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Remembering The Fed's Definition Of "Sound Money"
Nothing quite like hearing it from the printer's mouth. From a 1961 FRB of Chicago paper:
“In the United States neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. Coins do have some intrinsic value as metal, but generally far less than their face value. What, then, makes these instruments - checks, paper money, and coins - acceptable at face value in payment of all debts and for other monetary uses? Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and for real goods and services whenever they choose to do so."
It is handy to be reminded every now and then that the only thing people transact in is symbolic confidence in the truly stable financial system.
h/t Nobull
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The sound... a voice crying from the internet
http://tradewithdave.com/?p=6582
Dave Harrison
www.tradewithdave.com
Your analysis is but a walking shadow, a poor player that struts and frets its hour upon the stage. And then is heard no more: it is a tale told by an idiot, full of sound and fury, signifying nothing.
Here's all you really need to know: all species seek to maximize pleasure over pain. It is simply too much work for too little reward for those gifted with leadership qualities to continually attempt to guide and husband society in constructive, rewarding ways.
So what happens? Weaker, subsequent generations of "leaders" emerge who no longer have a stomach for the fight, nor wish to experience the constant aggravation of helping maintain a society which understands there is no free lunch. So they give in to defeat, and let the money-men run their time proven scams by providing them with a short-term mechanism (ie a central bank) that allows them to simply pay off the sheep.
Of course it all eventually ends in tears, but the objective, much like musical chairs, is to not let it happen while on your watch.
Now I'll be the first to admit, that like Charlie Brown and the football, history is replete with men filled with conviction who again and again attempt to craft a sustainable, morally just world. Egypt, Greece, Rome, Britain, the United States, et al had their respective periods in time where great men were attracted to the concept of governance, who practiced & applied it at the highest levels of skill, and society flourished as a result.
But it is utterly unsustainable; and the jackals hiding in the shadows, waiting with infinite patience, are there with a solution, when leadership eventually becomes exhausted and cries out "no mas"! So they set up the central bank, and governent begins the process of simply paying off any and all complainers with the mere flick of a pen.
But the bankers, who have been running this same scam for at least the last 5-6,000 thousand years, know something that the weakling "leaders" don't comprehend: what happens when the jig is up.
You know, ZH has a lot of excellent analyses and smart posters, but very few appear to realize that events we now see transpiring aren't any great surprise to those who put this all into play many generations ago. After all, the designers of the system knew fully well what they were doing - they are the ultimate students of history. They KNOW that if they just wait, ALL societies eventually tire of productive work and come asking for the loan.
And that's when they smile to themselves, knowing that all men eventually seek the solace of the devil incarnate on this temporal plain. No one asks to be born; some get lucky and show up just when republics are formed, or when the money is first printed. Some, like ourselves, get to eat the shit sandwich at the end of the party. Just know where you are in the cycle, and know how to survive when the bankers launch their final solution.
Hey B9, nice to see ya.
Unfortunate that you have to say the same thing all the time. Still, it is gold.
+$1537
Yeah, a real shit kicking gold is taking according to Robot. What's that, less than 1% from all time closing highs?
FWIW, the GOLD/XAU ratio shows the miners are now past the Helicopter Ben Zone and are now in the WTF Zone. Highest since March 09.
http://www.traders-talk.com/mb2/index.php?showtopic=92028
...ooooooh, now I get it B9K9, that was a peanut.
But that's the real trick isn't it? Don't get from here to a "sustainable population" without a lot of death. Haven't heard a sure fire plan to duck the great culling, well for us guys with the misfortune to be born poor but aware of the world.
Agree mostly, but I think the jackals as you put them have a more active hand and help steer things without wholly relying on human nature, which of course they are masters of.
B9,
Your reasoning is excellent, but as you yourself note ("ZH has a lot of excellent analyses and smart posters, but...") working from a flawed assumption results in a flawed conclusion.
Your reasoning is based upon this premise:
which I believe, with all due respect, to be incorrect. I think it should be replaced with this:
All forms of life inherently seek equilibrium (balance), also known as peace, on all scales.
