• Guest, The rules for the P & N subforum have been updated to prohibit "ad hominem" or personal attacks against other posters. See the full details in the post "Politics and News Rules & Guidelines."

The Economics Game: Understanding Monetary Policy

Page 5 - Seeking answers? Join the AnandTech community: where nearly half-a-million members share solutions and discuss the latest tech.

Mavtek3100

Senior member
Jan 15, 2008
524
0
0
Originally posted by: LegendKiller
Originally posted by: Mavtek3100


The Fiat system isn't helping anything.
So what is the solution, right now, lay it out.
Allow competing private currencies, not sponsored or created by the government. Effectively imagine Google spending $10 billion on Silver and providing a 50% reserve bank for "Google Credits". They could essentially pay their employees in credits, allow it to be used when purchasing with Google checkout, they could provide banking services, bill pay, direct deposit. Imagine your deposits would immediately have a "credit" value that would not be subject to inflation. If you have 10,000 credits you have $20,000 in 5 years if you didn't touch it you'd have 10,000 credits and $25,000. Google could provide a debit card and they could allow users to use it to provide loans for credit cards or personal or other loans (Prosper like). Ebay/Paypal would freak and immediately provide competition. JPMorgan, Wamu, Chase would have to quickly step up and provide more competition. The name of the game would be finding the currency that held the most value while provided the best service all while being backed by a metals that typically don't inflate or lose value. Hence it would be in the banks best interest for the currency to keep it's value, unlike the system we have now where banks aren't really affected by the value of the currency.
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: Mavtek3100
Originally posted by: LegendKiller
Originally posted by: Mavtek3100


The Fiat system isn't helping anything.
So what is the solution, right now, lay it out.
Allow competing private currencies, not sponsored or created by the government. Effectively imagine Google spending $10 billion on Silver and providing a 50% reserve bank for "Google Credits". They could essentially pay their employees in credits, allow it to be used when purchasing with Google checkout, they could provide banking services, bill pay, direct deposit. Imagine your deposits would immediately have a "credit" value that would not be subject to inflation. If you have 10,000 credits you have $20,000 in 5 years if you didn't touch it you'd have 10,000 credits and $25,000. Google could provide a debit card and they could allow users to use it to provide loans for credit cards or personal or other loans (Prosper like). Ebay/Paypal would freak and immediately provide competition. JPMorgan, Wamu, Chase would have to quickly step up and provide more competition. The name of the game would be finding the currency that held the most value while provided the best service all while being backed by a metals that typically don't inflate or lose value. Hence it would be in the banks best interest for the currency to keep it's value, unlike the system we have now where banks aren't really affected by the value of the currency.
No bank today would be able to survive in its current form with a 50% reserve.

Here is the bottom line though: traditional checking & savings accounts are already obsolete. I can go on an online discount brokerage site, open a brokerage account and put my savings in a variety of investments with an extreme variety of risk/reward for the cost a few ATM withdrawals.
 

LegendKiller

Lifer
Mar 5, 2001
18,261
68
86
Originally posted by: Mavtek3100
Originally posted by: LegendKiller
Originally posted by: Mavtek3100


The Fiat system isn't helping anything.
So what is the solution, right now, lay it out.
Allow competing private currencies, not sponsored or created by the government. Effectively imagine Google spending $10 billion on Silver and providing a 50% reserve bank for "Google Credits". They could essentially pay their employees in credits, allow it to be used when purchasing with Google checkout, they could provide banking services, bill pay, direct deposit. Imagine your deposits would immediately have a "credit" value that would not be subject to inflation. If you have 10,000 credits you have $20,000 in 5 years if you didn't touch it you'd have 10,000 credits and $25,000. Google could provide a debit card and they could allow users to use it to provide loans for credit cards or personal or other loans (Prosper like). Ebay/Paypal would freak and immediately provide competition. JPMorgan, Wamu, Chase would have to quickly step up and provide more competition. The name of the game would be finding the currency that held the most value while provided the best service all while being backed by a metals that typically don't inflate or lose value. Hence it would be in the banks best interest for the currency to keep it's value, unlike the system we have now where banks aren't really affected by the value of the currency.
Banks can barely keep themselves out of trouble, let alone handle currencies. Your system equates to chaos, bank runs, and panic. It's been tried in many countries before and failed. Get out of your libertopian dreams.
 

