Posted on 04/29/2002 5:14:43 PM PDT by shrinkermd
Ooops... Yeah, that's what I meant!
What you are probably concerned about are all those dollars being exported. If and when they come home to roost the scenario you fear will come to pass and we will all have to run for cover.
Well, if they don't come home to roost, that means that these countries have basically been sending us all their exports for free, right? Somewhere along the line, they're going to want to get paid for it with something they can actually use. Looking over this thread, it seems you're more or less on my side - pro-gold, anti-fiat. So what I don't understand is, how can the pro-fiat people not see this? How can anyone just pretend it's not an issue?
It's easy...just accept the fact that foreigners, for some unaccountable reason, are perfectly willing to trade bananas, computers, etc. for tastefully green pieces of paper.
Ain't it grand?!? Heck of a deal for Americans!
La la la la la... la la la la la...
The private banking cartel -- Federal Reserve System has been sucking the wealth from productive Americans for 90 years using their literal and figurative "monopoly money."
The Constitution's Article I, Section 8 reads, "...The Congress shall have the Power to...Coin Money, regulate the Value thereof and of foreign Coin, and fix the Standard of Weights and Measures..." It does not authorize Congress to transfer this function to private bankers (Federal Reserve).
Accordingly, our Congress committed treason and violated the Supreme Law of the Land by allowing private/foreign interests to regulate our currency by fiat. And all politicians who take an oath to defend and protect the Constitution are committing perjury by allowing this funny-money system to continue to operate.
Now, we use "colorable" money that moved us into a colorable jurisdiction (Uniform Commercial Code), and right out of our Common Law Jurisdiction (Constitution), where real money (gold/silver) is the substance of Law.
It's certainly easy to start. Every fiat currency ever created has ended up worthless!
So, along with your Confederate notes, Reichsmarks, rubles, etc., etc., etc., stuff away a few Washingtons and Lincolns, even a Ben Franklin if you're particularly masochistic, and DON'T spend them.
There is nearly a 100% probability that they, too, will become worthless. Hey, don't shoot me; I'm just the messenger!
Charles de Gaulle called our position as a reserve currency an "exorbitant privilege" because we promised (but discouraged) gold redemption at 1/35 ounce per George. France held our feet to the fire throughout the sixties: they were impertinent enough to prefer gold to green. Charlie would be turning over in his grave if he saw the situation today: we have been able to get people to hold dollar as a reserve even without the redemption promise. As Mel Brooks says in "History of the World":
It's good to be the King!
It is impossible to debate someone who is too ignorant to even make a point.
Those are some great examples. Let's see, the South lost the Civil War, the Third Reich fell in World War II, and Russia went Communist. Being fiat money had zero to do with it. I am 100% confident the US dollar will be solid through my lifetime.
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About FDR:
I agree that FDR was socialist scum, but when it came to taking us off the 'gold standard', he had no choice. The Great Depression was deepening and the US gold reserves were disappearing at an alarming rate as people redeemed their currency for precious metals. There was no where near enough bullion of any kind in America's reserves to cover the amount of currency issued; there never has been in the entire history of our nation, not even close to that amount.
If FDR has not acted, the bullion reserves would have been exausted in a very short time. Once everyone discovered that there was nothing left to back the supposedly gold-backed currency, there would be a panic and hyperinflation, with the currency becoming literally worthless overnight. I'd like to hear the gold cultists explain what FDR could have done instead.
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About the 'real value' of gold:
People pooh-pooh the market value of gold and talk about the 'real value'. They are right in that the market value is heavily manipulated, but they are wrong in that the 'real value' is not what they think. The goal in using the term 'real value' is to project the false impression that gold's value is immutable. They point to the history of our country, and say that supply changes (like the California gold rush) didn't drastically change the value of gold, which is true. But that doesn't take into account new events that have never happened before, like a technological breakthrough in gold extraction, or a really massive new source, like asteroid mining.
The basic point is this. The true value of gold is what other people are will to trade you for it. It's just that simple. The only reason that gold has remained so valuable over the history of our country is that the general population believed it was scarce, thus believed it was valuable. If news gets out that new technology can extract/mine/transmute gold cheaply in very large quantities, that general perception of value, which is totally predicated on gold's scarcity, will disappear in a flash, and gold's true value will evaporate on the spot. No one can change that fact.
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About the changeover from floating currency to specie-backed currency:
No one has yet explained how this can be accomplished without crashing the economy. The argument seems to be, "gold will solve all our problems, and since the fiat currency will crash anyways, we have nothing to lose, so let's go for it!" First, our fiat currency has survived for 70 years now without becoming worthless, in spite of constant predictions of imminenet currency collapse since day one. Second, the benifits of a specie-backed currency have been largely debunked here. Third, the dangers of a specie-backed currency remain unanswered by the gold cultists. I can't see the justification for destroying our economy with such a changeover for no real gain.
