Basic Economic Systems

Confident Learner Joined: Jun 09, 2008 Posts: 68

kmisho wrote:

carx, I am definitely curious what you mean by a free market driving out money. How will that work?

Its actually easy imagine some organization (and lets grant this for the sack o argument) not using money and having no riche and no pore since every body is working in such a organization. Lets imagine a global completely free market ignoring all the dictatorships that would resist south change (and lets grant this for the sack o argument). In a free market setting corporations defeat individual shops because they are more adapt and can use recourses better (ignoring the fact that corporations are immortal don’t deal with problems if the owner dies ).

Lets imagine a organization that pays no money to its members and every body is a productive member of this organization simply put a organization that provides for its members and cuts cost associated with money can compete better. Therefore like corporations eliminated family business , eliminating minimal pay and interventionist actions will lead to the surviving of organized systems that don’t use internally money however operate like a one entity (think of it like a ant hive mind ) will succeed in the free market. This succession will allow this organization to buy lend and grove slowly pushing capitalist business into history books.

Posted: Tue Jun 17, 2008 4:07 am

carx wrote:

kmisho wrote:

carx, I am definitely curious what you mean by a free market driving out money. How will that work?

Its actually easy imagine some organization (and lets grant this for the sack o argument) not using money and having no riche and no pore since every body is working in such a organization. Lets imagine a global completely free market ignoring all the dictatorships that would resist south change (and lets grant this for the sack o argument). In a free market setting corporations defeat individual shops because they are more adapt and can use recourses better (ignoring the fact that corporations are immortal don’t deal with problems if the owner dies ).

Lets imagine a organization that pays no money to its members and every body is a productive member of this organization simply put a organization that provides for its members and cuts cost associated with money can compete better. Therefore like corporations eliminated family business , eliminating minimal pay and interventionist actions will lead to the surviving of organized systems that don’t use internally money however operate like a one entity (think of it like a ant hive mind ) will succeed in the free market. This succession will allow this organization to buy lend and grove slowly pushing capitalist business into history books.

I think I see what you're saying but I'm not sure I agree.

The main advantage of money as an improved form of barter is that it removes the problem of distance between traders. Without money, how would I be able to buy that book on the internet that was only printed in one place on the far side of the world from me?

I like the idea of capitalism being its own downfall if it drove the engine of prosperity to the point at which everyone could easily be more than minimally prosperous. I'm not sure that would happen, though it could possibly lay the groundwork for a philosophy that abandons wealth as a basis, wealth no longer being an issue outside of the facile attitude of keeping up with the Joneses.

Capitalism works well for frills, but not for necessities or anything that it could be argued that people deserve just for being people, such as medical care. It only seems to be working reasonably well for these things right now because the barrel of capitalism is nearly empty so there is a lot of fluidity for those who reside in the barrel. But if the barrel filled up, capitalism's impotence in the face of fairly distributing necessities would become readily apparent.

Confident Learner Joined: Jun 09, 2008 Posts: 68

kmisho wrote:

carx wrote:

kmisho wrote:

carx, I am definitely curious what you mean by a free market driving out money. How will that work?

Its actually easy imagine some organization (and lets grant this for the sack o argument) not using money and having no riche and no pore since every body is working in such a organization. Lets imagine a global completely free market ignoring all the dictatorships that would resist south change (and lets grant this for the sack o argument). In a free market setting corporations defeat individual shops because they are more adapt and can use recourses better (ignoring the fact that corporations are immortal don’t deal with problems if the owner dies ).

Lets imagine a organization that pays no money to its members and every body is a productive member of this organization simply put a organization that provides for its members and cuts cost associated with money can compete better. Therefore like corporations eliminated family business , eliminating minimal pay and interventionist actions will lead to the surviving of organized systems that don’t use internally money however operate like a one entity (think of it like a ant hive mind ) will succeed in the free market. This succession will allow this organization to buy lend and grove slowly pushing capitalist business into history books.

I think I see what you're saying but I'm not sure I agree.

The main advantage of money as an improved form of barter is that it removes the problem of distance between traders. Without money, how would I be able to buy that book on the internet that was only printed in one place on the far side of the world from me?

