The real world is a very difficult place to manage, for instance, Star Trek, a franchise with a Communist ideology in its programs, sells very well in a capitalist economy. So what does that say about its citizens? The biggest communist ideal sold extremely well in the capitalist economy that allowed the free market for it to exist. The world is a crazy and fucked up place. No one knows exactly how it works and no one is God. We just have to try the best we can.
Say I have $1Million worth of gold. The law says that’s a fractional reserve, and I can then print, say, $10 Million worth of “Gold Reserve Notes” with that reserve. Because I know that a bank run is very unlikely, and people will not try to withdraw all of their gold from the bank at once. How does that solve the problem of fake money exactly? It really doesn’t. That’s actually how it started in the first place.
Your intent is good, but the fact is that in a fractional reserve system, the bank can always loan out 90% more money than actual gold onhand because of fractional reserve law, and therefore there’s not that much of a net change in society. Yes, gold is an asset, but if you only need a little gold to print way way more gold reserve notes than necessary, not much changes really.
That’s why we should back our paper currency with gold.
and bernanke, and many chair members are jewish! what a coincidence!
IN FACT READING THROUGH THESE COMMENTS MOST PEOPLE ON HERE KNOW MORE ABOUT THE ECONOMY THAN BEN BERNANKE THE FUCKIN CROOK MASTERMIND. IT’S TIME FOR PEOPLE ON YOUTUBE TO START RUNNING CAMPAIGNS AGAINST THE NWO AND OTHER INSTITUTIONS DESIGNED TO CONTROL OUR LIVES AND MAKE US LESS FREE THAN EVER!!!!
BEN BERNANKE ONLY CARES ABOUT PADDING HIS ALREADY ABSURDLY STACKED POCKET BOOK. THE FEDERAL RESERVE HAS ZERO TRANSPARENCY. ALL THAT BEHIND CLOSED CURTAIN SHIT IS GETTIN OUT OF HAND. YOU CAN SEE BY THE WAY HE STEALS FROM US THAT HE IS UP TO NO GOOD! RON PAUL MADE COHERENT ACCURATE AND FAIR CLAIMS. HE KNOWS MORE ABOUT THE ECONOMY THAN BEN BERNANKE! WHAT CREDENTIALS DOES THIS FUCKIN CROOK HAVE ANYWAY!? PRETTY MUCH NONE!!!
Well yes of course paper money or electronic money makes everything much much easier. We don’t want to walk around with heavy gold coins or have to barter every time…
True but as older culture proved having a standard for all trade streamlined the process and made it easy for different cultures to trade the different product’s they produced. Something like a grain exchange works best in a closed economy i suppose.
>>>Lets not also forget your 19th century idea is flawed since we still had a gold standard until 1971. You can track the increase of bubbles and instability after the Nixon shock if you want but you seem very set on this fiat currency bulshit.
Well anything that has physical value that’s extremely useful could be money. Diamonds, gold, oil, food, whatever.
Your hypothetical idea of wage increase with the rate of inflation would prove your point if in fact wage increases were higher than the inflation rate. Unfortunately, for your point they are not. Tell me this if you seem to think John Law economics is so great. What is the difference between the system we use now and the fiat systems that have all failed in the past?
Say I make $100 a month and my living expenses are $90 (90%). Lets say my living expenses increase to $800 a month due to devaluation of the dollar, but my income increases to $1000 a month (80%). Are your living standards going down because the dollar devalued? No, there is an improvement and that is a simplified version of whats happened. Speaking of history, the 19th century is all the history you need to see what fiat currency is better than gold.
>>>We’re going to see our fiat currency go where all others in history went. Remove the stranded and your paper goes back to it’s intrinsic value.
The increase of the money supply is one of the main reasons for the deflation of our currency. As for the US GDP, consumer spending hasn’t increased since 2005 even though the population has grown. Our GDP has been fueled by our war spending and stimulus packages for the rich. Inflation has completely outstripped the average salary budget. Our money supply has tripled in one decade. >>>
If an economy grows in terms of GDP and in terms of Velocity, the money supply must increase or it leads to deflation. Look to the Great Depression the Fed allowed the money supply to contract.
The increase in exports and the devaluation of the dollar didn’t happen over night its a process over decades. In the short run a number of things could make the dollar go up but in the long run it will always go down. If I remember correctly we’ve seen a 6-for-1 increase in real GDP per capita over the 20th century. That led to an astounding increase in purchasing power, far greater than the devaluation of the dollar. Incomes rose far faster than the dollar fell.
Federal Reserve is run by Socialists that Ivey League MBA programs churn out each year. Asking a vegetarian for advise on a good steak house is just as crazy as asking a liberal progressive Socialist for financial advice and giving them reign over your money.
“Currency must depreciate as an economy grows basic economics.””exports have doubled” I’d like to know were you took you economics class. Currency appreciates when a county is exporting goods at a higher rate than others in the global market. If what you say is true that are exports have doubled then our currency should appreciate not the opposite. I also like how people like you talk about our recovery as if it pertains to them. The middle class lost net worth after the recovery the rich gained
Well, if my memory serves me correctly U.S. exports have doubled since the 70’s so I’m not worried about American industry. The U.S. grows on average 2-3% per annum which means the economic output has doubled since the 70’s. WAY more goods and services and much higher gdp per capita. Yeah THINGS ARE BETTER even in this recession. Currency must depreciate as an economy grows basic economics. Holding dollars has never been a good idea for long periods.
Sign up to receive free email updates from the RonPaul.com grassroots with the latest news, videos and liberty action alerts.