Define "Dollar"

[Matthew Carberry]

To be fair, when you ask folks to "define a dollar" and then deny any of the definitions given are valid, you kinda set people up to get frustrated with you.

[K Frame]

Disagreeable?

You're the one who keeps disagreeing with people.

Many people have given you their definitions for the dollar, and you predicate everything with this: "To me, the "dollar" still seems somewhat imaginary...an "IOU-nothing"

That tells me that the only thing you're really looking for are definitions that SUPPORT your version of what the dollar is. If it doesn't match what you want to hear, you reject it.

Have you ever really LOOKED at a dollar bill?

This statement is on the front, and is on the front of every US bill: "This note is legal tender for all debts, public and private."

As a tender issue by the Government, it is, to quote a quote, backed by the full faith and trust of the US Government.

FAITH.

TRUST.

That means that your dollar isn't backed by a comparable quantity of a tangible good, such as gold. It's not a gold or a silver certificate bill.

It means, as I said, that the currency of the United States is a CONCEPT. That WE accept it, and use it, instead of going to a goods for services barter system (I wonder how many chickens it would take to pay my mortgage) means that we also accept the concept that the US dollar has value that exceeds that of the ink, cloth, and labor that goes into producing it.

Obviously, though, none of these definitions really meets your "gold standard" so to speak.

[The Rabbi]

You're right,Mike.  Everyone has given a slightly different definition.  But (of the serious ones anyway) I could probably live with any of the ones offered.  We all understand what the term means and it means pretty much the same thing to all of us.  That's what makes it a "medium of exchange" i.e. money.

[RevDisk]

"To me, the "dollar" still seems somewhat imaginary"

Fair enough. You're now free to exit the discussion.

To be fair, the dollar's value is entirely imaginary.  It's worth what everyone believes it is worth.  Technically, it is not backed by anything non-imaginary. 

Yes, yes, full faith and trust.  When anyone actually HAS full faith and trust in the govt, let me know.

[roo_ster]

I guess someone could argue that the dollar is imaginary.

BUt, it becomes real as soon as you exchange it for goods or services.  Unless gasoline, fast food, and lawyers on retainer are imaginary, too.

[The Rabbi]

"To me, the "dollar" still seems somewhat imaginary"

Fair enough. You're now free to exit the discussion.

To be fair, the dollar's value is entirely imaginary.  It's worth what everyone believes it is worth.  Technically, it is not backed by anything non-imaginary. 

Yes, yes, full faith and trust.  When anyone actually HAS full faith and trust in the govt, let me know.

Even if it were "backed" by something, it is still imaginary.  Gold is no more real than a dollar bill, as its value depends on people's willingness to exchange it for goods and services.
All money is "imaginary" in that sense as money is simply a proxy for goods and services.

[K Frame]

"All money is "imaginary" in that sense as money is simply a proxy for goods and services."

Yep, and that all harks back to my contention that the dollar is a CONCEPT.

An object's value only exists if two or more people agree on it.

[Matthew Carberry]

I'm so self-centered, I don't even believe in you Mike. 

[Headless Thompson Gunner]

To be fair, the dollar's value is entirely imaginary.  It's worth what everyone believes it is worth.  Technically, it is not backed by anything non-imaginary. 

Yes, yes, full faith and trust.  When anyone actually HAS full faith and trust in the govt, let me know.

You don't need to trust the government to trust the dollar.  All you need to trust is that dollars are generally accepted by everyone else to be a valuable form of payment, which is obviously true.  There is nothing imaginary about it.

[richyoung]

Even if it were "backed" by something, it is still imaginary. 

If it were "backed" by something, the government couldn't create new "dollars" out of thin air, without the capability of redeeming them in whatever its backing is, at par value. In fact, most of the "Panics" and such blamed on soldi currency are in fact the result of issuing more "backed" currency than the government had backing for - this is why setting weights and measures and coining money was delegated to Congress - if they wanted to keep their jobs, they wouldn't debase the currency.  What we get now, is a long, steady inflation of the currency, because there is no backing.  This is a de facto tax increase in three ways: it enables the .gov to pick the pockets of any one holding dollars by stealing some of the held dollars value, it enables the .gov to push more currency out without a corresponding increase in revenue - that is to say, the politicians get to buy votes with pork without the attendant political pain of taxing, AND they get to obligate future taxpayers to pay for it all, plus interest.

Gold is no more real than a dollar bill, as its value depends on people's willingness to exchange it for goods and services.

...care to point out any time in modern history it WASN'T?  As long as women like jewelry, and as long as certain industrial processes need it, it will have intrinisic value.

