I'm a member of the Trilateral Commission so I'm really getting a ki+++++=======NO CARRIER=======+++++++

It'll be interesting to hear people griping about things in the near future, just because I'll get a kick out of reminding them that it is what they voted for. Then I'll pat them on the back and tell them to enjoy the win.

Yes, the majority of people get the government they deserve.

Enjoy it while it lasts, idiots!

He's still real to me!

If the gold standard was actually brought back, the country would shut down because we can't handle that much logic. Or maybe just the government would. Fine with me.

I voted for Paul two weeks ago. Suck it McHillbama, you pandering f*cks.

did someone say reverse vampires?

bhorvic: did someone say reverse vampires?

he's not in the bus, frylock, he is the bus

gayb: If the gold standard was actually brought back, the country would shut down because we can't handle that much logic. Or maybe just the government would. Fine with me.

I voted for Paul two weeks ago. Suck it McHillbama, you pandering f*cks.

care to explain how to transition into a gold standard, for all of us who dont understand logic?

Why do people buy into this gold standard bullshiat? Fiat money has allowed real control of monetary policy, which in turn has allowed nations to have profound effects upon their economies. When politicians push for the gold or silver standards, they are arguing for:

1) The abolition of our power to easily and effectively control the money supply. We would no longer be able to adequately moderate the market via monetary policy. This, for all you Paultards at home, would be really bad.

2) Massive deflation. The total price of gold is nowhere near the money base in the US, let alone the global economy. If we were to enact such a policy, the effects on the global economy would be bad, but the effects on the US would be worse. Most people here are net borrowers. Deflation is effectively a "tax" on borrowers. While this might help some sectors of the economy (banks would be helped, and this might be good during the current credit problems), a fall in aggregate demand is the exact opposite of good policy during a recession. This is what the gov't did during the Great Depression - raise taxes and interest rates, thereby hurting demand. Guess what it lead to?

Most criticisms people make of fiat money are either stupid or fixable. The "fiat money is worthless" argument is stupid because all money is worthless. Gold has little inherent value, most people only value it for what it can buy them. Indeed, suddenly changing money to something with inherent worth will really fark with the need for monetary neutrality.

If you're worried about monetary discipline, there are many different policies that can be placed upon central banks. Most European countries establish rules - don't allow inflation to get above X, etc. This would solve many problems, but probably isn't necessary. The Fed has generally shown itself to be fairly well-disciplined.

BetterThomas: he's not in the bus, frylock, he is the bus

He craves sunlight!

Also frowns on Paul's shenanigans

FTFA:Paul, author of Revolution: A Manifesto, Agreed that Obama offers a false "revolution" in that he speaks constantly of change but at the heart of it represents a continuation of the same political system.

As opposed to a continuation of the old, archaic political system, that Americans generally rejected a century ago.

FTFA:"If we have an Obama Presidency we're not suddenly going to have an ethical foreign policy, the same forces will still have their control." Paul commented.

We're also not going to suddenly have unicorns and magic fairies either. That doesn't make Obama a bad president, that just means that Obama will have to work within the reality of what the previous administration already created. Ron Paul seems to think that he's the sort of man who could build Rome in a single day, and he seems to criticize any candidate who can't promise the same thing. Unfortunately, Ron Paul hasn't really accomplished much of anything in ten terms of being a congressman, so the idea that he can suddenly fix all the problems that Bush created in a single day is a wee bit laughable.

FTFA:He went on to explain that the debate should not be over which of the three remaining candidates to pick, rather it should be over whether we want to continue to allow the politics they espouse to rule the roost or whether we want to change revert the country for the worse , restore completely misrepresent the constitution the way that Fred Phelps misrepresents the bible, and return to sound money. an archaic monetary that flat out doesn't work in a modern economy, which is the main reason why every nation in the industrialized world has since abandoned it.

FTFA:The Congressman also explained how the Republican Party is missing a trick not inviting him to the Convention because he could in effect "neutralize some of Obama's support."

So a vote for Ron Paul is a vote for John McCain? Thanks for clearing that up for us, Congressman.

FTFA: The Congressman also implored all his supporters to attend the rally in a dignified manner without looking for confrontation or resorting to other wild tactics.

Ron Paul has trouble keeping his own supporters in line, and yet he expects to be able to lead an entire country full of people who are ideologically opposed to him.

Stupid infowars.

And the control excercised over the monetary supply by central banks is never used to benefit any ordinary person; though they've gotten good at making it sound like they're trying.