Mavtek3100

Senior member
Jan 15, 2008
524
0
0
Originally posted by: LegendKiller
Originally posted by: Mavtek3100
Originally posted by: LegendKiller
Originally posted by: Mavtek3100


The Fiat system isn't helping anything.
So what is the solution, right now, lay it out.
Allow competing private currencies, not sponsored or created by the government. Effectively imagine Google spending $10 billion on Silver and providing a 50% reserve bank for "Google Credits". They could essentially pay their employees in credits, allow it to be used when purchasing with Google checkout, they could provide banking services, bill pay, direct deposit. Imagine your deposits would immediately have a "credit" value that would not be subject to inflation. If you have 10,000 credits you have $20,000 in 5 years if you didn't touch it you'd have 10,000 credits and $25,000. Google could provide a debit card and they could allow users to use it to provide loans for credit cards or personal or other loans (Prosper like). Ebay/Paypal would freak and immediately provide competition. JPMorgan, Wamu, Chase would have to quickly step up and provide more competition. The name of the game would be finding the currency that held the most value while provided the best service all while being backed by a metals that typically don't inflate or lose value. Hence it would be in the banks best interest for the currency to keep it's value, unlike the system we have now where banks aren't really affected by the value of the currency.
Banks can barely keep themselves out of trouble, let alone handle currencies. Your system equates to chaos, bank runs, and panic. It's been tried in many countries before and failed. Get out of your libertopian dreams.
Oh SNAP! You got me thar!

It was tried in the 18fucking-hundreds! People went to college to learn how to use the fucking abacus! Come ON! If you keep a real reserve you don't have to worry about runs. The profit potential alone is worth the attempt. Oh and if you read, I clearly stated Banks would be the last ones to the party. Why don't you go tell Google they can't handle fucking currency? Sorry it's Miller Time and I'm pissed off!
 

LegendKiller

Lifer
Mar 5, 2001
18,261
68
86
Originally posted by: Mavtek3100
Originally posted by: LegendKiller
Originally posted by: Mavtek3100
Originally posted by: LegendKiller
Originally posted by: Mavtek3100


The Fiat system isn't helping anything.
So what is the solution, right now, lay it out.
Allow competing private currencies, not sponsored or created by the government. Effectively imagine Google spending $10 billion on Silver and providing a 50% reserve bank for "Google Credits". They could essentially pay their employees in credits, allow it to be used when purchasing with Google checkout, they could provide banking services, bill pay, direct deposit. Imagine your deposits would immediately have a "credit" value that would not be subject to inflation. If you have 10,000 credits you have $20,000 in 5 years if you didn't touch it you'd have 10,000 credits and $25,000. Google could provide a debit card and they could allow users to use it to provide loans for credit cards or personal or other loans (Prosper like). Ebay/Paypal would freak and immediately provide competition. JPMorgan, Wamu, Chase would have to quickly step up and provide more competition. The name of the game would be finding the currency that held the most value while provided the best service all while being backed by a metals that typically don't inflate or lose value. Hence it would be in the banks best interest for the currency to keep it's value, unlike the system we have now where banks aren't really affected by the value of the currency.
Banks can barely keep themselves out of trouble, let alone handle currencies. Your system equates to chaos, bank runs, and panic. It's been tried in many countries before and failed. Get out of your libertopian dreams.
Oh SNAP! You got me thar!

It was tried in the 18fucking-hundreds! People went to college to learn how to use the fucking abacus! Come ON! If you keep a real reserve you don't have to worry about runs. The profit potential alone is worth the attempt. Oh and if you read, I clearly stated Banks would be the last ones to the party. Why don't you go tell Google they can't handle fucking currency? Sorry it's Miller Time and I'm pissed off!

How does that change one thing? A real reserve? What's that? 100%? LOL.


Google isn't doing so hot, remember? Their stock lost $300 bucks because they can't even keep things going correctly.

The amount of profit gained? Are you fricking kidding me?


Hey, I gots me a great idea. Lets introduce a shit-ton of chaos into the system.


1. Create a shit-ton of new currencies.
2. Have people run from one to another to find the best.
3. Add in fraud, bank runs, investor stupidity, speculation, disaggregation, reduced transparency, increased friction making lost profits, and a touch of greed and fear.
4. ......??????
5. PROFIT!