All action by all life is aimed at one thing only, which is to achieve this balance, this sense of peace. The drawing of a breath momentarily achieves this; when the equilibrium from this is lost it is the exhalation that restores it. This process can be seen at all scales in all life, the action to achieve balance (the sensation of satisfaction/peace), the momentary attainment, and the next action to restore it.
Consumer has feeling of "need"; consumer makes purchase which requites this feeling (resulting in "peace"); consumer experiences the return of feeling of "need".
All action is based on value. Everything is an instrumental value, instrumental in the attainment of the only inherent value: peace, which is actually the feeling resulting from a state of balance/equilibrium.
I find your comments to be the most visionary and valuable on ZH, but I think you are working from a flawed premise, making your views cynical. If such a premise were sound it would be applicable at all scales throughout existence, but it cannot be or life could never have evolved at all.
Nunuit, Both you and b9 are right. It's the level of awareness the separates the two. The less aware seek pleasure, the more aware seek balance.
+1 Agree.
Only thing I would add would be that no matter what history has taught us, the constant pursuit to balance out inequities helps keep this dynamic tension we call life in harmony.
Yes, we've identified the reality of the next level up in the societal control structure, the meta level if you will. We know we are really mere automatons in a game run by an invisible elite that control the levers of government and society around the globe. We have tantalizing hints of who they are, but everything is rumor, innuendo, conspiracy.
I say that's all irrelevant, because the important thing is that we now know the reality. The problem is to figure a way out of the illusionary labyrinth that everyone voluntarily imagines before us. The labyrinth contains the luxuries and rewards in life we yearn for as well as the punishments awaiting if we step out of line. But even though the details in the labyrinth are suggested and fed to us during our entire lives (the fictional narrative) the construct of the labyrinth itself is of our own creation, of our own energy. It is each of us who at any time can simply exit the labyrinth by the simple act of refusing to believe it exists anymore. To refuse to believe is to simply decide to take your own life into your own hands, as is your individual right to do as a solitary and unique being in this Universe with rights unto yourself, born free by the divine virtue of God. You are a being of free will, free to choose to use your energy for good or for ill, and free to enjoy the consequences of your choices.
Government is a fiction that you choose to accept. Its power comes from the consent you as an individual bequeath upon it and your willingness to accept it as an authority with power over you. But without your consent its "authority" is fictional, as it ultimately only comes from superior ability to inflict pain or death. For when you withdraw your consent, as is your right even within the context of this republic by virtue of its very founding document ("Governments are instituted among men, deriving their just powers from the Consent of the Governed." - DoI, 1776) you become "free", but not truly, for you are still trapped within the clutches of a society inhabited by zombies that are threatened by your status being outside the system. Thus we can only truly regain our sovereignty when a sufficient number of others do so simultaneously, so that our rights will literally be self-reinforcing. Strength in numbers. United we stand, divided we fall. Do these themes seem familiar?
You see, the error of the Founding Fathers and the myth of their heroism is that they were not forceful enough in emphasizing that each of us individually truly is a sovereign. They were not sufficiently enlightened to realize that the ultimate flaw of a republic is that it is still based up the State. For if the State ever turns despotic, we are entrapped. The protection of our individual liberty being handed over to the State exposes us to a dangerous organism that at any time can be infected and become a psychopath. It is a precarious balance between trust in the self and faith in the group.
Since we can never truly trust the group to ensure our individual liberty and to not become psychopathic, we can never truly ever trust its protection to others. So the first order of individual liberty is to reject the State and take on the philosophy and means of protecting your own liberty.
The second order of individual liberty is then focusing your effort on destroying those who would usurp it, for we can never truly be free if we are hunted all our lives. Yes, we may be free in the wilderness or the diaspora, but the Earth is our dominion as free beings and we have the right to travel to where we are welcomed by other free beings.
We must destroy the sorcerers who project reality upon the masses, who will do all in their power to destroy us and keep us from curing the masses of their madness. We are sorcerers in our own right imbued with the knowledge and wisdom of our own true Freedom. We incant our powerful spells by exposing the truth, actively speaking out about it, writing about it, disseminating, evangelizing, breathing unto them the air of righteousness until it captures in their heart and ignites a spark, and they awake.
