Fiat Money Or Gold Standard?

The actual problem is the lobbist.

If the big three (or two) collapses....so do thier lucrative one sided union labor contracts. the union can not let this happen. And basically had an ad campaign that states this should not happen......what this is...especially to the auto makers when this is nothing more than than a market adjustment....could they go under? yes, should they go under? yes

Will thier be people out of work yes......but did these or how much did these people contribute.......?

Jobs wouldn't be lost, why because the job market never was there in the first place. And the actual jobs that these markets supported that was there before, will still be there after. Only under a different corporate name......probally non union.

phoenix911

Why blame just the union, I read a report awhile back that labor costs for a ford f150 is only 1% of the cost to make the truck. If the union was to blame for everything that figure should be higher.

I am union yes but I do not work in the auto trade, the non union shops charge the customer the same rates as the union shops. The non union shops pay about 1/3 to 1/2 of what I make entire package. Who is making the money the owners, and with the big three who are the owners the stockholders.

now to get back on topic the fiat currency is goingto be our downfall, most people in the US and most likley in the world think that the Federa; Reserve is part of our goverment, its not it is a private owned bank. For which our goverment pays them a fee to print the dollar.

We as in the goverment need to go back and start printing our own money and stop doing business with this bank.

Who's blaming the union, they are only doing whats currently legal......1% cost to make the truck. I like to see that report. How does that stack up with the competition and what was missed. Does that include benefits... wow. While your looking for the union label on that shirt.....thats made in Pakistan. Your world is in jeopardy. How's that go.....Rome burns, as Nero fiddles.

To correct this...its not a simple cut with a hatchet, as you like to think. The problem evolved. and is alot more complicated to do that. The union is only a part of it, but a big part and a very good example.

the non union shops charge the customer the same rates as the union shops.

The union when they get a contract. they job out to ..........other union shops. Even when non-union shops can built it cheaper.......example.

Lambeau Field renovation in Green Bay, Non union shops were so restricted by the controlling Union contracts, it did not make it pay.

On a another contract, a company that supplied cement, actually went union to get work. Hard to believe that union won that contract. But they knew, thier existance depended on it, And their existence does mean the best interests of the actually union worker.

I worked only in 2 union shops.....one that now is non existance.....but the union saddled the owner with union pensions. And the owner is responsible.

And the other. the union when on strike, (an illegal one at that) after the employees found out, where ALL employees except one crossed the line. That one employee that held his ground...he's still at the union hall, picking up work here and there.

As far as printing our own money.......Andrew Jackson who set up the Federal Reserve.....I feel was a lot smarter man than you or I, and I think you should not how they say "throw out the baby with the bath water."

Instead, stop the corruption that is occurring in Washington. Where the union lobbyists and people like the union lobbyist such as the pharmaceuticals, financial institutions attorneys, contractors....ect... start capping their influences in Washington.

correction I lift out a very important word.

And their existence does NOT mean the best interests of the actually union worker.

I guess "fiat" money is at the root of our money problems. Without it there would be no money problems because no one but a few rich folks would have any money. A return to a gold standard would mean that there would be only as much money as there was gold to back it. And there simply isn't enough gold to back the amount of money in circulation needed to run a modern economy.

No money; no money problems. No more ATM's, no more credit scores. Nothing but a barter system. Last week you were paid in potatoes, next week it'll be a bag of flour and a pile of of firewood.

In case you guys haven't noticed the banks that got all that bailout money are now chafing at the bit to pay the federal government back now that the change in the accounting rules has saved them. So I'm not sure the "fiat" money is a real problem anymore.

How much has the federal bailout of GM and Chrysler to do with this? The amount is about in the same range as what Bernie Maddoff stole. Anyway that one is playing out for Chrysler this week and GM's time is coming for a very likely bankruptcy reorg.

If you really love gold invest in it. The guy on TV last night said it's going to 3000.

Ed Weldon

The real problem with Fiat money is that the system is not controlled, or owned by 'us'. and... it is not equal to the value of the GNP. The difference is inflation, and it is that which puts 'us' running ever faster on the hamster wheel.

IF it was equal to the GNP, and IF it was a stable system, serving the public, then maybe it would be okay. In its current implementation, it serves evil purposes. The current system sucks the lifeblood out of the public, and accumulates economic power in the hands of the owners.

Value and Resources are NOT limited. If gold is an insufficient standard, then there are other ways of determining value. Value is that which serves the greater good. Fiat money does not.

