Posted on 04/06/2007 12:30:30 PM PDT by farlander
and throughout history...fiat money always goes to -0-...NO EXCEPTIONS....The founding Fathers understood that!...ART. 1 sec. 8...hell..even Greenspinner understood that... http://www.constitution.org/mon/greenspan_gold.htm
Use M2 and extrapolate.
and throughout history...fiat money always goes to -0-...NO EXCEPTIONS....
Scary! How much time do you reckon we have left?
C ustomarily
N egative
B usiness
C ommentary
You said it, not me.
I welcome your guess!!!....Think the “Greenback” is King?
maybe just a simple answer to my tag line will do...
Speaking of M3, do I remember reading somewhere that it will still be calculated, but just not used in policy-making? Or is my recollection incorrect?
The founding fathers said you didn't have a clue?
!!!....Think the “Greenback” is King?
We've had a "fiat" currency for how long now? It hasn't gone to zero. So much for your no exceptions.
maybe just a simple answer to my tag line will do...
Because gold is shiny?
You could still calculate it, but I think the idea was that the extra work and expense involved didn't give enough additional value. If you use M2, you can get the same basic idea. The only people who care are those who think the Fed is owned by an evil cabal of foreign bankers draining our essence.
The “Gnomes of Zurich?” [chuckle]
If a currency is backed by, oh let’s say gold, what would happen if one day it was reported that a way was found to inexpensively formulate gold out of inexpensive chemicals? The currency would plunge immediately because of the perception that what it was that gave it value was now valueless. This can happen no matter what the backing commodity is as was shown when salt was the legal tender in Rome and was used to pay the soldiers. Indians used shells and beads as currency because they were PERCEIVED to have value at that time. In todays world, as long as all currencies are more or less valued by the worlds perception of the strength of the (issuing) government there will be no problems. Germany had hyper inflation after the war because it printed endless amounts of currency that had nothing at all behind it because the country was in shambles and there was no “faith and trust”. It is but one example but it serves to make the point.
It is all about perception in any case. Even when the currency was backed by gold, it was illegal to own it except in the form of jewelry. You certainly couldn't bring your dollars into a bank and demand gold or silver for them.
I have been hearing the stories about the total collapse of the dollar for about 35 years now and I’m sure it will be said for another 235 years but it will not happen unless an event so cataclysmic occurs so as to make currency itself of no use.
Exactly! These clowns think that while our money was backed by gold we had no inflation or deflation. No booms or busts.
The Continental dollar was a fiat currency and it suffered severely from inflation, giving rise to the phrase ‘not worth a Continental’.
When Hamilton organized the Treasury he took on the accumulated debt of the Continental government. The United States would pay interest on its debt in gold, but would accept as payment for taxes either gold or paper money. This had the effect of driving the depreciated American currency to parity with gold. The policy strengthened the finances of the United States, and provided it with a funded public debt that gave it a money supply much larger than the amount of specie available to it.
Now, having long read your criticisms of the fallacy of gold, I’m certain you will be able to give us an erudite critique of where Alexander Hamilton went wrong.
I think Hamilton was correct to do what he did.
So in the particular case of Hamilton you concede that it was necessary to make the dollar exchangeable for gold?
If that’s so, then at what point did it become necessary or wise to break the link to gold? At the time Hamilton set up American finances there was very little specie in the U.S., far less than the amount of dollars in existence at the time of assumption.
Because gold is shiny?
Yup!...you’re too smart for me! Harvard Graduate??...I got a deal for u tomorrow...Wanna double your money in 5 days?..check back...
Sure. Why wouldn't I?
If that’s so, then at what point did it become necessary or wise to break the link to gold?
What's so great about gold? Did it prevent inflation or deflation?
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