OF THIN AIR, in 7 years......................

Only if pigs can fly.

 

[eflatminor]

Do we have to take gold standard folks here seriously or can we just laugh and ignore them?

You don't have to do anything. However, if you want to be taken seriously as a grown up capable of debating with logic, reason and specificity, you'll have to do better than your childish little taunt.

Please, tell us why standing for a sound money should not be taken seriously.

The floor is yours...

You need not tell anyone not to take you seriously. You are a simple con tool who simply posts bat shit crazy con ideas and expects folks too listen. Sorry you missed it, but your concept of gold backed currency is about as popular as a fart in church among the vast majority of people, and economists. Enjoy your solitude.

So you're not able to respond with logic, reason or specificity either.

Hmm. Color me shocked.

But hey, when you got nothing, it's always best to launch an ad hominem, right?

 

[jasonnfree]

Not exactly. It's more complex than that. Nixon dealt the final blow, but getting us off the gold standard absolutely started with FDR.

A little history:

In the mid-1800s, most countries wanted to standardize transactions in the booming world trade market. They adopted the gold standard, which guaranteed that any amount of paper money could be redeemed by the government for its value in gold.

In 1861, U.S. Treasury Secretary Salmon Chase printed the first U.S. paper currency. The Gold Standard Act was passed in 1900. At this time, the value of all American currency was to be based on actual gold.

In 1933, FDR disallowed the redemption of dollars for gold. This was the first major blow to the gold standard. After all, if paper money is to be based on a gold standard, that means nothing if one could no longer redeem dollars for gold.

In 1934, the Gold Reserve Act prohibited private ownership of gold. It allowed the government to pay its debts in dollars, not gold. FDR was authorized to devalue the gold dollar by 40%. He increased the price of gold, which had been $20 per ounce for 100 years, to $35 per ounce. The government's gold reserves increased in valued from $4billion to $7.3. This effectively devalued the dollar by 60%.

It is not unreasonable to say that FDR was the first to take us off the gold standard, because that is effectively, if not formally, exactly what he did.

Then, in 1946, the Bretton Woods System was enacted. Under this agreement, central banks had to maintain fixed exchange rates between their currencies and the dollar. They did this by buying their own country's currency in foreign exchange markets if their currency became too low relative to the dollar. If it became too high, they'd print more of their currency and sell it.

The formal end of the gold standard came in 1971. All formal links between major world currencies and actual commodities were broken with this change. On August 15, 1971, he changed the dollar/gold relationship to $38 per ounce. More importantly, the Fed stopped redeeming dollars with gold. The U.S. government repriced gold to $42 per ounce in 1973, and then decoupled the value of the dollar from gold altogether. The price of gold quickly shot up to $120 per ounce in the free market.

That was the final nail in the coffin of sound money.

Probably wasn't enough gold that could be mined fast enough.

I believe you're missing the concept of how sound money works. The entire world's supply of money could be based on a single ounce of gold...literally. The market would simply adjust the value of the gold based on supply and demand. As long as currency is based on something REAL (and gold is as good a basis as any), it matters not how the supply fluctuates over time.

Things went along pretty well since FDR took office. Fought a war and built the suburbs afterward without a gold standard. The workers could afford to buy houses. Ordinary working class could even afford to go to college.

This sounds like you're lamenting inflation and how it has, over time, so negatively impacted the average working guy.

Couldn't agree with you more.

That problem we can lay at the feet of The Federal Reserve. In 1913, the Federal Reserve was created to stabilize gold and currency values. What they REALLY did was force inflation that should have never existed in the first place. The proof is in the pudding: From 1780 until 1913, the rate of inflation was flat. Some products/services saw inflation, others deflation. Point is, the market determined that, not central planners. From 1913 until today, inflation is up about 2500%. Now that's the most regressive tax of them all.

