The US currency vs. ...

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Wallew

Moderator
I don't know where to post this, but if you need to delete it or move it, please feel free. Thanks.

Lots of people have been complaining that the US currency has dropped forty percent against the Euro. My personal opinion is that it's ON purpose by the US government.

This is the exact same tactic that CHINA is using. They have lowered the Yen (Yuan?) yet again. WHY?

SO their products are CHEAPER everywhere and it allows them to bring in tons of money from all over the globe.

My opinion is that we are doing this and that allows the EURO to go higher than the US dollar is a good thing! Making US products cheaper than European products in Europe.


WHAT SAY YOU?
 
There's no question that foreign trade (among MANY other factors) affects US Monetary Policy. I think this is as it should be, so long as currency is not backed by any value other than faith in the Government that prints it.
Rich
 
i see one place the declining value of the dollar is bad: savings.

i have $100 in savings.
a gallon of milk costs $.10. my savings is worth 1000 gallons of milk.

50 years later i still have the $100 in savings.
a gallon of milk now costs $1. my savings is worth 100 gallons of milk.

the actual "value" of the milk did not change but now through the devalued dollar i have lost 10 times the value of my savings.

i don't see how this is good.
 
I agree with Rich. When the US gave up the gold standard for the "? don't know what to call it standard, faith in government".

Our money is worth the paper that it's printed on, and paper is cheap now days.
 
Gold Standard.
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unfortunately the gold standard is not the answer either. i am doing some research now so i will have more information in a bit.

the correct answer is to drop the Federal Reserve (privately owned bank) and have the US federal government perform one the few duties actually enumerated in the Constitution: printing money.
 
redhawk41,

If you started with $100 in savings and 50 years later you still ONLY had $100 in savings either you removed tons of money OR you bank at a really lousy bank, credit union, whatever

Secondly, the Federal Reserve Bank DOES NOT print money. They only DISTRIBUTE what the MINT makes in coin and the Bureau of Engraving prints in folding money (both TREASURY Department - my wife corrected me). They also set the prime interest rate. That's the interest rate that the FRB loans money to banks at.

Careful in mixing up your federal government agencies. And yes, though the FRB IS a privately owned bank, it is OWNED by the federal government.

My grandfather owned a bank back during the depression. This was when the money was printed and distributed to the banks, whose OWNER SIGNED each bill. My Dad has a $5 framed on his wall, signed by his DAD. I think that MAY be one of the reasons my grandfather died so young. All the stress involved in owning a bank. The family ALSO owned a candy company all the way up until WWII. I have a picture of the family business horse drawn covered delivery cart that has the family name on it, with the horse all hitched up and ready to go.

If you wish to learn more about the Federal Reserve, there is a book called "Secrets of the Temple - How the Federal Reserve Runs the Country". It's a really lengthy (718 pgs + another 80 pgs for appendixes and index) boring tome, but it does do a fairly good job of explaining who the FRB is.

I HAVE worked at two Feds. The one here in Denver, and the one out in San Francisco. So kindly be careful with your facts. Thanks.

Also we are still ON the gold standard. Kind of.

In 1964, when we stopped backing our currency with any metals, a new Mustang cost about $3000 and an ounce of gold was $32/ounce.

In 2004, a new Mustang costs about $30,000 and an ounce of gold was just a smidge over $350/ounce. So, not much has changed in the interveining forty years. The main difference NOW is that the FEDERAL GOVERNMENT will no longer accept 'Silver Certificate' dollars and REDEEM THEM for silver.

THAT would definately have us still on the Gold Standard. I have many Silver Certificate dollars in my collection.

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This one is dated 1957. Notice that under the words "Silver Certificate" it says that "this certifies that there is on deposit in the Treasury"...

I collect currency. Go figure.
 
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In 1964, when we stopped backing our currency with any metals, a new Mustang cost about $3000 and an ounce of gold was $32/ounce.

In 2004, a new Mustang costs about $30,000 and an ounce of gold was just a smidge over $350/ounce. So, not much has changed in the interveining forty years.
Click to expand...
Well, there was that period around 1980 when gold spiked to over $1000/ounce.....
 
Lots of people have been complaining that the US currency has dropped forty percent against the Euro. My personal opinion is that it's ON purpose by the US government.
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My personal opinion is that governments who show irrational fiscal irresponsibiltiy and let their deficits skyrocket out of sight have their currency lose favor in international markets.... leading to devaluation.
 
TIME is the great devaluator (new word!) of ANY currency. Not the government who issues it.

Kindly name ONE currency that is worth MORE NOW than it was when it was issued. I am ONLY talking about paper currency.

NOT HARD METALS. Gold, silver, platinum, etc. Though those are not actual currencies any more. Just a way to keep hard metals.
 