Awake, brothers and sisters, awake! You must awake!
I am Chumbawamba.
Well said Chumba.
me like
Excellent post B9K9 - these guys make Satan himself look virtuous , he was but a fallen angel , misunderstood and all that.........
I get a feeling that the Banks continued to develop the Basel Byzantine Maze because MMT might have just been working using convential securities , we cannot have that can we.
Anyhow the relative simplicity of the US monetory system stands in stark contrast to perhaps the ultimate Banking modern art - the Euro system , the connecting dots of various central banks some officially owned by their respective states while some including their outside mother Hen The Swiss national Bank is completly private.
Its a truely extraordinary system - the most striking fact that has come to my attention is that while the Governor of the Irish central bank takes direction from Frankfurt all liabilties ultimately fall back to Dublin.
Its a magnificently dastardly construction, this Euro.
Google : Central bank given 'Formal Comfort' by Noonan.....The Irish Times
And there was this simple Irishman thinking ELA was the banks problem......
Wow. It's like old ZH week. Some heavy hitters have arrived to comment.
Wish I were as eloquent as the old-timers.
You only go back 5-6000 years.
Do you think the pyramid creators had need for money? Indigenous tribes do not need money. Nobody ever talks about harmony in total. To focus on 'money' is extremely narrow. You were not born to make money and when you die I am sure you will not care either.
So there is no shit sandwich, there is a choice, you have free will so use it.
Au contraire, mon ami. You willingness to substitute my "analysis" for "life" and for your choice of playwright's failed attempt to equate a shadow with life itself is the point indeed. For He came that we may have life and have it more abundantly. He is the way, the truth and the life.
Like you and I, Nicodemus never asked to be born either, but he did ask Jesus directly what the requirement is to see the Kingdom's eternal plain. The Good News is the price has been paid for "the loan." Redemption is yours freely and no amount of work is called for. Come to the table and eat and drink and you will never be hungry or thirsty again.
To open the door, or not open the door... that is the question.
Dave Harrison
www.tradewithdave.com
@b9
was that poetry, or just diction in action?
Word.
Interestingly, in 1961, the face value of silver coins was much more than the silver content. Today, the silver content is worth 20x the face value.
The nature of money has changed since this text was written. In 1961, the gold window was still open. Today, it's fundamentally different, and it's not clear at all if all the economic concepts applicable to sound money still apply to debt-based fiat.
I'd be careful before embracing openly this text, as it may be (now) more a case of wishful thinking than present reality.
"Face value" is the caveat in that argument.
Julie Andrews singing on the mountain top '...the hill are alive with the sound of money...' then the baron shows up and sez 'bitch... dat be minez' then open hands bitch slaps her keeping the strong pimp hand on her. Dats how wez roll in da Street.....
De pimp is strong in dat bruh.
It goes "KA-CHING"!
That's why it is called "sound money".
Just dont be transacting in anything other than FRNs otherwise you're part of their problem and they will take action against.
I love the smell of liberty in the morning.
it's interesting that having private money is illegal. Only Federal Reserve Notes are allowed, yet the Federal Reserve is a private organization.
the US Mint has been making gold and silver coins since 1789 or so. nothing to do with the FED. congress, extremely busy taking corporate donations, has turned it over to the executive branch/treasury. kinda like war, if you follow.
It's time to get in the streets people. MENA is doing their thing, and Europe is starting to get rolling. Are we going to let them show US how to protest? Yea yea, the sheep don't know better and won't get off their asses...unless they see other's doing it. The rage is in the air, just talk to anyone you know and see how angry they are( http://www.thedailybeast.com/blogs-and-stories/2011-06-04/anger-in-ameri... ). All it takes is a few leaders to show the masses the time is now.
http://www.pacificfreepress.com/news/1-/8870-american-revolution-20-on-j...
exactly - what is the intrinsic value of a dollar bill?
nothing.
