Should We Kill The Fed?

[Kevin_Kennedy]

I've explained it, and addressed many of those questions. I'm not going to sit here and repeat myself.

No there are a lot of things you have not explained.

How is Wal-mart going to price their products when there are a 1000 different "dollars"? You have not answered that.



Oh great. Now I a bunch of Iriemon bank dollars and no one has to take them. I gotta tell you, this system is sinking fast as a viable alternative.

However, since that currency would be a claim to a certain amount of gold or silver there should be no reason that Wal-Mart wouldn't accept that currency, unless the currency has in fact been debased and it isn't certain that they'd be able to claim their gold or silver with the "dollar."

What do you think Madoff "gold backed" dollars are worth these days? If you hold a million in Madoff dollars you're kind of screwed, aren't you?

Or is the Govt going to police every entrepreneur that decides to issue dollars?

I have addressed that. I said that they would only need price their products to gold or silver, and accept the number of dollars equal to that amount of gold or silver.

If your currency isn't debased there isn't any reason why they shouldn't be accepted.

No, just because you put Madoff's name on them doesn't change their worth, unless people simply stopped using the currency because of it's association to Madoff. So long as he hasn't inflated the currency to death and it's still redeemable in gold or silver then there's no problem.

 

[Iriemon]

No there are a lot of things you have not explained.

How is Wal-mart going to price their products when there are a 1000 different "dollars"? You have not answered that.



Oh great. Now I a bunch of Iriemon bank dollars and no one has to take them. I gotta tell you, this system is sinking fast as a viable alternative.



What do you think Madoff "gold backed" dollars are worth these days? If you hold a million in Madoff dollars you're kind of screwed, aren't you?

Or is the Govt going to police every entrepreneur that decides to issue dollars?

I have addressed that. I said that they would only need price their products to gold or silver, and accept the number of dollars equal to that amount of gold or silver.

That's the first I heard. OK. Great, we are finally getting somewhere, though it's like pulling teeth.

So when I go to Wal-mart, the price of the hammer will be in units of gold, and not dollars. So we are in essence getting rid of dollars, and moving to a pure commodity currency where goods are expressed in units of gold, and private institutions will not be essentially be issuing "dollars" but certificates representing some unit of gold, (like the old piece of eight.")

So what you are really talking about is a pure gold standard. I think we've already covered in this thread the criticisms of a gold standard, so we don't need to repeat them here.

If your currency isn't debased there isn't any reason why they shouldn't be accepted.

No, just because you put Madoff's name on them doesn't change their worth, unless people simply stopped using the currency because of it's association to Madoff. So long as he hasn't inflated the currency to death and it's still redeemable in gold or silver then there's no problem.

Are you trying to claim it would be impossible for an organization to defraud their certificate holders? What if Madoff bank issued gold certificates when it didn't have the gold, just like it issued certificates of stocks when it never had the stock?

Or if it had the gold but spends it? Or lents out its certificates and in a panic there is a run on the "bank" and there's not enough gold to back up the redemptions? You're screwed?

Why should or would Wal-mart accept gold certificates from Iriemon Bank when it's never heard of it? It's not going to do that.

 

[krotchdog]

Iriemon

How on earth could you possible have a sound currency when anyone can print up as many "dollars" as they want?

That is a good point, so our current system of using the Federal Reserve should be abolished.

 

[Kevin_Kennedy]

I have addressed that. I said that they would only need price their products to gold or silver, and accept the number of dollars equal to that amount of gold or silver.

That's the first I heard. OK. Great, we are finally getting somewhere, though it's like pulling teeth.

So when I go to Wal-mart, the price of the hammer will be in units of gold, and not dollars. So we are in essence getting rid of dollars, and moving to a pure commodity currency where goods are expressed in units of gold, and private institutions will not be essentially be issuing "dollars" but certificates representing some unit of gold, (like the old piece of eight.")

So what you are really talking about is a pure gold standard. I think we've already covered in this thread the criticisms of a gold standard, so we don't need to repeat them here.

If your currency isn't debased there isn't any reason why they shouldn't be accepted.