There would be no trade there are multiple systems that fulfill this criteria , however I think the best is standardization in the system. Every thing in this only society gets standardized like in a corporation for instance corporate uniforms. And the basis of this organization is that it members don’t trade or poses any thing , this can be accomplished in multiple ways I think if the organization pervades standard copies for every body is a good example. People can eat or drink a finite amount of recourses in a given time simply take the most extreme individual using the most * number of people * 2 (to be on the save side ).

The main point is not if this system is good or bad its simply a process of organization we can see it corporations use uniforms every inside product is standardized and given a complete free market its only a meter of introduction of a money free organization until every thing evolves into communist systems (our organizations ). Every simulation seams to confirm the observation that we can observe capitalist firms turning more and more communistic. The health care would be provided via the organization in its interior organs.
It can be argued that sometimes the organization needs to get something for it members however every time it’s the organization making a rational decision not the individuals (while they are the ones pointing to the request ).

Basis this organization would be completely immortal in a anarcho capitalist free market how can you compete with something than can’t be harmed via price wars and can damage you painfully every time ?

I think the main advantages of money free organizations are
- No market damage
- No negative selection
- No capitalist corrosion (similar concept to negative selection )
- Can inflict full damage on market opponents in a free market competition
- Cuts of the middle man (a philosophy indorsed by ford in the start of his business )

PS Think a little about china and the free market than you see that capitalism and communist organizations are going hand in hand or the standardization in corporations.
They are not part of my reasoning however they show that something is wrong with the standard conception about capitalism.

PS2 The downfall that you are specking of may come from technological innovation however I’m not cretin if capitalist corrosion eats this up.

Graduate Thinker Joined: Oct 24, 2005 Posts: 665

carx wrote:

Jason_Harvestdancer wrote:

There would be no such thing as "legal tender", a currency defined as good by a government. Instead currency would be whatever people choose to accept. This is different from barter in that people do generally choose a few goods to use as currency absent government declaration, so therefore currency does exist unlike barter.

Countless times throughout history gold has been the money of choice, although silver is often used. It has all the characteristics of money - it is consistent in nature so that any ounce of gold is the same as any other ounce of gold, it is divisible into smaller quantities as needed, it is durable in that it doesn't decay like food, it has few other uses unlike food.

Many items have been used for currency. During the age of piracy, rum itself was considered a currency, as it was fairly consistent, durable, divisable, etc., but it really had other uses. Some people in history have used sea shells, but they aren't divisible at all, and gemstones have that same failing. What it has come down to time and again for more advanced economies currencies have been metals.

Absent any government intervention, you would probably buy and sell in gold, silver, and copper.

Interesting and complete fail :

1) Transportation is difficult with a lot of metals , try to buy a house in a distant place that costs 500 KG of gold.

Not a problem. First of all, even in a gold standard, people did not always carry the gold itself. Many of them deposited the gold and carried little green pieces of paper giving redemption title to the gold to the bearer. I believe the Knights Templar pioneered this system, and it was used in the USA for a long time.

carx wrote:

2) Inflation and deflation basically in a gold based (or resource based ) system you have the risks of you getting very very pure if somebody produces more gold Very Happy

so you can get robed do to a other person manipulating market forces.

If you are discussing mining, the amount of gold ever introduced to the market by mining has been very low. What makes gold attractive (and the dirty secret is that gold bugs aren't attached to gold itself but to stable currency) is that gold does give stable currency. Yes, more gold can be mined. No, you can't double the amount of gold overnight.

carx wrote:

3) Fusion and fission you can make gold out of air water or dirt using fusion or turn led into gold removing some protons and electrons. The gold standard fails if somebody can start “printing” money like that and you cant locate or stop him. Consider also the discovery of new recourses or mining of metals in asteroids or moons.

Fission and fusion take much enery to produce. Scientists can make atoms of gold from lead and vice versa, but the problem is those atoms cost much more to make than the cash value of redeemable metal. The mining of moons and asteriods won't siginificantly alter this equation because first you need the energy to transport the metal, and second mining has never historically unbalanced a gold economy. The amount introduced by mines has never had a significant impact on the pool of circulating gold.

carx wrote:

Besides every capitalist system is based on barded today we have printed pictures that we exchange or virtual credits its still treating on thing agents another and gold is barded to you are exchanging a commonly accepted good “insert here the name of it” for another good

Seriously, your "fail" fails rather badly. All you assert is that we need a medium of exchange, not the superiority or inferiority of any particular medium of exchange.