One might as why would the Fed force inflation? The answer is in the mindset of leaders like Wilson, FDR and those cut from that same bolt, which includes Ds and Rs, no doubt. Basically, the Fed allows Congress to enact entitlements and engage in warfare without having to pay for those expenditures beforehand or even spell out how they will be paid for eventually. Instead, they place the burden on the backs of those yet to be born through the Federal Reserve mechanism. It's quite the scam.

So, I agree with you that it's a shame the average guy has such a hard time these days affording what he used to. I hope you will join us in the calls to end the Fed and return to a sound monetary policy. Baby steps, at least.

From 1780 until 1930 The working class didn't get ahead either. There were also many panics prior to the federal reserve. Increase in prices have been met with increase in wages which you well know. Entitlements. That hateful word has allowed us to have social security and medicare. I like these times better and I'm old enough to remember talking to oldsters, some born during the civil war who said the good old days weren't all that good. Look into some of the pictures in Jacob Riis's works. Those photos of near starving kids living in alleys wasn't trick photograpy either. Jack London wrote similar stuff about the good old days.

 

[eflatminor]

So, what economics background did you think that ayn rand had?? She is simply another opinion maven, with no concept of economics at all. Proposing an economic system that never has nor never will work.

There are more than a few actual economists that would disagree with you, whose opinions mirror those of Rand. Friedman, Mises, Williams and plenty of others:

First, Wikipedia is not a substitute for a working knowledge of history of economic thought.

No, but it does offer a reasonable list of libertarian economists. Do you deny those are libertarian economists?

Second, Wikipedia does not say what you represent it as saying. I am one of the Wikipedia editors on articles on history of economic thought. You clearly have no clue as to Milton Friedman's writings, and comparisons to von Mises is a stretch.

I never said Wiki "said" anything, only that it provided a list of economists that were reasonably considered in the same school as Rand.

Secondly, I have studied Friedman and Mises extensively and while there are difference, to call a comparison of the two a 'stretch' exposes your profound ignorance.

Likening either to a Keynesian? Now that would be a stretch.

So what economics background do you have?

I suggest you stay away from this argument. It's an appeal to authority which is the weakest argument of the feeble-minded.

But I haven't appealed to authority. That's what Rshermr did. I simply retorted with a bit snark, sure, but the point remains, libertarian leaning economists have offered well researched and solidly backed conclusions for sound economic models.

If you'd care to address the point, then please do so.

 

[eflatminor]

Probably wasn't enough gold that could be mined fast enough.

I believe you're missing the concept of how sound money works. The entire world's supply of money could be based on a single ounce of gold...literally. The market would simply adjust the value of the gold based on supply and demand. As long as currency is based on something REAL (and gold is as good a basis as any), it matters not how the supply fluctuates over time.

Things went along pretty well since FDR took office. Fought a war and built the suburbs afterward without a gold standard. The workers could afford to buy houses. Ordinary working class could even afford to go to college.

This sounds like you're lamenting inflation and how it has, over time, so negatively impacted the average working guy.

Couldn't agree with you more.

That problem we can lay at the feet of The Federal Reserve. In 1913, the Federal Reserve was created to stabilize gold and currency values. What they REALLY did was force inflation that should have never existed in the first place. The proof is in the pudding: From 1780 until 1913, the rate of inflation was flat. Some products/services saw inflation, others deflation. Point is, the market determined that, not central planners. From 1913 until today, inflation is up about 2500%. Now that's the most regressive tax of them all.

One might as why would the Fed force inflation? The answer is in the mindset of leaders like Wilson, FDR and those cut from that same bolt, which includes Ds and Rs, no doubt. Basically, the Fed allows Congress to enact entitlements and engage in warfare without having to pay for those expenditures beforehand or even spell out how they will be paid for eventually. Instead, they place the burden on the backs of those yet to be born through the Federal Reserve mechanism. It's quite the scam.

So, I agree with you that it's a shame the average guy has such a hard time these days affording what he used to. I hope you will join us in the calls to end the Fed and return to a sound monetary policy. Baby steps, at least.

