Newspeak Alert!

[SDEngineer]

[quote=sdduuuude][quote=SDEngineer]How much manipulation can a single individual really do? Please, enlighten me on how this can happen, and exactly how a similar effort could not undermine a standard tied to a SINGLE commodity.

Thanks for the personal attack though.[/quote]

Suggest you direct the next phase of your studies towards Greenspan, interest rate manipulation and the housing bubble. That’s how much.

1 person (OK, maybe its a few) controls the value of all the money in the entire country. That’s how much.

With a gold standard, for one person to manipulate the value of the currency, they would either have to buy most of it, or find a stash of previously undiscovered gold large enough to affect the existing base. I don’t know how one person could affect the value of gold in any other way – you tell me.

I have shown how one person can affect FIAT money, and provided a recent example. Now, you show me how one person can affect the purchasing power of gold.

Hopefully the “personal attack” as you call it will encourage you to dig deeper. Maybe even as deep as I have dug.[/quote]

Yes, I guessed at what your reply was going to be. However, your problem is with regulation (or rather lack of it) and centralization into a central authority (something that can also easily be done in a non-fiat money system as well).

I agree with you that Greenspan (and the Fed in general) should NEVER have held that much power over currency, and the Fed should have remembered that one purpose behind regulation is to regulate not only the downside of the economy, but the upside as well, so that bubbles don’t form as easily, or grow as large.

With similarly lax regulation, one person can ALSO effectively change the gold standard – with one stroke of the pen, the dollar was revalued against gold several times during our history. Whatever dollars you currently held were no longer convertible to gold in the same ratio they were just the day before.

Unless our currency is actually MADE of a substance with inherent value, it’s always a fiat currency of one sort or another, and it will ALWAYS be subject to manipulation by government. The fact that the government agrees that a dollar is worth a certain amount of grams of gold on one day doesn’t mean the government can’t change that on the next day.

BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure, which harms investment (since dollars become more valuable over time if they are worth a fixed amount of a rare commodity). This occurs because productivity, due to technological enhancements and population increase goes up much faster over time than the commodity supply does.

[sdduuuude]

[quote=SDEngineer]The fact that the government agrees that a dollar is worth a certain amount of grams of gold on one day doesn’t mean the government can’t change that on the next day.[/quote]

Well, I agree that would just be another FIAT currency, but that really isn’t a gold standard, then. A gold standard is not expressed in dollars, it is expressed a certain mass of gold. “This paper is worth so much gold.”

The whole point is not whether gold is the right currency. The point is to remove the FIAT currency from the loop and let the market figure out what to use as a store of value. Likely it will be gold, but if it isn’t, and a better store of value emerges, I’m all for it.

[sdduuuude]

[quote=SDEngineer]The fact that the government agrees that a dollar is worth a certain amount of grams of gold on one day doesn’t mean the government can’t change that on the next day.[/quote]

Well, I agree that would just be another FIAT currency, but that really isn’t a gold standard, then. A gold standard is not expressed in dollars, it is expressed a certain mass of gold. “This paper is worth so much gold.”

The whole point is not whether gold is the right currency. The point is to remove the FIAT currency from the loop and let the market figure out what to use as a store of value. Likely it will be gold, but if it isn’t, and a better store of value emerges, I’m all for it.

[sdduuuude]

[quote=SDEngineer]The fact that the government agrees that a dollar is worth a certain amount of grams of gold on one day doesn’t mean the government can’t change that on the next day.[/quote]

Well, I agree that would just be another FIAT currency, but that really isn’t a gold standard, then. A gold standard is not expressed in dollars, it is expressed a certain mass of gold. “This paper is worth so much gold.”

The whole point is not whether gold is the right currency. The point is to remove the FIAT currency from the loop and let the market figure out what to use as a store of value. Likely it will be gold, but if it isn’t, and a better store of value emerges, I’m all for it.

[sdduuuude]

[quote=SDEngineer]The fact that the government agrees that a dollar is worth a certain amount of grams of gold on one day doesn’t mean the government can’t change that on the next day.[/quote]

Well, I agree that would just be another FIAT currency, but that really isn’t a gold standard, then. A gold standard is not expressed in dollars, it is expressed a certain mass of gold. “This paper is worth so much gold.”

The whole point is not whether gold is the right currency. The point is to remove the FIAT currency from the loop and let the market figure out what to use as a store of value. Likely it will be gold, but if it isn’t, and a better store of value emerges, I’m all for it.

[sdduuuude]

[quote=SDEngineer]The fact that the government agrees that a dollar is worth a certain amount of grams of gold on one day doesn’t mean the government can’t change that on the next day.[/quote]

Well, I agree that would just be another FIAT currency, but that really isn’t a gold standard, then. A gold standard is not expressed in dollars, it is expressed a certain mass of gold. “This paper is worth so much gold.”