Confident Learner Joined: Jun 09, 2008 Posts: 68

Jason_Harvestdancer wrote:

Not a problem. First of all, even in a gold standard, people did not always carry the gold itself. Many of them deposited the gold and carried little green pieces of paper giving redemption title to the gold to the bearer. I believe the Knights Templar pioneered this system, and it was used in the USA for a long time.

I agree however how is this different from the current system ? What stops the depositors of gold from making phony papers and literally print money using the rule of rest reserves in banking ?

Jason_Harvestdancer wrote:

If you are discussing mining, the amount of gold ever introduced to the market by mining has been very low. What makes gold attractive (and the dirty secret is that gold bugs aren't attached to gold itself but to stable currency) is that gold does give stable currency. Yes, more gold can be mined. No, you can't double the amount of gold overnight.

NO
I’m not talking here about mining I’m talking about one person starting to collect the gold reserves and creating deflation , after this this person releases this gold to the market creating a inflation shock.
However
This is a logical fallacy you assume because mining on this planet earth in the past is not profitable it will never be profitable. Well the transport in a zero G enticement is cheap you give the inertial speed and it flies away , secondly moons have no liquid cores and a weak gravitation making it easy to get to the core.

Besides you are proposing a currency that is able to deflate how do you deal with the deflation and inflation after wave ?
And lets not forget you are proposing a currency that is stable , do you realize that that is stagnation for the economy since its going to kill the banking system or I’m misunderstanding something.

Graduate Thinker Joined: Oct 24, 2005 Posts: 665

carx wrote:

Jason_Harvestdancer wrote:

Not a problem. First of all, even in a gold standard, people did not always carry the gold itself. Many of them deposited the gold and carried little green pieces of paper giving redemption title to the gold to the bearer. I believe the Knights Templar pioneered this system, and it was used in the USA for a long time.

I agree however how is this different from the current system ? What stops the depositors of gold from making phony papers and literally print money using the rule of rest reserves in banking ?

And that has occasionally happened under a gold standard, but most people considered it a criminal act, an act of fraud, to issue papers above and beyond the actual gold reserves. Banks tried to make fractional reserve legal, but any bank that inflated more than the competitors would find the competitors demanding gold redemption. While the potential for greater profit was there for the inflators, those with more reserve would often wind up owning the banks with less reserve. Not wanting to have your bank bought out by the competition was an incentive to not over inflate.

Meanwhile the current system is vastly different to the point where I'm surprised you need to ask. So, if I take my dollars to the issuing bank and ask for redemption in hard currency, what will the result be? Do you see a difference?

carx wrote:

Jason_Harvestdancer wrote:

If you are discussing mining, the amount of gold ever introduced to the market by mining has been very low. What makes gold attractive (and the dirty secret is that gold bugs aren't attached to gold itself but to stable currency) is that gold does give stable currency. Yes, more gold can be mined. No, you can't double the amount of gold overnight.

NO
I’m not talking here about mining I’m talking about one person starting to collect the gold reserves and creating deflation , after this this person releases this gold to the market creating a inflation shock.

You are? Really? As in a "What if WalMart buys ALL the land..." sort of question often asked by Georgists? So, how will this one person collect the gold reserves?

carx wrote:

However
This is a logical fallacy you assume because mining on this planet earth in the past is not profitable it will never be profitable. Well the transport in a zero G enticement is cheap you give the inertial speed and it flies away , secondly moons have no liquid cores and a weak gravitation making it easy to get to the core.

Did I posit that mining is not profitable? If that were the case, there would be no mining. I instead wrote that the amount of gold mined by all the gold mines on the planet in any given year doesn't produce enough gold to upset the gold reserves and the value of the metal as a commodity. As for your answer, there's still the energy expenditure of getting from the Earth's surface to the asteroid and also landing the ores so they don't burn up in Earth's atmosphere . Sure, you can tranport metal from asteroid to asteroid with very little expenditure of energy, but you haven't answered the basic problem of asteroid mining in such a way that you can show we can significantly increase our gold stocks and thusly upset the value of gold.

carx wrote:

Besides you are proposing a currency that is able to deflate how do you deal with the deflation and inflation after wave?
And lets not forget you are proposing a currency that is stable , do you realize that that is stagnation for the economy since its going to kill the banking system or I’m misunderstanding something.