From 1780 until 1930 The working class didn't get ahead either.

That's a lie. Compared to the rest of the world, more American poor became middle class than at any time in history. You start off with a falsehood, anything that comes afterwards is HIGHLY suspect.

There were also many panics prior to the federal reserve. Increase in prices have been met with increase in wages which you well know.

There were even bigger panics and economic downturns after the Federal Reserve. We're in one now. And yes, inflation includes inflation in the cost of labor. That doesn't change the fact that buying power has been severely eroded. This doesn't so much hurt the rich, but it's DEVASTATING to the poor.

Entitlements. That hateful word has allowed us to have social security and medicare.

Which are broke and fiscally unsustainable, particularly in an environment of ongoing inflation and government meddling in the health sector. Have you seen the rate of inflation in medical services? It isn't pretty.

I like these times better and I'm old enough to remember talking to oldsters, some born during the civil war who said the good old days weren't all that good. Look into some of the pictures in Jacob Riis's works. Those photos of near starving kids living in alleys wasn't trick photograpy either. Jack London wrote similar stuff about the good old days.

Anecdotal at best. I'll stick to real evidence, not what some old guy said to me one time.

 

[eflatminor]

So, what economics background did you think that ayn rand had?? She is simply another opinion maven, with no concept of economics at all. Proposing an economic system that never has nor never will work.

There are more than a few actual economists that would disagree with you, whose opinions mirror those of Rand. Friedman, Mises, Williams and plenty of others:

Category:Libertarian economists - Wikipedia, the free encyclopedia

So what economics background do you have?



As has been discussed here so many times before, everyone knows that there has never been a 100% pure libertarian economy anymore than there has been a perfect example of a socialist economy. We look at trends and examine results from economic and social experiments over time. There, we see that the American experience, especially prior to the Progressive era, most closely resembled that of free markets and free minds. It also happened to be a time during which more poor become middle class and more middle class become rich than at any time in human history, while the country came to dominate the world economically and socially, despite representing a tiny portion of the population. Even in today's economic malaise, countries that embrace economic freedom are thriving as the US heads down the path of central planning. It would appear we have not learn from past lessons. Ironically, you look to those central planners to fix the problems they've caused in the first place. Amazing.

Or do you simply love fantasy. I mean, really, most boys quit believing in Libertarianism by the time they reach puberty. Sorry about you.

An ad hominem attack does not help you case.

That would be 56 libertarian economists out of thousands and thousands of economists. Or would be, except, Uh, dead economists do not count. So, maybe actually 40 or so. Nice. And they have become, over the past few years, about as popular as a fart in church. Nice, me boy. Good luck next time.
I mean, really, dead and mostly old (I am old, but these guys make dirt look young for the most part.)

By the way, it was not an ad hominem attack. Truth never is. Most libertarians get over it with age. Most of those that do not are simply paid shills. If they are capable.

How much economics background do I have?? Way more than Ms. Rand. Who had NONE.

Ah, so economics is a matter of a majority?

Got it...

Sorry, but I choose to take a deeper approach and actually study the various schools of thought. You're free to count up the players and go with the majority. I mean, it's not like the government has a vested interest in Keynesian-leaning economists or anything...

Still looking for any logic, reason or specificity in your argument. Until then...

 

[Toro]

I believe you're missing the concept of how sound money works. The entire world's supply of money could be based on a single ounce of gold...literally. The market would simply adjust the value of the gold based on supply and demand. As long as currency is based on something REAL (and gold is as good a basis as any), it matters not how the supply fluctuates over time.

If the supply of money stays fixed and the economy grows, the demand for money will grow but supply will not, and the "cost" of money, i.e. the rate of interest, would rise. Real rates that are higher than they otherwise would be would curtail investment and economic growth.

