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HR 1207 : Federal Reserve Transparency Act 2009 (pg. 21)
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| pkcRAISTLIN |
| quote: | Originally posted by DOOMBOT
So then you don't believe that if we were using gold/silver as a society that their prices, when connected to the amount of gold/silver in the society, would come down? See, this is where I end up butting heads with people when I bring up this type of argument. We have gotten so used to the fact that a house may cost $200,000 USD but why would that have to translate to some sort of astronomical figure in gold or silver? The values would simply fix themselves by consumer demand.
Also, do you think China is acting unreasonably for jacking up its gold reserves? Nations across the world hold reserves in precious metals. Since it is plainly obvious that you think this is pointless, would you please make an argument as to why these countries are acting foolish for doing it themselves? If you think using gold and silver isn't feasible, why do you believe nations are holding these metals in reserves? |
this is where a degree in economics might help you (he even talks about you in the second paragraph!)
| quote: |
Thanks in large part to the hype surrounding Ron Paul's candidacy within the Republican Party, the notion of a US return to the Gold Standard has enjoyed renewed popularity as of late. Mr Paul supports the dissolution of the United States Federal Reserve and a return to the Gold Standard. Others in his ideological camp would take the matter yet further, and some have gone so far as to suggest that the United States do away with paper currency altogether and return to the practice of using coins minted from actual precious metals as currency.
Like many of the solutions seized upon by hobbiest libertarians, these monetary policies are concise, simplistic, and - unfortunately -completely wrong. A return to the Gold Standard is not only profoundly inadvisable for the United States, but also impractical, unnecessary, and unrepresentative of the problems and solutions put forth by the dicitfuls of Dr. Paul. In an effort to inject some sanity into the debate, this article will address the first of three myths and misunderstandings upon which the Gold Standard movement is based.
[b]Myth: Gold Ensures A Stable Currency
Take a dollar bill out of your wallet or purse and look just to the right of George Washington's head. Printed in small black letters should be the phrase "This note is legal tender for all debts public and private." These words, and the guarantee of the United States Government, are the only things that give the US Dollar weight as a currency, either domestically or on the international currency markets.
Some 30 years ago, in 1972, this was not the case. Under a system called Bretton Woods, the US Dollar was, for some time, pegged at $35/ounce of gold, meaning that one dollar was worth, by decree of the United States Federal Government, 1/35 of an ounce of gold. The Bretton Woods system was brought to an end in 1972 as the unequal market pressures forced a rapid movement of dollars (and thus liabilities for the sale of gold at $35/ounce) out of the United States. Since that time the United States has operated on a fiat currency, meaning that the dollar is no longer pegged to the price of gold nor guaranteed by it. Rather, dollars have value because the government of the United States says that they have value.
Such a notion is troubling to many as the notion of a government controlling anything, much less money, through an exercise in self restraint seems a joke at best and a recipe for financial disaster at worst. Critics of the fiat system question what motive such a government has that would compel it not to simply print money as it sees fit, thus inadvertently destroying overnight the value of its own currency. Gold or silver, by comparison, can not be simply produced, and thus acts as a natural check upon this assumed tendency to expand the money supply without consideration for the hyper-inflationary pressures such a move would have.
The problem with this argument is not one of its accuracy, but rather a matter of degree. A fiat system is more prone to governmental expansion of the money supply, but such expansion is neither unique to it nor a probable course of action for its economic governors. A gold based system is less prone to hyper-inflationary tendencies, but by no means immune from them and, as demonstrated under Bretton Woods, is less able to respond to rapid changes in the market. As such, the opposition between Gold Standard and Fiat is neither a binary one nor nearly so clear cut in its costs and benefits as laid out by critics of the existing system.