No, just because you put Madoff's name on them doesn't change their worth, unless people simply stopped using the currency because of it's association to Madoff. So long as he hasn't inflated the currency to death and it's still redeemable in gold or silver then there's no problem.

Are you trying to claim it would be impossible for an organization to defraud their certificate holders? What if Madoff bank issued gold certificates when it didn't have the gold, just like it issued certificates of stocks when it never had the stock?

Or if it had the gold but spends it? Or lents out its certificates and in a panic there is a run on the "bank" and there's not enough gold to back up the redemptions? You're screwed?

Why should or would Wal-mart accept gold certificates from Iriemon Bank when it's never heard of it? It's not going to do that.

No, it wouldn't be impossible for them to print money not backed by gold, but it would be fraudulent and that's illegal.

 

[neurosport]

Gold should not be the basis of our currency for a few reasons.

1.) There's not enough gold in the world.
2.) The money supply should not be dependent upon the profitability of gold miners, especially since the mining industry has historically been one of the worst run industries on the planet.

i was thinking exactly that myself ...

plus most of the gold already belongs to somebody. we don't want to jack up the value in somebody else's pockets ...

we need "sound" money that is backed with something tangible but probably not gold or at least not only gold ...

we need to somehow get rid of fractional reserve banking and we need to get rid of fiat money.

banks ought to be able to lend out enough ( how could we do this with gold ? ) but not an unlimited amount ( the problem with fiat money ) and they have to be GOOD FOR the money.

not exactly sure how to do this but if we could put a man on the moon we can probably figure something out ...

 

[ItsFairmont]

The gold standard pretty much puts a stop to inflation. The only time prices go up is when more gold is put into the system.


The gold standard was right.

 

[neurosport]

The gold standard pretty much puts a stop to inflation. The only time prices go up is when more gold is put into the system.

The gold standard was right.

amount of gold in the system would probably rise slower than amount of just about anything else

we would probably have relentless deflation

which is not a problem. at least the RATE of this deflation would be based in REALITY and not illusion.

the real problem is what others pointed out - we would end up feeding the entire planet as long as they already have gold or will mine more

thats sort of the opposite of what was happening for the last couple decades when we were printing money and everybody else was supplying us with valuable products for our worthless toilet paper

i like the sound of "commodity based currency" although i haven't really looked into how exactly that would work ...

 

[Iriemon]

That's the first I heard. OK. Great, we are finally getting somewhere, though it's like pulling teeth.

So when I go to Wal-mart, the price of the hammer will be in units of gold, and not dollars. So we are in essence getting rid of dollars, and moving to a pure commodity currency where goods are expressed in units of gold, and private institutions will not be essentially be issuing "dollars" but certificates representing some unit of gold, (like the old piece of eight.")

So what you are really talking about is a pure gold standard. I think we've already covered in this thread the criticisms of a gold standard, so we don't need to repeat them here.



Are you trying to claim it would be impossible for an organization to defraud their certificate holders? What if Madoff bank issued gold certificates when it didn't have the gold, just like it issued certificates of stocks when it never had the stock?

Or if it had the gold but spends it? Or lents out its certificates and in a panic there is a run on the "bank" and there's not enough gold to back up the redemptions? You're screwed?

Why should or would Wal-mart accept gold certificates from Iriemon Bank when it's never heard of it? It's not going to do that.

No, it wouldn't be impossible for them to print money not backed by gold, but it would be fraudulent and that's illegal.

Sure it would be fraudulent and illegal. When has that ever stopped shysters. How are you going to prevent the Madoff out there from ripping people off? What are you going to do with the people who have been stolen from and now have their life savings in worthless Madoff certificates?

BTW, I image with the pure gold standard, each certificate issue will have to have actual gold to back up its certificates. So they'll need vaults, like a bank. What are they going to do to compensate themselves for the service of creating money? Maybe print a bit for themselves?

 

[Iriemon]

The gold standard pretty much puts a stop to inflation. The only time prices go up is when more gold is put into the system.


The gold standard was right.

We'd have deflation. And at year end your boss can tell you congratulations Fairmont! We're cutting your salary $3000.

 

[Iriemon]

Iriemon

How on earth could you possible have a sound currency when anyone can print up as many "dollars" as they want?