The whole point is not whether gold is the right currency. The point is to remove the FIAT currency from the loop and let the market figure out what to use as a store of value. Likely it will be gold, but if it isn’t, and a better store of value emerges, I’m all for it.

[sdduuuude]

[quote=SDEngineer]BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure[/quote]

I’m with you there.

[quote=SDEngineer]which harms investment[/quote]

Not with you there. It would change the investment environment, not necessarily for the worse. The economy would become less “borrow and spend” oriented and more savings oriented. How awful.

[sdduuuude]

[quote=SDEngineer]BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure[/quote]

I’m with you there.

[quote=SDEngineer]which harms investment[/quote]

Not with you there. It would change the investment environment, not necessarily for the worse. The economy would become less “borrow and spend” oriented and more savings oriented. How awful.

[sdduuuude]

[quote=SDEngineer]BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure[/quote]

I’m with you there.

[quote=SDEngineer]which harms investment[/quote]

Not with you there. It would change the investment environment, not necessarily for the worse. The economy would become less “borrow and spend” oriented and more savings oriented. How awful.

[sdduuuude]

[quote=SDEngineer]BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure[/quote]

I’m with you there.

[quote=SDEngineer]which harms investment[/quote]

Not with you there. It would change the investment environment, not necessarily for the worse. The economy would become less “borrow and spend” oriented and more savings oriented. How awful.

[sdduuuude]

[quote=SDEngineer]BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure[/quote]

I’m with you there.

[quote=SDEngineer]which harms investment[/quote]

Not with you there. It would change the investment environment, not necessarily for the worse. The economy would become less “borrow and spend” oriented and more savings oriented. How awful.

[4plexowner]

“BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure”

why is this a problem? it makes sense to me that over time, manufactured goods and perhaps even services should decline in price because of increasing efficiency – seems like a good thing

“which harms investment (since dollars become more valuable over time if they are worth a fixed amount of a rare commodity). This occurs because productivity, due to technological enhancements and population increase goes up much faster over time than the commodity supply does.”

again, why is this a problem? perhaps the world’s economies only need to grow (or can accommodate) 2-3% growth rates (which seems like the annual limit on increasing the planet’s stash of above ground gold)

perhaps it is the implementation of fiat currencies that enables the push for growth rates of 5-6% and thereby enables the economic boom-bust cycles

[4plexowner]

“BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure”

why is this a problem? it makes sense to me that over time, manufactured goods and perhaps even services should decline in price because of increasing efficiency – seems like a good thing

“which harms investment (since dollars become more valuable over time if they are worth a fixed amount of a rare commodity). This occurs because productivity, due to technological enhancements and population increase goes up much faster over time than the commodity supply does.”

again, why is this a problem? perhaps the world’s economies only need to grow (or can accommodate) 2-3% growth rates (which seems like the annual limit on increasing the planet’s stash of above ground gold)

perhaps it is the implementation of fiat currencies that enables the push for growth rates of 5-6% and thereby enables the economic boom-bust cycles

[4plexowner]

“BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure”

why is this a problem? it makes sense to me that over time, manufactured goods and perhaps even services should decline in price because of increasing efficiency – seems like a good thing

“which harms investment (since dollars become more valuable over time if they are worth a fixed amount of a rare commodity). This occurs because productivity, due to technological enhancements and population increase goes up much faster over time than the commodity supply does.”

again, why is this a problem? perhaps the world’s economies only need to grow (or can accommodate) 2-3% growth rates (which seems like the annual limit on increasing the planet’s stash of above ground gold)

perhaps it is the implementation of fiat currencies that enables the push for growth rates of 5-6% and thereby enables the economic boom-bust cycles

[4plexowner]

“BTW, the other problem with a currency tied to a particular commodity – especially a scarce commodity little tied to GDP as a whole – is that by it’s nature, any fixed relationship to that commodity will result in deflationary pressure”

why is this a problem? it makes sense to me that over time, manufactured goods and perhaps even services should decline in price because of increasing efficiency – seems like a good thing

“which harms investment (since dollars become more valuable over time if they are worth a fixed amount of a rare commodity). This occurs because productivity, due to technological enhancements and population increase goes up much faster over time than the commodity supply does.”

again, why is this a problem? perhaps the world’s economies only need to grow (or can accommodate) 2-3% growth rates (which seems like the annual limit on increasing the planet’s stash of above ground gold)

perhaps it is the implementation of fiat currencies that enables the push for growth rates of 5-6% and thereby enables the economic boom-bust cycles

[Author]

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