I have something to say about currency

Normally I just attack theories.
I thought I should give others a chance,
by making one of my own, to attack my theory.

The history of currency is fascinating, long, and boring.
All at once, so let me cut out a tiny piece, and just assume
that every reader is fully versed on the entire history of currency.

My theory is that there _IS_ a conspiracy in America by the Fed, but
it is a conspiracy to do well. My instinct is that we will be more angry than
if the evidence supported a more nefarious intent, because if someone has to
form a secret conspiracy to do well by you, then by omission they are also admitting
that you couldn't be trusted with the information. Like a drowning man, sneak up behind them.


David Grouchy

So yeah...

Sir Isaac Newton
The British Gold Guinea
twenty plus years later the
British go onto a paper currency.

Newton issues a standardized gold coin that turns out to be a little over valued compared to silver. Of course the merchants paid all overseas bills with silver but tried to only accept gold for their goods. As a result silver flowed out of the country. Eventually a famine of silver coins developed.

The British went on a paper currency. The problem is that no government can figure out the market faster than the market itself. Currency speculators work across boarders. What is needed is a small group of financial types who's sole job is to value the currency. But this group would have to be completely immune to political pressure or influence.

Later when thirteen little colonies are forming their own government they too encounter the same problem. Currency goes through fluctuations and variations so intense that the entire history of America, up until the founding of the fed, can be called the "era of currency wars." With the post Civil War era being particularly nasty with the Confederate bills being equal to Counterfeit, or a high crime with prison time.

What was needed was an independent body, contracted by congress, to be the impartial referee and bring some sanity to currency valuation so that business wouldn't be randomly bankrupted by two Governors having an argument. Needless to say the State Banks didn't like any of this, and the consolidation of Fed power was not pretty because their was so much entrenched resistance.

What the Federal Reserve is doing, is charging interest on the money the government uses, so congress doesn't go crazy and just start throwing money around.

[heckled from the audience]

What do I think congress is doing now?

Well, they are borrowing tons of money from the fed at record low interest rates. Why isn't the fed raising rates to slow this down? Well... here comes the bad news. This is the point where we have to tell America they dropped the ball.

Why is all that money sitting in banks unloaned. Have you noticed we don't hear any stories about people with real ideas, and collateral, who can't get loans to start a new business. I feel that the Fed projected that the number of small businesses would grow proportionally with the population. But it has not. And it's not because of local legislation, as atrocious as that may be to starting a business, it's because this generation has no drive.

Look, the Federal Reserve was loaning money to the government at almost zero percent a while back. And no one was taking the money. Obama has been practically begging America to start businesses. I haven't even heard of one cookie shop opening up.

So here we are America. Ignore TV, and help the sitting president he may very well destroy the bankers, and set up something new. Or start a business. But belive me, it's as real as stacking one brick on another, do anything in between and this place is going to implode.

===========================================
Addenda:

In the seventies two brothers cornered the silver market. Prior to this move I remember a lot of publicity getting people to invest in silver, as precious metals are immune to inflation. It was said. A percentage of middle class America lost their life's savings when the silver was devalued and then gobbled up entirely.

In the post 2k world, there was a lot of publicity getting people to go online and invest in the stock market. The market always goes up, it was said. When the market crashed not only middle class America, but vast swaths of our institutions lost their savings, and then all the stock was gobbled up on the cheep.

In the nineties there was a lot of publicity getting people to invest in real estate, as property is immune to inflation. It was said. We still have no idea how many people this has ruined.

Hell in the eighties there was the savings and loan crash.

Currently a lot of people seem to be buying gold. I hope you actually have that gold, and didn't invest in it.

===========================================

Summary:
Invest in yourself, or back this president against the bankers.


Post Script:
For all you bible thumpers out there. The last thing to go before all the really bad stuff happens in revelations is the merchants stand far off and mourn. Been hearing a lot of business men in mourning lately?

freaking excellent...you are good.
i'm a proffessional currency account money manager and i see this as new math!...how cool. and the bible prophecy....yessirrr!

Yeah, that is all we need to do is create more debt as currency.

Sounds like a plan to me.

What I find ironic, the US dollar, without the tie to oil would be worthless and would have collapsed say 30 years ago.

As for innovation, you cannot grow a populace at the rate we have and not come to a point where the populace outruns the jobs.

What is the latest number of unemployed people right now? 10 million? 15 million? 20 million? 30 million?

