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So if Gold was the new money standard then how would you buy more gold, with GOLD?


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2023 Mar 26, 10:59am   13,904 views  189 comments

by Tenpoundbass   ➕follow (7)   💰tip   ignore  

Also with digital currency, if there wasn't any fiat money how would you acquire tokens?

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1   richwicks   2023 Mar 26, 2:48pm  

You purchase gold with production of goods and services in a gold standard.

In our system, you can purchase money with production of goods and services, or just changing digits in a fucking computer.

The Federal Reserve, whoever owns it, has INFINITE purchase ability. They are not audited, they can create as much money they want, they can purchase anything they wish. They are our true government.

They can fund a corporation or initiative infinitely. They've completely purchased our government.
2   komputodo   2023 Mar 26, 3:08pm  

Tenpoundbass says


So if Gold was the new money standard then how would you buy more gold, with GOLD?

How do you buy dollars with dollars?You don't buy dollars, you earn or steal dollars.
3   Patrick   2023 Mar 26, 3:20pm  

richwicks says

The Federal Reserve, whoever owns it, has INFINITE purchase ability.


https://www.quotemaster.org/qa9277aece5ff2d642a3c4987fc066b82


Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with a flick of a pen they will create enough to buy it back. - Josiah Stamp
4   🎂 Tenpoundbass   2023 Mar 26, 4:34pm  

richwicks says


You purchase gold with production of goods and services in a gold standard.

komputodo says


How do you buy dollars with dollars?You don't buy dollars, you earn or steal dollars.


Ah you both are talking about two different things. Richwicks is saying only Entreprenuers that produce a service or a product earns Gold.
He did NOT describe employment or their employees.

Komputodo on the other hand describes how you make dollars through either illegal means or Employment. How ever in Komputodo's example in a Gold Standard world, you would be earning Company script, which you spend at the company store or in Modern times it might be called "Affiliated Partners". The guy who owns your place of employment, certainly isn't going to break you off a piece of his Gold.

The answer is of course, you don't and can't buy more Gold with Gold. It's a paradox that has led to Mans greatest sin. Murder and Plunder through War.
If the world had been on the Gold standard even to this day. We would be on WWV by now.

Petrol dollars is the great equalizer, it's the same currency used by the poor or the billionaires.
If your poor as fuck and you work some shitty job in a gold standard world. You can't save up company script and start your own business. It's worthless to all of the other Producers and the Banks..
5   richwicks   2023 Mar 26, 4:44pm  

Tenpoundbass says


The answer is of course, you don't and can't buy more Gold with Gold.


Yeah, of course.

People do mine gold though. For a processing fee where the processor kept a portion of the gold, it was turned into coins.

There's no paradox here.

Tenpoundbass says


If the world had been on the Gold standard even to this day. We would be on WWV by now.


NO, if we were on the Gold Standard and didn't have fucking fractional reserves, nobody could have afforded to have WWI or WWII.

We don't pay for fucking wars anymore, not really. We just add it to the debt, and this causes inflation, and impoverishes the nation. If we actually had to pay for our fucking wars, we'd overthrow the goddamned government before we'd pay for it.

We go to war, because the Federal Reserve dictates it.

We wouldn't have had the civil war if Lincoln didn't force the use of the greenback. If people refused to engage in this bullshit, we'd all be better off.

Making war is a fucking waste of money, making infrastructure, isn't.
6   🎂 Tenpoundbass   2023 Mar 26, 4:48pm  

richwicks says

People do mine gold though. For a processing fee where the processor kept a portion of the gold, it was turned into coins.

There's no paradox here.


LOL a very small percent struck it rich in the 1849 Gold Rush. Most non well connected people without muscle and protection... The saying was a fool and his Gold will soon part ways.

Besides most all of the easily available Gold in the world has already been recovered. If you ever watch any of the gazilions of Gold digger shows. It's a tens of thousands dollar a day operation. And even those operations have a stressful time just making payroll, and getting their investment back.
7   🎂 Tenpoundbass   2023 Mar 26, 4:53pm  

richwicks says

We wouldn't have had the civil war if Lincoln didn't force the use of the greenback. If people refused to engage in this bullshit, we'd all be better off.


