REAL money versus paper money

[Drusus]

its worthless paper that someone arbitrarily gave a value to backed by nothing but say so...If the paper was a promissory note it would be different. Its not the paper but what backs it. That paper is worth less and less as the they create more and more each day...it now takes like 61/2 of those pieces of paper to buy each of those ounces while at one time it took much much less, because those pieces of paper represented something at one time..

 

It is slowly taking more and more of those pieces of paper to buy anything at all...because of course the more pieces of paper you make (or make on a computer)...the less all those other pieces of paper (or 1's and 0's ) are worth.

I would take your 8 pieces of paper and buy more gold at the current market value (or wait for a dip) and keep the extra to spend in the system set up by welathy private banking families that almost forces us to use that paper and the banks they own if you want to get by (or plastic and credit)...

 

In essence, the paper is worthless but the government (fed) fiat isnt as long as they prop up the system. Of course the whole world is on fiat now so it is one big fiat system. Like WWI notgeld but on a worldwide scale...when the US goes fiat...the world does. So worth of money is proped up by a worldwide system and all nations fiat is validated by a few nations fiat...its all very interesting. Since we have went fiat there has been constant inflation and thats even with the hedging to slow it down. I think soon our money will be much like italy where 50,000 lira rents you a moped for a few days

[Sweet Mercury]

I found this in an another forum from ageka.

 

I like the sound of silver and gold. Makes me wonder the sound of platinum.

 

http://www.youtube.com/watch?v=1w0LOtWmy_o

 

Some currency note bashing though I'm afraid

 

 

Hehehe, I remember when I first started buying silver bullion rounds, I loved to clink them together. Not only do they have a beautiful ring, but they sound so different from the 'change' minted today.

 

The video was cool. A really condensed version of info that any good Capitalist already knows. Paper money that isn't directly linked to specie of some sort, that is to say, exchangeable on demand, is ultimately worthless. Linking paper to specie also limits the amount of promissory notes that can be printed at all, which stops inflation.

 

I'm surprised that no one arguing this viewpoint cited Murrey Rothbard's definitive work on the subject: The Case for the 100% Gold Dollar. It's a long read for a weblink (about 30 pages printed), but very informative.

[Scottishmoney]

OK - now let me ask you a question. Let's say you had 10 Troy ounces of gold ( just plain ordinary gold not coins with numismatic value ) and I offered you 8 current $100 dollar bills for each ounce - would you say no ?

 

Well I already know you wouldn't say no, but why ? It's just worthless paper isn't it ?

 

 

Actually I would say yes, because the net profit would be $1500, which I could take along with the other funds and buy 12 ozs to sell to you at the price of 14

[bahabully]

We already are a broke country!!!!

 

True,, but if we inflate that 10 bazillion debt down to 1 bazillion, then we ain't really that broke anymore... and printing debt away is a heck of alot easier than mining it away. R.Rodney makes a good point also.

[GDJMSP]

Actually I would say yes, because the net profit would be $1500, which I could take along with the other funds and buy 12 ozs to sell to you at the price of 14

 

 

Of course you would say yes, that was my whole point. The real question was why you would say yes. I mean here you would be giving me gold, "real money" for worthless paper.

 

As you can see the point I am making is that you don't really consider it to be worthless paper - you consider it to be money with which you can go and buy things - that's what you do with money. And the reason you can go and buy things with it is because everybody else in the world considers it to be money as well.

 

Which of course is the point of the entire conversation - "real money" can be anything, anything at all. There is no denying this, there is no arguing the point. The facts speak for themselves. Real money is anything that people are willing to accept as money - even worthless paper.

[ccg]

And if anyone disagrees with GDJMSP's last line there, I might just end up doing a MA (Econ) thesis paper on this topic agruing that.

[Scottishmoney]

The facts speak for themselves. Real money is anything that people are willing to accept as money - even worthless paper.

