Utah Legislature goes for gold, silver as currency options - Polidicks

[QUOTE=Kagrenak;28548974]But if you slam more gold into currency based on gold, you just inserted more currency into the market. This devalues the market. Also what about fake gold? Most people aren't going to know the difference between a real gold coin and a fake one. In this hypothetical market, all currency is now gold, so coins would likely be based on some low alloy of gold. No one would notice if the alloy was altered to have no gold.[/QUOTE] Oh hey, we just hit the same problem we hit with paper money. Fakes. There's always going to be that problem, you can't completely get rid of it. We slam more paper money into the market all the time, with paper that for all intents and purposes, is useless. It's paper. It has no value except for what the fed tells us it has. How is that useful?

[QUOTE=Tigster;28549018]Oh hey, we just hit the same problem we hit with paper money. Fakes. There's always going to be that problem, you can't completely get rid of it. We slam more paper money into the market all the time, with paper that for all intents and purposes, is useless. It's paper. It has no value except for what the fed tells us it has. How is that useful?[/QUOTE] And gold has no value except for what the speculators tell us, how is this any more useful? Face it, paper money is easier to control, easier to protect, and easier to use. Also, how would you manage electronic transmissions if you were using real gold as money? A gold standard is a better idea, not gold as real money. The gold standard is still probably not very economically sound, but atleast it isn't as clearly insane as using real gold. Using purely physical items for monetary transactions isn't feasible in this day.

[QUOTE=Kagrenak;28548974]But if you slam more gold into currency based on gold, you just inserted more currency into the market. This devalues the market. Also what about fake gold? Most people aren't going to know the difference between a real gold coin and a fake one. In this hypothetical market, all currency is now gold, so coins would likely be based on some low alloy of gold. No one would notice if the alloy was altered to have no gold. [/quote] Guess what, gold and silver have a value right now. People mine new gold and silver. The value still goes up. [quote] Except gold and silver as actual currency is just as worthless as paper is. If it's something used primarily as currency, the other values of it will go down and with it being used less for jewelry and related items, its value becomes what people make of it.[/QUOTE] Who said it can't be used for jewelry still? This doesn't mean you need to halt 100% of jewelry production and turn it all to making money. [editline]11th March 2011[/editline] [QUOTE=Kagrenak;28549046]And gold has no value except for what the speculators tell us, how is this any more useful? Face it, paper money is easier to control, easier to protect, and easier to use.[/QUOTE] It's only easier to control and protect because you assume that everybody in the whole fucking world can make the money.

[QUOTE=CjienX;28549055]Guess what, gold and silver have a value right now. People mine new gold and silver. The value still goes up. [/quote] That's nice, it's also gone down before. Tying our entire complex economy to a single commodity is stupid and reckless. [QUOTE=CjienX;28549055] Who said it can't be used for jewelry still? This doesn't mean you need to halt 100% of jewelry production and turn it all to making money. [/quote] Then how are you going to have enough of it to back all of the money supply? [QUOTE=CjienX;28549055] It's only easier to control and protect because you assume that everybody in the whole fucking world can make the money.[/QUOTE] With coins, it's harder to implement good security measures. Also, none of you have answered my point about it getting lost, or about actually using the fucking things day-in-day-out.

They don't really have the constitutional authority to do this, idk if Obama will let this fly.

[QUOTE=macerator;28549124]They don't really have the constitutional authority to do this, idk if Obama will let this fly.[/QUOTE] I think they do. They can't refuse federally printed money, but I think they do have the authority to say that gold and silver are additionally legal. (This is mostly based on the factoid in the article about Oregon having had this system in place for several decades.)

Ha ha holy shit, what is this, Rome? Yes it's a fucking wonderful idea to use a limited resource for physical currency in a global economy, that's just brilliant.The entire reason we use a representative currency is so we don't link the actual wealth to it and it's able to be much more flexible and extensible.

[QUOTE=Awesomecaek;28547471]Will I also be able to break the coin in half to pay half of it's value?[/QUOTE] Pieces of eight motherfuckers. :v:

[QUOTE=Xen Tricks;28549600]Ha ha holy shit, what is this, Rome? Yes it's a fucking wonderful idea to use a limited resource for physical currency in a global economy, that's just brilliant.The entire reason we use a representative currency is so we don't link the actual wealth to it and it's able to be much more flexible and extensible.[/QUOTE] And yet this bill isn't outlawing or superseding your far superior magical fiat currency, it's just offering it as an alternative. The money value isn't based on gold or silver so i don't really know what point you're trying to make here. Do you think gold and silver stopped being traded after we switched to fiat currency? lol

