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Paper Money Versus The Gold Standard
Submitted by Richard Ebeling via EpicTimes.com,
We are living in a time that can only be considered monetary chaos. The U.S. Federal Reserve has manipulated key interest rates down to practically zero for the last six years, and expanded the money supply in the banking system by $4 trillion dollars over that time. And with the true mentality of the monetary central planner, the Fed Board of Governors are now planning to manipulate key interest rates in an upward direction that they deem desirable.
The European Central Bank (ECB) has instituted a conscious policy of “negative” interest rates and planned an additional monetary expansion of well over a trillion Euros over the next year. Plus, the head of the ECB has assured the public and financial markets that there is “no limit” to the amount of paper money that will be produced to push the European economies in the direct that those monetary central planners consider best.
We also should not forget that it was the Federal Reserve that earlier in the twenty-first century undertook a monetary expansion and policy of interest rate manipulation that set the stage for the severe and prolonged “great recession” that began in 2008-2009, in conjunction with a Federal government distorting subsidization of the American housing market.
The media and the policy pundits may focus on the day-to-day zigs and zags of central bank monetary and interest rate policy, but what really needs to be asked is whether or not we should continue to leave monetary and banking policy in the discretionary hands of central banks and the monetary central planners who manage them.
Central Banking as Monetary Central Planning
And make no mistake about it. Central banking is monetary central planning. The United States and, indeed, virtually the entire world operate under a regime of monetary socialism. Historically, socialism has meant an economic system in which the government owned, managed, and planned the use of the factors of production.
Modern central banking is a system in which the government, either directly or through some appointed agency such as the Federal Reserve in the United States, has monopoly ownership and control of the medium of exchange. Through this control the government and its agency has predominant influence over the value, or purchasing power, of the monetary unit, and can significantly influence a variety of market relationships. These include the rates of interest as which borrowing and lending goes on in the banking and financial sectors of the economy, and therefore the patterns of savings and investment in the market.
If there is one lesson to be learned from the history of the last one hundred years – during which the world and the United States moved off the gold standard and onto a government-managed fiat, or paper, money system – is the fundamental disaster of placing control of the money supply in the hands of governments.
Continual Government Abuse of Money
If is worth recalling that money did not originate in the laws or decrees of kings and princes. Money, as the most widely used and generally accepted medium of exchange, emerged out of the market transactions of a growing number of buyers and sellers in an expanding arena of trade.
Commodities such as gold and silver were selected over generations of market participants as the monies of free choice, due to their useful characteristics to better facilitate the exchange of goods in the market place.
For almost all of recorded history, governments have attempted to gain control of the production and manipulation of money to serve their seemingly insatiable appetite to extract more and more of the wealth produced by the ordinary members of society. Ancient rulers would clip and debase the gold and silver coins of their subjects.
More modern rulers – whether despotically self-appointed through force or democratically elected by voting majorities – have taken advantage of the monetary printing press to churn out paper money to fund their expenditures and redistributive largess in excess of the taxes they impose on the citizenry.
Today the process has become even easier through the mere click of a “mouse” on a computer screen, which in the blink of an eye can create tens of billions of dollars out of thin air.
Thus, monetary debasement and the price inflation that normally accompanies it have served as a method for imposing a “hidden taxation” on the wealth of the citizenry. As John Maynard Keynes insightfully observed in 1919 (before he became a “Keynesian”!):
“By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.”
It is the corrosive, distortive, and destructive effects from monetary manipulation by governments that led virtually all of the leading economists of the nineteenth century to endorse the “anchoring” of the monetary system in a commodity such as gold, to prevent governments from using their powers over the creation of paper monies to cover their budgetary extravagance. John Stuart Mill’s words from the middle of the nineteenth century are worth recalling:
“No doctrine in political economy rests on more obvious grounds than the mischief of a paper currency not maintained at the same value with a metallic, either by convertibility, or by some principle of limitation equivalent to it . . . All variations in the value of the circulating medium are mischievous; they disturb existing contracts and expectations, and the liability to such changes renders every pecuniary engagement of long date entirely precarious . . .
“Great as this evil would be if it [the supply of money] depended on [the] accident [of gold production], it is still greater when placed at the arbitrary disposal of an individual or a body of individuals; who may have any kind or degree of interest to be served by an artificial fluctuation in fortunes; and who have at any rate a strong interest in issuing as much [inconvertible paper money] as possible, each issue being itself a source of profit.
“Not to add, that the issuers have, and in the case of government paper, always have, a direct interest in lowering the value of the currency because it is the medium in which their own debts are computed . . . Such power, in whomsoever vested, is an intolerable evil.”
The Social Benefits of a Gold Standard
Under a gold standard, it is gold that is the actual money. Paper currency and various forms of checking and other deposit accounts that may be used in market transactions in exchange for goods and services are money substitutes, representing a fixed quantity of the gold-money on deposit with a banking or other financial institution that are redeemable on demand.
Any net increases in the quantity of currency and checking and related deposits are dependent upon increases in the quantity of gold that depositors with banking and financial institutions add to their individual accounts. And any withdrawal of gold from their accounts through redemption requires that the quantity of currency notes and checking and related accounts in circulation be reduced by the same amount. Under a gold standard, a central bank is relieved of all authority and power to arbitrarily “manage” the monetary order.
Many critics of the gold standard consider this a rigid and inflexible “rule” about how the monetary system and the quantity of money in the society is to be determined and constrained. Yet, the advocates of the gold standard have long argued that this relative inflexibility is essential to discipline governments within the confines of a “hard budget.”
A Gold Standard Can Limit Government Monetary Abuse
Without the “escape hatch” of the monetary printing press, governments either must tax the citizenry or borrow a part of the savings of the private sector to cover its expenditures. Those proposing government spending must either justify it by explaining where the tax dollars will come from and upon whom the taxes will fall; or make the case for borrowing a part of the savings of the society to cover those expenditures – but at market rates of interest that tell the truth about what it will cost to attract lenders to lend that sum to the government rather than to private sector borrowers, and therefore, at the social cost of private sector investment and future growth that will have to be foregone.
In other words, it prevents the government from “monetizing the debt” to cover all or part of its budget deficits. The borrowed sums cannot be created out of thin air through central bank monetary expansion. The government, under a gold standard, can no longer create the illusion that something can be had for nothing.
As Austrian economist, Ludwig von Mises, expressed it:
“Why have a monetary system based on gold? Because, as conditions are today and for the time that can be foreseen today, the gold standard alone makes the determination of money’s purchasing power independent of the ambitions and machinations of governments, of dictators, and political parties, and pressure groups. The gold standard alone is what the nineteenth-century freedom-loving leaders (who championed representative government, civil liberties, and prosperity for all) called ‘sound money’.”
Milton Friedman’s “Second Thoughts” About the Benefits of Paper Money
It must be admitted that even some advocates of economic freedom and limited government have been advocates of paper money. The most notable one in the second half of the twentieth century was the Nobel Prize economist, Milton Friedman. Over most of his professional career he argued that maintaining a gold standard was a waste of society’s resources.
Why squander the men, material and machinery digging gold out of the ground to then simply store it away in the vaults of banks? It is better to use those scarce resources to produce more of the ordinary goods and services that can enhance the standard and quality of people’s lives. Control the potential arbitrary recklessness of central banks, Friedman proposed, by setting up a monetary “rule” that says: Increase the paper money supply by some small annual percent, with no discretion left in the hands of the monetary managers.
But it less well known is that in the years after Friedman won the Nobel Prize in Economics in 1976, he had second thoughts about this monetary prescription. In a 1986 article on, “The Resource Costs of Irredeemable Paper Money,” he argued that when looking over the monetary mismanagement and mischief caused by governments and central banks during the twentieth century, it was “crystal clear” that the costs of mining, minting and storing gold as the basis of a monetary system would have been far less than the disruptive and destabilizing costs imposed on society due to paper money inflations and the booms and busts of the business cycle brought about by central bank manipulations of money and interest rates.
In his 1985 presidential address before the Western Economic Association on “Economists and Public Policy,” Friedman said that Public Choice theory – the use of economics to analyze the workings of the political process – had persuaded him that it would never be in the long-run self-interest of governments or central bankers to manage the monetary system according to some hypothetical “public interest.”
Those in government or holding the levers of the monetary printing press will always be susceptible to the temptations and pressures of short-run political gains that monetary expansion can fund. He admitted that it had been a “waste of time” on his part to try to get governments and central banks to follow his idea for a monetary rule.
And in another article in 1986 (co-authored with Anna Schwartz) on, “Has Government Any Role in Money?” Friedman said that while he was not ready at that time to advocate a return to the gold standard, he did conclude that “that leaving monetary and banking arrangements to the market would have produced a more satisfactory outcome than was actually achieved through government involvement.”
Monetary Mismanagement versus Markets and Gold
But it is not only the political dangers arising from government mismanagement of paper money that justifies the establishment of a gold standard. It is also and equally the fact that monetary central planning is unworkable as a means to maintain economy-wide stability, full employment, and growth.
Especially since the 1930s, many economists and policy makers influenced by Keynes and the Keynesian Revolution have believed markets are potentially unstable and susceptible to wide and prolonged fluctuations in employment and output that only can be prevented or reduced in severity through “activist” monetary and fiscal policy.
But in reality, the causation runs the in the opposite direction. It is central bank manipulations of money, credit and interest rates that have generated the instability and periodic swings in economy-wide production and employment.
The fact is financial institutions and interest rates have important work to do in the market economy. Banks and other financial intermediaries are supposed to serve as the “middlemen” who bring together those who wish to save portions of their earned income with others who desire to borrow and invest that savings in profit-oriented productive ways that generate capital formation, technological improvements, and cost-efficient production of new, better and more goods and services to satisfy consumer demands in the future.
Market-determined interest rates are meant to bring those savings and investment plans into coordination with each other, so the amount of invested capital and the time-shape of the investment horizons undertaken are consistent with the available real savings to support them to maintainable completion.
Monetary expansion by central banks creates the illusion that there is more actual investable savings in the economy than really exists. And the false interest rate signals generated in the banking system by the monetary expansion not only misinforms potential investment borrowers about the amount of real savings available for capital projects, but creates an incorrect basis for determining the present value calculations that influence the time horizons for the investments undertaken.
