by Confucious 27 Replies latest jw friends
Renee...
Get a savings account with a bank that doesn't have a lot of branches.
Right now ING.com has a savings at 3% - which isn't much - but better than the reguar joke of a savings account at regular banks.
Or.. stagger your CD's - like 6 CD's over 12 months - so that every 2 months you have one maturing. You might get 5% with that.
Con
there will always need to be a "piece of paper" that represents that gold.
I think it's worth noting that paper dollars used to be exatly that. They were redeemable for a set amount of gold.
And during that time when dollars could not be systematically devalued for political convenience, the United States experienced much prosperity.
A dollar in 1912 bought pretty much what one bought in 1812. Inflation wasn't there to confiscate and eat up peoples' savings.
Ok... Hybrid.
Lets do that and see what happens.
Right now... Gold is trading at about $850 and ounce.
To make things simpler... lets just say $1,000 an ounce.
So each dollar of yours is worth 1/1000 of an ounce of gold.
So for every $1,000 a bank has on it's balance sheet - it needs 1 once of gold READY to exchange with you on demand.
Ok... sounds like real money right?
Ok... so 3 rich business men from China come to a bank in South Dakota with $900 Million U.S. dollars and a truck.
They demand 900,000 ounces of gold.
Then 3 rich business men from Saudi Arabia come into a Wisconsin bank with $900 Milion U.S. dollars and a truck.
So they demand 900,000 ounces of gold.
Then China - the country - is like, forget this... The U.S. owes us 50 Trillion (whatever it is) - hell... might as well get gold for it.
Ok... so then... how long do you think it will be until we run out of gold?
The true anchor of money is NOT the commodity behind it.
It's a bridge for goods and services.
You don't need gold to anchor it.
You could anchor it to Big Macs.
A big mac used to cost 10 cents. Now it costs, what? $4.50?
Either way.. we've invented a piece of paper that one Big Mac costs us about 1/4 hour worth of labor if the average salary is about $20 a hour.
Back then... when Big Macs costed 10 cents - the average salary was probably 40 cents an hour.
It's all relative.
Con
We need a global currency. It's value would hold stability much better than all currencies today, which are played against each other, as well as against commodities.
S
Satanus.
I don't have an opinion about that because I haven't researched it.
But a world currency such as the Euro - but worldwide?
Pros and cons of that would be interesting.
how long do you think it will be until we run out of gold?
We'd never run outta gold. As it diminished in available quantity, like everything else, it would go up in price. Until it was too expensive for people to want to trade dollars for. The link between dollars and gold never had to but static and set for all of eternity to be useful. But there had to be some kind of official relationship to protect people who owned dollars from what is happening right now.
But that's precisely what gave the dollar its power. The willingness of the fincancial establishment (as perscribed by the Government at the time) to trade, at any time, those pieces of cloth/paper, for something else that was rare and hard to create. When dollars=gold, then its not likely that people would rush to exchange dollars for gold, because dollars are something you can have confidence in, and are certainly more convenient.
Your argument that a thing is only worth what someone else will pay for it, is basically true. But the argument for gold goes to the fact that the alternative is terrible.
The true anchor of money is NOT the commodity behind it.
If the anchor of money is not a hard commodity behind it...then what shall it be? Is there one at all? Money is indeed a bridge for goods and services, but in order to function in that capacity it must relate in some meaningful way to the two. That's the point of gold (or oil, or silver etc...). That's the way in which it relates.
You don't need gold to anchor it.
You could anchor it to Big Macs.
Yes, I suppose we could anchor it to those. But now you've changed the argument, because a currency guaranteed in Big Macs (or anything else for that matter) is not a fiat currency.
That's the point and the central weakness of fiat. You're not guaranteed any amount of any commodity at all. There's no set relationship between fiat dollars and anything else, and as such, it is dangerous and unstable, as history testifies to.
Gold has served as the default currency for millenia because it is rare and hard to obtain. It represents the effort and work it took to mine/purify/or otherwise obtain. Now dollars, on their own, not representing gold...how hard are they to create? The government creates them at will to cover it's own financial melfeasance, so I'd submit that it's not hard at at all to create an excess of them.
I'm sure you know already what an excess of dollars means to those of us who have our wealth stored in them.
"The US government has sold us into slavery to the banking system."
Exactly IP. That's why I work in finance. Now back to work Cracka!
Lets look back on Easter Island Society. They had easy living as long as resources were plentiful and population was low. However, near the end when resources ran out and over population stripped away every tree and bush and edible animal they turned to cannibalism to survive. Our easy living days will soon be over- maybe by the end of the century,unless society makes a concerted effort to change direction- and assuming a meteor doesn't take us all out.
