Subject:
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Re: A hypothetical economics question...
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Newsgroups:
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lugnet.off-topic.debate
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Date:
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Fri, 1 Mar 2002 01:27:50 GMT
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Viewed:
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423 times
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In lugnet.off-topic.debate, Pedro Silva writes:
> Then immagine the rest of the world decides they don't need Gold, or that
> Gold has a lesser value to them than to the American Government - then what?
> Besides, I think every issued banknote must have a correspondent amount of
> "metal" in the Federal Reserve. At least I hope so!
I hate to be overly harsh -- but you have no idea what you are talking about.
The corresponding amount of paper money to precious metals is by definition
in U.S. federal law supposed to be .999 fine 1 oz. silver for a dollar (it is
essentially the definition of a U.S. dollar, despite the existence of Federal
Reserve Notes), and 1 oz. gold for twenty dollars. But there is no real
corresponding relationship because the U.S. went off the gold standard in
1934 and off the silver standard in 1963 (years are approx., if not precise
-- I am going from memory here). The Federal Reserve Notes used in the U.S.
have very little to do with what one might traditionally associate with U.S.
dollars. Federal Reserve Notes are not U.S. Dollars, and if they were it
would say so right on the face of the instrument. Instead, Federal Reserve
Notes are a kind of money borrowed by congress from a private banking entity,
this is supposedly done under the Constitutional clause to borrow money while
ignoring the Constitutional dictate that only gold and silver be minted by
the U.S. govt. The U.S.' national debt represents in part the monies borrowed
from the Federal Reserve in the manner described.
[Note: If any of this is incorrect, I certainly would like to be corrected
by someone more knowledgable than myself. Not a joke. Everything here is
my best understanding of the situation based on many years of study of U.S.
federal law, case law, political essays, and historical documents. Not the
easiest way to figure things out.]
Gold and silver, different from things like diamonds, are elements that are
in a strictly finite supply. You can find gold and silver but you cannot
create them. This makes gold and silver excellent choices for monetary units
because you cannot devalue them as you can paper money by simply printing
more. Get it?
Believing in the value of paper money is exactly like believing in god -- it
is a matter of faith. In the U.S., under the Articles of Confederation
(before the U.S. Constitution was adopted), people were wallpapering their
walls with the monetary notes, paper money, issued under the Articles as a
kind of political comment on their value.
> Do you want to pay more to live better earlier? As simple as that: extra
> money buys extra time to enjoy possession.
You are placing a lot of faith in what is a monetary shell game. You really
have no idea what paper money is actually worth, nor does anyone else.
Intrinsically, paper money has no value beyond its value as paper and ink.
The value imputed to paper money is whatever we all agree it is, and closely
related to the control the Federal Reserve has over the supply of these notes.
I very much doubt that things are substantially different in Brazil, but feel
free to educate me if it is otherwise. There is probably some paper means of
exchange and y'all think it has some value because that is what some national
bank, or whatever, tells you is true. That doesn't make it true though.
And what exactly do you mean by "extra money" -- you will pay for it more than
twice over, and don't forget that by the time you are done paying for it some
of the value of the home is lost through aging, not to mention money expended
in terms of upkeep (plumbing, electrical, roofing, painting, etc.). But I
think these details stretch the argument to a point of absurdity, much as
you did by mentioning other details. The broad strokes of the issue are
enough to understand the dilemma in my view.
Debt is slavery. Great profit is to be made if you qualify to become a bank.
If it were otherwise, the banks would not be so VERY KEEN to loan everyone
money and give them credit cards. The only thing that annoys them is
bankruptcy laws (forgiveness of debt), and they regularly lobby for stricter
regulation for private bankruptcy. Corporate bankruptcy is a different matter
though, vexed as it is with their own need to maintain protection from
liabilities incurred as "fictitious persons."
-- Hop-Frog
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Message has 2 Replies:
 | | Re: A hypothetical economics question...
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| (...) No harm done! I wrote "I think" and "I hope" for a reason! :-) (...) Ah, ok. My mistake then. In my place money is understood to have correspondance with central bank reserves (USD + Gold). Now it may have changed, with the new "Strong (...) (23 years ago, 1-Mar-02, to lugnet.off-topic.debate)
| | | Re: A hypothetical economics question...
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| (...) Completely aside from the issue of how it's supposed to be, I've been wondering -- why the 20:1 ratio? It seems like a bad idea to have a ratio instead of just gold certificates and silver certificates and maybe a daily exchange rate. Do you (...) (23 years ago, 4-Mar-02, to lugnet.off-topic.debate)
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Message is in Reply To:
| | Re: A hypothetical economics question...
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| (...) <Snipped> (...) You are assuming housing costs would not fluctuate in the 6 years in study, right? I mean, by the time they reach 100k the house cost a tad more... and in the meanwhile, they may have been experiencing other possible (...) (23 years ago, 28-Feb-02, to lugnet.off-topic.debate)
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