I recently had a discussion with my teacher about the FED...
It went on for awhile, and he agreed with some of my points..
But it basically ended with him saying that there's not enough gold in the world to circulate with our huge population, so he didn't see the possibility of having a gold standard again, also considering our "global" economy.
I didn't know how to reply to this, considering I am only 17 and don't have all the facts as I am still learning.. But I was wondering if anyone here could help me out with this.. I would like to be able to go back and continue my discussion with him on this topic.
There's a lot of good stuff on my blog about how the Federal Reserve is one big scam. The Federal Reserve is a humongous price-fixing cartel. Interest rates should be set by the free market, and not a handful of insiders.
Fiat debt-based money allows insiders to steal from everyone else, as they print and spend new money. Economic power is concentrated in the hands of the banksters, who get the State-granted perk of printing and spending new money.
If you're a State insider, you prefer paper money to gold, because it lets you steal via inflation.
If you're an individual, there's *NO* reason for you to prefer paper money to gold.
Given the free choice to use whatever you want as money, what would you choose? Obviously, as an individual you'd prefer gold (if you're rational). If you use paper as money, people may steal from you via inflation. If you use gold or silver, you're protected from theft via inflation.
The reason people don't use gold and silver as money is that it's illegal. Consider the examples of what happened to The Liberty Dollar and E-Gold. Gold and silver are so heavily taxed/regulated, making it impractical/illegal to use them as money.
If you really want to get your teacher angry, try mentioning the Compound Interest Paradox.
Unfortunately, your teacher is a brainwashed pro-State troll. You probably aren't going to be able logically convince him/her that they are wrong.
I have my own blog at FSK's Guide to Reality. Let me know if you like it.
Riley:But it basically ended with him saying that there's not enough gold in the world to circulate with our huge population, so he didn't see the possibility of having a gold standard again, also considering our "global" economy.
To add to everything else said, gold is not the only metal used for exchange. Copper, silver, nickel, and platinum are all used as well.
At most, 5% of the population would need to stop complying to bring down the government.
But it basically ended with him saying that there's not enough gold in the world to circulate with our huge population,
February 17 - 1600 - Giordano Bruno is burnt alive by the catholic church. Aquinas : "much more reason is there for heretics, as soon as they are convicted of heresy, to be not only excommunicated but even put to death."
"There's not enough gold" is a silly excuse.
You can use laminated gold slivers for small transactions. You can even buy them on Kitco!
You can use silver or copper for small transactions.
fsk: "There's not enough gold" is a silly excuse. You can use laminated gold slivers for small transactions. You can even buy them on Kitco! You can use silver or copper for small transactions.
Just to clarify - due to shortages at many mints, they're no longer selling Chip Gold (as it was called). And the premium over spot on chip-gold was enormous.
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David Z
"The issue is always the same, the government or the market. There is no third solution."
Really? I didn't know that. I checked on Kitco and it's gone now. They used to sell them.
The smallest coins I've seen are 0.5 ounce silver rounds on APMEX.
You also could use "junk silver" (pre-1964 State-issued silver dimes, quarters, and half dollars).
I haven't seen any 1 ounce copper rounds anywhere. For small valued coins, the cost of minting the coin becomes a greater % of the total value.
You could always use State-issued money for transactions smaller than an ounce of silver.
Prashanth Perumal:You are not understanding me right. I did not attach any fixed face value to the green paper I talked about. So I made no reference to the dollar with the green paper talk.
I understood you perfectly. You said "single piece" of green paper. Maybe calling it a dollar was presumptuous on my part, it still can't be divided. Unless they have scissors, but you saying the single piece wasn't enough to facilitate trade is an artificial restriction on divisibility. Why can't they cut it up? If they can't, why are they using it and not something else? I mean if it can't be exchanged how does it get exchange value of any kind no matter its value? A lump of gold the size of a Hummer is pretty valuable. It has zero exchange value unless I break it up with a hammer or feel like buying Minnesota and have a flat bed truck to haul it there and make the deal.
Prashanth Perumal:If you are uncomfortable with green papers, take something else, like a piece of leather. There is a limit to it's divisibility.
True, but then there is no particular need for anyone to use it for exchange beyond those purposes for which it will adequately serve. So when its limit for divisibility is found it will simply not be used any longer or only in those circumstances in which it benefits people to do so. For other transactions they will use other monetary media. That's why people can still use cows in African villages but ten miles away in the city they use dollars to buy a stereo. There need not be only one monetary medium, multiple standards have existed and still do. Gold, silver, and copper for example. All existed in parallel. Also for example, the whole petro dollar set up makes it favorable for people to use dollars to buy oil, so they do. It's not a divisbility issue, but it shows people are perfectly competent and able to make one purchase using one money and another purchase using another for whatever reason.
The only reason people would use an unfavorable monetary medium is if that was all there was available for them to use, like prisoners using cigs, or if someone is forcing them to, like the government. Otherwise, why are they continuing to use it after its short comings are obvious to everyone? You can draw up infinite scenarios in which people hit limits of divisibility, portability, etc., in this or that chosen money. So what? Those scenarios say nothing about a reality in which people are, or at least should be, free to trade whatever they want for whatever they want, directly or indirectly, using whatever money they want so long as the other person willingly accepts it. I mean, you're basically asking what happens if money fails to develop, because there's no other reason for people to sit around with their thumbs up their butts passing around one piece of green paper with their free hands because it's the only medium of exchange for some God unknown reason.
good post xahrx
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
fsk:You also could use "junk silver" (pre-1964 State-issued silver dimes, quarters, and half dollars).
George Donnelly was talking about these a while back. What sort of premium is APMEX asking for?
Junk silver seems to be a premium of a couple percent compared to generic rounds.
When buying junk silver, remember that the coins are worn from circulation. The actual silver content is less than it was when the coin was newly minted.
Personally, I'd just deal with rounds and bars to avoid confusing. The only hard part is that I haven't seen any generic rounds smaller than a half ounce of silver. That's only a problem for small transactions.
I did an estimate once based on the coinflation website. Approximately $0.35 of junk silver is equivalent to 0.25 ounces of silver.
Prashanth Perumal: Saan:If divisibility becomes impractical for one medium, then the market will decide on another medium, while still retaining the older medium for larger purchases. Yes, I've already told about it.
Saan:If divisibility becomes impractical for one medium, then the market will decide on another medium, while still retaining the older medium for larger purchases.
Yes, I've already told about it.
My apologies, I thought you were advocating advocating arbitrary control over the money supply.
"...The post-totalitarian system contrives to force life into its most probable states...This system serves people only to the extent necessary to ensure that people will serve it
Vaclav Havel
xahrx:Unless they have scissors, but you saying the single piece wasn't enough to facilitate trade is an artificial restriction on divisibility. Why can't they cut it up?
They can, and I've already recognized the possibility in one of my previous posts. Here is the line:
"The green paper could be divided into pieces, but as you know, there is a limit to the number of smaller pieces that could be made out of the single green paper. The same applies to gold."
xahrx:So when its limit for divisibility is found it will simply not be used any longer or only in those circumstances in which it benefits people to do so. For other transactions they will use other monetary media.
I've talked about the same in one of my previous posts. Here is the line:
"Always keep in mind that gold was made money by the market, not by any government decree. So, if gold becomes unfit to be money, the market will find new substances to be used as money."
Saan: My apologies, I thought you were advocating advocating arbitrary control over the money supply.
No problem. All of us are busy in our lives. And it's obvious that we sometimes miss reading all posts.
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