South Carolina wants separate currency for state

[Eugene]

[quote]Why don’t we just legalize the Constitution? The Constitution states that only gold and silver shall be legal tender.[/quote]

It says no such thing. It says that the Congress (i.e. the federal government) has the supreme right to issue money, and it says that states are explicitly prohibited from doing that. It also says that the Congress has the power to regulate the value of money (this power would be meaningless if only gold and silver were valid money). As an exception, it allows states to authorize gold and silver coins as legal tender (but not to mint them).

[quote]Chart the price of many items vs. gold and the price of those items relative to gold will remain flat.[/quote]

Price of an entry-level car vs. gold has gone down 5x in the last ten years. Price of a burrito at Chipotle or a pound of potato bread at Vons has gone down 4x.

[quote]Inflation is a hidden tax that nobody wants to talk about. Those that get the money first (Wall St., big corporations, etc.) benefit while the rest of us have to produce/earn more to keep up.[/quote]

There’s inflation under gold, too. Like I said, between 1.5% and 8%/year, depending on how you measure the money supply. Only in case of gold, we have no way of controlling the rate of inflation, and the benefactors are mining companies rather than Wall Street.

[urbanrealtor]

[quote=Rich Toscano][quote=urbanrealtor]The irony of being against price controls and for a gold standard seem entirely lost on Paul.[/quote]

That doesn’t make any sense at all. Making something the currency isn’t the same as controlling the price of it. You may be controlling the dollar denominated price, but the whole point is that the dollar-denominated price is irrelevant. In a gold standard it’s the price of things in gold terms that matters, and all such things can float freely, and conversely the price of gold against anything else can float freely. Linking the dollars to gold is just a convenience so you don’t have to carry ingots around, it’s not fixing or controlling the price of anything.

[/quote]
At a literal level, you are correct.
It is however an artificial commodity-money parity, like a price control, and thus functions in virtually the same way.

Let’s look at an example.
Let’s suppose a pound sterling meant what it used to and literally denoted one pound of silver chopped into 240 circular pennies.
As long as there are enough stamps running and little enough robbery and clipping, you are fine.
This is not a parity.
In this case money actually is the commodity.
The exchange rate is relatively fixed (barring exogenous hyperinflation or massive new silver mines being found) and pound is secure.
In this example, lets say that a pound of silver costs 100 American dollars (thus 1 american dollar equals 2.4 British pence).
The problem is when you add paper into the mix.
Then you have non-commodity representative currency in an artificial parity with a commodity.
So now we have pieces of paper that say 10 pence or half pound on them instead of actual silver pieces (thus making them essentially government-issued demand deposits).
The exchange rate slips the minute there is a perceived lack of parity between the representative currency and the commodity.
It is not a question of if but when this divergence occurs.
Any amount of fractional interest banking or government deficit will create such a divergence.
Essentially, any time M1 and M2 can be seen a s distinct numbers there is a vulnerability to speculative predation.
The minute somebody can exchange 90 bucks for a 1 pound note and then exchange it for a pound of silver (worth 100 bucks), the BofE is totally fucked.
Once a few speculators do this, it is perceived that the central bank has less commodity and the exchange rate for the paper slips further and now we are buying 100 bucks of silver for 60 bucks of cash.

In Venezuela, you can buy gas for like 25 cents a gallon a mile from the Colombian border (where it costs 10 times that).
Making money there is strangely easy.
The same logic (or logical failure) applies.

[quote=Rich Toscano]

(I am not endorsing a gold standard and I have no interest in debating the merits of a gold standard… I’m just pointing out that the above quote is a misapprehension of what price controls are).

[/quote]
I am going to have to call bullshit on this I-don’t-endorse-gold-standard line.
My first memory of you in person is you with a pint in your hand telling me about the gold standard and how it prevents runaway expansionist monetarism.
I remember it quite vividly.
In fairness, it was not a direct endorsement but an extended gush about its benefits.
Still, your parenthetical is disingenuous.
[quote=Rich Toscano]
This however was well played, sir:

[quote]
I seem to remember another alternative currency endeavour that South Carolina spearheaded previously.
http://en.wikipedia.org/wiki/Confederate_States_of_America_currency
[/quote][/quote]

Thanks.