Wow, great fucking idea. What's next, do you want to trade a sheep for 5 goats? Can you think of any other backassward regressing crap? How about we bring back the practice of bloodletting to cure everything!
 

LegendKiller

Lifer
Mar 5, 2001
18,261
68
86
Originally posted by: Mavtek3100
LK I'm just fucking ecstatic you don't get it or like it!
Obviously it's me who doesn't "get it". Enjoy the fringe, because when you're in a room and you're calling 99% of the people crazy, perhaps it isn't them who is crazy.
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: LegendKiller

How does that change one thing? A real reserve? What's that? 100%? LOL.


Google isn't doing so hot, remember? Their stock lost $300 bucks because they can't even keep things going correctly.

The amount of profit gained? Are you fricking kidding me?


Hey, I gots me a great idea. Lets introduce a shit-ton of chaos into the system.


1. Create a shit-ton of new currencies.
2. Have people run from one to another to find the best.
3. Add in fraud, bank runs, investor stupidity, speculation, disaggregation, reduced transparency, increased friction making lost profits, and a touch of greed and fear.
4. ......??????
5. PROFIT!

Wow, great fucking idea. What's next, do you want to trade a sheep for 5 goats? Can you think of any other backassward regressing crap? How about we bring back the practice of bloodletting to cure everything!
Wow, listen to yourself, you are the one sounding crazy. You like all the bankers don't realize that there is a new tool in town it is called the Internet AND there are already competing payment services on this new thing called the Internet. Right now most of these services like PayPal and Moneybookers use fiat currencies while some others use commodities like e-gold(e-gold.com) & GoldMoney(goldmoney.com).

If these 100% reserve payment sites replaced banks (as they should), what would probably happen is an oligopoly would emerge, with 2 or 3 payment sites having 90%+ of a particular regional market. However, what would emerge as well and what has already emerged for the sites in existence are third party exchangers who will convert your holdings in one payment site to another for a fee. Your alarmist 'shit ton of new currencies' is complete bullsh!t. The Internet solves the competing currency problems of the past very nicely.

Once again I challenge you to explain to me how traditional savings & checking accounts aren't already obsolete. I'm a full time software engineer and I know for a fact that it is possible to design a site that blows what banks offer in terms of online banking out of the water. As I explained before, you could have a site that offers total financial integration with worldwide instantaneous payments. We are talking investments, escrows, accounting & tax, savings, 'checking' and payroll etc. all integrated into one system with instantaneous transfers. Also, this system would be waaaaay more secure because it would eliminate problems of identity theft and check fraud.
 

LegendKiller

Lifer
Mar 5, 2001
18,261
68
86
Originally posted by: Dissipate
Originally posted by: LegendKiller

How does that change one thing? A real reserve? What's that? 100%? LOL.


Google isn't doing so hot, remember? Their stock lost $300 bucks because they can't even keep things going correctly.

The amount of profit gained? Are you fricking kidding me?


Hey, I gots me a great idea. Lets introduce a shit-ton of chaos into the system.


1. Create a shit-ton of new currencies.
2. Have people run from one to another to find the best.
3. Add in fraud, bank runs, investor stupidity, speculation, disaggregation, reduced transparency, increased friction making lost profits, and a touch of greed and fear.
4. ......??????
5. PROFIT!

Wow, great fucking idea. What's next, do you want to trade a sheep for 5 goats? Can you think of any other backassward regressing crap? How about we bring back the practice of bloodletting to cure everything!
Wow, listen to yourself, you are the one sounding crazy. You like all the bankers don't realize that there is a new tool in town it is called the Internet AND there are already competing payment services on this new thing called the Internet. Right now most of these services like PayPal and Moneybookers use fiat currencies while some others use commodities like e-gold(e-gold.com) & GoldMoney(goldmoney.com).

If these 100% reserve payment sites replaced banks (as they should), what would probably happen is an oligopoly would emerge, with 2 or 3 payment sites having 90%+ of a particular regional market. However, what would emerge as well and what has already emerged for the sites in existence are third party exchangers who will convert your holdings in one payment site to another for a fee. Your alarmist 'shit ton of new currencies' is complete bullsh!t. The Internet solves the competing currency problems of the past very nicely.

