Texas Launches Gold-Backed Bank

[SwimExpert]

Yeah, a currency tied to gold would be wildly unstable. With about 11 times the volatility of the US dollar.

Well, that's not quite true either. But gold standard money systems certainly don't have the magical stability that many proponents imagine.

 

[SwimExpert]

Gold backed money almost never loses its value.

That is absolutely impossible to claim. I believe what you mean to say is that under a gold standard, inflation is significantly reduced, compared to fiat systems. In which case, you would be correct. Of course, under the gold standard, short term prices are typically subject to more volatility.

 

[SwimExpert]

Hmmm, no, that's an indisputable fact. We went off the gold standard when ordinary Americans could no longer exchange their bank notes for gold. That occurred under FDR.

No, the US remained on the gold standard until 1971. Up until that point, the dollar was defined based on gold.

 

[Bombur]

It is like the OP wants us to know he is stupid and delusional.

The bank will either be a pointless waste of money or illegal so a pointless waste of money.

Lots of local currencies exist around the country.

lol

 

[SwimExpert]

The market determines what gold is worth.

You're absolutely correct. What you don't realize is this: The same holds true for fiat money. At the end of the day, all forms of money are inherently social. That is, they exist only within the minds of people who agree to their value. If I have one ounce of gold, I might decide that it's worth $10,000. But that valuation will only become true when someone agrees to exchange $10,000 for my ounce of gold, or exchange some property that we agree is worth $10,000. Fiat money works the same way. If I have $10,000 in my pocket, it's value is ultimately determined by the market, i.e. by at least two parties agreeing to exchange other goods and/or services that we also agree are worth $10,000.

Gold, like every other substance, is inherently worthless. It only becomes valuable when people assign it value, for whatever reason. In ancient times, it was perceived as valuable because of its qualities which make it ideal for jewelry and ornamentation. Ornamentation was valued as a means of impressing other people. If gold looked like lead, then nobody would have ever thought it valuable. The rarity of gold lent to its increased perception of value by people, but other substances have supplanted it at times (silk, purple dyes), or ruled in it's regional absence (silver). Still other substances have at times made ornamentation a comparable irrelevancy as other human desires emerged with greater force than the desire to impress other people, leading to salt, sugar, tea, vanilla, and various spices as the gold of their day. At the end of the day, commerce based on these things have fundamentally operated on the same basis as fiat money does today: They derive value based on people interacting with each other and coming to agreement to exchange them for other goods and/or services.

Your real gripe is that money is inherently of undefined value, i.e. it has no objective value. But that is true regardless of whether a system uses fiat money, a gold standard, a silver standard, a tea standard, a purple dye standard, or a pig shit standard.

 

[SwimExpert]

Over the long term, it gains value, not loses value. I just posted the evidence. Fiat money, on the other hand, eventually goes to zero in value.

You seem to be confusing a great many things. In fact, it appears that what you really want is a pre-gold standard economy. Because, under the gold standard, $1 US bought you the exact same amount of gold, always and forever.

Inflation happens under a gold standard economy too, BTW. Inflation is caused by increases in money supply. When the California gold rush hit, inflation soared. There was more gold (i.e. money) thus the value of money decreased. Therefore, as I said, in order for the US to return to a gold standard and see the value of money increase, it would require the amount of money in the economy to decrease.

 

[hipeter924]

If Texas wants to waste its money building up stockpiles of gold, then by all means it can do so.

The Gold Standard has its own problems.

People have short memories if they can't remember the Nixon Shock: Nixon Shock - Wikipedia the free encyclopedia

The current world monetary system assigns no special role to gold; indeed, the Federal Reserve is not obliged to tie the dollar to anything. It can print as much or as little money as it deems appropriate. There are powerful advantages to such an unconstrained system. Above all, the Fed is free to respond to actual or threatened recessions by pumping in money. To take only one example, that flexibility is the reason the stock market crash of 1987—which started out every bit as frightening as that of 1929—did not cause a slump in the real economy.

