gooddebate says:

39 the oxymoron (look closely, surprised you missed it). Are you so infantile as to actually take up everyone’s time by tearing apart someones moniker? It’s a moniker. Well, I can’t wait to see your come back to this. You act as if no one can wait to hear what you have to say. Ooo, he didn’t answer a question; neither do you.

Exactly what do you call your debate technique in this example: “One of many BAD pilllars of debate, the ad hominem: “You do realize that this is a pillar of Marxist thought, right?” //// SOOOOOOO scatalogically bad, I’m surprised you didn’t catch it on seeing what your detached fingers put forth. Really? In your scotchguard sky colored world “anything Marxist” is bad/wrong/irrelevant? Is that how silly you are?”

What is your point? Is it an attempt at humor? Is it an attempt to make fun of me? Are you trying to simply make an idea that you don’t agree with look as bad as you can?

What’s interesting (or not) is that it has nothing to do what what I said or the idea that I am challenging. I think that the idea that our economy is based on labor is wrong. I heavily implied that it’s Marxist thought as a way to further denigrate the idea. If you don’t agree you could say that.

bobbo, the devout evangelical anti-theist says:

Normally, I don’t correct the many mistakes I make resting on anyone who cares to correct me in context. But since you are upset Gooddebate, I see I failed to read the last paragraph of my post #39 which indeed is all a rip on your name. But without your oxymoronic name, I would have said the same thing without the irony.

50/50? Learn, adapt, overcome, excel.

doodoo says:

Put your tinfoil hats on: doomsday 2012 aka the collapse of the fiat currency. Could it happen? .. tune in dec 31st 2011 and let us find out!

chris says:

DA, I was speaking in simplest terms of using gold as a physical medium of exchange.

Let’s go a step closer to your proposed solution. There is an interface at the central bank where anybody can go and trade in their notes for some physical gold. Most of the time there isn’t much activity. Then one day a friendly Chinese gentleman comes in and asks to trade in $2 trillion notes into gold.

People see a long line of trucks being filled with gold. They start to worry that maybe the government doesn’t have enough gold to give everybody if the world were to suddenly end. They all line up and decide to trade in their notes as well.

Now, suddenly, the money supply has been vastly decreased. The government would like to buy more gold, but what is it going to use? Currency is needed for daily transactions so people don’t have to carry around little bits of gold. Many people that have mortgages find themselves unable to pay because their debts are set but the boss cut their nominal pay to reflect the higher value of currency.

Everything grinds to a halt and suddenly the government hits on an idea: change the rate at which currency is exchanged for gold. Now, after all that bother, the nation has essentially the same system we do today.

If you want to talk about underlying problems let’s start with empire. I’ll call it the “Unnecessary Weapon System Fallacy,” a member of Congress allocates money to build an expensive new weapon. Campaign contributions increase, unemployment decreases, defense stocks go up, and the representative’s testosterone goes through the roof. Has anything actually happened? No. Productive capacity has not increased. The system isn’t used until a conflict breaks out and then it is often found to be irrelevant by the military.

Empires always do end, and usually in a messy fashion. An empire ending tends to have greater impact on its currency’s reserve status than whether that currency is fiat or gold backed.

DA says:

#36 bobbo,

“Ouch!!! The Dismal Science? I hear a quick six-pack will lessen your pain?”

Makes me wonder how many Keynesian economists are also alcoholics. That would explain a lot of things.

For me, the question isn’t whether we should hedge with commodities, or save our fiat currencies. The question is commodity money vs. fiat currency. The question is more complex than that, since the gold standard we have had for the last century has been inherently unstable, under the legitimized fractional reserve banking, lender of last resort system and especially under Breton woods.

“If USA had stuck with gold standard in 1971, would anything differently take place?”

It would have been disastrous.

Yes that is a serious reply, although I don’t think it’s the one you expected. Bretton woods was a convoluted mess of agreements between nations that I’d rather not get into.

For me, the question isn’t whether we should hedge with commodities, or save our fiat currencies. The question is commodity money vs. fiat currency. Although, the question is more complex than that, since the gold standard we have had for the last century has been inherently unstable, especially under Breton woods, and the legitimized fractional reserve banking, lender of last resort system before that.

