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Author | Topic: The Giant Pool Of Money. Implications | |||||||||||||||||||||||||||||||||||||||||||
crashfrog Member (Idle past 1496 days) Posts: 19762 From: Silver Spring, MD Joined: |
In the UK at the moment we have low growth, low interest rates and (relatively) high inflation. This seems like a potentially problematic combination. It's called a "liquidity trap". Your central bank has hit the zero bound on interest rate discounting; it just can't loan money much cheaper than it's loaning it, now. That said I'm not sure you have "real" inflation; I think you have the same kind of fake inflation in the CPI that Buz is on about. The price of oil underlies the price of a lot of other things - food, plastic items, anything that has to be manufactured using energy or transported via fossil fuels. Since wage growth isn't very high in the UK I suspect your suddenly-higher rate of "inflation" just reflects a Consumer Price Index over-weighted towards oil-derived prices. Or it could be "stagflation", which economists still aren't too clear about.
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Taq Member Posts: 10085 Joined: Member Rating: 5.1 |
Taq, You're ignoring my point, that the $$ was never in danger as it is today. You would actually need to make that point in order for me to ignore it. The US dollar is the globe's currency. You would have a tough time finding any currency right now that is going to weather the next 10 years better than the US dollar. This is why China adopted the US dollar as their currency and not the Euro or any other currency. They aren't stupid.
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Theodoric Member Posts: 9201 From: Northwest, WI, USA Joined: Member Rating: 3.2 |
This is why China adopted the US dollar as their currency and not the Euro or any other currency. Buz is going to turn this around and use it as evidence for his crazy arguments. Facts don't lie or have an agenda. Facts are just facts
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Theodoric Member Posts: 9201 From: Northwest, WI, USA Joined: Member Rating: 3.2 |
The emergence into globalism makes the gold standard unfeasible. The best we can do is banish the Federal Reserve,
Now that it has been shown that the gold standard is not feasible you switch arguments in midstream. Is this the Buz gallop? You want to eliminate the federal reserve? You want our currency to be manipulated by speculators and foreign governments? Why do you hate the USA so much Buz? Without a national entity to help control the dollar and the economy robber barons and foreign governments could quickly manipulate our currency to their benefit. Why do you hate working people so much? Why do you hate the middle class? Why the love for the ultra wealthy? Facts don't lie or have an agenda. Facts are just facts
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Taq Member Posts: 10085 Joined: Member Rating: 5.1 |
The fall of the Spanish Empire can be partially attributed to influx of gold and silver from the new world. The huge inflow of gold and silver destroyed the Spanish economy.
Imagine if we backed our currency with diamonds. The Russians would have us by the balls. They have been sitting on mountains of diamonds for decades now, as have the big diamond cartels. All they would need to do to crash the US economy would be to dump the diamonds into the market. The US dollar could lose half of it's value in the matter of a few days.
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Modulous Member Posts: 7801 From: Manchester, UK Joined: |
I know what it means. It means that the $$ was very sound, able to purchase many goods. Though you could buy more per dollar, you earned less dollars per day. You did not account for this in your description of the golden Victorian age. That was my rebuttal, and you repeating your original point does not serve to address my rebuttal.
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Phat Member Posts: 18348 From: Denver,Colorado USA Joined: Member Rating: 1.0 |
in the Twenties, an ounce of gold would buy a new suit for a man. Today, it still will.
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Modulous Member Posts: 7801 From: Manchester, UK Joined: |
I'm not sure where you are shopping for suits. I can get half a dozen decent suits, maybe even a dozen pretty good ones (in a sale) for an ounce of gold. If I was going to be spending a whole ounce of gold on a suit it'd have to be top end commercial designer wear or the like.
Edited by Modulous, : No reason given.
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Dr Adequate Member (Idle past 313 days) Posts: 16113 Joined: |
I know what it means. It means that the $$ was very sound ... That's not what "sound" means. Obviously it has nothing to do with the purchasing power of the currency, otherwise you'd have to think that the US dollar was "sounder" than the US cent! Rather, it has to do with the rate of change of the purchasing power --- i.e. with inflation. The inflation rates in the 1900s were little different from those today.
