Value of the Dollar

Gold has more stability than the paper stuff, that's why it is preferred. These days with the increased demand for it, it is gaining value and not losing it. Right now a dollar today is worth 14 cents three decades ago or less. Gold doesn't have that problem and that's A VERY BIG PROBLEM. Anti inflation aspect is one thing I love about the gold standard. The real thing I love about the gold standard, and the very reason it was done away with, is that it limits government spending and taxation. They can't spend infinitely while on the gold standard because they can't make up money that doesn't exist--if it's not backed by metals, it doesn't exist. We need the gold standard for that reason alone. It effectively tells the government no, and we need more of that.
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Back in the day when money actually was little pieces of gold or silver instead of paper and cupronickel, it was common for governments in need of more money to debase the currency. Hence Gresham's Law: Bad money drives out good.

Also, back when the US was on the gold standard a lot of foreign contries were starting to buy US dollars on the open market and redeem them for their face value in gold. This was a problem because the treasury had allowed the supply of dollars to exceed the supply of gold backing them; in short, the value of the gold backing the dollar was far in excess of the market value of said dollar. That's why Nixon (IIRC) took the US off the gold standard in the early '70s. At the rate things were going the US was going to have a gold-backed currency and no gold backing it, i.e., what we have now (except no gold in Ft Knox).
 
Well, those are some good points except in my little diatribe I never call for a return to the Gold Standard, I call for the abolition of the Federal Reserve. Then Congress can then reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Article I, Section 8 of the U. S. Constitution, only Congress has the right to issue money and regulate its value.

Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.

cornfedmidget said:
If we do go to a gold standard, who benefits. Be it the federal reserve in New York probably has the largest reserves of gold in the world, therefore, will they set the price? The US government is defunct of gold, it was given to the Federal Reserve for collateral on future debts.
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As cornfedmidget points out while making the case against a return to the gold standard the Federal Reserve already the gold that was formerly the property of the USA. Ask your self how did they do it?

They aquired it from interest on the national debt.

Once again I'll state ... THERE IS NOTHING “Federal” about the Federal Reserve Bank. In other words, the Federal Reserve is not “federal” and it does not have any “reserves.” The Bankers, who own the Federal Reserve Bank, print money with interest but without any backing, and would like to keep their “federal” banking cartel a secret.


 
This was a problem because the treasury had allowed the supply of dollars to exceed the supply of gold backing them; in short, the value of the gold backing the dollar was far in excess of the market value of said dollar.
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When that happens it's a warning to tighter monetary policy, not just ignore it a little longer. That's why a peg to gold serves the purpose of regulating monetary policy.
 
Don't forget that gold's value

is also partly psychological.

The difference between the "use value" of gold, the value of the stuff you can actually make out of it and nothing else, and the "trading value", what you can sell it to someone else for, is enormous.

Come on, you're talking about a material that acquired its perception of value because it's pretty and retained it over the centuries for that reason, and because it had been valuable for a long time. It doesn't get any more psychological than that. If most people hated the color, gold wouldn't be worth squat.

All means of exchange above the level of direct barter are inherently psychological. They're worth what they're worth because all participants agree that they are. The guy in New York who draws 1 dollar bills by hand and then trades them for stuff illustrates this brilliantly. It's even legal, because he tells the other party that he drew the bill.

--Shannon
 
The difference between the "use value" of gold, the value of the stuff you can actually make out of it and nothing else, and the "trading value", what you can sell it to someone else for, is enormous.

Come on, you're talking about a material that acquired its perception of value because it's pretty and retained it over the centuries for that reason, and because it had been valuable for a long time. It doesn't get any more psychological than that. If most people hated the color, gold wouldn't be worth squat.

All means of exchange above the level of direct barter are inherently psychological. They're worth what they're worth because all participants agree that they are. The guy in New York who draws 1 dollar bills by hand and then trades them for stuff illustrates this brilliantly. It's even legal, because he tells the other party that he drew the bill.
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You make a good point, but besides being pretty both the gold and the artists work took time and effort to produce. This time and effort can be translated into value and equated to the time and effort it takes to do other labor.

