Political Crossfire Forums

[Brooklyn]

Quote: they lead to a comparitvely small (compared to the amount the government will spend) decrease in private sector spending. They do this becuase taxes come from the private sector, and if the private sector has less money, they will spend less.

Iriemon's point, that if the savings rate is 0, or better yet, if individuals marginal propensity to save is zero, then aggregate demand will be boosted exactly the same no matter who spends it, is correct. This doesn't include peoples marginal propensity to import, however.

Quote: Innovation shifts the entire GDP curve outward, drastically increasing GDP.

GDP curve? Innovation pushes the PPF outward.

Quote: actually, less than nill. They spend more money than they have, while the average person, as you say (although I don't know where your source is from) saves 0-5%.

Currently, the private savings rate is negative.

[Free Thinkr]

Atlas Bergeron wrote: Free Thinkr wrote: They're sorta the logical choice, don't you think? Who else should mint money?
Couldn't a company buy gold and then mint coins?
Sure. But why bother with coins at all, in that case? Gold has value irrespective of the fact that it's coined. Again, the natural evolution of currency is toward a currency with no intrinsic value. Going back to gold coins is a step back. Why waste a valuable commodity for use as money, when money is nothing more than a placeholder for trades?

Quote: Why shouldn't they be able to?
Probably because it would tend to undermine the national currency, thereby making all transactions more difficult.

Quote: Why does the government have to be involved in it?
Again, who else is going to mint money? Any fool can press coins from gold, and obviously they'd have value; but for you to use something like paper money, there must be a nation-wide confidence that the money will have exchange value. It seems to me to be common sense, then, that the government, which is theoretically beholden to the people, would manage the creation of money.

[LeopardPM]

Free Thinkr wrote: Atlas Bergeron wrote: Free Thinkr wrote: They're sorta the logical choice, don't you think? Who else should mint money?
Couldn't a company buy gold and then mint coins?
Sure. But why bother with coins at all, in that case? Gold has value irrespective of the fact that it's coined. Again, the natural evolution of currency is toward a currency with no intrinsic value.
natural evolution? says who? If this were the case then government would not have to use force to accomplish this feat, right?

Quote: Going back to gold coins is a step back. Why waste a valuable commodity for use as money, when money is nothing more than a placeholder for trades?
money is NOT 'just a placeholder' - it is a commodity as well... when I trade dollars for a car, that is a complete trade, not some 'placeholding' temporary condition. The reason 'why' to use something valuable as money is so that people do not have to carry around large amounts of it, so that it has relative stability (cannot be created with little or no labor), and to minimize any changes in value relative to its total value.

Quote: Quote: Why shouldn't they be able to?
Probably because it would tend to undermine the national currency, thereby making all transactions more difficult.
...making it hard, if not impossible, for the government and the federal reserve cartel to continue to engage in their joint swindling of the citizenry.

Quote: Quote: Why does the government have to be involved in it?
Again, who else is going to mint money? Any fool can press coins from gold, and obviously they'd have value; but for you to use something like paper money, there must be a nation-wide confidence that the money will have exchange value. It seems to me to be common sense, then, that the government, which is theoretically beholden to the people, would manage the creation of money. beholdin' to the people? pa-shah! Beholdin' to themselves! You make it sound like paper money is desired in some way... why is this? There is a reason why people usually don't normally accept any old scrap of paper for goods owned by them.... because its value is highly suspect and dubious!

There is nothing about a commodity backed money which prevents it from being just as easily used (debit cards, paper receipts, checks, etc) as any fiat money. The only thing that having a commodity based currency would do, would be to severe the ability of government to siphon productivity increases from the general population in the form of reducing their purchasing power.

[LeopardPM]

Iriemon wrote:
Are you really suggesting the economy would be better off if exchange was based on peice of 8? To buy a coke you'd have to drop in a piece of gold the size of a grain of sand. And then you'd need to have systems to ensure the grain was pure. We'd all need to carry aroud tweezers and jewel's magnifying eye piece to conduct day to day business.
are you seriously thinking that having a commodity money would necessitate actually carrying around the commodity itself? I think you purposely present this argument as deception - YOU know that there is no problem using ANY form of current transactional medium (credit/debit card, checks, paper receipts, etc) with a commodity backed money.

In fact, there is no reason to even use a common basis of commodity units - no need to denominate everything in only one universal commodity - technology allows for on-the-fly conversion from any commodity (or group thereof) to any other.

