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Thread: Debt On Track To Destroy The American Middle Class

  1. #31
    Quote Originally Posted by acptulsa View Post
    Well, you know perfectly well it's a gold standard without a central bank. It's where you use gold as money. You know. Gold=money. You take gold, coin it, and use it to buy things. Like that.

    What has any of this to do with competing currencies?
    Kinda like they did during and prior to the Great Depression? Silver was acceptable too.

    Examples of a "pure gold standard" in history?



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  3. #32
    Quote Originally Posted by Zippyjuan View Post
    Kinda like they did during and prior to the Great Depression? Silver was acceptable too.

    Examples of a "pure gold standard" in history?
    Has the U.S. not always minted silver coins? Wouldn't that amount to some kind or another of 'bi-metallic standard'? Didn't FDR recall gold coins during 1933? Is that your idea of the gold standard during the Depression? Seriously?

    Are you even going to acknowledge that currencies can and do compete? Are you even going to admit that people could still find a way to trade with no official currency at all?
    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

    'Well, you can get no more liberty than you give.'--Will Rogers



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  5. #33
    Quote Originally Posted by acptulsa View Post
    Has the U.S. not always minted silver coins? Wouldn't that amount to some kind or another of 'bi-metallic standard'? Didn't FDR recall gold coins during 1933? Is that your idea of the gold standard during the Depression? Seriously?

    Are you even going to acknowledge that currencies can and do compete? Are you even going to admit that people could still find a way to trade with no official currency at all?
    That was after the Depression already hit. The government was running out of money. Using gold for money didn't prevent any economic crisis and did not prevent income disparity.

    Are you even going to admit that people could still find a way to trade with no official currency at all?
    Yes, they can and do- it is called "barter" but isn't terribly convenient. If you have a chicken and want some apples but the apple seller doesn't want any chicken you have to find a third or even fourth party to barter with. Too complicated. Money is much simpler.

    Are you even going to acknowledge that currencies can and do compete?
    We tried competing currencies in the US. At one point there were over 3,000 different notes used in the US (most of them failed along with the banks who issued them) during the "Free Banking Era" in the mid 1800's. Jackson got rid of the Central Bank and allowed States to do what they wanted. It didn't go very well. It was too confusing and values were uncertain so people decided they wanted just one currency.

    https://thismatter.com/money/banking...ing-system.htm

    Because of the importance of banks and money to an economy, a bank could not be formed by just anyone. They required a bank charter from the state to legally exist, and, although not just anyone could start a bank, anyone with the right political connections could, whether they knew how to manage a bank or not. Before 1837, a state bank charter could only be obtained by the approval of the state's legislature; federal charters were not available until 1863. And because banks could print money in the form of banknotes, naturally, many people wanted to start banks. This fostered corruption and favoritism.

    So that bank charters were not just granted to political cronies, Michigan, in 1837, began the trend of free banking where a bank charter could be obtained without an act of the legislature; only very minimal requirements had to be satisfied. Other states followed, with New York enacting a free banking law in 1838, but required that banknotes be backed by government bonds. Presumably, this would protect depositors and noteholders, since if the bank failed, then the collateral could be sold to satisfy the bank's customers.

    The Suffolk Bank in Boston Massachusetts began a new practice of redeeming banknotes of other banks, but only if the banks had enough deposits with the Suffolk Bank to cover the redemptions. Because Boston was a major trade center, many banks in New England began to accept this new system, referred to as the Suffolk banking system, which encompassed virtually all New England banks by 1825.

    New York also developed a safety fund system, in the early 1800s, requiring member banks to contribute a small percentage of its capital annually to a state managed fund that could be used to reimburse noteholders when a bank failed. This was probably the earliest form of deposit insurance. Another law to protect noteholders was an early form of a reserve requirement, enacted by Louisiana in 1842, limiting the number of banks and requiring them to maintain at least 1/3 of their assets in cash and 2/3 as short-term obligations.