There maybe some value -- toilet paper? But, it would hurt my butt, so really no value.. you are right
How about snorting some grade "A" Peruvian flake through a tightly rolled C-note my friend?
OK, you got me. Some cheap Meth through a taped up single. But these are hard times man!
The fractional reserve fiat banking system is falling apart. Everything going on today is just desperation to keep it going, because the people who run it only know how to live by loaning out worthless pieces of paper to others at interest. But its all falling apart regardless of their attempts to prop it back up.
Yep. Those who clamour for revolution should chill out, get some popcorn, and enjoy the show. The system will collapse upon itself very soon imo.
About 6 cents (the cost of the ink, paper, and anti-counterfeiting tech).
Which is why the transition from paper money to credit cards has worked... so far.
There is a reason why Casinos force little plastic chips upon those who dare enter.
Austrians have known this since 1920 and before. Nice reminder for all the Keynsians though. Too bad most people were taught Keynsian socialism. Re-education is a bitch...
Re-education for most will have to be taught the hard way, most of them wont survive their re-education.
Could not have said it better
Ron Paul, in a conversation with Lew Rockwell regarding his presidential bid, “is challenging the economics of government power and dollar destruction, as exemplified by John Maynard Keynes,” says Rockwell. “He wants to reverse Nixon’s dictate that ‘we are all Keynesians now,’ and make that ‘Austrians.’”
Paper money is worth soemthing. Apparently unlike PMs I can eat.
My favorite. Guess the author before looking at it:
"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
Alan Greespan, 1966. Excerpt from his essay "Gold and Economic Freedom"
Ok, that was a genuine surprise. Thanks for posting it.
Hoenig now saying easing should stop immediately.
No wonder PM stocks are getting absolutely smoked.
He can say anything he wants now that he is off the FOMC.
Same with Greenspan, the false libertarian, claiming he now wants to go back to the Clinton tax rate.
greedscam is a pimpco whore.
+ 4 makeover/avatar, b_B
greenspan is false just about everything. is he even the real greenspan, any more?...
but that's good for you. remember, you're short the market having shorted with both hands once 1300 broke as you said you would. and since the market looks determined to drop quite a bit as you said it would you'll be able to quit your part time 1099 processing job, and go back to your life as a retired, urban gentleman, given the sea of profits you'll be making on your short.
got to admire the fight of the bulls...these people really deserve to keep their jobs even if they will lose money...keep gambling others people money...
Money? Whats that?
it's the stuff robottradar wishes he had so he could be one of the beautiful people - as he sees the world - and hang out in the hampton's with those he so envies.
Yep but Robo will never be a Pigman.
Also OT: looks like BIDU is about to flash crash
Modern Money Mechanics!
Oh, Zero Hedge, you did remember! My bestest, most favorite book/manual/evil plot of all time!
It feels like my birthday!
www.bigeye.com/griffin.htm
For a nice discussion on the evil that is the Federal Reserve.
+1 million. About two years ago, some subversive individual posted that link into the CNN comments. I made the mistake of reading it and awoke to this oppressive nightmare. Proper blue pill / red pill matrix stuff. Although even as a child I could sense there was something wrong with central banking. Watching the news on TV, I would always think, "why dont they just leave those interest rates alone? Just stop messing with them!"
From the article.....
"I think it's time for a new definition of usury as follows: any interest on any loan of fiat money (meaning money made out of nothing). This example of a $100,000 home, as shocking as it is, producing $172,741 unearned interest, this is just a grain of sand in the Sahara. You have to multiply that by all the homes in America, by all of these hotels in America, all the high-rise buildings, all the factories, all the airplanes, automobiles, farm equipment, schools, everything, all the physical assets of America. You apply this same ratio and can you see it in your mind? We're talking about a river of unearned wealth that is so wide you can't even think of crossing it, flowing perpetually into the banking cartel. A dead short across the productive element of society. Money being taken from people who are working hard providing the material and the labor. They don't even know that this is being taken from them and it's in this huge river of wealth flowing into the banking cartel. It's a staggering thought........."
Note how the money supply must increase exponentialy or the system of theft collaspes into default. This is what Bernanke understands and fears more than death. Without the increase there is not enough to pay the deductable.
