patrick.net

elliemae says

There can be tension between friendly support and useful criticism. A critic might usefully help an individual artist to recognize what is poor or slapdash in their body of work, but the critic may appear harsh and judgmental in the process. Useful criticism is a practical part of constructive criticism.

elliemae says

Hypercriticism is a feature of certain personality types and is colloquially known as nitpicking or nagging. Nitpicking is minute, trivial, unnecessary, and unjustified criticism or faultfinding.[5] Nagging is to scold, complain, or find fault constantly.[6]
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We actually welcome constructive criticism here. You should try it some time.

Thank you for one of the finest illustrations of hypocrisy I've ever seen. Coming from the Queen of Insults, this is just too funny. LOL !!

You're welcome. I always enjoy teaching children something important. I'm a Giver.

RayAmerica says

Kevin says

Make some ridiculous prediction about how the country is going to collapse

http://blogs.telegraph.co.uk/finance/edmundconway/100005657/us-faces-same-problems-as-greece-says-bank-of-england/

Kevin says

and yet give no explanation for why you choose to stay here.

Do I take that to mean that anyone that offers constructive criticism should leave instead? I guess the Founders should have all packed up and left when King George levied all those taxes.

No, it means what I said. If you believe the country is going to collapse, why would you stay here? Only a complete fucking idiot would stay in a country that they knew was going to collapse. An intelligent person would get to the most suitable stable country that they could find.

Which tells me that one of two things is true of the people making these claims:

1. They're complete fucking idiots
2. They're just spewing hyperbole and don't actually believe the crap that comes out of their mouths

Kevin says

RayAmerica says

Kevin says

Make some ridiculous prediction about how the country is going to collapse

http://blogs.telegraph.co.uk/finance/edmundconway/100005657/us-faces-same-problems-as-greece-says-bank-of-england/
Kevin says

and yet give no explanation for why you choose to stay here.

Do I take that to mean that anyone that offers constructive criticism should leave instead? I guess the Founders should have all packed up and left when King George levied all those taxes.

No, it means what I said. If you believe the country is going to collapse, why would you stay here? Only a complete fucking idiot would stay in a country that they knew was going to collapse. An intelligent person would get to the most suitable stable country that they could find.
Which tells me that one of two things is true of the people making these claims:
1. They’re complete fucking idiots
2. They’re just spewing hyperbole and don’t actually believe the crap that comes out of their mouths

But the sky is falling, don't you get it? And it's all Obama's fault. Just ask Rayray.

Don't forget that it's my fault too. Rayray is intimidated by intelligent women with opinions that differ from his. And intelligent men with opinions that differ from his. He'd rather attack me personally.

As the great Homer Simpson once said: "Sometimes the only way you can feel good about yourself is by making someone else look bad." He's trying, really trying...

Nomograph says

What about me??? I’m a freedom-hating rights destroyer too!

Don't forget that you're an elitist who's out of touch with the common man, even though you received your education at the expense of others.

Nomograph says

elliemae says

Don’t forget that it’s my fault too.

What about me??? I’m a freedom-hating rights destroyer too!

And you probably eat arugula too. Grrrr! And what elliemae said too. :-P

Money is a common denominator in all economic transactions. The existence of such a commodity is a precondition of a division of labor. In the absence of a defined, uniform standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. The financial policy of the welfare state requires that there be no way for the owners of wealth (no matter how meager) to protect themselves.

This is the shabby secret of the welfare statist's tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold, or silver, would stand in the way of this insidious process. Precious metal would stand as a protector of property rights. If one can understand this simple concept, one has no difficulty in understanding the statists' antagonism toward a sound money policy backed by gold or silver.

Honest Abe says

In the absence of a defined, uniform standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. The financial policy of the welfare state requires that there be no way for the owners of wealth (no matter how meager) to protect themselves.

But of course there is. Don't hold your savings in currency. Use those dollars to buy investments that hedge against inflation. There are many such outlets for your savings...

Wrong, I just think it's unthinkable that a government would STEAL (through deception) from its own citizens, thats all. Obviously you don't know, or care, that the most vulnerable of Americans stand the most to lose. Retired teachers, police officers, fire fighters, people on fixed incomes and the like.