It is these false monetary and interest rate signals that induces the misdirection of resources, the mal-investment of capital, and the incorrect allocation of labor among employments in the economy that sets the stage for an inevitable and inescapable “correction” and readjustment that represents the recession stage of the business cycle that follows the collapse of the artificial boom.
The monetary central planners can never be more successful in determining a “optimal” quantity of money or the “right” interest rates to assure savings-investment coordination than all other socialist planners were when they tried to centrally plan agricultural production or investment output for an entire society.
All such attempts at monetary planning and management by central bankers are instances of what Friedrich A. Hayek called in his Nobel Lecture a, “pretense of knowledge,” that they can know better and do better than the outcomes generated by competitive interactions of the market participants, themselves. And as Adam Smith warned, nowhere is such regulatory power “so dangerous as in the hands of a man who had the folly and presumption enough to fancy himself fit to exercise it.”
There is no way of knowing the optimal amount of money in the economy other than allowing market participants in the competitive exchange process to decide what they want to use as money – which has historically been a commodity such as gold or silver. And there is no way of knowing what interest rates should be other than allowing the market forces of supply and demand for lending and borrowing to determine those interest rates through the process of private sector financial intermediation, without government or central bank interference or manipulation.
The Return to the Gold Standard as a Monetary Constitution
Finally, how do we return to a functioning and workable gold standard? Under the current government and central bank-controlled monetary system the simplest method might be for the monetary authority to stop creating and printing money and credit. Over a short period of time a fairly reasonable estimate could be made about the actual quantity of a nation’s currency and checking and related deposits that are in existence and in circulation. A new legal redemption ratio could be established by dividing the estimated total quantity of all forms of these money-substitutes into the quantity of gold possessed by the government and the central bank.
A country following this procedure would then, once again, be on the gold standard. Its long-run maintainability, of course, would require the government and the central bank to follow those “rules of the game” that no increase in the quantity of money-substitutes may be created and brought into circulation unless there have been net deposits of gold in people’s accounts with banking and other financial institutions.
Can we trust governments and central banks to abide by these rules of the game? The temptations to violate them will still remain strong in a political environment dominated by ideologies of wealth redistribution, special interest favoritism, and numerous “entitlement” demands.
It is why the real long-run goal of monetary reform should be the denationalization of money. That is, the separation of money from the state by ending of central banking, altogether. In its place would emerge private, competitive free banking – a truly market-based money and banking system.
But nevertheless, in the meantime, a gold standard can serve as a form of a “monetary constitution” setting formal limits and imposing restraints on those in government who would want to abuse the monetary printing press, similar to the way political constitutions, however imperfectly, are meant to limit the abuses of power-lusting monarchs and the plundering majorities in functioning democracies.
If it fails, it should not be for want of trying. And a gold standard can be one of the positive institutional reforms in the attempt and on the way to a fully free market monetary system.
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Yes, for quite a while now bankers and financiers have been nothing but overcompensated middlemen stuck between the printer/computer (where they create money with no real collateral or work) and the producer/consumer in the real economy. Fine, if they don't want to have to deal with real work, real collateral or real risk then I say it is long past time to execute the middlemen!!!
sounds great to me!!!!
The government cannot surrender the printing press because if it did, it would be bankrupt.
We are beyond the point at which we can move back to the gold standard without defaulting on our obligations (which have ballooned to an unimaginable scale).
That's the leverage they use though. It seems to start with the threat of war, something to the effect that "if you don't allow a central bank we will attack you with our other slave states and destroy you with outside aggression of civil war".
Once the bank has a foot hold they push you to do more and more of the changes they want to see with property rights, social security programs, banking reform, whatever they want.
Then they threaten you with "if you try to pull our authority we will collapse your country and starve your asses and maybe bring war too."
One way or another you are screwed in the end in my opinion. The best thing that could happen is for everybody to rebel at once.
The Von Mises Intstitute was completely financed by the Rockefeller foundation BTW just in case anyone was wondering.
https://realcurrencies.wordpress.com/2012/02/17/how-the-money-power-crea...
A return to the gold (reserve) standard is actually what the Khazarati banksters want as it will assist in the creation of the new Rockefeller-Rothschild IMF-SDR global currency (AKA Phoenix) and make private gold ownership once again ILLEGAL
When you read shit like > "Can we trust governments and central banks to abide by these rules of the game" when "the game" was created by the globalist bankers and global financial elite... they are asking you to check your brains at the door.
Caveat emptor muttonheads...
dude get out of here with this shit. you and the other brics are NWO crowd are getting tiresome with the totally unsubstantiated "facts"
so you link an article, where the guy first says:
"According to this amazing report, all non-specified quotes in this essay are taken from it"
then every quote of substance that indicates vos mises institute was completely financed by rockefeller comes from this "amazing report". then you open said report and the first line reads:
"Posted in full with the permission of the anonymous author"
then proceeds to again, go through a ridiculous story with a bunch of tenuous connections that are supported with zero facts.
stop spewing your bullshit. im starting to think youre the shill.
edit: make sure you link another redefining god article that "proves" youre right.
So what, Brandon Smith and James Corbett not present enough solid info for your taste either? Have you ever even bothered to double-check the info in those redefining god articles or look at the links he presents? Have you ever read a history book written by an actual historian instead of 'Common Core' assholes?
There is a shitload of proof, and the links those guys point to are all the words and books of the very people who are pulling this shit off on us. Just check Brandon's last article and watch that sickening LaGarde interview. What more proof do you need? Or do you have a Putin man-crush and prefer wishful thinking to reality?
same thing with brandon smith. it's all extrapolating out quotes and making sweeping inferences based on shoddy evidence. ex: putin met with kissinger so he's in on it. flies in the face of putin arresting or kicking out multiple jewish oligarchs.
corbett did an excellent video that i did indeed see regarding china ONLY, nothing on russia, and the video presented evidence of mao being hand picked etc. all the evidence in the video seemed legit, except that he basically stopped being able to draw connections after 2000. so yes china when it was poor was controlled by the banking cabal. but obviously as china grew to the world power that it is today namely from 2000 - the present, its interests have changed in tandem. corbett presented zero evidence of any actual high level ties apart from the fact that the chinese still meet with the banking cabal.
one cannot conclusively draw the conclusion that china and russia are controlled opposition based largely--if not entirely--on the fact that they still meet and cooperate with the banking cabal. you guys are getting dogmatic with your shit. at the beginning of his last article, brandon smith said that he proved his theory to be 100% true (i believe he said indisputably true) and linked a previous article with all the same flaws i just mentioned. if ive learned anything at ZH is that anyone who speaks in such a manner is probably an asshole.
what is the motivation for china and russia to join the NWO and bring in the bankers' wet dream of a one world government and monetary system? so they can share power with the craziest psycopaths in history who have the worst track record of backstabbing, lying, and cheating of all thime? all they have to do is wait for the west to implode, avoid war at all costs, and then dont have to share power with the same crazy motherfuckers. the entire premise when viewed in this light is ridiculous.
I've read enough of the links in those articles to convince me beyond any burden of proof. When you put together hundreds of pieces of evidence from all around the world in one place, it eventually paints a fairly complete picture - especially when you take the time to read through their OWN DOCUMENTS, and sit through all their fucking boring videos. When you also consider history, and see that these same patterns of events repeat over and over again, using THE SAME METHODS, then it is pretty damn hard to deny what is going on.
Have you ever read any of Carroll Quigley's books? Antony Sutton? How about Gary Allen or Larry Abraham? Or how about the old-timers who laid the foundation for what is going on, like Albert Pike and Adam Weishaupt? Major General Cherep-Spiridovich? Books by those guys are all available as free downloads on-line. All of what is going on was PLANNED, at least a hundred years ago.
(BTW, here is that link to Corbett's expose on the NWO and China connection:
https://www.corbettreport.com/interview-1032-sgt-report-chinese-brics-in...
https://followingworldchange.wordpress.com/2015/08/20/the-corbett-report...
And here - Corbett covers some of the Sutton material, and goes much deeper into the China-fronted NWO involvement:
https://www.corbettreport.com/episode-297-china-and-the-new-world-order/
That link also has lots of quotes and material from the Rothschilds, Soros, Kissinger, Brzinzski, etc.
And here's a video where he talks about the NWO: https://www.youtube.com/watch?v=5sAuPLYkZME )
Well said bro. And BS and Corbett never bother to explain why Russia and China make so many moves that weaken the NWO position. Take Syria or Iran. Or many of Putin's speaches. The actions of Putin are far more consistent with him desperately avoiding a war with the Zionists than being another corrupt player hoping to get paid off after he finally lets the vultures pick over the carcass of Russia.
Correct, Ms No.
A naive article.
The "ring of truth" present in commodity backed money is due to the principle of the conservation of matter. However, that has been demonstrated to have been a special case of the overall conservation of energy. Therefore, an energy backed money would be better than a matter backed money. However, after one studies human beings and civilizations as manifestations of general energy systems, one discovers the theoretical reasons for why what exists, as the actual empirical situation, namely, MONEY IS MEASUREMENT BACKED BY MURDER.
Articles like the one above are pathetically ridiculous, silly, superficial, as well as naive to the point of being too childish to be able to effectively respond to within their own frame of reference. The ONLY thing that presuming the politically impossible miracle of going back to some "gold standard" could actually do in the real world is to insert the following into the basic nature of the social situation, namely, a "gold standard" is actually MEASUREMENT OF GOLD BACKED BY MURDER.
As soon as human beings are perceived and defined as separate from their environment and each other, then they necessarily live as entropic pumps of environmental energy flows, or basically as gangs of robbers. The history of civilization has been the history of organized crime on larger and larger scales, through the history of successful warfare based on being able to back up deceits with destruction, morphing to become successful finance based on enforcing frauds.
The theoretical "gold standard" is supposed to limit the degree to which governments enforce frauds by privately controlled banks. It does that by its old-fashioned "ring of truth" derived from matter like gold not being possible to make out of nothing, or disappear to nothing, unlike money as debts, which is made out of nothing as debts, and disappears back to nothing when debts disappear. That system only works because that form of money made out of nothing as debts is a fraud by privately controlled banks, that is enforced by governments, due to the long history of the funding of all aspects of the political processes, through both legal and illegal activities, resulting in the methods of organized crime being applied to capture control over those governments.
