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| Thread: I want the earth + 5% |  This thread is pages long: 1 2 3 4 · «PREV / NEXT» |
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JollyJoker
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posted December 17, 2008 08:38 PM |
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Yup, as I said, very helpful in times of desaster - which is when you would NEED the back-up behind a currency.
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TheDeath
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posted December 17, 2008 08:45 PM |
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You do realize that, without any backup, money could just be printed over and over again -- and the guy which ends up with the money will be at a disadvantage (of where an entire chain will go on) and eventually the economy would collapse...
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mvassilev
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posted December 17, 2008 10:41 PM |
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JJ:
Why would currency backing be good in a crisis?  Rather, the opposite is true - good management of the money supply is good in a crisis, and it's hard for the government to manage the money supply under a commodity standard.
TheDeath:
Nevertheless, all countries currently print their money. Some do it responsibly, and others, like Zimbabwe, just run with it. What do you mean by "the guy who ends up with the money"? Money doesn't stand still.
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JollyJoker
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posted December 17, 2008 10:42 PM |
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Well, that is so. I mean, that's actually the situation. The only backup there is, is the power of PEOPLE and what they can and want to do. Or what do you think China gets its power from?
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JollyJoker
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posted December 17, 2008 10:53 PM |
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Quote:
JJ:
Why would currency backing be good in a crisis? Rather, the opposite is true - good management of the money supply is good in a crisis, and it's hard for the government to manage the money supply under a commodity standard.
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Well, the question is, when do you need a currency backing anyway? You don't need it, if things are running fine. People trust the currency no matter the backing. That trust may be shattered only after a desaster. When it's clear that the things you want may not be readily available. You see that when you take a look at the currencies of the ex Warsaw Pact states until 1990. Their currency just couldn't buy the things people wanted, so they didn't trust in it. You might say there was no backing, but the backing isn't gold or oil or whatever. The backing is always the trust of the members of society that your money will BUY the things you want or need or not..
Now, after a meteor hits the US, it will be rather unimportant whether the "money" is backed by gold. The gold won't do anything. People will start to barter, no matter the gold.
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mvassilev
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posted December 17, 2008 11:00 PM |
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Ah, I see what you mean. You are quite correct. I thought you meant that we should switch to the gold standard during recessions. My misunderstanding.
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TheDeath
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posted December 18, 2008 02:00 PM |
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Quote:
Nevertheless, all countries currently print their money. Some do it responsibly, and others, like Zimbabwe, just run with it. What do you mean by "the guy who ends up with the money"? Money doesn't stand still.
At any given moment in time, someone must have money traded with someone else for a product.
i.e: you buy a computer from me -- I end up with more money (useless, if not backed up), you end up with an actual product (computer)
Now, if money was printed in excess (as we know) and, somehow, inflation wouldn't occur, then everyone would be able to afford all my products -- and I will end up with what? Money? To do what? Since there's more money than products available I can't do anything with all that money, the things I want to buy are simply limited, compared to the "value" my money has.
And if gold is useless in disaster effects, who said money isn't in the same position?
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JollyJoker
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posted December 18, 2008 02:31 PM |
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I have absolutely no idea what the point of your last post is exactly.
Just let me repeat two things again:
A currency is backed ONLY by the TRUST of the people in the power, productivity and performance of that nation. If there was only ONE currency worldwide it would ultimately be backed by the trust of people in the power, productivity and performance in their own full race.
Secondly, inflation is happening only when more money is added to the mix than value. Value is added every second, so it's correct that money is added as well. If the money would be kept constant, things would become ever cheaper and cheaper, which would lead to people save their money hampering production.
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TheDeath
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posted December 18, 2008 02:44 PM |
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Edited by TheDeath at 14:45, 18 Dec 2008.
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You say trust is the thing that keeps money circulating normally?
What about counterfeiting?
(and I mean even government 'counterfeiting').
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JollyJoker
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posted December 18, 2008 02:57 PM |
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It's trust in the assumption that "our" (as in the society that lives with the currency in question) society will be there in 50 years as well, that nothing untoward will happen and that things are going in an orderly fashion. It's furthermore trust in the fact that IF something untoward happens order won't break down completely.