[urbanrealtor]

[quote=Rich Toscano][quote=urbanrealtor]The irony of being against price controls and for a gold standard seem entirely lost on Paul.[/quote]

That doesn’t make any sense at all. Making something the currency isn’t the same as controlling the price of it. You may be controlling the dollar denominated price, but the whole point is that the dollar-denominated price is irrelevant. In a gold standard it’s the price of things in gold terms that matters, and all such things can float freely, and conversely the price of gold against anything else can float freely. Linking the dollars to gold is just a convenience so you don’t have to carry ingots around, it’s not fixing or controlling the price of anything.

[/quote]
At a literal level, you are correct.
It is however an artificial commodity-money parity, like a price control, and thus functions in virtually the same way.

Let’s look at an example.
Let’s suppose a pound sterling meant what it used to and literally denoted one pound of silver chopped into 240 circular pennies.
As long as there are enough stamps running and little enough robbery and clipping, you are fine.
This is not a parity.
In this case money actually is the commodity.
The exchange rate is relatively fixed (barring exogenous hyperinflation or massive new silver mines being found) and pound is secure.
In this example, lets say that a pound of silver costs 100 American dollars (thus 1 american dollar equals 2.4 British pence).
The problem is when you add paper into the mix.
Then you have non-commodity representative currency in an artificial parity with a commodity.
So now we have pieces of paper that say 10 pence or half pound on them instead of actual silver pieces (thus making them essentially government-issued demand deposits).
The exchange rate slips the minute there is a perceived lack of parity between the representative currency and the commodity.
It is not a question of if but when this divergence occurs.
Any amount of fractional interest banking or government deficit will create such a divergence.
Essentially, any time M1 and M2 can be seen a s distinct numbers there is a vulnerability to speculative predation.
The minute somebody can exchange 90 bucks for a 1 pound note and then exchange it for a pound of silver (worth 100 bucks), the BofE is totally fucked.
Once a few speculators do this, it is perceived that the central bank has less commodity and the exchange rate for the paper slips further and now we are buying 100 bucks of silver for 60 bucks of cash.

In Venezuela, you can buy gas for like 25 cents a gallon a mile from the Colombian border (where it costs 10 times that).
Making money there is strangely easy.
The same logic (or logical failure) applies.

[quote=Rich Toscano]

(I am not endorsing a gold standard and I have no interest in debating the merits of a gold standard… I’m just pointing out that the above quote is a misapprehension of what price controls are).

[/quote]
I am going to have to call bullshit on this I-don’t-endorse-gold-standard line.
My first memory of you in person is you with a pint in your hand telling me about the gold standard and how it prevents runaway expansionist monetarism.
I remember it quite vividly.
In fairness, it was not a direct endorsement but an extended gush about its benefits.
Still, your parenthetical is disingenuous.
[quote=Rich Toscano]
This however was well played, sir:

[quote]
I seem to remember another alternative currency endeavour that South Carolina spearheaded previously.
http://en.wikipedia.org/wiki/Confederate_States_of_America_currency
[/quote][/quote]

Thanks.

[urbanrealtor]

[quote=Rich Toscano][quote=urbanrealtor]The irony of being against price controls and for a gold standard seem entirely lost on Paul.[/quote]

That doesn’t make any sense at all. Making something the currency isn’t the same as controlling the price of it. You may be controlling the dollar denominated price, but the whole point is that the dollar-denominated price is irrelevant. In a gold standard it’s the price of things in gold terms that matters, and all such things can float freely, and conversely the price of gold against anything else can float freely. Linking the dollars to gold is just a convenience so you don’t have to carry ingots around, it’s not fixing or controlling the price of anything.

[/quote]
At a literal level, you are correct.
It is however an artificial commodity-money parity, like a price control, and thus functions in virtually the same way.

Let’s look at an example.
Let’s suppose a pound sterling meant what it used to and literally denoted one pound of silver chopped into 240 circular pennies.
As long as there are enough stamps running and little enough robbery and clipping, you are fine.
This is not a parity.
In this case money actually is the commodity.
The exchange rate is relatively fixed (barring exogenous hyperinflation or massive new silver mines being found) and pound is secure.
In this example, lets say that a pound of silver costs 100 American dollars (thus 1 american dollar equals 2.4 British pence).
The problem is when you add paper into the mix.
Then you have non-commodity representative currency in an artificial parity with a commodity.
So now we have pieces of paper that say 10 pence or half pound on them instead of actual silver pieces (thus making them essentially government-issued demand deposits).
The exchange rate slips the minute there is a perceived lack of parity between the representative currency and the commodity.
It is not a question of if but when this divergence occurs.
Any amount of fractional interest banking or government deficit will create such a divergence.
Essentially, any time M1 and M2 can be seen a s distinct numbers there is a vulnerability to speculative predation.
The minute somebody can exchange 90 bucks for a 1 pound note and then exchange it for a pound of silver (worth 100 bucks), the BofE is totally fucked.
Once a few speculators do this, it is perceived that the central bank has less commodity and the exchange rate for the paper slips further and now we are buying 100 bucks of silver for 60 bucks of cash.