[Free Thinkr]

LeopardPM wrote: Free Thinkr wrote: Atlas Bergeron wrote: Free Thinkr wrote: They're sorta the logical choice, don't you think? Who else should mint money?
Couldn't a company buy gold and then mint coins?
Sure. But why bother with coins at all, in that case? Gold has value irrespective of the fact that it's coined. Again, the natural evolution of currency is toward a currency with no intrinsic value.
natural evolution? says who? If this were the case then government would not have to use force to accomplish this feat, right?
Here we go with this hollow claim of "force" yet again. As if some king decreed it. Here's what actually happened: there was once many people who did produce their own currencies. In order to better facilitate trade, the people of the US agreed to use the greenback.

Quote: Quote: Going back to gold coins is a step back. Why waste a valuable commodity for use as money, when money is nothing more than a placeholder for trades?
money is NOT 'just a placeholder' - it is a commodity as well... when I trade dollars for a car, that is a complete trade, not some 'placeholding' temporary condition.
No, it is in fact a temporary condition. The dollars you gain from the transaction have no use in and of themselves; you only want them so that you might trade them for something you will use: either an item of wealth, or a service. It's stupid to say that money is a commodity; no one wants money for the sake of having money.

Quote: The reason 'why' to use something valuable as money is so that people do not have to carry around large amounts of it, so that it has relative stability (cannot be created with little or no labor), and to minimize any changes in value relative to its total value.
Yeah, and using something of no value is even better yet.

Quote: Quote: Quote: Why shouldn't they be able to?
Probably because it would tend to undermine the national currency, thereby making all transactions more difficult.
...making it hard, if not impossible, for the government and the federal reserve cartel to continue to engage in their joint swindling of the citizenry.
:roll:

Quote: Quote: Quote: Why does the government have to be involved in it?
Again, who else is going to mint money? Any fool can press coins from gold, and obviously they'd have value; but for you to use something like paper money, there must be a nation-wide confidence that the money will have exchange value. It seems to me to be common sense, then, that the government, which is theoretically beholden to the people, would manage the creation of money. beholdin' to the people? pa-shah! Beholdin' to themselves! You make it sound like paper money is desired in some way... why is this?
Convenience, mainly.

Quote: There is a reason why people usually don't normally accept any old scrap of paper for goods owned by them.... because its value is highly suspect and dubious!
That's right: hence government backing. Unlike "any old scrap of paper," people do very regularly, and happily I might add, accept government-issued currency for their goods.

Quote: There is nothing about a commodity backed money which prevents it from being just as easily used (debit cards, paper receipts, checks, etc) as any fiat money. The only thing that having a commodity based currency would do, would be to severe the ability of government to siphon productivity increases from the general population in the form of reducing their purchasing power.
Couldn't you achieve the exact same thing simply by fixing supply?

[LeopardPM]

Iriemon wrote:
Governments went off a commodity standard for a good reason, it tied money supply to the availability of a commodity.

We agreed that a restrictive money supply between 1929 and 1933 was a force that was a factor in the great depression. A money supply tied to a commody, as the dollar was during that time period, is restricted to the supply of the commodity. In times of depressed economic activity and deflation like the great depression, Govt needs and should have the ability to expand the money supply to ease credit and stimulate economic activity.

Who exactly 'agreed' that a restrictive money supply was a force that was a factor in the great depression? It was the immense credit expansion BEFORE the contraction which caused the market bubble which was popped. And such an event does not occur without a fiat money situation.

Could you explain exactly how such a depression could occur without a monetary expansion first occuring? Even before the FedRes was formed, our money was rarely, if ever, truely on a commodity standard - Ever since commercial banking in the early 1800's came into being (with the force of government, of course), booms and busts naturally occured. Only major environmental crisis could cause such disruptions, and the disruptions would be warranted as they reflected the actual state of the economy.

Could a 'depression' occur, in your mind, with a commodity backed money, and how would this come about?

[LeopardPM]

Free Thinkr wrote: LeopardPM wrote: Free Thinkr wrote: Atlas Bergeron wrote: Free Thinkr wrote: They're sorta the logical choice, don't you think? Who else should mint money?
Couldn't a company buy gold and then mint coins?
Sure. But why bother with coins at all, in that case? Gold has value irrespective of the fact that it's coined. Again, the natural evolution of currency is toward a currency with no intrinsic value.
natural evolution? says who? If this were the case then government would not have to use force to accomplish this feat, right?
Here we go with this hollow claim of "force" yet again. As if some king decreed it.
hollow claim? The government FORCES us to pay them in fiat currency for taxes. Some 'king' DID decree it!

