An excellent article explaining why an economic collapse is inevitable.

originally posted by: FamCore

originally posted by: Cobaltic1978
a reply to: liteonit6969

No more Boom and Bust - Gordaon Brown - 1999.

Nearly twenty years and one major recession later, 'No more Boom and Bust' is laughable.

It's strange how the wealthiest have become even wealthier, despite a recession. Yet, the poorest are the ones that have to pay.

And people who were advocating for Timewave Zero and 2012 have now moved that date to 2018. It's a perpetual Joke

They had to.... They dont have the guts to act, only to predict. They are just playing the opposite part of the table.
And here we sit as cats, watching the pingppong ball go back and forth.

originally posted by: FromRussiaWithLove
a reply to: liteonit6969

Solution is simple

Nationalise central bank and production of currency

China has an awesome model whether world wants to admit it or not

Or even simpler, make it a crime to acquire extreme wealth for personal interests.
The current end result with today's system is that those in the bottom will at some point litterally kill those at the top. And how can you blame them, I would even say you are obligated to act because those who gather extreme wealth are hurting far more people than they are helping.

originally posted by: Aazadan

originally posted by: Semicollegiate
The gold backed dollar kept the same value, 0% (zero) inflation from 1789 until 1917. The price of everything decreased over the 19th century.

Incorrect. The gold backed dollar suffered from quite a bit of inflation.

You don't know what inflation is. Gold backed money cannot be inflated. The amount of gold is always the same. Inflation means more dollars for the same amount of gold, which is not the gold standard.

At first there was the continental which ended up not being worth anything.

The Continental was not gold standard money, it was IOU money.

Then there was the USD which saw it's value destroyed in the Civil War.

Because it was no longer represented by gold. More money was printed than gold was owned to back it.

Then there was the Greenback which was entirely fiat and the most successful currency we've had as a nation.

The Greenback confiscated 100% of its value. Two Greenbacks equaled one Gold dollar unless the government made you take the tender at one to one.

Then the Greenback was outlawed

The Greenback was legal counterfeit that confiscated by legal tender laws.

and the USD lost almost all value in the 1880's and 90's banking collapse.

Banks collapse because they move away from the gold standard, that is, banks collapse because the print more money than they have gold to cover.

During that time period value was given to existing money by sucking excess dollars out of the system and instituting mass deflation in order to make existing money be worth something.

In other words, going back to the real gold standard, after the fraudulent banking practices had crashed the money.

It ended in absolute failure because artificial scarcity and limiting a money supply doesn't work.

The gold standard ended in order to "Make the World Safe for Democracy" in World War I because there wasn't enough gold in the world to pay for WWI.

The gold standard had nothing to do with any of the frauds that caused inflation.

The constant restraint on money production required to keep up the appearance of being on the gold standard was the reason that the dollar kept its value from 1790 until 1918.

originally posted by: Aazadan


The gold standard and fractional reserve banking are not mutually exclusive concepts. They are actually usually tied together. Additionally, fractional reserve banking has been in use since the 1650's.

A gold backed dollar is 20 grains of gold. Fractional reserve money is zero grains of gold.

The amount of land on Earth is fixed, that's what makes it such a good investment.

Said everyone for the decade preceding the housing collapse. Let me give you some free advice, whenever someone uses the above reasoning you know for 100% certainty that the commodity in question is in a pricing bubble.

Non sequitur, land is a good investment for that reason depending on the price.

Until of course, the population begins to expand at a rate less than that of gold production. At which time the amount of gold available per capita will begin to rise. Gold being indestructible can't be taken out of the economy, there is an ever increasing supply of the metal and that will remain true for as long as it continues to be mined. There is however a cap to it's demand, a cap on demand and an ever increasing supply is a recipe for a failed investment given enough time.

Ultimately the cap in on supply. The Earth has a finite amount of gold.

I don't have much interest in continuing this since I'm clearly not going to convince you and it's just going to be a circular debate but I'll give this one last shot for the benefit/entertainment of others who may be reading.

originally posted by: Semicollegiate
You don't know what inflation is. Gold backed money cannot be inflated. The amount of gold is always the same. Inflation means more dollars for the same amount of gold, which is not the gold standard.