The current systems are based upon almost all successful politicians being the puppets of the banksters, who are voted for by enough of the masses of muppets, who have been miseducated and misinformed about everything by their schools and the mass media throughout their whole lives. Within that context, the "gold standard solutions" are simply more deliberate STUPIDITY, IGNORANCE & WILLFUL BLINDNESS.
The only things that actually exist are the dynamic equilibria between different systems of organized lies operating robberies. The only solutions which could actually exist are changes in those dynamic equilibria or systems of organized lies operating robberies. I REPEAT: What actually exists are COMBINED MONEY/MURDER systems. Those are the only things that could actually exist. What actually exists are sociopolitical systems due to the best organized gangsters, the international bankers, or the banksters, having captured control over the powers of governments through the vicious spirals of POLITICAL FUNDING ENFORCING FRAUDS.
The ONLY realistic ways to change the real monetary systems would have to simultaneously change the murder systems that back up those monetary systems. Those who promote old-fashioned notions about returning to any kind of "gold standard" are grossly over-simplifying the actually quite hyper-complicated relationships of human artificial selection systems WITHIN natural selection systems.
The political economy is INSIDE human ecology. The ways that the death controls back up the debt controls are what makes the current monetary systems work. Political fantasies about old-fashioned sound and honest money backed by gold and silver, etc., are nothing more than short-circuited bullshit, based on deliberately NOT thinking through the issues regarding how and why civilization NECESSARILY operates according to the principles and methods of organized crime.
The title of that article itself was ridiculously old-fashioned. What actually exists now is NO LONGER paper frauds backed by the force of gunpowder weapons. Rather what exists now are globalized electronic frauds, backed by the threat of force from atomic bombs. Of course, a deliberately superficial article like the one above has no interest in thinking through those issues ... An article like the one above does not engage in deeper analysis regarding how and why governments are necessarily the biggest forms of organized crime, controlled by the best organized gangs of criminals. Rather, it likes to use the magical words like "free markets," without considering that the history of warfare has been a de facto free market in murder, and that was made the currently existing civilization to be what it actually is. Furthermore, the same methods of organized crime, applied through the political processes, drove the development of the situation whereby governments enforce frauds by privately controlled banks.
Since the debt controls are actually backed by the death controls, there are no other ways to realistically resolve the real problems than by changing the death control systems. Of course, the "free market" magic phrases tend to presume that there will be some functioning "rule of law" ... without thinking through the paradoxes with respect to the possible enforcement of that "rule of law."
What actually happened is that there tended to be oscillations between periods of relatively stable empires, to periods of relative chaos, out of which may then have emerged again some relatively stable empire, wherein there was sovereign power, that emerged as the biggest form of organized crime, controlled by the best organized gang of criminals, which were then able to assert that they were the government, which could legalize their robbery as taxation, and justify and rationalized that form of legalized robbery through the rule of law.
Any future monetary system will necessarily continue to operate inside that historical context, EXCEPT for the ways that globalized electronic frauds, backed by atomic bombs, may go through phases of chaos to the degree that no technologically based civilization survives through that, and indeed, perhaps the human species commits collective suicide and goes extinct instead.
Neolithic Civilization was always based upon being able to back up lies with violence, which grew at about an exponential rate due to progress in physical science and technology. Hence, there developed more and more sophisticated systems of legalized lies, backed by legalized violence, through the phases of paper money frauds, backed by gunpowder weapons, to become electronic money frauds, backed by atomic bombs.
The article above was spouting nostalgic nonsense. The essential issues are how to operate the human murder systems after the development of weapons of mass destruction? Nothing less than answers to those questions are sufficient, because MONEY IS MEASUREMENT BACKED BY MURDER, while the "gold standard" actually can never become anything other than the MEASUREMENT OF GOLD BACKED BY MURDER.
Human beings and civilization have been driven to develop intense paradoxes, as sets of consistent contractions, due to the murder systems having always been the central controlling systems, upon which everything else necessarily depended. Since the social successfulness of the actually existing murder systems depended upon the maximum possible deceits and treacheries, that history is what enabled the development of financial successfulness to become based on the maximum possible frauds by privately controlled banks being enforced by governments.
It ridiculously short-circuits thinking through those issues to rely upon magic phrases and old-fashioned notions, such as "gold backed money and free markets." Governments exist because organized crime exists, because some death control systems must actually exist, and the ones that actually survived then became the ways and means whereby the debt control systems were backed by those death control systems.
As I said, we should develop money based upon the standard of the conservation of energy, not based upon the gold standard, as merely the single simplest symbol of the conservation of matter, which is the clearest example of the special case that matter is a form of energy. However, when one thinks through such an energy standard more deeply and consistently, one discovers the theoretical reasons for how and why the actually empirically observed situations exist, that governments are the biggest forms of organized crime, controlled by the best organized gangs of criminals.
While I generally agree that we appear headed towards the currently established debt slavery systems driving the generation of numbers which have become debt insanities, which are probably going to provoke death insanities, the final outcomes, IF enough technologically based civilization manages to survive through that, THEN any new empire that emerges will necessarily be based upon whatever survives to become the new death control systems, which then will be the surviving form of the rule of law, that will be what enables whatever degree of free market to then operate within that context.
What I recommend is that we should go through series of intellectual scientific revolutions, that especially ought to enable profound paradigm shifts in the ways that we perceive the death control systems, with the human murder systems being the most extreme forms of those. From that perspective, the kinds of nostalgic nonsense promoted as utterly bogus "solutions" to the problems of paper money, being to go back to any "gold standard," are pathetically inadequate, and would be more laughable if it were not the case that there is almost nothing which actually exists now by the core of organized crime (bankster dominated governments) surrounded by layers of controlled opposition groups that survived by agreeing to operate inside the bullshit world view promoted by those banksters.
Those who promote returning to any "gold standard" are nothing more than old-fashioned controlled opposition groups. They deliberately do not admit and address the underlying issues regarding how and why the currently existing systems are combined money/murder systems. Everything works through those means. Private property is based upon claims backed by coercions. There is no private property outside of some systems of public violence. Money is the most abstract form of that, since MONEY IS MEASUREMENT BACKED BY MURDER. At the present time, the money made out of nothing as debts systems are the existing ways that those debt controls are backed by the death controls operated by the governments, which thereby enforce those frauds.
The impossible ideals that there should not be any death control systems, or that money should not be based on measurements backed by murders, are what the controlled opposition groups like to promote, because they have adapted to survive as being co-opted and compromised to agree to operate inside of the biggest bullies' bullshit world view, whereby the dualities of false fundamental dichotomies and the related impossible ideals, are the kinds of bullshit social stories that bury the basic social facts that governments are actually the biggest forms of organized crime, controlled by the best organized gangsters, who are now the banksters.
What you outlined, Ms No, were merely some of the many ways that those banksters operate through applying the methods of organized crime upon the political processes. HOWEVER, what most of the few people who begin to perceive those social facts then do is continue to stay inside of the dualities of false fundamental dichotomies, and the related impossible ideals, in order to promote the same old-fashioned bullshit "solutions," based on somehow going backwards to old fashioned religions and/or ideologies, such as returning to the "gold standard" as a way to achieve sounder and more honest money. However, the esstential, and extremely intractable, problem is that sounder, honest monetary systems would require sounder, honest murder systems to back that up, any achievement of which is in a head-on collision with the long history of successful warfare based on deceitful death controls, backing up successful finance based upon enforcing frauds, such that all of that long history of social success based on deceits and frauds has created HUGE SYSTEMS OF BULLSHIT SOCIAL STORIES, as well as the tactical and strategic issues of how to develop better organized crime, operating better death controls, in order to cope with the existence of electronic frauds, backed by the threat of force from atomic bombs, when almost EVERYONE HAS BECOME PROPORTIONATELY SUCCESSFUL BY BEING THE BEST AVAILABLE PROFESSIONAL HYPOCRITES, ABLE TO NAVIGATE THROUGH FUNDAMENTALLY FRAUDULENT FINANCIAL ACCOUNTING SYSTEMS.
On the contrary, what I recommend is starting to use more unitary mechanisms, that involve approaching money as an energy standard, which has various corollaries, such how and why MONEY IS NECESSARILY MEASUREMENT BACKED BY MURDER. A genuinely more honest monetary system would have to be able to admit and address how and why that could or would be done better, by making greater use of information, that enabled higher consciousness. Of course, doing that, after the development of globalized systems of electronic monkey money frauds, backed by the threat of force from apes with atomic bombs, appears to be politically impossible at the present time. Rather, the most probable futures appear to be those wherein technologically based civilization commits collective suicide, rather than adapts to survive by changing the ways it thinks enough in order to cope with already existing globalized electronic frauds, backed by atomic bombs.
Know that there are long-standing civil wars within the 1%, each with their preferred School of Ancestor Worship. Each one has a preferred money system that, strangely enough, favors the one that prefers it.
No group gives a shit about the betterment of mankind, only about increasing its own power and it's a shame that the Tylers don't see the Mises whores for who they really are, shills for a subset of the 1%; the (g)old money.
A little history that proves quite informative and details the formation of the Mises Institute after a falling out with the "Beltway Libertarians" (Koch Brothers).
http://archive.lewrockwell.com/gordon/gordon37.html
http://archive.lewrockwell.com/gordon/gordon39.html
http://archive.lewrockwell.com/gordon/gordon86.1.html
Hypocritically, what the Lew Rockwell types criticize the Kochtopus for, they so frequently express themselves. As is common with the Libertarian Right, they are good at identifying oppression (of them) and demanding it's removal in the name of Liberty, but when pressed for details of what might happen in the aftermath, they turn out to be nothing more than 2-bit Fascists with all sorts of strong opinions of what YOU can and cannot do.
http://rationalwiki.org/wiki/Lew_Rockwell
They operate with an interpretation of "Liberty" that really just means "Got mine, fuck you". AKA: Liberty for me (to get control), Oppression for you (once I get it), AKA: Don't tell me what to do, but do as I say. They're just not big on broadcasting that second part but it's there all right. Simply ask why they hate Left Libertarianism and Anarchism so much: Property Rights you see...got mine, fuck you.
Good points Mediocritas!
Especially I agreed with:
Yup. One that works for producers would be my choice.