Well I guess the dumocrats are not the compassionate, caring party they claim to be - what a surprise.

Are we still trying to figure out what a dollar is? It's a fiber-type thing in my wallet, hanging out with its friends waiting to get taken out at the bar.

:)

NoMo - I'm just am opposed to a government that is systematically running our once great country into the ground, with the support of people like you. Maybe you haven't noticed the condition of our national economy, or what?

Honest Abe says

NoMo - I’m just am opposed to a government that is systematically running our once great country into the ground, with the support of people like you. Maybe you haven’t noticed the condition of our national economy, or what?

Abe--maybe you haven't studied history? The US economy has gone through periodic recessions since its inception. This is nothing new.

The problem is that I have studied history, read extensivly, and discovered the results are always the same. If a government removes the value from its' currency, the currency, over time beocmes worthless. If a government runs it's economy based on inflation, ultimately reality catches up, and the economy is ruined If government provides wefare, it produces an entire class of lifetime dependents.

Yes, our economy has gone through periodic recessions. A recession is that period of time it takes the free market to correct the mistakes created by government intervention. No matter how many times our government tries to "save" our economy, "fix" our economy, "repair" our economy, or "correct" our economy - it always falls back to disrepair. Thats because our economy is based on a fiat currency, and the economy is manipulated by an interventionist government.

]

tatupu70 says

This is nothing new.

Disagree. The immense trade deficit with China, increasing import dependence on a declining strategic resource, rise of the Gummint is Eveel conservatism from fringe to 48% of the population, hip-deep spending a third of the budget on undeclared wars . . . these are new developments.

We were doing pretty good during Clinton's second term, so one would think it would be possible to return to those days.

But this chart:

http://research.stlouisfed.org/fred2/series/M3

kinda illustrates that what screwed us up last decade was just getting started in 1996.

We only recovered in 2002-2006 by blowing up a $5T credit bubble.

There is a hole in our economy somewhere and money is gushing out of it. Nobody wants to know where this money is going.

We need to get serious about raising taxes, cutting military spending, getting more services for less cost in health care, reducing our import losses to oil exporters, and figuring out how the trade imbalance is working for us and should we attempt to rein it in.

These are trillion-dollar challenges yet our political processes are AFAIK the most broken since 1850.

AFAICT, we're simply f----ed.

Honest Abe says

The problem is that I have studied history, read extensivly, and discovered the results are always the same. If a government removes the value from its’ currency, the currency, over time beocmes worthless. If a government runs it’s economy based on inflation, ultimately reality catches up, and the economy is ruined If government provides wefare, it produces an entire class of lifetime dependents.
Yes, our economy has gone through periodic recessions. A recession is that period of time it takes the free market to correct the mistakes created by government intervention. No matter how many times our government tries to “save” our economy, “fix” our economy, “repair” our economy, or “correct” our economy - it always falls back to disrepair. Thats because our economy is based on a fiat currency, and the economy is manipulated by an interventionist government.
]

So, why did we have such frequent recessions when we were under the gold standard then? They were without a doubt more frequent and more severe than those that we have experienced under a fiat currency...
You remind me of the joke about the guy who only has a hammer in his tool belt--everything looks like a nail to him...

Troy says

Disagree.

It's different (they always are), but we've had difficult problems before. It will be painful, but I guess I'm just more optimistic that the tough choices will be made.

tatupu70 says

o, why did we have such frequent recessions when we were under the gold standard then? They were without a doubt more frequent and more severe than those that we have experienced under a fiat currency…

The idle rich love deflation, all that shiny gold earning buying power, just sitting in a box doing nothing with no risk.

Workers and producers with debt love inflation paying off their loans for them.

From 1880 to 1910 the US dollar deflated from $1.00 to $1.03. Great environment if you were a wealthy lender, not so good if you had loans to pay.

That was the entire background behind William Jennings Bryan's "Cross of Gold" speech, he was riling up the populist Democratic midwest so it could break the deflationary regime the old-Republican capitalists of the Northeast had created.