Sure it can, the value of gold rises and falls just like any other commodity. When the value of gold falls (and it does at times fall), it purchases fewer goods just as a dollar that is inflated purchases fewer goods. Inflation is defined as a decrease in purchasing power of a particular commodity (usually currency), that happens all the time.

The Continental was not gold standard money, it was IOU money.

The two are not mutually exclusive. Unless your currency is literally made up of the item in question so that it always has a melt value, then all money is IOU money. Do you know why we don't do that with money though? It's because it means the GDP of society can never be higher than the value of precious metals and that's a recipe for mass poverty. Also IOU money as you put it is quite natural. If I offer to do 2 hours of labor for you in exchange for something, that's an IOU, money is nothing more than a numerical system to track the different valuations of different types of labor.

Essentially, gold is a commodity and that naturally makes it a poor medium of exchange. Hours of labor however make for a very good medium of exchange because they aren't a physical commodity.

The Greenback confiscated 100% of its value. Two Greenbacks equaled one Gold dollar unless the government made you take the tender at one to one.

The Greenback confiscated no value because money inherently has no value beyond the labor you can redeem with it.

Banks collapse because they move away from the gold standard, that is, banks collapse because the print more money than they have gold to cover.

The gold standard was in place at this time.

originally posted by: Semicollegiate
A gold backed dollar is 20 grains of gold. Fractional reserve money is zero grains of gold.

All currency can be exchanged for 20 grains of gold, whether it's using fractional reserve principals or not.

Non sequitur, land is a good investment for that reason depending on the price.

Actually, it is not. The entire population of the world could each be given several acres of land and fit inside the habitable areas of Canada+Mexico combined, leaving the rest of the world empty, and that's before you get into using vertical space. There is a lot of available land, and that isn't going to change. Additionally, the amount of gold is not fixed because before we ever hit a peak gold production we are going to be mining asteroids made of the stuff. On top of that nuclear transmutation is possible, it just doesn't make economic sense at the moment.

Ultimately the cap in on supply. The Earth has a finite amount of gold.

See above, there is a near infinite supply of gold. The only part that is finite is the amount that can be produced each year.

originally posted by: Semicollegiate

originally posted by: Aazadan


The gold standard and fractional reserve banking are not mutually exclusive concepts. They are actually usually tied together. Additionally, fractional reserve banking has been in use since the 1650's.

A gold backed dollar is 20 grains of gold. Fractional reserve money is zero grains of gold.

The amount of land on Earth is fixed, that's what makes it such a good investment.

Said everyone for the decade preceding the housing collapse. Let me give you some free advice, whenever someone uses the above reasoning you know for 100% certainty that the commodity in question is in a pricing bubble.

Non sequitur, land is a good investment for that reason depending on the price.

Until of course, the population begins to expand at a rate less than that of gold production. At which time the amount of gold available per capita will begin to rise. Gold being indestructible can't be taken out of the economy, there is an ever increasing supply of the metal and that will remain true for as long as it continues to be mined. There is however a cap to it's demand, a cap on demand and an ever increasing supply is a recipe for a failed investment given enough time.

Ultimately the cap in on supply. The Earth has a finite amount of gold.

You appear to be confusing fiat currency with fractional reserve banking. A gold standard in no way stops or even hinders reserve banking,

Just to show its not a political thing here is a libertarian explanation

www.libertariannews.org...

originally posted by: ScepticScot

originally posted by: Semicollegiate

originally posted by: Aazadan


The gold standard and fractional reserve banking are not mutually exclusive concepts. They are actually usually tied together. Additionally, fractional reserve banking has been in use since the 1650's.

A gold backed dollar is 20 grains of gold. Fractional reserve money is zero grains of gold.

The amount of land on Earth is fixed, that's what makes it such a good investment.

Said everyone for the decade preceding the housing collapse. Let me give you some free advice, whenever someone uses the above reasoning you know for 100% certainty that the commodity in question is in a pricing bubble.

Non sequitur, land is a good investment for that reason depending on the price.

