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No the Fed will never be dissolved and the gold standard isn't the panacea you think it is.
Does anyone think this band of ungoverned thieves will ever be dissolved by the government? They have slowly turned our country from the richest with the most valuable, gold-standard money to nothing but a nation swimming in fiat money that only gets more worthless as they print more.
Thoughts?
No the Fed will never be dissolved and the gold standard isn't the panacea you think it is.
So you're cool with us having nothing to back our money besides our citizens' desperate belief that U.S. Dollars have worth?
Thoughts? I need another 70" TV. That will make it an even 6.
That's how we roll tbh.
Yeah, I'm good.
it's not exactly that they "print" more it's that under the fractional banking system, for every dollar you put in a bank it gets multiplied by 10. say you put 100 dollars in the bank, they are only required to hold onto 10 as "reserves" while loaning out the other 90. then the recipient of your money puts it in their bank, who keeps 9 and loans out the other 81. this goes on and on until your 100 dollars is now 1000 dollars, all shared amongst different people at different banks. there are only 1 trillion physical paper dollars in existance, but the M1 (checkable deposits and liquid things like money market accounts i think) is like 12 trillion or more? not sure on that exact number.
Still feeling good about the value of the US promise to pay?
the financial sector with owns govt, including the Fed they depend on, will NEVER let the Fed be killed. So Ron Paul and the rest of you dreamers are silly s.
As long as the U.S. can take what it pretty much wants, the value of the dollar is all good...
they are the biggest thieves int the financial market, funni enough this industry is too loose even with regulatory they will always go around it and do whats best in their own interests only...
reserves sets the interest rates, now the banks decide pass on the full rate cuts or not, but when rates go up...they have no problem adjusting their packages very quick compared to decreasing rates, hence the banks never listen to the feds anyway....
thieves isn't the word, it's a band of insiders, where the Fed lends money at very little interest rate and the banks lend to the market (or back to Treasury) and pocket the spread.
an en y made up of ex bankers lmao....
should goto every bank AGM, why they always agree salary increases and bonuses, cause the idiots with the biggest shares % is usually the bank consortiums...lol
And NOW the Fed steps in to "rescue" Europe by loaning them MORE money before they agree on substantial cuts...talk about just kicking the can down the road...
http://www.bloomberg.com/news/2011-1...lar-swaps.html
So is your problem with the idea of fiat money?Does anyone think this band of ungoverned thieves will ever be dissolved by the government? They have slowly turned our country from the richest with the most valuable, gold-standard money to nothing but a nation swimming in fiat money that only gets more worthless as they print more.
Thoughts?
Their mission of economic stabilization?
The fact they bailed out big banks?
Or you just think they are thieves?
I'm trying to understand the specific issue you have.
In any event: no, I personally don't think the government will ever dissolve the Fed.
Bingo. I think we can safely agree on both.
Should there be a bit more oversight of the Fed? A little.
I don't think most people understand the function of the Fed well enough to have a valid opinion of its operations.
I don't see that as any different than someones desperate belief that gold has worth.
Do you?
And what happens when the commodity we are using as money fluctuates in value?
Doesn't the govt fix the price under a gold standard?
True there is no govt fixed price for gold anymore and there's no gold standard anymore.
Not within our economy. We have a very stable currency with, by economic standards, very moderate levels of inflation/deflation over time. For example, a new Playstation 3 has been $59.99 for years, because a stable currency allows it to be. But if you are using gold, for example, and the price of gold goes up 30% (like it has over the last year, using the SPDR Gold Shares index as a proxy), then a PS3 game would take 30% less gold to buy.
This inflicts a cost upon the shopkeeper, what we call "menu costs" in economics. When prices change a lot, the cost to update those prices ("print new menus") is real. With relatively low inflation (like we see with our managed currency), these costs are minimal because the menu costs usually are greater than the costs of inflation (the shop keeper won't update all his prices every month based on a 0.16% increase in the general price level). Over time, the shop keeper will eventually raise his prices when the lose of value from inflation is greater than his menu costs.
What's the difference between an artificially valued commodity currency and a fiat currency, other than by artificially changing the value of the commodity, you disrupt that market in the process? Keep in mind, metals do have intrinsic value beyond just looking pretty on some chick's neck.
how does the intrinsic value of gold get determined?
Poop from albino tigers is rare too.
That doesn't mean I want to base a currency on it.
Meh, gold had its uses as currency, just as horses had their uses as transportation.
I feel no need to go back to either when other alternatives that seem to work better are available.
like what?
I'd argue that exchange rate fluctuation is an important too in ensuring PPP - and that is one of several reasons I don't support the idea of a global currency scheme (which in practice would just lead to oddly fluctuating prices).
We will never escape the fact that the market requires different prices in different places.
One of the functions of money (be it currency or fiat) is to acts as a unit of measure. In the United States, we generally know what a dollar is worth, no matter where in the country we are. But, as we know, a Big Mac in rural Nebraska does not cost the same as a Big Mac in New York City. It can be confusing when the same stuff has different value based on its geography, but because we have borders around our mindset of the value of the dollar (being the borders of the United States), we are able to wrap our minds around those price fluctuations. But if we had one currency, now we have an infinite number of different prices on an infinite number of different goods. It can get confusing, and the unit of measurement function of money becomes diluted and more arbitrage opportunities may occur.
With different currencies, all the same stuff is happening (and as the quan y theory of money and monetary neutrality tell us - in the long run, changes in nominal prices have no real impact) but the currency exchange rates give us a "short cut" of sorts to understand the price differences between one geographic area to another. If we wanted to go overboard, if there was a Rural Nebraska Dollar and a New York City Dollar, the exchange rate between the two would immediately explain to us the difference between the price of a Big Mac in both places (though there still could be some slight price fluctuation away from simply the exchange rate conversion).
Gold wouldn't be "stable within our economy" because the demand and the supply of gold are exogenous to the currency scheme, and the value of gold is determined by those factors - not to mention there is no differentiating between "US Gold" and "Euro Gold". It's all just gold, and you could really damage foreign economies just by taking all their gold way (so China could come and acquire all our nice Commodity Money, then take it back to China, melt it down, and have all the Gold and we're ed.) The way to stabilize prices would be to implement some mechanism to control the demand and supply available, but then all you've done is make a commodity more into a fiat currency - what's the point of that? In addition, you've disrupted a normally functioning market in the process.
It's important to remember that money has 3 functions:
1) Store of value (ability to use it to transfer your purchasing power from now into the future. So, milk, would be a bad commodity money since it goes bad)
2) Medium of exchange
3) Unit of measure
If money fails in any of those 3 areas, it isn't a good choice for money. Where, in my opinion, Gold falls short is:
1) Store of value: Like all money, it can be destroyed. But unlike other forms of money, it can't really be created as its a metal found in nature.
2) Medium of exchange: obviously we aren't talking about using gold coins, per se, because that would be impractical - so a representation of our gold stores (a debit card) would work just fine. It passes this test.
3) Unit of measure: because gold has intrinsic value beyond being used as currency, the value of it will fluctuate based on the supply and demand of its intrinsic values, making it difficult to use as a unit of measure.
If you remember in your US history, the agricultural sector really pushed for a silver standard, because silver tended to be quite inflationary. This is good for a farmer, who borrows funds at the beginning of the season and pays them back after the harvest and he sells his crops. Who would want to pay a loan back with money that is worth a fraction of what it was when you borrowed it?
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