Quote: Here's what actually happened: there was once many people who did produce their own currencies. In order to better facilitate trade, the people of the US agreed to use the greenback.
sweet fairytale - all it needs is a wicked witch and perhaps some ruby slippers to make it complete! Yes, people did produce their own currencies, and the ones which engaged in fraud (which is now institutionalized through government edict) were discovered and folded. People have no problem 'facilitating' trade as much as they desire.

Quote: the people of the US agreed to use the greenback
really? was there a national vote? no. It was through proxy, and even at that level it was far from unanimous - almost 50-50 in fact. 'The people' never agreed, only a bare majority in government agreed and to assign their decision as 'the will of the people' is a complete farce!

Quote: Quote:
money is NOT 'just a placeholder' - it is a commodity as well... when I trade dollars for a car, that is a complete trade, not some 'placeholding' temporary condition.
No, it is in fact a temporary condition. The dollars you gain from the transaction have no use in and of themselves; you only want them so that you might trade them for something you will use: either an item of wealth, or a service. It's stupid to say that money is a commodity; no one wants money for the sake of having money.
the dollars have no use in and of themselves BECAUSE they are fiat! A commodity would have an intrinsic use by itself, which would be always a part of its valuation - a minimal level of worth. Paper is just... paper.

Quote: Quote: The reason 'why' to use something valuable as money is so that people do not have to carry around large amounts of it, so that it has relative stability (cannot be created with little or no labor), and to minimize any changes in value relative to its total value.
Yeah, and using something of no value is even better yet.
ok, YOU use something which has no natural market value, but let everyone else decide for themselves what they desire to use instead of forcing everyone to your malaligned view - oh, thats right, in such a case NO ONE would use a valueless item for indirect exchange... I wonder why?

Quote: Quote: Quote: Quote: Why shouldn't they be able to?
Probably because it would tend to undermine the national currency, thereby making all transactions more difficult.
...making it hard, if not impossible, for the government and the federal reserve cartel to continue to engage in their joint swindling of the citizenry.
:roll:
pretty hard to refute such a blatant truth, huh? better to just roll your eyes and make ad homs...

Quote: Quote: Quote: Quote: Why does the government have to be involved in it?
Again, who else is going to mint money? Any fool can press coins from gold, and obviously they'd have value; but for you to use something like paper money, there must be a nation-wide confidence that the money will have exchange value. It seems to me to be common sense, then, that the government, which is theoretically beholden to the people, would manage the creation of money. beholdin' to the people? pa-shah! Beholdin' to themselves! You make it sound like paper money is desired in some way... why is this?
Convenience, mainly.
yeah, as in 'it is convenient to to go to jail or have ones property forcibly extracted due to non-payment (in terms of dollars) of taxes, or violating legal tender laws...

Quote: Quote: There is a reason why people usually don't normally accept any old scrap of paper for goods owned by them.... because its value is highly suspect and dubious!
That's right: hence government backing. Unlike "any old scrap of paper," people do very regularly, and happily I might add, accept government-issued currency for their goods.
yes, and government promises are so dependable....

Quote: Quote: There is nothing about a commodity backed money which prevents it from being just as easily used (debit cards, paper receipts, checks, etc) as any fiat money. The only thing that having a commodity based currency would do, would be to severe the ability of government to siphon productivity increases from the general population in the form of reducing their purchasing power.
Couldn't you achieve the exact same thing simply by fixing supply?
sure, except by its nature, its impossible for humans to exhibit such restraint naturally.... we ALL want something for nothing, and having a fiat money at their disposal is to great a lure to those in government (and supposed 'economists' which wish to play god).

[Atlas Bergeron]

Iriemon wrote:

Are you really suggesting the economy would be better off if exchange was based on peice of 8? To buy a coke you'd have to drop in a piece of gold the size of a grain of sand. And then you'd need to have systems to ensure the grain was pure. We'd all need to carry aroud tweezers and jewel's magnifying eye piece to conduct day to day business.

What are the systems in place now to ensure that money is valid? Why couldn't a private sector buisness do this?