Gold's value comes primarily from its high demand and low supply. There are many uses and applications for gold in the modern world and a limited supply of it. Currencies pegged to or backed by gold will remain stable provided these two economic realities remain true. Such monetary systems are, however, at the mercy of the global gold market. History teaches that, should demand for gold drop significantly or if world-wide gold production suddenly increased, gold backed currencies would immediately and irrevocably collapse. This is exactly the fate suffered by the Spanish (and by extension European) economy during the early era of New World Colonialism. As Spanish galleons hauled tons of silver and gold across the Atlantic, the European precious metals markets went into hyper-inflation. Dutch traders, then profoundly concerned for the long term stability of the European continent, bought and buried gold and silver en masse
in a desperate attempt to keep the entire European continent from slipping into a depression, but their economic sacrifice was neither large nor timely enough to save Spain herself, which suffered the brunt of the economic consequences of her wealth. Even Spain's gold standard could not save her economy from the massive influx of gold and silver brought about by her exploitation of the Americas. Indeed, Spain still suffers some of the consequences of that economic collapse today.
The risk of a Spanish style collapse can be mitigated by allowing a government to re-adjust the rate at which gold is pegged to a currency. A US gold standard would, by Constitutional mandate, incorporate such a safeguard as Article I, Section 8 clearly states: [Congress shall have the power] To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures. (Emphasis added) This safeguard and power, however, nullifies the initial advantages listed for a gold-standard system: namely the difficulty of devaluation and political stability.
In short, the constraints and limitations placed upon monetary governance by a gold standard system serve as little more than speed bumps should government seek to actively set about the devaluation of currency. In actuality, a gold standard offers only ineffectual protection for the money supply against incompetence and malice while profoundly limiting the ability of well informed and well meaning governments to enact substantive and beneficial monetary policy.
Far from ensuring a stable currency, a gold standard is a primitive relic serving only to hamper modern monetary regulation. |
http://www.nowpublic.com/debunking_..._myth_stability |
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| Lebezniatnikov |
| quote: | Originally posted by DOOMBOT
This post makes zero sense.
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Let me spell it out for you then. When we were on the gold standard the value of gold surpassed the value of commodities. Now, that no longer holds true. So for gold to cover the worth of all commodities, something has to change. That something is going to be the relative worth of gold. Inflation isn't completely out of the question. As the value of the reference (gold) changes, so too would the value of the currency it is pegged to.
| quote: | | Again, this isn't making much sense either. Are you saying that you don't care what the people who work at the Fed have to say? |
No, I'm saying that nobody watches youtube videos that are used for political points, regardless of their content. This is a music forum - what do you think I'm listening to? |
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| jerZ07002 |
| quote: | Originally posted by DOOMBOT
This post makes zero sense. |
what he was saying is that if a price of a house translated into an ounce of gold, acquiring that ounce of gold would become more expensive because of the limited supply.
| quote: | Originally posted by DOOMBOT
Again, this isn't making much sense either. Are you saying that you don't care what the people who work at the Fed have to say? |
nope - if you want to make an argument you better write it down. regular pdd posters don't watch youtube videos. not because we dont' care, but because most are out-of-context that contain omissions and have a ridiculous slant. |
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| DOOMBOT |
| quote: | Originally posted by jerZ07002
absolutely not. read about supply and demand. if everything translated to a price in gold or silver, and you actually needed the gold or silver to acquire it, the demand for gold or silver would drastically increase causing the value of those commodities to soar to an unbelievable level. this is econ 101 - based on total free market economics. [/b][/i] |
The price for what ever it is you are paying for would be determined by the the amount of gold and silver in the economy plus the demand.
| quote: | | there was nothing confusing. i don't invest at this point in my life, but i recognize the importance of those companies. nevertheless, i also see a flaw in the system. there's nothing confusing or contradictory in my post. |
Well then maybe you should invest to understand how the entire process works. Thanks for pointing this part of your life out to me though because it gives me more knowledge of what type of person I am dealing with. Not that I am trying to insult you or your intelligence here, but you are certainly making things much more clear for me.