While a freely floating national money has advantages, however, it also has risks. For one thing, it can create uncertainties for international traders and investors. Over the past five years, the dollar has been worth as much as 120 yen and as little as 80. The costs of this volatility are hard to measure (partly because sophisticated financial markets allow businesses to hedge much of that risk), but they must be significant. Furthermore, a system that leaves monetary managers free to do good also leaves them free to be irresponsible—and, in some countries, they have been quick to take the opportunity.[18]

Yeah man, the gold standard has problems such as politicians can not maintain a gargantuan welfare/warfare police state.

If you want to put all your money in a gold-standard system, then go right ahead, but without printing money that a gold-standard undermines, we wouldn't have had a great recession, but instead a great depression. It is also an anti-free market measure, as unlike today where you can choose between gold and cash, the emphasis is on relying on gold to back a currency.

 

[bripat9643]

The

Over the long term, it gains value, not loses value. I just posted the evidence. Fiat money, on the other hand, eventually goes to zero in value.

You seem to be confusing a great many things. In fact, it appears that what you really want is a pre-gold standard economy. Because, under the gold standard, $1 US bought you the exact same amount of gold, always and forever.

Inflation happens under a gold standard economy too, BTW. Inflation is caused by increases in money supply. When the California gold rush hit, inflation soared. There was more gold (i.e. money) thus the value of money decreased. Therefore, as I said, in order for the US to return to a gold standard and see the value of money increase, it would require the amount of money in the economy to decrease.

meaning of "soared" for a gold standard means the value of gold may have decreased by 20% over a period of a a decade, and then in a few years it returned to its previous value and went even higher. During the hyperinflation of 1923, the deutchmark decreased to a trillionth of its 1918 value. There is no lower limit on the value of fiat money, and it's value can be destroyed in a matter of months.

The gold standard is superior in every way to fiat money, unless you happen to be a politician who wants to loot the savings of your nation's citizens.

 

[bripat9643]

If Texas wants to waste its money building up stockpiles of gold, then by all means it can do so.

The Gold Standard has its own problems.

People have short memories if they can't remember the Nixon Shock: Nixon Shock - Wikipedia the free encyclopedia

The current world monetary system assigns no special role to gold; indeed, the Federal Reserve is not obliged to tie the dollar to anything. It can print as much or as little money as it deems appropriate. There are powerful advantages to such an unconstrained system. Above all, the Fed is free to respond to actual or threatened recessions by pumping in money. To take only one example, that flexibility is the reason the stock market crash of 1987—which started out every bit as frightening as that of 1929—did not cause a slump in the real economy.

While a freely floating national money has advantages, however, it also has risks. For one thing, it can create uncertainties for international traders and investors. Over the past five years, the dollar has been worth as much as 120 yen and as little as 80. The costs of this volatility are hard to measure (partly because sophisticated financial markets allow businesses to hedge much of that risk), but they must be significant. Furthermore, a system that leaves monetary managers free to do good also leaves them free to be irresponsible—and, in some countries, they have been quick to take the opportunity.[18]

Yeah man, the gold standard has problems such as politicians can not maintain a gargantuan welfare/warfare police state.

If you want to put all your money in a gold-standard system, then go right ahead, but without printing money that a gold-standard undermines, we wouldn't have had a great recession, but instead a great depression. It is also an anti-free market measure, as unlike today where you can choose between gold and cash, the emphasis is on relying on gold to back a currency.

Wrong, numskull. the recession was the result of the fed inflating the supply of credit used to buy houses. That can't happen with a gold standard, so the recession would never have occured.

 

[Toddsterpatriot]

The

Over the long term, it gains value, not loses value. I just posted the evidence. Fiat money, on the other hand, eventually goes to zero in value.

You seem to be confusing a great many things. In fact, it appears that what you really want is a pre-gold standard economy. Because, under the gold standard, $1 US bought you the exact same amount of gold, always and forever.

