|
PureBytes Links
Trading Reference Links
|
Okay, but what about 30 years from now when gold will be a by-product of our
fusion reactors?
Kent
At 08:56 PM 8/11/98 -0400, you wrote:
>Simple each serialized bill/digital credit is tracked with a certain amount
>of gold backing it. When you deposit the money in the bank they pay you a
>certain amount to use it.
>
>If you are intrested in this subject you can study Austrian Economics or
>check out the Von Mises Institute.
>
>Simple supply and demand.. If gold is scarce, your gold backed bills will
>be able to buy many loaves of bread.
>
>It goes back to the first existance of money. They didn't want to drag all
>this gold around.
>People appeared that were willing to store it for a fee and write a receipt
>for it. You could then trade the receipt (a paper note) for goods and
>services. The person receiving the note knew that he could at any time go
>and redeem it for gold at the storage facility. The fraud started coming
>into the picture when they had thousands of notes out backed by gold in the
>storage faciltiy. Knowing that not all the people are going to redeem their
>notes, they started printing up more than one note for each unit of gold in
>storage (fraudulently).
>
>Worse case scenario -- A run on the banks occurs, this is fine as long as
>the banks are held accountable to repay depositors.
>
>FDR relieved the banks of ever having to repay depositors (the so called
>banking holiday). This was the worst thing he could do. In the free market
>he should have let the banks that were going fail do just that. And the
>ones that made it financially by the the skin of their teeth or better would
>be the banks that would be the stronger and more fiscally sound.
>
>And for a side note.... The Roaring Twenties was built on a credit bubble.
>When you can borrow money cheaply people are willing to expand their
>businesses (get loans for new equipment, buildings, employees ect.) This
>creates a look of prosperity on the surface. New houses and pizza
>franchises going up everywhere. But it is built on credit that must be
>repaid. If there is a slump you can't make the payments etc...
>
>Under the gold standard there are not extreem fluctuations in business
>cycles and interest rates..
>
>La Gonzo
>
>
>-----Original Message-----
>From: Kent Rollins <kentr@xxxxxxxxxxxxxx>
>To: Gonzo <gonzo@xxxxxx>
>Date: Tuesday, August 11, 1998 5:30 PM
>Subject: Re: DEFLATION CRISIS... myth exposed <----Actually Stagflation.
>
>
>>Is there enough gold in existence for us to back our money with it? What
>>about all the currencies around the world? Also, if I deposit $100,000 in
>>the bank and the bank lends it out for someone to pay a home builder, does
>>the reserve need $200,000 or $100,000 in gold to back it up?
>>
>>Kent
>>
>>
>>At 10:59 AM 8/11/98 -0600, you wrote:
>>>The answer is simple get away from fractional reserve banking and return
>to
>>>a full gold standard (not the brenton-woods semi gold standard). The
>>>problem is that it is to late for the US because you can not run deficits
>on
>>>a gold standard. They wanted powerful money overseas so they allowed
>>>foreigners to exchange their money for gold bullion, but wanted
>inflationary
>>>money at home. This infationary money cheats the people. Why? because
>when
>>>you first print the money at the top it has a set value that is greater
>than
>>>when it trickels down through the economy (a lag time effect). Also they
>>>can take this money that they just printed and buy real assests such as
>land
>>>and buildings. This is why they wanted to dual standard money.
>>>
>>>Nixon took us off the Semi-gold standard (Brenton-Woods) because
>foreigners
>>>became scared about the US economy and decided to exchange their dollars
>for
>>>the gold. The government got worried when the gold reserves became low.
>>>Why was the government worried? Because we were using a fractional
>reserve
>>>system (a fraction of the dollars out there have gold backing them). If
>we
>>>had money fully backed by gold whether paper, coin, or digital credit you
>>>would experience new parallels or prosperity.
>>>
>>>Why is this gold backed money better? When you print a bill backed by
>gold
>>>you have to spend time/energy to get the gold. This time/energy/gold has
>>>greater value. Slapping a bill on a legalized counterfeiting machine does
>>>not create value.
>>>
>>>
>>>-----Original Message-----
>>>From: Timothy Morge <tmorge@xxxxxxxxxxxxxxx>
>>>To: bruceb@xxxxxxxxxxxxx <bruceb@xxxxxxxxxxxxx>
>>>Cc: Omega List <omega-list@xxxxxxxxxx>
>>>Date: Tuesday, August 11, 1998 9:43 AM
>>>Subject: Re: DEFLATION CRISIS... myth exposed
>>>
>>>
>>>>bruceb@xxxxxxxxxxxxx wrote:
>>>>>Why, because of all the potential threats to the US economy, this is by
>>>far the easiest >problemto fix.
>>>>
>>>>> What got us into the deflationary cycle of the 1930's? The government
>>>>> contracted the money supply at the very time they should have been
>>>expanding
>>>>> it. What got us out of it? A massive expansion of the money supply to
>>>pay
>>>>> for World War II (some things you learn by trial and error...).
>>>>>
>>>>> Bruce
>>>>
>>>>
>>>>Bruce:
>>>>
>>>>Personally, I'm not particularly interested in forecasting where the
>>>markets are
>>>>going--I'll trade them if they go up or if they go down. And until now,
>>>I've
>>>>read your personal opinions of how the world works and found them
>>>interesting. I
>>>>don't agree with all of what you've written, but that's what makes the
>>>world go
>>>>round.
>>>>
>>>>Now, your statement about deflation being simple to end...I was trained
>as
>>>an
>>>>economist at the University of Chicago. In fact, while there in their
>joint
>>>>degree program in the late 1970's, I paid for my schooling by doing
>>>research for
>>>>the BLS. In theory, deflation can indeed be cured simply by printing lots
>>>of
>>>>extra money. But you speak about it as if the economy will react and turn
>>>on a
>>>>dime. It isn't that simple and it doesn't work that way. No matter what
>you
>>>>read.
>>>>
>>>>I gave a speech at a dinner in Princeton, NJ about seven years ago, and
>Dr
>>>Paul
>>>>Samuelson was also speaking. And during his speech, he described the
>great
>>>>difficulty they had trying to get the economy to respond to ANY type of
>>>fiscal
>>>>stimulus, as well as the printing of huge amounts of 'dollars.' His
>>>statements
>>>>boil down to one phrase: At some point, deflation is almost impossible to
>>>>turn--It's like pushing on a piece of limp string. The economy just
>doesn't
>>>>respond. He was on the shadow open market committee during the 1930's...
>>>>
>>>>I've had my stint as an economist and I'll leave that job to someone
>else.
>>>But I
>>>>hope people that are reading your series take the time to think for
>>>themselves.
>>>>You've presented some interesting views, but unfortunately, you've
>>>presented
>>>>them as if they are fact and written in stone. They may be your views.
>They
>>>may
>>>>be right or wrong. But in many of the things you have written about here,
>>>the
>>>>way things unfold will not be dictated by anyone's opinion. And that's
>why
>>>there
>>>>is a market place.
>>>>
>>>>Best,
>>>>
>>>>Tim Morge
>>>>
>>>
>>>
>>
>
>
>
|