Quick Ron Paul questions.

[NoStateofMind]

What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

 

[LegendKiller]

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

Gloom and doom bullcrap. If the US economy collapsed there would be more to worry about than currency. As far as it being worthless, everything is cyclical. If it were to be worthless than nobody would be taking on more debt.

Your logic is flawed from step1.

 

[BeauJangles]

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

That's your answer? More questions?

There is no good reason to spend the billions and billions of dollars required to move backwards to a gold standard. The only possible reason is if our economy collapses - well, what if a giant meteor comes and annihilates our gold reserves? What do we do then?

People have provided ample links to show that fiat-based currencies recover relatively quickly from economic collapses and that those collapses are fewer and further between than on the gold standard.

What you're proposing is annihilating a system that has worked exceptionally well for this country because you're afraid of our weakening dollar instead of addressing the actual issue - the dollar. Why is it weak? Look at our trade deficit, look at our spending. Addressing THOSE issues are what's key here, not reforming our monetary policy to reflect ideals two hundred years ago. We want to find the best solution, one that addresses the most pertinent issues, not a nuclear bomb that destroys everything because of some irresponsible spending.

 

[NoStateofMind]

Originally posted by: LegendKiller

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

Gloom and doom bullcrap. If the US economy collapsed there would be more to worry about than currency. As far as it being worthless, everything is cyclical. If it were to be worthless than nobody would be taking on more debt.

Your logic is flawed from step1.

Answer the question please. Thats all I ask. It is not impossible for the economy to collapse, saying so would be completely ignorant of history. So I ask again:

What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed?

 

[NoStateofMind]

Originally posted by: BlinderBomber

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

That's your answer? More questions?

There is no good reason to spend the billions and billions of dollars required to move backwards to a gold standard. The only possible reason is if our economy collapses - well, what if a giant meteor comes and annihilates our gold reserves? What do we do then?

People have provided ample links to show that fiat-based currencies recover relatively quickly from economic collapses and that those collapses are fewer and further between than on the gold standard.

What you're proposing is annihilating a system that has worked exceptionally well for this country because you're afraid of our weakening dollar instead of addressing the actual issue - the dollar. Why is it weak? Look at our trade deficit, look at our spending. Addressing THOSE issues are what's key here, not reforming our monetary policy to reflect ideals two hundred years ago. We want to find the best solution, one that addresses the most pertinent issues, not a nuclear bomb that destroys everything because of some irresponsible spending.

I didn't quote you, so it wasn't directed to you, but if you would like to answer the questions, please do so

 

[StageLeft]

mavtek3100 Your post was too short. Can you give some more details?

 

[LegendKiller]

Originally posted by: PC Surgeon

Originally posted by: LegendKiller

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

Gloom and doom bullcrap. If the US economy collapsed there would be more to worry about than currency. As far as it being worthless, everything is cyclical. If it were to be worthless than nobody would be taking on more debt.

Your logic is flawed from step1.

Answer the question please. Thats all I ask. It is not impossible for the economy to collapse, saying so would be completely ignorant of history. So I ask again:

What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed?

What would a gold backed currency be worth? We essentially still had one during the GD and it didn't do anything. If anything, countries that had a gold backed currency exited the GD after those that did not have a hard peg. Gold is only worth something when people can buy it, nobody could back then. Sure, the dollar would go down, but that doesn't mean anything as it would go back up.

There is no real difference. The dollar is backed by the ability to transact in the good backing the dollar, our economy. Gold is backed by a shiny metal which has a value backed by people wanting it to make stuff and be wealthy. If they cannot make stuff, or be wealthy, then it's worthless.

Despite what you think, nobody is going to just dump US dollars, so your question is ridiculous. Doing so would sink the world into a massive depression beyond any imaginable scale. It's in everybody's best interest to keep the interlocking economies going.

 

[CitizenKain]

Originally posted by: PC Surgeon

Originally posted by: LegendKiller

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

Gloom and doom bullcrap. If the US economy collapsed there would be more to worry about than currency. As far as it being worthless, everything is cyclical. If it were to be worthless than nobody would be taking on more debt.

Your logic is flawed from step1.

Answer the question please. Thats all I ask. It is not impossible for the economy to collapse, saying so would be completely ignorant of history. So I ask again:

What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed?

We would have a collapsed economy and a lot of gold sitting around doing nothing. Then when you sell the gold to get money your economy is now worth less. Now how is that better?

 

[NoStateofMind]

Originally posted by: LegendKiller

Originally posted by: PC Surgeon

Originally posted by: LegendKiller

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

Gloom and doom bullcrap. If the US economy collapsed there would be more to worry about than currency. As far as it being worthless, everything is cyclical. If it were to be worthless than nobody would be taking on more debt.

Your logic is flawed from step1.

Answer the question please. Thats all I ask. It is not impossible for the economy to collapse, saying so would be completely ignorant of history. So I ask again:

What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed?

What would a gold backed currency be worth? We essentially still had one during the GD and it didn't do anything. If anything, countries that had a gold backed currency exited the GD after those that did not have a hard peg. 1Gold is only worth something when people can buy it, nobody could back then. 2Sure, the dollar would go down, but that doesn't mean anything as it would go back up.

1) Thats because gold was the currency. To say a gold necklace or ring wasn't able to be had on the market wouldn't be true.

2) The dollar wouldn't just go down, it would be kindling for the fire. Hyperinflation like in Germany circa 1923. The FED (with government help) is doing the same things Germany did, infusing more money to stave off a recession all the while debasing its currency. There were other factors as well, but we should not ignore history. There are some striking similarities with early 20th century Germany, printing massive amounts of fiat, not backed by gold, not raising taxes but instead relied on borrowing. This (to me) sounds eerily similar to our government and FED. The question is, why now should we ignore the same signs? Should we blindly except that our government and FED have our best interests at heart? Or should we at least heed the warnings from histories ghosts and try to do something about it?

