Read the following quote: People who will not turn a shovel of dirt on the project (Muscle Shoals) nor contribute a pound of materials will collect more money than will the people who will supply all the materials and do all the work. We know money is invented out of debt and the money at our disposal is not correspond to the values we have created. The very few who have not labored hard make too much and the ones who really work hard have to starve. The ones who have amassed it own and harness the scare resources of nature, the commodities available in society. They have a monopoly on the nation's resources, both natural and manmade. Let us discuss freely and un-preoccupationally as to where the money mechanics has gone wrong.
I'm not economic expert but I think part of the problem is usury, ie interest rates higher than economic growth. It turns the financial system into a ponzi scheme, gambling house. Bernie Madoff was perhaps extreme but he was a natural expression of that kind of something for nothing economic practice. Money's appropriate function is to facilitate an exchange in goods and services. Amassing money by stealing, charging ursury interest, simply gambling on assets and creating damaging externalities that you don't repair or pay for should be considered illegitimate economic activities. They are a negative departure from the appropriate use of money. Perhaps the biggest tension has to do with the relation between money and property. In modern society money is a public domain medium that affords a means to conduct our business. Property can't reasonably be considered a created good at the base as it is put there by nature, God or whatever. So it is also in the public domain. Since goods need to be produced and services need to be provided it would seem reasonable that a property entitlement would be bestowed on individuals who provided goods and services that the community needed. Call it a public trust. Property can reasonably be sold for its market value but with its function as a public trust kept intact and a reasonable charge for the public costs associated with that property, for instance water, sewage and police protection. The basic role of money is retained, a medium to facilitate and record the exchange of goods and services, not gambling as an inherent function. So property and its partner money would need to exist within a set of restraints that always tightly bound them to their role of providing goods and services and facilitating their exchange. Diverting from that role, for example treating base property as a pure profit making commodity of exchange or using money strictly to make money rather than directly facilitating trade would necessarily be a degrading of the legitimate function of property and money. As an additional thought I see no reason why communities can't create their own money to be used locally.
Only 10% of gold consumption is for industrial purposes. The rest is used for jewelry and hoarding. Why would I base my entire monetary system on something that only has a useful purpose 1 in 10 times? Gold was considered useless to most American Indian cultures, who saw much greater value in other minerals, such as obsidian, flint, and slate.
I'm not sure what you mean. It would have a purpose 10 out of 10 times, in every transaction it would eliminate the double coincidence of wants. it would be the currency and obviously currencies are of great importance in any economies of more than minimal size.
The value of gold is make believe. It should only be "worth" about $317/ounce, the cost of production of an ounce. The only reason it trades at $1500/ounce is because women and gay guys like shiny things and speculators. Hardly what I would call a rock solid base to build a society. Gold was considered useless to most American Indian cultures, who saw much greater value in other minerals, such as obsidian, flint, and slate.
excellent post and well written. I agree with most all of it. I believe your post and the OP to be the biggest problem of today which is overlooked and not understood. You nailed it with the term "restraints". Making money work for people, making it work for main street. No need to be an economist even they argue and have agenda's. There is enough economies around the world and throughout history to study and learn from. I think the answered are sitting right in front of us, just lacking the awareness and the will of leadership. IMO If we do not make changes to prevent and reign in the financial industry from repeating the 07 crash or the many boom bust cycles of the past decades we will not be able to move forward. The solution I best agree with can be seen here: http://www.politicalforum.com/political-opinions-beliefs/189768-problem-u-s-economy.html
As long as there is a financial system there will be a boom bust cycle. It doesn't mean we shouldn't regulate. I agree with more regulation, but I do not agree with this ridiculous fantasy gold nonsense.
Actually, the opposite. Why would you want your government hoarding gold to back a currency when it could be used in manufacturing? Anything that's used in the normal market obviously can't be the backing for a currency... as it would completely screw manufacturing prices and costs of production. They weren't exactly using gold for that purpose back in the day.
that is a common misconception. all prices are determined by supply and demand, and ultimately for their value comes from their utility to the consumer. as I said before, a currency is of immense value. an economy that does not have a currency must rely on barter, which introduces a variety of problems, including the double coincidence of wants. if you are a piano maker, and want to buy some butter you have to find a butter maker who wants a piano, and then what are you going to do with 50000 sticks of butter before they spoil? so clearly a currency is tremendously valuable. if you read up on currency, you will see that a currency is a commodity and it is incredibly useful for an economy to have. necessary, infact. obviously other things have value too.. but for any economy outside of a few people or maybe a small village, a currency is necessary, and thus has value. as to the question "why gold for money?" check out the npr planet money podcast #229. it talks about the characteristics that make a good money, and about how gold has them. its quite interesting. link: http://castroller.com/Podcasts/TheEconomyExplained/1948645-229 Planet Money Why Gold
Trust me I've read and dealt with currency more than most people ever will. The US' GDP in ONE YEAR is $14 Trillion. That's just GDP. That does NOT include the already accumulated wealth. The TOTAL amount of gold ever mined totals 165,000 tonnes. That's worth about $8.25 Trillion. How in the world are you going to run a $14 Trillion per a year economy with only $8.25 Trillion of gold? And that 8.25 Trillion assumes we can steal everyone's gold at no cost. And that $8.25 Trillion value is with the price already pumped up by speculation and all the jewelry for women and gay guys. Take that out and the gold is only worth about a 1/5 of its current trading price. You really think we can run an economy on a few billion dollars worth of currency?