Until of course, the population begins to expand at a rate less than that of gold production. At which time the amount of gold available per capita will begin to rise. Gold being indestructible can't be taken out of the economy, there is an ever increasing supply of the metal and that will remain true for as long as it continues to be mined. There is however a cap to it's demand, a cap on demand and an ever increasing supply is a recipe for a failed investment given enough time.

Ultimately the cap in on supply. The Earth has a finite amount of gold.

You appear to be confusing fiat currency with fractional reserve banking. A gold standard in no way stops or even hinders reserve banking,

Just to show its not a political thing here is a libertarian explanation

www.libertariannews.org...

How is unprosecuted fraud the fault of the gold standard?

The first instances of fractional reserve banking came into existence when banks began issuing more receipts for bullion than they actually had in reserve.
www.libertariannews.org...

a reply to: Aazadan

money inherently has no value beyond the labor you can redeem with it.

Money facilitates trade. Things traded away are extra things, that is, surpluses. Money has value from surplus.

A farmer grows enough food for his needs. The extra food the farmer has grown is traded for money. At some future time money is traded for food. Money is based on the surpluses generated by human action.

When enough surplus food is grown, and not before, civilization begins. Each person in civilization has all of the time in his life to do what he pleases. Since he would prefer not to die, he trades some of his surplus time for money. But the value of his money depends on what surpluses other people have created, either alone or in companies.

Sure it can, the value of gold rises and falls just like any other commodity.

The value of gold rises and falls because the amount of fiat currency changes. Gold itself is always worth about the same, as it is just plain gold, all of the time. Tying the dollar to gold, as in, every dollar has a one to one correspondence with some specific fixed amount of gold, eliminates inflation and restricts investment to savings.

All booms and busts are caused by artificially induced credit. Excess credit encourages risky or just plain bad investments. When enough resources get assigned to bad investments, away from genuinely demanded production, the economy busts. Additionally, excess credit becomes depended on, like an addiction, to the extent that reduction of credit causes busts, like withdrawal disease.

a reply to: Semicollegiate

You still seem to be confusing the two.

You can have a fiat currency with or without fractional reserve banking.

You can have a commodity based currency with or without fractional reserve banking.

You can argue for or against them both but they are not the same thing.

originally posted by: ScepticScot
a reply to: Semicollegiate

You still seem to be confusing the two.

You can have a fiat currency with or without fractional reserve banking.

You can have a commodity based currency with or without fractional reserve banking.

You can argue for or against them both but they are not the same thing.

All fractional reserve currency is fiat currency. Fractional reserve currency has no direct one to one correspondence to actual physical material property. That is why bank runs happen. Banks issue money that has nothing to exchange for it.

Fiat currency, that is not simply a way to monetize debt, assumes that someone knows exactly how much money should be in circulation under all circumstances. The fractional reserve fudge factor covers for the lack of knowledge, the impossibility of knowledge, so in practical usage, fiat money is always fractional reserve money.

originally posted by: Semicollegiate
All fractional reserve currency is fiat currency. Fractional reserve currency has no direct one to one correspondence to actual physical material property. That is why bank runs happen. Banks issue money that has nothing to exchange for it.

Fiat currency, that is not simply a way to monetize debt, assumes that someone knows exactly how much money should be in circulation under all circumstances. The fractional reserve fudge factor covers for the lack of knowledge, the impossibility of knowledge, so in practical usage, fiat money is always fractional reserve money.

I give you an IOU for 7 hours of work in exchange for you fixing my roof. This is fiat currency, you can then exchange that IOU to anyone else who will accept it for another good and let them redeem it. It however is not fractional reserve currency.

originally posted by: Semicollegiate

originally posted by: ScepticScot
a reply to: Semicollegiate

You still seem to be confusing the two.

You can have a fiat currency with or without fractional reserve banking.

You can have a commodity based currency with or without fractional reserve banking.

You can argue for or against them both but they are not the same thing.

All fractional reserve currency is fiat currency. Fractional reserve currency has no direct one to one correspondence to actual physical material property. That is why bank runs happen. Banks issue money that has nothing to exchange for it.