To disarm the inevitable Ron Paul fellaters who will be along shortly screaming, "Why does everyone hate Ron Paul!!!!1!111!!!", I'll speak to that. For MONTHS before the primaries and for the first coupleof them, all people (and especially I, being on a college campus) heard from his supporters was "Ron Paul!! He's gonna win!! He's SOO sensible and his policies are bulletproof and strict contructionism and good money and blah blah blah!! Incessant!! Ad Nauseum!! Ad Infinitum!! If you don't like Ron Paul, you're ignorant, you hate America, and are a member of the Sheeple!! He'll win hands down, no doubt!!" His disciples supporters were so sure of themselves, so abrasive, so in-your-face about everything that it was sickening to watch. So now that Paul doesn't have a chance in hell and, while having some good ideas, has also been exposed has having some crazily bad ones (the "We the People" Act comes to mind), everyone, myself included, derives great joy out of gleefully rubbing those snotty little motherfarkers' faces in the fact that no one wanted to vote for their messiah. Some of what Paul said makes sense, and I might even have been able to live with myself voting for him. But every time I heard than panicky voice start up with that holier-than-thou tone, coupled with the insane cult mentality of the vast majority of his supporters, my brain screamed "whackjob"and tuned him/them out.

Meh.

Even if there was a massive conspiracy behind the Federal Reserve, it doesn't matter. Changes in the fed bank rate is akin to steering a very, very big ship in that you can see when they "move the rudder", and you know what's going to happen. If you think that they are turning in the wrong direction, you have lots of time to complain.

Besides, people want cheap money, even if it leads to a bubble. Because in their minds, buying a $250,000 home with an 11% bank loan is worse than buying a $450,000 home with a 6% bank loan.


/Zombie Goldwater in '08
//"...because the undead are the least of our concerns..."

HeyHi2008-05-22 06:44:39 PM
gayb: If the gold standard was actually brought back, the country would shut down because we can't handle that much logic. Or maybe just the government would. Fine with me.

care to explain how to transition into a gold standard, for all of us who dont understand logic?

Basically, Ron Paul's goal is to remove all legal tender laws regarding fiat currency, thus making paper currency completely worthless since people will be under absolutely no obligation to accept it as payment for debt (nor would it be in their best interest to do so, since there's no guarantee that they would be able to do anything with that money later on.). After that point, he would introduce backed money as a "competing currency," after which point paper currency will then be phased out, because paper currency will have been made worthless by the legal tender laws.

Paultards are quick to insist, "Ron Paul doesn't call for a return to the gold standard, he calls for competing currency!" The phrase "competing" implies free market, which is therefore infallible. They ignore the part of Ron Paul's plan that ends legal tender laws. It's sort of like saying, "Oh, I'm not going to ban black people from playing sports, but what I will do is make it so that any points that they earn won't be counted on the scoreboard." Technically, you aren't "banning" them. But you are instating a policy that will effectively do the same thing.

So in a nutshell, Ron Paul wants a system where all paper money becomes worthless, and the only people with financial power are the people with gold. Moreover, this system will also make it impossible for people to pay off their debts already incurred, as well as making it so that the people who are already indebted will have a hard time getting their money back.

Gee, what could possibly go wrong here?

Selector 2008-05-22 07:14:51 PM
To disarm the inevitable Ron Paul fellaters who will be along shortly screaming, "Why does everyone hate Ron Paul!!!!1!111!!!", I'll speak to that. For MONTHS before the primaries and for the first coupleof them, all people (and especially I, being on a college campus) heard from his supporters was "Ron Paul!! He's gonna win!! He's SOO sensible and his policies are bulletproof and strict contructionism and good money and blah blah blah!! Incessant!! Ad Nauseum!! Ad Infinitum!! If you don't like Ron Paul, you're ignorant, you hate America, and are a member of the Sheeple!! He'll win hands down, no doubt!!" His disciples supporters were so sure of themselves, so abrasive, so in-your-face about everything that it was sickening to watch. So now that Paul doesn't have a chance in hell and, while having some good ideas, has also been exposed has having some crazily bad ones (the "We the People" Act comes to mind), everyone, myself included, derives great joy out of gleefully rubbing those snotty little motherfarkers' faces in the fact that no one wanted to vote for their messiah. Some of what Paul said makes sense, and I might even have been able to live with myself voting for him. But every time I heard than panicky voice start up with that holier-than-thou tone, coupled with the insane cult mentality of the vast majority of his supporters, my brain screamed "whackjob"and tuned him/them out. It's because I hate the constitution and common sense. Also, I'm being paid off by the zionists for reasons unknown, and I am part of their vast conspiracy to say bad things about Ron Paul, who stands in the way of their vast zionist interests. Plus, I'm a pinko commie neocon who loves taxes and torturing people and I want to stay in Iraq for all eternity.

