patrick.net

Nomograph says

AdHominem says

No one is arguing the “value” of the dollar except you. This article is merely meant to educate the misinformed about what a dollar physically is. And what it physically is is a specific amount and purity of silver.

Incorrect. That is what you wish it was. A dollar is simply an medium to allow for the convenient exchange of goods and services. Silver has no bearing on the exchange of goods and services.

Wrong again. A dollar is a dollar. Orwellian style government may try to change the meaning of words but that doesn't change what the meaning of IS is.

A dollar was a piece of silver of a certain quantity and purity. And a dollar IS a piece of silver of that same certain quantity and purity.

Congress can no more change that than they can change what how many feet in a yard.

The Dollar (specific amount and purity of silver) is just a yardstick. Congress has no authority to change the yardstick.

Its authority to regulate the value of the dollar was with respect to how the dollar could be exchanged for other currencies (foreign and domestic). For example the congress does have the authority to set the exchange rate between gold and silver or between coins from our country and coins of another country.

You would have to be a fool to think that our constitution gives congress the authority to change the yardstick let alone to argue that changing the yardstick is a good thing.

AdHominem says

The Dollar (specific amount and purity of silver) is just a yardstick. Congress has no authority to change the yardstick.

you're literally insane, beyond reach of fact or reason. This will be my last post to patrick.net. Thanks all.

Troy, thanks for your input, we'll miss you, but please, PLEASE take Elliemae with you.

P.S. perhaps AdHominem was trying to point out that the dollar had a specific definition in the past. It was defined as a certain weight of gold or silver. Today the dollar has NO definition. That in itself is dishonest. Inagine if each gas station dispensed a certain number of gallons of gas for a specific price BUT each sation had its own defination of what a "gallon" was??? In the absence of a standard for weights and measures there is chaos...and dishonesty.

There is no law or statute anywhere in America that describes what a dollar is. Maybe that's what the original question was..."What is a dollar"?

Gold standard? What about silver?

We could have gold coins but still have fractional reserve lending, ZIRP, zero reserve requirements, and Enron accounting.

What if we had a gold / silver standard, "backing" a paper currency, like America had prior to 1964, AND eliminated fractional reserve banking, zero reserve requirements and Enron accounting? Abe.

A lot of paper rich would suddenly be brought low. Fincial sector would be returned to a normal parasitic size not the giant that it is. Odds of Goldman Sachs allowing this.... ZERO!

Honest Abe says

Troy, thanks for your input, we’ll miss you, but please, PLEASE take Elliemae with you.

I'm not going anywhere. But congrats for driving away yet another poster. I'll bet you're a blast at parties.

Vicente says

Gold standard? What about silver?
We could have gold coins but still have fractional reserve lending, ZIRP, zero reserve requirements, and Enron accounting.

We can make fractional reserve lending illegal as well. Have you ever seen the way they regulate casinos? The government makes sure they have cash on hand for their chips in circulation. I've never heard of a casino run.

AdHominem says

By your account congress can decide that a year is 40 days

Indeed, they can -- look up "weights and measures". Of course, they'd look incredibly foolish for making such a claim, and as such wouldn't do it.

and that a dog is a person/citizen eligible to vote (if they are 18 years of age, which means of course 720 days old since a year is now 40 days).

Well, no, the supreme court would be responsible for defining "personhood" -- and this kind of cuts to the heart of the abortion debate (and before that, slavery).

If your claim was true, there would be no need for the coinage act. America is a soverign country, and the currency standards of other nations are irrelevant. There is no single "historical" definition of a "dollar" -- several coins bearing that name (or ancestors of it) being worth various amounts of silver (or gold) existed well before either the spanish dollar, or indeed the discovery of the Americas.

So, your claim is bullshit.

The coinage act was based on Alexander Hamilton's recommendation to congress, and the value was chosen for practical matters -- the alternatives were the dutch dollar, the shilling, and the german thaler (which americans called "dollar"), but our trading ties with Spain were strongest and we wanted to sever all things british. Yes, we once had coins of a certain weight of silver that we called "dollar" -- but this was simply federal law, not "constitutional".