A stable currency will only kill the banking system as you know it, but it won't kill the banking system overall. Yes, you are misunderstanding something. Moreover it won't stagnate the economy. There's no reason to believe it will. Do you buy the monetarist myth that without the ability to rapidly inflate the economy will stagnate? The economy runs on production of goods and services, not on passing pieces of paper back and forth in a loop without those papers ever being used for goods or services.

Confident Learner Joined: Jun 09, 2008 Posts: 68

Jason_Harvestdancer wrote:

And that has occasionally happened under a gold standard,

So why are you for a gold standard , I’m curious if you have a slight inflation potential.

Jason_Harvestdancer wrote:

but most people considered it a criminal act, an act of fraud, to issue papers above and beyond the actual gold reserves. Banks tried to make fractional reserve legal, but any bank that inflated more than the competitors would find the competitors demanding gold redemption. While the potential for greater profit was there for the inflators, those with more reserve would often wind up owning the banks with less reserve. Not wanting to have your bank bought out by the competition was an incentive to not over inflate.

I agree this type of printing occurred in the past however its undetectable if you understand the rest rule of backing or how modern banks work , simply inflation is generated and its impossible to detect the source can you elaborate how you can detect the same dollar printed in bank A from the same dollar printed in bankB ? Did you have a banking class or read a book on banking ? I’m curious if you are proposing a detection system can you elaborate on it.

Jason_Harvestdancer wrote:

Meanwhile the current system is vastly different to the point where I'm surprised you need to ask. So, if I take my dollars to the issuing bank and ask for redemption in hard currency, what will the result be? Do you see a difference?

There are miner differences however you can go to your local “Złotnik”[PL](fuck I cant translate the name of the job of the guy who can sell gold and expensive minerals )
And buy some gold if you wont to no one is stopping you. You seam not to understand the difference between money and representation of money in the past gold was money and the paper dollar its representation , today the paper dollar is money and electronic currency its representation so yes you can go to a bank and demand your money (paper dollar).
Basically all money systems are the same you have thing Z and you can exchange other stuff for thing Z .

Some stuff have different properties like the ability to inflate or the potential to deflate.

Jason_Harvestdancer wrote:

You are? Really? As in a "What if WalMart buys ALL the land..." sort of question often asked by Georgists? So, how will this one person collect the gold reserves?

Hmm Its not like one person buys off all the land fashion. Think like this a organization/individual is starting to keep gold and on every 5 $ he/it gets of a transaction he/it puts 1 $ in the gold volt.

This generates deflation because the money supply is reduced OK.
During deflation most people are happy because for the same amount of gold they can get more , this is deflation.
After he/they/it got a good procreant of the entire money splay in circulation like 10% they release this money with because of the deflation generated is worth more then at the beginning and this generated inflation because of this people start losing faith in the gold standard with can lead to a spiral of inflation do to people releasing more and more of the gold into the market. In the end we can get a currency crash or some people get robed do to manipulation of market forces.
Remember every money system can be destroyed this way , I’m not advocating any money system I’m simply giving you a example and remember that the central backing system of modern country’s implies measurements to increase the money supply if deflation is detected.

A nice example is the stock market you are collecting stocks of X corporation at the beginning they are worthless however if people are interested and start to decrees the supply of X stocks the price gets up. If you have a significant share of X stocks you can release them getting more money out of the deal however this will bring the price of the stocks down other shareholders can start to get ride of the stocks to and the people who didn’t get ride of the stocks can get bankrupt.

Jason_Harvestdancer wrote:

A stable currency will only kill the banking system as you know it, but it won't kill the banking system overall. Yes, you are misunderstanding something. Moreover it won't stagnate the economy. There's no reason to believe it will. Do you buy the monetarist myth that without the ability to rapidly inflate the economy will stagnate? The economy runs on production of goods and services, not on passing pieces of paper back and forth in a loop without those papers ever being used for goods or services.

My friend I don’t buy any propaganda if something isn’t making sense and cant be explained and is taken on fait I reject it.

I find your appeal to ridicule fallacious especially if you are proposing passing paper coupons back and forward like you mentioned above for a explanation how to overcome the difficult transportation of gold.

