Exactly! That's why the idea of using gold as THE currency is so ludicrous. Gold looks good on paper, but can't work in practice because of who owns the above ground and below ground supplies of the metal.
In one of his most remarkable letters to Thomas Jefferson, Adams also said "All the perplexities, confusion and distresses in America arise not from defects in the Constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation." It would be simply reassuring if the government came out and just said "Look, guys, we had a million warnings, and never listened to one of them; thus we can throughly conclude we (as of now) have no idea what we're doing"
I propose an ending of FRL because â¦â¦â¦â¦when banking was free (before 1913)â¦â¦â¦.banks used to held 40% to 60% of reserves. It was the cartel of 1913 that made 10% reserve banking possible. It is of course, much harder today to go to 100% reserves than it was in 1912.
the problem with gold is it is the same thing as fiat money. The people who create fiat money control it's supply and demand, the same is true with gold Just because gold has limits on how much can be produced doesn't solve the problem of having to borrow or buy the medium of exchange . IF i work all day for a printing company. And want to trade some of my days labor for a steak.. If I use dollars (since all dollars are loaned into existence) the bank gets to profit from that transaction. for simply creating a medium of exchange. If i use gold the people who control the gold will lend it to me with interest or sell it to me at a profit to exchange for a steak. I don't want anybody profiting off the transaction except the store and farmer that created what i want money is simply a receipt for labor or resources. and no one should profit from it's existence or use
of course i do the federal reserve is a private corp. With no other purpose than to create and manipulate the money supply for profit of its stock holders. all of their operations though they seem complex and confusing is to simply control the supply and demand of money. Why should we have to pay a tribute to private bankers in order to have a money supply to facilitate commerce FRB only increases and leverages their of power. the American people are getting conned into paying interest for something that can be created interest free
Exactly! The core weakness of fiat currencies is the weakness of the flesh -- the money regulators inevitably opt for short-term gains that lead to long-term corruption of the currency. Some form of standard provides a rational constraint lacking in the wills of the people and politicians. Yet any standard (whether with gold or not) will face instabilities because the standard is also a fiat construct. Governments will (ab)use the standard-setting and adjudication process for their own purposes. The problem is that there is no difference between a malignant currency manipulation, socially beneficial guidance of the economy, and a benign side effects of the sum total of the economic policies and consumptive behaviors of respective economies of the world. Worse, there are no true disinterested third parties to adjudicate whether a given exchange rate, economic policy or behavior is beneficial, malignant, or incidental. China wants a certain exchange rate regime for the benefit of the standards of living of the Chinese people. The USA wants a different exchange rate regime for the benefit of the standards of living of the American people. Both sides have "justice" and "fairness" on their sides. At every turn, the WTO (or any successor entity) could be criticized for favoring one block over another or for applying a flawed ideology to a decision. We shall see if Mundell outlives his child. The attempt to create a pan-European currency standard seems to be heading for a rough patch as the fates of the constituents diverge.
Very interesting quotes and very interesting discussion. Thanks to all who wrote, especially traden4Alpha, jueco, trefoil and antitrust.
I find this post ironic considering this is a trading forum. All people here do is try to make a profit from the 'value' of money, by whatever means necessary. Nobody profiting off lending money would be fine in the perfect world with no inflation and 100% debt repayment. The problem isn't with banks charging interest, the problem lies within the federal's reserve power to create money. Without this power, the federal government would be forced to live within it's means. It also couldn't redistribute wealth by printing money, giving it to a small group of bankers, and devaluing everybody else's money.
Government debt and the central bank printing press are two different independent issues. Governments don't need the printing press in order to borrow (they just need willing lenders). Lots of governments have failed to live within their means without using the printing press -- just look at the Latin American debt crisis. In fact, one could argue that the printing press provides a natural deterrent (and natural safety valve) to government over-borrowing because lenders should know that the printing press would enable the government to softly default on the loan without the harsh consequences of a true default. It's also crucial to realize that all cases of over-borrowing and failing to live within one's means involve two guilty parties -- a borrower that over-borrows and a lender that over-lends.