Chris

Chrisq -- "then there are other ways of determining value."

Seriously, Chris. Got any suggestions? Right now all we've got is the "Full faith and credit of the United States government".

Land? Trouble is that the value of land and most everything else varies around too much.

Today Financial talk show host Bob Brinker and an economist type he was interviewing agreed that several months ago the "Atlas" holding up the entire world financial system from collapsing was the lonely FDIC underwriting of all USA bank deposits under $250K.

Ed Weldon

Hi Ed... first.. its a G, not a Q in my name.

Second, as for suggestions, let's tie it to GNP/GDP. The GNP is a number that represents all the VALUE created in a given year. That is what money is supposed to represent anyway! The problem is that when the Fed, or Bank of Canada, or any Central bank issues money, they are picking a number out of their ass, and saying this is what the GNP will be NEXT year, and therefore will represent the amount of money in circulation then! This is a decrease in the spending power of the currency before it is spent! At least you can't do that to a hard currency

The people do not own the Fed! so change that. The inflation scheme does not serve the people. So change that. And it is not a wholly unreasonable idea to reduce the amount of money in circulation by 3 trillion dollars. That will end the recession instantly. Most of the money is electronic anyway.

The type of inflation we experience is an invention of the Central Banks. Doesn't that make you feel ill? It does me! I don't agree with it.

Chris

Sorry Chris. I see what happened there. When I hit the reply button your name comes up in blue 6 point letters with an underline that covers the bottom of the lower case "g" so it looks like a "q".

I'm not sure GNP/GDP is a good choice. It's a lagging indicator that would make it a slow to respond to rapid onset events. Also it is at best a loose analog of intrinsic value of the nation, the variable being how much of it is immediate consumables that quickly lose value.

I could suggest the real property tax base as determined by local tax assessors. This is a big and broad number; but it also lags. It does have some self correcting properties. It would be quite resistant to outside tampering. The value of land is related to its productivity but the link is a bit looser than actually including some valuation of other means of production such population skills, personal property, intellectual property and monetary wealth.

Perhaps another basis for the currency would be the collected AGI reported on all Federal income tax returns each year. This is a very direct measure of the production (and therefore the intrinsic value) of the nation that essentially represents the collected wealth less the basic costs of maintaining the population and doing business (deductions). And it is very current given our practice of withholding taxes and quarterly estimated tax reporting, all of which goes right into the IRS computers.

Ed Weldon

Yes, you are right about the lag, but that would be a good thing because it would be the opposite of inflation. What purpose does inflation serve for the people?

Chris

Inflation serves three purposes that people see as useful. There are likely others that I've missed.

1. It makes the interest payments on their savings deposits go higher which most view as an income they can spend (even when discounted by income tax payments, perhaps the cruelest of all forms of income taxes).

2. It means that the money they have borrowed at fixed interest rates can be paid back with lower value money in the future assuming their incomes also rose proportionately with inflation.

3. People on inflation adjusted payment systems like to see their increased payment amounts.

Ed Weldon

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

Yes, inflation makes the numbers look good but it reduces the purchasing power of most people.

You have more dollars in your pocket but buy less with them.

This is why inflation is the taxation method preferred by governments. Ignorant people (almost everybody) don't complain. But at the end, inflation caused by over printing of money transfers your hard earned wealth into the hands of the politicians who give it to their sponsors through fat contracts and bailouts.

I find it refreshing to see than many CR4 members are awake and have a good idea of what is happening. Way to go guys!

Now, while we are not likely to change the system in the near future, we can try to avoid being a victim by investing in solid values instead of fiat money. While real estate in general will be a bad investment for the next few years, there are other real assets that are interesting. Some gold or silver coins for liquidity, a farm or a place to produce food, an energy producer, a business that doesn't rely on cheap labor to survive, etc...

Choose something that grows in an inflationary environment because it is coming as soon as the velocity of money (peoples confidence) picks up. The central banks will not pull out all the money they injected in the system. MV will exceed PQ! (see my other post below #12)

Happy hunting.

No, Ed, this is a common canard - a true red herring, with which you cannot hope to cut down a weed, let alone the mightiest tree in the forest.

What those who have convinced you of this completely fail to see - or intentionally mean for you to believe - is that gold would stay at the same "price" no matter how many people it was divided out to serve. Somehow they actually attempt to "prove" there is "not enough" gold to go around, by pretending that the available gold would have to be divided by the Constitutional amount per dollar, and compare that to the currently existing number of Federal Reserve Notes. That is a patently fraudulent argument, as there is no way to compare the "intrinsic" value of an ounce of gold to the thin-air/paper-and-ink "value" of a note that is a Promise To Deliver...nothing.