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I would love for someone to show me a realistic option to our fiat currency with a realistic plan to get there, but I have yet to hear either after dozens of gold-standard debates. The privatization of currency has some interesting possibilities, although I think those that actually believe that such a currency couldn't be manipulated by banksters or the government are being quite naive. Such sleazebags always find a way to manipulate currencies, and our gold-standard currency was certainly heavily manipulated by currency speculators throught it's history.
Just to stir up the debate, I will propose an idea I came up with myself. Suppose we used land titles to back currency. The fedgov could start selling the huge amount of public lands to private currency issuers (PCIs). The PCIs would hold the land, and have the right to lease use of it. They would be responsible for maintaining the land. The PCIs would then issue currency based on the value of the basic land title (not on the structures on the land). They would pay these 'land notes' to the fedgov, who would use them to pay the national debt and for government services, thus putting this new currency into circulation painlessly. The trick would be the appraisal of the land, to get an impartial board to decide the value of each title, and how much currency could be issued against it. This is an idea I haven't heard elsewhere before.
The obvious advantage is that, with increasing populations, land is highly unlikely to lose any long-term value - ever. The two currencies, FRNs and land notes could coexist in the economy, making the currency transition gradual. The currency would become privatized, although the fedgov would likely grab an oversight role to stop the inevitable fraud. The drawback is potential inflation, as over the long term, land always increases in value due to the fixed supply.
Anyways, there's an alternative for all of you to think about. Perhaps you could come up with other better ways to ditch FRNs. The idea that fiat currency or specie-backed currency are the only possible options is false.
More accurately, he CONFISCATED gold at 1/20 ounce/$ and then redefined the $ as being only worth 1/35 ounce as soon as the confiscation was complete. "Taking us off the gold standard" is a euphemistic phraseology.
I'd like to hear the gold cultists explain what FDR could have done instead.
A primary tenet of free enterprise is that you have the right to compete, but not to suceed. Those who made bad decisions were supposed to suffer the consequences not get the government to act in a totalitarian manner to rescue them.
The basic point is this. The true value of gold is what other people are will to trade you for it.
Who's disagreeing with this?
Gold's true value will evaporate on the spot [if it no longer is scarce]. No one can change that fact.
Who disagrees with that? If it is not the most ideal long term store of liquidity, why is there a 25+ year inventory sitting in inert bars in vaults. What other commodidity even comes close? Name one other commodity (diamonds don't count because they lose their value when divided) that has even 2 years of production in inventory.
No one has yet explained how this can be accomplished without crashing the economy.
Will you favor it if someone can?
I would love for someone to show me a realistic option to our fiat currency with a realistic plan to get there, but I have yet to hear either after dozens of gold-standard debates.
You are not ready to hear how it can be done. You are not at all convinced it is a desireable goal.
our gold-standard currency was certainly heavily manipulated by currency speculators throught it's history.
Where can I learn more about such manipulation.
d:
"More accurately, he CONFISCATED gold at 1/20 ounce/$ and then redefined the $ as being only worth 1/35 ounce as soon as the confiscation was complete. "Taking us off the gold standard" is a euphemistic phraseology."
While the way FDR executed the changeover was criminal, that is not an answer to my question. What was the alternative to floating the currency, with the total depletion of the bullion reserves being imminent ???
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V1:
"I'd like to hear the gold cultists explain what FDR could have done instead."
d:
"A primary tenet of free enterprise is that you have the right to compete, but not to suceed. Those who made bad decisions were supposed to suffer the consequences not get the government to act in a totalitarian manner to rescue them."
If FDR had allow the run on the bullion reserves to continue until they were gone, and the currency had collapsed completely, everyone would have suffered immensely. In such an emergency, who should be punished is not the priority. Only slowing the crash and minimizing the damage are important to a new President taking office during such a disaster. Again, considering that the subject is what FDR needed to do as the leader of the nation, and given the economic circumstances when FDR took office, your point is irrelevant.
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V1:
"The basic point is this. The true value of gold is what other people are will to trade you for it."
d:
"Who's disagreeing with this?"
Those gold advocates who wrongly imply that gold's value is basically immutable.
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V1:
"Gold's true value will evaporate on the spot [if it no longer is scarce]. No one can change that fact."
d:
"Who disagrees with that?"
Same answer as above.
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d:
"If it is not the most ideal long term store of liquidity, why is there a 25+ year inventory sitting in inert bars in vaults. What other commodidity even comes close? Name one other commodity (diamonds don't count because they lose their value when divided) that has even 2 years of production in inventory."