Inflation happens under a gold standard economy too, BTW. Inflation is caused by increases in money supply. When the California gold rush hit, inflation soared. There was more gold (i.e. money) thus the value of money decreased. Therefore, as I said, in order for the US to return to a gold standard and see the value of money increase, it would require the amount of money in the economy to decrease.

meaning of "soared" for a gold standard means the value of gold may have decreased by 20% over a period of a a decade, and then in a few years it returned to its previous value and went even higher. During the hyperinflation of 1923, the deutchmark decreased to a trillionth of its 1918 value. There is no lower limit on the value of fiat money, and it's value can be destroyed in a matter of months.

The gold standard is superior in every way to fiat money, unless you happen to be a politician who wants to loot the savings of your nation's citizens.

The gold standard is superior in every way to fiat money

Especially if you like deflation and deflationary depressions.

 

[Kondor3]

Hang in there... January 20, 2017, is just around the corner now.

 

[bripat9643]

The

Over the long term, it gains value, not loses value. I just posted the evidence. Fiat money, on the other hand, eventually goes to zero in value.

You seem to be confusing a great many things. In fact, it appears that what you really want is a pre-gold standard economy. Because, under the gold standard, $1 US bought you the exact same amount of gold, always and forever.

Inflation happens under a gold standard economy too, BTW. Inflation is caused by increases in money supply. When the California gold rush hit, inflation soared. There was more gold (i.e. money) thus the value of money decreased. Therefore, as I said, in order for the US to return to a gold standard and see the value of money increase, it would require the amount of money in the economy to decrease.

meaning of "soared" for a gold standard means the value of gold may have decreased by 20% over a period of a a decade, and then in a few years it returned to its previous value and went even higher. During the hyperinflation of 1923, the deutchmark decreased to a trillionth of its 1918 value. There is no lower limit on the value of fiat money, and it's value can be destroyed in a matter of months.

The gold standard is superior in every way to fiat money, unless you happen to be a politician who wants to loot the savings of your nation's citizens.

The gold standard is superior in every way to fiat money

Especially if you like deflation and deflationary depressions.

Deflation occurs during ever recession because the demand for money increases as people cut down on their spending and trying to increase their cash reserves. Deflation is an effect of a recession, not the cause.

 

[Toddsterpatriot]

The

Over the long term, it gains value, not loses value. I just posted the evidence. Fiat money, on the other hand, eventually goes to zero in value.

You seem to be confusing a great many things. In fact, it appears that what you really want is a pre-gold standard economy. Because, under the gold standard, $1 US bought you the exact same amount of gold, always and forever.

Inflation happens under a gold standard economy too, BTW. Inflation is caused by increases in money supply. When the California gold rush hit, inflation soared. There was more gold (i.e. money) thus the value of money decreased. Therefore, as I said, in order for the US to return to a gold standard and see the value of money increase, it would require the amount of money in the economy to decrease.

meaning of "soared" for a gold standard means the value of gold may have decreased by 20% over a period of a a decade, and then in a few years it returned to its previous value and went even higher. During the hyperinflation of 1923, the deutchmark decreased to a trillionth of its 1918 value. There is no lower limit on the value of fiat money, and it's value can be destroyed in a matter of months.

The gold standard is superior in every way to fiat money, unless you happen to be a politician who wants to loot the savings of your nation's citizens.

The gold standard is superior in every way to fiat money

Especially if you like deflation and deflationary depressions.

Deflation occurs during ever recession because the demand for money increases as people cut down on their spending and trying to increase their cash reserves. Deflation is an effect of a recession, not the cause.

Deflation occurs...

When the money supply grows more slowly than the economy.
For instance, if output rises 3% but you only dig 1% more gold out of the ground.

 

[Dont Taz Me Bro]

It is like the OP wants us to know he is stupid and delusional.

The bank will either be a pointless waste of money or illegal so a pointless waste of money.

Lots of local currencies exist around the country.

lol

Try and educate yourself. You'll look less ignorant in the future.

Funny money 11 local currencies - BerkShares 1 - CNNMoney

 

[thereisnospoon]

Texas is a joke, no one cares.

Ha ha...You're just pissed because they are not kissing the federal government's pinky ring.

 

[thereisnospoon]

Texas is a joke, no one cares.

You and the feds won't think it's a joke when everyone stops using federal reserve notes.

Yeah, trillions versus jack-shit, not worried.