 

 

Right, you have made a very good point, real money is whatever people are willing to accept. People accept worthless paper because they believe that it has some value, in fact the only value it has is the confidence that somehow the government or institution that issued it will back it up somehow. But the comparison to gold or silver coinage is that if the government that issued them lost the ability to value them, at least they retained the value of the metal included in them, that is a universal value. Paper is only utilitarian at that point for recycling or using to light a fire, or if it is pretty or historical retain as a collectible. I have whole albums full of paper money that only now has collectible value and none other.

 

As I illustrated above in the thread with the gold and silver certificates, the government issued paper, but basically decided it no longer is redeemable for gold or silver or anything universally and historically recognized as value, but only that the government deems it legal tender.

[jtryka]

GDJMSP and ccq, what you say is true, but really only in the short run. Certainly, I would accept your offer of $800 for each ounce of my gold because in the short run I know I can go out right now and buy more gold with that $800 than I just sold to you. So you are right, in the short run the paper is worth what people believe it to be worth. I'm sure you could have made the same offer in 1922 in Germany and offered 1 billion marks for an ounce of gold, and someone would have been happy with the deal. If they merely held the marks, they would have been sorry a year later when an ounce of gold was selling for 475 trillion marks.

 

Similarly, if you offered me just 5 $100 bills for an ounce of gold in 2002, I would have taken it, but by today I would be kicking myself. Ignoring the time element is missing much of the story, especially since, like it or not, in the long run every fiat currency in history has gone to its intrinsic value, but gold and silver are still gold and silver.

[just carl]

I really think many people are beating a dead horse, so to speak. I think I've told this to many people before and they have all agreed. In the not to distant future such things as paper money, Gold, Silver, Platinum, coins for money, etc will all be a thing of the past. The not to distant future is dueto the constant improvements in trades with all countries all over the planet. Eventually there will just have to be one type of monitary system for everyone. Regardless of even that, I'm afraid the plastic thing we almost all now carry will be the thing in the future. A computer will automatically change your US bucks into whatever they use in China, Japan, Germany, Australia, Lower Slobovia and possibly the Moon or Mars. Even now so many gas stations have slots for credit cards and then leave. Stores, hospitals, even Las Vegas have gone to the computer for money systems. I forsee even gum ball machines will soon be credit card freindly.

Someday, and not to long from now, a kid will be saying "Hey Grandpa, what was that stuff you people used to use way, way back called cash or money? I heard at school some was actually made out of metal"

[bahabully]

But the comparison to gold or silver coinage is that if the government that issued them lost the ability to value them.......

** Then in that environment you'd be much better served by a gun and plenty of ammo.. maybe a piece of land, some seed, and livestock. Gold is worthless in a worthless economy, and a bag of rice would have more value than a bag of gold.

This argument is commonly used to sell gold using fear... powerful marketing.

 

GDJMSP and ccq, what you say is true, but really only in the short run

** That's what money is for, short term transactions. Anything else I'd consider an investment,, which gold is o.k., but not the best.

 

Gold, Silver, Platinum, coins for money, etc will all be a thing of the past..

** nod.

[cladking]

Right, you have made a very good point, real money is whatever people are willing to accept. People accept worthless paper because they believe that it has some value, in fact the only value it has is the confidence that somehow the government or institution that issued it will back it up somehow. But the comparison to gold or silver coinage is that if the government that issued them lost the ability to value them, at least they retained the value of the metal included in them, that is a universal value.

 

 

 

This is exactly what makes gold and silver or any other commodity so exceedingly

dangerous in the modern age. Gold has no intrinsic value. It is worth no more and

no less than what people think it's worth. But people have a long history of suddenly

revaluing things. If a huge gold discovery is made the value of the currency would

evaporate overnight causing a financial panic. Such events are not sufferable in mod-

ern times.

 

Ideally currency should be like a stock certificate in the issuing entity or perhaps like

a bond. As productivity and wealth increases, its value should reflect most of that in-

crease. As is the government spends so much that they take all of that increase plus

add on the large tax called inflation.

 

Again I say, the problems of fiat have no bearing on the composition, or lack thereof,

of the money but rather it lays in us who vote for politicians who promise to rape the

treasury. Start voting for statesmen and quit voting for populists and the money will

be strong soon enough even with no backing whatsoever.