Once again I challenge you to explain to me how traditional savings & checking accounts aren't already obsolete. I'm a full time software engineer and I know for a fact that it is possible to design a site that blows what banks offer in terms of online banking out of the water. As I explained before, you could have a site that offers total financial integration with worldwide instantaneous payments. We are talking investments, escrows, accounting & tax, savings, 'checking' and payroll etc. all integrated into one system with instantaneous transfers. Also, this system would be waaaaay more secure because it would eliminate problems of identity theft and check fraud.
I closed a deal this weak that totaled more than those two sites have in gold combined. BFD.

If you had such a great system, it'd already be here. As far as you're "eliminating the problems of identity theft and check fraud" good luck. When somebody comes up and says they will "eliminate" something, I laugh my ass off. Nothing is eliminated.
 

Dissipate

Diamond Member
Jan 17, 2004
6,829
0
0
Originally posted by: LegendKiller
I closed a deal this weak that totaled more than those two sites have in gold combined. BFD.
What the heck does that have to do with anything?? :confused:

My point was that your characterization of alternative currencies has no basis in reality, which has nothing to do with any totals of anything.

If you had such a great system, it'd already be here.
Yeah, and if every entrepreneur said that then nothing would ever be built. The fact that it doesn't exist doesn't mean that it isn't superior. There are many superior technologies that take a long time to be fully adopted. F minus on logic.

As far as you're "eliminating the problems of identity theft and check fraud" good luck. When somebody comes up and says they will "eliminate" something, I laugh my ass off. Nothing is eliminated.
Nothing is eliminated? Hahahahahaha! You really are on crack.

You have no valid arguments and your arrogance/ignorance is hilarious as well.
 

LegendKiller

Lifer
Mar 5, 2001
18,261
68
86
Originally posted by: Dissipate
Originally posted by: LegendKiller
I closed a deal this weak that totaled more than those two sites have in gold combined. BFD.
What the heck does that have to do with anything?? :confused:

My point was that your characterization of alternative currencies has no basis in reality, which has nothing to do with any totals of anything.

If you had such a great system, it'd already be here.
Yeah, and if every entrepreneur said that then nothing would ever be built. The fact that it doesn't exist doesn't mean that it isn't superior. There are many superior technologies that take a long time to be fully adopted. F minus on logic.

As far as you're "eliminating the problems of identity theft and check fraud" good luck. When somebody comes up and says they will "eliminate" something, I laugh my ass off. Nothing is eliminated.
Nothing is eliminated? Hahahahahaha! You really are on crack.

You have no valid arguments and your arrogance/ignorance is hilarious as well.
I guess time will tell.
 

SleepWalkerX

Platinum Member
Jun 29, 2004
2,650
0
0
Originally posted by: halik
Originally posted by: SleepWalkerX
Originally posted by: 3chordcharlie
Originally posted by: SleepWalkerX
Originally posted by: 3chordcharlie
You waited 6 months to make your first post... and still managed to be wrong!

Nice!

At least your spelling is pretty good.
His post seems pretty spot on to me. How is he wrong?
He is wrong for the same reason that everyone who supports a gold standard is wrong.

For all the myriad arguments about whether gold has any actual value, etc, the gold standard fails for being deflationary. It doesn't need any other destabilizing failures to be a bad idea.

edit - broke the quotes
1) Gold has actual value because its worth something whether you like it or not.

2) Being deflationary is not a bad thing at all. Prices should go down in a healthy economy! It also encourages saving and wise investments. A lot of people automatically think of the Great Depression when they think of deflation and thats not a good way to look at it at all.
Ha, that right there is a proof that you're clueless. Ask Japan how was their economy doing under deflation.
Probably sad that their paper dollars couldn't be traded for anything else. Think about this for a second, Japan went through a deflationary spiral right? Why did that happen? It happened because their monetary unit was overvalued and suddenly people stopped accepting them for such a high worth, which caused others to stop accepting them, etc. What else can you do with a piece of paper Yen after people begin to realize it has no inherent worth? The Yen would only be worth a slip of paper because it wasn't backed by anything else. Paper is only worth a few cents?

Things might've been different if the Yen was backed by something like gold. If you take out the risk of a bank run, then each Yen would've represented a certain weight of gold so it would actually have some worth. Gold retains its value because at least you can melt it and make jewelry. Gold has always been in demand because you can at least use it in another way besides money.

Originally posted by: halik
If businesses like to be in debt then I really can't help them. If you like to encourage businesses being in debt then something is wrong with you.