In all probability, if the government would leave the currency issue, then a few companies would take up the job of making currency. Over a short period of time, consumer trust would fall between one, two, or three major companies. These companies would try and continuously keep people from forging thier money, so they would probably develop new methods against counterfieght.

Wait, Leopard already adressed this. If you still disagree, rearead his post

Quote: ="LeopardPM"]are you seriously thinking that having a commodity money would necessitate actually carrying around the commodity itself? I think you purposely present this argument as deception - YOU know that there is no problem using ANY form of current transactional medium (credit/debit card, checks, paper receipts, etc) with a commodity backed money.

In fact, there is no reason to even use a common basis of commodity units - no need to denominate everything in only one universal commodity - technology allows for on-the-fly conversion from any commodity (or group thereof) to any other.

[Iriemon]

LeopardPM wrote: Iriemon wrote:
Governments went off a commodity standard for a good reason, it tied money supply to the availability of a commodity.

We agreed that a restrictive money supply between 1929 and 1933 was a force that was a factor in the great depression. A money supply tied to a commody, as the dollar was during that time period, is restricted to the supply of the commodity. In times of depressed economic activity and deflation like the great depression, Govt needs and should have the ability to expand the money supply to ease credit and stimulate economic activity.

Who exactly 'agreed' that a restrictive money supply was a force that was a factor in the great depression? It was the immense credit expansion BEFORE the contraction which caused the market bubble which was popped. And such an event does not occur without a fiat money situation.

Sorry, I cut off the user name; my comment was addressed to Atlas, to whom I was responding in that post, also the contention in the article:

"Monetary Contraction. The Depression was precipitated by a one-third drop in the money supply from 1929 to 1933, which was mainly the fault of the Federal Reserve."

I admit I am not initimately familiar with money policy prior to 1929, though I don't believe there was a problem with inflation that you would expect to see with an over expansion of the money supply.

Quote: Could you explain exactly how such a depression could occur without a monetary expansion first occuring?

You have a stock market built upon over speculation, fueled by leverage based upon only 10% margin requirement that allowed speculators to build paper fortunes based upon high debt leverage -- assets that just as quickly vanish with a 10% drop in market price and the margin call start coming in. That can happen with any asset that speculators are allowed to leverage highly.

When the market started collapsing, that created a demand on bank assets that had insufficient reserves to cover demand. It all created a chain reaction that caused thousands of banks to fail, wiping out more assets.

Then a restrictive money supply combined with fear of exposure reduced lending and the ability to finance any business expansion, which contracted. There was also price deflation, coupled with bank failings and uninsured deposits (no FDIC), which made hiding money under the mattress a viable savings plan (when future prices are expected to be lower than current prices) further reducing the availability of capital.

Quote: Even before the FedRes was formed, our money was rarely, if ever, truely on a commodity standard - Ever since commercial banking in the early 1800's came into being (with the force of government, of course), booms and busts naturally occured. Only major environmental crisis could cause such disruptions, and the disruptions would be warranted as they reflected the actual state of the economy.

I agree that it was not truly on a commodity standard, in the sense that the dollar could be devalued in terms of the commodity. Apparently the Fed was reluctant to do that in the early 30s, though I don't know for sure what the gold standard policy was in that time period.

Quote: Could a 'depression' occur, in your mind, with a commodity backed money, and how would this come about?

Of course. That is what happened. See above.

[Iriemon]

LeopardPM wrote: Iriemon wrote:
Are you really suggesting the economy would be better off if exchange was based on peice of 8? To buy a coke you'd have to drop in a piece of gold the size of a grain of sand. And then you'd need to have systems to ensure the grain was pure. We'd all need to carry aroud tweezers and jewel's magnifying eye piece to conduct day to day business.
are you seriously thinking that having a commodity money would necessitate actually carrying around the commodity itself? I think you purposely present this argument as deception - YOU know that there is no problem using ANY form of current transactional medium (credit/debit card, checks, paper receipts, etc) with a commodity backed money.

Fair enough, we could do away with coins and buy a coke with a card that debits our account for 1/400th of an oz of gold as opposed to a dollar. Or we could return to a gold based standard so that one oz of gold = x dollars.

The question presented was: "Couldn't a company buy gold and then mint coins? Why shouldn't they be able to? Why does the government have to be involved in it?"

If you are not using the commodity as the standard for the exchange, then what are you using? Coins minted by a company? MS Cents? Ford quarters? How would that work? You'd have to keep track of the value of each company's currency.

