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  1. #11
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    Quote Originally Posted by ygolo View Post
    What I wonder about, if we return to a gold standard, is how we would deal with counterfeiting... hollowing out and filling with a bit of more common, higher density metal with similar properties (for instance).

    Paper currency is designed to be pretty close to worthless if nobody believes in its worth, and can therefore have most of the expense go to making countermeasures for counterfeiting.

    Also, if any of you figure out the intrinsic value thing, let me know. I would love to see how you can establish somethings as having intrinsic value, because all I would have to ask is "then why is ____ valuable?"
    It's not that the money actually has to be made out of gold...it's just that whatever you use as money has to actually reflect a real world piece of gold. The problem was, this is what money actually was when this whole banking thing started (in America, in the west, based off of my knowledge). Every piece of paper you were given corresponded to gold you actually had but didn't want to carry around. The bank would literally hold your gold. Then the bankers figured out that they could literally say they have more gold than what they have (a bold faced lie..lol) and get away with it, as long as not everyone would come and collect their gold all at once.

    So then, not every piece of paper that said it was worth a certain amount of gold was actually worth that amount. I think it got as stupid as you only had to have 10% of all the gold you said you did (as evidenced by the papers they were giving out, which by this time had been standardized into a central process).

    Eventually someone realized a mess was well on its way...and instead of working it back down to manageable and realistic levels...they just decided "to hell with it...no more gold backing at all...". This was a retarded move...

    So then the standard switched to "America"...the dollar being king. America was willing to go into places and defend their "nationalism"...which included their money policies..which included the whole "the dollar is powerful, because we say it's powerful" policy that they were determined to make work...because if they didn't some very rich people would no longer be as rich.

    Until technology came along...and all of a sudden...money is literally a number on a screen. That's all there is...just a number of how much you're worth.

    I don't even know what banks are anymore. Just buildings, I guess. I mean, if there is not a physical backing...what the hell do they do all day? All there is is a database showing what your numbers are. It's like, you know how countries buy and sell gold at fort knox or wherever...and what the guys at fort knox do is take a pile of gold from france's pile, for example, and give it to brazil's? This is what banks do with people....they're just "balancing piles of gold" by taking some from your pile and giving it to others...and vice versa. All the while taking their cut...which is how they make money.

    So, literally, a bank is like a data warehouse....it's ridiculous that they even exist in their physical form still. But, then again, most banks have moved beyond "personal" banking and have gone into "investment" banking...that is, "scamming businesses with the same exact processes they got people with"...

    It's a good thing...they'll die by killing themselves.

    And whoever gets a handle on the next step in the evolution of money is a very very "rich" (or whatever the word will be, it comes down to influence anyway) wo/man.

    As for intrinsic value, I guess that's the rub....humans still have no idea what is in fact valuable. The problem is that value is a concept and we want to attach something real (tangible) to that concept to feel safe.

    At the end of the day, I'd say what is actually valuable is whatever you think is valuable.

  2. #12

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    Quote Originally Posted by xisnotx View Post
    It's not that the money actually has to be made out of gold...it's just that whatever you use as money has to actually reflect a real world piece of gold. The problem was, this is what money actually was when this whole banking thing started (in America, in the west, based off of my knowledge). Every piece of paper you were given corresponded to gold you actually had but didn't want to carry around. The bank would literally hold your gold. Then the bankers figured out that they could literally say they have more gold than what they have (a bold faced lie..lol) and get away with it, as long as not everyone would come and collect their gold all at once.
    Well, yes. I understood that. Counterfeiting something nobody would ever look at seems easier than circulating pieces of gold. It seems inevitable that people will say that they have more gold than they actually have.

    Quote Originally Posted by xisnotx View Post
    As for intrinsic value, I guess that's the rub....humans still have no idea what is in fact valuable. The problem is that value is a concept and we want to attach something real (tangible) to that concept to feel safe.

    At the end of the day, I'd say what is actually valuable is whatever you think is valuable.
    That's pretty much my take on it too.

    Accept the past. Live for the present. Look forward to the future.
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  3. #13
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    Quote Originally Posted by Lark View Post
    The major push in libertarian capitalist thinking at the moment is for a return to the gold standard and turn away from the consumption and credit backed currencies of the present.

    I can understand why this would be popular in those circles, there's big problem with a consumption driven economy when what is trending is jobless growth and the wages of the biggest spending population are being repressed to make for greater profits. Credit has been a fix for that for a while but that is not working any longer either.

    However a gold standard is going to require massive cuts in welfare and some massive adjustments in popular expectations, basically a reversion to the kind of society of the great gatsby or something. For libertarians that's not really a problem. Its what they'd really like to happen actually. Into the bargain they've been hoarding gold for a long, long time.

    I dont see how this is any solution, for one all the surplus people who are unemployed and unable to claim entitlements, what does anyone suppose will happen to them? Practically its something on the scale of Stalin or Mao's engineered famines which is on the cards for the 99%

    While I dont believe the libertarian ideas are worth anything, credit and consumer driven economies, while keynesianism is impossible for a variety of reasons, mainly political, are going to experience problems. I'm not even sure that without more fundamental structural adjustments that keynesian fixes are going to work. What do you guys think?

    There are problems with the market systems besides the more fundamental contradictions which gold standards will not address too. Principally wage inflation in the private, banking, and public (managerial and boardroom) sectors.
    Gold itself is just a metal whose value is determined by market forces, like anything else.