In Venezuela, you can buy gas for like 25 cents a gallon a mile from the Colombian border (where it costs 10 times that).
Making money there is strangely easy.
The same logic (or logical failure) applies.

[quote=Rich Toscano]

(I am not endorsing a gold standard and I have no interest in debating the merits of a gold standard… I’m just pointing out that the above quote is a misapprehension of what price controls are).

[/quote]
I am going to have to call bullshit on this I-don’t-endorse-gold-standard line.
My first memory of you in person is you with a pint in your hand telling me about the gold standard and how it prevents runaway expansionist monetarism.
I remember it quite vividly.
In fairness, it was not a direct endorsement but an extended gush about its benefits.
Still, your parenthetical is disingenuous.
[quote=Rich Toscano]
This however was well played, sir:

[quote]
I seem to remember another alternative currency endeavour that South Carolina spearheaded previously.
http://en.wikipedia.org/wiki/Confederate_States_of_America_currency
[/quote][/quote]

Thanks.

[urbanrealtor]

[quote=Rich Toscano][quote=urbanrealtor]The irony of being against price controls and for a gold standard seem entirely lost on Paul.[/quote]

That doesn’t make any sense at all. Making something the currency isn’t the same as controlling the price of it. You may be controlling the dollar denominated price, but the whole point is that the dollar-denominated price is irrelevant. In a gold standard it’s the price of things in gold terms that matters, and all such things can float freely, and conversely the price of gold against anything else can float freely. Linking the dollars to gold is just a convenience so you don’t have to carry ingots around, it’s not fixing or controlling the price of anything.

[/quote]
At a literal level, you are correct.
It is however an artificial commodity-money parity, like a price control, and thus functions in virtually the same way.

Let’s look at an example.
Let’s suppose a pound sterling meant what it used to and literally denoted one pound of silver chopped into 240 circular pennies.
As long as there are enough stamps running and little enough robbery and clipping, you are fine.
This is not a parity.
In this case money actually is the commodity.
The exchange rate is relatively fixed (barring exogenous hyperinflation or massive new silver mines being found) and pound is secure.
In this example, lets say that a pound of silver costs 100 American dollars (thus 1 american dollar equals 2.4 British pence).
The problem is when you add paper into the mix.
Then you have non-commodity representative currency in an artificial parity with a commodity.
So now we have pieces of paper that say 10 pence or half pound on them instead of actual silver pieces (thus making them essentially government-issued demand deposits).
The exchange rate slips the minute there is a perceived lack of parity between the representative currency and the commodity.
It is not a question of if but when this divergence occurs.
Any amount of fractional interest banking or government deficit will create such a divergence.
Essentially, any time M1 and M2 can be seen a s distinct numbers there is a vulnerability to speculative predation.
The minute somebody can exchange 90 bucks for a 1 pound note and then exchange it for a pound of silver (worth 100 bucks), the BofE is totally fucked.
Once a few speculators do this, it is perceived that the central bank has less commodity and the exchange rate for the paper slips further and now we are buying 100 bucks of silver for 60 bucks of cash.

In Venezuela, you can buy gas for like 25 cents a gallon a mile from the Colombian border (where it costs 10 times that).
Making money there is strangely easy.
The same logic (or logical failure) applies.

[quote=Rich Toscano]

(I am not endorsing a gold standard and I have no interest in debating the merits of a gold standard… I’m just pointing out that the above quote is a misapprehension of what price controls are).