At 9.6% I believe it is 10 million. So for the real numbers of 16-22% we have approximately what 17-24 million unemployed.

Hey, is there a country out there we could just ship them to. Heck, why don't we send them North, that is what Mexico did with all of their unemployed and misplaced workers?

Okay, getting out of the discussion.

Nope, the currency has lost 97% of its value.

Where did THAT value go? Can you tell me OP? I know where it went, do you?

With a 20$ gold coin in 1913 you could purchase a handcrafted suit.

What can you buy with that same 20$ gold coin now? A handcrafted suit.

How bout the same in US dollars, not so much.

Sorry, inflationary taxation is the HIGHEST tax we all pay. It is what fuels the spend spend spend spend attitude. Knowing that debt based currency you have now, will be worth less in a month or a year, so you have to spend it.

Any commodity based system of course requires asset saving and responsible FISCAL policy. That is why the ups and downs in the markets. Also with innovation.

Tell me, let us say I just created free energy. Tell me, what would THAT do to the market of human employment? Detrimental?

What you bring up on innovation does not have anything to do with the economic downturn. We cannot continue to expand exponentially to drive demand.

In 40 years I have been around, we have gone from 198M to our current population of 317M.

Tell me, how long will it take for us to triple that? According to some charts, 90 years.

Now you brought up the population component. Here is the deal, according to figures given by the US census bureau, we have only gained approximately 2.5 million a year for the last 40 years. Have you seen the statistics on immigration and the illegal immigration numbers?

Kind of makes you go hmmmm. Almost as if it is correlative to the increase that we have seen in population growth. Is it also a sign of the increase in the economic troubles? I do not know, but maybe the increase could be a possible causal effect but only partially.

Debt cannot be a basis of a currency system though IMO.

reply to post by saltheart foamfollower[/url]
With a 20$ gold coin in 1913 you could purchase a handcrafted suit.

What can you buy with that same 20$ gold coin now? A handcrafted suit.

I agree with everything you say Foamfollower,
particularly this part. If one actually has the coin.
I think it would be worth more than one handcrafted suit.

You really nailed me on the 97% devalued, "where did it go" question.

...that... is another entire thread ... maybe a series,
I sudenlly feel tired, wow, good question. I think
I'll take a Greenspan on this one. He said that

"Wealth cannot be created without debt."

I'll do twenty rounds with you on that
another day, and will be confident
that you will see that there was
some small bit of genious
at work in the Fed.


David Grouchy

Originally posted by saltheart foamfollower
Nope, the currency has lost 97% of its value.

Where did THAT value go? Can you tell me OP? I know where it went, do you?

With a 20$ gold coin in 1913 you could purchase a handcrafted suit.

What can you buy with that same 20$ gold coin now? A handcrafted suit.

How bout the same in US dollars, not so much.

Instalment 1

This sentence is worded in such a way that it makes one feel as though they have been robbed of 97% of something, and no matter what I say, if I don't give it back they will not be satisfied with the answer. I'll invert the math,
just so I can speak on the subject in a way where the path doesn't suddenly end.

the currency has lost 97% of its value

Let me invert this number. This is the same thing as saying each dollar we have should be equal to 33.33 dollars of buying power, if there had been no inflation. [100 -97 = 03%] So where did the other 32.33 dollar go.

Well there are three times as many people in the USA as there were in 1913.

[color=gold]1913 97,225,000

[color=gold]2010 310,133,338

so lets adjust for the 3x population... I mean we don't want 2/3rds of the population walking around with access to zero dollars. How would they eat?

33.33 dollars divided by 3 = 11.11 dollars

So where did the other 10.11 dollars go.

Well here is a comparison of the GDPs from 1913 and 2009

[color=gold]1913 39,100
[color=gold]2010 14,237,200

14,237,200
/ 39,100
= 364.12

divided by the 3x population
364.12 / 3 = 121.37

In English that means our domestic product is 121 times more, per person, than it was in 1913. This means that we produce one hundred times as much, but our dollar has only had to be diluted by one tenth to cover all those purchases. Technically, and as you allude too if not for oil, our dollar should be worth about ten cents this day. Has the quality of our product also gotten 10x better in value? Then a dollar should only be worth 1 cent.

Which brings us to the issue of overproduction. Overproduction is how one creates poverty and drives out smaller businesses that can't compete in quality. Take YouTube for example. Massive, seemingly unlimited, quantities of high speed band width for free, with free access, and no obligations. What Internet entrepreneur could possibly compete with that. Let alone the quality of their flash animation code, I mean when does YouTube crash, if ever.