Quote: In fact, there is no reason to even use a common basis of commodity units - no need to denominate everything in only one universal commodity - technology allows for on-the-fly conversion from any commodity (or group thereof) to any other.

Don't see how that would work. Doesn't an agreed medium of exchange facility transfers between companies? Otherwise you are on the barter system.

[Iriemon]

Atlas Bergeron wrote: Iriemon wrote:

Are you really suggesting the economy would be better off if exchange was based on peice of 8? To buy a coke you'd have to drop in a piece of gold the size of a grain of sand. And then you'd need to have systems to ensure the grain was pure. We'd all need to carry aroud tweezers and jewel's magnifying eye piece to conduct day to day business.

What are the systems in place now to ensure that money is valid? Why couldn't a private sector buisness do this?

The systems in palce to ensure that money is valid is the Federal Reserve System.

How would a system where you have different monetary exchange units based on separate companies work?

Quote: In all probability, if the government would leave the currency issue, then a few companies would take up the job of making currency. Over a short period of time, consumer trust would fall between one, two, or three major companies. These companies would try and continuously keep people from forging thier money, so they would probably develop new methods against counterfieght.

So we would have MS dollars? What is the advantage to having a corporation in control of the money supply over the Govt? A corporation is not acting in the best interest of the nation but its shareholders. The Fed is not beholden to its shareholders and as at least somewhat reactive to the politically system. What happens when MS has problems? What is to prevent MS from printing more assets and inflating the value of its money. Are MS moneyholders then just SOL? Do we want a corporation in control of our money supply? Why is that better than the fed?

Wait, Leopard already adressed this. If you still disagree, rearead his post

Quote: In fact, there is no reason to even use a common basis of commodity units - no need to denominate everything in only one universal commodity - technology allows for on-the-fly conversion from any commodity (or group thereof) to any other. [/quote]

Why is a barter system a better means of exchange, even given we have more instanteous access to valuation. The benefit of a fixed universal currency is its universality -- it can be exchanged for any good or service.

Are you proposing a barter system, or a currency based upon a corporation?

[Atlas Bergeron]

Iriemon wrote:

How would a system where you have different monetary exchange units based on separate companies work?
There would probably be only one unit of exchange: gold

If not, everything could be equated to gold

Quote: Quote: In all probability, if the government would leave the currency issue, then a few companies would take up the job of making currency. Over a short period of time, consumer trust would fall between one, two, or three major companies. These companies would try and continuously keep people from forging thier money, so they would probably develop new methods against counterfieght.

So we would have MS dollars? What is the advantage to having a corporation in control of the money supply over the Govt? A corporation is not acting in the best interest of the nation but its shareholders.
if you study the trends of supply and demand, you will see that acting in self interest often helps everyone else as well--as long as no force is used.

Quote: The Fed is not beholden to its shareholders and as at least somewhat reactive to the politically system. What happens when MS has problems? What is to prevent MS from printing more assets and inflating the value of its money.
reputation? Firstly, the money they "printed" would either be made of gold or pegged to gold. If they just started printing money without pegging it, while at the same time claiming it was pegged, they would be subject to fraud.

Quote: Are MS moneyholders then just SOL? Do we want a corporation in control of our money supply? Why is that better than the fed?
This is not the question. The question is why consumers shouldn't be allowed to choose which money supply to use.

Inflation is increasing drastically. One of the reasons is becuase our monetary unit is not pegged to any actual commodity. There is one reason.

Quote: Wait, Leopard already adressed this. If you still disagree, rearead his post

Quote: In fact, there is no reason to even use a common basis of commodity units - no need to denominate everything in only one universal commodity - technology allows for on-the-fly conversion from any commodity (or group thereof) to any other.

Why is a barter system a better means of exchange, even given we have more instanteous access to valuation. The benefit of a fixed universal currency is its universality -- it can be exchanged for any good or service. [/quote]
We already live in a barter system, except this one uses a monetary unit which is meaningless. If we used gold, there would be much more trust in the value of the monetary unit.

Quote: Are you proposing a barter system, or a currency based upon a corporation?
When the governemnt left, there would be a short time of bartering. People would want to find a currency, so a company would step in to fulfill that need (demand) by supplying a currency which is hard to counterfieght, and obviously of value. It is my guess that that currency would be gold, but with the electronic age they could use oil, iron ore, or stocks. Most likely, a majority would either be gold or be a differnt stable commodity.