[/quote]
I am going to have to call bullshit on this I-don’t-endorse-gold-standard line.
My first memory of you in person is you with a pint in your hand telling me about the gold standard and how it prevents runaway expansionist monetarism.
I remember it quite vividly.
In fairness, it was not a direct endorsement but an extended gush about its benefits.
Still, your parenthetical is disingenuous.
[quote=Rich Toscano]
This however was well played, sir:

[quote]
I seem to remember another alternative currency endeavour that South Carolina spearheaded previously.
http://en.wikipedia.org/wiki/Confederate_States_of_America_currency
[/quote][/quote]

Thanks.

[urbanrealtor]

[quote=Rich Toscano][quote=urbanrealtor]The irony of being against price controls and for a gold standard seem entirely lost on Paul.[/quote]

That doesn’t make any sense at all. Making something the currency isn’t the same as controlling the price of it. You may be controlling the dollar denominated price, but the whole point is that the dollar-denominated price is irrelevant. In a gold standard it’s the price of things in gold terms that matters, and all such things can float freely, and conversely the price of gold against anything else can float freely. Linking the dollars to gold is just a convenience so you don’t have to carry ingots around, it’s not fixing or controlling the price of anything.

[/quote]
At a literal level, you are correct.
It is however an artificial commodity-money parity, like a price control, and thus functions in virtually the same way.

Let’s look at an example.
Let’s suppose a pound sterling meant what it used to and literally denoted one pound of silver chopped into 240 circular pennies.
As long as there are enough stamps running and little enough robbery and clipping, you are fine.
This is not a parity.
In this case money actually is the commodity.
The exchange rate is relatively fixed (barring exogenous hyperinflation or massive new silver mines being found) and pound is secure.
In this example, lets say that a pound of silver costs 100 American dollars (thus 1 american dollar equals 2.4 British pence).
The problem is when you add paper into the mix.
Then you have non-commodity representative currency in an artificial parity with a commodity.
So now we have pieces of paper that say 10 pence or half pound on them instead of actual silver pieces (thus making them essentially government-issued demand deposits).
The exchange rate slips the minute there is a perceived lack of parity between the representative currency and the commodity.
It is not a question of if but when this divergence occurs.
Any amount of fractional interest banking or government deficit will create such a divergence.
Essentially, any time M1 and M2 can be seen a s distinct numbers there is a vulnerability to speculative predation.
The minute somebody can exchange 90 bucks for a 1 pound note and then exchange it for a pound of silver (worth 100 bucks), the BofE is totally fucked.
Once a few speculators do this, it is perceived that the central bank has less commodity and the exchange rate for the paper slips further and now we are buying 100 bucks of silver for 60 bucks of cash.

In Venezuela, you can buy gas for like 25 cents a gallon a mile from the Colombian border (where it costs 10 times that).
Making money there is strangely easy.
The same logic (or logical failure) applies.

[quote=Rich Toscano]

(I am not endorsing a gold standard and I have no interest in debating the merits of a gold standard… I’m just pointing out that the above quote is a misapprehension of what price controls are).

[/quote]
I am going to have to call bullshit on this I-don’t-endorse-gold-standard line.
My first memory of you in person is you with a pint in your hand telling me about the gold standard and how it prevents runaway expansionist monetarism.
I remember it quite vividly.
In fairness, it was not a direct endorsement but an extended gush about its benefits.
Still, your parenthetical is disingenuous.
[quote=Rich Toscano]
This however was well played, sir:

[quote]
I seem to remember another alternative currency endeavour that South Carolina spearheaded previously.
http://en.wikipedia.org/wiki/Confederate_States_of_America_currency
[/quote][/quote]

Thanks.

[urbanrealtor]

In case anyone was wondering the personal communication with Rich took place at the Pigg meetup in March of 2009.

[urbanrealtor]

In case anyone was wondering the personal communication with Rich took place at the Pigg meetup in March of 2009.

[urbanrealtor]

In case anyone was wondering the personal communication with Rich took place at the Pigg meetup in March of 2009.

[urbanrealtor]

In case anyone was wondering the personal communication with Rich took place at the Pigg meetup in March of 2009.

[urbanrealtor]

In case anyone was wondering the personal communication with Rich took place at the Pigg meetup in March of 2009.

[jpinpb]

Did the Federal Reserve exist at the time the Constitution was written?

[jpinpb]

Did the Federal Reserve exist at the time the Constitution was written?

[jpinpb]

Did the Federal Reserve exist at the time the Constitution was written?

[jpinpb]

Did the Federal Reserve exist at the time the Constitution was written?

[Author]

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