3There is no real difference. The dollar is backed by the ability to transact in the good backing the dollar, our economy. 4 Gold is backed by a shiny metal which has a value backed by people wanting it to make stuff and be wealthy. If they cannot make stuff, or be wealthy, then it's worthless.

3)I think the confidence in the dollar plays a huge role, but what happens when that value is lost? What happens when the confidence is lost? You lose one, you lose both. The weaker the dollar gets, the more unwilling other nations will be to take it. If they see America's debt and the amount we borrow, along with the monetization of debt, you can see how other countries would be apprehensive. Other nations depend on us, we depend on them and if they see a sinking ship they will do what it takes to protect themselves and their economy, leaving us to lick our wounds.

4)That precious metal (gold) has held a relative value through the majority of civilizations throughout history. Even during "fiat" currencies gold has held its stature as a desirable product and good for trade.

Despite what you think, nobody is going to just dump US dollars, so your question is ridiculous. Doing so would sink the world into a massive depression beyond any imaginable scale. It's in everybody's best interest to keep the interlocking economies going.

Like I said in point #3


We cannot predict the future my friend but we can get a general direction by reading history . We mustn't think that "it won't happen here". What makes us impervious to such a thing? I say no, be on guard and research histories economic trends.

 

[NoStateofMind]

Originally posted by: CitizenKain

We would have a collapsed economy and a lot of gold sitting around doing nothing. Then when you sell the gold to get money your economy is now worth less. Now how is that better?

Go read history to have a better informed answer.

 

[halik]

Originally posted by: LegendKiller

Originally posted by: SleepWalkerX

Whoops, sorry I missed this post.

In today's age it would be simple. Transactions are made through computers anyway. It would be calculated right then. What are you talking about no profit? That doesn't make sense. Also, if a currency is unstable and fluctuates like crazy then there's no way a business would accept it or it would even be a standard. Its easy to track that anyway. Its ultimately the influx of money that creates inflation (from the money side of things).

Are you kidding me? do you know what it costs to transact in foreign currencies? First off, any business would have to have up to the minute tables, or fixed rates per day. Additionally, there would be overhead for each transaction, whether it was layed on by the business, or by the transaction medium (such as a CC card) since, by the time the transaction is closed and funds have been transferred, rates could have moved significantly.

That's why CC Companies charge ridiculous rates for currency translation when you are overseas. They give you horrible exchange rates, as does any ForEx desk at an airport or wherever.

"It's easy to track", ROFL, I love how people who have no flucking clue about ForEx translation can toss around "easy to track" like they know so fricking much.

The amount of arbitrage that can be undertaken increased geometrically the further away from a real exchange the transaction takes place. This is further increased geometrically the more currencies that are added into the transaction structure. As such, prices are increased to take into account the risk of increased transaction variance due to currency translation.

In other words, everything would have to take into account the risk of everybody getting screwed by delayed settlement dates. Overall this would reduce the transparency and efficiency of the market. The overhead would be gained by people arbitraging the system, or by those charging higher transaction costs.

Look at how much ATM machines charge for just accessing different data systems. Hell, the transaction cost for the ATM machine in my building's basement is $3.00 for Chase and another $2.00 for BoA.

Do you know what the favored currency was when we had a fractionalized banking system?

The Sterling, because it was the only one that major transactors knew was stable. That's because state banks were a fricking mockery and the international scene knew it. Our whole financial system was the laughing stock of the world and yet people think the 1800's were so great for the gold standard.

This country was a bunch of piss-poor obligors on every debt we owed. We swindled international investors out of millions of dollars due to hucksters creating tracks to nowhere, banks racking up bad debts, states defaulting on loans the instant they took them out, and our banking system unable to contend with all of the problems, especially when their biggest motivation was to bury other banks by creating runs on the securities they held in reserve.

You people amaze me.

Most Large multinationals have in-house forex hedging department (to protect themselves from fluctuations)... I'm sure they'll be ecstatic about the prospect of hedging again goats, stones, gold, donuts and whatever else 'currency' they get for their products :roll:

This is by far the stupidest thing to come out of Ron Paul's mouth yet; I'm astounded you imbeciles actually subscribe to it.

 

[BeauJangles]

Originally posted by: PC Surgeon

Originally posted by: CitizenKain

We would have a collapsed economy and a lot of gold sitting around doing nothing. Then when you sell the gold to get money your economy is now worth less. Now how is that better?

Go read history to have a better informed answer.

And how many years are you basing your glorious gold standard on?

 

[SleepWalkerX]

Originally posted by: LegendKiller

Originally posted by: PC Surgeon

Originally posted by: LegendKiller

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

Gloom and doom bullcrap. If the US economy collapsed there would be more to worry about than currency. As far as it being worthless, everything is cyclical. If it were to be worthless than nobody would be taking on more debt.

Your logic is flawed from step1.

Answer the question please. Thats all I ask. It is not impossible for the economy to collapse, saying so would be completely ignorant of history. So I ask again:

What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed?

What would a gold backed currency be worth? We essentially still had one during the GD and it didn't do anything.

I think gold demand dropped globally, but its kinda hard to say what its worth, relative to America, when its illegal. Roosevelt eventually made it illegal to own.

http://en.wikipedia.org/wiki/Trading_with_the_Enemy_Act

Originally posted by: LegendKiller
If anything, countries that had a gold backed currency exited the GD after those that did not have a hard peg. Gold is only worth something when people can buy it, nobody could back then. Sure, the dollar would go down, but that doesn't mean anything as it would go back up.

You're right, actually. People were looking for other forms of currency. Guess which country avoided the Great Depression? I'll go ahead and tell ya. China. They used a silver backed currency that still had worth.

Originally posted by: LegendKiller
There is no real difference. The dollar is backed by the ability to transact in the good backing the dollar, our economy. Gold is backed by a shiny metal which has a value backed by people wanting it to make stuff and be wealthy. If they cannot make stuff, or be wealthy, then it's worthless.

Despite what you think, nobody is going to just dump US dollars, so your question is ridiculous. Doing so would sink the world into a massive depression beyond any imaginable scale. It's in everybody's best interest to keep the interlocking economies going.

