Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Sadly, not 1 in 10,000 Americans have a clue about the monetary system in the USA.
Yahoo! Groups
(sound bite mode)
* Lawful money = gold / silver coin (aka real money)
* Money = lawful money or currency (i.e., certificates which are receipts for real money in the vault)
* Notes are not money, by law. They are debt. Debt cannot pay debt.
* Notes were never "backed" by precious metal. If they were, they'd be certificates (receipts).
It seems the person you are quoting knows even less.
1) gold and silver are metals, not "real" money at all. We can debate the value of that gold and silver all day long but until I can walk into a store and use it to buy what I want, its not money. It holds value, but holding value doesnt make it money.
2) certificates are receipts, for value, but they are not backed by anything other than the faith of the US Government. There isnt anywhere close to enough gold in the vaults to back up the currency in circulation.
3) Debt can pay debt. its done all the time. People create 1 mortgage, to pay off another mortgage.
4) contradicts everything they said above. If notes arent backed by precious metal, (i.e. gold), then how can they be considered certificates for "real money" in the vault, since they consider gold, "real money". Furthermore, they are notes. I hand you a "note", (i.e. cash), and tell you its backed by gold I have sitting in my vault, then it IS a note, from me to you. Its a receipt for you, but a note for me because a note is an IOU, and #2 above says its a receipt backed by gold in a vault. Since I own the gold, and I hand you something of value to cover it, you receive a note which says I promise to pay YOU $x gold in exchange for you taking that piece of paper. A note is a promise to pay.
Only if cuts are made too quickly or deeply. The fact is the Fed has increased the money supply by too much to control future inflation, and adjoining interest rates - this will cause a major crash because the US Dollar will crash and the government holds way too much debt.
The only chance is for the economy to recover (which it won't because the current 'recovery' is only down to the mass printing of money and stimulus) or the government needs to balance the budget by cutting spending and reforming the tax code to increase revenue (higher taxes) at the same time. Being as most do not accept tax reform in this way (due to ideological resistance and not economic necessity) then future inflation will come thick and fast with higher interest rates.
Nobody in either party is acknowledging this or has any plan to do just that. The global economy will feel the full force of 2008 which has been postponed by stimulus and quantitive easing.
I understand that, but you attacked my post, that was referring to that statement. Sounds like you were attacking my position, which was that not all government jobs are bad.
The poster in which I was referring to won't answer that question, because they know my response shots down their entire argument.
Not all government employees are leeches on society. I think everyone can find a government entity we disagree with. But saying you don't like drug enforcement agents doesn't mean you hate USDA meat inspectors.
This is hilarious. You take Economics 101 and you're an expert throwing out this worthless equation. Do you know where "G" comes from? It comes from siphoning "C+I" private consumption through taxes.
Also, GDP does not measure how strong an economy is. Remember when GDP went up because of the housing boom....oh yeh we knew what happened there.
Yes, G is a function of taxes from C + I, but you also forget that those millions of people whose livelihood is tied to the G piece of the equation also directly contribute to the C part of the equation, which also indirectly reinforces the I part of the equation. There is a dynamic interplay between these variables at all times.
I'm not saying that spending doesn't have to go down. It does. All I'm saying is that if G was to be cut in half in the near term, and if C and I won't increase by the same magnitude in the near term, then mathematically speaking it is impossible for GDP not to go further down in the near term. It's not rocket science.
And GDP is a measure of economic growth. It's not the only measure, but it is an important one. Obviously, it doesn't tell you the full story of the sources of growth that show up in those variables. I never said it had some magical properties to ferret out asset bubbles. But...it's still kind of important in the long run. Extensive studies have shown that if you want your economy to grow, then you have to do things that will ultimately make the value of that GDP equation go up. No, really! I know it sounds crazy, but look it up. There is a real reason why this equation still matters in modern economics.
Let me know if I can clear up any other confusion for you.
It seems the person you are quoting knows even less.
1) gold and silver are metals, not "real" money at all. We can debate the value of that gold and silver all day long but until I can walk into a store and use it to buy what I want, its not money. It holds value, but holding value doesnt make it money.
Please read the USCON, Art. 1, Sec.8, Sec. 10, 7th amendment, then read the Coinage Act of 1792, et seq. Those facts may change your opinion.
Quote:
Originally Posted by pghquest
2) certificates are receipts, for value, but they are not backed by anything other than the faith of the US Government. There isnt anywhere close to enough gold in the vaults to back up the currency in circulation.
That is incorrect. By law, a certificate / receipt IS for coin in the vaults. A note is a promise to pay IN THE FUTURE. Nothing is in the vaults for a note. Since 1933, Federal Reserve notes (dollar bills) have no par value, and are not redeemable on demand, pursuant to Title 12 USC Sec. 411. This is the reason for the State of Emergency that began in 1933.
Quote:
Originally Posted by pghquest
3) Debt can pay debt. its done all the time. People create 1 mortgage, to pay off another mortgage.
Debt may discharge debt, but cannot pay it. See Art.1, Sec. 10, USCON. Only gold and silver coin are tender in PAYMENT of debt.
Quote:
Originally Posted by pghquest
4) contradicts everything they said above. If notes arent backed by precious metal, (i.e. gold), then how can they be considered certificates for "real money" in the vault, since they consider gold, "real money". Furthermore, they are notes. I hand you a "note", (i.e. cash), and tell you its backed by gold I have sitting in my vault, then it IS a note, from me to you. Its a receipt for you, but a note for me because a note is an IOU, and #2 above says its a receipt backed by gold in a vault. Since I own the gold, and I hand you something of value to cover it, you receive a note which says I promise to pay YOU $x gold in exchange for you taking that piece of paper. A note is a promise to pay.
[1] Notes are not certificates - certificates are not notes.
[2] "Dollar bills" (Federal Reserve NOTES) are not "backed" by gold in the vaults. In fact, based on the 147.4 million ounces in Ft. Knox, there's only gold backing for 2.9 billion dollars in CERTIFICATES. Dollar bills are not certificates.
[3] You own no gold if your money is a "dollar bill". FDR criminalized the possession of gold money by "free" Americans, in 1933. "Free" Americans could not own gold money until 1975.
[4] In House Joint Resolution 192, in 1933, Congress suspended redemption of any contract payable in gold. In short, they declared bankruptcy and took "us" to the cleaners with them.
Actually, I do have a bachelor's degree in economics. I also have a master's degree and seven years of professional experience in corporate finance. And I completed both degrees with significantly above-average GPAs. And what I'm laying out here is just the beginner's section that is non-controversial to the large majority of people who are well-versed in economics. Just sayin'.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