The other big question would be, “savings AND loan?” OR “savings OR loan?”. More specifically I’m referring to the legitimized practice of lending out peoples savings and still allowing them to withdraw 100% of their money. Savings is not separate from loans in our current banking system, rather it’s conglomerated. Banks loan out warehoused money, that money is then spent and deposited elsewhere. When that money is deposited it’s loaned out again. Banks literally create money from nothing, this combined with the central bank setting artificially low interest rates is what fuels the massive and disastrous bubbles we see in our economy today.

Chris was right that there was a disconnect between the currency and the goods it’s purchasing. This is what caused that disconnect. It’s also why savings is penalized severely, and going in debt is rewarded. This is why we’ve incorrectly bailed out a system that is inherently unstable and also why we have an FDIC which is a government operation that only protects the nominal value of deposits. You will always be able to get your money from the bank, but I can’t guarantee it will be worth anything.

“Give us the synthesis of your studies.”

To rephrase: How would things be different from today under a non-conglomerated gold standard without government protection of banks?

Thats a daunting question, because it requires lots of imagination and good sound theory. The only sound theory in economics is based on axioms. Supply and demand is axiomatic, one of the central laws of economics. It’s also difficult to exactly describe, because I don’t believe a banking system should be forced on anyone, people would accept whatever system is most capable of meeting their needs as a consumer or investor, or a saver etc. It’s likely that what I describe is not exactly what the market would choose, entrepreneurs would come up with ideas and implement then the consumer would vote with their money for the best ideas. If the business succeeds it’s doing a good job of meeting consumer needs, if it fails then it shouldn’t be propped up by government.

Throughout history the market has chosen gold because it best meets all the requirements for a stable money.

So all deposits at banks would be backed by gold, and redeemable at any point. The banks would likely make money by charging a small fee although other means could be used to turn a profit.

Transactions in the market would be made with checks or debit cards or maybe even credit cards and loans for large transactions.

Consumption would be largely based on savings and capital accumulation. Speculating in the stock market would be a thing of the past for the average Joe. He could retire wealthy by working hard and stacking up his gold. Consumer debt would be much less common if not entirely non-existent. People wouldn’t be the slaves to debt anymore. I suspect this would have tremendous social benefits. Debt causes a lot of stress and ruins countless marriages.

When a crisis hits people will have savings in the bank to weather the storm. During a crisis the need for savings would rise, as savings increased so would the value of the money. Higher value of money would decrease the cost of goods, this would be an ongoing process that would reward good investments and punish bad ones. As the cost of goods dropped people would feel comfortable again and would reduce their savings and either consume or invest into a business to increase their capital. Leisure would be something you earn, not something you deserve. The more productive society becomes from this process the more leisure time and the higher the standard of living gets for everyone.

Banks would have buy deposit insurance and have security to protect their customers wealth. The amount the bank is charged for their insurance depends on how secure the insurance deems the money to be. Private companies and consumer advocate groups would take the place of the SEC. Any bank that claims it has 100% reserves and were secretly defrauding their customers would no longer be given get out of jail free cards. Moral hazard would be eliminated because of this. The moral hazard in our banking system is a product of numerous government guarantees.

In short, allowing competition is the surest way to increase individual wealth across the board. I believe competition would ultimately choose commodity based money, gold and silver would be the commodities of choice.

“I threw in a red herring that you haven’t dismissed: all economies eventually fail.”

I didn’t dismissed it, I just didn’t say anything.

Here’s what I thought…economies can’t fail, governments fail. Wait, I think I did say that. Economies are nothing more than an organization of people. The prosperity and success of each economy is very subjective and entirely dependent on the views of each individual. I measure an economies success by it’s ability to produce the highest standard of living for the poorest person in that society. To that extent, the free market is the greatest equalizer of wealth, of course, thats an entirely different debate.

“OFF TOPIC: My other open window is YouTubing “Vanessa Mae.” Much better than dirty old dollar bills. Just for instance: http://youtube.com/watch?v=qn6vnwzpLAI&feature=related””

Wow, love that music. It’s different, and thats refreshing. I’m always listening to music when I’m doing anything.

“THIS is actually one of the best DU threads I have seen. Nice to see the different input.”