[QUOTE=s0beit;28549811]And yet this bill isn't outlawing or superseding your far superior magical fiat currency, it's just offering it as an alternative. The money value isn't based on gold or silver so i don't really know what point you're trying to make here. Do you think gold and silver stopped being traded after we switched to fiat currency? lol[/QUOTE] For other goods and services, it pretty much did. Also if you would read the thread past the OP (which you must have to red Xen's Post), you would realize the discussion has turned towards a debate on the merits of a purely gold based currency. (Read: there are none)

[QUOTE=s0beit;28549811]And yet this bill isn't outlawing or superseding your far superior magical fiat currency, it's just offering it as an alternative. The money value isn't based on gold or silver so i don't really know what point you're trying to make here. Do you think gold and silver stopped being traded after we switched to fiat currency? lol[/QUOTE] Wat Kag said, read the topic. I'm arguing against the morons saying gold is a viable general currency.

[QUOTE=Kagrenak;28549847]For other goods and services, it pretty much did. Also if you would read the thread past the OP (which you must have to red Xen's Post), you would realize the discussion has turned towards a debate on the merits of a purely gold based currency. (Read: there are none)[/QUOTE] There are some merits, actually, there's advantages and disadvantages to every system. [quote][b]Advantages[/b] * Long-term price stability has been described as the great virtue of the gold standard.[15] Under the gold standard, high levels of inflation are rare, and hyperinflation is nearly impossible as the money supply can only grow at the rate that the gold supply increases.[16] Economy-wide price increases caused by ever-increasing amounts of currency chasing a constant supply of goods are rare,[16] as gold supply for monetary use is limited by the available gold that can be minted into coin.[16] High levels of inflation under a gold standard are usually seen only when warfare destroys a large part of the economy, reducing the production of goods, or when a major new source of gold becomes available.[16] In the U.S. one of those periods of warfare was the Civil War, which destroyed the economy of the South,[17] while the California Gold Rush made large amounts of gold available for minting.[18] * The gold standard limits the power of governments to inflate prices through excessive issuance of paper currency.[16] It provides fixed international exchange rates between those countries that have adopted it, and thus reduces uncertainty in international trade.[16] Historically, imbalances between price levels in different countries would be partly or wholly offset by an automatic balance-of-payment adjustment mechanism called the "price specie flow mechanism."[16] * The gold standard makes chronic deficit spending by governments more difficult, as it prevents governments from inflating away the real value of their debts.[19] A central bank cannot be an unlimited buyer of last resort of government debt. A central bank could not create unlimited quantities of money at will, as there is a limited supply of gold.[16] [b]Disadvantages[/b] * The total amount of gold that has ever been mined has been estimated at around 142,000 metric tons.[20] This is less than the value of circulating money in the U.S. alone, where more than $8.3 trillion is in circulation or in deposit (M2).[21] Therefore, a return to the gold standard, if also combined with a mandated end to fractional reserve banking, would result in a significant increase in the current value of gold, which may limit its use in current applications.[22] However, this is specifically a disadvantage of return to the gold standard and not the efficacy of the gold standard itself. Some gold standard advocates consider this to be both acceptable and necessary[23] The amount of such base currency (M0) is only about one tenth as much as the figure (M2) listed above.[24] * Deflation rewards savers[25][26] and punishes debtors.[27][28] Real debt burdens therefore rise, causing borrowers to cut spending to service their debts or to default. Lenders become wealthier, but may choose to save some of their additional wealth rather than spending it all.[29] The overall amount of expenditure is therefore likely to fall.[29] Deflation also prevents a central bank of its ability to stimulate spending.[29] However in practice it has always been possible for governments to control deflation by leaving the gold standard or by artificial expenditure.[29][30][31] * Mainstream economists believe that economic recessions can be largely mitigated by increasing money supply during economic downturns.[32] Following a gold standard would mean that the amount of money would be determined by the supply of gold, and hence monetary policy could no longer be used to stabilize the economy in times of economic recession.[33] Such reason is often employed to partially blame the gold standard for the Great Depression, citing that the Federal Reserve couldn't expand credit enough to offset the deflationary forces at work in the market.[34] Opponents of this viewpoint have argued that gold stocks were available to the Federal Reserve for credit expansion in the early 1930s, but Fed operatives failed to utilize them.[35] * Monetary policy would essentially be determined by the rate of gold production.[36] Fluctuations in the amount of gold that is mined could cause inflation if there is an increase, or deflation if there is a decrease.[36][37] Some hold the view that this contributed to the severity and length of the Great Depression as the gold standard forced the central banks to keep monetary policy too tight, creating deflation.[22][38] Milton Friedman however argued that the main cause of the severity of the Great Depression in the United States was the Federal Reserve, and not the gold standard, as they willfully kept monetary policy tighter than was required by the gold standard.[39] Additionally, three increases by the Federal Reserve in bank reserve requirements occurred in 1936 and 1937, which doubled bank reserve requirements[40] * Although the gold standard gives long-term price stability, it does in the short term bring high price volatility.