patrick.net

C'mon guys, you're actually expecting him to come up with facts and quotes that exist? Geez, you're picky.

simchaland says

C’mon guys, you’re actually expecting him to come up with facts and quotes that exist? Geez, you’re picky.

AdHominem says

simchaland says

money, whether it’s in the form of shiny metals or colorful paper or polymer bills, varies in value depending on what any given person at any given time is willing to exchange for it.

simchaland says

Again, gold and silver are only worth what someone is willing to exchange to obtain either substance. They have no other real “value” than that as money. They are tokens just like the papers and coins we carry now are tokens. “Value” is purely a psychological concept attached to material things.

So which is it simcha? As you noted, the constitution clearly says that Congress has the power to coin money and regulate its value. But then you pull a 180 on us. You would instead have us believe that money’s value is a “psychological concept,” and as such it is “what any given person at any given time” believes that determines the value of money. Sounds like you are VERY conflicted. You pay lip service to the constitution and then attempt change the definition of what value is in the very same post.

To me however it is quite simple. The constitution refers to a dollar as not an abstract psychological concept, but rather a concrete and definite store of value, being a specific amount and purity of silver. Silver is a store of value because it represents a relatively scarce resource and one whose replacement value is roughly equal to the labor/investment it would actually take to actually replace it. That is all we as supporters of sound currency are seeking, that we follow the constitution and use a sound money.

simcha, I'm still waiting for your answer. Which is it? Does the constitution give congress the power to coin money and regulate its value or is value a "psychological concept" subject to the whims of any given person at any given time?

so which is it?

Kevin says

The constitution never mentions any specific amount or purity of silver, or anything else, for the value of the dollar.

It doesn't? I suppose it also doesn't define the year as 365 days either but then again nobody is disputing that. You see when the constitution referred to a dollar, it did not need to define it as a specific amount of silver because it was well understood what a dollar was. It was a specific coin with a relatively consistent amount and purity of silver. The congress subsequently refined the definition of a dollar by actually defining what that specific amount and purity of silver was. But it in no way changed (for all intents and purposes) what a dollar was materially.

It is you who are making shit up.You support the changing of the definition of a dollar from its original intent to something that in no way resembles historical truth. You would have us believe that it is perfectly reasonable to change the meaning of a dollar from a piece of silver to a piece of paper. You are supporting counterfeiting, and treason against the constitution.

You are making shit up yet again. In fact what you are doing in your latest pathetic post is arguing semantics all over again. There is not a hill of beans difference between what I said earlier and what I said a few posts ago. "imply" and "refer" are so similar in meaning as to be understood as essentially two different ways of communicating the same thing.

However changing material composition/definition of a dollar from a piece of silver of specific amount and purity to a piece of paper with ink on it is a dishonest counterfeit at best. The difference between a silver dollar and a federal reserve note is so stark that it is ridiculous to consider them in the same breath. A federal reserve note is not a dollar. It will never be a dollar no matter how much you believe it to be true. Furthermore, only congress has the power to coin money, meaning to make coins. If it ain't a coin, it ain't money according to the constitution.

I am so glad that you are happy with our current system of counterfeiting. I can only assume that you will be until you cease to benefit, or realize that you do not benefit from the counterfeiting. A day which, unfortunately for anyone who holds federal reserve notes, is rapidly approaching.

It must be nice to live in a fantasy world.

I'm still waiting for Ad hominem to back up anything he has to say with actual facts and text that exists in the Constitution. But alas, I should stop waiting because it hasn't happened by now, it most likely won't ever happen. Oh, and I don't answer questions from anyone who can't back up their opinions with facts that exist and can be verified. And I especially don't answer questions that make absolutely no sense.

What is a dollar? With NOTHING backing it - it is NOTHING. A "$100 US paper bill" has the same "VALUE" as a $100 monopoly money paper bill.

America can never have a sound economy until we have a sound currency.

Again, you all don't seem to understand the psychological concept called "value" that gets attributed to material things depending on the subjective experience of whomever is evaluating the material thing.

The reason that the Monopoly $100 isn't worth the paper it's printed on is because people don't psychologically assign any value to it beyond the game's scope.

The reason that a US $100 bill is worth something is that people generally agree that it holds some value and can be used for all debts public and private.

The only reason gold or silver or any other material we use to "store" "wealth" has "value" is that people have generally agreed that these things hold value.