Would there be enough gold if, for instance, an ounce of gold were worth $100,000 USD per ounce? Oh yeah...it probably would...and that fact is directly related to how long we've allowed this expansion of the number of paper FRN's (Federal Reserve Notes) - as opposed to U.S. Dollars, which are Constitutionally defined as a specific mass of gold or silver.

Any modern economy, including the entire world's worth of trade, could easily "run" on any fungible, dividable, rare commodity that is impossible (or extremely difficult) to counterfeit. In particular, the "real" basis for the currency could be held as it is now and something "representing" that commodity could be used electronically for trade.

That is, in fact, what we are now doing, but through the fraud of a "fractional" reserve that has been extended to "no" reserve. The argument is false on its face. And it also ignores the monetary value of the one other metal with both monetary history and industrial value - Silver.

When the United States went off the gold standard the dollar, the dollar worth indirectly tied to the production of the American worker.

When the Fed prints extra money, it is still worth goes down a proportional rate unless the productively of the average worker goes up the same amount.

Right now is the worse possible time to start printing more money, maybe we should decrease the amount of money printed as the productively falls.

When demand for goods is down, production will meet that demand, but there will be a time of adjustment. Our illustrious leaders have decided to make an artificial adjustment to try and short cycle the natural raise and fall.

We, the American worker, is getting a disservice, as we are getting a pay cut even though, for the most part, production has not gone down.

We, union, nonunion, or salary, have just had the shaft.

jsmart is on the trail of the problem methinks. How the economy got this way is in my opinion due to over consumption by the American Uber-Consumer. The Industry, backed up by Advertising, has so many people maxed out on credit, that there is no way to fill the gap between what is 'bought', and what is paid for. When all this electronic currency comes due, default and bankrupcy has the banks screaming for assistance. The analogy is like the fat lady at the supermarket, with a basket full of junk food, and paying for it with food stamps. Then the Govt. picks up her health care costs because she doesn't eat properly. What expensive toys do you have, that you bought on credit, hardly use, but is "nice to have"?

The Money crisis and the energy crisis have the same root cause. Over consumption and waste inherant in the mindset of the public. And the public points its collective finger at a bailout.

I agree....and I don't think your post should have been off topic.

And the Financial institution, is a Rather delicate institutions not to be played with by influenced politicians nor corrupt corporate executives

phoenix911

"And the Financial institution, is a Rather delicate institutions not to be played with by influenced politicians nor corrupt corporate executives"

GA, phoenix911. You are looking at the heart of the problem.

Ed Weldon

Speaking of brilliant economists.

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

Excellent! GA

I appreciated your post, and also appreciate this blog thread.

I have been trying to come up with new, and more fair sources of wealth so as to obviate pain for the honest working classes.

Credit Card interest, off book and on book accounting practices, off shore banking, out sourcing, and ultimately a divorce from either legacy valuations, come from gold, or productivity seem to have created Financial Market rules that were, or are, insane.

I hear we are to zero percentage CDs for example.

The printing of money recently has gone to the same institutions that have amassed oligopolist power not much challenged except at the fringes, even now with the supposedly new and improved administration.

In my struggle to figure what positive actions actually would mitigate what feels like an economic disaster to me. I have fastened on 2 things primarily.

Your opinion, and judgement will be taken into strong account.

One very controversial suggestion I believe of value for the greatest number of working people is The International Minimum Wage. Without it there is no brake on the race to the bottom on the part of International Corporations.

Apparently Dick Gephardt gave a speech endorsing the concept of an International Minimum Wage, a year before I myself came to the conclusion that it was called for.

My other suggestion, or concept, is that every citizen be awarded a "Whole Life Insurance Policy" at birth. This move is intended to put "labor" at some parity with "capital", and spread among the populace economic power, instead of the situation we have now seen where monolithic institutions such as AIG, get money to burn.

According to my theory, were individual citizens given monetary value for their lives and contributions to the country, able to compete better with the "haves", the nation, or whatever nation instituted such a system would be stronger.

I have not been able to complete an international precedent study to establish general equivalents in nations like Canada, or Sweden, The Netherlands, and am sure there are disadvantages.