How Paultards will read that.

the only reason we went off the gold standard is because the US went from being a credit nation to a debit nation in the 70s. Once those dirty foriegners were actually going to turn in our paper currency for gold, the US got its panties in a twist and went fiat.

It's the truth. Don't believe the globalists. Globalization is a scam.

I wish Fark had a decent search function for past posts. It'd be fun to run queries to find out the number of threads/posts/words different people have for various keywords.

If the U.S. were to revert back to the Gold Standard:

1. Total amount of U.S. currency in circulation - $7.6 Trillion.
2. Current value of all U.S. gold reserves - $261 Billion.
3. Current price of gold - $913/oz.
4. Result of returning to the Gold Standard - price of gold has to skyrocket in order to back all currency in circulation.
5. New price of gold - $30,000/oz.

the only reason we went off the gold standard is because the US went from being a credit nation to a debit nation in the 70s.

Actually, the US started to move off of the gold standard in a serious way during the Great Depression when the volatile world economy started wreaking havoc here at home.

Fiat currency is like having shock aborbers on your car -- it's not going to eliminate the bumps in the road, but it's going to soften them. Running on the gold standard is like replacing your car's shock aborbers with lead bars -- you not only feel every bump in the road, but depending on how quickly the shocks come, they may create dangerous sympathetic reverberations in the vehicle.

This is why the United States took only a handful of years to rebound from the Great Depression, and why European countries who failed to abandon the gold standard were still in tattered ruins 25 years later.

Snarfangel 2008-05-22 07:30:13 PM
I wish Fark had a decent search function for past posts. It'd be fun to run queries to find out the number of threads/posts/words different people have for various keywords.

And that would prove... what exactly?

Are you still under the impression that everyone who doesn't like Ron Paul is on the Majestic 12 payroll?

Are you hoping that you'll someday hack into their computers and discover their receipts?

Oh, I think the reverse vampires will get out the vote.

He's beginning to sound a lot like Nader...

/Sung to the melody of "It's beginning to look a lot like Christmas"

This head line was written in collaboration with the rand corporation

You can't handle the truth.

schrodinger: Snarfangel 2008-05-22 07:30:13 PM
I wish Fark had a decent search function for past posts. It'd be fun to run queries to find out the number of threads/posts/words different people have for various keywords.

And that would prove... what exactly?
Are you still under the impression that everyone who doesn't like Ron Paul is on the Majestic 12 payroll?
Are you hoping that you'll someday hack into their computers and discover their receipts?

No, I'm more concerned that certain people seem a little... obsessed, shall we say.

BTW, are you still under the impression I'm worried about Majestic 12 plots and men in black, or do you think everyone else is conspiracy-theorizing against you? :D

Bob Page unavailable for comment.

El Chode
I'm a member of the Trilateral Commission so I'm really getting a ki+++++=======NO CARRIER=======+++++++

First rule of the Trilateral Commission is don't talk about the Tri+++++=======NO CARRIER=======+++++++

schrodinger:

I'm curious. Do you ever post comments supporting a policy or candidate? Or do you just obsessively target Ron Paul?

Imagine using gold to pay for things. Obviously not small purchases. But even a dime sized gold coin has about a tenth of an ounce of gold.

Potential for cheating. In 1883, a new nickle came out. It had a large V on the reverse to signify five. It didn't say cents. Conmen would gold plate them, pass them as five dollar gold coins, which were the same size. The mint soon had to add the word 'cents' to it.

res ipsa dixit: schrodinger: I'm curious. Do you ever post comments supporting a policy or candidate? Or do you just obsessively target Ron Paul?

He mentioned talking about other things in the past on another Ron Paul post, but all that is behind him now.

/came here for the Schrodigner anti-Paul rant
//was not disappointed
///still hoping to get to a thread early enough to say
////I summon Schrodigner!!!!!!1111!!ELEVENTY!!!!

An infowars link, eh? Well, I guess since we let people post Kos and HuffPo links...

Ron Paul is actually a covert stooge for Majestic 12, working to make third party candidates not under NWO control look bad and make sure nobody ever votes for one again.

Stoker 2008-05-23 01:51:29 AM
Why do you all hate America and the ideals that made America a great country?

Why do you keep beating your wife?

Every four years the question comes "Are we better off than we were four years ago?" Rarely can we say we are. So, after so many years of going downhill, when are you going to want it to actually get better?

Obviously, we should elect someone who will return us to where we were a century ago, where everyone was even more unhappy than they are now. Duh!