The election of 1912 was the end-game in this battle, and the Federal Reserve was a compromise. Bryan was brought on board by being given the Secretary of State job in Wilson's admin.

"What is the benefit of a sound dollar? It represents integrity, it insures the peoples control over the government's use of public funds. It is the best guarantee against the socialization and destruction of a nation. It enables a people to keep the government, banks and the war machine in check. It prevents currency expansion from getting out of bounds until it becomes worthless. It tends to force standards of honesty on government and bank officials. It is the symbol of a free society and an honorable government. It is the necessary prerequisite to economic health." [Walter E. Spahr, 1926 - 1966]

It appears that there is a direct connection with the topics quoted above, and the problems that are happening in America today. Could that be because America is without a sound dollar???

Honest Abe says

Obviously you don’t know, or care, that the most vulnerable of Americans stand the most to lose. Retired teachers, police officers, fire fighters, people on fixed incomes and the like.

How in the fuck are retirees "the most vulnerable of Americans"? These are people who have their medical bills mostly paid for. Half of those people have union pensions that are ridiculous.

The most vulnerable people are the ones who have nothing to lose, because they have nothing in the first place.

Honest Abe says

It appears that there is a direct connection with the topics quoted above, and the problems that are happening in America today. Could that be because America is without a sound dollar???

...or it could be that the entire world is dealing with the worst financial crisis since the great depression.

I might add that during the great depression, most of the world had a "sound currency". A lot of good that did.

Honest Abe says

It appears that there is a direct connection with the topics quoted above, and the problems that are happening in America today. Could that be because America is without a sound dollar???

The economy of Norway belies this naked assertion:

"It is the necessary prerequisite to economic health.” [Walter E. Spahr, 1926 - 1966]"

Norway has a per-capita GDP of $95,000, #2 behind Luxembourg which runs a shell economy one-tenth the size of Norway's. Its sovereign debt is the highest-rated in the world, with a 0.16% CDS premium, twice the rating of the US.

Its currency has been off the gold standard since 1931 and off any pegs since 1992. Its citizenry hold a per-household $200,000 in pension savings, greatest in the developed world (33% greater than Alaska's, which has $150,000 for a population one-seventh the size of Norway).

Your theory is destroyed. Find another one.

A dollar used to be pegged to such and such quantity of gold. Some dollars were pegged to silver and called "silver dollars". Today, a dollar is an arbitrary unit of currency backed only by faith in it. As such, it has no fixed value. That's why a dollar today doesn't buy what it did ten years ago. Before becoming a pure fiat currency, dollars did retain their value over decades.

Dan says

A dollar used to be pegged to such and such quantity of gold. Some dollars were pegged to silver and called “silver dollars”. Today, a dollar is an arbitrary unit of currency backed only by faith in it. As such, it has no fixed value. That’s why a dollar today doesn’t buy what it did ten years ago. Before becoming a pure fiat currency, dollars did retain their value over decades.

Wow--thanks professor. Now it takes $1 to buy a candy bar instead of $.30. But the average income is $30K instead of $10K. So what?

PS--I know those numbers aren't exactly correct, so please don't post saying a candy bar actually costs $.88. Just making the point...

> Wow–thanks professor. Now it takes $1 to buy a candy bar instead of $.30. But the average income is $30K instead of $10K. So what?

OK, smart-ass. Here's the point. Say you put 20% of your income in a savings account that offers 2% interest, but inflation is running at 5%. You are actually paying a 3% annual fee to the bank for storing your money. You pay a 5% tax if you keep your money in cash. That's damn significant to anyone who has savings including retirement plans. Factor in the fact that you will keep adding to your savings, and the amount of real wealth you lose each year grows every year. That's the point.

Furthermore, the real median income of U.S. households has decline over the past ten years. This may be masked by inflation, but its effects are not.

Inflation also makes it more difficult to meaningfully compare the change in value of assets over long periods of times. This is especially true since the Federal Reserve stopped reporting M3 on Federal Reserve stopped reporting M3 on March 23, 2006. If the fact that they don't even report what M3 is doesn't scare you, then you aren't very smart. Unfortunately, what you don't know can hurt you.

