patrick.net

Reality says

It is important to keep in mind that "Specie" means both gold and silver.

Very informative Specie thanks for the finer details in the history of precious metal backed currency.

And I had a NO Idea that Isaac Newton was the head of the Royal Mint.
Talk about gravity, did he discover falling prices too?

Gold and silver ARE money. They represent the labor and energy used to mine, refine, and mint coins or bars.

A federal reserve note is only worth what the makers say it is worth. Fiat money represents debt, corruption, and the enslavement of the American people.

Onvacation says

A federal reserve note is only worth what the makers say it is worth. Fiat money represents debt, corruption, and the enslavement of the American people.

Since Biden took office only 2 years ago, the Federal Reserve Dollar is now worth only 87 cents.

Reality says

It is important to keep in mind that "Specie" means both gold and silver.

America has silver in vast quantities.

The ultra rich prefer Gold because it's much easier for a combine or coven to corner to local/national market in Gold due to it's rarity and give out Private Fiat (JUST as bad as Government Fiat) Cotton Paper Banknotes

"But muh voluntary". Nobody in their right mind in a financial crisis hands over good Metal Specie for paper. It's not voluntary when the Bankers refuse to hand over any gold or silver but give out Paper Banknotes, period.

What's the difference between value based upon a promise and the actual value of a substance?

You only need to look at American coinage that was minted prior to 1964 in silver, and compare its intrinsic value to the counterfeit coinage thereafter, which was made of nickel clad copper. At the current silver price of $23 per troy ounce, a 90% silver Franklin half dollar has a melt value of $8.32. An Eisenhower (1971-1976) 'silver' dollar, which contains only 40% silver, has a melt value of $7.26. In comparison, the melt value of nickel clad copper coins would be worth about 2 cents.

Our paper money used to be linked to precious metals as well. I own several "Silver Certificate" US Dollar bills. Back when money was actually backed by something of value other than a promise, Silver Certificates could be exchanged at any bank for actual silver. Replacing that now are dollars created out of thin air, along with the reckless mismanagement of the banksters that are running the biggest Ponzi scheme in world history.

RayAmerica says

Since Biden took office only 2 years ago, the Federal Reserve Dollar is now worth only 87 cents.

Wow, we actually became Canada!!

"Specie" usually means a metal coin that has its metal value close to the face value (i.e. a specimen of metal that does not rely on fiat command of the government to make it worth nearly the supposed value). Historically, some seigniorage charge amounting to a small percentage of the face value was commonly present for the convenience of coin vs lump metal, but the percentage was very low due to competition among various different governments and private mints, and people's rejection of coins with too low metal content (just like people would reject clipped specie coins; and coin clipping faced death penalty, when not done by government) in the absence of fiat laws engendering Gresham's Law. During the first century of the republic, US mint even waived seigniorage charge: allowing all citizens to take gold or silver to the US mint and have the metal minted into US metal coins without charge.

The 1873 demonetization of silver has caused massive inflations and deflations that not only caused all the bankruptcies during the bankster-engineered recessions and depressions, but also ironically made what after 1873 was supposed to be a token coin the silver coins between 1873 to 1964 (and to 1972 half dollars despite halving silver content) into practically "specie" by 1960, and now the penny into almost "specie"-like (at least the copper ones), and possibly the nickel soon if inflation exacerbates in the future.

Banksters indeed prefer gold-only exchange-standard or fraud-standard or no-standard fiat money, because then they can print up fraudulent warehouse receipts and not-even-worth-a-fraud plantation scripts for the gullibles and the slaves. As for ultra-rich, not all ultra-rich are worshippers of Marduk (or whatever the war-mongering and deliberately war-losing Banksters are into, as eventually the banking fraud has to be covered up in a bout of mass self-destruction of the society, so many banksters and their cronies will also die in the bon fire / holocaust); otherwise, there wouldn't be the founding of the USA.

"Let us not crucify the United States on a Cross of Gold."

The weird scenarios you all come up with regarding a "gold standard" are truly bizarre.

In a gold standard, pretty much everything would work EXACTLY the same as today w/ regard to dollars, transactions, buying, selling, etc..

The main differences would be:

1) The federal reserve couldn't issue credit as "the lender of last resort" without somehow increasing its actual gold (commodity) reserves.