I dunno about that. What do we really have that the rest of the world needs from us? I know the rest of the world would slump as far as economies go, but we would definitely have it the worst if we fell in started heading into another depression.

 

[SleepWalkerX]

Originally posted by: halik

Originally posted by: LegendKiller

Originally posted by: SleepWalkerX

Whoops, sorry I missed this post.

In today's age it would be simple. Transactions are made through computers anyway. It would be calculated right then. What are you talking about no profit? That doesn't make sense. Also, if a currency is unstable and fluctuates like crazy then there's no way a business would accept it or it would even be a standard. Its easy to track that anyway. Its ultimately the influx of money that creates inflation (from the money side of things).

Are you kidding me? do you know what it costs to transact in foreign currencies? First off, any business would have to have up to the minute tables, or fixed rates per day. Additionally, there would be overhead for each transaction, whether it was layed on by the business, or by the transaction medium (such as a CC card) since, by the time the transaction is closed and funds have been transferred, rates could have moved significantly.

That's why CC Companies charge ridiculous rates for currency translation when you are overseas. They give you horrible exchange rates, as does any ForEx desk at an airport or wherever.

"It's easy to track", ROFL, I love how people who have no flucking clue about ForEx translation can toss around "easy to track" like they know so fricking much.

The amount of arbitrage that can be undertaken increased geometrically the further away from a real exchange the transaction takes place. This is further increased geometrically the more currencies that are added into the transaction structure. As such, prices are increased to take into account the risk of increased transaction variance due to currency translation.

In other words, everything would have to take into account the risk of everybody getting screwed by delayed settlement dates. Overall this would reduce the transparency and efficiency of the market. The overhead would be gained by people arbitraging the system, or by those charging higher transaction costs.

Look at how much ATM machines charge for just accessing different data systems. Hell, the transaction cost for the ATM machine in my building's basement is $3.00 for Chase and another $2.00 for BoA.

Do you know what the favored currency was when we had a fractionalized banking system?

The Sterling, because it was the only one that major transactors knew was stable. That's because state banks were a fricking mockery and the international scene knew it. Our whole financial system was the laughing stock of the world and yet people think the 1800's were so great for the gold standard.

This country was a bunch of piss-poor obligors on every debt we owed. We swindled international investors out of millions of dollars due to hucksters creating tracks to nowhere, banks racking up bad debts, states defaulting on loans the instant they took them out, and our banking system unable to contend with all of the problems, especially when their biggest motivation was to bury other banks by creating runs on the securities they held in reserve.

You people amaze me.

Most Large multinationals have in-house forex hedging department (to protect themselves from fluctuations)... I'm sure they'll be ecstatic about the prospect of hedging again goats, stones, gold, donuts and whatever else 'currency' they get for their products :roll:

This is by far the stupidest thing to come out of Ron Paul's mouth yet; I'm astounded you imbeciles actually subscribe to it.

This sounds like a pretty stupid comment considering gold is more than $900 an oz right now. I'm pretty sure those companies would be ecstatic if they had bought gold a few years ago.

 

[BeauJangles]

Originally posted by: SleepWalkerX

Originally posted by: LegendKiller

Originally posted by: PC Surgeon

Originally posted by: LegendKiller

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

Gloom and doom bullcrap. If the US economy collapsed there would be more to worry about than currency. As far as it being worthless, everything is cyclical. If it were to be worthless than nobody would be taking on more debt.

Your logic is flawed from step1.

Answer the question please. Thats all I ask. It is not impossible for the economy to collapse, saying so would be completely ignorant of history. So I ask again:

What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed?

What would a gold backed currency be worth? We essentially still had one during the GD and it didn't do anything.

I think gold demand dropped globally, but its kinda hard to say what its worth, relative to America, when its illegal. Roosevelt eventually made it illegal to own.

http://en.wikipedia.org/wiki/Trading_with_the_Enemy_Act

Originally posted by: LegendKiller
If anything, countries that had a gold backed currency exited the GD after those that did not have a hard peg. Gold is only worth something when people can buy it, nobody could back then. Sure, the dollar would go down, but that doesn't mean anything as it would go back up.

You're right, actually. People were looking for other forms of currency. Guess which country avoided the Great Depression? I'll go ahead and tell ya. China. They used a silver backed currency that still had worth.

Originally posted by: LegendKiller
There is no real difference. The dollar is backed by the ability to transact in the good backing the dollar, our economy. Gold is backed by a shiny metal which has a value backed by people wanting it to make stuff and be wealthy. If they cannot make stuff, or be wealthy, then it's worthless.

Despite what you think, nobody is going to just dump US dollars, so your question is ridiculous. Doing so would sink the world into a massive depression beyond any imaginable scale. It's in everybody's best interest to keep the interlocking economies going.

I dunno about that. What do we really have that the rest of the world needs from us? I know the rest of the world would slump as far as economies go, but we would definitely have it the worst if we fell in started heading into another depression.

Are you kidding? China didn't even have a modernized economy in the 1920s. Please don't compare it to the US, Britain, Germany, France, et al, who were active international trade partners before the depression.

Second, the US exported around 1.1 trillion dollars worth of goods in 2004. So, we have a lot of stuff the rest of the world wants.

 

[SleepWalkerX]

Originally posted by: LegendKiller

Originally posted by: SleepWalkerX


Doesn't this happen already under the dollar? Currencies already compete. One day the dollar may end up dropping in price in relation to another currency. It doesn't seem like
That's another interesting thing. Even ATMs are starting to jack up the price for transactions thanks to our inflation.

http://www.abcnews.go.com/GMA/story?id=4196835

Yeah what happened was people in their state were forced to use their state currency. Remember, just because you CAN have competing currencies doesn't mean you WILL many get competing currencies. Eventually, one form will remain dominant. In our history's case, this happened too. People got together and formed a nationally accepted currency. Now unfortunately there was no way to compete against the state's monopoly so we still had to rely on the state to force a national one, but yes it did end up being better.