Wow...so you've never taken a single business/econ/finance class in your life. Please go back to illuminati and youtube videos, this sort of idiocy has no place in this thread. FYI deflation destroys the entire credit system: money tomorrow is worth more than today...try to swirl that idea in your tiny head.
Deflation doesn't destroy credit, but it makes it a lot harder to pay off. Which is why it encourages paying off any debt as soon as possible.

Swirl this in your head, how come debt has existed under a gold standard? It doesn't take a conspiracy nut to understand that loans/debt will exist in either a deflationary or inflationary environment. People will always have a need to borrow money to finance investments in hopes of making profit. And there will always be people with wealth that are willing to loan money in hopes of making profit.
 

SleepWalkerX

Platinum Member
Jun 29, 2004
2,650
0
0
Originally posted by: rchiu
Originally posted by: SleepWalkerX


Your analogy doesn't work that well. Because most of the adjustments made are artificial and the market eventually realizes the actual worth of the money being used. Its not actually any more powerful. If our system is so powerful then how come the dollar is no where near worth as much as it was in the 1700s? Is it a healthy thing when the purchasing power of the dollar gets smaller and smaller?

http://www.measuringworth.com/uscompare/

You are correct in that the government is just another thing the market has to work around.

Business cycles are a result of contractions/expansions in the money supply and could happen in either system. The reason is because when the money supply becomes worth less it takes a while for everyone in the market to adjust and realize that. Once the market realizes the actual value of the money being used then they adjust their prices, wages, etc to reflect that trend. (if it costs someone $30 to make a product and if the same $30 is now only worth $20 then the person is going to adjust his price or he will actually lose money on the product. now apply this on a bigger scale).
Heh, I don't wanna get into explaining to you how foreign exchange work, but if your sole reason for wanting gold standard is to protect US dollar, you are doing exactly what you preach against, using artificial means to mask the true health of a economy.
That's how I see fiat systems. Artificially propping up the value of money through manipulation. Its pretty hard to artificially manipulate physical commodities. Please explain.

Originally posted by: rchiu
USD is weak, but that's not because of fiat system. Yen is strong right now and Euro is strong right now against USD, why? they are using fiat system too. In a free international trade today, your competitiveness determines how strong your currency is. Having a gold standard doesn't change the fact that US offshores lots of manufacturing, buying lots of natural resources, and not selling enough stuff other country wants. You wanna protect dollar, do something through fiscal policy and create an environment that supports economic growth and friendly to businesses. Promoting gold standard will just do the opposite.
Because government spending has really stuck the nail in the coffin, so to speak. This war has inflated our currency so much that its drastically falling. That's where most of it is coming from. An inefficient and incompetent government. A gold standard would definitely limit the amount of currency being printed (because the only thing that matters are the physical commodities that back up each printed currency).

However, a gold standard is not exactly ideal in current situations where everyone else is using a fiat system. My fear is that the world's gold supply begins shifting towards the US because everyone else's money supply is not related to gold. This is a recipe for inflation (even if we are using sound money). This is why free market currencies are the best approach imho.
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
Originally posted by: LegendKiller

Banks can barely keep themselves out of trouble, let alone handle currencies. Your system equates to chaos, bank runs, and panic. It's been tried in many countries before and failed. Get out of your libertopian dreams.
What's worse, depressions arising from central bank intervention or banks with imprudent lending standards going out of business? You're an idiot if you prefer the former. Even when those runs were happening, people were in control and it was a system of freedom. People chose what banks to make contractual agreements with, deposits in, and they called these banks on their mistakes, sending them into oblivion. Bye bye shitty bank. Instead of that, now you just get inflation and ultimate collapse, because the system gives power to people who cannot resist the temptation to abuse it. It's idealistic to think that they won't, and this is where your argument fails, because gold gives more far power to the people than fiat.

Furthermore, you can't seem to figure out the subtle governing concept that if you reward bad behavior, you get more of it. And that's exactly what the federal reserve is doing now in bailing out these institutions. If they were allowed to go under, it would send a strong signal for banks to self-correct in order to compete for customers now more wary of their money. The free market would work on its own. But now that they've been bailed out, what incentive have these banks to follow different policies the next time, knowing that the government empowered federal reserve will spare them true consquence?