2) If people/banks/institutions suspected the fed was issuing credit without associated gold reserves, they would rapidly begin withdrawing their reserves in a form of "bank run".

3) This would lead to banks depositing far smaller amounts of gold with the federal reserve in the first place, to lower their risk of a "bank run" at the fed. The fed would revert to a function of transaction clearing between large institutions. Basically, maintaining a ledger of which gold belongs to who, and in which regional vaults.

4) Since the fed can't/couldn't transfer gold to the treasury account in exchange for T-bills in excess of its reserve requirements, we couldn't "increase the national debt" to pay for washington spending. The fed would be a limited buyer of national debt. National spending would be forced to reign in, or increase taxes proportionally. Politics would shift remarkably fiscally conservative.

5) Since there is a limited amount of physical gold, additional commodities would also be used to back the currency. A national exchange rate between coined commodities would be established. 1 oz of gold might be worth 20 oz of silver. We might nominally call 1 oz of gold $1000 and one ounce of silver $50. This might need to be periodically adjusted if the rates of gold and/or silver and/or other commodity mining changed relative to each other such that it created arbitrage opportunities. There would be some amount of currency arbitrage and speculation.

6) New commodities might enter the national currency. For example, pure silicon, which is a commodity input for microchips. This might lack the easy divisibility of metals, but might make up for it in value density, or might exist only in vaults and commodity houses. Platinum, palladium, cobalt, and other rare earths might also join the spectrum.

7) Digital currencies to facilitate representation of storage location, owner transfer records, and authorization to withdraw might spring up. These would be "asset backed digital currencies". These are currently somewhat known as "commodities contracts", but lack widespread use as a currency mechanism. In a commodity backed currency this would become common

8) As people became comfortable with pseudo floating multiple commodity currencies, innovation around commodity based finance would ensue. Friction in the exchange of commerce would present business opportunity. Banking systems would have a hard time maintaining control in similar ways that bitcoin attempts to provide. The energy cost of bitcoin would be removed and reduced to the problem of trust that current banking relationships themselves have not yet solved. IMHO this would lead to innovation in risk management, distributed trust, insurance, and verification tech.

9) As a result, banks would be forced to compete again. Massive consumer defrauding organizations like BofA would likely dissolve as people just told them to pound sand.
VISA & MC implode as networks can't gather 3% fees due to fintech competition.

10) As unproductive "bullshit" jobs wash out of the economy, massive productivity increases begin as workers retrain into production oriented careers. Wage deflation as well as CPI deflation occur. Economic protectionism takes stronger hold as more people are subject to communist slave competition and vote in a bloc for their own interests.

I could go on. In short, pain, but then benefit.

Money is the most readily accepted commodity in the society/market. I'm having a hard time envisioning a scenario where a currency would stay a currency without being the most accepted commodity. For example, when Nazi Germany and Soviet Union collapsed, cigarette and alcohol became currency and money, plus canned tuna in the latter case (also in former east bloc countries like Poland briefly when communist regimes collapsed in those countries). When Czarist Russia collapsed, and the Reds rapidly inflated their new currency into near-zero value, the old Czarist paper currency became the currency and money briefly and appreciated in purchasing power because the old Czarist paper money was no longer printed.

What a commodity based money/currency does is limiting the government from arbitrarging political coercive power into make-belief money. The problem with gold-only standard is that there is not enough gold for daily currency circulation, so paper representations of it would have to be in wide use, thereby giving rise to the opportunity for banking fraud (creating far more paper representation than there is gold to back the allegedly commodity back currency/money in gold-standard, reducing gold-only standard to fraud-standard). The fundamental problem with arbitrarging political coercive power into make-belief money is what we see today: more and more young people flocking into the fraud industry called "banking," which in the full economic cycle doesn't create any real aggregate profit. Madoff, the man who made most of the rules we know today in financial industry, came to the conclusion a long time ago that a ponzi scam without having to pay many employees would actually lose less money than a managed fund with many paid employees (index fund investing is somewhat akin to that, especially those around narrow-focus indices). People flock to banking industry because bailouts create an environment where gamblers take the winnings while letting the society at large absorb the losses.

To err is to be human; therefore it takes numerous mutually willing negotiations and exchanges for a society to function and for an economy to prosper (i.e. a command economy wouldn't work, and the 20th century saw numerous mass starvations to prove the point). A sound money that nobody can fraudulently create out of thin air is necessary to facilitate the fair exchange of goods and services.

