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No Gold is NOT money. the Federal Reserve Act gives that power to the Fed.
HOWEVER we can solve this debt crisis using a coin.
However, the Coinage Act grants the Secretary of the Treasury rather broad coin seigniorage authority. Geithner could sidestep the debt ceiling this afternoon by ordering the West Point Mint to coin a 1 oz. $ 1 trillion coin.The Secratary of the Treasury can then present the jumbo coins at the NY Fed to buy back $1 trillion in Fed-held debt (the Fed has to accept it, a creditor can’t refuse legal tender paid in to settle a debt):
(h) The coins issued under this title shall be legal tender… (k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.”
Don't accept them when I sell on craigslist. Just silver. A couple of ignorant morons tried to e-mail me and say what I was doing was illegal. Takes a little longer to sell my stuff but it's all good with me.
But the question stands. How can gold simultaneously have a face value and an implied value? How come it's considered a collector's item by the IRS yet still has a face value? Why don't baseball cards have a face value? Fine art? An autographed basketball?
But the question stands. How can gold simultaneously have a face value and an implied value? How come it's considered a collector's item by the IRS yet still has a face value? Why don't baseball cards have a face value? Fine art? An autographed basketball?
Because, we a a society haven't make currency out of any of those other things. Gold does not have an implied value, it has an intrinsic value determined by the market.
if I have a 18kt gold necklace, and the dollar is worth nothing, then the gold necklace will buy more than the dollar or hundreds of dollars will.
No, the gold necklace, can be converted into dollars. So it will be worth as many dollars as you can get for it. You wouldn't be able to walk into your grocery store and buy a couple of steaks with your necklace. So in that instance, it has no value.
The necklace is exactly equal to the number of dollars the market determines it is.
No, the gold necklace, can be converted into dollars. So it will be worth as many dollars as you can get for it. You wouldn't be able to walk into your grocery store and buy a couple of steaks with your necklace.
The necklace is exactly equal to the number of dollars the market determines it is.
not really, if the person doing the transaction does not want any dollars for his business, but will take my gold, then dollars are worth nothing at all.
not really, if the person doing the transaction does not want any dollars for his business, but will take my gold, then dollars are worth nothing at all.
But in that case the necklace is not money, either, it is just one object exchanged for another. If you exchange a six pack of Budweiser for a football, is either of them money?
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