You don't see the government resorting to monetary inflation to bail out failed businesses from going bankrupt under the pretense of helping the economy, do you? So why on earth would you support the same for banks? You know darn well what the central bank is: a utopian socialist fallacy and one of the ten communist planks. It helps itself, wall street, and tyrannical government, but it sure as hell doesn't help you. It is a self-fulfilling institution that justifies its existence by telling you that it must "stabilize" volatility in the market. But that volatility is that which, by and large, it creates. The boom/bust cycles and occasional depressions are intense and unavoidable under this system. Any attempt to paint the gold standard as equally volatile are laughable. Any attempt to make the argument that we must have inflation in order to better predict nominal growth is also pointless and laughable. I'm glad you think chasing your own tail in both directions is a helpful function.

The great empire collapses throughout history have been on fiat systems and/or central banking systems, so you apparently like making up history as well. You don't know what freaking chaos is. Chaos is what's about to happen because of ignorant crazies like yourself. You cannot escape the historical matter. Before the federal reserve, the economic lot of the common man was undeniably better. The rate at which the economy grew in the 19th century in real terms, has never been matched to date. A carpenter's wage could raise seven children on his income alone. Today, you would be lucky to raise one on a wage like that. Charity was at its highest level ever and, surprise, the government was small and of ill importance. But you are born into a modern arrogance to believe only in these socialist systems, forgetting those which built the foundation for that arrogance. Any idea over a certain date is "outdated" and relevant only to bygone era. You don't see Thomas Jefferson as a person, you see him a cartoon. The 19th century? Just a black and white photo. But some ideas, I'm afraid to tell you, are timelessly true and relevant. Sound currency happens to be one of them and your roundabout defenses of an unconstitutional format of money just don't hold up.
 

LegendKiller

Lifer
Mar 5, 2001
18,261
68
86
Ahhh, it's about time somebody brought up Thomas Jefferson. The guy who died 100k in debt to banks and people, while decrying banks controlling us. The guy who had so little personal responsibility himself that he died leaving his family in a shambles, yet preached it throughout the country. The guy who almost bankrupted the country, manipulated the government to his own will (Louisiana Purchase), expanded federal powers to purchase. The very same guy whose policies inevitably lead us into war? The guy who "hated" slavery so much, but reconciled his own slaves by saying that black people were incapable of being intelligent, thus they should be slaves? Was that the same guy who preached limited government, yet wanted public education?

Ahh yes, one of the ultimate hypocrites in this country's history. He basically ripped off the content of the Declaration, never followed what he preached. Hated bankers but died massively indebted to them (leaving the US the same ). However, he's seen as a near deity. Why?
 

Mavtek3100

Senior member
Jan 15, 2008
524
0
0
LK, as I tell my children, do what I say not as I do. Just because Jefferson couldn't practice how he preached doesn't mean he was wrong.
 

LegendKiller

Lifer
Mar 5, 2001
18,261
68
86
Originally posted by: Mavtek3100
LK, as I tell my children, do what I say not as I do. Just because Jefferson couldn't practice how he preached doesn't mean he was wrong.
No, but it's proof that what he preaches is outside of what many people can attain. Thus, realizing this reality is the first step in countering potential problems. Merely striving for the unattainable is ridiculous and unrealistic.

I can say the sky is purple all day too.
 

rchiu

Diamond Member
Jun 8, 2002
3,850
0
0
Originally posted by: SleepWalkerX
Originally posted by: rchiu
Originally posted by: SleepWalkerX


Your analogy doesn't work that well. Because most of the adjustments made are artificial and the market eventually realizes the actual worth of the money being used. Its not actually any more powerful. If our system is so powerful then how come the dollar is no where near worth as much as it was in the 1700s? Is it a healthy thing when the purchasing power of the dollar gets smaller and smaller?

http://www.measuringworth.com/uscompare/

You are correct in that the government is just another thing the market has to work around.

Business cycles are a result of contractions/expansions in the money supply and could happen in either system. The reason is because when the money supply becomes worth less it takes a while for everyone in the market to adjust and realize that. Once the market realizes the actual value of the money being used then they adjust their prices, wages, etc to reflect that trend. (if it costs someone $30 to make a product and if the same $30 is now only worth $20 then the person is going to adjust his price or he will actually lose money on the product. now apply this on a bigger scale).
Heh, I don't wanna get into explaining to you how foreign exchange work, but if your sole reason for wanting gold standard is to protect US dollar, you are doing exactly what you preach against, using artificial means to mask the true health of a economy.
That's how I see fiat systems. Artificially propping up the value of money through manipulation. Its pretty hard to artificially manipulate physical commodities. Please explain.