Let me explain and ashore I’m willing to accept a rational explanation if you can present it the problem with banking systems is this :

Person A haze a invention with is revolutionary however possesses no money to realize it.
Modern bancs can give credits to this person and this invention gets realized.
The bancs have this money because people deposit it there.
And people deposit it there to because if they don’t do this inflation will eat away there money we have a system that encourages innovation however in a stabile system backs don’t have south amounts of money because people don’t need to deposit to save their money we have here a little problem with inventions or progress.
I’m not cretin about this because I haven’t herd your alternative system can you present your concept that will enable money flow to innovative ideas ?

O I have a revelation write now and please answer this because it’s a difficult problem how do all the banks have enough gold if someone wants to redeem his/her paper money for gold ?
Lets assume this scenario person A is rich he deposits his gold in bank A in the region of A , he goes to region B and demands in bank B to get his gold how is this possible if the physical gold is in banc A ???
Isn’t this a typical scenario of a bank panic ?

Graduate Thinker Joined: Oct 24, 2005 Posts: 665

carx wrote:

Jason_Harvestdancer wrote:

And that has occasionally happened under a gold standard,

So why are you for a gold standard , I’m curious if you have a slight inflation potential.

Because, as pointed out in the second half of the chopped in half paragraph there is a check against said inflation.

carx wrote:

Jason_Harvestdancer wrote:

but most people considered it a criminal act, an act of fraud, to issue papers above and beyond the actual gold reserves. Banks tried to make fractional reserve legal, but any bank that inflated more than the competitors would find the competitors demanding gold redemption. While the potential for greater profit was there for the inflators, those with more reserve would often wind up owning the banks with less reserve. Not wanting to have your bank bought out by the competition was an incentive to not over inflate.

See, there was the answer.

carx wrote:

I agree this type of printing occurred in the past however its undetectable if you understand the rest rule of backing or how modern banks work , simply inflation is generated and its impossible to detect the source can you elaborate how you can detect the same dollar printed in bank A from the same dollar printed in bankB ? Did you have a banking class or read a book on banking ? I’m curious if you are proposing a detection system can you elaborate on it.

It is not undetectable though. If you have two different banks issuing notes against their gold reserves, their notes will say which bank issued said notes. The banks will accept as deposit the notes of other banks knowing that the other banks are doing so in return and that at clearing time the notes would be exchanged for each other and any shortfalls made up in gold.

That was the way it actually happens before central banks are instituted. That's the way it actually did happen in the USA or in the UK before central banks were instituted.

carx wrote:

Jason_Harvestdancer wrote:

Meanwhile the current system is vastly different to the point where I'm surprised you need to ask. So, if I take my dollars to the issuing bank and ask for redemption in hard currency, what will the result be? Do you see a difference?

There are miner differences however you can go to your local “Złotnik”[PL](fuck I cant translate the name of the job of the guy who can sell gold and expensive minerals )
And buy some gold if you wont to no one is stopping you. You seam not to understand the difference between money and representation of money in the past gold was money and the paper dollar its representation , today the paper dollar is money and electronic currency its representation so yes you can go to a bank and demand your money (paper dollar).
Basically all money systems are the same you have thing Z and you can exchange other stuff for thing Z .

I'm not writing about purchasing gold, I'm writing about asking for my currency to be redeemed at the central bank. I'm writing about taking my federal reserve notes to the federal reserve for them to be redeemed. That's the difference that you aren't getting. It is a system of protected monopolies and irredeemable (ultimately) currency.

carx wrote:

Some stuff have different properties like the ability to inflate or the potential to deflate.

They are different based on the nature of the currency involved. So?

carx wrote:

Jason_Harvestdancer wrote:

You are? Really? As in a "What if WalMart buys ALL the land..." sort of question often asked by Georgists? So, how will this one person collect the gold reserves?

Hmm Its not like one person buys off all the land fashion. Think like this a organization/individual is starting to keep gold and on every 5 $ he/it gets of a transaction he/it puts 1 $ in the gold volt.

This generates deflation because the money supply is reduced OK.
During deflation most people are happy because for the same amount of gold they can get more , this is deflation.
After he/they/it got a good procreant of the entire money splay in circulation like 10% they release this money with because of the deflation generated is worth more then at the beginning and this generated inflation because of this people start losing faith in the gold standard with can lead to a spiral of inflation do to people releasing more and more of the gold into the market. In the end we can get a currency crash or some people get robed do to manipulation of market forces.
Remember every money system can be destroyed this way , I’m not advocating any money system I’m simply giving you a example and remember that the central backing system of modern country’s implies measurements to increase the money supply if deflation is detected.