Yes, but to have competing currencies within the US? That's just simple idiocy and will undermine our greatest strength, economic organization.

Ok I don't think so.

Originally posted by: LegendKiller
ROFL, the fees are up because of inflation? Are you fricking kidding me? The article itself mentioned that it is about slumping revenues from other things, not inflation. They are looking for revenue sources, this is a good one since it's captive money. Inflation means the cost of the determinants inputted into the process are more expensive. If anything, the determinants are cheaper in IT. You completely fail at logic. Man, you are a loon.

Good call. It isn't directly because of inflation, but are you going to admit that inflation has nothing to do with it?

Originally posted by: LegendKiller
So, the chaos we will have for years is a good thing? Please, get a grip on yourself. There is nothing good about chaos.

Oh no! Gloom, doom, and chaos!!

..

If you had a choice is there any reason you wouldn't pick the most valued/stable currency available?

You raise a lot of interesting concerns. Check out this article. It addresses a lot of them.

http://vdare.com/pb/080126_currencies.htm

 

[SleepWalkerX]

Originally posted by: BlinderBomber

Originally posted by: SleepWalkerX

Originally posted by: LegendKiller

Originally posted by: PC Surgeon

Originally posted by: LegendKiller

Originally posted by: PC Surgeon
What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed? What would the gold be worth? KISS.

Gloom and doom bullcrap. If the US economy collapsed there would be more to worry about than currency. As far as it being worthless, everything is cyclical. If it were to be worthless than nobody would be taking on more debt.

Your logic is flawed from step1.

Answer the question please. Thats all I ask. It is not impossible for the economy to collapse, saying so would be completely ignorant of history. So I ask again:

What happens when/if the economy collapses and we have billions of paper currency? What would it be worth? Now what would happen if we were on the gold standard and the economy collapsed?

What would a gold backed currency be worth? We essentially still had one during the GD and it didn't do anything.

I think gold demand dropped globally, but its kinda hard to say what its worth, relative to America, when its illegal. Roosevelt eventually made it illegal to own.

http://en.wikipedia.org/wiki/Trading_with_the_Enemy_Act

Originally posted by: LegendKiller
If anything, countries that had a gold backed currency exited the GD after those that did not have a hard peg. Gold is only worth something when people can buy it, nobody could back then. Sure, the dollar would go down, but that doesn't mean anything as it would go back up.

You're right, actually. People were looking for other forms of currency. Guess which country avoided the Great Depression? I'll go ahead and tell ya. China. They used a silver backed currency that still had worth.

Originally posted by: LegendKiller
There is no real difference. The dollar is backed by the ability to transact in the good backing the dollar, our economy. Gold is backed by a shiny metal which has a value backed by people wanting it to make stuff and be wealthy. If they cannot make stuff, or be wealthy, then it's worthless.

Despite what you think, nobody is going to just dump US dollars, so your question is ridiculous. Doing so would sink the world into a massive depression beyond any imaginable scale. It's in everybody's best interest to keep the interlocking economies going.

I dunno about that. What do we really have that the rest of the world needs from us? I know the rest of the world would slump as far as economies go, but we would definitely have it the worst if we fell in started heading into another depression.

Are you kidding? China didn't even have a modernized economy in the 1920s. Please don't compare it to the US, Britain, Germany, France, et al, who were active international trade partners before the depression.

Second, the US exported around 1.1 trillion dollars worth of goods in 2004. So, we have a lot of stuff the rest of the world wants.

The rest of the world's money was in relation to gold. China's money was silver in relation to gold. If China was on the gold standard they would've slumped too.

http://eh.net/XIIICongress/cd/papers/3Lai68.pdf

As far as our exports are concerned. What I mean is our exports are, in a way, replaceable. If we stop exporting TVs or cars then Japan will take that up. Agriculture? Others can farm too. I'm not saying that our exports are not important. And there will be a very disastrous outcome globally if we went into a depression, but we would suffer the most. This is all speculative and imo obviously.

 

[NoStateofMind]

Originally posted by: BlinderBomber

Originally posted by: PC Surgeon

Originally posted by: CitizenKain

We would have a collapsed economy and a lot of gold sitting around doing nothing. Then when you sell the gold to get money your economy is now worth less. Now how is that better?

Go read history to have a better informed answer.

And how many years are you basing your glorious gold standard on?

Uhh I don't know, maybe the majority of economic history?

 

[LegendKiller]

Originally posted by: Mavtek3100

1. Glenn Beck specifically mentions it. RP knows nothing about the topic, but he's sure as hell able to move onto FDIC and FHA, which is completely unrelated. It's akin to somebody asking me what I think about Ford transmissions and me discussing GM's windshields. He's a buffoon who has tunnel vision to the Fed.


2. How are the assets depreciating? If anything, with rates declining, the assets are appreciating. If you have proof they are depreciating, show it. How do their liabilities outweigh their assets? From what I can see, and what I know about finance, the formula is A = L + E (or C in the Fed speak).

Again, how is the money created out of thin air? Is there not wealth backing the money and other assets? Are there not other investments? Do people not put money into the system? Is the main asset not the ability of this economy to generate cash?

The Fed doesn't inject money to pay for defaulted notes. If you haven't checked, most banks are taking huge losses and aren't getting bailed out by the Fed. The rates are lowered, not for the banks, but for everybody else.

3. What does far more debt than capital saved matter? The same thing would occur with our without the Fed.

4. What data has shown you that we are in a recession? Is GDP not increasing? Last I checked Q4 GDP came in *HIGHER* than projections at still decent growth. If that's the case, since we are still only 1/3 of the way into Q1, it's impossible for us to even be in a recession, since it requires 2 full quarters of negative growth. Sorry sparky, your logic fails yet again.

What foreign capital? What about foreign investors buying any of our debt assets? What about them investing in our financial companies? Are you blind?