 

[Toro]

From 1780 until 1930 The working class didn't get ahead either. There were also many panics prior to the federal reserve. Increase in prices have been met with increase in wages which you well know. Entitlements. That hateful word has allowed us to have social security and medicare. I like these times better and I'm old enough to remember talking to oldsters, some born during the civil war who said the good old days weren't all that good. Look into some of the pictures in Jacob Riis's works. Those photos of near starving kids living in alleys wasn't trick photograpy either. Jack London wrote similar stuff about the good old days.

I went back and checked this the other day - from 1865 to 1914, the US economy was in recession half the time. Literally. Roughly 9,000 days, the economy was in recession or depression over 40 years. No wonder the Free Silver Movement was a political force.

http://www.nber.org/cycles/cyclesmain.html

 

[eflatminor]

I believe you're missing the concept of how sound money works. The entire world's supply of money could be based on a single ounce of gold...literally. The market would simply adjust the value of the gold based on supply and demand. As long as currency is based on something REAL (and gold is as good a basis as any), it matters not how the supply fluctuates over time.

If the supply of money stays fixed and the economy grows, the demand for money will grow but supply will not, and the "cost" of money, i.e. the rate of interest, would rise.

Wrong. Interest rates would rise and fall based on the supply and demand for capital, not the mineral upon which currency is based. Stated differently, the money supply doesn't stay fixed under a gold standard because the price of gold can fluctuate.

Real rates that are higher than they otherwise would be would curtail investment and economic growth.

Disagree. Real rates would be determined by market forces, not central planners. And if we're talking about curtailing investment and economic growth, then we must consider the debt and unfunded liabilities, which would NEVER have hit the levels they have under a sound money policy. That debt, which is going to come home to roost at some point, is a horrible drag on economic growth because it creates uncertainty, fostering a risky economic environment, as every country throughout history that has devalued its currency through unsustainable debt learned the hard way.

 

[eflatminor]

I went back and checked this the other day - from 1865 to 1914, the US economy was in recession half the time. Literally. Roughly 9,000 days, the economy was in recession or depression over 40 years.

Setting aside that you've cherry picked time frames to include the devastating economic situation following the civil war, what you're overlooking is the fact that economies are supposed to fluctuate between growth, no growth, and shrinkage. That's why we had basically flat inflation. It worked to create unparalleled prosperity and fostered the industrial revolution. It made America the greatest power the world have ever known.

What you're also overlooking is that after the Fed, we went from customer driven economic fluctuations to prolonged periods of economic growth followed by devastating crashes. That boom/bust cycle produces all kinds of issues that free markets do not face.

Bottom line, central price controls never work better in the long run. The Fed centrally controls the price of money. The price we pay is inflation, which devastates the poor and debt/unfunded liabilities, which will devastate us all.

We should learn from the past societies that tried these measures and failed. Otherwise, we're falling victim to the six most dangerous words in the English language: "It will be different this time".

 

[Toro]

I went back and checked this the other day - from 1865 to 1914, the US economy was in recession half the time. Literally. Roughly 9,000 days, the economy was in recession or depression over 40 years.

Setting aside that you've cherry picked time frames to include the devastating economic situation following the civil war, what you're overlooking is the fact that economies are supposed to fluctuate between growth, no growth, and shrinkage. That's why we had basically flat inflation. It worked to create unparalleled prosperity and fostered the industrial revolution. It made America the greatest power the world have ever known.

What you're also overlooking is that after the Fed, we went from customer driven economic fluctuations to prolonged periods of economic growth followed by devastating crashes. That boom/bust cycle produces all kinds of issues that free markets do not face.

"Cherry-picked?" This is the time period the gold bugs like to mythologize as being some sort of fabulous unique time period in American economic history, as someone argued the other day. In fact, we had more economic volatility during this time period than perhaps any time in our history. It was the constant booms and busts that led to the creation of the Fed in the first place. Also, economic growth over that time period was not materially different than the next 100 years.