However the threat of war against a nuclear armed state is a hollow threat. I say the government should storm the Fed and rub out the bankers.
Of course the government would have to free themselves of the banksters tentacled grip first.
We'll know how to judge Trump, should he ever become President, by how he deals with the evil of the Fed.
So, you are saying that because we are down we cannot move up?
The guy that wrote the article is at the right pier but he missed the boat. A 'gold standard' is nothing but a fig-leaf designed to cover banker abuse of the currency. The GLD ETF is on a 'gold standard'. Each share is supposed to be worth 1/10 of an ounce of gold. But they only have 1/249th of the gold to 'back' their claims. Let the central bankers and you will find out how many hidden ways there are to print money.
The only solution to our money problem is to go on an 'equity' standard. That means: Prohibit bankers from making loans, prohibit them from fractional-reserve games, and keep title for all deposits in the name of the depositor, not the bank.
Creature From Jekyll Island is a great book that covers this in considerable detail. Read it if you are not sure what I am talking about. Or, if that's too heavy (which it is, literally), read Thieves Emporium instead. It covers all the points well in a 'primer' sort of way as well as a wide variety of other issues we face in trying to control the Deep State.
http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/09129864..., rated 4.7
And
http://www.amazon.com/Thieves-Emporium-Max-Hernandez-ebook/dp/B00CWWWRK0, rated 4.6
Don't think that would work. Not in a democracy or constitutional republic, at any rate.
You'd have to get a government that would see it in their intrests to create and maintain sound money, over and above one that prints cash that it gets to spend first, hand over fist.
I have a philosophical view when it comes to government:
Don't ask for good men to lead the government. They don't exist and never have.
Ask instead for men, who by happy co-incidence will better the common man by serving their own selfish desires.
That's the government you want.
So the question becomes: what would cause a government to want to create sound money?
Answer: One that needs to trade with partners and know that its settlements will not be refused. One that needs its internal economy to build upwards, quickly with infinite investor/consumer confidence in the currency.
The government would have to be one with a personal stake in the success of the state - perhaps even a sovereign is required.
As to the curency used itself - personally I can't see past gold being the answer.
Ask yourself this - would you turn down someone if they wanted to trade with you and settle in gold (if you could verify its purity).
Neither would I.
the alternative is real treasury money, which is open to the same abuse fed money has except the tax payer is only on the hook for inflation.
Personally I like BOTH, paper and Gold.
But cannot afford much of either.
why not back money with something useful like oil and commodities?
Counterproductive. Supply and demand for money should not be commingled with supply and demand for commodities as the two will distort each other.
Money needs no backing, it's inherently valuable in its own right as a medium of exchange.
needs no backing, do you mean like...bitcoin?
Correct. Neither bitcoin nor gold needs backing. Sound money needs no backing. Sound money facilitates trade. That's what it does. That's its valuable service. Thinking that service must have some additional backing by something else in order to be valuable makes no sense.
An apple does not need backing to be valuable, because an apple provides the valuable service of feeding a human just fine all by itself.
Governments attempt to back their fiat money with something else not because it's money, but because it's unsound money being forced onto people who wouldn't otherwise choose to use or value it as money.
Of course money needs backing- even if it's "merely" the full faith and credit of the empire.
Full faith and credit meaning the CIA/USMilitary/EconomicHitmen can and will force feeble governments to exchange their uncommingled commodities and labor for your medium of exchange.
Inherently valuable!
Money (that is, fiat) cannot be backed, as any "backing" is just another lie. Money (fiat again) is also inherently valueless - except for it Btu value of course. As a medium of accepted exchange it does fine - as a store of value, not so well.
Everyone seems to be looking for a way to "save" the idea of the paper/digital dollar. Kill the damn thing already, it's the idea itself and its ownership by the evil doers in the Fed that is destroying America and enslaving the world.
You want money you can trust? Try gold. Only has approx 5000 years of success as money. Probably something to that.
You can't eat gold, but you can eat bankers; and it may come to that........
I'd rather pass them through rats first.
Somebody has been watching Season 3 of Hannibal. Of course rats taste bad but after you flavor their meat with banker they become gag nasty. It's a great idea but after you harvest the rat, chuck it, they served their purpose.
Whats have you got against rats ?
Sorry, maybe I wasn't clear enough: I'd rather eat ratshit than bankers. Not that I'd like to have to settle for either, mind.
I'd like a BBQ'd royal baby.
utopian claptrap. anything can be currency if everyone decides to accept it as currency. giant rocks and shells and beads to notches on wood have all been used, as is barter but a universal system of acceptance must have a universal means of acceptance. gold and silver are almost universally accepted and could easily be accepted in universal terms as a function of weight. that is about as close to utopia you are going to get.
Today, gold and silver are just commodities. You can just as easily trade any commodity.
The most universally accepted medium today? The US dollar.
You bleat too loudly, and too much. Clearly a paid troll.
I'm not protesting, I'm pointing out the falicy of your statements.
You did nothing that showed any intelligence or education, as usual? Gold and Silver have the properties which make them the best choices ever found to allow them to function as sound money. Have you ever learned the 5 properties of money?
It is fallacy, not falicy. almost ironic or something
The reason I love gold and silver so much is that it can't be printed. It is the result of real labor and energy to mine and coin it.
But the value of gold and silver is determined by desire and greed, and not by industrial demand, like every other commodity.
It's like determining the value of a painting. What's a painting worth? Why is a Picasso worth $100 million when it only took one day and a couple dollars worth of paint to create it? (the painting is Nude, Green Leaves and Bust)
It does not take a day to paint an Oil.
The canvas must be lacquered, sanded smooth, textured, aged, and properly prepared. That can take a year.
There is planning involved.
Perhaps you lack taste for the talent of Picasso. Cubism does not appeal to the unimaginative after all.
You may prefer to have Factory Oils adorn your walls but many will believe that to be gauche.
But you may lack appreciation for fine art as most do,
Thank goodness some do. We Americans don't usually get much exposure. I will never forget visiting the Monet and Dali museums in Paris and walking for hours through the Louvre and musee d' Orsay. Deeply moving, spiritual experience.
Miffed;-)
A tube of gauche is about 1 oz of silver. Imagine that.
No it's not. Paintings are individual works, gold is on the Periodic table - it's an element - and a damn rare one at that.
Gold's value is not determined by desire and greed, but like the painting, by supply and demand.
While both the painting and gold generate their value from both supply and demand the painting cannot be duplicated. Gold can.
Gold gains its value from its inherent characteristics, not the vageries of a given art market. As a result the same pieces of gold will be of great worth when Picasso's works are dust.
Gold does not tarnish (lose its beauty), it does not oxydize. It does not degrade over time. It's not for nothing that it is call the Eternal Metal.
Picasso's pieces can be destroyed by water, violence or fire. Gold can't.
Picasso's pieces could not be used as currencies as they are too few. Man has been stockpiling gold for millenia.
Picasso's works are not terribly portable, are not durable, are not divisible and are not interchangeable. In fact they would make awful money.
Gold ticks every box. Being money is its very nature.
"Today, gold and silver are just commodities. You can just as easily trade any commodity. "
Gold and silver are not just commodities - even today. They are still treated as money - even by the Central Banks - they just don't fess up to this reality anymore.
Gold and silver will be money when not only has the US dollar gone the way of the dodo - but even when the memory of it has.
@anolpheles
I wonder why that is. Perhaps it has something to do with international agreements hammered out by GOVERNMENTS all bought and paid for by the very same banksters intent on setting up the dollar as the world's reserve currency now referred to lovingly as the "petro dollar" which when it breaks will crash the US dollar. Since all the criminal gangs called "Governments" are financed by the banking cartel through DEBT and the cartel steals makes it money through that debt paid for by TAXATION, the two remain in bed together. Until then...
And it's all backed up by the overwhelning threat of violence provided by The US military, NATO, and what The Japanese refer to as The Unforgettable Fire. Walk the straight line or we will incinerate you. Or ig you are just a tin horn dictator thinking about minting gold dinars, then we can just foment a "revolution" in your shit hole "nation" and you will end up like Muammar Quadafi.
Just sayin'
On a completely separate note our current form of "money" is unconstitutional being of paper form and being created by a private cartel. Which would make Janet Yellen, Ben Bernanke, et al counterfeiters the original penalty of which was death.
Now we just threaten death to those who try to edge in on our action.
Kinda ironic.
"utopian claptrap. anything can be currency if everyone decides to accept it as currency."
True, anything can be used as currency - even worthless pieces of Fed stamped paper.
Can anything be used as a store of value? Didn't think so.
That's why gold and to a lesser extent silver are considered money - unoffically today - but still universally recognised.
Anything can be a currency. Can't think of anything better than gold for use as money though. That's the difference and the very essence of this entire discussion.
Fiat money controlled by a few humans in a special club or specie money controlled by all of humanity through the marketplace? Hard decision.
i like free markets in money. i also like ellen brown's proposal from web of debt, where she details the currency system in pennsylvania pre revolution, with the government issuing its own debt free paper money in the form of loans to small farmers and businessmen at a fixed relatively low (3-5%) interest rate. any profits from the loans were used to finance the government, so that taxes could remain at zero.
We will be back to the gold standard - but after the great fiat collapse.
I wonder if the central banks or BIS will someday start a new global gold backed currency, backed by gold... for a while. Probably anything is possible with those people, there is no true accounting on anything.
That's absolutely the plan. SDR/Bancor/Phoenix. It will be a basket of national currencies and gold (perhaps silver, but that depends on the PTB having a secret hoard) that will be digital in form supposedly backed by said basket of currencies and gold. Once people have accepted that in a White Knight BIS/IMF are rescuing us from the FED and nasty chump banks, they will quickly (5-15 years) revoke gold convertibility as per their usual methods. They have a plan. Make no mistake the current monetary state off affairs is unfolding as planned with a careful planned demolition of currencies, national ledgers and economies underway. Derivatives will be the explosive and rates the fuse.
Only if we didn't learn anything from the current collapse or are still in thrall to the banksters.
What about the silver standard. Andrew Jackson, "I killed the bank," approved. Gold is still likely to be controled the existing money changers; that is how they got started after-all.
Not if they're dead it won't be.
Joo confetti. Who's worse for the USSA? ISIS or The Fed?