It was a low period in terms of inflation, but a wonderful high time in the industrial revolution, prosperity and progress, beautiful victorian homes fancy oak furnishings emerging oil and energy production & rural estates, and the emerging of automobiles, advancement of electrical and media technology and air travel, etc. INCOME WAS NOT TAXED! And the average life expectancy was 46 for men and the average wage was 22 cents an hour. What you're describing is the life of the rich --- "beautiful Victorian homes, fancy oak furnishings ... rural estates". What the average American had was poverty and squalor. You say you could buy a solid oak dining set for $30? Yes, but back then the annual wage of a schoolteacher was $325. Today you can pick up an oak dining set for ~$500, which is higher, but the annual wage of a schoolteacher is considerably higher than $5,400 (the equivalent of $325 on the oak dining set standard), meaning that s/he would be much more able to afford it. Those weren't the good old days, Buzsaw.
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Buzsaw Inactive Member |
crashfrog writes: The only intention of the original paper $$ was that all of it printed would represent and equal amount of precious metal held in reserve. Right, but the value of precious metal is by fiat, too. Online Dictionary
quote: Commodities are not fiat legal tender/currency. They are products that legal tender buys in commerce.
crashfrog writes: Whether you're trading gold or trading paper dollars doesn't matter, Buz. Money is just an abstract representation of how valuable we consider goods and services, and how much demand for them there is. There's literally no difference between trading paper dollars that represent fiat values of precious metal, and trading paper dollars that are themselves a fiat value. Silver will always have value for trading for paper. Paper money which has historically been swept up in streets after inflating into oblivion cannot always necessarily be traded for silver.
crashfrog writes: It could be taken to any bank and exchanged for an equal amount of silver coinage on demand. So what's so great about silver, Buz? It has, historically, always considered precious, having non-corrosive beauty, durability and commercial use. Not so with unbacked paper notes. BUZSAW B 4 U 2 C Y BUZ SAW. The Immeasurable Present Eternally Extends the Infinite Past And Infinitely Consumes The Eternal Future.
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jar Member (Idle past 423 days) Posts: 34026 From: Texas!! Joined: |
Buzsaw writes: It has, historically, always considered precious, having non-corrosive beauty, durability and commercial use. Not so with unbacked paper notes. Sorry Buz but silver most certainly corrodes, and is very easily corroded. Anyone so limited that they can only spell a word one way is severely handicapped!
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crashfrog Member (Idle past 1496 days) Posts: 19762 From: Silver Spring, MD Joined:
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Commodities are not fiat legal tender/currency. Precious metals are and always have been; they have no intrinsic worth because they have little intrinsic utility. By definition they're a fiat currency whose value, instead of being set by a central bank charged with regulating the economy, is set instead by narrow, parochial mining outfits interested only in making money and thereby inflating your currency. On a metals standard, your currency inflates every time someone opens a mine.
Paper money which has historically been swept up in streets after inflating into oblivion cannot always necessarily be traded for silver. If there's silver to buy, money can always buy it. But not everybody wants to buy silver. There's not much of a market for giant stone wheels, these days. You certainly couldn't argue that they were paper money, but the value of giant stone wheel currency plummeted when Irish sailors started importing wheels to the Island of Yapp. All currencies can inflate, even gold-backed dollars. Historically gold-backed dollars inflated even faster than today's fiat dollars. We proved it.
It has, historically, always considered precious, having non-corrosive beauty, durability and commercial use. Money has always been considered precious and been of commercial use. Money has enduring value simply because of its role as currency. Hence, numismatics.
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Buzsaw Inactive Member |
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jar writes: Buzsaw writes: It has, historically, always considered precious, having non-corrosive beauty, durability and commercial use. Not so with unbacked paper notes. Sorry Buz but silver most certainly corrodes, and is very easily corroded. You needn't be sorry. It's less corrosive than brass, copper and iron, suitable in many electronic components and other industrial uses. and highly desirable for it's beauty in jewelry, flatware, decorative desirables, etc whether used as plated or solid. The base metals have historically been less coveted than silver and gold since history has been recorded. Go figure. BUZSAW B 4 U 2 C Y BUZ SAW. The Immeasurable Present Eternally Extends the Infinite Past And Infinitely Consumes The Eternal Future.
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Wounded King Member Posts: 4149 From: Cincinnati, Ohio, USA Joined: |
There's not much of a market for giant stone wheels, these days. You certainly couldn't argue that they were paper money, but the value of giant stone wheel currency plummeted when Irish sailors started importing wheels to the Island of Yapp. And they were the devil for wearing a hole in your pockets. I also considered a comment on my almost having enough ningis to make one pu. TTFN, WK
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jar Member (Idle past 423 days) Posts: 34026 From: Texas!! Joined: |
Actually Buz, silver is not used in many electronic components because it is so corrosive.
Anyone so limited that they can only spell a word one way is severely handicapped!
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