Fiat Currency Is A Ponzi Scheme!

Except two things:

1. I'd be even better off had I not bothered to produce anything in the first place. You've just incentivized me to put my money in the bank, rather than use it for productive purposes.

2. If I borrowed money to boost production capacity, I'm now having to pay back my loan in deflated currency, meaning it's costing me an arm and a leg. You have just eliminated any incentive to invest in my business through borrowing.

There's a reason deflation is considered WAY worse than inflation.

You mean, other than the entire 20th Century and beyond.

Never mind that your phrase "central planners" is nothing but spin. The Fed doesn't set the size of the money supply. It uses indirect tools -- interest rates -- to keep the market from going too far in one direction or the other. If inflation starts going up, they raise interest rates to stop it. If unemployment starts going up, they lower interest rates to encourage investment. The actual size of the money supply is determined by banks issuing loans, which they do in response to market forces.

 

so you are making my point for me
there is has been no non governmental economic system for a long time
and that will not change in the future
gold standard or not

 

apples to oranges
everyone knows that currency is not a good storehouse of value except on a short term transactional basis

 

this is what YOU said
currency is not a debt inflated asset, real estate and stocks are debt inflated assets
arguably bonds are also which is why the have an interest rate
so far your prediction is false
debt inflated assets have not gone worthless

 

well doh!!!

in my view, perfect free markets are a fantasy. as is an economy that is free of governmental influence

since government will always be a factor, it might as well be as good as possible a factor

imo it is also a fantasy that some idealized free market would be more stable or produce better economic results

 

Holy strawman Batman!

 

yeah
some how the thread title has been twisted so that all past government errors prove the point

with the implicit but totally unsupported implication that if government disappeared, then all would be rosy

 

Please quote anyone making those claims.

 

You are all fired up about the wrong issue. There is nothing inheritably wrong with a FIAT currency. It works as well as any other currency as all currencies including gold have an arbitrary value.
The threat to the US is that the money is illegally created by a private corporation and loaned into existence to the people and the government. So long as money is loaned into existence by banks, it is automatically inflationary and discourages savings and investments while encouraging speculation and debt.

 

I disagree with the idea of backing the USA dollar with precious metals.

The dollar is backed up by the productivity of Americans which is still quite high.

Have you read about how successful the Worgl, Austria local money system was when it was applied in about a thousand USA communities during the Great Depression?


http://www.politicalforum.com/histo...ria-experiment-can-applied-america-again.html

 

In my opinion this is an exceptionally good analysis of the real problem.

http://www.politicalforum.com/curre...our-billion-dollars-how-can-we-do-2013-a.html
President Lincoln saved taxpayers four billion dollars...how can we do this in 2013?
I was given a copy of this article in 1994.

After reading this article those lectures from Economics 101, 212 and Economic History sure took on a whole new level of importance.

http://www.michaeljournal.org/lincolnkennedy.htm
Melvin Sickler:

OK, so how do we apply this information in 2013 without scaring the guys on Wallstreet, who have a tendency to go out on their balconies and jump, if investors get scared....which actually could happen even if government did something intelligent!!!!!???????

 

100 years really isn't a long time. 42 years since going off gold completely is a very short time.

It's already changing.

 

Currency has always been a little fiat since you had to take the word of the state in most cases that the amount of metals in a coin weren't different than what they were presented as being. A method similar to quantitative easing in the past was lowering the amount of precious metals in each new batch of minted coins, sometimes reaching very low levels.

 

This is a fun myth.

Money's only purpose is to make it easier to represent labor and resources and move their benefits around without actually having to ALWAYS move those things. As well, labor is INIFINITE. How can you use a finite item to represent an INIFNITE resource such as labor?

As well, we're moving into a future where resources are more renewable, further removing this idea of a 'finite representation via gold standard'.

By putting all this value on this one item rather than agreeing on it being flexible, you essentially create a way to seize up any way to actually move wealth around and/or create barriers for the low end people.

Now hear me out...

Any human being who is able to breath and is over the working age has wealth hidden within them. Their labor. So basically what happens is while population becomes healthier, life expectancy becomes longer, there is less gold to go around. Less gold starts representing more and more people...So that when new generations are handed down their gold without working for just coming out of the right vagina, they may not actually be able to supply that much labor and resources to actually represent the 'currency' they get...

Basically what I'm getting at is ALL currency as it stands now is non-representative of what actually fuels an economy. Fiat however is closer to what reality is, which is that WE AS HUMANS create the value with our ideas, inventions, creations, productivity, etc. That's value.

If you want to represent that with a useless gold nugget or a piece of paper, it doesn't matter. The idea is that the currency needs to accurately represent what IS work and what ISNT work, what IS a resource and what ISNT a resource.

Right now, wealth is basically representing 'people (*)(*)(*)(*)ed over'. The more you have, the more someone else got (*)(*)(*)(*)ed over.