[The Rabbi]

I hope you're not suggesting that a gold standard would eliminate inflation, because it won't.  There are abundant examples of inflation even with a gold standard.
Would you care to name a time in modern history when people would not accept Federal Reserve Notes?  And they are far more accepted the world over for goods and services than gold.  Go to Paris and try giving the waiter a gold sovereign for your meal.

[Guest]

To be fair, when you ask folks to "define a dollar" and then deny any of the definitions given are valid, you kinda set people up to get frustrated with you.

 I apologize for any frustration I caused. I admit that I wanted to provoke disagreement and discussion about the definition. I consider it worth the risk to attempt to convince members to question the present fiat dollar system. Any time one challenges peoples' worldviews there is bound to be some pain.

The author of the article is a noted Austrian, hard-money economist and according to him, the US dollar is not able to be defined in strict economic terms.

[K Frame]

So, in other words, you came here with the avowed purpose of fomenting discord as a means of furthering one of your personal pet peeves.

That, boy, is a textbook definition of a troll.

Next time why don't you try the "honesty" up front instead of being a smarmy, sneaky little prick about it.


"according to him, the US dollar is not able to be defined in strict economic terms."

That description is applicable to EVERY nationally issue currency currently used anywhere in the world.

[Guest]

"To me, the "dollar" still seems somewhat imaginary"

Fair enough. You're now free to exit the discussion.

To be fair, the dollar's value is entirely imaginary.  It's worth what everyone believes it is worth.  Technically, it is not backed by anything non-imaginary. 

Yes, yes, full faith and trust.  When anyone actually HAS full faith and trust in the govt, let me know.

 Thank you. This is the point of the thread. I warn that this faith and trust can evaporate in a very short time period - like between dusk and dawn.

[Gewehr98]

according to him, the US dollar is not able to be defined in strict economic terms.

So the Euro is?

Back to trading chickens and eggs, but how many chickens for each monthly mortgage payment, and which bank is going to accept said chickens?

[Guest]

So, in other words, you came here with the avowed purpose of fomenting discord as a means of furthering one of your personal pet peeves.

That, boy, is a textbook definition of a troll.

Next time why don't you try the "honesty" up front instead of being a smarmy, sneaky little prick about it.

 But Mike, you can't complain about being trolled; you didn't even post until a day after I had come clean by posting the article (which was only 12+- hours after I started the thread.)

[Guest]

according to him, the US dollar is not able to be defined in strict economic terms.

So the Euro is?

Back to trading chickens and eggs, but how many chickens for each monthly mortgage payment, and which bank is going to accept said chickens?

 No one mentioned the Euro. Salinas Price says, "The world, as of February 2007, does not possess a means of payment."

[Perd Hapley]

I consider it worth the risk to attempt to convince members to question the present fiat dollar system. Any time one challenges peoples' worldviews there is bound to be some pain.

The problem with this approach (of which I am sometimes guilty) is that it is condescending to a group of people that don't appreciate the insult to their intelligence.  You always seem to think that you are the only that has questioned "the system," and that we need you to come along and open our eyes.  The truth, however, is that many members of APS have long ago considered the kinds of things you believe in, but dismissed them.  If your point of view is correct, just explain it and tell us why we should agree with you.  Don't treat us like mindless drones who need rescuing.  Like I said, I've been down that road many times, and it doesn't further useful conversation.

[K Frame]

So, in other words, you came here with the avowed purpose of fomenting discord as a means of furthering one of your personal pet peeves.

That, boy, is a textbook definition of a troll.

Next time why don't you try the "honesty" up front instead of being a smarmy, sneaky little prick about it.

 But Mike, you can't complain about being trolled; you didn't even post until a day after I had come clean by posting the article (which was only 12+- hours after I started the thread.)

No, boy, you "came clean" just now when you finally admitted that your primary intent was to provoke disagreement.

Before that, your motives were veiled and on their face false.

For once, I agree with Fistful's assessment.

[The Rabbi]

The author of the article is a noted Austrian, hard-money economist and according to him, the US dollar is not able to be defined in strict economic terms.

First off, he isn't Austrian.  He's a Mexicano.
Secondly, he isn't an economist.  He's a businessman.
Third, the fact that his "middle" name (I dont know the correct term for this) is Salinas, which is also the name of a past president, leads me to believe he has some connection to politics and thus some kind of agenda.

So I think we've established he has no more credentials than I do.  We can certainly define the dollar in "strict economic terms" (whatever that means) as:
"The unit of currency in use by the U.S."  We can further define currency as "money" and money as "a store of value for exchange for goods and services."

So you have failed to show that the current system is anything other than what it is.  As for faith evaporating overnight: it hasn't happened yet and there is no reason to think it will in the foreseeable future.  Anything beyond that is idle speculation, like whether Fistful will make an honest woman of Brittany Spears.

