A Gold Standard?

[theaustinescorts]

I agree with Ron Paul on just about everything, except this idea that fiat currency is a bad idea.

The reason why any medium of exchange works is because it's scarce and cannot be made or found by anyone else.

Ever try making a fiat currency yourself? That's why it's scarce. That's how it works.

Gold is merely an almost useless metal that for various reasons people have had a fetish over for centuries, and it's abundant in some countries and non-existant in others.

Whether the fiat currency should be made by the government or a private bank is another matter however.

[Advocate]

I agree, it is crazy that America borrows all of it's money from bankers. It did not used to be that way. Forgetting the gold standard, which would jam us up in terms of having any real monetary policy, we need to cuut out the middle man and just issue our own damn money. See The United States Note for more info on how it should be done. Can't wait to call you again, btw, you seem to have quite a few nice additions.

[Sternomancer]

The argument could strongly be made that fiat currency is what has gotten America in the fiscal problems it currently has. The reason for linking gold and silver to currency was to control inflation and maintain stability. With nothing backing currency, government can just print more and more until the value is nearly worthless and prices for goods/services rise. So, linking currency to a finite valuable asset isn't a bad idea.

The reason the federal reserve system doesn't work put simply:

1. The fed prints the currency then loans the amount out plus interest.
2. The fed doesn't print the interest on the principal in physical currency.

In reality there's never enough physical currency to pay off the loan even if the US could pay off the principal.

"Let me issue and control a nation's money and I care not who writes the laws." - Amshall Rothschild

Hmm, perhaps the bankers know something we don't?

[theaustinescorts]

Once again, printing a lot of money doesn't necessarily result in inflation.

It can happen if the extra money is dumped into the economy without any corresponding production of any kind.

The extra money being created presently is simply filling out the balance sheets of banks who've lost value because of market depreciation of their assets.

None of the extra money is finding it's way into the hands of consumers without them working hard for it as normal.

There are huge opportunities for crime when central banks are created, and this was the root of early opposition by people like Jefferson and Jackson.

Central banks in places like Mexico and about a hundred other such places have been used to manipulate currency and stage boom-and-busts in which elites with access to capital buy up whole countries whose economies have been deliberately collapsed. Then there are arbitrage schemes in which a country's commodities are bought up using local printed currency, and then used a collateral for foreign sold national bonds. Then there's ways to discount and collapse such bonds.

There are a million ways to loot a country of all it's resources, and these schemes have been used for the last sixty years to loot countries like Brazil, Argentina, Mexico, etc....

It's because of such plunder that such countries have only now AS IF BY A MIRACLE emerged into prosperity.

All of these countries would have been filthy rich decades ago were it not for looting by corrupt political/financial elites, and control of the central bank is always necessary to operate.

Fortunately the world is emerging from these kinds of plunders.

We don't have to worry about our central bank plundering us like Jefferson was afraid of.

The Federal Reserve banks make very little interest off the funds they create, and although they usually manage the money supply to the benefit of their member banks, they otherwise operate responsibly.

I'm open to the idea that Congress or the President should do it instead however.

[kingorpawn]

Originally Posted by theaustinescorts

I agree with Ron Paul on just about everything, except this idea that fiat currency is a bad idea.

The reason why any medium of exchange works is because it's scarce and cannot be made or found by anyone else.

Ever try making a fiat currency yourself? That's why it's scarce. That's how it works.

Gold is merely an almost useless metal that for various reasons people have had a fetish over for centuries, and it's abundant in some countries and non-existant in others.

Whether the fiat currency should be made by the government or a private bank is another matter however.

The gold standard within a few years. We don't have a choice.

[theaustinescorts]

We might as well take whatever moon rocks we have, grind them into dust, and make them our new standard.

That would make about as much sense as using gold.

[kingorpawn]

I don't know, but Glenn Beck likes gold.

[TxToast]

The entire idea of fiat currency comes from a lack of understanding of financial and economic models. Ron Paul (and most if not all current politicians have there head firmly up their ass with regard to any understanding of economic policy).

The 1st thing to understand is that all current major currencies are in fact fiat currency. The only thing supporting them is the underlying promise from the issuing entity. The world currency market is in fact a balance of the perceived "value" of those promises.

Currency exists to facilitate barter (trade) and a tangible exchangeable medium was needed. Hence gold, silver, jewels, spices became the major initial currencies. The entire premise is that one party can provide a good and accept payment of defined value that can act as a temporary representation of the products value until a suitable use can be found.

Since fiat currency has no intrinsic value its backed entirely by faith in the issuer. Global fiscal policy is currently so shattered that both the Dollar and Euro are on the verge of collapse. I'd say its roughly 50/50 the Euro survives more then another year and the dollar will continue to plummet in value for the foreseeable future.

[theaustinescorts]

Originally Posted by TxToast

The entire idea of fiat currency comes from a lack of understanding of financial and economic models. Ron Paul (and most if not all current politicians have there head firmly up their ass with regard to any understanding of economic policy).

The 1st thing to understand is that all current major currencies are in fact fiat currency. The only thing supporting them is the underlying promise from the issuing entity. The world currency market is in fact a balance of the perceived "value" of those promises.

Currency exists to facilitate barter (trade) and a tangible exchangeable medium was needed. Hence gold, silver, jewels, spices became the major initial currencies. The entire premise is that one party can provide a good and accept payment of defined value that can act as a temporary representation of the products value until a suitable use can be found.

Since fiat currency has no intrinsic value its backed entirely by faith in the issuer. Global fiscal policy is currently so shattered that both the Dollar and Euro are on the verge of collapse. I'd say its roughly 50/50 the Euro survives more then another year and the dollar will continue to plummet in value for the foreseeable future.

wrong..

It's actually the opposite.

The mechanics of fiat currency has nothing to do with the often heard, "good faith of the issuer," or "confidence by the public," and other groundless nostrums.

Fiat* currency works absolutely because it's scarce.

It's scarce, and the government requires everyone to use it and nothing else, and no one but the government or it's licensees can make it.

It has nothing to do with perception....it works by mandate, and that's no perception.

Gold on the other hand has no intrinsic value whatsoever. It has virtually no practical uses.

Gold is valued like a Picasso etching....because it's interesting to look at and rich people create a perception of value regarding such things regardless of any real utility. This is the reason why Gordon Gekko used to hoard art when he still had the money to do it.

"The perception has become reality. Capitalism at it's finest" -- Gordon Gekko

*the word FIAT means to impose universally by government order.