Under a Gold standard this cannot occur and nations must live within the means afforded by a balanced budget of "earned income" from labour.
Pearls to PIIGS ? I am glad that subversive allowed you to see. Remember to use the Force Luke
Modern Money Mechanics: How To Make and Destroy MoneyThere's a factor most gold/silverbugs choose to ignore: paper money is beautiful, light and practical.
The main reason peoples have very easily adopted paper notes across the history is because they had enough of clutching heavy, undividable coins.
I thought it was because the jews owned all the gold/silver....everything. ;)
OK, that too.
nope they don't own wine women and song
No good returns on investment there.
my grandpa always told me to invest in vice
Gold/Silver bugs can afford to ignore it, because most of them have no problem with the continued use of paper money, so long as it is backed by pms.
I have yet to meet a PM bug who actually advocates carrying around bags of gold and silver coins. Strawman?
" so long as it is backed by pms."
Bullshit. There's no way to assure yourself that every dollar emitted has been really backed by gold. Cheating has always existed.
The only way to make a real "gold standard" is to directly use gold denomination, in milligrams for example.
Debasing the currency for most of the history carried a death penalty(unless the King did it), under those rules Bernanke, Geithner and most of the FED and Treasury employees should be hanged immediately
Or you could lift your thought process and understand.....
It's Good to be KING
"'Tis death to counterfeit!" This is NOT a law, but a Natural Law -- Mother Nature will only accept so much confetti for REALITY, before demanding payment in blood!
BS on YOU! There is certainly a way for a (competing) trusted and audited PM reserves to issue electronic currency based on the same electronic currency technology as bitcoin ( http://www.bitcoin.org/ ) backing that currency. I'm sure many wedded to and profiting from the legacy systems want to believe it won't happen. It is happening. Adapt or drown in a sea of worthless fiat.
go to www.goldmoney.com they are already doing it. Have used them for years, Turk started it and it works great! BTW, no affiliation.
hamy's right to an extent. Without (well founded) trust in the PTB (and good regulation) no currency, even so called gold backed, is any good.
"paper money is beautiful, light and practical"
http://2.bp.blogspot.com/_OhF9OpDsgfs/Sgp3R27OyRI/AAAAAAAACEM/SJxH5Dzc4A...
I agree! And i'm sure this lucky zimbabwe gentlemen grabbing a loaf of bread and a pint of milk would agree too! ;-)
LOL Hamy youre really the best troll around!
Hammy is awesome. I'd buy him some beers.
Harry has no time for drink or sport as his urinal cake business is exploding (or so he says).
And apparently you choose to ignore the various paper currencies throughout history that were backed by gold/silver.
Mr. HamyWanger taking the piss again. I am pretty convinced American fiat will die last so I just converted a small sum of paper that I am keeping for the transition period from the Euro to the Dollar. I will do anything to preserve the silver, and so will Mr. HamyWanger who, I am fairly sure, is long physical as well...
No Renminbi?
you also, can eat it...paper might not qualify exactly as ones menu choice but when you got nothing (as gold bugs claim on ending of times...) one surely can eat it....to survive!
By the time you're eating dollar bills, I'd say you'd have a lot more to worry about than eating.
FRNs... high in fibre, I believe.
And traces of cocaine. Quite a few notes I've been given clearly have been exposed to bodily fluids of one sort or another - surely they add some nutrional value also?
Hamy, Hamy, Hamy...
Nobody with a brain is advocating walking to Costco with a bag of gold.
What gold standard advocates are proposing is finite paper currency backed and exchangeable for a defined quantity of gold. You can adjust the fraction in order to have lots of bills in circulation, but the final total is capped.
Hamy, I reckon you are here to take the mickey out of us and get us all riled up!
Indeed.
Why, Just last week, I needed to buy something from the store, and only had a ten. Luckily, the cashier had a pair of scissors, so we were able to cut it in two. I then hung the lovely remainer in a nice frame in the hall.