To have a better understanding of Ron Paul's position on the Gold Standard actually requires reading what he says. I have, and to a certain degree (meaning that I am not 100% in with it) can understand where he is coming from on the subject. It also helps to read what people who invest into gold says too.

I can understand where Ron Paul is coming from on the gold standard, just like I can understand where he's coming from he says that he doesn't accept the theory of evolution. That doesn't mean that I have to agree with him, though, nor does it mean that I have to accept his reasoning as being valid.

Here is an article Ron Paul wrote a couple of years ago about our currency and how it relates to gold. (new window)

Here is the method in which Ron Paul suggests to reintroduce Gold back into the monetary system. (new window)

I found it to be interesting reading among some other things such as a Comparative value of the dollar. (new window)
as well as a quick history of paper money (new window).

Yes, and..?

You linking to a few Ron Paul articles where he doesn't really say anything at all of substance like coming into an evolution thread and seeing Bevets posting a bunch of bible quotes.

Tell you what... why not take one of Ron Paul's arguments, and re-phrase it in your own words to show that you understand it? And note how I said "argument," not "impassioned pleas." Explain to me how a gold standard would be better than paper currency for an average American in day to day transaction, how we transition into a gold standard without completely destroying the economy, and how the gold standard adapts a growing economy and to interest rates on debts.

Don't rely on blanket statements on "the value of the dollar has gone down relative to gold!" We already know that, just like we already know that the bible says that God created the Earth in six days. Construct an argument. The dollar has many advantages that gold doesn't (easily accessible, easier to manage, can keep up with a growing economy and interest on debt.). Please explain how a gold standard would be able to achieve these same advantages while still maintaining its value.

And ya just got to love how he stands up against the machine. There isn't many who have the balls to do that nowadays.

Sure, if by "machine," you mean "reality."

Only_A_Lad: Why do people buy into this gold standard bullshiat? Fiat money has allowed real control of monetary policy, which in turn has allowed nations to have profound effects upon their economies. When politicians push for the gold or silver standards, they are arguing for:


WTF do YOU care???

It isn't going to happen, so why question it?

You are about to get exactly what you asked for. STFU and enjoy it.

Besides, it's so simple that a child can follow the reasoning:
Fiat currencies always fail.
Backed currencies seldom fail.

SECRET CLUE #17753.0.1: YOUR CURRENCY IS FAILING
Example:
Four 1960 dimes will still buy a gallon of gas and a candy bar.
What will your fiat dimes purchase?

Sure, it's more complicated than that, but the base logic behind this simplistic example holds up just fine.

No, you can't easily trade massive debts, or profit from inflation with a backed currency, which is what much of our economy is currently based on, but why would any sane economist want that to go on anyway? It just leads here. Here isn't very good at the moment, and it's about to get a lot worse.

So, STFU and enjoy the show. It's guaranteed to be interesting.

But what does the Pentavirate have to say about this?

I have a hard enough time dealing with scratch ticket junkies. They blow $60 on instant IQ tests, and take their freakin' time picking them.

You want to go back to gold and silver coins? Now I have to wait for their coins to be weighed (forgeries tend to be lighter). Adding another delay to the process. I JUST WANT A FARKING SODA, GET OUT OF MY WAY!

Giblet

It isn't going to happen, so why question it?

For the same reason I don't like it when people try to get creationism taught in schools - it's fairly unlikely, but the fact that so many people are so stupid bothers me. Especially when we live in a system that hinges upon people having a basic understanding of reality.

Besides, it's so simple that a child can follow the reasoning:
Fiat currencies always fail.
Backed currencies seldom fail.

If you read some history, you'd note that there were hyper-inflationary periods in backed systems, as well. But fiat currencies can be effectively removed from the marketplace. The central bank can control inflation as long as we let the exchange rate float. Under a gold-standard system, we've pegged the currency to the price of gold. The central bank now has little power over the interest rate, and we're back in a system that affords us no control over inflation. Inflation will still happen - people will speculate against the price of gold - and inflationary periods will still happen.

And most fiat currencies have not "failed" - the pound, US dollar, Euro, etc. have not "failed." And it's relatively unlikely that the central banks governing those currencies would engage in policies allowing hyper-inflationary periods.

SECRET CLUE #17753.0.1: YOUR CURRENCY IS FAILING
Example:
Four 1960 dimes will still buy a gallon of gas and a candy bar.
What will your fiat dimes purchase?

Are you simple or something? Seriously, are you retarded? Money is farking neutral, dumbass. Price levels have risen, but in the long run that doesn't matter. All prices adjust, including the price of labor. Inflation matters in the short term, but has virtually no effect in the long run. And most modern economists believe a small level of inflation (about 3%) is desirable. fark, you're stupid.