The value assigned to any substance is all about psychology and "group consensus." That's what the "free market" is all about. It's psychology and group consensus deciding what anything is worth at any particular moment in time in any particular place.

No thing has "intrinsic value" monetarily. Money is a psychological construct by necessity. All money is fiat money whether you choose to use shells, shiny metals, trinkets, paper bills, beads, cigarettes, or stamps to represent the psychological idea of something that is a store of value that can be traded for goods and services.

When will you guys learn?

And still none of you can point to any place in our Constitution where it defines exactly what a dollar is worth, because it doesn't exist. Even our Founding Fathers realized that the value we place on money whatever the species we use to represent that "value" is psychological. And so they don't define the "value" of a dollar, since that is subject to change depending on the needs of the people and government at any particular time and place. The document simply allows the government to issue and regulate the currency because psychologically people throughout history have assigned "value" to whatever government will accept as payment for tax obligations, goods, and services.

Honest Abe says

What is a dollar? With NOTHING backing it - it is NOTHING. A “$100 US paper bill” has the same “VALUE” as a $100 monopoly money paper bill.

Um, no it doesn't. It has the backing of the United States of America. That's why you can go anywhere in the US and pay with a $100 bill. I don't think you'll have much luck trying the same with a $100 monopoly money....

Back to the original thread "What is a Dollar?"

A Dollar, as of 5/14/2010 is 1/1237 of one Troy ounce of Gold.

No--actually it's one Burger King double cheeseburger.

No, it's anything priced at $1 at the Dollar Store.

simchaland says

No, it’s anything priced at $1 at the Dollar Store.

Did you know that you can buy a pregnancy test at the dollar store? It's amazing, the items that can be found there.

Honest Abe says

What is a dollar? With NOTHING backing it - it is NOTHING. A “$100 US paper bill” has the same “VALUE” as a $100 monopoly money paper bill.

Try paying your taxes in monopoly money and see what happens, LOL.

The value of a dollar is related to the global economic footprint of the USD bloc. Half of the dollars printed circulate outside the domestic economy, whether this remains the case is an open question.

America can never have a sound economy until we have a sound currency.

This is sheer jingoism, substituting word patterns for actual thought and analysis.

A sound economy (over the long run) simply comes from a balance between consumption and production of physical (hard) wealth / trade goods. Money doesn't enter into it, really, it's just easier doing the accounting in a common paper unit of relatively stable value. A Star Trek-esque wealth replicator technology would instantly give us a sound economy, no gold required.

A sound economy over the short run requires avoiding the boom/bust cycle of investment in unproductive assets. A modern PM-limited economy existed prior to the 1930 crack-up, fat lot of good it did keeping things "sound" in the 1920s, or for most of the 19th century for that matter.

Yea, our paper money has the "backing of the US Government". What does that mean? I guess that means other countries that we owe money to can foreclose on things of value when our money becomes absolutely, completely and totally worthless. That means they can take our buildings, our businesses, our homes, our land...anything that actually does have value. Thanks Uncle Sam!

When will you "paper-bugs" ever learn ??? Oh, I know when that will be. After you get screwed (again), this time with the upcoming, government backed "Guaranteed Retirement Account" - hahahah.

Todays book: "Advernture Capitalist" by Jim Rodgers

wut? We have issued several hundred billion of unsecured debt denominated in USD to the Chinese, and they are holding another trillion or two in USD-denominated assets (cash, whatnot). Foreclosure is when a lien holder takes a secured asset after a loan goes in default.

You really don't seem to understand international finance that much; China has been a willing player in a very dangerous game. I don't pretend to understand international finance that much either, but I do know that our present standard of living, with some important modifications wrt energy, recycling, FIRE reform, taxation, etc. is perfectly sustainable.

OK, LOL, we may be f---ed (due to the political inability to seriously tackle these modifications before it's too late) but there is no "Goldistan" economic actor waiting in the wings to sweep the table when all paper economies blow up. China may be the strongest man at the table, but they may not. They have their own serious problems and very well may find their yuan strengthen 3X quickly, just as the Japanese experienced 1976-1987. This would make their yuan holdings more deployable in acquiring overseas assets, but also reduce their ability to add to their existing USD cashpile as Chinese wages and standard of living came closer into alignment with the first world.