[Free Thinkr]

LeopardPM wrote: Free Thinkr wrote: Here we go with this hollow claim of "force" yet again. As if some king decreed it.
hollow claim? The government FORCES us to pay them in fiat currency for taxes. Some 'king' DID decree it!
Of course the government forces us to pay them in fiat currency. What, would you have them accept whatever you please at their own expense?

Quote: Quote: Here's what actually happened: there was once many people who did produce their own currencies. In order to better facilitate trade, the people of the US agreed to use the greenback.
sweet fairytale - all it needs is a wicked witch and perhaps some ruby slippers to make it complete! Yes, people did produce their own currencies, and the ones which engaged in fraud (which is now institutionalized through government edict) were discovered and folded.
Some were discovered and folded; eventually. The fact that this is a recurring problem is one of the reasons to have a common national currency; look around, and you'll find that every civilized nation has come to the same conclusion.

Quote: People have no problem 'facilitating' trade as much as they desire.
Of course not; a national currency just makes trade much easier.

Quote: Quote: the people of the US agreed to use the greenback
really? was there a national vote? no. It was through proxy, and even at that level it was far from unanimous - almost 50-50 in fact.
Almost. Too bad this isn't horseshoes.

Quote: 'The people' never agreed, only a bare majority in government agreed and to assign their decision as 'the will of the people' is a complete farce!
Not really. It's called democracy. And if it were put to a vote today, you know as well as I do that the vast majority would just stick with dollars.

Quote: Quote: No, it is in fact a temporary condition. The dollars you gain from the transaction have no use in and of themselves; you only want them so that you might trade them for something you will use: either an item of wealth, or a service. It's stupid to say that money is a commodity; no one wants money for the sake of having money.
the dollars have no use in and of themselves BECAUSE they are fiat! A commodity would have an intrinsic use by itself, which would be always a part of its valuation - a minimal level of worth. Paper is just... paper.
Yeah, welcome to my point. Money need not be a commodity. Why use commodities as money, when the defining factor of money is its being a placeholder for value? I could theoretically pay for a car with bags of rice, but it'd be much less convenient then simply agreeing upon a system of credit.

Quote: Quote: Yeah, and using something of no value is even better yet.
ok, YOU use something which has no natural market value, but let everyone else decide for themselves what they desire to use instead of forcing everyone to your malaligned view - oh, thats right, in such a case NO ONE would use a valueless item for indirect exchange... I wonder why?
Really? Is the tendency to use commodities in trade becoming more prevalent, or less? It's getting to the point that we hardly even use money anymore, and instead trade mere balances between banks and credit agencies.

Quote: Quote: Quote: Quote: Probably because it would tend to undermine the national currency, thereby making all transactions more difficult.
...making it hard, if not impossible, for the government and the federal reserve cartel to continue to engage in their joint swindling of the citizenry.
:roll:
pretty hard to refute such a blatant truth, huh? better to just roll your eyes and make ad homs...
Ad homs? I rolled my eyes because your reply was not a rational argument, but emotive rhetoric.

Quote: Quote: Quote: beholdin' to the people? pa-shah! Beholdin' to themselves! You make it sound like paper money is desired in some way... why is this?
Convenience, mainly.
yeah, as in 'it is convenient to to go to jail or have ones property forcibly extracted due to non-payment (in terms of dollars) of taxes, or violating legal tender laws...
Again: :roll:

I'm not seeing any big clamor by people to have our money replaced with any commodity, despite your implications to the contrary.

Quote: Quote: That's right: hence government backing. Unlike "any old scrap of paper," people do very regularly, and happily I might add, accept government-issued currency for their goods.
yes, and government promises are so dependable....
In this case, they're certainly dependable enough, as evidenced by the widespread support of the US dollar, not only domestically, but internationally as well.

Quote: Quote: Couldn't you achieve the exact same thing simply by fixing supply?
sure, except by its nature, its impossible for humans to exhibit such restraint naturally.... we ALL want something for nothing, and having a fiat money at their disposal is to great a lure to those in government (and supposed 'economists' which wish to play god).
So in other words, the actual commodity is irrelevant, and your real issue is with monetary policy.