I wonder about barter. That is, with the internet there could be an exchange where one could list items available and items needed. A large database with easy search could match traders together. One day you could trade a side of beef for lawn services, then later a collection of cakes for silver bars to put in "savings." Taxes would be tough, though.

Gold hawks are dishonest on one hand they point to gold because it is finite and there is a limited supply.
But then to fill in any paradoxical conundrums on supply for people to have readily available for currency. They just arbitrarily suggest you go out and mine some more.
That's the same answer I get on BitCoin which I see digital currency like gold but worse. Who will keep the servers running when all of BC has been mined, and if it's all mined how could you just mine more? Also the bothersome thing about digital currency, a Bit Coin can cost up to $64,000 each depending on the market. But if you're buying $300 of Bit Coin, is the digital ledger on that single BIt Coin being recorded? Like a serial number. Then you keep buying in increments you have up $64,000 in Bitcoin but it's spread out over hundreds if not thousands of BItCoin. How is that reconciled in your digital wallet? I never have gotten an suitable answer on if that is the case.
But why are people hating on paper money saying more can be printed. But they would be fine with someone going out and finding the motherload of Gold ever struck. Uganda just struck it rich, I wonder what that will do to the price of Gold?
And what kind of carnage and mayhem will be created over it?

Zak says

2) If people/banks/institutions suspected the fed was issuing credit without associated gold reserves, they would rapidly begin withdrawing their reserves in a form of "bank run".

Would they? Why would they? Nobody flinched when run away spending ramped up on Carter's watch and continued through Reagan's watch..

You're sane and reasonable. .But the first time Congress got up there and said they were going to have to close the Government and not make payroll.
The same result we see time and time again will happen. 60% of the people will support congress raising the debt ceiling, and the Fed Chief Printing more bills.

Zak says

3) This would lead to banks depositing far smaller amounts of gold with the federal reserve in the first place, to lower their risk of a "bank run" at the fed. The fed would revert to a function of transaction clearing between large institutions. Basically, maintaining a ledger of which gold belongs to who, and in which regional vaults.

What would that kind of bank run look like? Are you suggesting there would be a long line at the Wels Fargo bank at the entrance door, and people exiting the exit with their black bag of gold dust and arm full of bullion?

IMHO, the Uganda gold discovery is a fake story. The often quoted numbers are 30 million tons of ore, with 300k ton of refined gold expected. Those numbers make no sense: gold ore quality is measured in grams of gold / ton of ore; a very high quality gold ore can yield about 10grams / ton, or 10ppm, 0.001% (typical placer mining operates at lower concentration than 0.3ppm). The numbers from the Uganda story is 1%! That has to be someone sprinkling refined gold dust onto the ore samples, like the Bre-X fraud story in Indonesia circa 1997.

stereotomy says

"Let us not crucify the United States on a Cross of Gold."

Yep, let's use America's abundant silver!

Which is what Bryan was getting at. Or rather, bimetalism which is even better because the PTB would have to manipulate both silver and gold simultaneously.

The original 1792 US Dollar was fixed at either a given weight of gold OR (higher, obviously) silver and Founding Father approved.

It was the Crime of 73 (1873) when Congress forbade the on-demand minting of silver coins from any silver metal brought to it by any citizen, in return for a token seignorage tax to cover the cost of the minting and stamping.

Each time Congress regulated beautiful Silver after the Civil War, the country was thrown into a "Panic" as greedy banks and landlords used to their lock on the gold supply to screw over debtors, farmers, miners, prospectors, frontiersmen, and working people generally, forcing them to pay with expensive Gold instead of affordable silver, strangling commerce and consumption.

Silver is self-regulating, if the price gets too low, people stop bothering to mine or mint it.

Oh, @Patrick, another form of currency debated in the late 19th Century was the Stanford - of University fame - idea of having a currency based on rolling land values over a decade average. Very Georgist!

Tenpoundbass says

Would they? Why would they? Nobody flinched when run away spending ramped up on Carter's watch and continued through Reagan's watch.

Carter and Reagan the fix was already in. Nixon took us off the standard. He flatly said notes would not be redeemed for physical:
https://www.investopedia.com/terms/n/nixon-shock.asp

And why? Because exactly what I said above. People (specifically foreign pegged Bretton Woods currencies) began to see that the gold was not there to back the currency, and began withdrawing it.