Fiat currency, that is not simply a way to monetize debt, assumes that someone knows exactly how much money should be in circulation under all circumstances. The fractional reserve fudge factor covers for the lack of knowledge, the impossibility of knowledge, so in practical usage, fiat money is always fractional reserve money.

Sorry but that is simply wrong, Gold Standard and fractional reserve banking would only be mutually exclusive if the entire money supply was cash.

Equally it is possible to an entirely un-backed currency that can be regulated to a fixed supply (bitcoin).

You have pointed out in your post why fractional reserve banking is good for an economy, the supply of money in an economy is best determined by the demand for money not by some arbitrary set amount either by government decree or supply of gold or other commodity.

originally posted by: ScepticScot

originally posted by: Semicollegiate

originally posted by: ScepticScot
a reply to: Semicollegiate

You still seem to be confusing the two.

You can have a fiat currency with or without fractional reserve banking.

You can have a commodity based currency with or without fractional reserve banking.

You can argue for or against them both but they are not the same thing.

All fractional reserve currency is fiat currency. Fractional reserve currency has no direct one to one correspondence to actual physical material property. That is why bank runs happen. Banks issue money that has nothing to exchange for it.

Fiat currency, that is not simply a way to monetize debt, assumes that someone knows exactly how much money should be in circulation under all circumstances. The fractional reserve fudge factor covers for the lack of knowledge, the impossibility of knowledge, so in practical usage, fiat money is always fractional reserve money.

Sorry but that is simply wrong, Gold Standard and fractional reserve banking would only be mutually exclusive if the entire money supply was cash.

Arithmetic deals with dollars in accounts. The bank keeps the gold, as would a storage area (does a storage area rent out your stuff?) checks and credit card money would always have gold backing them. The banks would probably charge a fee per check or monthly rate. Or an entrepreneur like pay pal could facilitate transfers without a bank, keeping track of the gold all of the time.

Equally it is possible to an entirely un-backed currency that can be regulated to a fixed supply (bitcoin).

Bitcoin is money, in the sense that value is traded for every coin. The value of bit coin could go lower than gold though.
Bit coin could go to zero, gold will never go to zero.

You have pointed out in your post why fractional reserve banking is good for an economy, the supply of money in an economy is best determined by the demand for money not by some arbitrary set amount either by government decree or supply of gold or other commodity.

In a gold economy the value money and everything else is determined solely by demand. In a fiat economy the person(s) in charge of the money determine the value, which historically, always means inflation and the boom and bust cycle.

a reply to: Semicollegiate

What you are describing isn't the gold standard its banning reserve banking. Even if the dollar is linked to a fixed amount of gold and gold has to be held as a physical deposit there is nothing to stop banks extending credit beyond the level of gold reserves they hold the same way they always have. What you are actually proposing is that the government regulates the amount of broad money in the economy rather than control the amount of narrow money as it does now. It always strikes me as strange that libertarians who are so anti government in all other things would trust such an important economic power to the state rather than letting the market decide how much money is required.

It terms of gold the vast majority of its value comes from the fact that people see it as having value. In this way it is little different from a fiat currency. It has some industrial uses for which we pay too much for because its value is artificially inflated by speculation and historical value.

It is also worth pointing out that the world economy has done far better since coming off the artificial constraints of the gold standard.

As i have been reading these articles for decades now I think these type of threads should really be in the dreams and predictions forum.

originally posted by: Semicollegiate
Bitcoin is money, in the sense that value is traded for every coin. The value of bit coin could go lower than gold though.
Bit coin could go to zero, gold will never go to zero.

There was a time where salt was worth more than it's weight in gold. Hows that working out today? Gold can lose a lot of value.

a reply to: Aazadan

The entire population of the world could each be given several acres of land and fit inside the habitable areas of Canada+Mexico combined, leaving the rest of the world empty, and that's before you get into using vertical space.

I get your other arguments but not this one. No one wants to live in a space where there is no access to water (desert). That removes much of the the desert areas of Mexico as habitable. And that removes much of Canada for reasons that few crops will grow up there in large swaths of Canada. Also, some people want to have their own garden.