[37] In the United States from 1879 to 1913, the coefficient of variation of the annual change in price levels was 17.0, whereas from 1943 to 1990 it was only 0.88.[37] It has been argued by among others Anna Schwartz that this kind of instability in short-term price levels can lead to financial instability as lenders and borrowers become uncertain about the value of debt.[41] * James Hamilton contended that the gold standard may be susceptible to speculative attacks when a government's financial position appears weak, although others contend that this very threat discourages governments' engaging in risky policy (see Moral Hazard).[38] For example, some believe that the United States was forced to raise its interest rates in the middle of the Great Depression to defend the credibility of its currency after unusually easy credit policies in the 1920s.[38] This disadvantage however is shared by all fixed exchange rate regimes and not just limited to gold money. All fixed currencies that appear weak are subject to speculative attack.[42] * If a country wanted to devalue its currency, it would generally produce sharper changes than the smooth declines seen in fiat currencies, depending on the method of devaluation.[43][/quote] [quote][b]Prolongation of the Great Depression[/b] [b]Some economic historians, such as American professor Barry Eichengreen, blame the gold standard of the 1920s for prolonging the Great Depression.[4] Others including Federal Reserve Chairman Ben Bernanke and Nobel Prize winning economist Milton Friedman lay the blame at the feet of the Federal Reserve[/b].[5][6] The gold standard limited the flexibility of central banks monetary policy by limiting their ability to expand the money supply, and thus their ability to lower interest rates. In the US, the Federal Reserve was required by law to have 40% gold backing of its Federal Reserve demand notes, and thus, could not expand the money supply beyond what was allowed by the gold reserves held in their vaults.[7] In the early 1930s, the Federal Reserve defended the fixed price of dollars in respect to the gold standard by raising interest rates, trying to increase the demand for dollars. Its commitment and adherence to the gold standard explain why the U.S. did not engage in expansionary monetary policy. To compete in the international economy, the U.S. maintained high interest rates. This helped attract international investors who bought foreign assets with gold. Higher interest rates intensified the deflationary pressure on the dollar and reduced investment in U.S. banks. Commercial banks also converted Federal Reserve Notes to gold in 1931, reducing the Federal Reserve's gold reserves, and forcing a corresponding reduction in the amount of Federal Reserve Notes in circulation.[8] This speculative attack on the dollar created a panic in the U.S. banking system. Fearing imminent devaluation of the dollar, many foreign and domestic depositors withdrew funds from U.S. banks to convert them into gold or other assets.[8] The forced contraction of the money supply caused by people removing funds from the banking system during the bank panics resulted in deflation; and even as nominal interest rates dropped, inflation-adjusted real interest rates remained high, rewarding those that held onto money instead of spending it, causing a further slowdown in the economy.[9] Recovery in the United States was slower than in Britain, in part due to Congressional reluctance to abandon the gold standard and float the U.S. currency as Britain had done. It was not until 1933 when the United States finally decided to abandon the gold standard that the economy began to improve.[10] [b]British hesitate to return to gold standard[/b] During the 1939-1942 period, the UK depleted much of its gold stock in purchases of munitions and weaponry on a "cash-and-carry" basis from the U.S. and other nations.[citation needed] This depletion of the UK's reserve convinced Winston Churchill of the impracticality of returning to a pre-war style gold standard. To put it simply, the war had bankrupted Britain. [b]John Maynard Keynes, who had argued against such a gold standard, proposed to put the power to print money in the hands of the privately owned Bank of England. Keynes, in warning about the menaces of inflation, said "By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some".[11] Quite possibly because of this, the 1944 Bretton Woods Agreement established the International Monetary Fund and an international monetary system based on convertibility of the various national currencies into a U.S. dollar that was in turn convertible into gold.[/b] [b]Post-war international gold-dollar standard (1946-1971)[/b] After the Second World War, a system similar to a Gold Standard and sometimes described as a "gold exchange standard" was established by the Bretton Woods Agreements. [b]Under this system, many countries fixed their exchange rates relative to the U.S. dollar.[/b] The U.S. promised to fix the price of gold at approximately $35 per ounce. Implicitly, then, all currencies pegged to the dollar also had a fixed value in terms of gold.[1] Under the administration of the French President Charles de Gaulle up to 1970, France reduced its dollar reserves, trading them for gold from the U.S. government, thereby reducing U.S. economic influence abroad. This, along with the fiscal strain of federal expenditures for the Vietnam War and persistent balance of payments deficits, led President Richard Nixon to end the direct convertibility of the dollar to gold in 1971, resulting in the system's breakdown (the "Nixon Shock").[/quote] In effect the world wasn't [i]really[/i] off the gold standard until much later, being that their currency was backed by the US dollar which was in turn backed by gold until quite recently, generally speaking. I don't want the gold standard either but i do respect currency based on something physical, each has its own advantages and disadvantages. The world monetary system is a house of cards right now and for the time being it's served us fairly well. However, the price of failure is far too great.

