patrick.net

2ND CLASS - thanks for pointing out the obvious. Proponents of big government will never acknowledge the truth because they live in a world of "feelings", devoid of facts.

The question of an unstable dollar, debt and inflation has been answered numerous times history. But fools don't learn from history (facts) and would rather repeat the same mistakes (insanity).

The question of how big government should be is not a question of economics, per se. Its a question of freedom versus force. Every time Congress creates a new program, it necessitates the hiring of a whole new layer of bureaucracy, more lawyers, and more government agents to enforce the rules. It necessitates the forcible collection of additional new revenues and taxes.

When government spends money, no matter how noble-sounding the objectives are, freedom shrinks, and so does privacy. When everything becomes a matter of serving the "public good", the concept of individual liberty and privacy becomes as obsolete and dispensable in the minds of the political class as spoiled milk. Todays book recommendation: Common Sense by Glen Beck.

I am John Galt.

Honest Abe says

Todays book recommendation: Common Sense by Glen Beck.

Credibility -1

Glen Beck is a complete moron.

what about silver? gold is very high right now (compared to what it was-- and I'm not saying that it wont go higher-because I think it really might)... I want to start touching into silver, just to see... and I don't want to really hear crap that I'm stupid, or naive... but for any of those who want to give sound advise, preferably with experience... Everyone of the older/experienced people I know who've made money investing- have done so in real estate--- and obviously I'm not touching that! so please, if you have any advise, I'm definitely all ears, I'd like to do a bit of research before jumping the gun

Crash-Olah,

I have not bought any gold/silver. Just remember that you will have to protect it if you keep a physical supply of it. I don't trust those etfs that say you own gold but you can't touch it. I have seen how counterfeit stuff can be when working on an electronic exchange (naked short selling).

I really think the best thing to do is get something productive. An acre of land and an education on how to grow something edible would be the thing I would go for. I just bought a 2/3 acre lot in Ohio and I am building an energy efficient home here (ICF) after moving north from Texas (where I was born) 5 years ago.

My mom came from a town about 50 miles from me and she told me about Depression gardens. Her grandmother would grow lots of stuff and can it. This food would supplement the winter foods that they had to buy. They could not grow enough for all their food, but they were able to really cut the expenses down. The grandma never dropped the habit even when times got better.

I want to enjoy life and not worry so much about all this crap. I am cynical now about the whole damn blunder that we call an economy. Along with learning the skills on how to grow and preserve food, I also want to learn how to make beer. Cheers.

-TNN

Honest Abe says

He’s a proponent of things like free speech,

Except when it's critical of him and he files lawsuits to censor people.

private property, individual liberty, privacy rights,

Unless one's preferred liberties and privacy has anything to do with being gay or not wanting religion interferring with your government.

personal responsibility,

So long as it's not taking responsibility for irresponsible lies that you tell that incites people to violence.

freedom, the rule of law…you know, things that you, liberals and elitists hate.

Yeah, "liberals" hate freedom! (I hope everyone appreciates the absurdity of that statement).

By the way, Glenn Beck is an "Elitist". You think he's some working class schlub? Get real.

thenuttyneutron says

I also want to learn how to make beer. Cheers.

Google morebeer. You can make your own to rival any micro brew at about $.50 a bottle. Probably wont save you much over buying a 12 pack of pabst, but damn worth it for good beer. I considered growing beer from the ground up for kicks, but with the amount of water, energy and other supplies, it doesn't really add up. Buy malted barley and go for it. Not really rocket science and you'd be surprised what you get in the first shot.

ARGUING WITH IDIOTS, none of you have read the book. I could tell by your incorrect assumptions on virtually all points you attempted to make.

Todays book: 1984, by George Orwell.

TotallyScrewed123, I totally enjoyed your posts. Sounds like a good project - too bad I quit drinking. Cheers, Abe.

Honest Abe says

ARGUING WITH IDIOTS, none of you have read the book. I could tell by your incorrect assumptions on virtually all points you attempted to make.
Todays book: 1984, by George Orwell.
TotallyScrewed123, I totally enjoyed your posts. Sounds like a good project - too bad I quit drinking. Cheers, Abe.

I've never smoked crack either -- I suppose I can't say that it's bad for you?