In 1971 , an ounce of gold was ~ $40. Today we are about 50x that. Compare a dollar in the S&P 500 in 1971: today you would have about $180.

This means there is a 7.75% inflation rate eating in to the 10.5% S&P 500 return rate giving a "real return" of about 2.75% on the S&P 500 !!! Over 50 years obviously that adds up, but goes to show the real impact of inflation.

Contrast that to a dollar held under your mattress. A 1$ silver certificate from 1971 is worth... $1 .. The system is clearly designed to take from those least able to diversify from dollars (the poor).

Tenpoundbass says

What would that kind of bank run look like? Are you suggesting there would be a long line at the Wels Fargo bank at the entrance door, and people exiting the exit with their black bag of gold dust and arm full of bullion?

Well, for starters, no. People in general would keep some money at home, and keep some money at the bank. The average American today has less than $500 on hand to pay for any kind of emergency at all. So it's not crazy that an "average" person have 50 silver dimes at home @2 dollars each & 5 silver dollars @20 dollars each, and have another 200 "in the bank" for conducting transactions. "paycheck come in paycheck go out" ..

With $500 on hand for the average emergency, this is less than a single gold coin per household for HALF of America!!!

With only 50 silver dimes, a tiny tiny pile.. how do you think most people would feel giving 2 of their 50 for a coffee at starbucks? It's just different than paper in the first place.

Second. The kind of run I'm talking about is where 25lb bars (400 oz) are sitting in a vault, and the depositor comes calling. A 25# bar of gold is 400oz x $2000/oz = $800,000. Banks might deposit several of these bars into the local federal reserve bank. Suppose Bank A has net 10,000 customer transactions come in transferring money to Bank B @ $1000 each on average over the course of a month, netting $10,000,000 to be moved to Bank B. This could be payments, account closure/moves, etc. Suppose the customers are satisfied to let the banks clear the transactions rather than withdraw and deposit the currency themselves.

The way this might occur is that Bank A has 100 25# gold bars on deposit at the federal reserve, and they send a note to the federal reserve and say transfer ownership of 10 bars to Bank B. This covers 8 million of the 10 million transfer. The bank then couriers over an additional 1000 x 1oz. gold coins to cover the remaining $2M dollars. In "the meantime" during the month, as transactions are accumulating, both banks are keeping track of one bank becoming in-debt to another bank.

So the first thing to happen in a "bank run" is that Bank B gets suspicious of Bank A, and asks for earlier than month end clearing. This is allowed under terms, month end clearance is a convenience and effective "extension of credit". Today this is called overnight interbank lending, and has an interest rate set at the federal funds rate. So Bank B says "hey we think you lost the money, we're calling in our overnight loans." If Bank A is in good shape, they just pay it off as they have plenty of reserves. But if Bank A balks AT ALL... boom.. wildfire. Bank B insiders call all their buddys and say "go get out now". That's when somehow the word leaks out, and people start waiting in line for their 100 silver pennies.

That's why banks always want to keep a "bit extra" in at the federal reserve, so any 1 bank creditor can kind of see their money sitting there in liquid form, and why any individual bank would always want to pay a portion of a credit to another bank directly, and never fully deplete their reserves at the FED.

And the "big bank run" (like 1970) is when people see the fed balk at withdrawing some of those 25# bars for some reason. That is "oh no oh no oh no" territory. And that is exactly why the inflation adjusted wage has been declining for much of America since 1971, and a bigger and bigger share of GDP has been going to the top .1% . The .1% just gets printed money from FED loans and buys all the assets (blackrock). Then if they get overleveraged, they are "systemically too important" and get a bailout.

Sometimes you just got to be able to print the money.

If you have a commodity based monetary system, it leads to deflation as "money" is removed from the system by people "saving" it.

Now it really doesn't matter as people can go ahead and plan on getting paid less in 5 years than they are today, but the math is more difficult than in an era of inflation where people believe they will get paid more.

Since 1913, the price of silver has gone up about 3.3% per year vs the value of a dollar. If you put those dollars into an interest bearing account you will have mostly eliminated this advantage. Yes, this takes into account the wild free money days of Covid.

The commodity based system is inferior to a fiat based system except in times of her-inflation.

Misc says

If you have a commodity based monetary system, it leads to deflation as "money" is removed from the system by people "saving" it.