[jtryka]

Again I say, the problems of fiat have no bearing on the composition, or lack thereof,

of the money but rather it lays in us who vote for politicians who promise to rape the

treasury. Start voting for statesmen and quit voting for populists and the money will

be strong soon enough even with no backing whatsoever.

 

I agree, but this will never happen as long as human nature is what it is.

[cladking]

I agree, but this will never happen as long as human nature is what it is.

 

 

 

I'm sure you're right.

 

Perhaps a new Constitutional Convention is called for.

[Scottishmoney]

I'm sure you're right.

 

Perhaps a new Constitutional Convention is called for.

 

 

Any tinkering with the Constitution will not lead to any improvements. The Constitution is fine, leave it alone. What needs to happen is the citizens of the USA need to actually learn and appreciate what is there, and apply the rights given accordingly. In essence the Constitution is not the problem, the people that have no earthly idea what is in it are the real problem.

 

More people can also stand up and exercise their Constitutionally afforded right to vote, yet they don't. Blames are common, work, school etc. But I have always known that any employer must legally allow employees time to vote. Frankly it all comes down to pure and simple laziness and the "I don't think it does any good" scenario. Here locally we have had a millage defeated three times in a row, by only a few votes in the whole county. This is with approximately 30% of the electorate voting. So now services which we have relied on and need are gone.

[cladking]

Any tinkering with the Constitution will not lead to any improvements. The Constitution is fine, leave it alone. What needs to happen is the citizens of the USA need to actually learn and appreciate what is there, and apply the rights given accordingly. In essence the Constitution is not the problem, the people that have no earthly idea what is in it are the real problem.

 

More people can also stand up and exercise their Constitutionally afforded right to vote, yet they don't. Blames are common, work, school etc. But I have always known that any employer must legally allow employees time to vote. Frankly it all comes down to pure and simple laziness and the "I don't think it does any good" scenario. Here locally we have had a millage defeated three times in a row, by only a few votes in the whole county. This is with approximately 30% of the electorate voting. So now services which we have relied on and need are gone.

 

 

It's my fault for leading this off topic and I don't intend to post further on this but

I don't want you to misunderstand my point. The only real error of The Constitution

is that The Articles of Confederation were never properly superceded. The document

itself lacks only to the degree that it has not been followed and going back to correct

this is an impossibility. An onion can not be returned to its start by peeling away layers.

 

It's not that there is any fault in The Constitution; it's merely that it has been changed

in the name on convenience over the years. Perhaps a new one which incorporates

more of the current realities while preserving and expanding on the original would revit-

alize the spirit of the founders and spread it among more of its citizens.

[Johnny 1989]

I really think many people are beating a dead horse, so to speak. I think I've told this to many people before and they have all agreed. In the not to distant future such things as paper money, Gold, Silver, Platinum, coins for money, etc will all be a thing of the past. The not to distant future is dueto the constant improvements in trades with all countries all over the planet. Eventually there will just have to be one type of monitary system for everyone. Regardless of even that, I'm afraid the plastic thing we almost all now carry will be the thing in the future. A computer will automatically change your US bucks into whatever they use in China, Japan, Germany, Australia, Lower Slobovia and possibly the Moon or Mars. Even now so many gas stations have slots for credit cards and then leave. Stores, hospitals, even Las Vegas have gone to the computer for money systems. I forsee even gum ball machines will soon be credit card freindly.

Someday, and not to long from now, a kid will be saying "Hey Grandpa, what was that stuff you people used to use way, way back called cash or money? I heard at school some was actually made out of metal"

 

 

I'm really dreading the day that happens. I know several people, including my mum who have been victims to card cloning & have now decided to use cash more.

 

As far as I'm concerned cash is still superior, at least if you have a fake you have one & only lost the value of that fake (be it a £1 coin or £20 note). Depending on how quick you are depends on how much the b*st*rd who cloned your card gets away with.

 

Also could you imagine buying a 45p chocolate bar with a Natwest card, just ridiculous