Well if we went that far back to avoid our modern problems, then a shave and hair cut today would still be 2 bits.
I have seen New York cafe street signs spanning from the late 1800's when photography was first invented all the way to great depression.
The prices on the food items or room and board were constant, the greenbacks did create the concept of inflation. There's no way we could ever go back to gold with the current inflation and price expectation on every good and service in every vertical and industry. A dollar or two a day would have to be going wage, and rent would be under 20 bucks a month..
8   🎂 Tenpoundbass   2023 Mar 26, 5:02pm  

Who wants to be Ugandan trillionaire?

https://www.miningreview.com/news/uganda-discovers-gold-deposits-worth-12-trillion-usd/

In a Gold standard world the soon to be Ugandan immigrants would be most of our overlords.
9   HeadSet   2023 Mar 26, 5:34pm  

Tenpoundbass says

In a Gold standard world the soon to be Ugandan immigrants would be most of our overlords.

Uganda would be conquered and the natives would be mining gold for the British Empire.
10   EBGuy   2023 Mar 26, 5:43pm  

Gold to silver ratio is pretty crazy right now. You should be selling your gold to buy silver.
11   richwicks   2023 Mar 26, 7:01pm  

Tenpoundbass says


LOL a very small percent struck it rich in the 1849 Gold Rush. Most non well connected people without muscle and protection... The saying was a fool and his Gold will soon part ways.

Besides most all of the easily available Gold in the world has already been recovered. If you ever watch any of the gazilions of Gold digger shows. It's a tens of thousands dollar a day operation.


I'm simply pointing out that gold is recoverable from the ground, when it's worthwhile to recover.

We've been on various gold standards for 1000's of years, every culture has accepted it as money or "valuable". We're in an aberration right now, and it will end in disaster. This is purposeful.

Periodically an ounce of gold is revalued to be about 1/billionth of the national debt. If it revalued to that today, it would be around 30,000 dollars an ounce. It's done this 3 times, 1980, 1937, 1932. EVERYTHING returns to the mean, when? Nobody knows.

https://www.thebalancemoney.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287

Remember, in our BULLSHIT financial system, DEBT is considered an asset, not a liability. Black is white, up is down, good is bad, right is wrong. Can't you see that yet? When this corrects, everybody nearly will be wiped out.
12   just_passing_through   2023 Mar 26, 7:15pm  

With silver ya silly goose!
13   NuttBoxer   2023 Mar 27, 8:48am  

Tenpoundbass says

The answer is of course, you don't and can't buy more Gold with Gold. It's a paradox that has led to Mans greatest sin. Murder and Plunder through War.
If the world had been on the Gold standard even to this day. We would be on WWV by now.


So the current centralization push started around the 1500's led by the bank of England. Now according to you that should have been around the time wars ceased to exist. Yet since then we've fought the bloodiest wars in world history, especially WWI and WWII, both under central bank fiat currency.

Do you understand the reason gold and silver have served as money since the beginning of time? Precise measurement, and inability to inflate. That second piece you have to understand in order to discuss the subject of money and wars. Because no war is possible without lending, which causes inflation, which as I just mentioned, is impossible in a true money system. So your opinion here goes against rationale, and history.

On your main thread point, as was pointed out no one buys same with same. If you are asking about investing, you swap gold and silver at the top and bottom of the ratio, as EBGuy pointed out, gold for silver right now.
If you are asking about earning, work for someone who pays in real money. Yes, they would have to have to money to pay you. Isn't that the expectation you have before starting any job, that someone will break you off some of their wealth?

Are these real questions you have, or are you just attempting to push your narrative? Sincerely asking because they seem very leading, and a bit silly.
14   NuttBoxer   2023 Mar 27, 8:50am  

Tenpoundbass says

In a Gold standard world the soon to be Ugandan immigrants would be most of our overlords.


I didn't realize Uganda was communist, and the discoverer is forced to share equally with every citizen.