Unless Beck is writing books that are nothing like his TV show, the book is trash.

Orwell was a giant "liberal" by the way.

Ummm, let me see, you acknowledge you haven't read "Common Sense"...yet you claim it's trash, and the author is a moron, haha.

Todays book: The Vampire Economy, by Gunter Reimann.

Oh, wait a minute, are you fools going to say Gunter is a moron and his book is trash - again, without reading it?

Koo-Koo, Koo-Koo.

"There were FAR more economic controls under Nixon than exist today, in fact it’s not even close. NO ONE, and I do mean NO ONE with any knowledge of history would argue otherwise."

So the countless FASB pronouncements / SEC guidelines and regulations effecting business over the past some 30 years don't count ?

Nothing wrong with being Ultranationalist or do you sing the "International" everyday ?
http://www.youtube.com/watch?v=pm7dHfw6hmE&feature=related

Walk into the Vietnamese community in San Jose and tell them your story.
How do you think they will react?

I doubt you even knew such regulations even existed.
SEC Final Rules http://www.sec.gov/rules/final.shtml

"600%"
So your using the activities of the mafia/gangs as being legit business practices. Nice going.

Deregulation in the 1980s like Telecom and Airlines? Do you recall how much it cost to fly or
make a phone call before that? Didn't prices of both fall making it easy for consumers to travel more?
I doubt you were even around.

Do you think you would have access to internet and able to make be logged on for hours for small flat monthly fee. Did it take regulations to see prices fall? Nope! Look at your cell phone,
You think that was possible under regulated telecom industry? Not a chance!

"mortgage bonds, sub-prime lending, huge segments of the derivatives market, and gambling"

http://iperceive.net/hidden-clinton-success-story-fannie-mae-subprime-loans-for-minorities/

thomas.wong87 says

I doubt you even knew such regulations even existed.

SEC Final Rules http://www.sec.gov/rules/final.shtml
“600%”

So your using the activities of the mafia/gangs as being legit business practices. Nice going.

Do you even know what payday loans are or how they work? Yes, interest rates *are* in the 600% range.

Deregulation in the 1980s like Telecom and Airlines? Do you recall how much it cost to fly or

make a phone call before that? Didn’t prices of both fall making it easy for consumers to travel more?

I doubt you were even around.
Do you think you would have access to internet and able to make be logged on for hours for small flat monthly fee. Did it take regulations to see prices fall? Nope! Look at your cell phone,

You think that was possible under regulated telecom industry? Not a chance!

The breakup of AT&T was what dropped telecom prices. It turns out that markets with competition (the actual reason that capitalism works, which seems to be lost on a lot of so-called "conservatives" these days) are far better for consumers than markets with monopolies.

Find me one credible analyst or economist who disagrees with the above paragraph.

Overall, regulations on telcos are actually stronger than they were under ma bell. Price restrictions went away (since there was no longer a monopoly, it wasn't necessary), but we then introduced requirements like common carrier status and e-911.

Mobile phone technology also had very very little to do with anything regarding regulation. In fact, it was the introduction of Microwave technology (do you know what MCI stands for?) that convinced the justice department that AT&T was not a "natural" monopoly and that the market would thrive if it was broken up.

thenuttyneutron says

Crash-Olah,
I have not bought any gold/silver. Just remember that you will have to protect it if you keep a physical supply of it. I don’t trust those etfs that say you own gold but you can’t touch it. I have seen how counterfeit stuff can be when working on an electronic exchange (naked short selling).
I really think the best thing to do is get something productive. An acre of land and an education on how to grow something edible would be the thing I would go for. I just bought a 2/3 acre lot in Ohio and I am building an energy efficient home here (ICF) after moving north from Texas (where I was born) 5 years ago.
My mom came from a town about 50 miles from me and she told me about Depression gardens. Her grandmother would grow lots of stuff and can it. This food would supplement the winter foods that they had to buy. They could not grow enough for all their food, but they were able to really cut the expenses down. The grandma never dropped the habit even when times got better.
I want to enjoy life and not worry so much about all this crap. I am cynical now about the whole damn blunder that we call an economy. Along with learning the skills on how to grow and preserve food, I also want to learn how to make beer. Cheers.
-TNN