I tend to agree, it’s been mostly civil. There hasn’t been any partisan bullshit and best of all, no mention of Glenn Beck.

DA says:

…Continued…

“Give us the synthesis of your studies.”

To rephrase: How would things be different from today under a non-conglomerated gold standard without government protection of banks?

Thats a daunting question, because it requires lots of imagination and good sound theory. The only sound theory in economics is based on axioms. Supply and demand is axiomatic, one of the central laws of economics. It’s also difficult to exactly describe, because I don’t believe a banking system should be forced on anyone, people would accept whatever system is most capable of meeting their needs as a consumer or investor, or a saver etc. It’s likely that what I describe is not exactly what the market would choose, entrepreneurs would come up with ideas and implement then the consumer would vote with their money for the best ideas. If the business succeeds it’s doing a good job of meeting consumer needs, if it fails then it shouldn’t be propped up by government.

Throughout history the market has chosen gold because it best meets all the requirements for a stable money.

So all deposits at banks would be backed by gold, and redeemable at any point. The banks would likely make money by charging a small fee although other means could be used to turn a profit.

Transactions in the market would be made with checks or debit cards or maybe even credit cards and loans for large transactions.

Consumption would be largely based on savings and capital accumulation. Speculating in the stock market would be a thing of the past for the average Joe. He could retire wealthy by working hard and stacking up his gold. Consumer debt would be much less common if not entirely non-existent. People wouldn’t be the slaves to debt anymore. I suspect this would have tremendous social benefits. Debt causes a lot of stress and ruins countless marriages.

When a crisis hits people will have savings in the bank to weather the storm. During a crisis the need for savings would rise, as savings increased so would the value of the money. Higher value of money would decrease the cost of goods, this would be an ongoing process that would reward good investments and punish bad ones. As the cost of goods dropped people would feel comfortable again and would reduce their savings and either consume or invest into a business to increase their capital. Leisure would be something you earn, not something you deserve. The more productive society becomes from this process the more leisure time and the higher the standard of living gets for everyone.

Banks would have buy deposit insurance and have security to protect their customers wealth. The amount the bank is charged for their insurance depends on how secure the insurance deems the money to be. Private companies and consumer advocate groups would take the place of the SEC. Any bank that claims it has 100% reserves and were secretly defrauding their customers would no longer be given get out of jail free cards. Moral hazard would be eliminated because of this. The moral hazard in our banking system is a product of numerous government guarantees.

In short, allowing competition is the surest way to increase individual wealth across the board. I believe competition would ultimately choose commodity based money, gold and silver would be the commodities of choice.

“I threw in a red herring that you haven’t dismissed: all economies eventually fail.”

I didn’t dismissed it, I just didn’t say anything.

Here’s what I thought…economies can’t fail, governments fail. Wait, I think I did say that. Economies are nothing more than an organization of people. The prosperity and success of each economy is very subjective and entirely dependent on the views of each individual. I measure an economies success by it’s ability to produce the highest standard of living for the poorest person in that society. To that extent, the free market is the greatest equalizer of wealth, of course, thats an entirely different debate.

“OFF TOPIC: My other open window is YouTubing “Vanessa Mae.” Much better than dirty old dollar bills. Just for instance: http://youtube.com/watch?v=qn6vnwzpLAI&feature=related””

Wow, love that music. It’s different, and thats refreshing. I’m always listening to music when I’m doing anything.

“THIS is actually one of the best DU threads I have seen. Nice to see the different input.”

I tend to agree, it’s been mostly civil. There hasn’t been any partisan bullshit and best of all, no mention of Glenn Beck.

DA says:

ok…umm.

Yipes?

yea, #50, 51, 52, and 53 can be deleted.

>____>

LibertyLover says:

#55, It appears that you also subscribe to the idea that consumption drives an economy forward to prosperity.

Not consumption, but production. If you assume that credit represents consumption, we have consumed way more than we’ve produced — house, two cars, boat, 30 sets of clothes, etc.

If the value of the commodity-based money was strongly based on production, inflation would be held to a minimum as the value would only increase as production increased.

People would get paid by what the produce. If you want a raise, produce more. These days it’s common to get cost of living raises. The reason the cost of living is going up is because inflation is eating the value of their dollar away.

The value of money has to represent something other than trust.