That is a good point, so our current system of using the Federal Reserve should be abolished.

Ha ha cute point. But not anyone can print up dollars; only the Fed can.

 

[B94]

What does the Fed do that Congress and the treasury couldn't do with out them?

 

[neurosport]

What does the Fed do that Congress and the treasury couldn't do with out them?

look smart and businesslike !

 

[SpidermanTuba]

For the financial crisis that has wiped out trillions in wealth, many have felt the lash of public outrage.

Fannie and Freddie. The idiot-bankers. The AIG bonus babies. The Bush Republicans and Barney Frank Democrats who bullied banks into making mortgages to minorities who could not afford the houses they were moving into.

But the Big Kahuna has escaped.

The Federal Reserve.

Should We Kill the Fed? by Patrick J. Buchanan

And replace it with what exactly?

 

[Kevin_Kennedy]

No, it wouldn't be impossible for them to print money not backed by gold, but it would be fraudulent and that's illegal.

Sure it would be fraudulent and illegal. When has that ever stopped shysters. How are you going to prevent the Madoff out there from ripping people off? What are you going to do with the people who have been stolen from and now have their life savings in worthless Madoff certificates?

BTW, I image with the pure gold standard, each certificate issue will have to have actual gold to back up its certificates. So they'll need vaults, like a bank. What are they going to do to compensate themselves for the service of creating money? Maybe print a bit for themselves?

Because some may abuse the system doesn't mean that it's not a good system.

 

[Kevin_Kennedy]

For the financial crisis that has wiped out trillions in wealth, many have felt the lash of public outrage.

Fannie and Freddie. The idiot-bankers. The AIG bonus babies. The Bush Republicans and Barney Frank Democrats who bullied banks into making mortgages to minorities who could not afford the houses they were moving into.

But the Big Kahuna has escaped.

The Federal Reserve.

Should We Kill the Fed? by Patrick J. Buchanan

And replace it with what exactly?

The free market and sound money.

 

[mash107]

I did. I'm sorry. It was Mash107, who was also proposing a "free market" theory as an alternative. I asked a few probing questions and he disappeared.



Because you can't defend your own proposal as an alternative to the Fed?

In a truly free market economy, money would not be monopolized by legal tender laws or by a central bank, in order to receive taxes from the transactions or to be able to issue loans.[citation needed] Minarchists (advocates of minimal government) contend that the so called "coercion" of taxes is essential for the market's survival, and a market free from taxes may lead to no market at all. By definition, there is no market without private property, and private property can only exist while there is an entity that defines and defends it. Traditionally, the State defends private property and defines it by issuing ownership titles, and also nominates the central authority to print or mint currency. "Free market anarchists" disagree with the above assessment – they maintain that private property and free markets can be protected by voluntarily-funded services under the concept of individualist anarchism and anarcho-capitalism[14][15]. A free market could be defined alternatively as a tax-free market, independent of any central authority, which uses as medium of exchange such as money, even in the absence of the State. It is disputed, however, whether this hypothetical stateless market could function freely, without coercion and violence.

Free market - Wikipedia, the free encyclopedia

I agree with the text that there is good reason to dispute that such a system could possible work.

I still don't understand how the "free market" sets the money supply. Everyone who supports this theory seems to be coy about describing it in detail. It makes me suspicious.



No dollars?

In a truly free market you could have competing private currencies, and people would be able to use their currency of choice or multiple currencies if they wished. So long as it's backed by a commodity such as gold or silver, or is gold and silver themselves, then people would accept them.

I'm not sure what you're asking by "No Dollars?" Could you clarify that?

This is the same thing Mash107 said. Why is it so much to ask to explain how this "free market" alternative to the Fed will work?

I'll make it simple. I go to Mcdonald's to buy a big mac. Or Walmarts to buy a hammer. What do I sue to pay for it? How is it priced?

If the answer is "with dollars" then: Who creates the dollars and controls the number of dollars in currency?

I went away on business.