How does usary create wealth? You keep thinking that wealth is created out of nothing. Sorry but wealth is created out of the net proceeds of revenue and expense, usary is nothing more than shifting wealth. Debt will be paid by the future creation of wealth. I fully agree that we need to stop debt spending, paying down the wealth, but how does that get back to eliminating the Fed, considering that debt is still incurred with or without a Fed.

The Euro isn't a competitive currency. If it were then you'd still see Deutsch Marks traded to extensive amounts. Sorry, it is *THE* currency for the euro-zone that's accepted it. Europe's currency is appreciating relative to ours because they have less problems than we do, it's all relative. That's not to say that have lower inflation. What's funny is that you are arguing against our CB to a zone that has an even stronger CB. Yet, somehow, their currency is better.

Now, if you have two different countries, both have fiat currencies with strong CB's, if a CB were bad, then how does one currency go up while another goes down?


5. I have been through Sarb-Ox audits and I do think they are egregous, but they are needed and so is that regulation.

6. A lot more people listen to my logic about the estate tax with our without the snide remarks or insults since I speak the truth. It's better than stupidity and ignorance tinging your posts when you have little forethought into what consequences your policies will inflict.

7. Which bubble? The investors in this latest bubble are using domestic and foreign capital, all the while getting charged taxes for it. How is it possible that taxes are charged and people still invest? Enough to make an asset bubble? The logic fails!

8. Even Greenspan acknowledged in his book that the Fed had almost no control over mortgage rates. What's funny is that you think they do. The Fed cannot control the long-term rates to any great extent when 10+ trillion in domestic and foreign capital rushes into one asset class after spurning another. I guess you can explain how assets shifted out of the stock market, into housing, and how that had no affect on long-term rates, but the Fed magically did!


9. You remind me of the typical gloom and doomer who thinks that everything will stay down. Please, it will come back. If it's 5 years or 10 years, who cares? As long as it comes back. OMG, somebody thought that it would come home to roost? Broken clocks are right twice a day.

10. Thanks for answering this question.

11. So what if those prices are going up? You think that because speculation into where gold will be, or even just demand due to uncertainty proves anything? CPI, even with it's artificially lower rate, wouldn't justify the price increase. The dollar itself is just on a cyclical pattern, as it has been before.

12. That article mentioned real wages in manufacturing. Who cares? What about the rest of the information?



13. I hope that things keep going and I am sure that we will pay it back.

14. There is no definitive proof. Where is *YOUR* proof behind it? Or are you just going to quote more?


15. Thanks for answering this.

16. Great prognostication. Wanna put a wager on it?

17. The evidence is alarming for a lot of things. However, evidence isn't proof.

18. Any great nation off gold standard will not remain to be great, what nations? Emperical proof is against. - Proof? Empirical evidence says he is wrong as Halik linked. I guess he has some Mises or Friedman theory that counters that, eh?

19. I have already shown you. ATM machines.

20. Hey, according to you, evidence makes it true.

 

[LegendKiller]

Originally posted by: PC Surgeon

Originally posted by: BlinderBomber

Originally posted by: PC Surgeon

Originally posted by: CitizenKain

We would have a collapsed economy and a lot of gold sitting around doing nothing. Then when you sell the gold to get money your economy is now worth less. Now how is that better?

Go read history to have a better informed answer.

And how many years are you basing your glorious gold standard on?

Uhh I don't know, maybe the majority of economic history?

Which shows that society was much more chaotic and proved that it doesn't work well. Compared to the prior 200 years, the last 100 has been much more prosperous and stable.

 

[BeauJangles]

Originally posted by: PC Surgeon

Originally posted by: BlinderBomber

Originally posted by: PC Surgeon

Originally posted by: CitizenKain

We would have a collapsed economy and a lot of gold sitting around doing nothing. Then when you sell the gold to get money your economy is now worth less. Now how is that better?

Go read history to have a better informed answer.

And how many years are you basing your glorious gold standard on?

Uhh I don't know, maybe the majority of economic history?

my advice would be to look at how instable the world's economies have been prior to the 20th century. Take a look at how Spain, France, England, Italy, et al spent themselves to death despite using something resembling a "gold standard." Take a look at the severe depressions that hit the United States in the 19th century.

Things weren't so rosy. In fact, I'd say things have been going much, much better in the past seventy years.

 

[0roo0roo]

i think half his support are pot heads. too bad his other positions are nuts.

 

[NoStateofMind]

Originally posted by: LegendKiller

Which shows that society was much more chaotic and proved that it doesn't work well. Compared to the prior 200 years, the last 100 has been much more prosperous and stable.

No, actually it shows government greed. Governments move off of a hard (gold & silver) currency in order to spend more. Fiat works for a time as long as spending is put in check. There are MANY hyperinflation incidents with the fiat monetary system. Hers a few listed on Wikipedia:

Text

Angola
Angola went through its worst inflation from 1991 to 1995. In early 1991, the highest denomination was 50,000 kwanzas. By 1994, it was 500,000 kwanzas. In the 1995 currency reform, 1 kwanza reajustado was exchanged for 1,000 kwanzas. The highest denomination in 1995 was 5,000,000 kwanzas reajustados. In the 1999 currency reform, 1 new kwanza was exchanged for 1,000,000 kwanzas reajustados. The overall impact of hyperinflation: 1 new kwanza = 1,000,000,000 pre 1991 kwanzas.

Argentina
Argentina went through steady inflation from 1975 to 1991. At the beginning of 1975, the highest denomination was 1,000 pesos. In late 1976, the highest denomination was 5,000 pesos. In early 1979, the highest denomination was 10,000 pesos. By the end of 1981, the highest denomination was 1,000,000 pesos. In the 1983 currency reform, 1 Peso Argentino was exchanged for 10,000 pesos. In the 1985 currency reform, 1 austral was exchanged for 1,000 pesos argentino. In the 1992 currency reform, 1 new peso was exchanged for 10,000 australes. The overall impact of hyperinflation: 1 new peso = 100,000,000,000 pre-1983 pesos.

Austria
Between 1921 and 1922, inflation in Austria reached 134%.