Currency with real value should be our goal not currency based on debt.

Anyone who is not fully understanding what is going on with our current system should watch the video that zxcvbob provided the link for.

Money = Debt (+ interest)
 
Come on, you're talking about a material that acquired its perception of value because it's pretty and retained it over the centuries for that reason, and because it had been valuable for a long time. It doesn't get any more psychological than that. If most people hated the color, gold wouldn't be worth squat.
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Not exactly. Gold is also an excellent conductor of electricity, and is the only known metal on earth that will not corrode...ever. Its "value" because of asthetics is only part of the equation.
 
"Permit me to issue and control the money of a nation and I care not who makes its laws"
Mayer Anslem Rothschild

If you notice from the list of 9 of the twelve banks of the Federal Reserve I provided on the first page that Rothschild Banks of London and Berlin is in the number one position. I absolutely believe that they are the controlling factor and the number one bank in the world.

Their intended goal is to have only three central banks in the world The Federal Reserve, the European Central Bank and the Central Bank of Japan all controlled by the Rothschilds.
 
Nate,
Slow down. You are monologuing. Give other folks a chance to reply ;)

BTW, did you notice that that video concluded that a gold (or bi-metal) standard was also flawed? The only honest monetary system is barter-based script and an interest rate of 0%. (not sure I agree with this, but it's compelling)
 
True, but...

Not exactly. Gold is also an excellent conductor of electricity, and is the only known metal on earth that will not corrode...ever. Its "value" because of asthetics is only part of the equation.
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Well, sort of true. Gold is a good conductor, but copper and aluminum are both better. Titanium doesn't corrode, so far as I know, and heavier metals like iridium may not either. But that's not really the point I was making.

First, all of the uses I can think for gold that don't revolve around its being yellow and shiny are modern, and one of the arguments for "gold is real money" is that it has been used as a medium of exchange for a long time.

Second, and more importantly, the industrial uses for which gold is the best material comprise a very small fraction of it's price. In fact, at current prices, a lot of those uses will go to other materials, as using gold becomes non-cost-effective.

100% cotton paper isn't cheap stuff, so far as paper goes. But 18 square inches of it won't set you back a buck, either.

For both, the difference in price is a purely human invention, existing only in the minds of the people making the exchanges. It really matters very little whether the medium of exchange is metal, paper with special writing and pictures on it, beads, shells, or dehydrated goat testicles.

Money is a symbol system. A consensual mass delusion, maintained because nobody wants to try to figure out how many sheep to swap for a Toyota.

We made the whole thing up, so what the heck does it matter what we use for it?

--Shannon
 
What is money? What is value? What is valuable?

Peoples faith/belief in a currency give it value.
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Money, no matter whether paper or metal or seashells is simply an idea, backed by confidence. When confidence declines, so does the "value" of the money.

True wealth is the ownership (control) of items of value, and the value is determined by the social situation.

Outside of their use in manufacture (like industrial diamonds) precious gems only have value because people want them. They are pretty. They enhance the appearance of women in many people's eyes. Compared to fancy cut glass they are durable, but no more pretty. Primitive peoples are as happy with glass beads as they are with diamonds and emeralds.

Gold is a soft metal, and easily worked. It has a pleasing appearance, and while not common, when found it was often in an easily refined or even pure form. In the distant past it was valued because of this.

What has value, and how much, depends on the situation. In the worst situations, only food and water, and the things that help you get and keep food and water have real value, and everything else is not as important. When things are better, things beyond those needed for survival have value. And so the story of the chicken and the Krugeraands (and the bullets).

