dudest » Fri Aug 22, 2014 8:38 pm wrote:

nanningbob » Fri Aug 22, 2014 2:55 pm wrote:I saw this debate between gold and paper money and it was a nice summary so I posted it.

Your central premise is both correct and incorrect. Money by itself is indeed worthless. We currently trade goods and services for green pieces of paper with painted on numbers. However, the worthiness of that is no different than using gold as a trading instrument. Gold by itself also has no value. You can’t eat it, plant it, cover yourself in it to keep you warm, or build with it. The value of it lies in what others are
willing to trade you for it. In that sense rocks or animal pelts could be used, and have been used, to the same effect as gold and our current greenbacks.
The same problems that arise in the current banking system arose in the gold standard regarding inflation and the devaluing of currency. Fractional banking is what allows economies to grow. This is why most developed countries operate under this system. If I deposit $100 into Bank A, I retain $100 worth of purchasing power. If you take out a $100 loan from Bank A, now you have $100 worth of purchasing power. Simplistically, our economy just grew by $100. Now, your argument should be “what if I can’t pay back the $100 loan and you need your $100.” Well, that is why we have multiple banks and multiple banking customers. I concede that if the run is large enough some people would not be able to withdrawal their money. However, I pose that overarching public good served by a growing economy is worth that small risk. Wouldn't you agree?

Hallo Bob,

My humble opinion in response to the summary:


1. True that money / value is what people say it is ( whether paper money, cowrie shells, tally sticks, etc )

2. Gold can be more easily controlled and manipulated, especially when amassed by relatively few people (artificial scarcity), thus making it very easy to trigger inflation/deflation when a currency is 'backed' by gold

3. The 'greenbacks' in current circulation are not the same as Lincoln's greenbacks. Lincoln's greenbacks were printed DEBT FREE for the good of the Union. Today's dollars are printed of Government-issued debt bonds purchased by the Federal Reserve. No comparison

4. Fractional banking is what is KILLING economies. Why should Banks be allowed to lend out money they DON'T HAVE? [ upto x10 in some countries ]. Yet another way to cause periods of boom and bust.

Summary: If the Government can issue a bond, it can issue a dollar [ the quantity of which can be controlled to match the monetary needs of the society ]. Gold is just an excuse to put global wealth in the hands of a few. If not, why is silver coinage banned (e.g in the US)? [ Ans: because it is debt-free currency ]

Cheers

nanningbob » Sun Jan 19, 2014 12:56 pm wrote:\

The problems we face economically are more than just Conservative vs. Liberal, Socialism vs. Capitalism, etc. The problem is much more fundamental than those viewpoints. A truly great read in economics.

In a forthcoming book Thomas Piketty, an economist at the Paris School of Economics, argues along similar lines that America may be pioneering a hyper-unequal economic model in which a top 1% of capital-owners and "supermanagers" grab a growing share of national income and accumulate an increasing concentration of national wealth. The rise of the middle-class--a 20th-century innovation--was a hugely important political and social development across the world. The squeezing out of that class could generate a more antagonistic, unstable and potentially dangerous politics.
(The underlined part by me is clearly showing up in our Congress and political institutions.)

nanningbob » Fri Nov 18, 2016 12:43 pm wrote:So which Trump will we have?
1. The Hoover Trump--Isolation--anti-immigrant--trade war--tariffs
2. Republican--cut taxes--increase spending--depreciate the dollar massively--blow the budget
3. Pragmatic--business--invest in Infrastructure--have a budget--long term view
Or
???????????