Back before the American revolution, the colonies used a form of fiat currency called "Colonial Script". This is what Benjamin Franklin referred to as "honest money". Although it was a fiat currency, the colonies kept the supply of money a constant, enough to conduct the day-to-day business transactions. The money was a median of exchange, not a commodity. As a result, the American colonies were extremely prosperous.

How prosperous? During a trip to England as a colonial representative, Franklin was asked how the Colonies managed to collect enough taxes to build poor houses and care for the poor. Franklin replied, "We have no poor houses in the Colonies, and if we had, we would have no one to put in them, as in the Colonies there is not a single unemployed man, no poor and no vagabonds." England's response to Colonial Script was to outlaw it because it was infringing upon the profits of English banks. Franklin went on to say that this was one of the primary causes of the American revolution.

Thomas Jefferson warned against the very banking system we employed today, saying "If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."

Class dismissed.

It wasn't the financial system that kept the colonies prosperous, it was the fact that the untamed frontier was like 10' away.

Gold and silver will inherit all the purchasing power lost in the dollars continued collapse. Some have not noticed the price of gold and silver continues to increase. Well, actually that's not true, its the value of the dollar that continues to decrease. Tough concept for many to comprehend.

Some misconceptions can be attributed to simple ignorance. But some of them arise from neurotic and other irrational mental processes, and not lack of knowledge per se. Irrational liberal thinking may also distort a persons ideas about how society should be organized, what its "rules" should be, and how much value to give to individual freedom, opportunity, responsibility and cooperation.

Irrational processes consist of maladaptive ways of thinking, emoting, behaving and relating. Some are characterized by envy, jealousy and feelings of inferiority. Others by striving for power, domination and revenge. Some consist of paranoid perceptions of victimization, or obsessive pursuit of control and regulation. Lastly others by infantile claims to entitlement, indulgence and compensation.

"Modern liberalism's irrationality can only be understood as the product of psychopathology." ["Personality Disorders" in The Comprehensive Textbook of Psychiatry, by Robert C. Cloninger]

Dan says

OK, smart-ass. Here’s the point. Say you put 20% of your income in a savings account that offers 2% interest, but inflation is running at 5%. You are actually paying a 3% annual fee to the bank for storing your money. You pay a 5% tax if you keep your money in cash. That’s damn significant to anyone who has savings including retirement plans. Factor in the fact that you will keep adding to your savings, and the amount of real wealth you lose each year grows every year. That’s the point.

If you do that--it's your own fault. Investing your savings in a bank is almost always a losing proposition.

Dan says

Furthermore, the real median income of U.S. households has decline over the past ten years. This may be masked by inflation, but its effects are not.

Real incomes always decline during a recession and rise again as the economy grows. This has nothing to with having a fiat currency.

Dan says

Back before the American revolution, the colonies used a form of fiat currency called “Colonial Script”. This is what Benjamin Franklin referred to as “honest money”. Although it was a fiat currency, the colonies kept the supply of money a constant, enough to conduct the day-to-day business transactions. The money was a median of exchange, not a commodity. As a result, the American colonies were extremely prosperous.

You need a lesson in cause and effect.

Dan says

Thomas Jefferson warned against the very banking system we employed today, saying “If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”

Oh, wait a sec. If Thomas Jefferson said it, then it must be true....

tatupu70 says

Investing your savings in a bank is almost always a losing proposition.

Actually (to be pedantic) by definition you can't "invest" savings. Savings are savings, not investments.

It can be argued that a little inflation encourages risk-taking, moving people out of savings and into investments, while deflation decreases risk capital as savers dominate, and even the cash-in-the-mattress yields real returns.

Troy says

Actually (to be pedantic) by definition you can’t “invest” savings. Savings are savings, not investments.
It can be argued that a little inflation encourages risk-taking, moving people out of savings and into investments, while deflation decreases risk capital as savers dominate, and even the cash-in-the-mattress yields real returns.

It's probably not worth arguing, but until you invest it, it is savings. Then it is an investment

And I agree completely--managed inflation encourages investment which is a good thing. Jobs are created, productivity increases...

tatupu70 says

And I agree completely–managed inflation encourages investment which is a good thing.