Fer cripessakes- that is why there is more than one size of coin, and, dare I say, three monetary metals (traditionally, anyhow) Gold, silver and copper. We could now add Platinum, Palladium, and Nickel to that list, though I think it's still a bit of stretch to include zinc.
Coins are every bit as nice to look at as any paper bill, nicer depending on your personal tastes.
The only real point you have here is that the paper is lighter. And that's not nothing- a couple of hundreds fit in the pocket much more comfortably than close to a half pound of silver does.
Watch "The Money Masters" on youtube for a better education.
(Reuters) - U.S. Treasury bonds, seen worldwide as the risk-free investment, could be labeled "junk" if the government misses debt payments by August 15, credit agency Fitch Ratings warned on Wednesday.
http://www.reuters.com/article/2011/06/08/us-usa-ratings-fitch-idUSTRE75...
(zh snews) - Fitch, seen worldwide as a ho for the banks, could be labeled "crack whore" if they don't shut their pie hole by August 15, buzzsaw99 warned on Wednesday.
well played
How many STDs does Fitch have, now?
It's tricked itself out so many times, I'm surprised appendages haven't begun falling off.
We ran that skank outta town last month.
Wonder how long before the other "girls" take a walk on the wild side... LOL
Big hat tip to Conrad Murray, who posted a link to this in his comments yesterday.
Out of curiousity - what would you say is the intrisic value of an oz of gold?
When I ask that question to people I get answers like "market price", $1400, $1500, etc
But I know they are talking in dollars, which isn't real.
Eventually shouldn't we start coming up with our own set of intrinsic values? 1oz silver is 10 bushel of corn etc
1 quality handmade suit starts in the $3500-$4000 range.
http://www.mensluxurysuitguide.com/7_bespoke.html
Unless you think the Romans were paying 1 ounce of gold for a toga from Kmart.
Or 1 cloak for a sword. I like that trade better.
Thanks to cheap Indian labor, a functional sword and good set of rivitted chain mail can still be had for less than an ounce of gold. But this will not last.
Well thats the way it used to be, before the fractional fiat reserve banksters got their grubby little mitts on everything. Used to be currency was only a MARKER for future delivery of goods....for instance if a guy wanted 5 chickens from a chicken dude, and they agreed on 3 bushels of corn, they'd trade now and give 3 'coins' of something until that corn could be harvested and delivered. Then the debt was paid.
Only very RECENTLY has 'currency' itself had ANY 'value' itself at all! And still really doesnt!
Kinda like the Real Bills doctrine.
Very difficult to say. Imagine fiat system collapses. After the carnage , lets assume we are on a gold standard. Oil will still be the most important commodity , so the gold/oil ratio is the most important relationship. Work out the labor and energy costs to extract an ounce of gold and then whatever market value necessary to create a system of commerce. Oil in fiat is only going one way in the big picture. A hard gold standard will see even gold devalue to the price of oil in the long term.
The issue now as i see it is the price of gold in fiat is grossly misrepresented therefore the current gold/oil ratio is not the starting point we will have should a new monetary system be created using gold.
keep it simple...
1 barrel of oil
one oz of gold
10 oz of silver
all same value
Traditionally, if it still holds,
1 oz gold
15.8 barrels of light sweet crude
16 oz. silver.
world annual oil production: ~30 billion barrels
world annual gold production: ~2500 tons or 80 million ounces
price of barrle of oil: dated brent spot $117
ration oil/gold production: 30 billion/80 million = 375
375 times 117 = $43.8k /ounce
1 ounce gold = one quality .308 or 5.56, with quality optics, and a case of quality ammo.
Not too far off, actually. Winchester .308 featherweight for $850, case of quality ammo for $300, and a Leupold VX-II scope for $400.
Your scopes are fine, but make my 5.56 a BCM and my .308 a Remmy 700 (M40 spec).
And truth be told, my 5.56s will be phased out for 6.8 SPC eventually.
Tell the U.N. gun grabber fans I bid them all ΜΟΛΩΝ ΛΑΒΕ!