The coinage act would not have been necessary if there was some single, universal value of "dollar", and all of the subsequent coinage acts and other laws that redefined what a dollar is (from various amounts of silver, to silver or gold, to just gold, to "whatever the market decides") would be irrelevant.

But they aren't. No matter how much your revolutionary war reenactment fantasies want them to be, no matter how strongly you disagree with the actions taken by congress, it won't change the fact that congress does have the power to define the value of money in the united states (or to delegate that power to someone else).

Troy says

There is no law or statute anywhere in America that describes what a dollar is. Maybe that’s what the original question was…”What is a dollar”?

Yeah, no law or statute other than the various coinage acts, the gold standard act (which essentially reversed the metal => dollar definition by pricing gold in terms of dollars), and Bretton Woods.

The last two are what gave Richard Nixon the authority to bring us to the current "whatever the market decides" standard.

Now, I have to ask you, do you *honestly* believe that if there was actually any legitimate case to be made that congress doesn't have the power to define the value of a dollar, that it wouldn't have been challenged numerous times in the past?

The dollar is, and will be, defined by pricing it in relation to gold. Its just that the "value" of the dollar is baseless and floating against something of value, such as gold. Even a 6th grader knows putting ink on paper does NOT create "value".

Congress does NOT want to define the dollar. If it did, the fraud of inflation would be exposed, and the patriots in America would demand change. With a sound currency war could not be waged on multiple fronts, bridges to no-where could not be built, airports without passengers wouldn't exist, pork projects, waste and fraud would begin to disappear.

I think that's what AdHo was trying to point out in his retorical question: "What is a Dollar?"

Kevin says

The coinage act would not have been necessary if there was some single, universal value of “dollar”,

once again you are mistaking "value" for a physical quantity of silver. The dollar is a yardstick, it doesn't matter if the yardstick goes up in value or down, it is still the same 36 inches. And it doesn't matter if the dollar goes up or down it is still the same amount and purity of silver. When the constitution was written the dollar was a fixed and well understood piece of silver. The coinage act simply put numbers to the already known and measurable quantity and quality of silver that constituted a dollar. Which is why they did not need to amend the portions of the constitution that reference a "dollar." The dollar did not change with the coinage act, it simply received a more precise definition which enabled the congress to "coin" these dollars, which is exactly what the constitution called for them to do.

I can't believe you're still trying this argument. Hell, you don't even know what the term "value" means. It's quite amazing.

Yes, there were pieces of silver that people used in the Americas called "dollars" when the constitution was written. In fact, there were at least 5 different pieces of silver called dollars (4 of which were a different amount of silver -- and one gold). There was no "fixed and well understood" amount of silver that was a dollar. What the coinage act did is decide that the "fixed" (though certainly not well understood, since instruments were horribly imprecise at the time) amount of silver in a Spanish dollar was to be the amount of silver to be placed inside of US dollars.

This had nothing to do with the constitution, because the constitution didn't define it. It let congress define it. And congress said "a dollar is a coin made out of this much silver". Later they changed that amount of silver. Eventually they changed it to gold, and finally to an abstract concept.

Why you can't understand this, I'll never know, and it's a good thing that this conversation has no bearing on reality anyway. Please go try to exchange the only legal tender in the united states for .85 oz. of silver and let me know how that goes.

Nomograph says

theoakman says

We can make fractional reserve lending illegal as well. Have you ever seen the way they regulate casinos? The government makes sure they have cash on hand for their chips in circulation. I’ve never heard of a casino run.

You need to focus on finishing up. What, are you in your seventh year or something?

I did finish up. I already have a full time job. I just sit back and collect a second pay check from grad school now while I pretend to put the finishing touches on my thesis. Why are you always so anal about my career?

Paper bank notes represent money but they are not money. They are promissory notes whose "value" depends entirely on the fiscal and monetary discipline of the government that issued them.