Inflation, deflation are monetary phenomena. Nothing matters but wealth production per unit labor. That is the pulse of the real economy. We forget that we are many times more productive now than 30 years ago. Things change so slowly, we are too busy working to see the big picture, and of course modern economics is designed to hide this bigger picture from popular understanding.

Today's book: "The Corruption of Economics" by Mason Gaffney

How to talk about the economy in 2010:

1. Find an article on global economics from 1980.
2. Replace "Japan" with "China"
3. Make some ridiculous prediction about how the country is going to collapse, and yet give no explanation for why you choose to stay here.

Kevin says

Make some ridiculous prediction about how the country is going to collapse

http://blogs.telegraph.co.uk/finance/edmundconway/100005657/us-faces-same-problems-as-greece-says-bank-of-england/
Kevin says

and yet give no explanation for why you choose to stay here.

Do I take that to mean that anyone that offers constructive criticism should leave instead? I guess the Founders should have all packed up and left when King George levied all those taxes.

RayAmerica says

Do I take that to mean that anyone that offers constructive criticism should leave instead?

--------------------------------------------
http://en.wikipedia.org/wiki/Constructive_criticism#Constructive_criticism
Constructive criticism, or constructive analysis, is a compassionate attitude towards the person qualified for criticism. Having higher experience, gifts, respect, knowledge in specific field and being able to verbally convince at the same time, this person is intending to uplift the other person materially, morally, emotionally or spiritually. For high probability in succeeding compassionate criticism, the critic has to be in some kind of healthy personal relationship with the other one, which is normally a parent to child, friend to friend, teacher to student, spouse to spasm or any kind of recognized authority in specific field. Hence the word constructive is used so that something is created or visible outcome generated rather than the opposite. Participatory learning in pedagogy is based on these principles of constructive criticism, focusing on positive examples to be emulated over precepts to be followed.

There can be tension between friendly support and useful criticism. A critic might usefully help an individual artist to recognize what is poor or slapdash in their body of work, but the critic may appear harsh and judgmental in the process. Useful criticism is a practical part of constructive criticism.

Hypercriticism is a feature of certain personality types and is colloquially known as nitpicking or nagging. Nitpicking is minute, trivial, unnecessary, and unjustified criticism or faultfinding.[5] Nagging is to scold, complain, or find fault constantly.[6]
------------------------------------------------
We actually welcome constructive criticism here. You should try it some time.

elliemae says

There can be tension between friendly support and useful criticism. A critic might usefully help an individual artist to recognize what is poor or slapdash in their body of work, but the critic may appear harsh and judgmental in the process. Useful criticism is a practical part of constructive criticism.

elliemae says

Hypercriticism is a feature of certain personality types and is colloquially known as nitpicking or nagging. Nitpicking is minute, trivial, unnecessary, and unjustified criticism or faultfinding.[5] Nagging is to scold, complain, or find fault constantly.[6]
————————————————
We actually welcome constructive criticism here. You should try it some time.

Thank you for one of the finest illustrations of hypocrisy I've ever seen. Coming from the Queen of Insults, this is just too funny. LOL !!

You're welcome. I always enjoy teaching children something important. I'm a Giver.

RayAmerica says

Kevin says

Make some ridiculous prediction about how the country is going to collapse

http://blogs.telegraph.co.uk/finance/edmundconway/100005657/us-faces-same-problems-as-greece-says-bank-of-england/

Kevin says

and yet give no explanation for why you choose to stay here.

Do I take that to mean that anyone that offers constructive criticism should leave instead? I guess the Founders should have all packed up and left when King George levied all those taxes.

No, it means what I said. If you believe the country is going to collapse, why would you stay here? Only a complete fucking idiot would stay in a country that they knew was going to collapse. An intelligent person would get to the most suitable stable country that they could find.

Which tells me that one of two things is true of the people making these claims:

1. They're complete fucking idiots
2. They're just spewing hyperbole and don't actually believe the crap that comes out of their mouths

Kevin says

RayAmerica says

Kevin says

Make some ridiculous prediction about how the country is going to collapse

http://blogs.telegraph.co.uk/finance/edmundconway/100005657/us-faces-same-problems-as-greece-says-bank-of-england/
Kevin says

and yet give no explanation for why you choose to stay here.

Do I take that to mean that anyone that offers constructive criticism should leave instead? I guess the Founders should have all packed up and left when King George levied all those taxes.