Gold is the best commodity only as long as the percerption of its scarcity remains strong in the minds of the people. Technology advances by leaps and bounds daily. To assume the scarcity of gold will never change is foolish. To say using gold as the basis of anything is a good idea just because the fedgov does so is even more foolish. Your question also presupposes that a currency must be backed by a single valuable commodity. Hasn't the performance of the American dollar over the last seven decades put the lie to that idea? And anyways, I believe I proposed at least one interesting alternative commodity.
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V1:
"No one has yet explained how this can be accomplished without crashing the economy."
d:
"Will you favor it if someone can?"
That is hardly an answer to my question. However, to address yours, I am open-minded on the subject and willing to be convinced. However, after many debates, all I get is the same old line and I still have pretty much the same set of unanswered questions. I'm not impressed.
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V1:
"I would love for someone to show me a realistic option to our fiat currency with a realistic plan to get there, but I have yet to hear either after dozens of gold-standard debates."
d: "You are not ready to hear how it can be done. You are not at all convinced it is a desireable goal."
The first statement you've made here is a ridiculous and baseless assumption, which happens to be false. Jumping to conclusions about me and then stating them as factual only discredits you. The second statement is true, but isn't that what we9;re debating here, the desirability of the gold standard (or bullion itself as currency)? I'm not yet convinced only because you and others here have failed to make your case. The blame for that may not be laid upon my doorstep.
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V1:
".... our gold-standard currency was certainly heavily manipulated by currency speculators throught it's history."
d:
"Where can I learn more about such manipulation."
When you manipulate the gold market, you manipulate any gold-backed currency as well. Even with government price-fixing, the law of supply and demand still rules with any commodity, still determines the value and desirability of a commodity. Surely you don't believe that the gold market has ever gone unmanipulated at any time in human history? Anyways, if you want more detailed info, I recomend Currency and Coercion: The Political Economy of International Monetary Power, by Jonathan Kirshner. Great book. (ISBN: 0-691-01626-7)
In the mean time while y'all fuss over this I'll just keep buying NEM,GLG,DROOY and Harmony on the pullbacks.
1. Did we have to get off the gold standard because “everyone was in big trouble if we didn’t” or was that just an incredibly Big Lie?
2. What kind of a monetary system is the ideal one for a free society today and how do we get there?
Chose either one of these topics (again, I prefer 2) and lets proceed (in bite-sized chunks) to discuss them interactively. Once you let me know your choice I will give you my overall answer in a paragraph or two as the basis for an interactive and respectful dialogue
I don't think you're being completely honest with us here. FDR's pattern, not just when it came to monetary policy, but to all aspects of public affairs, was not to simply "minimize the damage", but to completely overhaul the pre-existing social order, using an emergency as his vehicle. There may have been plenty of temporary measures government could have instituted to alleviate the damage that government caused, but that's no reason for society to be run like a permanent emergency.
And again, you have yet to answer the point I (#43) and at least one other poster raised, that every charge of "instability" you can level against a gold-based system can be applied with even greater force against a fiat currency - unless of course you simply trust the government to do what's right.
And buy gold and gold stocks. ;^)
On the contrary, I think they are very easily disposed of. The article is full of ex cathedra pronouncements--such as the suggestion that America owes her present greatness to paper money. The Founding Fathers would certainly not agree with that. The man does not a case make.
There is sound reason that the Founding Fathers in the Constitution forbad the States from making anything but Gold or Silver a medium of exchange. Getting rid of the reckless inflation that followed the War, was one of the motives for the Constitution. Because it was the hard money group who were backing the Constitution, they overlooked the fact that a similar prohibition against the Federal Government would have been in order. But regardless of that, we had a Gold Standard until FDR, and a Gold Exchange Standard until Nixon. The Foundations of modern America were very closely related to that Gold Standard.
Of course, the reason for Gold is that it has value to most people. It does not depend upon the arbitrary fiat of the State of Bankers. While gold coins may be clipped, or adulterated, that does not make a point either. Man can corrupt almost anything. But fiat--paper money that is not convertible--is made to be corrupted. On the other hand, paper money convertible into a precise quantity of gold, offers far greater safety--unless a demagogue like FDR repudiates its convertibility, which is what happened. (Gold didn't fail us; our leaders stole our assets.)
Traditionally the opposition to the Gold standard is that it prevents the manipulations of the currency for the temporary advantage of the politically favored groups. It means that your savings--what you put aside in one era--should retain their value in the next. It adds predictability to accounting; makes long term planning easier.
William Flax Return Of The Gods Web Site
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