Now I ask you, how much fiscal and monetary discipline do American politicians have? Hahaha.

Troy says

AdHominem says

The Dollar (specific amount and purity of silver) is just a yardstick. Congress has no authority to change the yardstick.

you’re literally insane, beyond reach of fact or reason. This will be my last post to patrick.net. Thanks all.

if this was your last post how come I saw a new post on another thread dated March 24, 2010? It seems Troy has a problem with the truth. Which is not news to me, seeing as how he still believes that a "federal reserve note" with a picture of George Washington is a legal dollar and the same thing as the dollar referred to in the 7th Ammendment and Article 1, Section 9, Clause 1 of the Constitution.

How are your attempts at exchanging silver for goods and services going?

Kevin says

How are your attempts at exchanging silver for goods and services going?

the dollar (a piece of silver) is a store of value as you love to point out.

a federal reserve note (a piece of paper) is debt.

How is that working out for AMERICA?

The Constitution says "No State shall coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt".

Our monetary system is corrupt and evil. Fractional reserve banking is inherently evil. It is called multiple indebtedness. By decree the dollar is a Federal Reserve Note and forcefully to be used as legal tender for all debts, public and private. The dollar is as good as the people's confidence. Federal Reserve policies have eroded the value of the dollar (down 90+% the last 85+ years). The dollar will eventually be destroyed esp. with Obamacare, Soc Sec, Medicare, other promises, ad nauseum. No currencies last forever. Only gold and silver. Prior to the Jekyll Island event the gold dollar was a relatively stable value for almost 100 years. Let's institute a free market based money and the free market will determine the dollar's value. Of course the Central gov't won't allow this because of their corrupt taxing powers.

wcalleallegre says

Federal Reserve policies have eroded the value of the dollar (down 90+% the last 85+ years).

Down as compared to what?wcalleallegre says

No currencies last forever. Only gold and silver

Really? Please point me to where I can use gold or silver as currency today? If it lasts forever as a currency, then I should be able to use it somewhere, right?

Nomograph says

Pretty good so far. Except for health care, we are at the top of the heap.

Yes I believe we ARE the BIGGEST DEBTOR NATION!!!!

Wohoo!!! WE'RE #1

Thanks Federal Reserve!

Nomograph says

It’s amazing how little you seem to appreciate what you happen to have been born in to.

...unless it's to complain about people who want it, too.

AdHominem says

Nomograph says

Pretty good so far. Except for health care, we are at the top of the heap.

Yes I believe we ARE the BIGGEST DEBTOR NATION!!!!
Wohoo!!! WE’RE #1
Thanks Federal Reserve!

Well, shit, I suppose you should just move to a country that still uses metallic coins for currency.

Let me know how that works out for you.

Kevin,

Ever heard of a monetary reset? I suggest one is coming soon to a "democracy" near you.

I'll solve this all for every one of you with what I learned before pre-school:

100 cents = 1 dollar

End of discussion. Problem solved.

The correct solution is feeding the

http://www.youtube.com/watch?v=JnX-D4kkPOQ

Many either don't know, or perhaps don't care to know, what sound money is. A dollar can't even be defined, that in itself is dishonest. A dollar is a dollar because the government says it is - haha. Without a uniform system of standard weights and measures there is chaos.

simchaland says

I’ll solve this all for every one of you with what I learned before pre-school:
100 cents = 1 dollar
End of discussion. Problem solved.

2 Bits + 2 Bits + 2 Bits + 2 Bits = A dollar

All for the money hole stand up and hollar!

Hilarious video Vicente: My favorite line was "I don't take money from special interests but if I did I would throw it right down the hole because I am a patriot!

In all seriousness though, the reason a dollar is 8 bits is because a dollar is a specific amount of silver and eight bits is a dollar chopped into 8 pieces to facilitate trade. Of course today it would be even easier to chop metal into bits, we wouldn't need to carry coins or bits in our pockets. We can do it digitally just like the banks do now with credit cards.