There is no such thing as intrinsic value of a good or service. It's all subjective value. Is steak intrinsically priced for all people? Well steak lover might pay more than a vegan. How much would you pay for attorney if you didn't need one? How much would you pay if up on a murder charge? The market will find it's own price in whatever money is used. It can be distorted by manipulation but it will try to get back.
Spoken like the glad-handers I've met at some defense contractors . Cost sets a practical bottom to price, and a good will not be produced unless it is valued at this floor, which effectively sets the size of the market. For mechanical goods such as firearms,that have a commodity requirement and mature processes (tooling and labor), a cost change disproportionate to other goods of this type is unlikely. Therefore, I will only wait so long before springing for a gas piston .223 AR-115 . It's subjective value will rise above price sooner than I prefer.
Never mind, OBE given the edit to the above.
Exactly.
There's been quite a lot of thought on this throughout the centuries. Most people instinctively orient towards the labour theory of value, but frankly it doesn't matter if you spend a week hand-sewing a t-shirt - it probably won't sell for any more than one sewn together in 30 seconds by a machine at one-hundredth the cost.
At the end of the day, something is only 'worth' what someone else will pay for it. And if that is less than what it's worth to the owner, the trade won't happen.
Even if we went to a hard gold standard, it would be impossible to 'determine' what an oz of gold is worth, because supply and demand fluctuate. Gold would be worth whatever the market deemed at the time of the transaction.
A while back someone smarter than I made a reply pertinent to your statement. It's not what a willing buyer and willing seller agree upon that determines value. It is what one CAN pay that matters. We can agree on a price for your house but if I can't pay it, it's moot. Our agreement is irrelevant if a bank doesn't see it our way to provide financing for the house. In that sense, it is the financial institution that determines the "value". Something not right about that.
I wanna be careful here but the recent downtrend has been as orderly as the levitation up, more or less. Don't get me wrong, I'm more in favor of an elevator ride but this 5% move off the highs still feels relatively orchestrated as if Henry Mancini had the stix. we're just not there yet. "There" meaning the end of all this frekin' BS!
The red pills have blue covers.
http://www.goodreads.com/book/show/1879146.Pieces_of_Eight
There is no spoon-- except when it's made out of silver.
1 oz of silver = 100 loaves of bread
In your dreams, maybe. But in the real world, nobody will take your silver for bread. I wouldn't.
Yeah, because you are no baker or miller.
But if you are a baker, you want to sell and not have the bread rot in the shelves.
i agree with hammy. i know for the last few thousands years people did accept it...but again, back then amerika was not discovered yet...we live in a new age now - everything is different...
You don't really know, because you weren't there. Nor do I. It was all a long time ago.
However for a long time the FRN was backed by gold. You had a reasonable expectation that no matter what the value of your crops or eggs or shoes were on the market, you could take what money you had and exchange it for some proxy of gold.
Now, not so much. It's subtle, but I think it counts. And that is the "crisis in confidence" that many here allude to.
Mark Dice TRYING to Buy a 99¢ taco with 1 ounce gold coinShe could have kept the coin, thrown a fiatski dollar from her pocket into the till, and made what is the equivalent of what?...a month's pay (fast food employee)?
You jest, surely? 90% pure silver was used in US coinage until ?1965.
45 years ago you would indeed have paid for a loaf of bread with silver here in the US. And just a few years ago, in Zimbabwe, if you'd been a baker I bet you'd have preferred silver over a trillion-dollar 'zimmy' any day.
+1. Especially when the alternative is more than ten minutes of effort counting fist-sized stacks of fiat paper.
Are you implying price cannot be found when the medium of exchange is not paper notes? Surely, you're not that foolish? Surely, you understand the idea of trade via fiat is relatively new when looking at the big picture?
Hamy I'd just kick you square in the nuts and take your bread.
1 oz of gold = 2000 loaves of bread
Really small loaves then.
Like out of an E-Z Bake oven.
It depends on the availability of bread itself.
I can easily imagine a scenario where a collapse in the FRN leads to a collapse in economic activity and a surge in fuel prices that quickly leads to no-bread-on-shelves.