[QUOTE=s0beit;28550553]There are some merits, actually, there's advantages and disadvantages to every system. In effect the world wasn't [i]really[/i] off the gold standard until much later, being that their currency was backed by the US dollar which was in turn backed by gold until quite recently, generally speaking. I don't want the gold standard either but i do respect currency based on something physical, each has its own advantages and disadvantages. The world monetary system is a house of cards right now and for the time being it's served us fairly well. However, the price of failure is far too great.[/QUOTE] I didn't say the gold standard, in my earlier posts I brought it up, I said it's probably not the best idea, but it's not as insane as a gold currency. By gold as a currency, I mean actual coins, not the gold standard. I don't want to argue over the gold standard because I don't actually know enough about economics except to trust the experts. (and I've found a majority advise against the gold standard.)

Well if they're arguing against paper money of any sort then i don't understand the purpose of that at all I mean i guess it could work, just not very efficiently or well at all

build giant magnet capture asteroid mine it infinite resources

[QUOTE=Tigster;28548934]So you're saying if someone hit gold in their backyard and printed gold coins that'd be wrong? Counterfeit paper money is bad, because there isn't anything backing it, meaning you could print as much as you want without gaining any actual value. With gold, if you put in more gold, you just have more gold.[/QUOTE] That would only be fine if we knew the total amount of gold available in the world, we don't.

[QUOTE=Zeke129;28552446]That would only be fine if we knew the total amount of gold available in the world, we don't.[/QUOTE] No, but we do know the total amount of reserve gold in the national treasury which is what the national currency would derive it's value from.

I don't think this is a bad idea.

[QUOTE=CjienX;28549055]Guess what, gold and silver have a value right now. People mine new gold and silver. The value still goes up.[/QUOTE] The value isn't going up, that's just inflation dumbass The reason we keep hearing about 'Record' setting gold prices is because they intentionally don't factor in inflation, with Inflation factored, if I recall correctly the actual record was in 1980 at $850 an ounce, which today is $2,270 with inflation, right now it's only at $1,440 an ounce

[QUOTE=s0beit;28552739]No, but we do know the total amount of reserve gold in the national treasury which is what the national currency would derive it's value from.[/QUOTE] So if you're strictly controlling the amount of gold in circulation the same way you do with paper money now, how is it any better at all than using paper currency?

Throw in copper and we have a functioning WoW economy.

Let me pay for my house in gold. Oh wait that might be a problem, if only there was some form of easily identifiable currency that doesn't require mass amounts of resources.

[QUOTE=Zeke129;28554668]So if you're strictly controlling the amount of gold in circulation the same way you do with paper money now, how is it any better at all than using paper currency?[/QUOTE] Because you can't fake gold

[QUOTE=Explosions;28547768]Why exactly is gold and silver worth any more than any other rock? If I were to take a group of people from birth and replace gold and silver with coal and quartz, how exactly would that be any different?[/QUOTE] Gold is one of the few, if not the only, metals that do not corrode.

[QUOTE=Broseph_;28556218]Because you can't fake gold[/QUOTE] So the entire reason is to prevent counterfeiting? People want to switch to gold because of the current state of the economy and as far as I know counterfeiting played little to no role in the recession.

[QUOTE=Zeke129;28557712]So the entire reason is to prevent counterfeiting? People want to switch to gold because of the current state of the economy and as far as I know counterfeiting played little to no role in the recession.[/QUOTE] Plus, you know, all the other shit we've posted in the thread :downs:

[QUOTE=CjienX;28557827]Plus, you know, all the other shit we've posted in the thread :downs:[/QUOTE] [QUOTE=Zeke129;28554668]So if you're strictly controlling the amount of gold in circulation the same way you do with paper money now, how is it any better at all than using paper currency?[/QUOTE]

[QUOTE=Awesomecaek;28547471]Will I also be able to break the coin in half to pay half of it's value?[/QUOTE] Silver is worth about 1/50th of gold right now, so you should be okay. [editline]12th March 2011[/editline] [QUOTE=s0beit;28552739]No, but we do know the total amount of reserve gold in the national treasury which is what the national currency would derive it's value from.[/QUOTE] The US hasn't been on the gold standard for decades.