The Gold Standard Explained By A Contemporary

[strategy 4]

sooooo bitcoins?

[hblask 1]

We're not on the same page here. This is getting frustrating. I don't mind if people disagree; it would be nice if we could get a conversation though? I am saying that if the currency is exchangeable for gold at the market-determined rate. And the gold reserves of the central banks get marked to that say, monthly. So the CB has to offer up gold and can obviously participate in the free market. Redemption in gold would be open to citizens, and maybe domestic companies. So the government doesn't fix the price,but accepts the market's valuation.My question is why not allow the currency to be valued by this free-market principle?? Isn't that what money should be? Valued by the users(public)? You seem unable to break away from the concept of the issuer of money stating what its value is!! I put it to you that this is the result of being born into fiat, and no matter how anti-government and libertarian you claim to be, you actually still have the mental need for the issuer to tell you the value of the currency, rather than the market determine that!!

I'm not convinced we disagree here, but this gets confusing. This is why monetary policy is such a difficult subject.The value of a dollar is always exactly one dollar. That is a definition. The only difference is whether the dollar buys a lot of real world product or a little real world product. Theoretically, within a narrow range, the value of gold will fluctuate with other real world products. In a world without money, where only barter was allowed, the worth of gold, the amount of stuff you could trade it for, would vary based on the same supply and demand factors of every other product. (For now ignore exceptional events like a massive new mine being discovered.)So you can never change the amount of money represented by a dollar -- it is always a dollar. But you can change the amount of real world product you can buy with a dollar. If there are lots of dollars, each one only buys a little. If there are few of them, each one buys a lot. A common exchange product for a dollar is gold. All the gold standard says is "we have to trade dollars for gold and vice versa at a fixed price". So if there are too many dollars, people would rather have gold, because the same quantity of gold trades for the same quantity of wheat or whatever, while the same quantity of dollars buys less wheat. So the gold starts to leave the govt vaults, and they have to withdraw some of the dollars. It doesn't matter if the price is fixed for all time, or fixed monthly, the problem is the same: matching the dollars to the real world. Right? Either way, the govt has to print a number of dollars equivalent to the amount of products in the world. Too many dollars, the gold goes out. Too few dollars and gold comes back and people lose incentive to produce as much, slowing the economy.So if you believe that the ability to mine gold is at least somewhat based on the same factors as the rest of the economy -- the availability of labor, the advance of technology, then gold is just a proxy for everything else. It's not a perfect match, and that's where the gold standard falls down a little, but does that matter? (That's a discussion for another thread, I think). So I think the difference between fixed price gold and market-price gold is the rate that the govt has to change the money supply relative to other changes in the economy. Still the same task, just at a different rate.Right?BTW, I'm not arguing for or against a specific position here... just discussing how it works. It's insanely complicated because money is abstract but represents something real, and gold sits halfway between the two, and they are all inter-related, yet independent..... I think a market-based gold standard provides a slightly more complex task for those who decide how many dollars to print, but if they get it right, it may work better for consumers who generally can't be bothered with worrying about number of dollars in circulation.

[ahosang 0]

I'm not convinced we disagree here, but this gets confusing. This is why monetary policy is such a difficult subject.The value of a dollar is always exactly one dollar. That is a definition. The only difference is whether the dollar buys a lot of real world product or a little real world product. Theoretically, within a narrow range, the value of gold will fluctuate with other real world products. In a world without money, where only barter was allowed, the worth of gold, the amount of stuff you could trade it for, would vary based on the same supply and demand factors of every other product. (For now ignore exceptional events like a massive new mine being discovered.)So you can never change the amount of money represented by a dollar -- it is always a dollar. But you can change the amount of real world product you can buy with a dollar. If there are lots of dollars, each one only buys a little. If there are few of them, each one buys a lot. A common exchange product for a dollar is gold. All the gold standard says is "we have to trade dollars for gold and vice versa at a fixed price". So if there are too many dollars, people would rather have gold, because the same quantity of gold trades for the same quantity of wheat or whatever, while the same quantity of dollars buys less wheat. So the gold starts to leave the govt vaults, and they have to withdraw some of the dollars. It doesn't matter if the price is fixed for all time, or fixed monthly, the problem is the same: matching the dollars to the real world. Right? Either way, the govt has to print a number of dollars equivalent to the amount of products in the world. Too many dollars, the gold goes out. Too few dollars and gold comes back and people lose incentive to produce as much, slowing the economy.So if you believe that the ability to mine gold is at least somewhat based on the same factors as the rest of the economy -- the availability of labor, the advance of technology, then gold is just a proxy for everything else. It's not a perfect match, and that's where the gold standard falls down a little, but does that matter? (That's a discussion for another thread, I think). So I think the difference between fixed price gold and market-price gold is the rate that the govt has to change the money supply relative to other changes in the economy. Still the same task, just at a different rate.Right? Yes, the tool will be to sell and purchase gold for dollars. BTW, I'm not arguing for or against a specific position here... just discussing how it works. It's insanely complicated because money is abstract but represents something real, and gold sits halfway between the two, and they are all inter-related, yet independent..... I think a market-based gold standard provides a slightly more complex task for those who decide how many dollars to print, but if they get it right, it may work better for consumers who generally can't be bothered with worrying about number of dollars in circulation. The fact that the market determines the exchange rate means that citizens will also react to monetary policy in an appropriate way by buying or selling gold. This will be done as each person's circumstance dictates. Also remember that this works in isolation, but also has even greater significance if somewhat replicated in a global scenario. Think imports and exports. Think saving/investing overseas. Think about them liquidating in your economic area.