No, you can't easily trade massive debts, or profit from inflation with a backed currency, which is what much of our economy is currently based on, but why would any sane economist want that to go on anyway? It just leads here. Here isn't very good at the moment, and it's about to get a lot worse.

Again, fiat currency does all the things "backed" currency does, it just gives us less control over interest rates. Gold standards would result in the wholesale abandonment of monetary policy. That's why no legitimate economist backs such a policy - it would mean the loss of our most effective tools in running the economy. And the problems you speak of are problems of fiscal policy. These won't be fixed by changing currencies. Permanent debts are something that can fixed by legislatures fairly easily. We don't need to screw ourselves economically to accomplish the Paultards' weird ideological vision. We can run a balanced budget and still have effective monetary policy.

Jesus. Find your local community college. Enroll. Take some entry level economics courses. You might need to take some algebra courses, too. While you're at it, take some basic history classes, too.

Why do people think that it's a good idea to prescribe massive changes to a system they don't understand? I don't walk into discussions about biology and physics and start screaming about my own weird theories. But in discussions about economics, people start applying things they take as "common sense" and endorse policies that would doom our economy. That's what a Paultard is - some stupid bastard who thinks he knows a subject better than the experts.

Actually, that explains Paul's stupid bullshiat on evolution fairly well.

Only_A_Lad: Jesus. Find your local community college. Enroll. Take some entry level economics courses. You might need to take some algebra courses, too. While you're at it, take some basic history classes, too.

Why do people think that it's a good idea to prescribe massive changes to a system they don't understand? I don't walk into discussions about biology and physics and start screaming about my own weird theories. But in discussions about economics, people start applying things they take as "common sense" and endorse policies that would doom our economy. That's what a Paultard is - some stupid bastard who thinks he knows a subject better than the experts.

Actually, that explains Paul's stupid bullshiat on evolution fairly well.

I've taken the classes you've suggested, and I have a real actual degree. Our currency is a joke, engineered by bank owners. Read any Ben Bernanke, pre-1990.

I don't necessarily support Paul, nor his position on currency, but you seem to be making pretty big assumptions about the people making these arguments to avoid having to discuss the Nixonian decision to abandon Gold.

/Where else does anybody, anywhere defend any policy implemented by Nixon?

iawai

I'll agree that our current monetary policy has a lot of problems, and the fed system does benefit bank owners, but why is this necessarily bad? The issue is not who runs the central bank but whether it is correctly governed. Most of the time, the fed has made the correct decision. Even now, I think the fed has made the correct moves; it's just that the "correct" decision is difficult to judge right now.

As I see it, the main issues with fiat systems has to do with expectations. I think that creating certain rules for the fed would solve most problems. European central banks follow that model, and they seem to work fine. But the US Fed seems to work well most of the time, anyways. People know what to expect from the fed, and this usually works just as well as hard rules.

I hope you're joking about Nixon. I mean, Nixon also created the EPA, but I don't see that as tainted by Nixon's fascist dreams.

Again, the issue is not about whether fiat currency is perfect. It has its issues. But it allows us to do things we would never be able to do with gold. That means that there is a great deal of danger, but it can be used to solve problems that would, otherwise, be largely intractable.

It's like if we had a weather machine. If we started farking around with every weather pattern, bad things are bound to happen. But if the occasional adjustment is made to correct droughts and flooding and to stop hurricanes from hitting populated areas, then we can do a lot of good. Getting rid of the machine because of potential mishaps would be foolish. It's the same with fiat currency - it's possible to mis-engineer policy and cause massive inflation and deflation, but having halfway competent managers would prevent that. Overall, fiat currency is an improvement. And it seems to me that most criticisms of fiat currency have little to do with real economic analysis and more to do with "gut" feelings about what money should be.

Those criticisms based upon fears of inflation are misinformed. Again, see the speculative attacks on the dollar and pound during the Great Depression. Inflation is just as much of an issue with gold. If anything, potential speculative attacks make rapid, sudden, dangerous inflation more likely.

Only_A_Lad:

First we get:
If you read some history

and in the next paragraph we get:
And most fiat currencies have not "failed" - the pound, US dollar, Euro, etc. have not "failed."

What IS your idea of "history"??? Last season's "Spongebob Squarepants"?

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
- Thomas Jefferson (no, he's no relation to George and Louise)

Federal Reserve Notes have no value, except by virtue of a pseudo government decree - a decree arrived at under conditions of duress and thus in all probability invalid. Just as the decree of Franklin Roosevelt in recalling gold from the hands of the citizenry was under the direction of international bankers, the use of FRN's is just a continuation of that directive. It didn't benefit the people then, and it isn't benefiting the people now. Who does it benefit, then?