Just when a huge wave of graduates in Computer Science entered the market looking for a job, free user video streaming sprang from the brow of Zeus fully formed and obliterated all competition. Massive numbers of unemployed computer scientists haunt America. This is why it feels like the currency is broken. But the currency isn't broken, we are.



Here is a video of what this Generation was expecting.
This was made by the employees of Vimeo when
they launched the site. They were poised to
compete with YouTube on the basis of HD
quality video. They were slapped with
copyright infringement for this vid.
By the time they recovered
YouTube had HD video.
Vimeo still holds a
niche in the
Artists
world.


David Grouchy

reply to post by davidgrouchy


Well, I have been thinking on that inflationary taxation for over 2 years now. Went to college for business admin so had a few economics courses.

Funny how they never really got into fractional reserve banking, currency manipulation and the like.

Anyway, this is the conclusion I have come to. Yes, most of the inflationary costs went back into the economy. BUT, of every dollar traded, the originator of the debt vehicle, gets a penny. Everyone of them debt dollars being spent. Oh not much when you are talking just individuals, but millions of individuals?

I tried writing up a flow chart of this and it just gets so convoluted, it is hard to follow.

Yes, using debt currency created by signature probably was a boon to the economy and allowed it exponential expansion. BUT, there comes a time when the expansion cannot be maintained and a better or more stable currency needs to be examined.

I went over this in another forum probably about a year ago. If a bank can supply a person with currency that is debt based in nature, by only a signature, why cannot this go to the next evolutionary step? Remove the banks, what do they do anyway? Nothing right?

Kinda like going back to the credit sticks of old while adding the new debt based currency of today.

Still working on that theory in my mind. Something like you are born with $8 million of available credit for your life. You are allowed to use that credit yourself. Kinda the opposite of what some conspiracy theorists say the Fed does with our BC's. Only let the individual do it, not the collective.

Like I said, still working out the kinks on that idea.

David Grouchy

Fascinating stuff and I think quite believable as well...

I'm guessing that you are involved in the 'markets or currencies' so what should a man do now to protect himself from the coming storm if he holds cash ?

Regards

PurpleDOG UK

I do remember something from the Great Depression.
There is one specific type of old school stock that pays dividends.
People who still had this stock after the depression did very well, oh and
they got to enjoy the small dividends they got annually when every penny counted.
Unfortunately I have never heard of this kind of stock being availiable online. Get the certificate.


David Grouchy

reply to post by davidgrouchy

Well here is a comparison of the GDPs from 1913 and 2009

1913 39,100
2010 14,237,200

14,237,200
/ 39,100
= 364.12

divided by the 3x population
364.12 / 3 = 121.37

In English that means our domestic product is 121 times more, per person, than it was in 1913. This means that we produce one hundred times as much, but our dollar has only had to be diluted by one tenth to cover all those purchases.

Doesn't mean that we produce that much more, but that we pay that much more. Hence the lost value of the dollar

Originally posted by jlafleur02
Doesn't mean that we produce that much more, but that we pay that much more. Hence the lost value of the dollar

Sort of, yeah, but not
in the proportions one thinks.
We have one hundred times more,
our dollar should be diluted by a hundred,
yet it is only diluted by 10. Effectively the consistent
management of the Federal Reserve has made our dollar
ten times stronger than it should have been, and instead of
depressions our erratic congress should have gone bankrupt.
But it didn't cause the Fed can lightly apply the breaks, or gently
accelerate depending on how they evaluate the value of American policy.

By setting interest rates to near zero, the Fed was saying to congress, 'this
is so dumb, that I can floor it and the car will go absolutely no where at all. Ever.

The interest rate the Fed charges is like changing the acceleration on a high
speed object. Take a tennis ball. The Fed can hit the ball back a little
harder, a little softer, with a little top spin just like an olympic pro.
Lately our government, I feel they are influenced by wall street,
has been hitting tennis balls out of bounds, giving the Fed
nothing to return serve with. In fact they look a little
undignified running around after the ball. It's on
their side now after all. Maybe Wall Street
wants to crack the Fed, so they can
over see that too. Me, I'd feed
the Wall Street Bankers to
The president, and call
Fault on them. The
Fed I would give a
commendation.


David Grouchy

I just wanted to bump this thread that I started 2 years ago.

The information seems to still be relevant, and
people have had time to develope new criticisms; which I would like to hear.


David Grouchy