Originally posted by: rchiu
USD is weak, but that's not because of fiat system. Yen is strong right now and Euro is strong right now against USD, why? they are using fiat system too. In a free international trade today, your competitiveness determines how strong your currency is. Having a gold standard doesn't change the fact that US offshores lots of manufacturing, buying lots of natural resources, and not selling enough stuff other country wants. You wanna protect dollar, do something through fiscal policy and create an environment that supports economic growth and friendly to businesses. Promoting gold standard will just do the opposite.
Because government spending has really stuck the nail in the coffin, so to speak. This war has inflated our currency so much that its drastically falling. That's where most of it is coming from. An inefficient and incompetent government. A gold standard would definitely limit the amount of currency being printed (because the only thing that matters are the physical commodities that back up each printed currency).

However, a gold standard is not exactly ideal in current situations where everyone else is using a fiat system. My fear is that the world's gold supply begins shifting towards the US because everyone else's money supply is not related to gold. This is a recipe for inflation (even if we are using sound money). This is why free market currencies are the best approach imho.
Can you just for one minute think outside of USD being inflated? USD like everything else is determined by supply and demand. If people wanna buy lots of US t-bills, USD goes up. If people wanna buy USD based product and services, USD goes up. If people wanna put their money in USD based investments, USD goes up. Rather then freezing USD by using an inflexible mean like pegging it to gold, why not actually improve those factors that actually drives the value of your currency.
 

Mavtek3100

Senior member
Jan 15, 2008
524
0
0
Originally posted by: LegendKiller
Originally posted by: Mavtek3100
LK, as I tell my children, do what I say not as I do. Just because Jefferson couldn't practice how he preached doesn't mean he was wrong.
No, but it's proof that what he preaches is outside of what many people can attain. Thus, realizing this reality is the first step in countering potential problems. Merely striving for the unattainable is ridiculous and unrealistic.

I can say the sky is purple all day too.
Ridiculous, the technology exist to easily do what he espoused. Also many people live the lifestyle he preached. I'm one of those people. Would you rather be running your life on an idealistic path or a pessimistic path?
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
Originally posted by: LegendKiller
Originally posted by: Mavtek3100
LK, as I tell my children, do what I say not as I do. Just because Jefferson couldn't practice how he preached doesn't mean he was wrong.
No, but it's proof that what he preaches is outside of what many people can attain. Thus, realizing this reality is the first step in countering potential problems. Merely striving for the unattainable is ridiculous and unrealistic.

I can say the sky is purple all day too.
Like Mavtek said, Jefferson's personal finances don't really correlate to the issue of a central bank. People are just as capable of making bad decisions with private institutions under both systems, that issue isn't relevant to the charges being levied against the central bank, which have more to do with how the few in the government should obtain money from its people and what power unelected banking interests should have over a country's people. And it certainly wasn't unattainable. He and Jackson both abolished a central bank and some of the greatest periods of economic growth in the U.S. came under gold, decentralized systems. Don't divert the thread, that's hardly a solid rebuttal to anything I've said.
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
Originally posted by: rchiu

Can you just for one minute think outside of USD being inflated? USD like everything else is determined by supply and demand. If people wanna buy lots of US t-bills, USD goes up. If people wanna buy USD based product and services, USD goes up. If people wanna put their money in USD based investments, USD goes up. Rather then freezing USD by using an inflexible mean like pegging it to gold, why not actually improve those factors that actually drives the value of your currency.
"And if people in the U.S. want to use another currency as a means of exchanging wealth because they no longer demand dollars... NOT ALLOWED!" Sorry, just thought I'd add some coercive flair to your seemingly freedom-oriented defense.
 

NoStateofMind

Diamond Member
Oct 14, 2005
9,716
6
76
Originally posted by: LegendKiller
Ahhh, it's about time somebody brought up Thomas Jefferson. The guy who died 100k in debt to banks and people, while decrying banks controlling us. The guy who had so little personal responsibility himself that he died leaving his family in a shambles, yet preached it throughout the country.
For accuracy he had a lisp and didn't "preach" anything but through his writings.