Is there any point to this post?

Honest Abe says

Many either don’t know, or perhaps don’t care to know, what sound money is. A dollar can’t even be defined, that in itself is dishonest. A dollar is a dollar because the government says it is - haha. Without a uniform system of standard weights and measures there is chaos.

A dollar is a dollar because the government says it is and the people (and the rest of the world) accepts it as such. It really is that simple. That you can't grasp this concept (I'm guessing you never took Macro 101?) is beyond me.

A currency is not some fundamental universal concept. It's an arbitrary value assigned to an arbitrary thing by human beings. Altering it doesn't require changing the laws of physics.

AdHominem says

n all seriousness though, the reason a dollar is 8 bits is because a dollar is a specific amount of silver and eight bits is a dollar chopped into 8 pieces to facilitate trade.

That has to be the densest thing said yet on this thread. You don't even know the etymology of the term "bit" and now you're using it to assert some silly idea of what arbitrary amount of silver makes up a dollar?

Of course today it would be even easier to chop metal into bits, we wouldn’t need to carry coins or bits in our pockets. We can do it digitally just like the banks do now with credit cards.

Yeah cause that'll happen.

Still no luck exchanging your silver for goods and services I see.

Kevin, your tone and rhetoric shows a need to belittle rather than persuade. So whatever floats your boat.

Yes, I was an A student in economics and encouraged to major in it. Having a firm understanding of economics I chose a more lucrative path.

In your Orwellian training, no doubt you were programed to believe that a dollar is a dollar because big brother says so. But in fact, when the fledgling nation was looking to define a currency, they actually did some investigation about what the people where using as money. They found that spanish dollars (also known as pieces of eight, and thus the 2 bits, 4 bits, 6 bits a dollar rhyme) was the preferred choice in the free market. The founders also know of the requirements of Aristotle for a sound currency, and knew that precious metals fit the bill to a T. So naturally the early American leaders adopted the silver currency and standard in accordance with the will of the people. The fact that you deny and discredit this is your own arrogant downfall.

FYI there are already private companies who sell precious metal savings and debit accounts and their acceptance and use is growing in popularity, especially in a world where currency devaluation and collapse is a growing concern.

Nomograph says

You judge a nation by it’s people, not by it’s government....We are the wealthiest people in the world.

The cumulative household debt of Americans is over $16.5 trillion (that is in addition to the national debt of over $12.5 trillion). This is a level of debt that other nations could only dream of achieving. God bless America and the Federal Reserve who made it all possible!!!

I love this country as much as you do, that is why it is so sad to see it indebted to and enslaved by the banksters and corporations the FED enables. They are so good at it that they are even exporting our debt to other countries and using their labor and resources to support us and greatly enrich their own profits, power and influence! Eventually this all will end. And unfortunately you won't be so smug then, because right now it is actually sadly entertaining how arrogant and informed you consider yourself.

This is off topic and I don't know what your specialty is but I am curious if you know of any advancements in the understanding of the etiology of certain immune disorders such as hyperthyroidism or idiopathic adrenal insufficiency?

AdHominem says

This is off topic and I don’t know what your specialty is but I am curious if you know of any advancements in the understanding of the etiology of certain immune disorders such as hyperthyroidism or idiopathic adrenal insufficiency?

...and Nomo, I'm sure that you don't mind giving me an online consult. It hurts my neck when I stand on my head. Do you have any advice? (you're welcome in advance for the opportunity to provide the obvious answer)

Oh, friend, I don't deny that people used silver as a medium of exchange 250 years ago. What I take issue with is this absurd assertion that there is some fundamental natural constant for the value of said medium of exchange.

To a lesser extent I take issue with the idea that metallic currency is actually going to solve any real problems in the world.

But, please, the next time you're buying groceries, try to slap down some silver and let me know how that works out for you.