Fed
Fed - without the banksters there wouldn't be an ISIS, or a reason for their existance either.
We're all violently aware of the problem. It would be nice to get articles that don't merely rehash it. How about articles on different strategies of how to get people to start using gold.
I'll draft up an article along that line. There is a small but growing fraternity of us (small business owners) trading in grams of gold and using them as small savings strategies.
www.teamramgold.com/about-us
A small business community accepting and paying in gold is great of course. But larger economies are always more efficient than smaller economies. Larger economies have a greater diversity of unique skills and resources. They can support more specialization thus deliver even lower costs of production and higher quality.
I think a more interesting approach could be significantly reducing the friction for ordinary businesses to use gold and even giving them an advantage to doing so. I would study how credit cards first got a foothold and came to be accepted by merchants.
I read somewhere (I think Max Keiser) that the average life of a fiat currency is 27 years and we are probably going on over 40 years now. We have been used as an example for the other countries that are resisting CB tyranny so it has probably been an effort to keep the fiat city on the hill meme going.
State money is corruptable as well but atleast they are within reach. The BIS has supposedly some 700+ tons of gold last I saw but nobody knows how much is theirs and how much belongs to their member slave states. These assholes are elected by nobody, answer to no country's laws, are immune from taxes and have a private security force. They control a massive margin of the earths economic output and decide whether we eat, they decide whether we starve and they decide which nations will rise and fall in war.
We are slaves and they are the masters. They meet at "the tower of Basel" in Switzerland to decide your fate periodically. You are owned by a super entity of central banks and yet we bicker about whether Trump or Bernie will be elected, silly really.
To quote someone famous; not a man in a million realises this.
Very well said
When you spout or repeat bullshit like "the average life of a fiat currency is 27 years", you have less credibility than the bankers and governments you are trying to criticize.
Sure, there are lots of banana republics that only survive a few years, but there are LOTS of MAJOR currencies that have survived hundreds of years.
The British Pound is over 320 years old.
we're talking unbacked fiat currencies. a backed currency is not fiat
Actually a "backed" currency is fiat. It's just that the general public is not aware of this fact, until it is glaringly obvious that it is a fiat currency. Then there's the mad rush on the "backed" commodity, only to find that there isn't enough to go around and the President intervenes to take the currency temporarily off the standard.
Sound familiar?
The Pound is the longest lived currency, the shortest lived made it only months and that's why they call it an average. So what? That still doesn't counter any argument that gold and silver hold value and that having control over your own currency is preferable. It may be the case that gold backed currency fails just as often as gold-backed but you haven't made a case for that.
The Roman Empire had a "gold backed currency".
It was debased by a factor of 100,000 by the time the empire ended (collapsed). It's irrelevant how a currency is "backed". It's how it's managed that's important, meaning that it simply isn't "printed". The US dollar isn't "printed" into existance, it's loaned into existence.
However the Zimbabwe dollar was printed into existence and met it's demise becasue of that.
OK moron, get ready to learn. Do you know why it's called the 'pound sterling'? It's because it used to be backed up by, are you ready for this, 1 pound of silver.
https://en.wikipedia.org/wiki/Pound_sterling
Great. Now, I'll give you £1, and YOU give me ONE POUND of silver.
Or even better, I'll give you £10,000 and you give me 10,000 pounds of silver. Like you said, a pound is a pound of silver....
I was responding to your comment that the pound lasted 320 years, the only reason it has lasted that long is that it WAS backed by 1 pound of silver. Now it's not. By the way it's nice to see that you want to collect PM's, losing faith in government paper are we?
"You are owned by a super entity of central banks and yet we bicker about whether Trump or Bernie will be elected, silly really.
"
No, not that silly. Trump may do something about the state of things. Bernie would create an even more oppressive communist shithole than the US has already become.
Trump might attack the Fed and turn out to be a true Augustinian in nature. Bernie doesn't stand a snowball's chance in hell if he even hints at going down that line.
Trump could theoretically save America. Bernie can only burn it down faster.
If you truly think that people are only bickering over who is better or whether or not either candidate matters, then you haven't been paying enough attention to detail.
Edit: Why the downvote. Everything I say about Trump is with a caveat. Must be some Commies out there on the Hedge.
What's going to happen when China and Russia suddenly announce to the world that their respective currencies are now backed and secured by gold?!
Hahahahhahahhaaha
Tell us, HOW could they do that? To truly be BACKED by gold, that means they would have SETTLE ACCOUNTS in gold. And when they run out of gold? What happens then?
If they are unwilling to settle accounts in gold, then it's not a gold standard.
That's why it's NEVER going to happen.
The reason you're wrong is your assumption that they would adhere to the current, manipulated price of gold.
The way that it would work is the announcement would include the initial floating price at which they're willing to buy/sell gold with their currency. Put another way, why would they run out of gold if their price was the equivalent of, say, $5,000 per ounce?
You can only dictate the price of a commodity if you control all of it (or almost all of it)
Tell us, how successful has OPEC been in dictating the price of oil?
They wouldn't run out of gold because they would demand payments for their goods and services in gold.
And when people refuse to PAY them in gold?
People will go buy somewhere else or only offer a very low bid for the bother of dealing in gold.
So much for your grand design.
People would not refuse. What they would refuse to do at that point is trade in US dollars as they would be seen as worthless pieces of unbacked paper.
The markets are savvy to financial tides and always, always watch gold. Gold as currency would instantly slay all rivals - petrodollar or otherwise.
Edit: Thanks to the Fed shill for the downvote.
The U.S.A. no longer produces any goods for export.
The rate hike will raise the value of the dollar relative to the other currencies which are in a mad dash to devalue against the dollar to boost exports.
The only way other nations will be able to compete for dollars is if they export goods.
The shift in policy will essentially take the U.S.A out of the race to de-value the currency and put it into the position of Referee.
Other nations like China will accelerate their devaluation to remain competitive for dollars vs. other nations.
The U.S. will sit on the side-lines and eat a fat lunch while the working nations starve to death and commit suicide.
Personally I think its genius.
The U.S.A. no longer produces any goods for export.
That should come as a surprise to the people at Caterpillar. I was working there 40 years ago when they first exported more than they sold domestically. They had little non-USA manufacturing at the time. They have much more now, but they are still probably one of the USA's largest exporters ... and their exports are substantial.
USA labor has become too proud of itself so some day you may be correct. But you're not correct yet.
Personally, my paper money has done far better with it's purchasing power than gold over the last 5 years.
True perhaps but it is the next 5 years that will really matter.
What's gonna happen in the next 5 years that hasn't happened already? If it's guaranteed to happen in the next 5, why hasn't it happened in the last 5?
Talk of a "gold standard" is all just a pile of unicorn shit.
Gold standards don't survive much longer than paper currencies. Look at the Roman Empire. From the beginning to the end of the Roman Empire, the "value" of their currency was debased by a factor of 100,000
That proves without question, that even a so called "gold standard" is no different than fiat. It's NOT what the currency is based upon, it's HOW IT'S MANAGED.
The fact that it is "managed" at all is the key issue.
The fact that it is "managed" at all is the key issue.
The operation of an internal combustion engine is "managed" by its carefully designed governor, fuel metering system, and negative feedback system. No human intervention is required ... but management "is" required.
"Management" is "not" the key issue. "Proper" management of the MOE process "is" the key issue.
The operative relation is: INFLATION = DEFAULT - INTEREST = zero
The management process must monitor DEFAULTs. It must mitigate these immediately with INTEREST collections of like amount. This is not a "subjective" process. It is openly transparent and directly measurable.
Whatever MOE system is instituted, it must be managed. It must "not" allow mismanagement.
All existing systems are openly fraudulent. Our's drives for a 2% annual leak (funding government and money changers through counterfeiting). It achieves a 4% annual leak. For those who control it, it is performing splendidly. For the rest of us, it is a leaky bucket we shouldn't tolerate.
It's NOT what the currency is based upon, it's HOW IT'S MANAGED.
First, it's about how it is created. Since money is "a promise to complete a trade", it is created by traders getting their promises certified. It is reclaimed and destroyed when traders deliver on their promises. In the mean time it circulates as the most valued object in virtually all simple barter exchanges. That's why it was invented ... to facilitate simple barter exchanges over time and space.
Management is just score keeping: (1) Record the trading promise; (2) Monitor for deliveries; (3) Detect DEFAULTs; (4) Collect INTEREST equal to DEFAULTs to remove them from circulation.
Management is a process. We've all been through it when we buy our houses and cars. The only problems are (1) governments counterfeit it (they never deliver on their trades) and (2) Banks and money changers throttle it claiming that is capitalism and a good thing. It is not!
The only "real" currency is production of goods or services.
But since the first civilizations, money has been managed and manipulated. From traders to governments and tax collection.
Even former civilizations on a gold and PM standard have debased their currencies.
The Roman Empire debased their gold standard by a factor of 100,000 throughout its history.
The US dollar still has a long way to go to match the debasement of the Roman gold standard.
Look at what a dollar bought in 1913 vs what it buys today. I believe it's lost around 93% of it's purchasing power, but if that isn't debasement to you I don't know what else to say.
Look at WAGES in 1913 compared to wages today.
Your argument is BS.
You cant measure with a variable. Stop thinking in fiat terms. Please.
Also there was no icome tax prior to 1913, want to keep going moron?
Going to deal with some confusion here -
Gold standard - a printed paper redemption note "backed" by gold.
Gold currency - actual gold coins used in transactions as money.
Don't confuse the two. Rome never used a "gold standard". Sure it watered down it's moneys. Nowadays that's verifyable - 99.9% purity can be checked by x-ray with no damage to the gold. 99.99% by firetesting (but this destroys the sample).
So if gold was used by governments as currency today they couldn't just "water it down" without the populace becoming aware of it straight away - it would be akin to counterfitting, and would be seen as such.
When gold is being used as a currency it has no fiat worth - that is, it is the inherent worth of the metal that you are trading in, not a set amount a government body has dictated that the metal is worth. Debasing the purity of coins, whilst attempting to pass them off as pure would be seen instantly as attempted theft.
Wouldn't want to work in the government when they got caught trying to pull that one off.