If you started with $100 in savings and 50 years later you still ONLY had $100 in savings either you removed tons of money OR you bank at a really lousy bank, credit union, whatever
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ok, assuming 2% interest on the savings, i have $200 in savings, or 200 gallons of milk. still quite below what i started with.

since i seem to be off on who exactly owns the Federal Reserve banks, and you appear more knowledgeable, can you clear this up for me:

i am under the impression that the United States government borrows money from the Federal Reserve banks in order to issue 'Federal Reserve Notes'. US government is responsible for principle AND interest payments back to the Federal Reserve, which is the source of the US government's HUGE debt. Basically, cash you carry is a receipt of debt owed to the Federal Reserve banks.

i have greatly summarized, am i correct / incorrect with any of this?

TIME is the great devaluator (new word!) of ANY currency
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how does time devalue currency?
 
ok, assuming 2% interest on the savings, i have $200 in savings
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this is obviously not based on compound interest.

i am going to retract this and say that my savings consists of a can buried in the backyard.

nevertheless, inflation (currency devaluation) kills savings. inflation, from what i understand, is due to the increasing supply of currency. the more there is, the less it's worth.

And yes, though the FRB IS a privately owned bank, it is OWNED by the federal government
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does this make me a shareholder?
Kindly name ONE currency that is worth MORE NOW than it was when it was issued
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http://www.usarare.com/index5.htm
http://www.ronscurrency.com/rcpmfaq.htm

i sure hope that first one is a joke $28,000 for a $20 bill!!!???
 
redhawk41,

i am under the impression that the United States government borrows money from the Federal Reserve banks in order to issue 'Federal Reserve Notes'. US government is responsible for principle AND interest payments back to the Federal Reserve, which is the source of the US government's HUGE debt. Basically, cash you carry is a receipt of debt owed to the Federal Reserve banks.
Click to expand...

Ok, let me see if I can clear this up just a little.

The Mint makes all our coins while the Bureau of Engraving prints money and both are a branch of the US Treasury.

Most of the spending money known as M-1 existed as checking account deposits, about three-fourths of it, and the rest as currency. The proportions did not matter, since the two were interchangeable. If the public for some reason wanted to hold more of it's money in hard cash, the Bureau of Engraving printed more bills and the Federal Reserve distributed the currency through the banking system, but the printing itself did not create new money - since the cash was simply substituted for the existing deposits in checking accounts.

From "Secrets of the Temple" by William Greider, page 57, paragraph three
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Now to explain that paragraph. Basically most hard money is but a small percentage of all the "MONEY" in circulation. In truth, especially in the digital age, most money is just a mark in some accounting program, or in the 'olden days' (thirty years ago) they were marks in a ledger. Money is just a 'concept', not a fact. DOES THIS MAKE ANY MORE SENSE than the above paragraph?

There is no true deficit. It's all accounting procedures. It's a concept most people never grasp. Most people think we have every penny in our system is actually hard cash. NOTHING could be further from the truth. MOST of our economy is driven by accounting procedures (debits and credits).

Having said all that, go rent a video or DVD called "Rollover" with Jane Fonda and Kris Kristoferson. It kind of explains what our 'economic' system is all about.

WHAT is the world wide economy based on? CREDIT! Not hard currency. Sad if you think about it.
 
so is it fair to say that the american taxpayer pays interest to the private Federal Reserve bank for money created out of nothing?

in other words, we work, in debt, so that a few may become richer.

is this a fair assessment?

u·su·ry
n. pl. u·su·ries

1. The practice of lending money and charging the borrower interest, especially at an exorbitant or illegally high rate.
2. An excessive or illegally high rate of interest charged on borrowed money.
3. Archaic. Interest charged or paid on a loan.

Lots of people have been complaining that the US currency has dropped forty percent against the Euro. My personal opinion is that it's ON purpose by the US government.
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i agree that is is on purpose, but hardly for the benefit of the average american.
 
Guys-
Listen to Wallew....I'm learning much that I've forgotten since a high-dollar B-School education.

Currency creation, valuation and flow is one of the NATURALLY complicated issues of life.....simply because it's a necessary, agreed-to, artificial yardstick of goods and services. It's not some new conspiracy; it's been this way since the days of John Maynard Keynes.

Think about it....you move from an Agrarian society to one of specialization:
- How do you buy a loaf of bread if all you can trade is your time as a brain surgeon?
- How do you purchase a home if what you do daily is law enforcement?

The answer: Money. Yes, it started out as a Gold standard; a Cattle standard; a Goat standard.....but even those are not objective. They were a simple way to "value" your work. Crude, volatile and quite unconnected to reality.

Today we have paper and plastic....just as crude, volatile and unconnected to reality as the rest. It's just another measure of your hour's work. Yes, it's manipulated by governments, corporations and even wealthy investors.....just as cattle, sheep and gold were.

But it's hardly a modern invention or a clear trail to conspiracy.
Rich
 
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