[tyme]

Of course I'm using [dollars] for purchases. I also use them to save and invest. That's why I worry about their future.

Congratulations.  By repeatedly pointing out that the dollar has no backing, and even asserting (incorrectly) that the concept of a dollar (or, presumably, any numeraire) is "imaginary" (it's real enough that our society basically runs on money), you undermine others' faith in the currency system, leading to more inflation (affecting your savings) and more market volatility (negatively affecting your investments, unless you invest heavily in commodities or engage in sophisticated derivatives trading... in which case presumably you wouldn't be complaining about the "fiat" currency system.).

[K Frame]

Actually, Tyme, I sincerely doubt that he's undermined anyone's faith in the system.

Why?

Because I don't think anyone here is really that stupid that they don't understand at least the elementary basics of the US economic system, and they recognize him for the hypocrite that he is.

I also find it to be highly amusing that our economic system is supposedly so bereft that confidence in the American dollar is going to wither up and blow away in a short period of time. That supposition shows absolutely no grasp of US history and the assaults that our economic system has withstood.

Somehow, even in the darkest days of the Depression, World War II, etc., poverty, racial violence, basic faith in the viability and durability of the US economic system remained intact. Taxed, stressed, strained, but intact.

So tell us, Mercedes, just what might this event be that would cause, OVERNIGHT, faith in the dollar to evaporate like water?

Hillary Clinton or Barak Obama either elected or defeated for president?

The Cubs winning the World Series?

You chatting on the internet about how you don't believe in the dollar, but then admitting that you're a monumental hypocrite in that you use the dollar for your own personal gain and convenience?

[Headless Thompson Gunner]

according to him, the US dollar is not able to be defined in strict economic terms.

So the Euro is?

Back to trading chickens and eggs, but how many chickens for each monthly mortgage payment, and which bank is going to accept said chickens?

 No one mentioned the Euro. Salinas Price says, "The world, as of February 2007, does not possess a means of payment."

"Means of payment" is anything both trading partners agree upon.  Any time any good or service is traded for FRNs (or Euros or chickens or whatever) a payment has been made.  This notion of yours that a payment in dollars isn't a payment is absurd.

By definition, an item's value is equal to whatever one can trade it for on the open market.  Dollars can be traded for damned near anything, anytime, anywhere.  To say that they have no value or that they aren't a means of payment is just plain stupid.  Each and every financial transaction that takes place in this country proves your premises false.

You're being deliberately obtuse.  Stop.

[richyoung]

I hope you're not suggesting that a gold standard would eliminate inflation, because it won't.  There are abundant examples of inflation even with a gold standard.

I don;t forsee any events like conquereing the America's or Sutter's Mill in hte near future - and that's the kind of event it takes to spark inflation in a solid currency world - either that or deliberate debasing of the coinage.

Would you care to name a time in modern history when people would not accept Federal Reserve Notes?

until 1972, the dollarwas still redeemable in gold internationally - so until then, when people accepted Federal reserve notes, they WERE accepting gold.  After that, the  dollar was the official medium of payment for OPEC - essentially, the dollar was backed by oil - (actually, the willingess to convert dollars into oil - "petro-dollars").  THAT support for the FRN is going away - Iraq was in the process of doing so, with Iran and Venuzuela following suit.  This reaises the specter of a domino effect, as every other country scrambles to not be left "holding the (dollar) bag".

And they are far more accepted the world over for goods and services than gold.  Go to Paris and try giving the waiter a gold sovereign for your meal.

I've been to France...try paying for your meal with Federal Reserve notes and see what happens....

[K Frame]

You know, I'm trying to figure out just exactly who this Hugo Salinas Price is...

As stated, he's not an Austrian, unless the Austrians invaded Ole Mexico.

As pointed out, he's not an economist. He's a business owner -- appliance stores.

He also is the foremost Mexican proponent of going back onto the silver standard. In other words, William Jennings Bryant moved south of the border.

But here's the kicker...

In every one of his hundreds of alliance stores there's apparently a branch of Banco Aztec. It's Salinas' personal bank, which extends credit to his uncreditworthy countrymen. As such it provides a very valuable service, but it's also a source of great profit for the man.

For him, returning to a silver-based currency in Mexico would do a lot to stabilize his personal business empire and would remove a lot of worries about the fluctuating price of the Mexican peso. Why not a gold standard? Because Mexico is the world's largest producer of silver.

Salinas isn't so much decrying the concept that the world's "money" has no value.

He's decrying the fact that Mexico is sitting on top of what he believes to be an economic windfall in the form of coinable silver.

Hey Mercedes, once you figure out that Snr. Salinas is an advocate of the silver standard just as a means of increasing his personal wealth, what's that do to your estimation of him? Feel a little let down?