If gold is sold on free markets in major currencies, then we see gold flow as currency into productive regions for savings. And such will encourage productive endeavour in order to tempt gold liquidation in each region.

[AmScray 355]

Stupid. All of this.The main reasons we are dumber are:First) Back then, books were it. All you had. The bible, and books. Radio to a lessor extent. If you wanted to communicate to someone across the country or even across the territory, you had to write. If you wanted to address a large number of people it was in writing. If you wanted a fantasy, to escape - it was a book. Now we have gaming systems, cars, cell phones with the accompanying lol txt msgs lolomg, snowboarding, traveling, TELEVISION, CD's, uhmmm, a whole host of things that there probably isn't space in this post to list.So kids are doing all of these other things rather than reading. Also, "reading" is for "nerds". Being lettered is "geeky". All of these distractions and especially the popular culture that has come with movies, TV and Rap/rock has made being well read highly unlikely, and worse uncool. This is so painfully obvious I'm embarrassed that you've tried to make it about race. Yes blacks and jews and women aren't as smart as straight white males, duh..... but you can't blame this on them. That's just stupid.Two) We are moving further and further away from God and the bible in the culture. Going to be kind of hard to create writers of the caliber of Lewis and Augustine when you remove Godly inspiration. DUH!

I referenced our devolution of communication as an example of how 'dumb' we've become, but it goes beyond just how we speak and write. The fact remains, the standards in our systems of education have been drifting lower and lower and lower and lower for decades now. We've arrived at the point where an associates degree is about par with what a high school diploma effected in 1960. 'College' has become less about a credible vetting process to weed out the retards and all about 'inclusion', regardless of intelligence and/or ability. One can be a falling down dumbass yet still get placed into many state run 4 year institutions. Our access to information has never been better. This, combined with the natural implications of the Flynn Effect, ensures that self-learners in the 115+ IQ range born after 1980 or so will soar to heights of knowledge that were once reserved for the top 0.001% but for everyone else, thye're getting only getting dumber... probably because we no longer educate them with 'education' in mind. Rather, we educate them with feelings in mind. If we went back to a straight meritocracy model, 90% of the non-white/non-asian students would be somewhere in the lower levels of special ed. This actually was the case in the 70's and 80's in integrated (read: white flight) neighborhoods in Chicago, where the disparity in student performance between black and white students (who had the same teachers, lived in the same neighborhoods was so blindingly apparent, it lead to the bar being lowered to accommodate the underachievers."Feelings" have become a baseline mantra in education... Achievement is tolerated, at times resented. So, yes, we have video games, we have TV, people don't read "books" like they used to, but we also have Wikipedia, we have google and we have access to breadth of information that is so comprehensive, it almost supplants our need to 'remember' much... The rub is, only the self-learners (usually in the 115 and above IQ ranges) will benefit. Everyone else gets dumber and dumber, with no meaningful safety net of education to stop the downward spiral. Race has played a role in what we see today in education, what we see today in education has played a role in what we see with 90% of the population. And, you're a tard.

[LimbaughGod 0]

The rub is, only the self-learners (usually in the 115 and above IQ ranges) will benefit. Everyone else gets dumber and dumber, with no meaningful safety net of education to stop the downward spiral.

This is the only thing you said that was true.Ever heard of Neil deGrasse Tyson?? lol don't be a loony toon. Yes, blacks and gays are stupider on AVERAGE, but it isn't by as much as you claim. The main downfall of education in particular is PUBLIC schools, you know, where we aren't even allowed to pray any more. duh We need to move to a voucher program that supports private schools and eliminate public education all together. This is desirable for two reasons. A) people can choose religious schools rather than the liberal brainwashing factories known as public schools. ii) The job creators and self starters can get their kids better educations and the welfare queens can send their kids to the trashier less expensive schools.This would fix the problem.

[ahosang 0]

hblask, an old article by Robert Mundell, written in 1997 before euro launch etc:http://robertmundell.net/wordpress/wp-cont...%2FZkQ5sg%3D%3D

So much for the past and present: We now move to the 21st century. The dollar is the preeminent currency of the world. Europe is struggling to meet the Maastricht conditions to forge new European monetary arrangements. I believe that Europe is going to be much more successful than people generally believe. It will take three years after 1999 to put the currency into place. Then it will take another seven or eight years of growing pains while countries get used to the new procedures that are needed. By the year 2010, we will probably have a European currency firmly in place and generally accepted. The European continent, as a country, will have a GDP that is probably 10% to 15% larger than the United States. The European Community will produce a currency that is internationally important. Geographically, Europe is more convenient to all of the former Soviet Union countries,. Africa and the Middle East than is the United States. The single Eurocurrency will become very important.There will also be a role for gold. The total amount of gold mined since the days of Nefertiti is about 3.5 billion ounces (120,000 tons). One billion ounces is in the central banks, more than another billion ounces is in jewelry, and the rest is in speculative hoards. This last holding is why Alan Greenspan says he looks at gold whenever he gets a chance. I look at three things for signs of inflation in the economy: I look at the money supply, I look at interest rates, and I look at gold.You can see this in the bond market. If there is a big outbreak in the price of gold, you know that there is an increase in inflationary expectations and people will start to sell bonds, sending interest rates up. The stock of gold in the world is going to maintain itself as a viable reserve asset for a long time to come. But I do not think that we will see the time when either of those two great economic powers, the United States and the European Union, will ever again fix their respective currencies to gold as they have in the past. More likely, gold will be used at some point, maybe in 10 or 15 years when it has been banalized among central bankers, and they are not so timid to speak about its use as an asset that can circulate between central banks. Not necessarily at a fixed price, but a market price.