Much of US dominance has come from a general unease, and culturally inculcated guilt over lack of means, and a driving motivation of fear and desperation.

The off book accounting tradition starting in the US as land was taken from the Native Americans is not much different in my view, than the Russian use of Serfs.

Wage Slavery is not unique in the world.

Just as the US has the State of LA, using a completely different system of laws from any other State, I see uniting with Russia as a State of the US Union possible, and of benefit.

Especially if the reconciliation and unification returned both to their great ideals come from the Civil Wars of both, as improvements, flawed, but at least neither Slavery or Serfdom are legal, in either, anymore. -Maybe that's three ideas? And what the hell, while I'm at it, how about reinventing the UN!

Here is an excellent article:

http://www.goldstocknews.com/articles/2009/0409-Coleman.html

I haven't read anything so comprehensive since I read "The Creature From Jekyll Island"... GA. More please.

Chris

Yes, GA from me too!

Between you and Marcot, and all, there are good points to chew on.

I have some experience being non union in a union dominated industry.

My experience did eventually influence me to regard the union members and workers in my particular industry, as worth their pay.

Now as a caveat I must say that the Unions I was competing with didn't want me till I took some of their jobs.

I had become skilled.

So there are differences between Unions composed of unskilled labor, and skilled labor that have impact on value for currency spent to produce any product or service.

Still a nation is not a business, and every citizen deserves a living wage.

Prior to Social Security, Medicare, and Unemployment insurance, not to mention the Minimum Wage, economic panics, depressions, recessions or whatever you want to call these events that cause real and general suffering to honest working people this nation was on the brink of revolution prior to WWII.

After WWII conventional economic theory predicted recession, but this did not happen because the Federal Government gave GIs the GI Bill. The educational grants given to GIs were comphrehensive, and I judge to have really more than anything else enabled US economic strength.

I'd suggest that in this economic crisis it would be of great benefit if all the currently unemployed were given "Educational Credits", they could either use at the school of their choice, or sell, as a unique currency.

Hell, I'd give 'em to the employed as well, to advance the market.

At end I feel strongly that government has only two main responsibilities: Defense and Education, but recognize Defense is as broad a duty in collective, as education may be individually specific.

You are certainly correct that education is one of the best way to improves one's life prospects. You still have to work at it even if you have many certificates.

Education of the working class is probably the only way the western society will compete against the low cost labor available elsewhere. We don't all need a university degree but if most unemployed person uses the "opportunity" to upgrade by one level, we will all be better off.

The day laborer will become a craftsman, the craftsman a designer, the designer of simple systems will make more complex ones.... Maybe even the politicians will learn to do something useful ;) One could hope...

Yes, not only the bureaucracy, but the hiarcy on how that skill is unitized is what I question........such as the restrictions in a union shop. don't pick up that broom to sweep up you area, that the sweepers job. So skill labor becomes unproductive waiting for the sweeper to sweep out the area.

Loose example, but an example.

phoenix911

Dam good job there Sandman, GA. You should write a book, I'd buy a copy.

Where are you from anyway?

thank you Sandman,

for taking the time and addressing and even correcting the points with more details, enjoyed your post.

when in fault, I appreciate correction.

g.a. to you

phoenix911

The Fed RES borrowed yet to be paid future taxes to lend now. THAT IS THEY JUST PRINTED MORE! MR. GUY

http://www.youtube.com/watch?v=nzMURWASuJ0&feature=related

Here is a concise explanation

Enjoyed the vid nyappleboy. You may appreciate the Youtube vids by tryannyofsouls I fell across. They may turn up under Corrupt Banking Practices.

Still now I wonder what to do in the situation we are in now?

Would it be remotely possible or likely that the US would or could even return to the Gold Standard?

I have divided between Capital and Labor, and found Labor lacking.

Regardless of the valuation of land, or gold, or jewels, or art, those that have Tools, Jewels or Land, have collateral against which to borrow.

Labor does not much have this.

There are laws between nations that often seem to empower those with "stuff", more than those without it.

I am thinking of how multinational corporations can move money around, jobs around, and there are barriers that often inhibit the ability of labor to go where the work is.

In the case of Europe and the European Union I believe it is now easier for labor to follow work, than prior.

I do not know all the details.

In the case of labor that comes from Mexico to the US I have proposed that payroll taxes and the like paid to the US government by immigrant workers simply be divided between governments, and awarded as due the individual workers for government services shared by both nations.