Gold's main faults are that there is no way of knowing how much is ever going to be found or mined and therefore is subject to the possiblity of wild fluctuations in supply and therefore value and also the demand for industrial uses may vary over time. With digital currencies there is no other use but currency/smart contracts and the supply is known.
Milton Freidman on digital currencies back in 1999: https://www.youtube.com/watch?v=6MnQJFEVY7s
"With digital currencies there is no other use but currency/smart contracts and the supply is known."
Until they decide the economy needs an extra digit added to the supply at the stroke of a keyboard.
By "they" you would mean 75% of the miners and users of the currency would have to agree to make a change that would devalue their own investments since there is no central bank only users to make big changes like that. Not very likely but if it did happen people coiuld switch to something else with a few clicks of their mouse. No one with an internet connection is no longer limited to the currency they were born under.
Gold is also hard to move and spend for day to day purchases but good for storing wealth.
Silver is good for the day to day.
Silver is good for the day to day.
Ridiculous. On a per person basis there is only about $400 worth of silver in existence.
$400 per person? I can't tell when your joking or serious sometimes. That's more than I need to spend in a day. I know that you know your monetary theory better than I do but the way I see it we had silver coinage in this country before (not to the extent we could have) and it seemed to work fine until they debased it, which of course is a recurrent problem with all currencies.
If there isn't enough for some reason then maybe we could add something else.
Savers will screw it all up by doing the right thing.
Savers will screw it all up by doing the right thing.
Saving has absolutely zero effect on a properly managed MOE process. It has a great effect on any process requiring capital or commodity backing. It is what enables the farming operation the money changers refer to as the "business cycle".
$400 per person? I can't tell when your joking or serious sometimes. That's more than I need to spend in a day.
I'm not joking. For a precious metal to "back" a certificate for it (or to be actually used in exchange), there must be enough of it to back all in-process trades (that's what money is), and all stored record of wealth (as opposed to land and stuff ) ... i.e. retained money.
So it's not about what you need for a day. It's about what you owe; what you are owed; and what trades you have in process (e.g. payroll you haven't yet been paid ... credit purchases you haven't yet funded ... etc.). That's a lot of money, even for us poor people. Far more than $400.
it seemed to work fine until they debased it, which of course is a recurrent problem with all currencies.
I was just out of highschool when they did it. Nothing changed except you immediately saw fewer and fewer coins with silver content. There were no gold coins circulating at the time. People who put their coins under the mattress and are bringing them out now probably didn't gain much. A quarter in 1964 would buy a gallon of gasoline then. That same quarter today would still buy a gallon of gasoline ... but you would have to first trade it for 13 or 14 of the ones we use today. That's a pretty big hassle.
If there isn't enough for some reason then maybe we could add something else.
Coming up with an object of real value to be used as money just negates the marvelous invention of money ... a method of allowing simple barter trade over time and space.
Two things are crucial:
(1) Knowing money is "a promise to complete a trade" and is created and destroyed by traders ... not by governments, money changers, capitalists, or bankers.
(2) Counterfeiting must be held to an absolute minimal level and that means outlawing government's open counterfeiting practices.
The processes employed today in managing all Mediums of Exchange (MOE) are an abject travisty and openly fraudulent. No marketplace should tolerate such practices.
Sorry, the financials of your statement don't add up. There might be technically $400 (US I assume) for each person (is that on all of the Earth? If it is that is way more than enough by the way), but that is only in the current, value manipulated, mostly not used as currency environment.
Change those things and gold might level out at approx$5000 per toz. If silver reverted to its historical average of approx 1:15 with gold then in current spending terms silver would be worth approx $333.33 per toz!
Assuming your claim of $400 worth of silver per person to be correct, that would translate into approx 29 toz each.
This would mean the average person (meaning every last man, woman and child on Earth) would have access to up to $9666.57 in spending power at any given time - just in silver, let alone gold.
To sum up - if the world reverted to the use of gold, silver and copper then the value of those commodities - now money - would skyrocket up until they meeted the needs of the demand. Gold has done this several times in the history of the US alone - there is always enough metal to go around - it is the value of the metal that fluctuates, according to demand.
Sorry, the financials of your statement don't add up. There might be technically $400 (US I assume) for each person (is that on all of the Earth? If it is that is way more than enough by the way), but that is only in the current, value manipulated, mostly not used as currency environment.
They do add up. There is about one oz of gold per person on Earth. Its value is less than $2,000. There is 1/5 the "value" of silver in the world as gold ($6B/5 = $1.2B). It's not way more than enough to get you through a week, let alone to allow you to convert all your in-process trades and stored up value to it. The current environment manipulating the current value is the cost of mining. Right now it's current value is a little too low because miners are going bankrupt ... but it's far from several orders magnitude too low.
would have access to up to $9666.57 in spending power at any given time
My numbers are good ... the share of gold and silver and copper for each person in the world is currently valued at less than $2,000. But let's take your more precise number of nearly $10K. It's not just spending power at any given time for each person that this must cover. It's the stored up value at that same time that must be covered by the $10K as well. This is because, by your rules, anyone can turn their wealth, in whatever form, into gold and silver and copper at any time. If every person on Earth did just that you would see the problem within minutes.
To sum up - if the world reverted to the use of gold, silver and copper then the value of those commodities - now money - would skyrocket up until they meeted the needs of the demand.
Right. We call that the step response ... and it is responding to a new phony demand and trying to reach a new steady state that includes that new phony demand. In getting to that steady state people holding and/or producing the commodity prosper. Those who do not suffer. When the steady state is reached you've gained nothing.
Gold has done this several times in the history of the US alone - there is always enough metal to go around - it is the value of the metal that fluctuates, according to demand.
The Spanish plundering the natives of South America; the gold rushes in California and Alaska; and the silver in Nevada ... all are excellent examples of supply changes in those precious metals. All were disruptive step functions. The Spanish were destroyed by it. The other instances resulted in very brief foolish deployment of physical effort and a few people making enormous wealth ... usually by selling shovels.
I can't repeat enough times to get through to you. The value of the MOE should "not" change with supply and demand for the MOE itself. The only way to keep that from happening is to guarantee perfect perpetual balance between supply and demand for the MOE itself. By your statement, which is correct, precious metals can't equal that guarantee. Thus, they may pretend to be money, but they are inferior to real money ...that being "in-process promises to complete trades" ... a trade representing pure supply demand equality by its very definition. It only takes place when supply equals demand. And without an in-process trade, there is no money.
You might be right....... At today's prices
At today's prices
I submit that the cost of creation dictates the prices of things over the long haul. For gold and silver to be useful as a "backing" of "all trade and stored wealth", the value would have to go up many orders of magnitude, with the cost of production remaining static.
Ain't gonna ever happen!
Sorry, but no. Even when prices are too low refiners do not stop mining silver, for two reasons:
1. It's very expensive to open or shut mines, so they are only done so after a very protracted period of sub-viable prices.
2. Silver is primarily gained as a biproduct of copper mining today - ie it would require copper mines to close to stop silver mining - not going to happen.
As to whether more refiners would enter into mining if the price was high - the answer in the short term is no - mining is simply too expensive a set-up to get into at the drop of a hat. Over the long term, if very high prices are sustained, then yes, but the pickup is slow. Even then not much difference in mining commitment would occur as silver is a biproduct of copper mining today - with fewer and fewer pure silver mines in existance.
Silver would have to be extremely high in value to open excess copper mines just to find it. Mind you, if copper was part of a tri metal monetary base that might go some of the way to helping this, but probably not much - copper is much more commonly found than silver.
Copper price (Troy oz) : $US 0.14136
Silver pirce (Troy oz) : $US 14.12
Gold price (Troy oz) : $US 1,067.78
As you can see they do make excellent coinage, due to the vast difference in value, due to scarcity and demand.
In short, to make the argument that gold, silver and copper could not be used as currency goes against 5000 years of recorded history with the metals doing just that - ie faulty entrusted theory over proven fact.
Astonishing!
Silver is not a by-product of copper mining any more than it's a by-product of film processing (don't confuse this with film manufacture). It is because of it's value that it's worth going to the extra effort to refine it rather than just throw it in the garbage. Make it valuable enough and they'll go straight for the silver and to hell with the copper.
And everything you say regarding the change in supplier/demander is totally false when the new steady state is reached. All you're describing is a system with enormous inertia and a very large time constant. And you're delivering that up as a positive attribute. By that way of thinking an internal combustion engine with an enormous flywheel is better than one with a responsive feedback control system. It is not!
Just frigging amazing!
Maybe in a 17th century european village...honestly where/when is the last time you spent silver for a purchase...do you head down to the local Target and shave some off onto a scale? There are many ways to spend bitcoin either directly or indirectly through gift cards to eliminate the need for traditional banks and credit cards.
"Gold is also hard to move..."
Mustn't own much. Gold is lighter than paper notes for pure spending power.
It's uses as a currency are reserved for capital purchases only as it is worth too much for small purchases.
Silver does fine for smaller purchases though. Copper is great for loose change.
How about a 5000 year history of successful use? That's not good enough for you? Then nothing will be.
Gold is not an industrial metal. It derives its worth from the known stockpile and the demand the market has for that. The addition/subtraction to the stockpile via mining or usage barely scrapes the surface - supply side can not cause "wild fluctuations".
I'll bite my tongue and won't be snide - just do more research on the subject matter.
Where would be right now, if 2008 collapse was allowed to happen. We would be in a much better place. Honesty. Trust.
We'd be Iceland.
It would probably be somewhere in the area of 'fair value' arrived from a devalued-in-kind 'Scheise' dollar. So likely north of $10k/oz.
Right premise, wrong solution. The problem was clearly identified, then went to Gold standard as the solution. It excels in the proverbial six qualities desireable for money: scarcity, durability, divisibility, transferability, recognizability, and fungibility. But it is not a panacea.
The correct solution is to move to a non-printable, non-inflatable currency with an openly available double accounting ledger that exceeds the ability of gold in all of the aforementioned six qualities.
It excels in the proverbial six qualities desireable for money: scarcity, durability, divisibility, transferability, recognizability, and fungibility.
Then the proverb needs to be changed. Scarcity is "not" a good quality for money. There must be exactly as much money in circulation as there are in-process trading promises. That's what money is ... an in-process trading promise.
Under a properly managed MOE process, supply and demand for the MOE itself are always in perpetual perfect balance. That doesn't mean "scarce".