thanks for the suggestion, but I probably will not be buying land, or harvesting it for that matter, as this would take a lot of time and money, not to mention moving my family, etc. Since this original post was posted, I've been watching gold/silver out of the corner of my eye, and it's gone up- a lot! I've asked advise of family/friends who have invested money(in stock, housing, etc), and (no big surprise) they all said housing is the way to go... however, I do believe they can make it, as they aren't flippers and would be paying all cash- however, I'm not in a financial situation to do that as I'm about 50 years younger, and have never owned a house. No one I PERSONALLY know has tried PM's besides one of my friends about 6 months ago. 6 months is not a lot of time, so obviously that's not much to go off of. I plan on doing some more research before buying anyway, and I'm in no big rush- since the prices are just going higher and higher, they are expecting a POSSIBLE pullback anyway. Has anyone personally invested in gold/silver. and how do you start? advice? tips,websites, etc. I'm eager to learn about it, and maybe take a risk...

Back to gold and silver. Both are also fiat currencies. Yes, yes, yes, most of we humans like the shiny stuff and place a high value on it. Still WE decide how much goods and services gold and silver can by. There is no intrinsic value for either metal. Both metals have their industrial uses. However how WE value either metal is based on our SUBJECTIVE judgment on what these metals can actually buy. It's basically the same as the old barter system but you are using only one or two elements as "currency." All parties in any transaction must agree what to exchange for what. Using currency whether it be paper, shells, metals, knots, ribbons, or whatever is way more efficient than bartering because the currency can be traded without having to deliver actual goods or services immediately and it serves as a place holder for value when traded.

So, no matter what we humans choose to use as "currency" we are all playing Jedi mind tricks in assigning value to whatever we use as currency relative to goods and services.

Gold and silver are not necessarily the universal currencies people claim they are. There isn't enough to go around to make transactions efficient and we used to spend vast amounts of effort (money and time) to transport the stuff to make transactions happen.

Eventually we will be moving toward electronic "credits" as currency because paper and coins will eventually become less and less efficient as technology advances. So get ready for we humans to invent yet another monetary system and to assign value to whatever we are going to use in trade for goods and services.

The INFLATION BOOGEYMAN!

If you don't go out and SPEND SPEND SPEND my dear consumer, then you will be PRICED OUT FOREVER.

Yep that's the whole game plan. Nobody should ever save anything. You should spend money you don't even have yet. This is what your masters are attempting to convince you of. Slavery is Freedom. Debt is Money.

The underpinning of this system is keeping you in MORTAL FEAR that your dollars will evaporate if you let them sit. They drum this into you at every opportunity. They refuse to acknowledge even the possibility of deflation, because if you were to stop believing in the INFLATION BOOGEYMAN for even a second, then their power over you would evaporate and their position would be undercut. It is your PATRIOTIC DUTY to wear this yoke and transform yourself from citizen into "consumer" and keep THEIR...errr "our" system afloat.

Under about 750/oz gold was a better store of value than federal reserve notes.

If our standard of living has fallen over the past 30 years with the increase in two-wage-earner households then I reckon a repeat of Jan 1980 bubble price might be about 1600 USD. But it was a different world in 1980, buyers of gold then did not include folks from Mainland China.

Gold and silver are NOT fiat currency. Fiat currency is money that is declared by government to be legal tender. Gold and silver historically replace fiat currency when it finally became worthless, every time in the last 3,000 years. "Paper money always returns to its original value - zero." Thats the direction of the US dollar, because it is a fiat currency...backed by nothing.

Gold is the money of Kings
Silver is the money of Gentlemen
Barter is the money common men
Debt is the money of slaves

The words silver and money are the same in 14 different languages. And gold and silver are universal, everywhere, easily converted to the local currency anywhere in the world. Thats because they have inherent value.

There is no definition of a dollar anywhere. There is no statue or law anywhere in America the states exactly what a dollar is. Thats because its a fiat currency and the government says it can be used as a medium of exchange, yet it has no value.

Imagine if there was no definition for a "gallon". No standard measure. You pay for 20 "gallons" but only get say, 8 or 10 gallons. People would not put up with that type of dishonesty. But thats the type of dishonest money system we have with a fiat currency system. That is specifically why America needs sound currency, NOT a free floating, fiat currency, without any value what so ever.