No, it means what I said. If you believe the country is going to collapse, why would you stay here? Only a complete fucking idiot would stay in a country that they knew was going to collapse. An intelligent person would get to the most suitable stable country that they could find.
Which tells me that one of two things is true of the people making these claims:
1. They’re complete fucking idiots
2. They’re just spewing hyperbole and don’t actually believe the crap that comes out of their mouths

But the sky is falling, don't you get it? And it's all Obama's fault. Just ask Rayray.

Don't forget that it's my fault too. Rayray is intimidated by intelligent women with opinions that differ from his. And intelligent men with opinions that differ from his. He'd rather attack me personally.

As the great Homer Simpson once said: "Sometimes the only way you can feel good about yourself is by making someone else look bad." He's trying, really trying...

Nomograph says

What about me??? I’m a freedom-hating rights destroyer too!

Don't forget that you're an elitist who's out of touch with the common man, even though you received your education at the expense of others.

Nomograph says

elliemae says

Don’t forget that it’s my fault too.

What about me??? I’m a freedom-hating rights destroyer too!

And you probably eat arugula too. Grrrr! And what elliemae said too. :-P

Money is a common denominator in all economic transactions. The existence of such a commodity is a precondition of a division of labor. In the absence of a defined, uniform standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. The financial policy of the welfare state requires that there be no way for the owners of wealth (no matter how meager) to protect themselves.

This is the shabby secret of the welfare statist's tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold, or silver, would stand in the way of this insidious process. Precious metal would stand as a protector of property rights. If one can understand this simple concept, one has no difficulty in understanding the statists' antagonism toward a sound money policy backed by gold or silver.

Honest Abe says

In the absence of a defined, uniform standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. The financial policy of the welfare state requires that there be no way for the owners of wealth (no matter how meager) to protect themselves.

But of course there is. Don't hold your savings in currency. Use those dollars to buy investments that hedge against inflation. There are many such outlets for your savings...

Wrong, I just think it's unthinkable that a government would STEAL (through deception) from its own citizens, thats all. Obviously you don't know, or care, that the most vulnerable of Americans stand the most to lose. Retired teachers, police officers, fire fighters, people on fixed incomes and the like.

Well I guess the dumocrats are not the compassionate, caring party they claim to be - what a surprise.

Are we still trying to figure out what a dollar is? It's a fiber-type thing in my wallet, hanging out with its friends waiting to get taken out at the bar.

:)

NoMo - I'm just am opposed to a government that is systematically running our once great country into the ground, with the support of people like you. Maybe you haven't noticed the condition of our national economy, or what?

Honest Abe says

NoMo - I’m just am opposed to a government that is systematically running our once great country into the ground, with the support of people like you. Maybe you haven’t noticed the condition of our national economy, or what?

Abe--maybe you haven't studied history? The US economy has gone through periodic recessions since its inception. This is nothing new.

The problem is that I have studied history, read extensivly, and discovered the results are always the same. If a government removes the value from its' currency, the currency, over time beocmes worthless. If a government runs it's economy based on inflation, ultimately reality catches up, and the economy is ruined If government provides wefare, it produces an entire class of lifetime dependents.

Yes, our economy has gone through periodic recessions. A recession is that period of time it takes the free market to correct the mistakes created by government intervention. No matter how many times our government tries to "save" our economy, "fix" our economy, "repair" our economy, or "correct" our economy - it always falls back to disrepair. Thats because our economy is based on a fiat currency, and the economy is manipulated by an interventionist government.

]

tatupu70 says

This is nothing new.

Disagree. The immense trade deficit with China, increasing import dependence on a declining strategic resource, rise of the Gummint is Eveel conservatism from fringe to 48% of the population, hip-deep spending a third of the budget on undeclared wars . . . these are new developments.

We were doing pretty good during Clinton's second term, so one would think it would be possible to return to those days.

But this chart:

http://research.stlouisfed.org/fred2/series/M3

kinda illustrates that what screwed us up last decade was just getting started in 1996.

We only recovered in 2002-2006 by blowing up a $5T credit bubble.

There is a hole in our economy somewhere and money is gushing out of it. Nobody wants to know where this money is going.

We need to get serious about raising taxes, cutting military spending, getting more services for less cost in health care, reducing our import losses to oil exporters, and figuring out how the trade imbalance is working for us and should we attempt to rein it in.