Correct. If there's a scarcity of money, then nothing happens. Which means no economic prosperity.
Imagine if there was a scarcity of money today. That means nobody could go to a bank to get a loan to set up a business, or even just buy a car or house. They would have to "wait their turn", which could be years or decades.
People might laugh when I say years or decades. But that's exactly what happened in the former Soviet Union if a "regular" person wanted to buy a car. There was a scarcity. You put your name on a list, pay in FULL and wait from 5 to 10 YEARS before your car was delivered.
That's the argument the FED uses quite a bit as well. Their purchases and injections have stimulated growth alright. Maybe there is some middle ground somewhere.
Also the Russian circumstance was definitely not favorable but they survived hard times without becoming CB slaves so maybe for them the periods of scarcity were worth it.
That's the argument the FED uses quite a bit as well. Their purchases and injections have stimulated growth alright. Maybe there is some middle ground somewhere.
The idea that the FED "injects" and "purchases" is laughable on its face. Money is "a promise to complete a trade". It can only be created by traders. It is destroyed when traders deliver on their trading promises.
The FED injects and purchases with counterfeit money (money for which there is no trading promise and thus no expectation of delivery and return. That's DEFAULT and if not mitigated immediately by like INTEREST collection results in INFLATION ... the true financial engine sustaining all governments.
You're understanding of scarcity is wrong. "Scarcity" in the correct sense in that gold is rare enough to provide a high value, arrived at via supply and demand. Gold is not scarce in that there is not enough to use as money.
Having said that, gold was always only ever used by the nobility and the very well off. as it is simply not convenient to buy small purhases with.
Silver, bronze and copper were used by the commoners - each metal being found in more accessable amounts - being both more available for widespread use and also of much less value.
If we were to go back to a metal based money supply this is still the only viable option - gold alone won't cut it. But as a part of the metals used as currencies it definitely has its part - as it always has.
You're understanding of scarcity is wrong. "Scarcity" in the correct sense in that gold is rare enough to provide a high value, arrived at via supply and demand. Gold is not scarce in that there is not enough to use as money.
Gold has at least two huge problems:
1) It is trying to mimic what true money is ... a promise to complete a trade. But a trading promise assures perfect perpetual balance between supply and demand for money. Gold can't do that. Thus, gold can never guarantee zero inflation of the MOE itself.
2) There is only one ounce per person on earth. In today's terms that's less than $2,000 ... petty cash. And you don't fix that problem by saying it's worth $4,000 and thus goes twice as far. The $2,000 number comes from what miners and refiners are willing to produce it for. Solve that problem with divisibility and accomplish nothing. As you claim gold is worth more, the economic system the miners operate in becomes more expensive.
Gold isn't mimicking money. Fiat and all other currencies try to mimic gold. Gold is money.
While there may only be one ounce per person on earth atm you're valuation is incorrect. You are trying to value that gold in current fiat terms - less than $2000. In a world that accepted gold as currency again the renewed demand for the metal would drive its value sky high - so there would be exactly enough and no more than the required amount.
As always gold could only be used for capital purchases. Its value would simply be too high for smaller purchases.
It would not be me that claims that gold would be worth more, it would be the open market. Miners don't get to dictate the price of gold any more than anyone else gets to dictate the price of any other commodity - the market does that.
Mining costs don't change - they are still run by power, machines and men. The owner of the mines though - they probably become incredibly wealthy.
Gold isn't mimicking money. Fiat and all other currencies try to mimic gold. Gold is money.
If gold is money then so are double jam cement blocks.
While there may only be one ounce per person on earth atm you're valuation is incorrect. You are trying to value that gold in current fiat terms - less than $2000. In a world that accepted gold as currency again the renewed demand for the metal would drive its value sky high - so there would be exactly enough and no more than the required amount.
You are oh so wrong. The value is pretty tightly linked to the effort it takes to produce it. If you arbitrarily change the value of the result you automatically change the cost of the production process yielding the result by the same proportion. You thus change nothing.
The supply/demand for the MOE itself must be perpetually one. Gold can't deliver this attribute. You've created a fake demand by making it a necessary object in all trades. But you also drive people who would otherwise be doing useful work ... you drive them into digging and refining for gold ... a useless enterprise if it just supplies your new fake demand.
And if it does supply this fake demand, how much supply is needed? Well, if a current ounce is worth $2,000 we can expect a new ounce to be worth $2,000. So just taking yourself ... how much wealth do you have in storage? How much wealth do you have in in-process trades? How many ounces of gold does that amount to. For me it's at least a couple orders of magnitude greater than now.
In the steady state, supply equals demand and is at least 100 times what it is today. In the dynamic getting to that steady state, current miners and holders of gold are greatly advantaged over those who aren't. And worse, once you get to the steady state you'll just realize that things have changed and a new steady state must be established. This constant change in the state of the MOE itself is just what makes gold such a lousy choice for MOE ... not to mention the obvious inefficiencies.
And what does gold accomplish? Really, it says trades don't need to take place over time and space. They must always be in the here and now. You're making everyone give up the wonderful concept of money enabling trade over time and space ... and making traders follow at least three references of value. (1) The value of what they have; (2) the value of gold they must use in the interem trade; and (3) the value of what they want to trade for. At the very least you increased the complexity and uncertainty of their trade by 50%.
And you may retort that a properly managed MOE also instills that 50% additional complexity. Perhaps, but there's one huge difference. It doesn't add an additional degree of freedom. The value of the MOE "never" changes. The value of gold changes with the supply and demand for the gold itself ... which never has any hope of reaching a static balance.
It's just plain silly!
Mining costs don't change - they are still run by power, machines and men. The owner of the mines though - they probably become incredibly wealthy.
But you miss sight of the fact that the cost of the power and machines and men went up when you said the value of the gold went up. Those suppliers must use that gold to make their trades. They don't have it. And their cost of getting it is many times more dear after you impose your rule.
A litmus test of a bad medium of exchange is if anyone gets richer or poorer in the process of its implementation or operation. No one should become "incredibly wealthy". And you conveniently leave out the fact that not just the miners, but the current holders of gold get incredibly wealthy also.
The negative attributes of scarcity are greatly offset by divisibility.
The negative attributes of scarcity are greatly offset by divisibility.
No it is not. That's like saying if you take that piece of gold you have and divide it into 1000 pieces you become 1000x richer. Ridiculous!
No - he means it can be spread about through more hands. The value goes up not because you halve the size, but because the demand went up. Same as a stock split.
Same as a stock split.
It's not the same as stock splits. It's the same as 1/2 a stock split. With a stock split you change prices "and" shares outstanding. With a gold price change, you only change the price. The number of ounces can't change.
Yes, but the point is that a smaller amount of gold is needed to represent the same value - hence it can spread further and further as a currency the more it is in demand.
Ever see an Australian three pence piece? Silver content, tiny and very thin - smaller than our current 5 cent piece.
Imagine a half, quarter or eighth toz gold piece. That's what I'm getting at.
The argument isn't about whether or not there is enough gold to go around - most people to do not spend, or even possess that type of wealth at any given time. It's whether or not there is enough silver and copper to go around. The answer is yes.
Yes, but the point is that a smaller amount of gold is needed to represent the same value - hence it can spread further and further as a currency the more it is in demand.
How can you not get it?
A smaller amount of gold represents a smaller amount of value. If it represented the same or greater amount of value, the miners and those who held inventory before the new representation would be advantaged. That's not acceptable!
Take your stock spit equivalence claim. Typically a split takes an expensive stock and makes it affordable to the masses (e.g. $80 per share to $40 per share). Now use your logic and don't change the number of shares. The guys who hold the shares before the split have 1/2 the value after the split. You think they're going to stand for that?
What can be more obvious?
It's whether or not there is enough silver and copper to go around. The answer is yes.
I haven't run the numbers for copper, but I have for gold and silver.
Gold supply = about 1 ounce per person on Earth
Silver supply = about 1/5th value of gold supply
Together, they are 1.2 ounces of gold equivalence per person on Earth.
That's less than $2,000 in today's dollars. If you want to say that's $20,000, the people working in the mines are going to want 10x as much for their labor; the people who sell the arsenic are going to want 10x as much for it; the people who build the digging machines are going to want 10x as much for them. You change the price, you change the cost by like proportion.
Get it?
Copper obviously doesn't help. A penny is worth a penny for a reason. Copper is worth about 1/100th as much as silver.
Now take paper ... it's worth even way less than copper. But make it counterfeit proof and record a trading promise on it and it's worth whatever is recorded on it. And a ledger entry costs even orders of magnitude less than paper. Both do what you're actually having to do with metal ... recording a value which is used in exchange ... and you have the same result. The metal just does it much much more expensively.
The answer may be yes ... but that assumes the wrong question. With your logic paper suits your progression ... and there are obviously plenty of trees when the same size paper with different printing on it can have different value in trade.
The hang up you have is the money itself must have "physical" value. That's not necessary. Otherwise we couldn't have accounts storing our money. That's the brilliance of the invention of money. It is symbolic. It is a record of a promise ... not a carrier of value. That makes it much lighter to carry and move around. The proper MOE management process guarantees inflation of it to be zero ... an attribute metal or any object carrying its value can't deliver.
"The correct solution is to move to a non-printable, non-inflatable currency with an openly available double accounting ledger that exceeds the ability of gold in all of the aforementioned six qualities."
Ah yes, unicorn horns. Forgot about those. They beat gold every day of the week.Under a gold standard, it is gold that is the actual money.
Well, if that's the case we sure don't want to be under the gold standard do we!!!
...unless you have the gold already, and that's what this is really all about isn't it? A power grab, same as it ever was.
"He who has the Gold makes the Rules", that's the Golden Rule. So who are the new powers under a Gold Standard and what guarantee is there that the new Overlords will be any better than the Old?
Same shit I say.
Gold standard - the printing of paper notes, supposedly backed and redeemable in gold.
A gold standard changes nothing from the present set of circumstances, unless there is a run on the notes of course, aka 1971.
Gold as currency, ie actual gold coins used as money does change the game though. Sure the rich banksters might start with all the gold, but even those evil bastards can't print it at will.
And that's the point - robbing the bankster class of their ability to print "money" breaks their power - the fact that they are still rich is irrelevant - they no long control the nature of money.