[LeopardPM]

Iriemon wrote:
Fair enough, we could do away with coins and buy a coke with a card that debits our account for 1/400th of an oz of gold as opposed to a dollar. Or we could return to a gold based standard so that one oz of gold = x dollars.
OR... my personal favorite which provides as much freedom in exchange as possible while keeping abstraction (and hence ability of those 'in the know' from taking advantage of the common person) to a minimum: a card linked to a brokerage house in which people can keep their 'investments' in whatever the stock market allows. I could keep my wealth in pig futures, or whatever, and, when I went to purchase something from someone and they wanted gold, or silver, or IBM stock or whatever in exchange, then the exchange could occur in real-time at market valuations virtually immediately - no need for an intermediate medium for exchange though Gold would probably end up being widely used for listing prices in stores and such.

Quote: The question presented was: "Couldn't a company buy gold and then mint coins? Why shouldn't they be able to? Why does the government have to be involved in it?"

If you are not using the commodity as the standard for the exchange, then what are you using? Coins minted by a company? MS Cents? Ford quarters? How would that work? You'd have to keep track of the value of each company's currency.
on the market, a variety of different 'standards' could emerge, much like mutual funds these days - but, when it all breaks down, it really doesn't matter because of instant convertability. Even a basket of goods called a 'dollar', or any other name might emerge as the most popular as far as use as a standard. In this way, the market process will find the most desirable depending on whatever qualities are wanted: long term stability, ease of use, wide recognition, etc. Let the market sort it out instead of forcing any particular good (or even service!)


Quote: Quote: In fact, there is no reason to even use a common basis of commodity units - no need to denominate everything in only one universal commodity - technology allows for on-the-fly conversion from any commodity (or group thereof) to any other.

Don't see how that would work. Doesn't an agreed medium of exchange facility transfers between companies? Otherwise you are on the barter system.
that it the whole point! We ARE on a barter system: we barter goods for fiat dollars, then dollars for other goods... and while in fiat form the government s*cks its taxation out through inflation and counterfeit. Lets remove the inefficient middle-man who creeps in at night and lessens the value of all of our wealth!

[RueTheDay]

Leopard is still making the mistake of thinking that money is no different than any other good or service.

[Atlas Bergeron]

RueTheDay wrote: Leopard is still making the mistake of thinking that money is no different than any other good or service.

In ancient history, people bartered using differnt goods (my leather jacket for your bone knife). Eventually, they progressed into a means of exchange which was viewed by all as valuable AND was extremly easy to separate (i.e. gold). Gold didn't have value becuase it was differnt from any other good, but becuase it WAS a good--a good which was easy to trade and had almost universal accepted value.

I understand that you are much more well versed in this area than me Rue, but please explain how such a commodity as "money" is any differnt from any other commodity--besides it being a better means of exchange than most other commodities? "Money" only becomes differnt when it no longer has intrinsic value (or, if you prefer, real market value). Your statement can only partially apply, in my humble opinion.

[RueTheDay]

Atlas Bergeron wrote: RueTheDay wrote: Leopard is still making the mistake of thinking that money is no different than any other good or service.

In ancient history, people bartered using differnt goods (my leather jacket for your bone knife). Eventually, they progressed into a means of exchange which was viewed by all as valuable AND was extremly easy to separate (i.e. gold). Gold didn't have value becuase it was differnt from any other good, but becuase it WAS a good--a good which was easy to trade and had almost universal accepted value.

I understand that you are much more well versed in this area than me Rue, but please explain how such a commodity as "money" is any differnt from any other commodity--besides it being a better means of exchange than most other commodities? "Money" only becomes differnt when it no longer has intrinsic value (or, if you prefer, real market value). Your statement can only partially apply, in my humble opinion.

People do not desire money for it's own sake (as they do other commodities) but rather for what they can buy with it. Money serves as the mechanism by which exchange takes place in a modern economy, and when anything disturbs this mechanism, the effect ripples throughout the entire economy. Furthermore, money serves to break the link by which every buyer is a seller and every seller a buyer (which is why Say's Law applies to a barter economy but not a monetary economy).

[Iriemon]

Atlas Bergeron wrote: Iriemon wrote:

How would a system where you have different monetary exchange units based on separate companies work?
There would probably be only one unit of exchange: gold

If not, everything could be equated to gold

That is the only way it could effectively work. A system based on Big Macs probably wouldn't hack it.

So we are back on the gold standard, that didn't work so great the last time. Why should our money supply be based upon a commodity that we cannot control.

Quote: Quote:
So we would have MS dollars? What is the advantage to having a corporation in control of the money supply over the Govt? A corporation is not acting in the best interest of the nation but its shareholders.
if you study the trends of supply and demand, you will see that acting in self interest often helps everyone else as well--as long as no force is used.