| quote: | | when you speak to congress you do so under oath. i.e., you better be 100% certain before you open your mouth, especially when it is publicized. i take nothing away from the fact that she said nothing. |
Even though you will most likely not understand why, but we agree! |
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| jerZ07002 |
| quote: | Originally posted by DOOMBOT
The price for what ever it is you are paying for would be determined by the the amount of gold and silver in the economy plus the demand. |
yeah, and since there is a limited supply of gold and silver, acquiring that gold and silver would be much more expensive. it appears you are operating under the faulty assumption that the price of gold and silver would remain unchanged.
| quote: | Originally posted by DOOMBOT
Well then maybe you should invest to understand how the entire process works. Thanks for pointing this part of your life out to me though because it gives me more knowledge of what type of person I am dealing with. Not that I am trying to insult you are your intelligence here, but you are certainly making things much more clear for me. |
you really are a pompous SOB. under that faulty logic, you would need to work for or directly deal with the fed in order to understand it fully. somehow i doubt you directly deal with the fed in any manner, so your view is bull under your logic.
| quote: | Originally posted by DOOMBOT
Even though you will most likely not understand why, but we agree! |
clearly you missed the last part of my statement. you obviously think something shady is going down because she was saying nothing. on the other hand, i clearly stated i think it doesn't mean anything. thus, we do not agree. |
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| DOOMBOT |
| quote: | Originally posted by jerZ07002
yeah, and since there is a limited supply of gold and silver, acquiring that gold and silver would be much more expensive. it appears you are operating under the faulty assumption that the price of gold and silver would remain unchanged. |
What? No I'm not. We all know that there is silver/gold mining and that it is still being dug up. I'm just going to assume you don't invest and have no understanding of the silver/gold market.
| quote: | | you really are a pompous SOB. under that faulty logic, you would need to work for or directly deal with the fed in order to understand it fully. somehow i doubt you directly deal with the fed in any manner, so your view is bull under your logic. |
Are you suggesting that you do deal with them directly? If you do, please explain. I'm sure plenty of us would be very interested in hearing your story!
| quote: | | clearly you missed the last part of my statement. you obviously think something shady is going down because she was saying nothing. on the other hand, i clearly stated i think it doesn't mean anything. thus, we do not agree. |
Clearly I had something to say about the Fed before I even saw this video. |
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| Lebezniatnikov |
| quote: | Originally posted by DOOMBOT
What? No I'm not. We all know that there is silver/gold mining and that it is still being dug up. I'm just going to assume you don't invest and have no understanding of the silver/gold market.
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:wtf: |
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| pkcRAISTLIN |
| quote: | Originally posted by DOOMBOT
What? No I'm not. We all know that there is silver/gold mining and that it is still being dug up. I'm just going to assume you don't invest and have no understanding of the silver/gold market. |
awesome! let's have our currencies dependant upon how much gold is dug out of the ground. that sure sounds stable :haha: |
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| DOOMBOT |
| quote: | Originally posted by Lebezniatnikov
:wtf: |
There is not a limited supply of gold/silver right now. There are still mining companies digging it up.
You seriously didn't understand that from my previous response? :wtf: |
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| pkcRAISTLIN |
| The gold standard was the single biggest contributor to deepening and prolonging the great depression. |
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| DOOMBOT |
| quote: | Originally posted by pkcRAISTLIN
awesome! let's have our currencies dependant upon how much gold is dug out of the ground. that sure sounds stable :haha: |
You know I am an advocate for free markets. I've only used gold and silver as an example, especially since history shows that is what people like to use. But hey, if the free market decides empty cans of Hoegaarden, I'm all for it! |
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| DOOMBOT |
| quote: | Originally posted by pkcRAISTLIN
The gold standard was the single biggest contributor to deepening and prolonging the great depression. |
LOL!!!!!!!!
GOOD NIGHT! |
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