When times are good, Krugeraands (or Maple Leaves, or Eagles, or whatever form gold you have) will buy you chickens and bullets, and everything else you want. But when they are not.....it can go something like this;
Starving Investment Banker (SIB): "Hi Mr Farmer, care to sell one of your chickens?"
Farmer: "what you got to trade?"
SIB: (holding sack of gold) "I've got Krugeraands!" Gold!"
Farmer: Tell you what, give me a couple dozen of them things and I'll let you have a chicken."
SIB: "Are you kidding? These are Krugeraands! An ounce of pure gold each!!!"
Farmer: "Well, just consider it an expensive chicken!"

Then there is the other side of the "coin". Same bad times, but instead of a banker you have a well stocked shooter.
Well Stocked Shooter (WSS): ""Hi Mr Farmer, care to sell one of your chickens?"
Farmer: "what you got to trade?"
WSS: "I got some shells that fit your old Winchester.
Farmer: "How many chickens do you want?"

get the point?

Only things that are useful have value, and the value depends on just how useful they are. This is an extreme example, to illustrate the point, and things are a long way from this today, but the principle holds true.

Guns and ammo are some of the most potentially useful things you can easily own, and they keep for a long, long time. Only you can decide if they are worth the number of dollars that you can get them for today. Choose wisely.
You may or may not be able to trade them for the same number of dollars at a later date. It may be more dollars or less dollars, the value of the items in dollars may vary widely. But while the physical usefulness of the items remains unchanged, the value of that usefulness is dependant on the societal conditions. In the best of times, guns and ammo are worth what the market will bear. In the worst of times, they can be beyond price.

Right now, I think we are somewhere inbetween, but it doesn't look to me that we are heading into the best of times.
 
Add alcohol

to your list of always-useful stuff.

In your brilliant scenario, I bet "I've got beer" would go just about as well as "I've got ammo".

Forget the gold standard... we should go to the beer standard!\\

--Shannon
 
etymology of "federal"

THERE IS NOTHING “Federal” about the Federal Reserve Bank. In other words, the Federal Reserve is not “federal”
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Please don't confuse people with this construction: the Federal Reserve may indeed not be part of the federal goverment of the United States, but "federal", in its original sense, correctly descibes the federation of banks making up the Federal Reserve, just as it now incorrectly describes the government of the United States (which is more "united" than merely a federation of sovereign states--unless you're a Texan).:D

At any rate, as world confidence in America wanes, our ability to print and spend fiat money as we please without repercussions will also erode. When sheik whoever is willing to take--or even prefer--Euros instead of USD for his oil, the devaluation of the USD is accelerated. To put it another way, the US dollar was inflated by its historical status as the only universally trusted fiat currency, and now that it has some competition, we're feeling a painful correction....:eek:
 
How about uranium? And I mean the good stuff, the weapons/energy-grade uranium. Back it up with something that has to be not only collected, but also correctly processed.

Converting to the gold standard would cause instant and severe inflation. Because (as others have already mentioned), we don't have enough gold to back up the enormous value of our economy's goods and services. Nobody has enough. And if they did, that would be a problem, too. A major gold dump on the open market would be a real bummer. :p

And gold is too shiny, anyway. That uranium stuff is more EBR-like. :D
 
True wealth is the ownership (control) of items of value, and the value is determined by the social situation.
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Exactly.

Flashback... Did anyone here watch a short lived show on Fox in 92 called Whoops? The premise was a diverse group of people (bimbo, black biologist, venture capitalist, school teacher, militant feminist, bum, etc...) survive a nuclear apocalypse and find themselves in a farm house in a valley which is the only part of the world untouched.http://en.wikipedia.org/wiki/Woops!

Hang on here because this makes sense...

With nothing but the contents of the farm house they decide to all pick something of there own. One takes the record player (with the only record being The Ballad of the Green Berets), one takes a rocking chair and so on... It is all things the like and use but all are confused by Thorpe the Venture Capitalist, who only took a dirty old tool box full of tools and sits there whittling all day.