Why is deflation a bad thing?

Because you've been told over and over and over again it's a bad thing. You've been brainwashed into thinking it's a bad thing.

Do you REALLY think it's a bad thing for bread to get cheaper? That your house value goes down, but so does gasoline, electricity? That you may be asked to take a paycut because the company is selling less, but commodities are dropping in price as well, so manufacturing costs have dropped?

We had many "depressions" which before the Fed, just mean the economic contracted. Bad businesses went out of business, more efficient businesses took their place, this happened over and over and over again.

But then we got the Fed, and a Great Depression, that lasted from 1933 to 1945 when we entered WWII. We had about 405,000 people killed in that war. But at least we don't experience 1 or 2 years of deflation periodically... Now we're facing a "Great Reset", I wonder what that is about? Well, it's about time again..

House is around $400,000 dollars, how many 20 year old kids will be able to realistically own homes? Corporations are buying them up though, like Vanguard and Blackrock. The old have fucked the young because they were bought off. The new generation being born today, they're going to be slaves by the time they get to be adults.

Like I said, we can adjust our outlook to deal with living with deflation, but the math and mindset is easier with inflation.

Also, with a commodity backed monetary system the ability to charge interest is problematic. It simply cannot be done without the system collapsing. Whereas, with fiat interest can be charged as the system can continue to expand instead of forced contraction.

Misc says

Like I said, we can adjust our outlook to deal with living with deflation, but the math and mindset is easier with inflation.

Look, let me explain the scam we have right now.

Somebody "borrows" $1 billion dollars from a bank at a very good interest rate, like 1% because they have incredible credit. They purchase actual goods with this money, like property or whatever, then this money enters the economy and causes some inflation. Do this with 1000 people, and that's a trillion dollars that was printed, there WILL be inflation, and then they can sell off their whatever, and they made a profit.

That's the scam, we were warned about this by Andrew Jackson, when he destroyed the central bank.

Misc says

Also, with a commodity backed monetary system the ability to charge interest is problematic.

No, it's not. The reason you're earning interest is you're taking a risk. The interest is insurance payments for that risk when you loan money. If you aren't paid back, you get your interest, and that's it. They went bankrupt, too bad.

That's your CLASSIC banking system, right there.

The bankrupt party BTW has to liquidate in order to pay back, so if they bought property, the property went down, you may not be entirely whole, but you might get 80% of your money back. Maybe there's been a crash, and you get 50% of your money back.

That's the CLASSIC system. Banks did go bankrupt back then, but they could recall their loans. They had agreements. People who stop paying back, forfeit their property to pay it back - this still happens with home foreclosures.

What sometimes happened was a corrupt banker took the money that was deposited and used their own credit to make wild speculation, speculation used to be illegal. When this banker was caught doing this, generally it ended in the banker's death, by suicide. Banking used to be a very conservative, very low risk system but there were bumps, sometimes a loan didn't pan out. If you wanted to start up a business, you didn't go to bank for it, you went to an investor, that's what STOCK was for, you gave them a portion of your company, and the payout was eternal payouts from dividends from the stock. Maybe the company REALLY grew, well dividends grew as well, maybe though you think the company is going to shrink, so you sell your stock before it does.

We live in a system where people don't even consider dividends today. EVERY stock used to pay dividends except during the startup phase. It took time to build the factory, or to develop the research and product - you might get nothing for a year or two.

We have a completely perverted system now.

Look, Europe was in STAGNATION for CENTURIES. Then the US was founded, and a revolutionary war was fought to get rid of dependence on the Bank of England, that's what the Revolution war was REALLY about. Then we developed like fucking crazy. Suddenly inventors had an incentive. They had access to credit, and they could become RICH. When the Fed showed up it went into fucking overdrive because they gave out credit everywhere, until, the system went bankrupt.

If you have a commodity based system which by nature would have to be deflationary. It would be hard for someone to comprehend taking out a 30 year loan for a house. If he did, the house payment would take up more and more of his pay over time as his pay went down. With ever decreasing prices for real estate people simply would not invest for themselves. This would lead to only the wealthy owning properties and gouging common folks in the amount of rent they would charge.

An inflationary system, whereby the house payment would decrease as a percent of income over time is preferable IMHO.

When we had sound money, before inflation took hold by removing the gold standard, the average person could pay off a home mortgage on one income in 5-10 years. Inflation insures that most people will remain faithful slaves of the banksters.

