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Old March 5th, 2017, 11:03 AM   #1
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Money for nothing

Both IT and Coke are adamantly against The Fed and banks in general for creating money willy-nilly and repeatedly claim that this will devalue currency for the gain of the banks and government.

Yet this has been going on in the US since 1933 other than in foreign exchange. And in most of the rest of the western world even sooner. So why haven't the western world's economies collapsed like Zimbabwe and Venezuela keep doing?

Or more importantly, just like the question of fiat currency, what alternative do you have to offer?

In fact, virtually every economist I have ever heard on the topic say that not only is an inflation rate in the low single digits acceptable, it is necessary. Deflation is a terrible situation for economic health. But high inflation rates are also harmful (see Zimbabwe and Venezuela).

The fed "creates" money by buying notes from banks. But they also remove money by selling those notes.

And that is the balance a good government tries to maintain.

Of course there needs to be a net increase in the money supply. For every car produced, for every bbl of oil pumped to surface, for every tree turned into a piece of furniture, the net wealth of the nation is increased. If the money supply didn't keep pace, there would be a deflation effect proportional to your GDP.

So again I ask, what are your alternatives?
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Old March 5th, 2017, 11:17 AM   #2
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I hope and pray for deflation and cower in fear that inflation will raise its ugly head again.

Clearly we can't go back to the gold system for the simple reason that there is not enough gold. Speaking of gold, a guy on a coin forum keeps saying there is no more gold in Fort Knox.
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Old March 5th, 2017, 01:05 PM   #3
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Quote:
Originally Posted by RNG View Post
Both IT and Coke are adamantly against The Fed and banks in general for creating money willy-nilly and repeatedly claim that this will devalue currency for the gain of the banks and government.

Yet this has been going on in the US since 1933 other than in foreign exchange. And in most of the rest of the western world even sooner. So why haven't the western world's economies collapsed like Zimbabwe and Venezuela keep doing?

Or more importantly, just like the question of fiat currency, what alternative do you have to offer?

In fact, virtually every economist I have ever heard on the topic say that not only is an inflation rate in the low single digits acceptable, it is necessary. Deflation is a terrible situation for economic health. But high inflation rates are also harmful (see Zimbabwe and Venezuela).

The fed "creates" money by buying notes from banks. But they also remove money by selling those notes.

And that is the balance a good government tries to maintain.

Of course there needs to be a net increase in the money supply. For every car produced, for every bbl of oil pumped to surface, for every tree turned into a piece of furniture, the net wealth of the nation is increased. If the money supply didn't keep pace, there would be a deflation effect proportional to your GDP.

So again I ask, what are your alternatives?
It has caused problems. Just look at the "value of currency". Also, I believe it was 1972 when the Dollar went 100% fiat currency.

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The government held the $35 per ounce price until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard. In 1974, President Gerald Ford signed legislation that permitted Americans again to own gold bullion.
FDR takes United States off gold standard - Jun 05, 1933 - HISTORY.com
I stand corrected it was 1971. Now looking at the chart you can see as more an more fiat money is printed what happens to its value. Which is often times called inflation, when its not true inflation. It is the value of your currency being downgraded.
Historical Value of U.S. Dollar (Estimated)

We would need to audit the federal reserve, put Congress back in charge of printing money and audit our gold reserves. That would need to happen before we could come up with a tangible long term solution in my opinion. With the exception of Congress in charge of printing money, that would be a long term solution.
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Last edited by coke; March 5th, 2017 at 01:08 PM.
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Old March 5th, 2017, 01:13 PM   #4
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FDR confiscated gold.


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Old March 5th, 2017, 01:14 PM   #5
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FDR confiscated gold.


Yes he did. The original civil forfeiture! ha
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Old March 5th, 2017, 01:17 PM   #6
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Look back 100 years ago, we had housing with indoor plumbing, and electricity, and telephone service, and central heating, in urban and suburban areas. It was slowly, but inexorably moving farther out into the hinterlands. And we were on the gold standard all that time, while building the modern world.




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Old March 5th, 2017, 01:19 PM   #7
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Originally Posted by coke View Post
It has caused problems. Just look at the "value of currency". Also, I believe it was 1972 when the Dollar went 100% fiat currency.


