Kremlin to pitch new global currency at G20 summit

[Gewehr98]

So you're attributing fiat money as the root cause of the current economic downturn, vs. the housing bubble burst, sub-prime loans, AIG mismanagement, etc?

I'm all ears...

[MicroBalrog]

So you're attributing fiat money as the root cause of the current economic downturn, vs. the housing bubble burst, sub-prime loans, AIG mismanagement, etc?

I'm all ears...

Wait, you think that AIG mismanagement is at the root of the economic downturn?

It's a well-known theory that fiat money (and state-owned central banking in general) is the root cause of the boom-bust cycle as such. I recommend you read Mises' "The Austrian Theory of the Trade Cycle" for a better insight into this concept.

[Gewehr98]

No, MB the Obtuse.  It's part of the bigger problem that got us where we are now, not your overly simplistic scapegoat of fiat money.

Same as the sub-prime mortgage fiasco, the Democratic legislation that forced such lending practices, in conjunction with unsound Wall Street management of such notes and hedge funds.  Since you're really good at throwing reading recommendations at people, perhaps you should study the long-term effects of the Carter-era Community Reinvestment Act (CRA) of 1977 - it's an eye-opener.

It wouldn't have made a tinker's damn worth of difference had those risky loans been issued based on Federal Reserve dollars or Krugerrands.  The fact is they were issued, creating a huge house of cards with little regard for when it came time to eventually pay the piper. I'm just glad I didn't go with an Adjustable Rate mortgage, myself. 

 

[MicroBalrog]

1. CRA was not a main factor.

2. I never said it was the sole factor of anything. But artifically depressed costs of credit = bubbles. This is a known fact.

[makattak]

1. CRA was not a main factor.

2. I never said it was the sole factor of anything. But artifically depressed costs of credit = bubbles. This is a known fact.

CRA was not a SOLE factor.

I would place the blame at Fannie and Freddie's feet under the same impetus as the CRA.

Everyone screams about derivatives, et al. but the question is: Why were companies willing to purchase such risky assets?

Answer: They believed the government would back them should there be some failure of their backed mortgages.

One sec.......











Yep, I just checked what's happening... looks like those companies were right.

[lupinus]

ah Micro....

This has never, ever actually existed. Most of the dollars in the money supply are not physical dollars. You cannot eliminate that unless you eliminate fractional-reserve banking, and if you did that you would kill capitalism.

Yes, this has existed, that is a gold standard.  Under a gold standard every piece of money must contain it's face value in gold.  Everything else is a note which reflect it's value in gold.  A 1$ gold coin contains 1$ worth of gold.  A 1$ gold note represents 1$ of gold held in reserve backing it and available for exchange.  If you make those electronic it doesn't matter in the slightest.  Each and every single denomination must be traceable back to the gold backing it.  And no one said each dollar is a physical dollar, but each one represents one issued by the fed, they don't magically come appear in the monetary system.

And all money is a commodity. Including the fiat money you're using now.

Currency"money" is nothing more then a commodity standardised for ease of use.  You just identified one of the main advantages of our paper money.  We control the commodity, any other be it gold, silver, oil, or bull excrement others control it as well giving them direct control over the value of our money.

Except for the Great Depression, stagflation, and this current thing?

You mean like the several depressions and recessions we had while still on the gold standard?  Some arguably as bad or bigger then the great depression?  All of which this current recession doesn't come anywhere near to?

Except for the growth in Federal government powers and influence?

You mean like the several jumps while still on the gold standard?  Or the rise of tyranny in other nations all throughout history by countries who used a gold standard?  Yep, the whole rise of Ceaser and Augustus....damn that fiat money.

It's a well-known theory that fiat money (and state-owned central banking in general) is the root cause of the boom-bust cycle as such.

Key word Micro, key word.  I can theorise that there are really alien overlords all around us, it's just that we can't see them because they don't want us to know.  And they shoot these messages out to keep us more or less docile.  But with these special glasses, we can see them!  Anyone seen my bubble gum?

Mismanagement, poor lending practices, and living on credit caused our current bust.  It has nothing to do with fiat money or centralised banking.  Further mismanagement and socialist practices are continuing and worsening it, not fiat money or centralised banking.

You are constantly mistaking poor management and idiocy of the fed, with fiat money which works just fine when properly issued and managed.

[MicroBalrog]

And no one said each dollar is a physical dollar, but each one represents one issued by the fed, they don't magically come appear in the monetary system.

Money exists in other forms than just those formally called 'money'. Derivatives and obligations are also money.

  Or the rise of tyranny in other nations all throughout history by countries who used a gold standard? 

I never said fiat banking was the sole reason for these. It just made them much easier.

Key word Micro, key word

You see, here's the thing. I am not arguing here that 'free banking is the only way'. I'm merely arguig that opposition to fiat banking does not automatically brand the voicer as an idiot. There's room for legitimate disagreement on this issue.

[lupinus]

Money exists in other forms than just those formally called 'money'. Derivatives and obligations are also money.

Anything transfered from one person to another as payment is, in the most basic sense of the term, money.  I was under the impression we were confining ourselves to that which is generally considered and used for money.  And in that sense it is dollars and other similar currencies.  Even so, aside from direct trading of goods or barter, dollars or the currency of the land still factor in.  And fiat or gold standard makes no difference.

I never said fiat banking was the sole reason for these. It just made them much easier.

Actually, no, it makes tyranny harder.  With fiat money it's pretty hard to force a revolution.  On a gold or commodities based monetary system it's much easier to secure the cash needed for such things.  It's a bit harder to be a rebel leader raising an army when your soldiers expect to be paid in dollars.  Touch easier when you can mint your own gold coin or pay your troops with salt.

You see, here's the thing. I am not arguing here that 'free banking is the only way'. I'm merely arguig that opposition to fiat banking does not automatically brand the voicer as an idiot. There's room for legitimate disagreement on this issue.

There is always room for disagreement on any issue, that doesn't make ones point very good.