PeopleUnited says

When we had sound money, before inflation took hold by removing the gold standard, the average person could pay off a home mortgage on one income in 5-10 years. Inflation insures that most people will remain faithful slaves of the banksters.

No, inflation is a way out for a borrower. It harms lenders and savers, but that is mitigated by the interest charged.

Also, home ownership was rare. Most people were forced to rent.

Misc says

inflation is a way out for a borrower.

First of all, the biggest borrowers are not those taking out home loans, but the banks themselves: their action of taking deposit is borrowing.

More importantly, it's not inflation itself that helps borrowers (as lenders would charge higher interest rate when both sides expect higher inflation), but the difference between inflation rate during loan service vs. inflation expectations when the loan interest rate was set. That's where artificially manipulation of interest rates by monopolistic banksters really rip off the general population: just look at the millions of people who took out loans to buy houses at or near market peaks due to fear of run-away inflations (FOMO, "now or never"). There are always more people buying at the peaks than at the bottoms (that's how peaks and bottoms are formed). Left to a free market, the market should have peaked during the 2016-2018 time frame. The artificial manipulation during 2018-2021 to extend the bubble (pretending "inflation was only transitory") provided the opportunity for insiders to unload, while roping in the masses to overpay. The result is exacerbated booms and busts, and exacerbating wealth polarization.

Misc says

If you have a commodity based system which by nature would have to be deflationary.

Not true. More commodities are dug up every day/week/month/year. Even for gold, 2/3 of all gold mined by humanity has been mined after circa 1950. Also, the commodity based money system specified at the time of the founding of the USA was Bimetalism: either silver or gold, which ever is slightly less expensive than the 1:16 ratio. Silver being usually a biproduct of industrial mining other metals such as zinc, lead and tin, the slight laxity between Bimetalism and industrial mining biproduct give plenty room for monetary expansion at pace approximating industrial output, while not giving anyone the power to manipulate money supply at the stroke of a pen (or a push of a button) after the masses and banksters have already placed their bet on inflation expectations (remember, it's the difference between previous expectation vs. subsequent reality that is at the root of extra profit and bankruptcies/foreclosures). What we have right now is like: after you buy a stock and the dealer short it to you then the dealer appoints a committee to decide what the price of the stock should be; and vice versa after you short a stock and the dealer buys it to squeeze you. In gambling analogy would be a loaded dice instead of a fair dice.

The amount of gold mined would not come close to the amount that would need to be "saved"..

Could you imagine what the deflationary effect would be if there was a modest 5% savings rate? Then factor in population growth??

Then there is the fallacy of being able to charge interest on a commodity based system.

Nope, fiat is far superior.

Misc is right, nobody thinks about the logistical math involved with a Gold based economy.
You would be paid in company script like I have said. And only the business owners and producers would actually be paid in Gold.

Misc says

The amount of gold mined would not come close to the amount that would need to be "saved"..

Could you imagine what the deflationary effect would be if there was a modest 5% savings rate? Then factor in population growth??

You are engaging in strawman-tactic. The money defined at the time of the founding of the USA till 1873 was Bimetalism, not gold-only standard.

Then there is the fallacy of being able to charge interest on a commodity based system.

Why can't one charge interest for loans made to the opening of a silver mine or a gold mine? Literally more monetary metal would be produced after purchasing mining equipment and chemicals then putting them to use. By extension all the suppliers of food and energy to the mine operators can advance payments and collect interest; then likewise the secondary and tertiary suppliers to them. What will end is interest-bearing on-demand bank account, because interest-bearing on-demand bank account is a fraud! Just like a Ponzi Scam is a fraud: the operator is promising the mathematically impossible!

Nope, fiat is far superior.

Superior only for the fraudsters, at the expense of everyone else.

Tenpoundbass says

Misc is right, nobody thinks about the logistical math involved with a Gold based economy.
You would be paid in company script like I have said. And only the business owners and producers would actually be paid in Gold.