Belarus
Belarus went through steady inflation from 1994 to 2002. In 1993, the highest denomination was 5,000 rublei. By 1999, it was 5,000,000 rublei. In the 2000 currency reform, the ruble was replaced by the new ruble at an exchange rate of 1 new ruble = 1,000 old rublei. The highest denomination in 2002 was 50,000 rublei, equal to 50,000,000 pre-2000 rublei.

Bolivia
Bolivia went through its worst inflation between 1984 and 1986. Before 1984, the highest denomination was 1,000 pesos bolivianos. By 1985, the highest denomination was 10 Million pesos bolivianos. In 1985, a Bolivian note for 1 million pesos was worth 55 cents in US dollars, one-thousandth of its exchange value of $5,000 less than three years previously.[6] In the 1987 currency reform, peso boliviano was replaced by boliviano which was pegged to U. S. dollar.

Bosnia-Herzegovina
Bosnia-Hezegovina went through its worst inflation in 1993. In 1992, the highest denomination was 1,000 dinara. By 1993, the highest denomination was 100,000,000 dinara. In the Republika Srpska, the highest denomination was 10,000 dinara in 1992 and 10,000,000,000 dinara in 1993. 50,000,000,000 dinara notes were also printed in 1993 but never issued.

Brazil
From 1986 to 1994, the base currency unit was shifted three times to adjust for inflation in the final years of the Brazilian military dictatorship era. A 1960s cruzeiro was, in 1994, worth less than one trillionth of a US cent, after adjusting for multiple devaluations and note changes. A new currency called real was adopted in 1994, and hyperinflation was eventually brought under control.

Chile
Beginning in 1971, during the presidency of Salvador Allende who had implemented many marxist or radical left programs. Chilean inflation began to rise and reached peaks of 1,200% in 1973. As a result of the hyperinflation, food became scarce and overpriced. The economic and social troubles culminated in the 1973 coup d'état that deposed the democratically-elected Allende and installed a military government led by Augusto Pinochet. Pinochet's free-market economic policy ended the inflation and except for an economic depression in 1981 the economy has fully recovered.

China
As the first user of fiat currency, China has had an early history of troubles caused by hyperinflation. The Yuan Dynasty printed huge amounts of fiat paper money to fund their wars, and the resulting hyperinflation, coupled with other factors, led to its demise at the hands of a revolution. The Republic of China went through the worst inflation 1948-49. In 1947, the highest denomination was 50,000 yuan. By mid-1948, the highest denomination was 180,000,000 yuan. The 1948 currency reform replaced the yuan by the gold yuan at an exchange rate of 1 gold yuan = 3,000,000 yuan. In less than 1 year, the highest denomination was 10,000,000 gold yuan. The highest denomination by a regional bank was 6,000,000,000 yuan issued by XinJiang Provincial Bank in 1949. As the result of the hyperinflation, the New Taiwan dollar was introduced in order to help contain the problem.

Free City of Danzig
Danzig went through its worst inflation in 1923. In 1922, the highest denomination was 1,000 Mark. By 1923, the highest denomination was 10,000,000,000 Mark.

Georgia
Georgia went through its worst inflation in 1994. In 1993, the highest denomination was 100,000 coupons [kuponi]. By 1994, the highest denomination was 1,000,000 coupons. In the 1995 currency reform, a new currency lari was introduced with 1 lari exchanged for 1,000,000 coupons.

Germany
Germany went through its worst inflation in 1923. In 1922, the highest denomination was 50,000 Mark. By 1923, the highest denomination was 100,000,000,000,000 Mark. In December of 1923 the exchange rate from marks to US dollars was 4,000,000,000,000:1. During the worst times, one U.S. dollar was equal to 80 billion Mark.

Greece
Greece went through its worst inflation in 1944. In 1943, the highest denomination was 25,000 drachmai. By 1944, the highest denomination was 100,000,000,000,000 drachmai. In the 1944 currency reform, 1 new drachma was exchanged for 50,000,000,000 drachmai. Another currency reform in 1953 replaced the drachma at an exchange rate of 1 new drachma = 1,000 old drachma. The overall impact of hyperinflation: 1 (1953) drachma = 50,000,000,000,000 pre 1944 drachmai. The Greek inflation rate reached 8.5 billion percent.

Hungary
Hungary went through its worst inflation in modern history in 1945-46. Before 1945, the highest denomination was 1,000 pengo. By the end of 1945, it was 10,000,000 pengo. The highest denomination in mid-1946 was 100,000,000,000,000,000,000 pengo. Banknotes The rate of inflation was 4.19 quintillion (4.19 x 1018) percent. A special currency the adópengo - or tax pengo - was created for tax and postal payments [1]. The value of the adópengo was adjusted each day, by radio announcement. On January 1, 1946 one adópengo equaled one pengo. By late July, one adópengo equaled 2,000,000,000,000,000,000,000 or 2×1021pengo. When the pengo was replaced in August 1946 by the forint, the total value of all Hungarian banknotes in circulation amounted to one-thousandth of one US cent. [7]

One source [2] states that this hyperinflation was purposely started by trained Russian Marxists in order to destroy the Hungarian middle and upper classes. The 1946 currency reform changed the currency to forint. Previously, between 1922 and 1924 inflation in Hungary reached 98%.

Israel
Inflation accelerated in the 1970s, rising steadily from 13% in 1971 to 111% in 1979.From 133% in 1980, it leaped to 191% in 1983 and then to 445% in 1984, threatening to become a four-digit figure within a year or two. In 1985 Israel froze all prices by law. That same year, inflation more than halved, to 185%. Within a few months, the authorities began to lift the price freeze on some items; in other cases it took almost a year. By 1986, inflation was down to 19%.

Krajina
Krajina went through the worst inflation in 1993. In 1992, the highest denomination was 50,000 dinara. By 1993, the highest denomination was 50,000,000,000 dinara. Note that this unrecognized country was reincorporated into Croatia in 1998.

