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Thread: WTFudge is this "trillion dollar platinum coin" nonsense?

  1. #61

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    Quote Originally Posted by furface View Post
    Steven, all I'm saying is that a fundamental problem with an aggressive monetary policy is the amplification & accumulation of money. It's a factual numerical problem that is also an observed empirical fact. If you print money and have no way to recycle it, it's going to indefinitely increase in volume & accumulate. This is a numerical, mathematical fact.

    My assertion that it's THE underlying problem with Keynesian economics is a slightly different issue, but the fact that accumulation & amplification of money is a numerical problem still stands.
    My point is that there's a numerical accumulation problem (monetary inflation which leads to price inflation) in both scenarios, with or without amplification.

    Fiat currency that it LENT into existence is initially inflationary, then deflationary as the loan (plus interest) is repaid. Continual expansion of credit in the aggregate is the only thing that assures (for as long as it works) that it's inflationary on net.

    Fiat currency that is SPENT into existence, on the other hand, is strictly inflationary. Unless you have a mechanism for calling that currency back in for destruction. It also leaves the problem (the artificial pseudo-issue) of who are the lucky few chosen recipients that will be the first users of counterfeit funds before its effects permeate through the market, devaluing all other currency through dilution.

    You wrote, "You start handing money out for free, it tends to accumulate in the wrong places."

    That addresses the question of how debased counterfeit currency is allocated (introduced to the market). However, no matter what, counterfeit currency ALWAYS goes to the wrong places -- because it's counterfeit. It cannot be 'lent' or 'spent' into existence without stealing value from others, regardless how or whether or not it accumulates, or even how it is 'recycled'.

    In my opinion, it doesn't matter if counterfeit currency was dropped out of Uncle Ben's helicopters, amplified or loaned into existence by fractional reserve lending institutions, or simply spent into existence by a print-happy Congress that gets to forgo that pesky inconvenience of actually having to tax directly (and be politically accountable to taxpayers as a result). Saying, "Well, at least all that stolen value didn't go to Goldman Sachs!" is absolutely no consolation to me at all, any more than the argument that, "Well, at least when we steal and redistribute this way, the currency has a chance of recycling -- trickling down to those who are not front-line recipients.

    It doesn't matter to me who benefits from CONFISCATED WEALTH REDISTRIBUTION, or which THEFT CHANNELS are more likely to 'recycle' some of that STOLEN VALUE to me or anyone else. The fact that such a thing is not possible without theft still stands, as does the inescapable fact of the numerical problem of aggregate accumulation and growth via a perpetual dilution of the fiat currency supply.



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  3. #62

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    Steven, first of all I hope I don't give the impression that I claim to know definitively what I'm talking about. These are non-trivial, and to a large degree unanswered questions in economic theory in my opinion.

    The issue with fiat money versus commodity backed assets like a gold standard isn't as simple as it may first appear. First of all trust is a big issue. Do you trust a government when it says it has a certain amount of gold? It's actually an issue today with questions about how much gold governments really possess. Do you trust that a government will really trade a gold certificate for gold, even when there may be a run on gold?

    You can possess gold yourself, but that has a fairly high cost of possession, theft prevention, fraud prevention, and fractionalizability. As a direct exchange instrument, gold is very poor for these reasons & more.

    The other thing is fiat money actually is secured by the entire asset collection of the coining nation state or collection of states. In so much as the state has the ability to "recycle" money like I mentioned above through taxation or other means, and the state contains valuable assets & resources.

    I would argue that with good economic management it's actually much more secure than commodity standards. We don't have good economic management, though, and maybe the same problems of trust exist for fiat money that exist for asset backed standards. I don't know. It's a very tricky question.
    Last edited by furface; 01-09-2013 at 06:41 PM.

  4. #63

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    Quote Originally Posted by furface View Post
    The issue with fiat money versus commodity backed assets like a gold standard isn't as simple as it may first appear. First of all trust is a big issue. Do you trust a government when it says it has a certain amount of gold? It's actually an issue today with questions about how much gold governments really possess. Do you trust that a government will really trade a gold certificate for gold, even when there may be a run on gold?

    I actually personally don't give a fig about gold. It's one more commodity (of many) that could be used as money, so it's not a question for me of gold standard vs. no standard. That's another false choice, along the lines of people who insist that Ron Paul is advocating "a return to the gold standard".

    You can possess gold yourself, but that has a fairly high cost of possession, theft prevention, fraud prevention, and fractionalizability. As a direct exchange instrument, gold is very poor for these reasons & more.
    You might personally view those as downsides, but so long as artificial barriers to entry are piled up on top (for all commodities as money, not just gold), it doesn't matter what anyone thinks. Ultimately we would be talking about PERSONAL preferences. No committee deciding what is undesirable. I can make a case for Apple or Microsoft until I'm blue in the face, but there's always going to be the Linux-loyal, and the rest of the world, and their opinions, can kiss their asses. And that's how it should be. No one-size-fits-all for anyone.

    The other thing is fiat money actually is secured by the entire asset collection of the coining nation state or collection of states.
    That's fuzzy thinking that I will gladly attack. The "entire asset collection" IS NOT OWNED by the coining nation or collection of states, and fiat currency can NOT be said to be "backed" by GDP or anything else. That's a bullshit abstraction, because FRN's are not individual titles to assets. As fiduciary media they are evidences of LIABILITIES ONLY. Plus, in that same context you might as well say that FRN's are backed by Pesos and Euros, simply because they can be exchanged for them.

    Anyway, the idea that a "coining nation state" can be said to "back" its currency with everything inside its borders, INCLUDING PRIVATE PROPERTY, is absurd, to wit:

    ...and the state contains valuable assets & resources.
    (emphasis mine)

    Did you see how loosely you used the word 'contains'? Is the word 'contains' intended to imply 'owns' in a kinda sorta-ish way, as a statist abstraction?

    I would argue that with good economic management it's actually much more secure than commodity standards.
    I don't know about "better", but I agree in principle: with good economic management anything CAN be secure. And I would argue that it does not matter to me, nor should it, as I would advocate for natural checks and balances, not artificial ones. If it's that good and "secure", then LET IT COMPETE. And if a commodity-backed currency (free of ALL artificial barriers to entry) has so many downsides that it can't compete, let the market make that determination.

    We don't have good economic management, though, and maybe the same problems of trust exist for fiat money that exist for asset backed standards. I don't know. It's a very tricky question.
    It's only tricky if you fall for it as an EITHER/OR proposition, or phrase it as a false choice, as if we really were just one big happy giant of a collectivist committee that goes around deciding everything for everyone en masse. Then it's not "tricky" - it's more of the same insanity, with corruption and an ultimate fall (and well deserved I might add) pretty much guaranteed.
    Last edited by Steven Douglas; 01-09-2013 at 09:47 PM.

  5. #64

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    http://dictionary.reference.com/browse/remedy

    http://en.wikipedia.org/wiki/Legal_remedy

    If the system does something unconstitutional or illegal to you or to "the People" i.e. all of us they cannot deny us a remedy. This is the remedy built into the Banking law. Bo Gritz used to talk about this twenty years ago.

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