Trillions of worthless paper and fabric.
Do you realize that if the countries holding US Currency and/or debt decide to sell off the US Dollar or call in their holdings to be repaid, this country's banking system would collapse.

 

[amrchaos]

Ah, that is part of the risk in dealing with commodities. A booming economy with a strenghten dollar lowers the price of minerals and resources.

That is why when you see gold start dipping with god economic indicators, you sell that joker immediately. You road the upswing of the roller coaster, get off and look for something else that is going up! No need to ride that bad boy down.

It is called playing the markets, and if the Bank stays in gold and don't over exchange the gold notes, there is controlled lost(yes, the bank can lose money, but it does not become insolvent if it refuses to exchange currency for gold notes. i.e. Gold notes only redeem gold )

 

[Toddsterpatriot]

Federal reserve notes have lost 95% of their value since 1914.

When fiat money loses its value, it's because the money supply is increasing. When gold backed money loses it's value, it's because the money supply has decreased.

Gold backed money almost never loses its value. The dollar was worth more at the end of the 19th century than it was worth at the beginning.

Gold backed money almost never loses its value.

It would have lost about 2/3rds of its value between 1980 and 1999.
And over 1/3rd since September 2011.

Ah, that is part of the risk in dealing with commodities. A booming economy with a strenghten dollar lowers the price of minerals and resources.

That is why when you see gold start dipping with god economic indicators, you sell that joker immediately. You road the upswing of the roller coaster, get off and look for something else that is going up! No need to ride that bad boy down.

It is called playing the markets, and if the Bank stays in gold and don't over exchange the gold notes, there is controlled lost(yes, the bank loses money)

That is why when you see gold start dipping with god economic indicators, you sell that joker immediately.

And when your currency is backed by that joker?????

 

[amrchaos]

Federal reserve notes have lost 95% of their value since 1914.

When fiat money loses its value, it's because the money supply is increasing. When gold backed money loses it's value, it's because the money supply has decreased.

Gold backed money almost never loses its value. The dollar was worth more at the end of the 19th century than it was worth at the beginning.

Gold backed money almost never loses its value.

It would have lost about 2/3rds of its value between 1980 and 1999.
And over 1/3rd since September 2011.

Ah, that is part of the risk in dealing with commodities. A booming economy with a strenghten dollar lowers the price of minerals and resources.

That is why when you see gold start dipping with god economic indicators, you sell that joker immediately. You road the upswing of the roller coaster, get off and look for something else that is going up! No need to ride that bad boy down.

It is called playing the markets, and if the Bank stays in gold and don't over exchange the gold notes, there is controlled lost(yes, the bank loses money)

That is why when you see gold start dipping with god economic indicators, you sell that joker immediately.

And when your currency is backed by that joker?????

If we are talking about the Bank, you 'could' exchange it for currency, but why? Better to redeem the notes and hold gold until the bottom falls out, and then buy gold with the currency gained at early sell point.

In other words, for the bank, sell notes for currency. when gold turns , redeem notes for gold some currency(stipulation--notes only redeem gold, but letting lose currency at the beginning will encourage desperate holders of notes to agree) . shift that balance to only gold as gold prices drop--hold currency. Then when the bottom of gold prices is met, use half of currency to buy more gold cheaply. The Bank survives because it did not note all its gld, and still hold currency.

For the gold note holder, either sell when it first dip, or hold onto for several years as in when gold prices return to the level you bought it. Any other action is lost.

Only one getting burned here is the seller of gold notes during the time of low gold prices.--Well, not the bank since it gains currency to buy gold within order to print more gold notes. They made out like bandits and re-fertilizing the ground for profits..

Now if the gold market just crash--The bank should happily redeem all notes for gold--or, the gold note holder has to sit on his butt and pray the market recovers or face lost.

 

[Bombur]

It is like the OP wants us to know he is stupid and delusional.

The bank will either be a pointless waste of money or illegal so a pointless waste of money.

Lots of local currencies exist around the country.

lol

Try and educate yourself. You'll look less ignorant in the future.

Funny money 11 local currencies - BerkShares 1 - CNNMoney

lol