Madagascar
The Malagasy franc had a turbulent time in 2004, losing nearly half its value and sparking rampant inflation. On 1 January 2005 the Malagasy ariary replaced the previous currency at a rate of 0.2 ariary for one Malagsy franc. In May 2005 there were riots over rising inflation, although falling prices have since calmed the situation.

Mexico
The Mexican peso had a turbulent time in late 1980's and early 1990's, culminating in the 1994 economic crisis in Mexico.

Nicaragua
Nicaragua went through the worst inflation from 1987 to 1990. Before 1987, the highest denomination was 1,000 córdobas. By 1987, it was 500,000 córdobas, overprinted on a 1,000-córdoba bill. In the 1988 currency reform, 1 new córdoba was exchanged for 1,000 old córdobas. The highest denomination in 1990 was 100,000,000 new córdobas. In the mid-1990 currency reform, 1 gold cordoba was exchanged for 5,000,000 new córdobas. The overall impact of hyperinflation: 1 gold córdoba = 5,000,000,000 pre-1988 córdobas.

Peru
Peru went through its worst inflation from 1984 to 1990. The highest denomination in 1984 was 50,000 soles de oro. By 1985, it was 500,000 soles de oro. In the 1985 currency reform, 1 inti was exchanged for 1,000 soles de oro. In 1986, the highest denomination was 1,000 intis. It was 20,000,000 intis by 1991. In the 1991 currency reform, 1 nuevo sol was exchanged for 1,000,000 intis. The overall impact of hyperinflation: 1 nuevo sol = 1,000,000,000 pre 1985 soles de oro.

Poland
Poland went through its worst inflation between 1990 and 1993. The highest denomination in 1989 was 200,000 zlotych. It was 1,000,000 zlotych in 1991 and 2,000,000 zlotych in 1992. In the 1994 currency reform, 1 new zloty was exchanged for 10,000 old zlotych. Previously, between 1922 and 1924, Polish inflation reached 275%.

Republika Srpska
Republika Srpska was the breakaway region of Bosnia. As with Krajina, it pegged its currency to that of Yugoslavia. Their bills were almost the same as Krajina's, but they issued fewer and didn't issue currency after 1993.

Romania
Romania is still working through steady inflation. The highest denomination in 1998 was 100,000 lei. By 2000 it was 500,000 lei. In early 2005 it was 1,000,000 lei. In July 2005 the leu was replaced by the new leu at 10,000 old lei = 1 new leu. Inflation in 2005 was 9%. In 2006 the highest denomination is 500 lei (= 5,000,000 old lei).

Russia
Between 1921 and 1922, during the civil war, inflation in Russia reached 213%.

In 1992, the first year of post-Soviet economic reform, inflation was 2,520%, the major cause being the decontrol of most prices in January. In 1993 the annual rate was 840%, and in 1994, 224%. The ruble devalued from about 100 r/$ in 1991 to about 30,000 r/$ in 1999.

Taiwan
Severe inflation existed in the late 1940s due to factors such as corruption and Chinese Civil War. Increasingly higher denominations were issued on the island, up to one million yuan. Inflation was eventually controlled after the new Taiwan dollar was issued in 1949 at a ratio of 40,000-to-1 against the old Taiwan yuan.

Turkey
Throughout the 1990s Turkey dealt with severe inflation rates that finally crippled the economy into a recession in 2001. The highest denomination in 1995 was 1,000,000 lira. By 2000 it was 20,000,000 lira. Recently Turkey has achieved single digit inflation for the first time in decades, and in the 2005 currency reform, introduced the New Turkish Lira; 1 was exchanged for 1,000,000 old lira. There is still double digit inflation from 2005-2007.

Ukraine
Ukraine went through its worst inflation between 1993 and 1995. Before 1993, the highest denomination was 1,000 karbovantsiv. By 1995, it was 1,000,000 karbovantsiv. In 1992, the Ukrainian karbovanets was introduced, which was exchanged with the defunct Soviet ruble at a rate of 1 UAK = 1 SUR. In 1996, during the transition to the Hryvnya and the subsequent phase out of the karbovanets, the exchange rate was 100,000 UAK = 1 UAH. This translates to a hyperinflation rate of approximately 1,400% per month. And to this day Ukraine holds the world record for most inflation in one calendar year, which was set in 1993. [8]

United States
During the Revolutionary War, the Continental Congress authorized the printing of paper currency called continental currency. The easily counterfeited notes depreciated rapidly, giving rise to the expression "not worth a continental."

Between January 1861 and April 1865, the Lerner Commodity Price Index of leading cities in the eastern Confederacy states increased from 100 to over 9000. As the U.S. Civil War dragged on the Confederate States of America dollar had less and less value, until it was almost worthless by the last few months of the war.

Yap
The island of Yap in the Pacific Ocean used varying sized stones as money, of which the largest weighing several tons were the most valuable. The stones had been brought by sea from the Island of Palau 210 km away. The journey was very perilous given the length of the voyage and the rough seas between the islands of Palau and Yap. Many of the stones were lost at sea. The risk associated with procurement of the "money stones" initially made them highly valuable. The Yapese valued them because large stones were quite difficult to steal and were in relatively short supply. However, in 1874, an enterprising Irishman named David O'Keefe hit upon the idea of employing the Yapese to import more "money" in the form of shiploads of large stones, also from Palau. O'Keefe then traded these stones with the Yapese for other commodities such as sea cucumbers and copra. Over time, the Yapese brought thousands of new stones to the island, debasing the value of the old ones. Today they are almost worthless, except as a tourist curiosity.


Yugoslavia
Yugoslavia went through a period of hyperinflation and subsequent currency reforms from 1989 to 1994. The highest denomination in 1988 was 50,000 dinars. By 1989 it was 2,000,000 dinars. In the 1990 currency reform, 1 new dinar was exchanged for 10,000 old dinars. In the 1992 currency reform, 1 new dinar was exchanged for 10 old dinars. The highest denomination in 1992 was 50,000 dinars. By 1993, it was 10,000,000,000 dinars. In the 1993 currency reform, 1 new dinar was exchanged for 1,000,000 old dinars. But before the year was over, the highest denomination was 500,000,000,000 dinars. In the 1994 currency reform, 1 new dinar was exchanged for 1,000,000,000 old dinars. In another currency reform a month later, 1 novi dinar was exchanged for 10~13 million dinars (1 novi dinar = 1 German mark at the time of exchange). The overall impact of hyperinflation: 1 novi dinar = 1 × 1027~1.3 × 1027 pre 1990 dinars.