Strawman tactic. Gold-only standard is simply a prelude to gold-certificate standard (as you described) then fraud-stanard and fiat-money. That's why the monetary standard advocated by the Founding Fathers and responsible for the prosperity in the first nearly a century of the USA was Bimetalism, before the Civil War and "the theft of 1873" ushered in massive booms and busts, and the "American Empire" to impoverish Americans while enriching international banksters that have no loyalty to any country or community. Robbing the Helvetics and Gauls did not enrich Romans in the long run, but only brought the down fall of the Roman Republic; likewise, robbing food from Egypt at cheap prices did not enrich the Romans but bankrupted the Roman farmers and made them into dependents on the state and easily manipulated by the Emperor and his cronies (who then often killed the Emperors to become Emperors themselves).

Charging interest on a commodity based system doesn't work. I will let you do the math for a single ounce of gold compounded at a 3% interest rate for say 2000 years.

There is a reason that all the Great religious books forbid charging interest.

Fiat does away with this as the system can be expanded.

Misc says

Charging interest on a commodity based system doesn't work. I will let you do the math for a single ounce of gold compounded at a 3% interest rate for say 2000 years.

LOL! Whoever lends out a 2000-year loan deserves to lose his money, as he has completely shirked the responsibility for risk assessment. Who said interest rate has to be 3%? Those who want to make a living off lending out money should carry the risk of borrower defaulting, not shifting the risk to everyone else! Ever wonder why we have so many frauds and bubbles lately? How is a system set up to enable every fraud and fantasy by the insiders (or just bureaucrats in a government-run monopoly / public utility) any different from centrally planned economy?

There is a reason that all the Great religious books forbid charging interest.

So do you want to follow ancient wisdoms or not? Where do they say the solution is plantation scripts to rip off the slaves?

Fiat does away with this as the system can be expanded.

What Fiat does away is restraint on government power. Perhaps you think the Constitutional restrictions on the government should also be done away with.

Misc says

Charging interest on a commodity based system doesn't work. I will let you do the math for a single ounce of gold compounded at a 3% interest rate for say 2000 years.

It eventually leads to default in a commodity based system, on and off. There are ALWAYS bankruptcies in a commodity based system.

With a fiat system, it ALWAYS leads to inflation. In a purely fiat system, if a Bank loans out $1,000 to 1000 people, and charges 1% interest on everybody and loans it for a year, how is it possible for everybody to pay back the loan at the end of the year? Everybody will own $1010 at the end of the year. So how do you prevent a default in this system? Well, the bank creates $10 for each person, and uses that to buy goods and services from everybody. There can STILL be defaults, but it's not guaranteed.

The reason the US target inflation rate is 2%, is that is how much more gold we mine every year, about. Inflation is a direct measure of the increase in money supply. The Fed lies about it, which is why we went bankrupt in 1933 and 1971, The Federal Reserve is just a criminal organization, it's mathematically provable that's all they are.

It's not that they lose their money. It's that they enslave everyone else.

Since there is no way for you to refute that charging interest on a commodity based system leads to anything but the systems collapse, I will consider this a win.

Misc says

It's not that they lose their money. It's that they enslave everyone else.

Since there is no way for you to refute that charging interest on a commodity based system leads to anything but the systems collapse, I will consider this a win.

Charging interest rate in a bimetallic money system does not lead to system collapse: bad loans would default individually, hence lenders are individually held responsible for their business acumen. Whereas a fiat money system indeed not only enslaves everyone in the economy (as fiat money is essentially a Plantation Script for the society at large) but also causes frequent synchronized system crises and collapses like we have been seeing.

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Comes to think of it, if we model Collective Farming as a collective farming of crop seeds, then Fiat Central Banking is essentially collective farming of seed money and seed capital. That's why we have been having money/capital famines! Individuals have to be held responsible for what they do with the seeds if we want to have the seeds grow into bumper crop and good harvest.

Yes, charging interest, which is a mathematical construct, overwhelms physical supply in a commodity based system.

Misc says

Yes, charging interest, which is a mathematical construct, overwhelms physical supply.

What is the proper interest rate on a kernel of corn? What is the proper interest rate on a grain of rice or wheat? (those seeds yield 10x to 30x over a growing season before deducting labor cost and capital cost). What is the proper interest rate on an ounce of gold/silver as seed money to find and dig up more gold/silver? These are all dependent on the technology available at the time and the environment factors. Only through the negotiations of many lenders and many entrepreneurs can the proper interest rates be reached and changed. Some gamblers will have set backs. However, having a bunch of government bureaucrats set the yield by fiat command would only lead to corruption and inefficiency, and massive concurrent systematic collapses.