The guy who almost bankrupted the country, manipulated the government to his own will (Louisiana Purchase), expanded federal powers to purchase.
You always mention how he expanded the debt to a huge sum but fail each and every time to mention he balanced the budget first. You being in finance should know about the Louisiana Purchase and the equity it retained. I guess he should have never bought that land? :roll:

The very same guy whose policies inevitably lead us into war? The guy who "hated" slavery so much, but reconciled his own slaves by saying that black people were incapable of being intelligent, thus they should be slaves? Was that the same guy who preached limited government, yet wanted public education?
Again, point all the things that could discredit him but nothing to support him. I guess the Declaration of Independence should have never been written?

Ahh yes, one of the ultimate hypocrites in this country's history. He basically ripped off the content of the Declaration, never followed what he preached. Hated bankers but died massively indebted to them (leaving the US the same ). However, he's seen as a near deity. Why?
Ripped off the Declaration? The idea's that were used in the Declaration were from great philosophical works from around the world. A great idea is a great idea no matter where it comes from.
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,861
1
81
Originally posted by: Dissipate
Originally posted by: halik

Ha, that right there is a proof that you're clueless. Ask Japan how was their economy doing under deflation.

edit:

If businesses like to be in debt then I really can't help them. If you like to encourage businesses being in debt then something is wrong with you.

Wow...so you've never taken a single business/econ/finance class in your life. Please go back to illuminati and youtube videos, this sort of idiocy has no place in this thread. FYI deflation destroys the entire credit system: money tomorrow is worth more than today...try to swirl that idea in your tiny head.
So why doesn't inflation hurt lenders as much as deflation hurts borrowers?
Unexpected inflation/deflation simply hurts one party or the other. But expected deflation creates problems with 'lending' that can't be normalized to an expected 'real return'. If I expect a real return of 3-4%, but I have 3-4% deflation, I can achieve my return by stuffing my money in a pillow.

I also can't lend money guaranteed by a fixed asset, and recover my money later from sale of that asset, because it isn't worth enough. But I can adjust my rates based on expected inflation.

Inflation and deflation do not act as simple opposites.

In fact, mild inflation is an excellent incentive to invest, because it imposes a penalty for 'standing still', as in, you have to invest savings, just to stop them from shrinking.
 

BansheeX

Senior member
Sep 10, 2007
348
0
0
Originally posted by: 3chordcharlie
In fact, mild inflation is an excellent incentive to invest, because it imposes a penalty for 'standing still', as in, you have to invest savings, just to stop them from shrinking.
Threatening to steal from someone if they don't invest in my company would also be an excellent incentive for him to do so. Doesn't make it any less morally reprehensible.

You know, you guys just need to go back to school and get off the soviet bandwagon already.
 

3chordcharlie

Diamond Member
Mar 30, 2004
9,861
1
81
Originally posted by: BansheeX
Originally posted by: 3chordcharlie
In fact, mild inflation is an excellent incentive to invest, because it imposes a penalty for 'standing still', as in, you have to invest savings, just to stop them from shrinking.
Threatening to steal from someone if they don't invest in my company would also be an excellent incentive for him to do so. Doesn't make it any less morally reprehensible.

You know, you guys just need to go back to school and get off the soviet bandwagon already.
I said that in response to a post suggesting that commodity-backed currencies encourage savings and investment.

The reality is that you're more than free to invest in gold, and no one with half a brain leaves their savings in cash, because it is stupid to do so.

You aren't forced to invest in anything in particular, and the loss from holding cash long enough to complete a transaction is minimal.

A truly, 100% stable currency is a complete pipe dream. It will never happen, weather it is public or private, fiat- or commodity- based. This is the nature of economics and the world, and I would suggest that if one of us needs to 'go back to school' to understand simple concepts, it is you.

Now, if there is a currency system that provides more stabilizing effects than a managed, 1-3% inflation fiat system, I would be willing to learn about it, but the gold standard is not such a system, it never was, and it never will be. Multiple private currencies backed by [banks choice] can't achieve this kind of stability either, because any commodity faces shifting demand.

Look at the run-up on gold (net of $ devaluation) over the last 5 years - people are both moving to gold as a safe store of value, as you suggest should be possible (except... it already is!) and as speculators. Nothing will ever change this.
 

ASK THE COMMUNITY