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re: Is there anyone here who supports fiat curreny/the Federal Reserve?
Posted on 2/13/14 at 3:31 pm to Porky
Posted on 2/13/14 at 3:31 pm to Porky
quote:Wasn't it the main fiber used for making ropes for sailing ships at the time?
I've always found it interesting that for many years in America, taxes could be paid with hemp.
1
Posted on 2/13/14 at 3:43 pm to LSURussian
quote:
Wasn't it the main fiber used for making ropes for sailing ships at the time?
Yes. It was a necessity in industry, farming, as well as the military.
Posted on 2/13/14 at 3:49 pm to LSURussian
quote:
What is preventing you from starting a commodity based currency?
Pretty sure the Feds won't allow you to do this.
Posted on 2/13/14 at 4:21 pm to LSURussian
quote:
I'm trying to figure out why you posted those links in response to my post. Was there something in them that you believe contradicts what I posted earlier?
Not especially. I was going to quote several others including your comment with the links to be a point of interest and added discussion. I got rushed leaving and left things half done. No offense was intended.
The third link is an online book which summarizes a much larger work on what the constitution has to say about money and how that notion has been properly used or misused over the years. An understanding of that seems crucial to having a reasoned debate on the subject under discussion.
Posted on 2/13/14 at 4:25 pm to LSURussian
quote:
As opposed to what? Carrying around gold bars?
That is far from the alternative to central banking.
Posted on 2/13/14 at 4:28 pm to goldennugget
The FED is essentially a private multi national corporation masquerading as an entity of the US government.
We have the power to create currency in our treasury, without the burden of interest.
With the FED we have the burden of interest.
It's a ponzi scheme.
We have the power to create currency in our treasury, without the burden of interest.
With the FED we have the burden of interest.
It's a ponzi scheme.
Posted on 2/13/14 at 4:30 pm to LSUnKaty
quote:
1) Why are you so sure the operational use of the dollar as the reserve currency of the world isn't going away any time soon? This worries me because if the value of the dollar is based on supply and demand as you say, what is going to happen if/when demand for the dollar around the world goes down after the unprecedented expansion of the monetary base we have seen in the last decade or so?
The dollar is BY FAR the most widely used currency by claims and transactions. You can look up the data yourself at the IMF's website. The reason the dollar is the reserve currency is due to the overall relative strength of the US economy, the depth and breadth of the US financial markets, and the relative stability of the US dollar. People think a huge pile of debt is bad, and although I agree that running huge deficits is not great for the credit quality of the US, Treasuries are used for operational reasons across the world. The reason China can actually peg their currency to ours is because they own so many US dollars and Treasuries, hence they can cross trade FX to keep it pegged. This expansion of the monetary base has also not been found in the actual economy, its just been on bank balance sheets. They are beginning to lend but they still have nosebleed levels of excess reserves and guess what? The Fed could technically repo every last dime of this out of the banks if they wanted to. Until the US economy falters relative to other countries, which is extremely unlikely as the US energy revolution has basically saved us for the next couple decades, the dollar will be the reserve currency of the globe.
quote:
2) In terms of volatility, what do you say about the cost of consumer goods like shoes and suits in terms of gold vs dollars?
I'd say PCE inflation (personal consumption expenditures), which actually is the indicator that tracks things you buy and doesn't have any of the substitution or hedonic regressions like CPI, is running at ALL TIME LOWS.
quote:
3) In a previous post you talked about low inflation - do you refer to cost inflation like the CPI?
As the above I prefer PCE. If you prefer inflation indicators that are sitting around 12% right now, and I would point at the fact that it is running around historically low levels as well. Everybody keeps noting this massive inflation in the US, and I say where in the frick is it?
quote:
4) I still would like to know why we can't have competing currencies and let the market determine which it likes best.
We don't? You can go buy euros, liras, pesos, reals, yen, SGD, BRL, rupees, ringitts, or if you prefer commodities go buy them. All that makes a currency is medium of exchange and store of value. Go buy bitcoin if you believe in it and understand the coding. Hell, buy cattle. As long as something has value and can be exchanged then technically its a currency. Personally, I'm perfectly happy with my extremely stable and globally used US dollars.
Posted on 2/13/14 at 4:33 pm to BennyAndTheInkJets
quote:
The reason the dollar is the reserve currency is due to the overall relative strength of the US economy, the depth and breadth of the US financial markets, and the relative stability of the US dollar.
Because we'll kick in your door and drop bombs if your don't want to use the dollar would be equally accurate.