These are trillion-dollar challenges yet our political processes are AFAIK the most broken since 1850.

AFAICT, we're simply f----ed.

Honest Abe says

The problem is that I have studied history, read extensivly, and discovered the results are always the same. If a government removes the value from its’ currency, the currency, over time beocmes worthless. If a government runs it’s economy based on inflation, ultimately reality catches up, and the economy is ruined If government provides wefare, it produces an entire class of lifetime dependents.
Yes, our economy has gone through periodic recessions. A recession is that period of time it takes the free market to correct the mistakes created by government intervention. No matter how many times our government tries to “save” our economy, “fix” our economy, “repair” our economy, or “correct” our economy - it always falls back to disrepair. Thats because our economy is based on a fiat currency, and the economy is manipulated by an interventionist government.
]

So, why did we have such frequent recessions when we were under the gold standard then? They were without a doubt more frequent and more severe than those that we have experienced under a fiat currency...
You remind me of the joke about the guy who only has a hammer in his tool belt--everything looks like a nail to him...

Troy says

Disagree.

It's different (they always are), but we've had difficult problems before. It will be painful, but I guess I'm just more optimistic that the tough choices will be made.

tatupu70 says

o, why did we have such frequent recessions when we were under the gold standard then? They were without a doubt more frequent and more severe than those that we have experienced under a fiat currency…

The idle rich love deflation, all that shiny gold earning buying power, just sitting in a box doing nothing with no risk.

Workers and producers with debt love inflation paying off their loans for them.

From 1880 to 1910 the US dollar deflated from $1.00 to $1.03. Great environment if you were a wealthy lender, not so good if you had loans to pay.

That was the entire background behind William Jennings Bryan's "Cross of Gold" speech, he was riling up the populist Democratic midwest so it could break the deflationary regime the old-Republican capitalists of the Northeast had created.

The election of 1912 was the end-game in this battle, and the Federal Reserve was a compromise. Bryan was brought on board by being given the Secretary of State job in Wilson's admin.

"What is the benefit of a sound dollar? It represents integrity, it insures the peoples control over the government's use of public funds. It is the best guarantee against the socialization and destruction of a nation. It enables a people to keep the government, banks and the war machine in check. It prevents currency expansion from getting out of bounds until it becomes worthless. It tends to force standards of honesty on government and bank officials. It is the symbol of a free society and an honorable government. It is the necessary prerequisite to economic health." [Walter E. Spahr, 1926 - 1966]

It appears that there is a direct connection with the topics quoted above, and the problems that are happening in America today. Could that be because America is without a sound dollar???

Honest Abe says

Obviously you don’t know, or care, that the most vulnerable of Americans stand the most to lose. Retired teachers, police officers, fire fighters, people on fixed incomes and the like.

How in the fuck are retirees "the most vulnerable of Americans"? These are people who have their medical bills mostly paid for. Half of those people have union pensions that are ridiculous.

The most vulnerable people are the ones who have nothing to lose, because they have nothing in the first place.

Honest Abe says

It appears that there is a direct connection with the topics quoted above, and the problems that are happening in America today. Could that be because America is without a sound dollar???

...or it could be that the entire world is dealing with the worst financial crisis since the great depression.

I might add that during the great depression, most of the world had a "sound currency". A lot of good that did.

Honest Abe says

It appears that there is a direct connection with the topics quoted above, and the problems that are happening in America today. Could that be because America is without a sound dollar???

The economy of Norway belies this naked assertion:

"It is the necessary prerequisite to economic health.” [Walter E. Spahr, 1926 - 1966]"

Norway has a per-capita GDP of $95,000, #2 behind Luxembourg which runs a shell economy one-tenth the size of Norway's. Its sovereign debt is the highest-rated in the world, with a 0.16% CDS premium, twice the rating of the US.

Its currency has been off the gold standard since 1931 and off any pegs since 1992. Its citizenry hold a per-household $200,000 in pension savings, greatest in the developed world (33% greater than Alaska's, which has $150,000 for a population one-seventh the size of Norway).

Your theory is destroyed. Find another one.

A dollar used to be pegged to such and such quantity of gold. Some dollars were pegged to silver and called "silver dollars". Today, a dollar is an arbitrary unit of currency backed only by faith in it. As such, it has no fixed value. That's why a dollar today doesn't buy what it did ten years ago. Before becoming a pure fiat currency, dollars did retain their value over decades.