    Other states also enacted free banking laws, but there was little regulation, so many banks failed. Indeed, many of them actively conducted fraud. With little oversight of the banks, restrictions were not effective. Instead, banks proliferated and printed more banknotes than what they had in specie. In fact, some banks—referred to as wildcat banks—deliberately located in the remote wilderness expressly to make it difficult for any of its banknote holders to redeem their notes for specie. The free banking years, from 1837 to 1863, became known as the Wildcat Banking era.

    Unfortunately for merchants, this proliferation of banks created a proliferation of banknotes. The value of banknotes depended on the distance from the issuing bank, both because the banknote holder had to travel to the bank to redeem them in specie and because people were less familiar or unfamiliar with distant banks, and, hence, would not accept the banknotes as payment, at least not at full face value. It was, thus, difficult to know the value of a particular banknote, and it was difficult to distinguish counterfeit notes from real banknotes. To solve this problem, registers of banknotes were published periodically and distributed to merchants so that they could look up the value of a particular banknote. This was an inefficient process at best, and it created an appeal for a national uniform currency.
    Last edited by Zippyjuan; 02-25-2018 at 08:35 PM.

  6. #34
    Quote Originally Posted by Zippyjuan View Post
    That was after the Depression already hit. The government was running out of money. Using gold for money didn't prevent any economic crisis and did not prevent income disparity.
    If the government was running out of gold to cover the gold certificates it had printed it was not using gold for money. It may have been pretending to use gold for money. But it would seem the money supply was not quite the same thing as the gold it had on hand.

    Quote Originally Posted by Zippyjuan View Post
    Yes, they can and do- it is called "barter" but isn't terribly convenient. If you have a chicken and want some apples but the apple seller doesn't want any chicken you have to find a third or even fourth party to barter with. Too complicated. Money is much simpler.
    Bartering for silver is exceptionally simple and convenient. But, of course, you can't call that silver 'money' when you do it. You'll get arrested by the Federal Reserve's taxpayer-funded attack dogs.

    Quote Originally Posted by Zippyjuan View Post
    We tried competing currencies in the US. At one point there were over 3,000 different notes used in the US (most of them failed along with the banks who issued them) during the "Free Banking Era" in the mid 1800's. Jackson got rid of the Central Bank and allowed States to do what they wanted. It didn't go very well. It was too confusing and values were uncertain so people decided they wanted just one currency.

    https://thismatter.com/money/banking...ing-system.htm
    But the currency they wanted was not the central bank's constantly shrinking funny money. If they had wanted to keep using that crap, Jackson would likely never have won the election.

    Currencies competed, and gold wound up being the overwhelming favorite. It handily beat the central bank's fiat funny money. How is that a problem?

    You just don't like competition and freedom. But since you work for the Federal Reserve, which has a federally-legislated monopoly to provide the whole nation with an inferior product, I can't say I'm surprised.
    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

    'Well, you can get no more liberty than you give.'--Will Rogers

  7. #35
    Quote Originally Posted by acptulsa View Post

    Are you even going to acknowledge that currencies can and do compete? Are you even going to admit that people could still find a way to trade with no official currency at all?
    Who came up with the idea for competing currencies?

    That same person also said this in the Constitution of Liberty. Just saying.

    It is only natural, therefore, that some people should feel it would be better if governments were deprived oftheir control over monetary policy. Why, it is sometimes asked, should we not rely on the spontaneous forces of the market to supply whatever is needed for a satisfactory medium of exchange as we do in most other respects?

    It is important to be clear at the outset that this is not only politically impracticabletoday but would probably be undesirable if it were possible.
    Perhaps,if governments had never interfered, a kind of monetary arrangement mighthave evolved which would not have required deliberate control; in particular,if men had not come extensively to use credit instruments as money or closesubstitutes for money, we might have been able to rely on some self- regulatingmechanism.1
    Competing currencies is a fine idea. I think it makes sense to have the option available. In practice it would have had no influence on monetary policy in recent times or in the near future.

  8. #36
    Quote Originally Posted by Krugminator2 View Post
    Competing currencies is a fine idea. I think it makes sense to have the option available. In practice it would have had no influence on monetary policy in recent times or in the near future.
    It would only have had to influence the 'monetary policies' of individuals to have cut down the bleeding of the middle class.