Maybe not a formal definition, but here are some practical definitions, at least till they change:

a dollar is equivalent store of value to one twelve-hundredth of an ounce of gold or to an eightyth of a barrel of oil, or a third of a gallon of gasoline.

It's also equivalent to about 8 minutes of the minimum wage.

Honest Abe.,

The only reason why these metals have any value is because we have decided that they have value. There is no "intrinsic value" to any of these metals. People can change their minds at any time around how much of a certain metal they will accept for a certain good or service. The value of these metals fluctuate vis-a-vis goods and services too. They do not have static values for goods and services unless a government steps in and assigns static values for goods and services.

The government could do the same thing with our paper money too. They could dictate what kind/how much/how many goods and services a dollar buys. I believe the Soviet Union tried that with their Ruble. If we have a free market capitalist system, the value of these metals vis-a-vis goods and services fluctuate according to the laws of supply and demand, just like paper dollars.

So, no matter what you use as "currency" we humans decide whether or not something has value and whether or not wee should use any medium for exchange. It's psychology that makes metals, paper notes, shells, knots, ribbons, rocks, etc. have "value." What someone is willing to trade for a certain marker that "stores value" is what that marker is worth.

So, even if we go back to a gold standard, the value of gold will fluctuate vis-a-vis goods and services in a free market system without central planning from a government. There is no guarantee of economic stabilization with a gold standard. It's just another marker that holds value because we humans decided that it has value. How much value can gold hold? Well, that depends on what a person at any given time will exchange for a certain amount of gold. It's the same basic principle of a fiat currency, sorry. Metals have no intrinsic value besides being shiny and having properties that make them useful for industry. Paper bills can be used for other purposes besides using them as currency too (scrap paper, fire starter, packaging material, etc.).

@Abe

Furthermore, you can devalue gold just like paper money. Go mine some more of it. Exactly the same as running a printing press.

It doesn't prevent waste, it doesn't prevent debt, it doesn't prevent inflation.

- People can still waste on such projects. Why wouldn't they? They will try and bring as much money home as possible.
- They can still create debt that requires repayment at some time. In fact create a debt, and loot another countries gold reserves to pay it off! If a country can't get out of debt, what better way than to go to war to get out?
- Inflation is still possible. The cost of gas in gold today is far more than it was back in the 1960's. That is inflation.

Your idea is that gold has a higher cost than printing money, but both methods have a value attached to them. One has a better % yield than the other. You're also using $100 bills, why not $1 bills instead? Since we don't print most of the money we use, your comparison is moot anyways.

You're goal is to make the government less corrupt. Gold and the law never did that in the past. There was corruption in the past, there will always be some level of corruption in the future.

The gold standard simply represents another round of humanity's cleverness in assigning economic value to random objects that interest us so that we can exchange this shiny stuff for goods and services.

It's the same as paper money.

I fail to see how the gold standard ensures the people's control over the government. The government's of old borrowed to the hilt when currency meant metal coins. They found ways of making war. Inflation still happened in rich countries where there was an ample supply of the metal coins. That follows the laws of supply and demand.

You still have debt with the gold standard. You still have government overspending with a gold standard. And there isn't enough gold in the world at the moment to handle the world's financial needs to keep economies afloat. A return to the gold standard would slow economic activity because it requires delivery of a commodity and security plus freight charges. There are too many people in the world to stretch the supply of gold around the world so that most people prosper. It would create a highly inefficient economy because in an efficient economy goods and services are distributed such that most people get what they need to live. Our current system may not be the most efficient, but it sure is more efficient than returning to an element that doesn't exist in enough quantity to give purchasing power to enough people in the world to keep goods and services flowing.

@Elvis--

You're not teaching anything. You really need to understand what others are posting.

elvis says

the ability to create unlimited amounts of (worthless) paper money CAUSES inflation

The ability causes nothing. The actual printing can lead to inflation.

Everyone understands what inflation is. And what its effects are. The difference is that we also understand the effects of going on a gold standard as well.

Yes, the USA was on a gold standard untill the 1970s. Do you know why?

I'll tell you why, we have a sports team called the san fransisco '49ers. The USA mined out all of its gold and silver. we mined most of our oil.

It would be idiotic to go to a currency based on a shiny metal only found in 3rd world poopholes. No matter what rationale about how much work it takes to produce it relative to printing a $100 bill.