The Federal Reserve system is a private corporation which operates as an agency of the US Federal government, but it is NOT owned or controlled by that government. It is owned and controlled by private bankers with their own agendas that may or may not mesh with the agendas of We The People.

The Federal Reserve Act was passed (on Christmas Eve) in 1913 in closed sessions. It transferred the power to coin and issue our nations money and to regulate the value of that currency from Congress to a private corporation. Now, my country borrows what should be our own money from the Federal Reserve (a private corporation) and pays substantial interest on it. The folly of this aside, this is in clear violation of the US Constitution [Article 1 Section 1 and Section 8]. Nowhere, in the Constitution does it give Congress the power or authority to transfer any powers granted under the Constitution to a private corporation or individual.

The Federal Reserve has never been audited. HR-1486 called for a complete audit of the Federal Reserve by the GAO, but has been successfully thwarted by the Federal Reserve so far. The Federal Reserve has no idea how much currency is in circulation, but they'll admit to anyone that there is not enough to cover our debts. Not even close. Not even if you use the Sparkle-clouds and Rainbow-ponies versions of the national debt (6 trillion or so, even as the GAO says 79 trillion).

WTF do you classify as failure if you propose that this system is in some way a success for anyone other than the member banks who comprise the Federal Reserve? I'll freely admit that, if you're a member bank, it's full of win. You trade nothing for cool stuff AND YOU GET PAID TO DO IT! If you're a worker bee however, it's pure fail, completely illegal, and has led this country down the large-bore pipe to the cesspool of bankruptcy.

Every time someone gets pissed off while pumping $4, $6, and eventually $100/gal gas, they should pull out a picture of some dumbass tard like you and punch it to relieve their angst.

Only_A_Lad: Again, fiat currency does all the things "backed" currency does, it just gives us less control over interest rates. Gold standards would result in the wholesale abandonment of monetary policy. That's why no legitimate economist backs such a policy - it would mean the loss of our most effective tools in running the economy. And the problems you speak of are problems of fiscal policy. These won't be fixed by changing currencies. Permanent debts are something that can fixed by legislatures fairly easily. We don't need to screw ourselves economically to accomplish the Paultards' weird ideological vision. We can run a balanced budget and still have effective monetary policy.

Sure you can, Professor.

It's all working so smoothly this time. Any fool can see that. You, for example.

The history of fiat money, to put it kindly, has been one of failure. EVERY fiat currency since the Romans first began the practice in the first century has ended in devaluation and eventual collapse, of not only the currency, but of the economy that housed the fiat currency as well.

Why would it be different here in the U.S.? Well, in actuality, it hasn't been. In fact, in our short history, we've already had several failed attempts at using paper currency, and today's dollars are no different than the continentals issued during the Revolutionary War. But I'll get into that in a moment. In the meantime, I'll show you that fiat currencies have not been successful, and the only aspect of fiat currencies that have stood the test of time is the inability of political systems to prevent the devaluation and debasement of this toilet paper money by letting the printing presses run wild.

Fiat Money -Rome -- The Denarius

Although Rome didn't actually have paper money, it provided one of the first examples of true debasement of a currency. The denarius, Rome's coinage of the time, was, essentially, pure silver at the beginning of the first century A.D. By A.D. 54, Emperor Nero had entered the scene, and the denarius was approximately 94% silver. By around A.D.100, the denarius' silver content was down to 85%.

Emperors that succeeded Nero liked the idea of devaluing their currency in order to pay the bills and increase their own wealth. By 218, the denarius was down to 43% silver, and in 244, Emperor Philip the Arab had the silver content dropped to 0.05%. Around the time of Rome's collapse, the denarius contained only 0.02% silver and virtually nobody accepted it as a medium of exchange or a store of value.

Fiat Money -China -- Flying Money

When the Chinese first started using paper money, they called it "flying money," because it could just fly from your hands. The reason for the issuance of paper money is simple. There was a copper shortage, so banks had switched to the use of iron coinage. These iron coins became overissued and fell in value.

In the 11th century, a bank in the Szechuan province of China issued paper money in exchange for the iron coins. Initially, this was fine, because the paper money was exchangeable for gold, silver, or silk. Eventually, inflation began to take hold, as China was funding an ongoing war with the Mongols, which it eventually lost.

Genghis Khan won this war, but the Mongols didn't assume immediate control over China as they pushed westward to conquer more lands. Genghis Khan's grandson Kublai Khan united China and assumed the emperorship. After running into some setbacks with paper currency, Kublai eventually had some success with fiat money. In fact, Marco Polo said of Kublai Khan and the use of paper currency:

"You might say that [Kublai] has the secret of alchemy in perfection...the Khan causes every year to be made such a vast quantity of this money, which costs him nothing, that it must equal in amount all the treasure of the world."