Zaire (now the Democratic Republic of the Congo)
Zaire went through a period of inflation between 1989 and 1996. In 1988, the highest denomination was 5,000 zaires. By 1992, it was 5,000,000 zaires. In the 1993 currency reform, 1 nouveau zaire was exchanged for 3,000,000 old zaires. The highest denomination in 1996 was 1,000,000 nouveaux zaires. In 1997, Zaire was renamed the Congo Democratic Republic and changed its currency to francs. 1 franc was exchanged for 100,000 nouveaux zaires. The overall impact of hyperinflation: 1 franc = 3 × 1011 pre 1989 zaires.

Zimbabwe, 2000s

At Independence in 1980, the Zimbabwe dollar was worth about $1.50 US. Since then, rampant inflation and the collapse of the economy have severely devalued the currency, causing many organisations to favour using the US dollar instead. Inflation was stable until Robert Mugabe began a program of land reforms that primarily focused on taking land from white farmers and redistributing those properties and assets to others; this in turn sent food production and revenues from export of food plummeting.[9][10]

Early in the 21st century Zimbabwe started to experience hyperinflation. Inflation reached 624% in early 2004, then fell back to low triple digits before surging to a new high of 1,730% in March 2007. In June 2007 the government released the latest figures of 7,638%.[11] The predictions for the annual inflation range from 3,000% (according to the IMF) to 8,000%.[12]

On 16 February 2006, the governor of the Reserve Bank of Zimbabwe, Dr Gideon Gono, announced that the government had printed ZWD 21 trillion in order to buy foreign currency to pay off IMF arrears.

In early May 2006, Zimbabwe's government began rolling the printing presses again to produce about 60 trillion Zimbabwean dollars. The additional currency was required to finance the recent 300% increase in salaries for soldiers and policemen and 200% for other civil servants. The money was not budgeted for the current fiscal year, and the government did not say where it would come from.

In August 2006, the Zimbabwean government issued new currency and asked citizens to turn in old notes; the new currency (issued by the central bank of Zimbabwe) had three zeroes slashed from it. Most financial analysts remained skeptical and said that the new money would not provide relief from record inflation.[13]

In February 2007, the central bank of Zimbabwe declared inflation "illegal", outlawing any raise in prices on certain commodities between March 1 and June 30, 2007. Officials have arrested executives of some Zimbabwean companies for increasing prices on their products. Such measures, frequently tried during other episodes of hyperinflation, have always failed. [14][15]

In June 2007 inflation in Zimbabwe had risen to 11,000% from an earlier estimate of 9,000%. U.S. ambassador Christopher Dell predicted it would reach 1.5 million percent by December 2007.[16], although in the event the IMF estimated a rate of "only" 115,000% for that month, and 150,000% for January 2008.[17] The government is currently circulating a $200,000 note,[18] and reports of extreme shortages of basic foodstuffs, fuel, and medical supplies abound.[19][20] The government instituted a six-month freeze on wages on September 1, 2007. [21]

The Reserve Bank of Zimbabwe issued a $10million note in January 2008, roughly equivalent of 4 US dollars, and not even enough to pay for a hamburger.[22]

The fiat monetary system is far from impeccable, in fact, when it does hit hyperinflation people are left with nothing but kindling. Why is it that after an economic collapse (hyperinflation), governments resort back to hard (gold & silver) currency to stabilize their markets and monetary systems? Why not start with a new fiat currency? Because people would know it wasn't worth anything. They have to get people to see value in it first by using gold, then slowly remove it because of spending.

With the mountain of evidence showing how unstable fiat is or can be, how can anyone be for it? If hyperinflation happened those who stuck with the U.S. dollar would be out of everything. Those who had bought or retained gold/silver would be able to remove themselves from the mass poverty. Thats if you could get it passed through the government confiscating it all. Which is why you buy gold ina foreign market.

Cheers

 

[NoStateofMind]

Originally posted by: BlinderBomber


my advice would be to look at how instable the world's economies have been prior to the 20th century. Take a look at how Spain, France, England, Italy, et al spent themselves to death despite using something resembling a "gold standard." Take a look at the severe depressions that hit the United States in the 19th century.

Things weren't so rosy. In fact, I'd say things have been going much, much better in the past seventy years.

Refer to my response to LK.

 

[CitizenKain]

Originally posted by: PC Surgeon


The fiat monetary system is far from impeccable, in fact, when it does hit hyperinflation people are left with nothing but kindling. Why is it that after an economic collapse (hyperinflation), governments resort back to hard (gold & silver) currency to stabilize their markets and monetary systems? Why not start with a new fiat currency? Because people would know it wasn't worth anything. They have to get people to see value in it first by using gold, then slowly remove it because of spending.

With the mountain of evidence showing how unstable fiat is or can be, how can anyone be for it? If hyperinflation happened those who stuck with the U.S. dollar would be out of everything. Those who had bought or retained gold/silver would be able to remove themselves from the mass poverty. Thats if you could get it passed through the government confiscating it all. Which is why you buy gold ina foreign market.

Cheers

So, a lot of countries going through periods of political, economic, social and various instabilities have money problems and this is surprising? Strangely enough, all the countries on there had something like that happen. Although Yap is hilarious, because they essentially were using a gold standard with other shiny rocks.

Its strange that so many countries that are hugely successful don't instantly switch back to the gold standard after decades of prosperity of using fiat currency. If they only knew how wrong they were, and the solution is to instantly plunge their country into economic chaos to prevent their country from falling into chaos. The "We had to burn the village to save it" theory of economics.