One day something breaks and they ask to borrow the tool box... At that point he turns around the sign he was whittling which read "Thorpe Corporation".

It was an outstanding demonstration of perceived and relative value. Money was created, by Thorpe, based on is control of the most valuable resource and all essentially became indentured servants to him, until the threatened to all kill him. The point was made though... all value is relative, especially money.
 
At least Thorpe Corp had something real to lend. This is country almost wholly owned by private banks that lend an idea.

The Original Constitution for the United States stated that Congress was to mint the money and set the value of money in the United States.

However, in 1913 the Federal Reserve Act was passed. This act passed the authority to create money from congress over to the private consortium of banks collectively known as the Federal Reserve Bank.

The Federal Reserve Bank is pretty secretive about who it's owning banks or shareholders are. It has been determined that the "class A" stock in the Federal Reserve Bank are held by the following 8 institutions:

1. ROTHSCHILD BANKS OF LONDON AND BERLIN.

2. LAZARD BROTHERS BANK OF PARIS.

3. ISRAEL MOSES SEIF BANK OF ITALY.

4. WARBURG BANK OF HAMBURG AND AMSTERDAM.

5. LEHMAN BANK OF NEW YORK.

6. KUHN LOEB BANK OF NEW YORK.

7. CHASE MANHATTAN BANK OF NEW YORK.

8. GOLDMAN SACHS BANK OF NEW YORK.

The Remaining Stock is held by the Chemical Trust and the Rockefeller Trust. These stockholders hold Federal Government Obligations which amount to about $5 Trillion Dollars - The U.S. National Debt! Their annual profits from interest payments are over $200 Billion dollars per year!

Before the passage of the federal reserve act congress could print it's own treasury notes and use the money to pay for the cost of government. After the passage of this act congress had to borrow money from the privately owned Federal Reserve Bank at interest!


Fiat Empire We as a country could demand that the Federal Reserve be eliminated and control of our currency returned to congress.
 
4V50Gary said:
The Bureau of Engraving and Printing, an entity of the Federal Gubmint, prints the money for the Federal Reserve. You can visit them at Washington D.C. and it's right off the National Mall.
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The Federal Reserve Bank can order the U.S. Treasury to print a determined amount of Federal Reserve Notes and have the U.S. Mint deliver them for the cost of printing, which is a small fraction of the face value of the notes.

These Federal Reserve Notes are then lent into circulation by lending them either to congress or to the Federal Reserve Member banks.

Some economists point out that money lent into existence would be impossible to totally repay because only the principal was lent into circulation but the principal plus interest has to be paid back.
 
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Nate45 are you hinting that the Evil JOOOOOZ own the federal reserve??
Another Elders of Zion conspiracy theory???:p

The actual facts:

Who owns the Federal Reserve Bank?
A: There are actually 12 different Federal Reserve Banks around the country, and they are owned by big private banks. But the banks don't necessarily run the show. Nationally, the Federal Reserve System is led by a Board of Governors whose seven members are appointed by the president and confirmed by the Senate.
The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation's more than 8,000 banks are members of the system, and thus own the Fed banks.

The concept of "ownership" needs some explaining here, however. The member banks must by law invest 3 percent of their capital as stock in the Reserve Banks, and they cannot sell or trade their stock or even use that stock as collateral to borrow money. They do receive dividends of 6 percent per year from the Reserve Banks and get to elect each Reserve Bank's board of directors.

The private banks also have a voice in regulating the nation's money supply and setting targets for short-term interest rates, but it's a minority voice. Those decisions are made by the Federal Open Market Committee, which has a dozen voting members, only five of whom come from the banks. The remaining seven, a voting majority, are the Fed's Board of Governors who, as mentioned, are appointed by the president.

The Fed is a little defensive about the question of ownership. In its Frequently Asked Questions section, the Federal Reserve Board says: "The Federal Reserve System is not 'owned' by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects." It continues:

Federal Reserve Board: As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
 
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