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To: Nick Danger
A fixed exchange rate between the U.S. Dollar and the Russian Ruble would have been a joke. The U.S. economy was performing much more strongly throughout the entire 20th century.

Fixede exchange rates in no way require economies to grow at the same rates. In fact they have nothing to do with the performance of economies.

They merely require integrity from each party. The current fiat purveyors have no such integrity. If each monetary unit is defined as, and redeemable for, an explicit quantity of a given substance (gold works), then, by definition, exchange rates are fixed.

74 posted on 04/30/2002 9:47:38 PM PDT by Deuce
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To: Deuce
If each monetary unit is defined as, and redeemable for, an explicit quantity of a given substance (gold works), then, by definition, exchange rates are fixed.

No shuck, Sherlock. I'll bet you'd be among the first to say that you're against having a global one-size-fits-all economic policy. And yet here you are advocating for one.

You'll deny that, of course, and tell us that fixed exchange rates have nothing to do with economic policy, or the performance of economies (which you already said) but that's just because you don't understand this stuff well enough to understand the implications of your own proposals.

What you are essentially telling us is that we should abandon a free market in currencies, and instead fix the prices by fiat. And we can do that just this one time because we're using gold, which is special and magic and makes our price-by-edict system better than a market.

No it doesn't. It would just turn long-term control of the world's economies over to the gentle ministrations of the Russian and South African governments, who have enough gold in the ground to jack the price around all they want. You want Vladimir Putin setting the rate at which our economy can expand? (I know you don't believe you're doing that by pegging currencies to gold, but again, that's only because you don't understand how any of this really works).

You're so bent on removing "the current fiat providers" that you'd replace them with a worse bunch of fiat providers without even knowing you're doing it. You pretend that gold just "is," and there isn't anybody mucking around with its supply. Sure there is. It's not like The Lord releases so much every year from His secret stash in Heaven. Miners decide this, and some of them are governments that need not make economic sense in their production decisions. If there are military or other strategic objectives to be gained, they'll go ahead anyway. Meet your new "Fed" who decides your money supply: the Russian government. And you thought you were doing this to protect the Constitution.

Plus you'd take the currency-trading market out of the system, which is what keeps the current system honest.

94 posted on 05/01/2002 1:45:04 PM PDT by Nick Danger
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