It's not trust in a piece of paper.
It's comparable with trust in the fact that (the big majority of the) people will keep to the law and not club you down and steal your credit card (since if you wouldn't trust in it you'd have to fortify your house, get weapons, never go out alone and so on).
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TheDeath
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posted December 18, 2008 03:01 PM |
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No wonder there is an economic crisis and so much inflation 
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mvassilev
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posted December 18, 2008 03:03 PM |
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I end up with more money (useless, if not backed up)
Having gold back up your money wouldn't make it that much more useful. Money is only useful because it can be exchanged for other things. An ideal medium of exchange has no other use.
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TheDeath
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posted December 18, 2008 03:17 PM |
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Edited by TheDeath at 15:19, 18 Dec 2008.
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The difference: you can't create gold out of thin air.
Ok on topic:Quote:
One lesson of history is that a gold standard isn't so wonderful if the bankers own all the gold and that's the only legal currency. You end up with not enough money, instead of too much, and bankers controlling everything.
Of course, what we have right now is worst of all. Not only do we create money out of thin air, but instead of the government printing it, we let a private bank print it, and the LOAN it to the government and charge interest. Same amount of money printed either way, but now we're paying interest in addition to printing the money.
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mvassilev
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posted December 18, 2008 10:32 PM |
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Who's paying interest? I use Federal Reserve notes, and I'm not paying any interest. Only borrowers pay it.
And, to answer the original question, why would anyone borrow from Fabian in the first place?
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TheDeath
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posted December 19, 2008 11:11 PM |
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Quote:
Only borrowers pay it.
That is the government right?
Quote:
And, to answer the original question, why would anyone borrow from Fabian in the first place?
Because he prints the freaking money!
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mvassilev
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posted December 20, 2008 02:03 AM |
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That is the government right?j
The government borrows money, but that is unrelated to the Federal Reserve.
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Because he prints the freaking money!
That's not answering the question. What if I were to print my own money (if there were no legal tender laws)? Do you really think anyone would borrow from me if there was no other currency? They wouldn't.
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del_diablo
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posted December 20, 2008 10:09 AM |
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Quote:
Quote:
Because he prints the freaking money!
That's not answering the question. What if I were to print my own money (if there were no legal tender laws)? Do you really think anyone would borrow from me if there was no other currency? They wouldn't.
What if you convinced a horde of people to use your dam currency? Its also the first in the current era, so you got no dam competition.
Fabian got all traders to accept it, the commoners just follwed because of that. Next he convinced all the other goldsmiths to also do the same, using HIS currency. Because of that it become "universaly" accepted, which is the point.
If you do not get your currecy to work you just failed at it and lacked the ideas or gifts to be able to start the wheel to run your way.
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TheDeath
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posted December 20, 2008 02:02 PM |
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@mvass: Private banks, mvass. The government burrows "money" from Private banks, because they (the banks) PRINT money and keep it in circulation. This is, of course, the worst idea ever to happen because they want an 'interest', which is ridiculous in this context.
Go ahead make your own private bank and develop your own currency -- but don't blame if the government doesn't recognize it
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Moonlith
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posted December 21, 2008 05:50 PM |
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I still do wonder, indeed, why a society as a hole, via its government, needs to pay INTEREST over its OWN money supply.
The fact your government needs to pay interest over the money it "borrows" and brings into circulation, is the greatest proof you are being owned by a private banking cartel.
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mvassilev
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posted December 21, 2008 06:01 PM |
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del_diablo:
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Its also the first in the current era, so you got no dam competition.
Yes, but people use currency because it is more profitable for them to use it than to barter. But if (as in this case) it is rather unprofitable for them to use this specific currency, then they're not going to use it. They'll simply tell Fabian, "Thanks, but no thanks."
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Fabian got all traders to accept it
How?
Moonlith:
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I still do wonder, indeed, why a society as a hole, via its government, needs to pay INTEREST over its OWN money supply.
It doesn't.
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