Often it doesn't.

Quote: Quote: The Fed is not beholden to its shareholders and as at least somewhat reactive to the politically system. What happens when MS has problems? What is to prevent MS from printing more assets and inflating the value of its money.
reputation? Firstly, the money they "printed" would either be made of gold or pegged to gold. If they just started printing money without pegging it, while at the same time claiming it was pegged, they would be subject to fraud.

Alright, you didn't say that before. So we expect MS to maintain gold bullion reserves to back up MS$?

Quote: Quote: Are MS moneyholders then just SOL? Do we want a corporation in control of our money supply? Why is that better than the fed?
This is not the question. The question is why consumers shouldn't be allowed to choose which money supply to use.

You can. Make a deal to pay in euros or pesos. If anyone here will accept them. Do I have to accept your offer to pay in MS$? I'll trade you a MS$5 for your $5Ford, I hear the latter isn't doing that hot.

Quote: Inflation is increasing drastically. One of the reasons is becuase our monetary unit is not pegged to any actual commodity. There is one reason.

Last I heard was some mixed news inflation was down tho' mostly cuz of falling oil prices. "Drastically" I wouldn't agree with.


Quote: Quote: In fact, there is no reason to even use a common basis of commodity units - no need to denominate everything in only one universal commodity - technology allows for on-the-fly conversion from any commodity (or group thereof) to any other.

Why is a barter system a better means of exchange, even given we have more instanteous access to valuation. The benefit of a fixed universal currency is its universality -- it can be exchanged for any good or service. [/quote]
We already live in a barter system, except this one uses a monetary unit which is meaningless. If we used gold, there would be much more trust in the value of the monetary unit.[/quote]


If you think the dollar is meaningless, buy a bunch of gold. Despite the inflation of the dollar, gold is almost up to half of what it was worth the early 80s.

[Free Thinkr]

Atlas Bergeron wrote: RueTheDay wrote: Leopard is still making the mistake of thinking that money is no different than any other good or service.

In ancient history, people bartered using differnt goods (my leather jacket for your bone knife). Eventually, they progressed into a means of exchange which was viewed by all as valuable AND was extremly easy to separate (i.e. gold). Gold didn't have value becuase it was differnt from any other good, but becuase it WAS a good--a good which was easy to trade and had almost universal accepted value.

I understand that you are much more well versed in this area than me Rue, but please explain how such a commodity as "money" is any differnt from any other commodity--besides it being a better means of exchange than most other commodities? "Money" only becomes differnt when it no longer has intrinsic value (or, if you prefer, real market value). Your statement can only partially apply, in my humble opinion.
I hate to lean on George so much, but he explains this all very clearly in The Science of Political Economy. Read this chapter. George explains the natural progression to what he terms "credit money," which basically means that the money itself has no value, but represents a credit to the holder, due to the fact that it is recognized as a representation of a certain value by society.

[LeopardPM]

RueTheDay wrote:
People do not desire money for it's own sake (as they do other commodities) but rather for what they can buy with it.
agreed, except that I allow that people MAY value whatever is being used for money for its own sake (obvious with gold, less obvious with fiat - perhaps as wallpaper sometimes, or for historical collectibility, etc).

Quote: Money serves as the mechanism by which exchange takes place in a modern economy, and when anything disturbs this mechanism, the effect ripples throughout the entire economy.
why do you specify 'modern' here? wasn't the same true in pre-modern (whenever that was) economies?

Quote: Furthermore, money serves to break the link by which every buyer is a seller and every seller a buyer (which is why Say's Law applies to a barter economy but not a monetary economy).
How does it break this link, I say it doesn't, just adds an additional layer of abstraction helping to hide the underlying actions.
Quote: Say's lawFrom Wikipedia, the free encyclopedia
In economics, Say’s Law or Say’s Law of Markets is a principle attributed to French businessman and economist Jean-Baptiste Say (1767-1832) stating that there can be no demand without supply. A central element of Say's Law is that recession does not occur because of failure in demand or lack of money. The more goods (for which there is demand) that are produced, the more those goods (supply) can constitute a demand for other goods. For this reason, prosperity should be increased by stimulating production, not consumption. In Say's view, creation of more money simply results in inflation; more money demanding the same quantity of goods does not represent an increase in real demand.