Uh, asset prices?
Blended gold-fiat $ monetary system?
- Thread starter jakesteele
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Uh, asset prices?
Francesca R
Girl
A clock that goes backwards is right four times a day. I think this is a possible explanation for why some people think Rep. Paul is smarter than a gibbering imbecile
Francesca R
Girl
Find something where the market price in US$ has risen and scream: "The inevitable result of rampant counterfeiting/theft of buying power/debasement of currency!". If nothing to hand, find something whose price in US$ has fallen and scream: "The inevitable deflationary end to rampant monetary debauchery!"
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Like the price of land and buildings?
No, the other assets. The ones that actually support Tippit's lunatic theories.
You know, fairy circles, mithril mines, and magic gingerbread cottages.
Ron Paul counts on people not understanding that currency is simply a trading token that makes trade more efficient. It allows a farmer to sell corn without having to accept chickens in trade.
In a gold based economy, human cleverness, increases in productivity, building new factories or farming new land doesn't add to the total wealth of society. The only way to create new wealth is to dig gold out of the ground.
In a gold based economy, human cleverness, increases in productivity, building new factories or farming new land doesn't add to the total wealth of society. The only way to create new wealth is to dig gold out of the ground.
.... which, ironically, is usually very bad for the economy, because the amount of specie in circulation has nothing to do with the economic base. Sensible people learned this in the 1500s, when the Spanish Empire dug way too much gold and silver out of the New World and inflated their economy out of existence, during the time that the English and similar northern countries were building up their actual productive base.
The other risk, of course, is that you'll get massive deflation of currency if you somehow build the productive base up without increasing the money supply to match. The effects of massive deflation are even worse than the effects of massive inflation, precisely because they more or less destroy any ability to invest.
Tippit and the rest of the Paulistas complain about a huge increase in the price of assets and would prefer a gold-based system -- which would simply have prevented the assets from existing in the first place. No housing == no housing bubble.
I don't think you could express a more fundamental misunderstanding of what wealth is. Wealth is an abundance of the things that money can buy, and its existence is independent of whether you choose to accept real money, or fiat money "tokens" in exchange for real goods and services. In fact, it is through the manipulation of fiat money tokens that bankers swindle real wealth from everyone else. Gold's scarcity and the cost associated with digging it out of the ground is a feature, not a bug.
ponderingturtle
Orthogonal Vector
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He addressed money and currency not wealth.
Francesca R
Girl
Surely that can't be right. Gold is sound money. Pizzaro et al looting the Americas and shipping boatloads of it back to the Castillian kings and queens so they could make multiple failed attempts to land-grab north of the Pyrenées is way superior to the Fed's repo desk doing some trades.
Ah, but you see, that's the problem. Gold is sound money. But Pizzaro also looted boatloads of silver, which isn't sound money and therefore clearly the problem is that not all precious metals are suitable to serve as the basis for a currency.
Really, the only precious metals that are suitable are the ones that I have in my safe right now. Because I know that I would never let the world get involved in runaway inflation. Instead, since I have all the money that can possibly exist, I'll simply hang onto it and buy the entire world.
Bwa ha ha.
I admit there are less sensible economic theories out there. Ron Paul's, for instance.
It seems you missed the part where I said "In a gold based economy ..."
It's the gold based system you favor that forces an artificial link between economic growth and the supply of one specific commodity.
Francesca R
Girl
"Gold's scarcity and the cost associated with digging it out of the ground" is the admirable feature, apparently. If you have a pushover like Atahualpa and his eighty thousand wimps who are scared of a horse, then it's too tempting to rob holders of legal tender in Madrid by ransoming another Inca emperor and loading up a couple more ships. It's probably like taking candy from a baby or printing money out of thin air. So we just needed to wait for that conquisting business to work its way out of the system I guess.
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Does this mean I can't push for the change in my pocket to be the only legal tender in existence?
Damn. There goes my retirement plan.
I am holding out for traditional monetary systems. Any real North American understands that currency must be backed by wampum.
timhau
NWO Litter Technician
Bah. The world should adopt the Finno-Ugric tradition: the only real currency should be squirrel pelts. Replace Goldman Sachs with Tim's Squirrel Ranch.
Prometheus
Acolyte of Víðarr
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Why not use leaves; they grown on trees, after all.... 
timhau
NWO Litter Technician
So do squirrels.
stilicho
Trurl's Electronic Bard
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In a way it was capital investment in privateering vessels that launched Amsterdam on its way to becoming the chief European financial centre.
I finished a book by de Vries where he squarely "blames" the Swedes for our vicious fiat currency. He said their coins were minted in copper and larger denominations weighed several pounds each as a consequence.
Being that I have some Swedish ancestry and I have several jars of pennies, I vote to eliminate all fiat currency and replace it with copper. Maybe we need a poll on this?
Almo
Masterblazer
But Francesca... all the easy gold is gone! Only tough-to-get gold remains, so it's fine!