Natural gas and teraflops are the only reasonable backing for a currency once the world gets tired of hollywood/pro sports teams.

Nomograph says

Most people store their wealth assets

Most people [who actually have wealth]

Most people have a negative net worth.

elvis says

What is the total cost to mine, and refine an ounce of gold? Maybe $800?

Actually I read its around $500/ounce.

Gold is a LIMIT ON GOVERNMENT. Thats the MAIN point. (Well, other than a non-gold currency is unconstitutional).

(gov't CAN paper money for war, it CAN'T print gold for war)

It's not money if no one is willing to accept it as payment.

Everyone’s wealth is stolen by inflation.

LOL, half this country doesn't have a penny to their names.

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All this talk about gold. Come on, let's go back to the really olden days. Everyone should start trading in SALT again. Can it not be said that salt was: (1) a medium of exchange (2) a unit of account (3) a store of value, and (4) used as payment. Arguably, since we need it to survive it can be considered more valuable than gold.

So next time you're in a Target, pull out a bag of salt and see if you can convince the teller to take it as payment. By the same token, try to do the same thing with gold. Let's see how that works out for ya. I suggest you bring your dollars with you, so you can turn around and purchase in dollars.

Nomograph says

elvis says

Everyone’s wealth is stolen by inflation.

Incorrect. Your wealth is only stolen by inflation if you store your wealth in currency. Only a fool stores his or her wealth in currency.
Currency is supplied by the government as legal tender for goods and services. Where on earth did you EVER get the idea that it was a place to store wealth? You actually believe that it is the government’s job to provide you with a place to store your wealth? Where does the Constitution say that government must provide you with a place to store your wealth? Just how big and intrusive do you want government to be, and why do you want the government to watch over your personal finances?
Elvis, I think you need to take a little more personal responsibility for your finances and quit looking to the government to hold your money for you. It won’t end well.

Nomo, you are wrong. You are conveniently leaving out the fact that people's wages are devalued through inflation. I can protect the wealth I have by investing it. By and large, my wage, and the wages of millions of Americans are paid out in dollars, which are devalued everyday. Do they go up? Sure. Do wages rise along with inflation when the government is debasing the currency? Nope.

Oakman, try this: go to google, or wikipedia, type in inflation, and read what it says. A mind is a terrible thing to waste.

Also go to: dollar collapse.com Lots of good stuff there.

P.S. Much like the government, my wife has a plan to spend us out of debt.

When you print money, in the future, wages never keep up with inflation. They never have in world history. It's already happened. Prices in the past 10 years have easily outpaced wages.

"Nomo is never wrong. Haven’t you figured that out yet?"

A better slogan would be Nomo just never admits he's wrong.

theoakman says

wages never keep up with inflation. They never have in world history. It’s already happened. Prices in the past 10 years have easily outpaced wages.

That statement is so ridiculous as to be funny.

"That statement is so ridiculous as to be funny."

Yeah well, when you chop off the first half, you can obviously misconstrue the statement.

theoakman says

Prices in the past 10 years have easily outpaced wages.

In my analysis, this is neither here nor there.

At the end of the day, the wage-earner has to pay the bills from income, and I don't know about you but my expenses in order are:

1) Taxes
2) Rent
3) Food
4) Health insurance
5) Energy
6) Stuff

#2, existing housing, has a ZERO cost of production. Rent is a surplus. Taxes, food, insurance, and energy go up, rent will HAVE to go down if wages remain flat.

This is just my general theory, but I strongly suspect rents (and home values) will adjust downwards over the next decade should inflation in other stuff arise. I wouldn't bet my life on it but my experience living in Japan in the 90s (where rent went down in the midst of massive gov't printing) bears it out.

We'll see.

Edit: wut Nomograph sez ^.

"If that was the case, a quart of milk would have been beyond reach for the common man years ago."

Totally unsubstantiated. But yes, a gallon of milk will continue to get more expensive

"A median income earner can afford rent, food, a car, clothing, and luxury items. Wages and prices can never be decoupled. Eventually they must equilibrate."

Zimbabwe and every other inflationary collapse proved this statement to be entirely false. They only equilibration after the currency that was debased becomes no more and new one is introduced.