Posted on 2/13/14 at 5:08 pm to BennyAndTheInkJets
quote:
We don't? You can go buy euros, liras, pesos, reals, yen, SGD, BRL, rupees, ringitts, or if you prefer commodities go buy them. All that makes a currency is medium of exchange and store of value. Go buy bitcoin if you believe in it and understand the coding. Hell, buy cattle. As long as something has value and can be exchanged then technically its a currency. Personally, I'm perfectly happy with my extremely stable and globally used US dollars.
None of these are as stable as a currency with a value based on weight in gold.
Posted on 2/13/14 at 5:11 pm to Porky
quote:
None of these are as stable as a currency with a value based on weight in gold.
A currency backed by gold isn't as feasible or stable as many think.
Posted on 2/13/14 at 5:15 pm to Sleeping Tiger
quote:
A currency backed by gold isn't as feasible or stable as many think.
Gold is stable. But when there's more money issued or put into circulation than the total value of what backs the money, there's the problem.
Banks borrow from the Fed. The Fed creates their money without any backing. Fractional reserve banking allows a bank to loan $9 for every $1 on reserve and get paid back with interest on every dollar they loan with no backing. Not a bad deal for the banks. No wonder they like to finance debt.
This post was edited on 2/13/14 at 5:28 pm
Posted on 2/13/14 at 5:25 pm to Porky
quote:
Gold is stable. But when there's more money issued or put into circulation than the total value of what backs the money, there's the problem.
Gold fell 28% last year. I'm not sure where you get the idea that gold is stable.
Posted on 2/13/14 at 5:27 pm to Porky
Really the biggest enemy to stable currency is central banking. Gold standard has many issues of it's own, I'm not convinced it's the best alternative to fiat currency. It's not as stable as it's perceived.
Posted on 2/13/14 at 5:29 pm to Sleeping Tiger
quote:
Really the biggest enemy to stable currency is central banking.
I agree.
quote:
Gold standard has many issues of it's own, I'm not convinced it's the best alternative to fiat currency. It's not as stable as it's perceived.
Beats something with NO backing.
Posted on 2/13/14 at 5:30 pm to Sleeping Tiger
quote:
Really the biggest enemy to stable currency is central banking.
I'd actually argue the opposite when you look at the historical data.
quote:
Beats something with NO backing
Again, I still don't see why you would prefer a currency being backed by a commodity with very little use and no utility value over something that is historically much more stable than a commodity. Additionally, in times of stressed the gold standard was a massive hazard for economic stimulation and essentially turned some recessions even worse. In theory it makes sense, in the real world it doesn't.
This post was edited on 2/13/14 at 5:54 pm
Posted on 2/13/14 at 5:31 pm to BennyAndTheInkJets
quote:
I'd actually argue the opposite when you look at the historical data.
Central banking is, from a certain perspective, the greatest evil on earth.
Posted on 2/13/14 at 5:35 pm to BennyAndTheInkJets
quote:
Gold fell 28% last year. I'm not sure where you get the idea that gold is stable.
Yes, the value fluctuates up and down but what an ounce of gold will buy compared to what it would buy 100 years ago or 1000 years ago is almost the same. Compare that to the dollar 100 years ago...or even 30 years ago.
This post was edited on 2/13/14 at 5:41 pm
Posted on 2/13/14 at 5:47 pm to Porky
quote:
Gold is stable.
quote:
From 1836 to 2011, the average real rate of price change for gold in the United States is 1.1% per year and the standard deviation is 13.1%
Looks quite volatile, actually. LINK
ETA: also, a >1% average annual appreciation means that what gold buys now in real terms is very, very different from 100 years ago, or 30
This post was edited on 2/13/14 at 5:50 pm
Posted on 2/13/14 at 5:49 pm to 90proofprofessional
Give me a break... 
I understand statistics.
Gold is relatively stable. Fiat currency isn't anywhere close. That's what depreciates in value. It's an illusion of increasing value.
I understand statistics. Gold is relatively stable. Fiat currency isn't anywhere close. That's what depreciates in value. It's an illusion of increasing value.
This post was edited on 2/13/14 at 5:57 pm
Posted on 2/13/14 at 5:55 pm to Porky
quote:
Gold is relatively stable. Fiat currency isn't anywhere close. That's what depreciates in value.
If you understand statistics, or took the time to actually run the statistics, you would see that the dollar index is MUCH more stable than gold. You keep saying fiat isn't stable but you haven't provided dick for statistics to support your view.
This post was edited on 2/13/14 at 5:57 pm
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