    And truth be known, stripping the Fed of monopoly status could have gone quite a long way toward reigning in this out of control federal government, as the Fed enables them.
    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

    'Well, you can get no more liberty than you give.'--Will Rogers

  9. #37
    Quote Originally Posted by acptulsa View Post
    It would only have had to influence the 'monetary policies' of individuals to have cut down the bleeding of the middle class.

    And truth be known, stripping the Fed of monopoly status could have gone quite a long way toward reigning in this out of control federal government, as the Fed enables them.

    I didn't even include the best part. Somebody seems to have taken the whiteout to Hayek's views on money. I just started reading the Constitution of Liberty last week. I guess it explains why the Mises Institute just memory holed Hayek.

    The first of these facts makes money a kind of loose joint in the otherwise self- steering mechanism of the market, a loose joint that can sufficiently interfere with the adjusting mechanism to cause recurrent misdirections of production unless these effects are anticipated and deliberately counteracted.

    These spontaneous fluctuations in the supply of money can be prevented only if somebody has the power to change deliberately the supply of some generally accepted medium of exchange in the opposite direction. This is a function which it has generally been found necessary to entrust to a single national institution, in the past the central banks.

    Even countries like the United States, which long resisted the establishment of such an institution, found in the end that, if recurrent panics were to be avoided, a system which made extensive use of bank credit must rest on such a central agency which is always able to provide cash and which, through this control of the supply of cash, is able to influence the total supply of credit. There are strong and probably still valid reasons which make it desirable that these institutions should be independent of government and its financial policy as much as possible.
    It doesn't sound like Hayek would be on the Audit the Fed train.
    Last edited by Krugminator2; 02-25-2018 at 09:01 PM.

  10. #38
    Even countries like the United States, which long resisted the establishment of such an institution, found in the end that, if recurrent panics were to be avoided, a system which made extensive use of bank credit must rest on such a central agency which is always able to provide cash and which, through this control of the supply of cash, is able to influence the total supply of credit. There are strong and probably still valid reasons which make it desirable that these institutions should be independent of government and its financial policy as much as possible.
    And when has that ever happened? When has control of the money supply prevented corrections? When has it ever lessened their severity? Have we not had depressions since 1913 which have been more severe and longer-lasting than anything we had before--or, at least, anything we had since the Civil War?

    From what I can see, bubbles get blown which do delay the inevitable, but do not prevent it, and certainly do not lessen the severity. In fact, that in fact, the interference deepens the depression and delays proper recovery.
    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

    'Well, you can get no more liberty than you give.'--Will Rogers

  11. #39
    Quote Originally Posted by acptulsa View Post
    Have we not had depressions since 1913 which have been more severe and longer-lasting than anything we had before--or, at least, anything we had since the Civil War?
    My point is I have no idea what the correct monetary policy is and I don't think anyone else knows.

    I think it is amusing that if Hayek said that kind of stuff today, he would get called all sorts of names by certain quarters.

  12. #40
    Quote Originally Posted by acptulsa View Post
    And when has that ever happened? When has control of the money supply prevented corrections? When has it ever lessened their severity? Have we not had depressions since 1913 which have been more severe and longer-lasting than anything we had before--or, at least, anything we had since the Civil War?

    From what I can see, bubbles get blown which do delay the inevitable, but do not prevent it, and certainly do not lessen the severity. In fact, that in fact, the interference deepens the depression and delays proper recovery.
    No money system prevents corrections or recessions or bubbles. Not a central bank. Not a metal standard. Not competing currencies. None has prevented there from being different classes of individuals financially. The US has had them pretty regularly throughout our history. However, the percent decline in GDP as a result of them has gone down. Since the Great Depression, we only twice saw GDP fall by more than 5.1%- and those were in 1937-38 and 1945. Prior to that, the declines were nearly all double digit- some over 30% declines.