 

there's no more countries left to rob. Iraq was the last one the US could plunder to make a considerable loot. Ukraine is nowhere near it. WWIII is going to be a war for spheres of influence mostly with only sporadic use of military forces. America, as a world financial lottery holder, is bound to fail at coming up with revenue for investments in her financial schemes the world has made so far. Americans, too, would not tolerate raising taxes and tolls ever further.

 

it isn't a matter of money any longer... there's a war for control over spheres of influence you can't buy with money; in fact there are too many things you can't buy with money, while the amount of those who want to be part of world ruling elite is growing. America itself is not Capitalist since some time now, things there move in direction of an Orwellian kind of state.

 

Going toward an Orwellian kind of state, is certainly one of our options.

As the damage to our environment has a greater effect on agricultural production the pressure to become more authoritarian will become greater, but we do have alternatives.


http://www.near-death.com/storm.html#a04

 

Our currency and its manipulation could be seen as a bait and switch or a ponzi scheme, the truth is we don't have the information needed to define it either or ! Our currency could be seen as initially having a gold backing ie collateral to go with the promise to pay in gold or silver on demand. Token amounts are paid out ie the dollar was worth a dollar when the system was first put into place. Then the currency diminished in value as fast as was possible without raising suspicion.

Then after the investors are all in, that is when everyone in the USA is using the dollar, the scheme collapses after a period of time (or as long as the ruse can be perped'), maybe not for a century or more. I am afraid we are close to the ruse being exposed and that my dear friends will be a disaster with no comparison perhaps save for the collapse of the Egyptian Old Kingdom around 2200 BC. And that was a horrific event (see notes).

I suppose the big question is was the scheme fraudulent from the start, if it were then our currency policy was indeed a ponzi scheme. However what is going on now seems like a thievery in slo mo, everyone grabbing what they can get protected by positions of power, but I digress~.

Notes of horror; (written by the Egyptian sage Ipuwer) Lo, the desert claims the land Towns are ravaged, Upper Egypt became a wasteland Lo, everyone's hair [has fallen out] Lo, great and small say, 'I wish I were dead' Lo, children of nobles are dashed against walls Infants are put on high ground Food is lacking Wearers of fine linen are beaten with [sticks] Ladies suffer like maidservants Lo, those who were entombed are cast on high grounds Men stir up strife unopposed Groaning is throughout the land, mingled with laments See now the land deprived of kingship What the pyramid hid is empty [The] People are diminished.

reva

 

On the plus side the existing system slowed down the economy which was good for the environment.

Our ancestors who shot, boiled, fried and barbecued passenger pigeons into extinction…. and shot buffalo from the windows of trains……… really could not be entrusted with truly wise monetary policy that would maximize productivity?!

Genesis 11:6
"And the LORD said, Behold, the people is one, and they have all one language; and this they begin to do: and now nothing will be restrained from them, which they have imagined to do."

 

I don't buy into the hardcore goldbug stuff, though I do own plenty of gold and silver. I do think that the monetary system is basically being used to the benefit of the big banks and their corporate debtors, but that's another issue.

 

Yes, maybe it will be wayyyyyy slowed down lol! I am always astonished when I see an old photo of the mountains of dead buffalo slaughtered and left to rot. It seems like the animal equivalent of the pictures of the death camps with their awful piles of skeletal people. I wonder if an advanced race saw the same photos or visited a slaughter house or two if they might think too deserve to be in a pile of our own.
reva

 

More than gold can be used to secure an IOU. I am sure with all the computers and such commodities etc could be used in place of gold for on demand payment. For some reason I just don't trust a government IOU! Lol!

reva

 

Nothing wrong with owning gold or silver. And sure, big players always attempt to bend any system to their own benefit.

I just have an issue with people who start making dark comments about the Fed and "fiat currency", without understanding how it works and why we left the gold standard in the first place.

 

The problem with any "backed" currency is that, in the end, its value and the size of the money supply is dependent on the supply and demand of the underlying commodity, which should fluctuate independent of the currency. So you either end up with a commodity where the market is broken (the currency tie ends up fixing the price of the commodity, regardless of supply/demand) or a currency whose value can fluctuate wildly (due to normal market fluctuations in supply/demand of the underlying currency). Neither outcome makes much sense.

The only way such a system would work is if there was some material that had a fixed, known supply and no economic use beyond serving as a reference value for the currency. In other words, its value would have to be almost entirely aesthetic or spiritual.

For instance, you might be able to create a currency where each unit of currency represented a single mountain peak in the Himalayas. You don't actually own the peak; you merely have title to it for currency purposes. You could have subunits of the currency that represent slices of each peak, to increase the ability to conduct transactions.

The result would be a fixed money supply with a fixed value, and the price of items would go up and down relative to that.

Such a system would still not be as flexible as a fiat system with a central bank, but it would probably not be a disaster.

 

Labor is infinite?

So many new economic laws and principles I get to learn from threads like this that I didn't learn in my classical economics courses...