Inflation encourages the speculation flavor of investment, as savers seek risky assets to try to keep up with inflation. This is not a good thing.

I think the point is a mild monetary inflation is better than relying on how much of a certain shiny metal we can dig out of the ground each year determine inflation or deflation.

Troy says

I think the point is a mild monetary inflation is better than relying on how much of a certain shiny metal we can dig out of the ground each year determine inflation or deflation.

Troy, wasn't it terrible that under the gold standard the amount of gold that could be exchanged for one US dollar was STABLE till FDR confiscated gold?

(and consequently the poor and middle class were able to preserve their assets without giving control over to banks and/or wall street) That is why banks and wall street tycoons had to get rid of the gold standard, to force the average Joe's to "invest" with them (give them control over the average joe's assets) or watch them inflate away.

Troy says

I think the point is a mild monetary inflation is better than relying on how much of a certain shiny metal we can dig out of the ground each year determine inflation or deflation.

Wasn't it milton friedman that suggested we use an automated, constant, money creation mechanism that inflated the money supply by 3% per year? This way, new fiat money would be created at a standard, expected rate.

Am I representing his idea properly?

Nomo, stop! You're arguing the same sense I've argued in other "goldbug" threads. You'll scare 'em!

NOMO says "Gold is fiat money as well." Hahaha. Thats because nomo doesn't understand the meaning of fiat money. Nomo can argue all he wants, but since he doesn't understand the basic definition of fiat money, he has no argument at all. [Same goes for name calling Simchaland]

"Pathological processes in liberal minds generate irrational fears and doubts, compulsive thoughts and behavior, severe impairments of emotional control and other disorders of reason which destroy the capacity of the mind to comprehend the real world. Minds afflicted with severe disorders do not exercise free choice or free will in any ordinary sense of those terms." Gabbard, Glen G., "Theories of Personality and Psychopathology"

Nomo - are you out there?

Nomograph says

Gold is fiat money as well.

Honest Abe says

Thats because nomo doesn’t understand the meaning of fiat money.

Right you are Honest Abe, gold and silver were used as money for thousands of years, not because someone decreed them to be money but because the free market saw that these precious metals were the best form of money available. This is in stark contrast to true fiat money which is only money because the powers that be have decreed it to be money.

Nomo is right we are all free to use gold and silver as money (to a certain extent). But we are all forced to accept fiat federal reserve notes as payment for debts. We must pay our taxes, and we must pay them in federal reserve notes. That is not freedom. Not by any stretch of the nomograph.

Nomograph says

Gold is fiat money as well.

What more proof is needed that some people argue for the sake of arguing. Nomo, study this, memorize it, then post your correction as to your gross misunderstanding as to what fiat money is.

Fiat Money

What Does Fiat Money Mean?
Currency that a government has declared to be legal tender, despite the fact that it has no intrinsic value and is not backed by reserves. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on faith.

Investopedia explains Fiat Money

Most of the world's paper money is fiat money. Because fiat money is not linked to physical reserves, it risks becoming worthless due to hyperinflation. If people lose faith in a nation's paper currency, the money will no longer hold any value.

Over 300 times in history, fiat money has failed and become worthless. Nomo, name one single time in all of human history when gold has been worthless.

How many apples can I buy with 70 grains of silver? How many cars?

RayAmerica says

Over 300 times in history, fiat money has failed and become worthless. Nomo, name one single time in all of human history when gold has been worthless.

Worthless? Probably never -- but it's certainly lost a shit ton of its value through various actions, like countries changing their currency to being silver based, or dropping metallic standards entirely.

That said, I can name plenty of times. Find any society that hadn't discovered mining yet.

Name one single time in all of human history when land has been worthless.

Name one single time in all of human history when food has been worthless.

Name one single time in all of human history when steel has been worthless.

Take your 70 grains of silver to most any coin shop in America and they'll tell you how many apples or cars it will buy. they will buy the silver and give you its equivalent cash value on the spot.

Go ahead, name a couple of the "plenty of times gold has been worthless". And while you're at it name a country thats "dropped metallic standards entirely".

Land, food, steel ...whats your point, and how does that relate to the thread "What is a dollar?"