    https://en.wikipedia.org/wiki/List_o..._United_States



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  14. #41
    Quote Originally Posted by Zippyjuan View Post
    No money system prevents corrections or recessions or bubbles. Not a central bank. Not a metal standard. Not competing currencies. None has prevented there from being different classes of individuals financially. The US has had them pretty regularly throughout our history. However, the percent decline in GDP as a result of them has gone down. Since the Great Depression, we only twice saw GDP fall by more than 5.1%- and those were in 1937-38 and 1945. Prior to that, the declines were nearly all double digit- some over 30% declines.

    https://en.wikipedia.org/wiki/List_o..._United_States
    Of course the GDP doesn't appear to decline. It isn't adjusted for devaluation of the currency in which it's measured.

    Of all the Fed Hyperbole, that is the most ridiculous. Put up with getting your wages and savings devalued because all the indices just keep going up. Watch those numbers go up! GDP, the Dow, nominal wages--wheeee! Watch those numbers get bigger! Keep adding zeroes! Who cares what the real values are? Turn it up to ELEVEN. WHEEEEEEE!!
    'I prefer someone who burns the flag and then wraps themselves up in the Constitution over someone who burns the Constitution and then wraps themselves up in the flag.'--Molly Ivins

    'Well, you can get no more liberty than you give.'--Will Rogers

  15. #42
    "Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
    "War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.

  16. #43
    More than 7 million Americans are at least 90 days behind on their auto loans

    ... household debt rose by $32 billion, or 0.2 percent, to $13.54 trillion in the fourth quarter. That's $869 billion higher than the crisis peak of $12.68 trillion and is 21.4 percent above the post-crisis low point in the second quarter of 2013.
    Student loan debt edged higher to $1.46 trillion while credit card balances rose to $870 billion, right around their crisis peak. ...
    "Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
    "War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.

  17. #44
    U.S. Student Debt in ‘Serious Delinquency’ Tops $166 Billion Alexandre Tanzi February 16 2019, 7:01 AM February 17 2019, 6:56 PM (Bloomberg) --

    Student-loan delinquencies surged last year, hitting consecutive records of $166.3 billion in the third quarter and $166.4 billion in the fourth. ...




    "Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
    "War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.

  18. #45
    @AZJoe - As each of those charts shows a trend in rising, it also shows the cost of things going up, which means the purchasing power and the value of people as human beings going down.

    Zippy says "this Empire can never collapse" because no empire in history has ever collapsed before. No society could ever collapse. No civilization could ever collapse. Zippy promotes Doublethink. Sure it can happen elsewhere, just not to this empire / society / civilization. Zippy and his (their) writers of paychecks are the real danger to a survivable sustainable way of life.
    1776 > 1984

    The FAILURE of the United States Government to operate and maintain an
    Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

    The Elimination of Privacy is the Architecture of Genocide

    Belief, Money, and Violence are the three ways all people are controlled

    Quote Originally Posted by Zippyjuan View Post
    Our central bank is not privately owned.

  19. #46
    Quote Originally Posted by AZJoe View Post
    More than 7 million Americans are at least 90 days behind on their auto loans

    ... household debt rose by $32 billion, or 0.2 percent, to $13.54 trillion in the fourth quarter. That's $869 billion higher than the crisis peak of $12.68 trillion and is 21.4 percent above the post-crisis low point in the second quarter of 2013.
    Student loan debt edged higher to $1.46 trillion while credit card balances rose to $870 billion, right around their crisis peak. ...
    I would think by 45 days the bank would repo them .

  20. #47
    U.S. Student-Loan Delinquencies Hit Record







    Delinquent U.S. student loans reached a record $166 billion in the fourth quarter, according to a new report from the Federal Reserve Bank of New York. But here is the kicker, the NY Fed says, "delinquency rates for student loans are likely to understate effective delinquency rates” by about half. ...

    "Let it not be said that we did nothing." - Dr. Ron Paul. "Stand up for what you believe in, even if you are standing alone." - Sophie Magdalena Scholl
    "War is the health of the State." - Randolph Bourne "Freedom is the answer. ... Now, what's the question?" - Ernie Hancock.

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