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This is the answer I would expect. You don't know, but you have a question that is confusing to you. Fair enough. But that should really inform you as to whether the opinion you are putting forth holds, and you should spend time arguing for it, or if you should be trying to listen to the other people explaining the economic foundations and asking questions.
This ignores the printing of banknotes by banks.
Peru is very rich in precious metals, but the Presidents in the 90's through the early 2000's squandered all of it to China. They were building a railway system, but one of the President's absconded with the funds, it sat unfinished for over 20 years.
When they had minerals and wealth they were held down to dirt poor third world conditions. I saw it with my own eyes. It happens all over the world. I have also seen around the world when once third world countries have commerce open up and investors build and open business where none existed before. Those countries fast track to the 21st century over night.
The total worldwide supply of gold increases at a rate of about .9% per year. The supply of silver increases at a rate of about 1.2% per year.
Without social security, let's say the savings rate would be 20% (and I'd say that is waaaaaay too low).
With people needing to save 20% minimum of what they make and the supply increasing about 1%, how long could the system survive?
That is a separate issue though. Bank deposits should be made at the depositors own risk.
What enables a dictatorial regime is not the specific mineral per se, but the dollar value and its ability to buy support from cronies and buy violence to suppress the public. That is precisely what a Fiat Money Central Banking system is (until the currency it prints is universally rejected). The US is effectively having a giant mine that spits out trillions of dollars, the mine is the fiat money central banking system . . . and that is why the republic is gradually breaking down!
There's only about 550000 metric tons of silver in the world. There is only about 208874 metric tons of gold in the world. With the population of 1st world countries being about 1 billion, there is simply not enough of the commodity for it to be used as a currency.
Employers will be paying employees with paper banknotes
Misc says
There's only about 550000 metric tons of silver in the world. There is only about 208874 metric tons of gold in the world. With the population of 1st world countries being about 1 billion, there is simply not enough of the commodity for it to be used as a currency.
We don't know the true numbers for one, and for another, we can subdivide both gold and silver to the point they are sizes of peas. The idea that "there isn't enough" is just false.
The financial attack on these metals is being done because it would crash the system if everybody just bought a small amount of each. Our financial system is just a scam, and eventually, that will correct.
The savings rate would by necessity be much higher than the rate at which the metal is mined.
Without social security, a savings rate of 20% would be very low.
You have not addressed this fundamental flaw with the system. It leads to the system collapsing. A commodity based system is not stable.
Also, if you are promoting a commodity based system, you should have some idea of how much of the commodity is being added per year.
There's only about 550000 metric tons of silver in the world. There is only about 208874 metric tons of gold in the world. With the population of 1st world countries being about 1 billion, there is simply not enough of the commodity for it to be used as a currency.
It would be smaller than peas. It would have to be flakes There simply isn't enough. You work for 2 weeks...here's your flake of silver.
Yes, with any reasonable savings rate the rate of addition at about 1% collapses the system.
There is also about $28 trillion in bank deposits and money market accounts in this country alone, not even including the other outstanding bonds. I will let you do the math to determine the size of silver flakes that a person would receive for 2 weeks worth of work.
The size of the Fed's balance sheet is about $8.7 trillion.
Misc says
The size of the Fed's balance sheet is about $8.7 trillion.
Does that include all the MBS from 2008? Does the Fed really have any assets beyond the ability to print infinite dollars?
You are arguing that the production of gold and silver can go up at an exponentially increasing rate. This would keep up with not only increasing population but an increased need for savings as well. Mathematically this cannot occur.
It is the fiat system that is sound whereas a commodity based system must collapse.
The size of the Fed's balance sheet is about $8.7 trillion.
This monetary base can be increased or decreased as needed. Unlike a commodity based system.
You are arguing that the production of gold and silver can go up at an exponentially increasing rate. This would keep up with not only increasing population but an increased need for savings as well. Mathematically this cannot occur.
You still have not done the math to tell us the size of the silver flake that would be given for 2 weeks worth of work.
Also, you seem to be arguing that the monetary base (silver) can increase by 10-20 times its current size. How in the world is this better than fiat?
Cool story bro but it still has nothing to do with the fact that our government functioned best when we had sound money and government could not print money out of thin air.
Private Banks are a separate issue. They need separate regulations. But depositors should work with banks at their own risk. With sound money people don’t need banks.
With sound money people don’t need banks.
LOLwhat? Are we supposed to keep our "sound money" under a mattress or buried in a tin can under a peach tree?
You seriously suggesting that I should keep my couple of million $$ in savings at home, thus painting a huge target for a home invasion on my back? Or shall I hire private security to guard my house 24x7? The cost of that won't be trivial.
Because once the bank went under, that was the only thing your gold banknote was good for - padding for your legs.
Imagine Silicon Valley Bank, but with paper bank notes given to the depositors. Where is the FDIC going to get billions in gold coin?
TRUST THE BANKS! Give 'em your Gold, and Take their paper!
LOLwhat? Are we supposed to keep our "sound money" under a mattress or buried in a tin can under a peach tree? How the fuck that "no need banks" shit would work for somebody not living hand to mouth? You seriously suggesting that I should keep my couple of million $$ in savings at home, thus painting a huge target for a home invasion on my back? Or shall I hire private security to guard my house 24x7?
There were many panics and local busts during the Gold Era and most of them were brought upon by Wildcat banks that couldn't honor all the paper they spewed out relative to their metal deposits.
Good luck schlepping sacks of metal to buy land or a house in cash. Much less an airline delivering metal money for aircraft.
Do you understand what sound money means? It means money retains its value and prices for most goods, and necessities don’t rise to 250 times what they were in 1900.
PeopleUnited says
Do you understand what sound money means? It means money retains its value and prices for most goods, and necessities don’t rise to 250 times what they were in 1900.
I do. And I love taking money out of the hands of government.
Buuuuuut, I'm not putting it in the hands of banks.
Again, we saw what happened in the 19th. The Banks and top 0.1% soaked up all the gold, and gave out paper.
If you had a banknote for $100 in gold and went to another bank or tried to use it somewhere else, you got less than $100 for it, and often a 5% discount. You lost 5%+ of your money with gold-backed banknotes in many transactions.
AmericanKulak says
PeopleUnited says
Do you understand what sound money means? It means money retains its value and prices for most goods, and necessities don’t rise to 250 times what they were in 1900.
I do. And I love taking money out of the hands of government.
Buuuuuut, I'm not putting it in the hands of banks.
Again, we saw what happened in the 19th. The Banks and top 0.1% soaked up all the gold, and gave out paper.
If you had a banknote for $100 in gold and went to another bank or tried to use it somewhere else, you got less than $100 for it, and often a 5% discount. You lost 5%+ of your money with gold-backed banknotes in many transactions.
Forget about bank notes. That has nothing to do with sound money. In fact we can have sound mone...
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