Now I admit I am constantly attempting to imagine a fair world. If I got to be Ruler, President, King, or whatever I'd Like to be known as The Great Janitor.

Some of what goes on is an assault on the "Commons", facilitated by what I see as "Off Book" accounting, where the employers, and nations get to use people and things that they do not pay for.

We can truthfully only do so much with laws, or regulations, and if we are to really progress, knowing the spirit of the quest shall always be more important, than knowing the law.

Regardless of the valuation of land, or gold, or jewels, or art, those that have Tools, Jewels or Land, have collateral against which to borrow.

Tangible vs intangible

Phonix911 has a good handle on a key point

versitility & flexibility

There is still a basic inequity management generally make more than talent [the people who handle the money, seem to keep a more than fair share for themselves]

A sense of entitlement & the gift of gab [persausion] are the most highly valued skills.

There are laws between nations that often seem to empower those with "stuff", more than those without it.

The notion that a corporation should have protection equal to individuals is at the root of that bit. corporations have very few responsibilities, to anyone but return on investment [shareholders].

Some of what goes on is an assault on the "Commons", facilitated by what I see as "Off Book" accounting, where the employers, and nations get to use people and things that they do not pay for.

What is the "real value" of oil that is under public land [common]? or an old growth forest the takes eons to form?

The world is oriented towards short term goals & growth, why not spend tomorrows money, when there are seemingly no reprecussions, hey if you're a politician you need to do what's in your best interest today & hope everyone forgets or you can spin it to be a positive or someone else's fault. LOL

What we should do now is double down on innovation, increased efficency, the things we as a nation do best!

What economic system and disbursements will enable greatest innovations?

How will these innovations actually help US workers?

Currently one of the most powerful of Transformational products to have come along, computers, are not much made in the US.

The nature of the economy of the US had seemed to have devolved into finance, or financial ripoffs, and houses and cars.

You can individually be very versatile and flexible and find this is not particularly rewarded, or appreciated.

The expectation that people are rational in all matters is likely to disappoint.

When have nations, and peoples achieved great general shared good times?

What caused those times?

There are famous Laboratories like Edisons Menlo Park, and I remember hearing that some incredible number of Edison inventions were made in the US at a certain time.

Today any inventor would have anything for mass markets made in China, or Hong Kong.

Regardless of whether or not you feel Jesus was divine, he had a famous problem with the "money changers".

I read a book about religions called The Big Story, by John Loftin, and after reading how Muslims are not to loan at "interest", and Jews do, I went, gee, no wonder they have trouble living together!

These banks that put assets on their books of money they do not have in hand counting debts as assets that they know are way into fantasy world from past experience, and colluded with the Insurance Companies to float this fantasy, now all getting given to their institutions huge more lumps of money, in some expectation that they will give us any sort of stabilized currency, seem irrational to me.

What real program and policy will change things for the better?

I can think of nothing but radical reinvention of money, and what creates its value.

I do not think we can return to a time when there was no paper money.

I've ended up spending a good deal of time reading about John Maynard Keynes, and John Nash, with side to Lenin this day.

Since I didn't get into academia I could never really afford to go crazy.

This is not to say I haven't during some periods had bad episodes, and I admit I'm in one now.

Between Nash and Keynes, I end up falling toward Keynes, but see that as in other cases who is playing what game by what rules will flaw any perfections one set, may have, over another set.

Somewhere in Rochester New York, likely in a Landfill is a book I wrote called Tools Jewels and Land.

Sam Harris in his book The End of Faith did go so far as to say that a World Government was called for.

He also said there was evidence that just because you get only one life as certain, that does not mean that life has no spiritual value.

It does appear to me over and over that there are cases when people play the same games by different rules.

From my reading I feel Nash was attempting to explain this, while Keynes was focused more on some ideas that would work if generally added up by both the smart and the stupid.

The real thing is that money to be a fulfilled perfect idea made to paper or electronic still needs to be stable for the workers who cannot easily trade it on money markets.

The value of Gold has been discussed along with the value of silver as a basis for the valuation and standard value of printed dollars that were essentially all Bills, redeemable.

Let us do an experiment: Put 3,000 pounds of gold in a Learjet in Florida, and 3,000 pounds of Treasury Bond in another, and fly them to a Bank in Switzerland, and see who has the most purchasing power?

I propose this as an experiment without knowing the answer.

Otherwise at this point in my economic studies I have to think that Keynes is more right than others, knowing that he knew belief and facts are in conflict.