Any people with gold as their currency if FREE from the banksters - which is why they kill anyone that threatens to do it.
You want to be free from the Shylocks? Trade in gold and silver. Better yet, open a mine, a smelter and a mint and then trade in it.
but even those evil bastards can't print it at will. And that's the point - robbing the bankster class of their ability to print "money" breaks their power
But when you realize that money is "a promise to complete a trade" you see that only traders can create it. The money changers and the capitalists have been able to change your perception. They have taken the invention of money (a method of allowing simple barter exchange over time and space) and have corrupted it beyond recognition ... to maintain themselves in the driver's seat.
Capital and capitalists are totally unnecessary to a properly managed MOE process.
Not true. The creation of true money greatly enhanced trade. It is the lack of sound money that undermines it. We use money as a convenience in agreed terms to settle trade. Barter doesn't cut it - too damn complex.
Money is not "a promise to complete a trade". It is "potential agreed balance of a trade". Traders don't create it, they create its worth, like all things, by agreeing on it.
The money changers don't own my mind - far from it - they own the minds of those that don't know what real money is, and confuse fiat currency with sound money. That's the nature of the bansksters magic.
Money is not "a promise to complete a trade". It is "potential agreed balance of a trade". Traders don't create it, they create its worth, like all things, by agreeing on it.
I don't just disagree, I can prove you wrong.
When you buy a house with a promise to pay in 360 month payments, the seller of the house gets the money right away. You return it a little at a time as agree until you have returned all of it.
Capitalists will claim that you can't buy that house unless someone "loans" you the money. In other words, the money must exist and be available to you before your trading promise can come to be. But that's a fiction created by the people who want to profit by your transaction. Those people can't be involved if you "don't promise to make a trade". Thus, it is you and your promise that creates the money ... not the people who claim you must use their money to do the trade.
Before your trade no money need exist. After your trade no money need exist. In the interim, the money you create does exist and circulates as the most valued object of simple barter exchange. There is absolutely nothing in that process that suggests someone else's money needs to be involved at all.
withglee that is some clean logic. I like it.
Thanks. Copernicus' logic was clean too ... because it correctly described the reality. Too bad it took 400 years for the vested enterests to give up their grip on their lie. Hopefully this will become obvious to enough people that the grip can be loosened quicker. When it does, economists and most financial experts (who know how to calculate 1+i raised to the nth power) will need to find other work. "i" will be guaranteed to be zero then and anyone can do the calculation. It always results in "1" regardless of "n". Greatly simplifies trading over time and space.
I disagree with your analysis – I believe you have proved me right.
When you buy a house with a promise to pay in 360 month payments the seller does get the money right away – because you have borrowed the wealth from a third party in order to fulfil your part of the agreement. You then return the money to the third party a little at a time as agreed with him until you have returned all of it.
To state that “those people (meaning the money lenders) can’t be involved if you “don’t promise to make a trade” is true! But then of course you would not have made any trade to begin with.
It is not you and your promise that creates the money – it is the money lender’s willingness to lend you the thing of agreed worth - calculating the risk that doing such a thing takes and deciding that it will work in their favour to do so – that allows the money to pass from their hands to yours. The money lender didn’t create the money either. They accumulated it.
When precious metals are used as money the “creation” process include literally mining, smelting and minting. It’s the commodity in the form of coinage that is used as money. It doesn’t derive its value from anything other than the value of the commodity – and it is because of this that it really is a form of wealth, not merely a claim note.
This system only becomes abusive when the “money” being lent is fiat – as fiat has very little intrinsic value, as is proven every time it goes into hyperinflation. When this happens the fiat – or governmental dictat – is shown to be the lie backed by threats of force that it always was. The market calls the government’s bluff and proves the worthless nature of the paper – or nowadays the digital records.
A money lender that issues fiat to a buyer is a thief – they are stealing the servitude of the buyer and paying in worthless paper or digital records. That this theft may not be immediately apparent to either the buyer or the seller in this instance is beside the point – the theft has occurred. The buyer then proceeds to steal from the seller by passing on this worthless product in receipt of the property – the thing of real worth.
It is not “Capitalists” that claim you can’t buy that house without the required money (value of equal worth) – it’s the seller. In other words, the money must exist and be available to you before your trading promise can come to be. That’s not a fiction created by people who want to profit by your transaction – it’s a demand from the seller. They are not in the business of accepting promises of servitude – which is why the third party of the money lender becomes necessary.
Before your trade no money need exist in your hands. After your trade no money will exist in your hands – but there is a very great need for it to exist in the hands of the previous owner – otherwise you have stolen his land.
The driving force behind the need for other people’s money being absolutely necessary in this process is that the sellers of the world are conditioned to believe that the value of their houses is so high that their peers can only afford to purchase them by selling themselves into decades of servitude.
Since the buyers of the world are quite willing to do just that then the sellers are correct. The market has spoken and the market demands that houses be valued at this level. That is the reason for the required third party intervention ie other people’s money.
Money is potential agreed balance of a trade. It exists in a form of value that all users agree upon so that the passing of it from one person to another can balance the scales of any trade carried out.
The “promise to complete a trade” that you are referring to is the mortgage that the buyer owes to the money lender (the trade only truly being finalised when all parties have received their agreed upon returns), not the money itself.
Your claim that the buying of a house is a matter of a simple barter exchange is not true. Eggs for flour may be – because both parties can potentially own each part of the desired trade. When purchasing a house however this can only occur – and does on occasion, when both parties posses the agreed value of the trade – a promissory note doesn’t cut it.
because you have borrowed the wealth from a third party in order to fulfil your part of the agreement.
The "wealth" already exists in the house. When I make my promise, I take control of the wealth and the seller has a new form of wealth ... money. Taking control of wealth is different than having wealth. This is done by returning certificates (money) which takes them out of circulation. At the end of the 360 months I have accumulated the wealth as promised and then I control it "and" I have it. I have used money to engage in simple barter exchange over time and space. That "is" its purpose.
Getting someone else involved in this process is totally unnecessary. My "trading promise" is backed by the entire marketplace and a properly managed MOE process ... not someone who claims he must be part of the process. His "money" likely doesn't exist at all if he is a banker. In the case of my house (say it's $100,000), for the banker to claim that much wealth to loan, all he has to do is have it for 2 years. After that, his 40% return doubles the money he started with. He takes his $100,000 back and no longer has any skin in the game at all. That being the case, the remaining 28 years of my trading promise is backed by nothing at all anyway. It is just a very few elite among us who have this privilege of magnifying their return by 10x.
That's the fiction of capital and capitalism bringing something to the party.
To state that “those people (meaning the money lenders) can’t be involved if you “don’t promise to make a trade” is true! But then of course you would not have made any trade to begin with.
How often have you read about the Fed "injecting" money into the economy? They can't do that without someone who gets that injection promising to return it. This is usually the government. It doesn't return it. It "rolls it over" and that is default ... which results in inflation.
With a properly managed MOE process I would make the trade with no blessing from a third party. My blessing would be actuarially obtained. You miss the point right here.
The money lender didn’t create the money either. They accumulated it.
Sure they did. By obtaining a privilege of magnifying their return by 10x, thus doubling their money in 2 years and taking it off the table?
Money is potential agreed balance of a trade. It exists in a form of value that all users agree upon so that the passing of it from one person to another can balance the scales of any trade carried out.
I'm now cherry picking your reply. I can't find a single sentence that is not a false view of reality... or at least evidence that you have embibed in the cool aid. This is a good example.
Money is "not" an agreed balance of a trade. It is a record of an in-process trading promise. All users do "not" agree on the value of money. Only the two parties to the trade creating it agree. As it passes from one trader to another (as the most valued object of simple barter exchange ... because it itself never loses value ... inflation of the MOE is guaranteed to be zero), each subsequent exchange is just another pair of traders making their appraisal of the value of the certificates.
In the end, I must return the certificates, even if I had a false impression of their value when I created them. The house may really have been worth only $90,000, but I agreed to return $100,000 worth of certificates. It may have been worth $110,000, but I agreed to return $100,000 worth of certificates. In the former case, if I default by $10,000 worth of certificates, the process reclaims them with interest collections. More than likely, I just work a little harder than I expected and make up the $10,000 deficiency myself. And if I made a good trade intially, the $10,000 worth of certificates come out of the seller's hide ... and go into my hide. It's just simple arithmetic.
The proper process trumps our current system by guaranteeing no change in the value assumed in creating the promise and certifying it over the duration of the promise. The certificates don't exist before the promise. They don't exist after delivery.
A power grab, same as it ever was.
Exactly. But a properly managed MOE process can stop them in their tracks.
Simply remove the monopoly the "government" claims on printing currency. The results will be similar to having Fed Ex and UPS compete with the USPS.
But then, the true purpose of currency monopoly is to finance war and other mass murder, so why would printing ever stop?
Actually you've got it back to front. Wars and mass murders are committed to keep the money printing in continuance. The purpose? To keep the money printers at the top of the pyramid of course.
End the Fed and the dollar printing and you can dispense with the wars and go back to building and living. Won't happen until you do.
A bit like a kid with a band aid.
It won't feel good to take it off.
3 possibilities....
Leave it on - wound gets infected - seriously bad news.
Pull it off slowly... a small amount of pain over a noticeable length of time.
Pull the fucker off in one go.... it hurts, but at least you can start the recovery right away.
Gold Standard - Instable, deflation inflation all over the place. Poorly managed.
Petrdollar Standard - Wars, more debt, QE, controlling interntional oil reserves, pissing off the entire world, exporting inflation.
C'mon let's be objective about this. The empires suck at controlling wealth.
The US dollar was originally defined as 371.25 grains of silver, based on the commonly used Spanish silver coins that could, mostly, be relied upon for their metal content.
1.0 grain = 0.06480 gram
375 grains = 25.3935g of silver in a dollar.
For comparison - 31.1034768g per troy
The Bi-metal thing (inclusion of gold) kind of complicated things.
Paper is almost worthless, intrinsically.
Zeros and ones are worthless, intrinsically.
Just trying to be helpful.
Neat info. Imagine if we didn't have debit or credit cards with the current system we have now. We'd need a bigger wallet to do our grocery shopping. As time goes on, people would start to notice we're being duped.