Those are all nice trivia facts, but they don't have anything to do with our discussion. If gold were the currency dollars would not be. Things would be priced in ounces of gold not dollars. The currency is nothing but the medium of exchange. Why do you say there isn't enough gold for it to be the currency?
You CANNOT run a $14 Trillion economy on a currency that is backed by gold. There is not a single major world economy based on gold. Not one. You constrain the money supply, you shrink the economy. Its as simply as that. Then we go back to living on farms.
I am not talking about a currency backed by gold, I am talking about gold being the currency. therefore it would not be a $14 trillion economy, it would be (according to your numbers) a 165000 ton of gold economy. not long ago they all were. and that isn't really a very good argument considering all the advantages paper currency gives government overlords. that isnt really very simple. while the gold stock does increase, I believe at a percent or so a year, it remains relatively constant, compared to paper currencies. why does that matter? as the economy becomes more productive, the purchasing power of the unit of currency, in this case the ounce of gold, goes up. where is the problem?
The problem one MUST come to terms with when using any fiat currency (which the U.S. dollar is) - is the built in monetary inflation component. This is just simple math. If you issue a FIXED amount of fiat currency, when any new equity is created one must print MORE money to represent that expansion of equity. This creates monetary inflation as more currency is created on the "perceived" increase in equity wealth. If equity continues to expand - the money supply does so as well. This creates a mathematical inflationary component. The art and science is the ability to keep this balanced to avoid a major inflationary impact - or devaluation. However in doing this we must trust a few to make sure to keep this balance. The problem is when we add ADDITIONAL mandates to the Fed (who are in charge with money creation). It is very likely that these additional mandates are counter intuitive to inflation component they NEED (HAVE TO) monitor. Our Fed has completely deviated from the core monitoring of the inflation component as their dual mandate of employment is beyond silly. Why the Fed (the creator and monitor of the fiat currency) should have anything to do with employment is more of an excuse to change monitor policy AWAY from the core mathematical concern of inflation - than actual employment. The second problem is that a government that offers any amount of social services - has to maintain a balance sheet that has flat margins or surplus. If these government start running deficits and then debts - that train is hard to stop (if one is even able to). Our Fed is now printing money (credit) to fund government spending - creating unmeasurable (using the CPI) - hidden monetary inflation. The Fed has derailed some time ago. It is important to realize that no nation in the history of civilization has ever been able to maintain a fiat currency. They have all failed at some point - default, devalue, hyper inflation - either in a ball of fire or slow painful death. Is gold a better option, well it is a finite measurable option. Same thing with silver. I am not saying the are better - but they do remove the monetary inflation component and TRUST in a small group of people to keep the lid on monetary inflation. With any fiat currency you must trust the few (and government) to maintain value. If you can't trust in the government's ability to maintain this delicate balance - than a fiat currency will fail. Quick failures to fiat currencies (which we have seen) are: 1. Funding government deficits and/or debt. 2. Changing monetary policy on mandates that have nothing to do with maintaining a inflation/deflation balance - like an employment mandate. 3. Creating credit to allow banks to leverage their balance sheets. 4. To back any type of insurances. 5. To purchase any assets from the private sector. Those are just a few - once you expand the balance sheet of the very entity that is responsible for creating and maintaining your currency value - you will eventually fail. The problem - no matter the best intentions of man - we can not trust them when they deviate from maintaining the delicate balance between measurable equity and money creation. They will fail - because you can't make everyone happy and thus the fiat currency is the loser.
It's illegal... look up the "liberty dollar" even people who printed Ron Paul money got arrested. "Under 18 U.S.C. ? 486, it is a Federal crime to pass, or attempt to pass, any coins of gold or silver intended for use as current money except as authorized by law. under the Constitution ( Article I, section 8, clause 5 ), Congress has the exclusive power to coin money of the United States and to regulate its value. By statute ( 31 U.S.C. ? 5112(a) ), Congress specifies the coins that the Secretary of the Treasury is authorized to mint and issue and requires the Secretary to carry out these duties at the United States Mint (31 U.S.C. ? 5131). Accordingly, the United States Mint is the only entity in the United States with the lawful authority to mint and issue legal tender United States coins." Wtf? congress has exclusive power to "regulate its value" I knew there was a reason the dollar has declined in value... (*)(*)(*)(*) Congress did it.
read this and vomithttp://www.rollingstone.com/politics/news/is-the-sec-covering-up-wall-street-crimes-20110817
I agree with you Lulz the productive capability of Americans backs up the dollar . there is no need to hinge productivity on the abundance or lack of a shiny metal. www.BankingSystemFlaws.blogspot.ca/
You are confusing money with capital. Money is an exchange medium - nothing more, nothing less. The capital used to fund the project came from wealth creation by others some of which was invested in Muscle Shoals.