Even Helicopter Ben would be impressed. Marco Polo went on to say:

"This was the most brilliant period in the history of China. Kublai Khan, after subduing and uniting the whole country and adding Burma, Cochin China, and Tonkin to the empire, entered upon a series of internal improvements and civil reforms, which raised the country he had conquered to the highest rank of civilization, power, and progress."

Wait a second, I thought we were bashing fiat currencies here...Can anyone say crackup boom? Since Marco Polo experienced this firsthand, and has been very helpful to us thus far, I think I will allow him to finish his analysis of China's paper money experiment.

"Population and trade had greatly increased, but the emissions of paper notes were suffered to largely outrun both...All the beneficial effects of a currency that is allowed to expand with a growth of population and trade were now turned into those evil effects that flow from a currency emitted in excess of such growth. These effects were not slow to develop themselves...The best families in the empire were ruined, a new set of men came into the control of public affairs, and the country became the scene of internecine warfare and confusion."

I wonder if Keynes read Marco Polo's experiences with Chinese fiat currencies when he said that the U.S. government should just bury bottles full of money in old mine shafts to spur economic growth.

Fiat Money -France -- Livres, Assignats, and Francs

The French have been particularly unsuccessful in their attempts with fiat money.

John Law was the first man to introduce paper money to France. The notion of paper money was greatly helped along by the passing of Louis XIV and the 3 billion livres of debt that he left.

When Louis XV was old enough to make his own mistakes, he required that all taxes be paid in paper money. The currency was backed by coinage...until people actually wanted coins.

The theme of the day...the new paper currency rapidly became oversupplied until nobody wished to own the worthless junk anymore and demanded coinage for their currency.

Oops. It looks like Law didn't think that anyone would actually want coins ever again. After making it illegal to export any gold or silver, and the failed attempts by the locals to exchange their paper currency for something of actual value, the currency collapsed.

John Law became the most hated man in France and was forced to flee to Italy.

In the latter part of the 18th century, the French government again tried to give paper money another go. This time, the pieces of garbage they issued were called assignats. By 1795, inflation of assignats was running at approximately 13,000%. Oops.

Then Napoleon stepped on the scene and brought with him the gold franc. One of the good things that Napoleon realized is that gold is the way of a stable currency, and that's what pretty much ensued during his reign.

After Waterloo had come and gone, the French gave it another go in the 1930s, this time with the paper franc. It took only 12 years for them to inflate their currency until it lost 99% of its value. History has proven a couple things about the French: 1) They are quick to surrender and 2) They are very talented at making worthless currency.

Fiat Money -Weimar Germany -- Mark

Post-World War I Weimar Germany was one of the greatest periods of hyperinflation that ever existed. The Treaty of Versailles was essentially a financial punishment placed on Germany to make reparations.

The sums of money to be paid by Germany were enormous, and the only way it could make repayment was by running the printing press. (Huge unpayable debt -- that sounds familiar. I wonder what the solution in the U.S. will be.)

Inflation got so bad in this period that German citizens were literally using stacks of marks to heat their furnaces. Here is a brief timeline of the marks per one U.S. dollar exchange rate:

April 1919: 12 marks
November 1921: 263 marks
January 1923: 17,000 marks
August 1923: 4.621 million marks
October 1923: 25.26 billion marks
December 1923: 4.2 trillion marks.

In recent times, fiat failures have become more common occurrences. For the sake of time and my fingers, I won't go into extensive details of all these examples of paper money failures, because there are SO many. But here you have it:

In 1932, Argentina had the eighth largest economy in the world before its currency collapsed. In 1992, Finland, Italy, and Norway had currency shocks that spread through Europe. In 1994, Mexico went through the infamous "Tequila Hangover," which sent the peso tumbling and spread economic hardships throughout Latin America. In 1997, the Thai baht fell through the floor and the effects spread to Malaysia, the Philippines, Indonesia, Hong Kong, and South Korea. The Russian ruble was not the currency you wanted your investments denominated in in 1998, after its devaluation brought on economic recession. In the early 21st century, we have seen the Turkish lira experience strokes of hyperinflation similar to that of the mark of Weimar Germany.

In present times, we have Zimbabwe, which was once considered the breadbasket of Africa and was one of the wealthiest countries on the continent. Now Mugabe's attempts at price controls, combined with hyperinflation, have the nation unable to supply the most basic essentials such as bread and clean water.