If you were then the guy with flour and yeast and a working oven, I bet you a shoe buckle there will be a banker in your shop before nightfall with an ounce of silver to buy every loaf you can bake.
or silver paper certificates for that matter...you dont have to worry about those...i am sure the baker will take the banker at his word....
E-Z bake
foundry...
no bar too small
sounds like bitcoin
And that was 1961 .... long before nixon & bretton woods :-)
OT-- Any one have an explanation for the public dustup between Bernanke and Dimon ?
High level theatrics from low scum of the earth.
yep. If anyone was paying attention, bernank looked like he was laughing inside. Pure kabuki ...
...it's the 'tour de babel syndrome'....whenever access to funds diminishes, banksters will turn on one another !
Translation: Dimon is really asking/begging the bernanke for more QE.
why can't he take a pay cut and stop begging...its embarassing...
kabuki theater. the bernank is dimon's bitch #2 on speed dial.
Okay I'll bite:
Who you suppose is bitch #1?
whoever happens to be usa president at the time.
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=n00009638
rut ro, what's this?
http://jessescrossroadscafe.blogspot.com/2011/06/us-credit-rating-downgr...
Thx to Jesse.
Well, not much of an influential source,hey? Nice try.
Again, nobody is advocating shopping for groceries with gold or silver. The point is to have paper backed by a finite quantity of metal. You can adjust the fraction to suit the need for lots of bills in circulation. But the total sum is finite. Prices will adjust accordingly, as if priced in gold (or silver) but exchangeable for certificates backed by gold.
Here is the way it used to work prior to 1920. A person, or family would have credit accounts with the local merchants. The wife would go to the grocery store, order what she wanted, and the store would deliver it. Once a month on pay day the husband would drop in to the store and pay the bill with gold or silver coins.
In some cases the bill would be settled once a year. A farmer might run a bill for a year and settle up at harvest time, possibly by delivering potatos, wheat, or other produce in bulk.
That's what "credit" was all about. Your known ability to pay was your credit.
sound money is transferring funds to the pension pulse paypal account for all the great work leo does around here.........:)
When will the middle class lose their confidence in the value of paper?
I'll tell you when. The day they cannot afford to feed themselves with it anymore.
About 25 years too fucking late to do them any fucking good.
Bernank's handlers told him to tell the sheeple "it puts the lotion on the skin or it gets the hose again."
First they will get an electronic shock, then a paper shock soon afterward.
Our happy metrosexual will be stopping past the local 24hr store to stock up on face cream. He will get to the counter and pull out his plastic, 2% off, cash back, aeropoints card like he always does and the cashier will hand it back. After the 2s shock and confusion a bank card will be produced - "Please contact institution". Odd, but he figures he can do without the cream so he leaves. It is afterhours so he will call them in the morning.
The next morning our friend heads to the same mall and parks near the local bank. BEEP, BEEP on the Beemer lock and off to raise hell at the bank. 'Door locked' - WTF? Where is my card, I am calling the 1-800 number - 'All our operators are busy'.
In his confusion he glances back at the supermarket he was in last night. Strings of shopping carts are being rushed to cars with items stacked straight up. With his interest piqued our hero heads over to the store to see what the fuss is all about. The first 3 people he asks, 'whats up' to blow right past him. The fourth person he heads over to assumes a defensive postion signalling not to come any closer. "What are you doing" asks our hero? I guess you didn't see the news this morning, did you mister?
About 3 hours after this moment the middle class with lose confidence in the value of paper. When they eat through their JIT pantry later that week they will really understand everything they need to know going forward.
I've been imagining a similar scenario. Keeping enough actual cash on hand is vital.
http://dailycaller.com/2011/06/06/carville-2012-could-be-very-rough-for-...
corporal cueball says civil unrest is possible.........hmmmmm.......
still living in new orleans there carville? maybe you should consider de assing that area most haste.....
I've been saying the summer of 2012 will be long and hot since Nov. 2009. Unrest in depressed urban areas will make the LA Rodney King riots look like a street fair. I also think the 2012 Democratic Convention in Charlotte will be amplified echoes of 1968 and the nomination outcome is not certain.