But for your reasons of visualization, I get why you mentioned those 2 countries.

originally posted by: bulrush
I get your other arguments but not this one. No one wants to live in a space where there is no access to water (desert). That removes much of the the desert areas of Mexico as habitable. And that removes much of Canada for reasons that few crops will grow up there in large swaths of Canada. Also, some people want to have their own garden.

But for your reasons of visualization, I get why you mentioned those 2 countries.

I was just trying to convey the space requirements, it would require a lot of geoengineering for those locations to actually be habitable. For people in the US though that's an easier description than if I listed a bunch of tiny European countries together that come out to the same physical area.

But for what it's worth, we can make crops grow almost anywhere. Industrial scale hydroponic gardening is amazing.

a reply to: Semicollegiate
Dude whats with all you religious people. Gold is just a metal like any other, its not even all that rare here on earth as people seem to think. And whats more like some have said, gold has fluctuated up and down a lot. I dont know were you get this whole gold has stayed the same from.

Not only that like I said in my other post, yes you can make gold as well as its not really all that impossible or even all that hard. Besides refining it from bacteria like the other post showed, yes you can make gold, all the technologies needed are here even today, just imagine something like the LHC particle collider and a fusion reactor and go from there, you would need some more raw materials like iron or lead, and you add some salt and pepper and your good.

Joking on the salt an peeper thing but it would not really matter what you put in that particular incubator anyways.

They already started making diamonds. So much so that I think diamond corporations and companies took it to the supreme court and got them to label lab grown diamonds as not real diamonds, but really there is little to no difference between them. Other then the fact that the diamond market would crash if it became over saturated with them and they were common...Well you get the picture, there protecting there interests. Gold is really not all that different.

I see what your problem is here. Its a problem all other religious people have. You seem to be under the impression that our global or any market for that reason is based on a specific item or matter. Its not, which is why like others have said at one point in time salt was worth more then gold was. And to tell the truth, what do you think would happen if all this time for all these hundreds of years we would be using a gold standard and not fiat money paper? Or how about just this century?

The answer is nothing much. Same things would ensue, only people would be going more bonkers for gold then usual, but pretty much all the wars or anything else for other resources would have happened, simply because its how our system operates, must feed the machine right? In fact fiat currency is one of the least destructive of ways. But leave it to humanity to somehow mess that up as well. It takes a special kind of something to fail even at that.

All of that does not say anything about whatever medium you use as a currency or use as world currency you could be trading in pickles for all that it mattered. Because the actual medium you are working with is not gold, or money paper, or silver, or digital currency 0s and 1s on computer screen, or any of it. What your actually working with is peoples minds in a ever changing and self molded system, both on a physical scale and on a metaphysical scale one ties in to the other in what you all call supply and demand. What I am saying is that the medium your working in, and that is what our global monetary system is working with and based on. Everything else is just there to impress with its shininess.

All the gold and paper is just there to entrap and hold it all together. Because well? You all and I mean every single one of us are a stickler for all them trappings now aren't ya...Bling Bling.

originally posted by: ScepticScot
a reply to: Semicollegiate

What you are describing isn't the gold standard its banning reserve banking. Even if the dollar is linked to a fixed amount of gold and gold has to be held as a physical deposit there is nothing to stop banks extending credit beyond the level of gold reserves they hold the same way they always have. What you are actually proposing is that the government regulates the amount of broad money in the economy rather than control the amount of narrow money as it does now. It always strikes me as strange that libertarians who are so anti government in all other things would trust such an important economic power to the state rather than letting the market decide how much money is required.

It terms of gold the vast majority of its value comes from the fact that people see it as having value. In this way it is little different from a fiat currency. It has some industrial uses for which we pay too much for because its value is artificially inflated by speculation and historical value.

It is also worth pointing out that the world economy has done far better since coming off the artificial constraints of the gold standard.

Banning reserve banking simply means prosecuting fraud. If a bank loans out more money that it possesses then its fraud.

The gold standard limits the amount of money, without any governmental action. The money is limited by the amount of gold.

Money that is fixed in amount gains value over time. Fiat money could do that, be fixed in amount, but the government could also balance the budget every year. Not very likely.

Since the gold standard was first adjusted to pay for WW1, the dollar has lost 95% of its value.