Kevin, try this - Google: How sound money prevents tyranny. You'll get over 900,000 articles to read in about .43 seconds. Read and learn my friend, then you'll understand the value of sound money and how that will solve many problems in the world.

Respectfully,
Abe

Bah, only 900K hits? I see "moon landing conspiracy" comes in at nearly 4 MILLION! You'll have to do better if your argument is that quantity=quality.

I like Google Trends a lot. It shows me that "Huttaree militia" was the 5th hottest search today. Ranks well below "Ricky Martin news" though.

Where was I going with this? I forget.

$1 = 99 cents when bought on credit (WF Visa card). YMMV.

Honest Abe says

Kevin, try this - Google: How sound money prevents tyranny. You’ll get over 900,000 articles to read in about .43 seconds. Read and learn my friend, then you’ll understand the value of sound money and how that will solve many problems in the world.
Respectfully,
Abe

Hasn't anyone here ever heard of debasing coinage. It's been done since coins were invented, including the vaunted spanish dollar everyone is talking about. There is nothing sound about metal coins any more than seashells. If governments want to debase the currency they will no matter what it's made of. Everyone is missing the point that currency only has value as a medium of exchange for goods and services, not by having any intrinsic value in and of itself.

This whole post is meaningless anyway. There were dozens of spanish coins minted in the western world during colonial history with many different values and quite a few debasements. The alleged standard dollar at the time of the revolution could have been any one of a number of spanish coins, both silver and gold, of various values in circulation at the time of the American revolution.

Hasn't anyone other than me read how the lack of sound money leads to tyranny? A mind is a terrible thing to waste. Liberalism is a mental disorder.

Honest Abe says

Liberalism is a mental disorder.

Yet it is the dominant status quo in every modern economy. The LACK of liberalism can be found in Iran, North Korea, Myanmar, Saudi Arabia, Pakistan -- ie the real shitholes of the world.

The nicer and more successful a place is, the more liberal it is. Funny how that works.

Liberalism is essentially the rejection of freemarket Monopoly®-game morality.

Anti-liberals simply fail to understand that real estate price escalation is the spectre behind every "free" economy. Real estate will simply suck every last free dollar out of the system, out of the hands of productive members into the wallets of specuvestors and rentiers, since the supply of land is fixed and the demand (in every place worth living) is unbounded.

The liberal welfare state simply redirects this parasitical flow into wealth-creation and wealth-preserving community functions -- subsidized parks, schools, hospitals, beaches.

(Ideally. The actual implementation often leaves a lot to be desired, of course. A people only get the government they deserve, no less and no more)

Kevin says

Oh, friend, I don’t deny that people used silver as a medium of exchange 250 years ago. What I take issue with is this absurd assertion that there is some fundamental natural constant for the value of said medium of exchange.
To a lesser extent I take issue with the idea that metallic currency is actually going to solve any real problems in the world.
But, please, the next time you’re buying groceries, try to slap down some silver and let me know how that works out for you.

Precious metals are still a store of value and medium of exchange in many parts of the world. In fact the Chinese government is encouraging that its citizens save their money in the form of silver and/or gold. In our country we may not use silver or gold in our daily life, but many Americans do use it as an investment (not necessarily to make money, but to preserve purchasing power in an inflationary environment). Gold is an important part of other cultures and savings/trade for example in the Middle East and India.

A dollar as a piece of silver of a particular weight and purity is not merely a medium of exchange. It meets all four of Aristotle's requirements for good money:

* Durable: Money must stand the test of time and the elements. It must not fade, corrode, or change through time;
* Portable: Good money needs to hold a high amount of 'worth' relative to its weight and size;
* Divisible: Money should be relatively easy to separate and re-combine without affecting its fundamental characteristics. An extension of this idea is that the item should be "fungible", defined as "being freely exchangeable or replaceable, in whole or in part, for another of like nature or kind."
* Intrinsically Valuable: This value of money should be independent of any other object and contained in the money itself, starting with rarity.

Will having sound money such as Aristotle described solve all of our problems? Of course not, but it would be a good start.