Only_A_Lad: I'll agree that our current monetary policy has a lot of problems, and the fed system does benefit bank owners, but why is this necessarily bad?

If this was done in a private system, where each bank issued their own banknotes, and we could freely exchange between those currencies, I would agree, because then the people could choose which currency best suit their needs, whether that be immediate liquidity, international trade, savings, or investments. Let those banks fiddle with their own lending rates and bond promises.

Instead we get a monopoly under a Nationalistic banner, which is not only granted, but blessed and defended by the government. And though they may make the right decision from time to time, if they fail, the entire country is screwed, instead of a single bank.

And I was half-joking about Nixon, but as much as you claim the EPA was an anti-facist move, creating fiat money to create a war budget by defrauding the people through inflation is the ultimate Statist decree.

Just because the FED hasn't screwed everything up yet doesn't mean they are doing good. In real terms, the FED would get a passing grade so far, but they haven't been great at avoiding any bubbles: financial, futures, or credit, nor at maintaining the Value of the dollar, which is their primary stated purpose.

iawai: If this was done in a private system, where each bank issued their own banknotes, and we could freely exchange between those currencies, I would agree, because then the people could choose which currency best suit their needs, whether that be immediate liquidity, international trade, savings, or investments. Let those banks fiddle with their own lending rates and bond promises.

Exactly!

The "Liberty Dollar" (pops), a private but perfectly legal silver-backed currency is a good example of what you're saying. It hasn't caught-on yet, but by the "historical" terms in which Only_A_Lad apparently thinks, Richie Rich comics document the entire known history of economics, so the Liberty Dollar was a complete failure after twenty minutes.

I'm not sure which aspect of this crap irks me more, the being cheated by those I'm forced to finance, or the stupidity and short-sightedness of those who think this (the collective 'THIS') is an unqualified economic success.

Giblet

I define the "history" of fiat currency to be the period of its general adoption by most industrial nations. That's only been the last thirty years or so. Now, we can go into earlier historical examples, but I think it is the peculiar combination of a true central bank and "valueless" currency that is important. In the last thirty years, the Fed has been able to fight the effects of price and supply shocks by the use of its monetary powers - something they would not have under a gold standard.

The Wiemar Republic is an interesting example. The problem arose from the overuse of printing paper money to pay off debts. This is fine on a small scale, but if it's allowed to run rampant it will lead to hyper-inflation.

But this problem is headed off these days by granting the central bank autonomy from the gov't. And, in fact, economic studies show that central bank independence correlates strongly with low inflation.

Mexico is a fantastic example of the failure of pegged currencies. When speculators feel that a gov't can't back its currencies, they will dump the currency, causing the exchange rate to fall. This is exactly what happened in Mexico (as well as many Latin American countries). The devaluation can be avoided, provided reserves are high enough. Mexico did not have the necessary reserves of US dollars, and massive inflation resulted.

Why does this apply to a gold standard? A gold standard is the same as a fixed exchange rate. The only difference is what the currency is pegged to. Speculators will still attack the currency (see the US and Britain during the Depression), and inflation will still result.

Gold standards fail on stability. They aren't much better at controlling inflation (again, central bank independence can do the same thing). What's more, they take away our ability to control the interest rate. I think that our ability to mitigate the effects of a recession or slow down heavy growth is far more important than some perceived stability in currency values.

As for Constitutionality...

My understanding of our system is that the Treasury still issues notes. The government "makes" bills and coinage. The Fed just issues them. This is probably constitutional.

Beyond this, challenges to the constitutionality of the central bank go back to the first years of the Republic. You might recall the fight over the Bank of the United States. Under the interpretation of the day, this was constitutional (this was challenged by the Democratic-Republicans, but I think Hamilton was probably in the right on this one). The three central banks we've had over the last two centuries have been regarded as constitutional, they held the same function, why is the fed not constitutional?

The Fed isn't perfect, nor is it an unqualified success. But it has, overall, benefited the American economy. We must remember that economics as a real science is a relatively recent thing. We've only had macroeconomic analysis for the last seventy years. We're still working on the whole thing.

But we know that monetary policy is a critical tool of economic policy. If we take this away from ourselves, we'll be back in our pre-1940s boat: subject to every exogenous supply and price shock. We won't be able to effectively fight inflation, and the economy will once again fluctuate wildly.

The liberty dollar fails because it doesn't have the most basic requirement of money - be generally accepted.

Actually, this site has a lot of good articles. You should read it. It's better than whatever bullshiat Paultard articles you're coontpasting into this thread.

http://www.geocities.com/CapitolHill/Senate/3616/FedReserveFacts.html