FDR takes United States off gold standard - Jun 05, 1933 - HISTORY.com
I stand corrected it was 1971. Now looking at the chart you can see as more an more fiat money is printed what happens to its value. Which is often times called inflation, when its not true inflation. It is the value of your currency being downgraded.
Historical Value of U.S. Dollar (Estimated)

We would need to audit the federal reserve, put Congress back in charge of printing money and audit our gold reserves. That would need to happen before we could come up with a tangible long term solution in my opinion. With the exception of Congress in charge of printing money, that would be a long term solution.
It isn't the printing of money that causes problems. It isn't printing of money at all. There isn't enough currency to cover a small fraction of the wealth of the nation. It is the "issuing" of money by the fed buying bonds from banks.

The problem of inflation is kind of complex but if the government does too much of it the money supply can overreach the GDP growth and you get high inflation. It is an operational error, not a systemic error when inflation surges.

Why would you trust congress to do the issuance of money? That is the main cause of the Zimbabwean and Venezuelan problems. The government is running too large a deficit, so they issue money.

I trust the fed over politicians who only look at the two year repercussions of what they do.

And they'd still have to issue money or terrible deflation would occur. So I don't think that's a fix.

Plus, I don't see what the problem is. You seem to feel that if the dollar had a value such that your dream Corvette cost $3,000.00 your life would be wonderful. But that could only work if you were being paid 5% of your current salary so it would still be damned expensive.
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Old March 5th, 2017, 01:21 PM   #8
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Originally Posted by excalibur View Post
FDR confiscated gold.


FDR did not confiscate all of the gold. FDR must have been a coin collector and did not confiscate old gold coins.
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Old March 5th, 2017, 05:38 PM   #9
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Originally Posted by RNG View Post
It isn't the printing of money that causes problems. It isn't printing of money at all. There isn't enough currency to cover a small fraction of the wealth of the nation. It is the "issuing" of money by the fed buying bonds from banks.

The problem of inflation is kind of complex but if the government does too much of it the money supply can overreach the GDP growth and you get high inflation. It is an operational error, not a systemic error when inflation surges.

Why would you trust congress to do the issuance of money? That is the main cause of the Zimbabwean and Venezuelan problems. The government is running too large a deficit, so they issue money.

I trust the fed over politicians who only look at the two year repercussions of what they do.

And they'd still have to issue money or terrible deflation would occur. So I don't think that's a fix.

Plus, I don't see what the problem is. You seem to feel that if the dollar had a value such that your dream Corvette cost $3,000.00 your life would be wonderful. But that could only work if you were being paid 5% of your current salary so it would still be damned expensive.
What I am against and I have said this time and time again is the thousand dollar loaf of bread. Which is where we are heading.

https://www.youtube.com/watch?v=7sFLcLD1vPM

https://www.youtube.com/watch?v=hepidgw-l1w

Last edited by coke; March 5th, 2017 at 05:43 PM.
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Old March 5th, 2017, 05:52 PM   #10
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It has caused problems. Just look at the "value of currency". Also, I believe it was 1972 when the Dollar went 100% fiat currency.


FDR takes United States off gold standard - Jun 05, 1933 - HISTORY.com
I stand corrected it was 1971. Now looking at the chart you can see as more an more fiat money is printed what happens to its value. Which is often times called inflation, when its not true inflation. It is the value of your currency being downgraded.
Historical Value of U.S. Dollar (Estimated)

We would need to audit the federal reserve, put Congress back in charge of printing money and audit our gold reserves. That would need to happen before we could come up with a tangible long term solution in my opinion. With the exception of Congress in charge of printing money, that would be a long term solution.
We haven't been a gold economy in a long time. We are and have been an oil based economy since the first oil booms of the late 1800's. We have been a petrodollar based economy ever since. That morphed right into the megacorporate dollar, as the larger the numbers, the easier the scams, on everything from profits to taxes, to insurance, to speculation, and that's exactly the way the scumbags at the top of the food chain want it.

What's hilarious is the way you spend so much time here supporting those very scumbags, while out of the other side of your face call for an audit of the federal reserve.

Sharp as a tack.
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