    In a "consumption backed currency", as you call it, a country's currency is valued based on the market value of the goods and services it produces.

    In a gold backed currency, the same is essentially true, as the ability to buy Gold Reserves would depend on running a trade surplus, which would defined by value of goods and services exported vs value of goods and services imported.

    So there is ot a great essential difference, except that the need to buy Gold Reserves did act as a check on printing money. But in bothc ases market value of exports is decisive.

    Even today, for most of the world, the US Dollar is the Global Reserve Currency, and any currency printed way in excess of Dollar Reserves, will lose value on the markets. So times haven't changed that much.

    Short version of my post: look why so many country's dropped out of the Gold standard in the Great Depression. In this global recession,the exact same thing would happen, as populations would reject such a restriction on government ability to print money. See Greece, Spain, Portugal and Italy.

  4. #14

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    Quote Originally Posted by Il Morto Che Parla View Post
    Gold itself is just a metal whose value is determined by market forces, like anything else.

    In a "consumption backed currency", as you call it, a country's currency is valued based on the market value of the goods and services it produces.

    In a gold backed currency, the same is essentially true, as the ability to buy Gold Reserves would depend on running a trade surplus, which would defined by value of goods and services exported vs value of goods and services imported.

    So there is ot a great essential difference, except that the need to buy Gold Reserves did act as a check on printing money. But in bothc ases market value of exports is decisive.

    Even today, for most of the world, the US Dollar is the Global Reserve Currency, and any currency printed way in excess of Dollar Reserves, will lose value on the markets. So times haven't changed that much.

    Short version of my post: look why so many country's dropped out of the Gold standard in the Great Depression. In this global recession,the exact same thing would happen, as populations would reject such a restriction on government ability to print money. See Greece, Spain, Portugal and Italy.
    I agree, I think the fact that countries left the gold standard once has robbed it of any value because they could always do it again.

  5. #15
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    Quote Originally Posted by Lark View Post
    What do you guys think?
    I think you have no idea what you're talking about. You use lots of words and concepts incorrectly. Nonetheless, you have very strong opinions about all sorts of things you know nothing about--opinions which, to borrow your own words, 'aren't worth anything'. Ever heard of the Dunning-Kruger effect?
    A criticism that can be brought against everything ought not to be brought against anything.

  6. #16
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    The Heist

    The Americans offered us a deal - if we accepted the Greenback as our Reserve Currency, America promised to pay a certain amount of gold for each Greenback.

    Then came the greatest heist in world history - the Americans refused to honour their promise to redeem the Greenback in gold.

  7. #17
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    Quote Originally Posted by Victor View Post
    The Americans offered us a deal - if we accepted the Greenback as our Reserve Currency, America promised to pay a certain amount of gold for each Greenback.

    Then came the greatest heist in world history - the Americans refused to honour their promise to redeem the Greenback in gold.
    The Dollar only serves as a global reserve currency as long as the peoples of the world put their faith in it. Ultimately, they still do, because America is still seen as the most economically viable superpower long-term. If that ever ceases to be the case, then the rush from the Dollar will be inevitable and no "command" from the Americans will stop it. Perhaps Reserves will be made up of some "basket", but what? Japan is stagnant and has been for 2 decades, the Euro is unviable, and China is still a hugely underdeveloped country whose very strength, needs a strong Dollar!

    Let's hope the above transition doesn't happen in you or my lifetime, because it won't be good or any of us posting here.

  8. #18

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    I think participatory economics will be allocatively more efficient and equitable than the price signals of capitalism whether its gold or commodities backing the currencies.

  9. #19
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    Quote Originally Posted by Il Morto Che Parla View Post
    The Dollar only serves as a global reserve currency as long as the peoples of the world put their faith in it. Ultimately, they still do, because America is still seen as the most economically viable superpower long-term. If that ever ceases to be the case, then the rush from the Dollar will be inevitable and no "command" from the Americans will stop it. Perhaps Reserves will be made up of some "basket", but what? Japan is stagnant and has been for 2 decades, the Euro is unviable, and China is still a hugely underdeveloped country whose very strength, needs a strong Dollar!

    Let's hope the above transition doesn't happen in you or my lifetime, because it won't be good or any of us posting here.
    The Greenback is the Reserve Currency of the World because, under military threat, we are forced to buy oil in US dollars.

    For instance, when Saddam tried to sell his oil in Euros, the Americans hauled him from his spider hole and hanged him as an object lesson to the rest of us.

  10. #20
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    Gold standard is stupid, its utilization inevitably leads to a complete stop of the economy whenever a crisis hits - the mechanism is simple: if the economy slows down i.e. demand falls, then given that a currency is backed by gold at a fixed rate, the purchasing power of this currency will rise.
    Thus, people will hoard the currency resp. gold, causing a downward spiral in demand patterns and ultimately a collapse in the economy. When such a scenario comes true, or there are clear signs of its realization in the near future, government will likely debase the currency - whose gold backing becomes meaningless.

    The objection made by gold standard fanatics is: with a gold standard there will be no fall in demand, since there will be no monetary manipulation by the side of central banks and no boom-bust cycle. Looking at the evidence from the past, I don't think this is true at all.
    ENTj 7-3-8 sx/sp

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