We can go to McDonalds and use Visa or Mastercard or Discover card. We're given a choice there... why not with the currency we use? They'll probably price things for the few most used currencies, like Europe did when they had both the Euro and their local currency for a brief period. I was in fact in Germany when Euro was just taking over there, and it was pretty cool to be able to use different currencies at the same store.

I do rather agree that we need a State to enforce contracts are respected and property rights are ensured and fraud is caught and punished, however, they certainly do not need to monopolize and be in control of something as important as the money supply. Fraud does consist of making loans with money you don't have (i.e. leveraging), so bubbles would still be totally eliminated.

 

[editec]

The gold standard pretty much puts a stop to inflation. The only time prices go up is when more gold is put into the system.


The gold standard was right.

You gold bugs are idiots.

No offense dude but a gold standard insures continuous deflation in a thriving society.

The inevitable outcome of a gold standard (or silver standard, or diamond standard or any standard which confuses STUFF for money) is a very wealthy banking elite and an completely impoverished working class.

And that is why when nations were on gold standards few of them thrived UNLESS they suddenly found themselves with enormous amount so NEW gold to play with.

And even then, when Spain had a pefectly sound gold standard, inflation reared its ugly head when they suddenly got a LOT of it.

Study what happened to SPAIN's economy when they took over the new world and suddently found themselves with enormous amounts of gold in the treasury.

In the short run they were wealthy and powerful, but in the long run all that gold didn't help (because it did not encourage additional productivity), and their economy (and power) faded.

Neither money NOR gold is wealth

LABOR CREATES WEALTH.

Nothing else but labor creates wealth.

All money should ever represent is the aggregate ability of a society to create wealth.

The gold standard will replace the problem of fiat dollars with an even more deadly problem...DEFLATION.

 

[Skull Pilot]

The gold standard pretty much puts a stop to inflation. The only time prices go up is when more gold is put into the system.


The gold standard was right.

You gold bugs are idiots.

No offense dude but a gold standard insures continuous deflation in a thriving society.

And that is why when nations were on gold standards few of them thrives UNLESS they suddenly found themselves with enormous amount so fNEW gold to play with.

And even then, When they had a pefectly sound gold standard, inflation reared its ugly head.

STudy what happened to SPAIN's economy when they took over the new world and suddently found themselves with enormous amounts of gold in the treasury.

In the short run they were wealthy and powerful, but in the long run all that gold didn't help, and their economy (and power) faded.

Neither money NOR gold is wealth

LABOR = wealth.

If labor is wealth then a country with 100% of its people employed as government ditch diggers would be the richest nation in the world. No?

 

[neurosport]

i love what US did with the printing press thing though

yeah we are having a hangover now but you have to admit it was good while it lasted

other countries have it just as bad now but they never had it good

its certainly nice to be able to print money and have idiots in other countries treat it as if it has value

problem is we can't do it any more because the idiots are finally getting a brain - only took them like 40 years !

give your government some credit. they are not nearly as stupid as their citizens.

 

[Kevin_Kennedy]

The gold standard pretty much puts a stop to inflation. The only time prices go up is when more gold is put into the system.


The gold standard was right.

You gold bugs are idiots.

No offense dude but a gold standard insures continuous deflation in a thriving society.

The inevitable outcome of a gold standard (or silver standard, or diamond standard or any standard which confuses STUFF for money) is a very wealthy banking elite and an completely impoverished working class.

And that is why when nations were on gold standards few of them thrived UNLESS they suddenly found themselves with enormous amount so NEW gold to play with.

And even then, when Spain had a pefectly sound gold standard, inflation reared its ugly head when they suddenly got a LOT of it.

Study what happened to SPAIN's economy when they took over the new world and suddently found themselves with enormous amounts of gold in the treasury.

In the short run they were wealthy and powerful, but in the long run all that gold didn't help (because it did not encourage additional productivity), and their economy (and power) faded.

Neither money NOR gold is wealth

LABOR CREATES WEALTH.

Nothing else but labor creates wealth.

All money should ever represent is the aggregate ability of a society to create wealth.

The gold standard will replace the problem of fiat dollars with an even more deadly problem...DEFLATION.

We "gold bugs" have feelings too, ed.

At any rate, deflation isn't deadly. It means that your dollars gain value.