Guessing you aren't aware that central banks have been heavily purchasing gold the past few years. Seems like the people making your fake paper know something you don't...
15   NuttBoxer   2023 Mar 27, 9:00am  

One more comment here. Gold is not "new". Specie is, per the Constitution and the history of economics, the only real currency. Calling gold new compared to fiat currency and central banks is like calling Unix new compared to Windows.
16   Reality   2023 Mar 27, 9:16am  

It is important to keep in mind that "Specie" means both gold and silver. Gold alone is too rare to be used for daily transactions, so daily transactions would have to be carried out in silver specie, leaving gold for high value transactions such as buying houses, manufacturing contracts and paying soldiers (who then have to carry the specie during battle, so can't be too heavy). The mildly floating conversion rate between gold and silver (with "dollar" in contract being fulfilled by either, whichever is slightly less expensive than the 16:1 ratio at any given moment) also provides a level of insulation between capital goods price inflation vs. daily consumable price inflation (letting wholesalers providing the cushion). The reason why banksters pushed for gold-only standard around 1870 was because the rarity of gold necessitates gold-only standard to be a gold-exchange standard, then specie is out of circulation and banks can fake whatever amount of gold deposit certificates they wish in their usual fraud called "banking."

Gold-only standard and gold-certificate fraud to fiat fraud has some mild advantage in its early stages for the regime that institute it because the deliberate over-valuation of gold (likely Isaac Newton being the head of the Royal Mint and being blackmailed for his homosexuality) would suck gold from other countries, making it easier for that particular government to pay soldiers. The solution to that problem is two fold: citizens right to bear arms, and letting soldiers know that their paper gold certificates are frauds and don't have enough gold backing the paper being issued and the banksters are counting on the soldiers to die and never collecting the specie.
17   🎂 Tenpoundbass   2023 Mar 27, 10:21am  

NuttBoxer says

So the current centralization push started around the 1500's led by the bank of England. Now according to you that should have been around the time wars ceased to exist. Yet since then we've fought the bloodiest wars in world history, especially WWI and WWII, both under central bank fiat currency.


The ills of a unchecked runaway Robber Barons under the guise of Capitalism, didn't start until after the Great Depression and then in Post WWII.

Before that inflation and the value of the dollar was still pretty stable. People were paying for Rent and Grocery items the same exact amount as the prior generations before them. Sure there was supply demand issues occasionally. But they didn't have a congress intentionally creating those inflation pressures. When supply issues were corrected the prices always rebounded.
18   🎂 Tenpoundbass   2023 Mar 27, 10:25am  

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.
19   🎂 Tenpoundbass   2023 Mar 27, 10:27am  

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?
20   Onvacation   2023 Mar 27, 11:41am  

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.
21   RayAmerica   2023 Mar 27, 11:45am  

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.
22   AmericanKulak   2023 Mar 27, 11:48am  

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.
23   RayAmerica   2023 Mar 27, 12:07pm  

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.
24   HeadSet   2023 Mar 27, 1:03pm  

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!!
25   Reality   2023 Mar 27, 1:31pm  

"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.
26   stereotomy   2023 Mar 27, 1:40pm  

"Let us not crucify the United States on a Cross of Gold."
27   Zak   2023 Mar 27, 2:20pm  

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.
28   Reality   2023 Mar 27, 3:51pm  

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.
29   HeadSet   2023 Mar 27, 5:04pm  

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.
30   🎂 Tenpoundbass   2023 Mar 27, 5:37pm  

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?
31   🎂 Tenpoundbass   2023 Mar 27, 5:42pm  

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.
32   🎂 Tenpoundbass   2023 Mar 27, 5:45pm  

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?
33   Reality   2023 Mar 27, 6:10pm  

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.
34   AmericanKulak   2023 Mar 27, 6:35pm  

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.
35   AmericanKulak   2023 Mar 27, 6:46pm  

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!
36   Zak   2023 Mar 27, 7:25pm  

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).
37   Zak   2023 Mar 27, 7:56pm  

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.
38   Misc   2023 Mar 28, 2:25am  

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.
39   richwicks   2023 Mar 28, 2:53am  

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.
40   Misc   2023 Mar 28, 4:10am  

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.

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