You still haven't explained how one person is going to buy all the gold, or one bank is going to accumulate all the gold, which is the key point in your argument. It is only possible now because of the massive amounts of gold collected by the central banks during the forced conversions from backed to unbacked currency, which isn't exactly a strong argument against backed currencies.

So, what is this person who is collecting all the gold doing with it other than storing it in a vault? What is he eating? Where is he living? What is he paying his taxes with? How is he convincing people to do business with him instead of his competitors?

carx wrote:

A nice example is the stock market you are collecting stocks of X corporation at the beginning they are worthless however if people are interested and start to decrees the supply of X stocks the price gets up. If you have a significant share of X stocks you can release them getting more money out of the deal however this will bring the price of the stocks down other shareholders can start to get ride of the stocks to and the people who didn’t get ride of the stocks can get bankrupt.

And the amount of gold involved is beyond the stock offerings of a particular company. Meanwhile this individual is parting with currency to collect the stocks, while in a backed currency system what is the collector parting with to collect the currency?

carx wrote:

Jason_Harvestdancer wrote:

A stable currency will only kill the banking system as you know it, but it won't kill the banking system overall. Yes, you are misunderstanding something. Moreover it won't stagnate the economy. There's no reason to believe it will. Do you buy the monetarist myth that without the ability to rapidly inflate the economy will stagnate? The economy runs on production of goods and services, not on passing pieces of paper back and forth in a loop without those papers ever being used for goods or services.

My friend I don’t buy any propaganda if something isn’t making sense and cant be explained and is taken on fait I reject it.

I find your appeal to ridicule fallacious especially if you are proposing passing paper coupons back and forward like you mentioned above for a explanation how to overcome the difficult transportation of gold.

Which is different from passing federal reserve notes back and forth how exactly?

carx wrote:

Let me explain and ashore I’m willing to accept a rational explanation if you can present it the problem with banking systems is this :

Person A haze a invention with is revolutionary however possesses no money to realize it.
Modern bancs can give credits to this person and this invention gets realized.
The bancs have this money because people deposit it there.
And people deposit it there to because if they don’t do this inflation will eat away there money we have a system that encourages innovation however in a stabile system backs don’t have south amounts of money because people don’t need to deposit to save their money we have here a little problem with inventions or progress.
I’m not cretin about this because I haven’t herd your alternative system can you present your concept that will enable money flow to innovative ideas ?

You have aptly describecd the current system, but the problem is you include the hidden premise that it is the only possible system.

Person A has an invention with is revolutionary however possesses no money to realize it.
Person A goes to a lending bank (which is not the same institute as a depository bank) and they give him credits backed on their reserves of gold to realize the invention.
The lending bank has this money because it is in that business, it is basically a brokerage service for investors.
The average person stores their gold in a depository bank for the purpose of keeping it secure and because lugging around large quantities of gold is impractical. Although there is no interest (and actually there is a deposit fee) the stability of the currency system means there essentially is no inflation to beat and the fee pays for security and convenience.
The two banks involved in this scenerio are not the same bank.

carx wrote:

O I have a revelation write now and please answer this because it’s a difficult problem how do all the banks have enough gold if someone wants to redeem his/her paper money for gold ?

That is the reason banks wanted to switch away from a gold standard, because if they lent too much in fractional reserves, the depositors would notice and want redeption. That is the second check on the ability of a bank to lend out too much gold. So far I've only written one, you introduced the second.

carx wrote:

Lets assume this scenario person A is rich he deposits his gold in bank A in the region of A , he goes to region B and demands in bank B to get his gold how is this possible if the physical gold is in banc A ???
Isn’t this a typical scenario of a bank panic ?

No, that's not a typical scenario or a bank panic.

A bank panic is where the many massed depositors worry that the bank has depleted the stock of hard value through over-lending of a fractional reserve nature. The many depositors all demand payment at once. That is a bank panic.

What you described is simply a part of the standard operation of a bank wherein Bank B has notes of Bank A. For a large sum, Bank B will contact Bank A for redemption, and when it comes through will be able to supply the customer. It happens today if you try to deposit a check over $5000 and then use the money right away. The bank holds the deposit pending redemption. For smaller sums the bank will redeem on the spot and later Bank B will contact Bank A for redemption. Usually that redemption is Bank B and Bank A trading paper notes, and gold only is used to shore up any shortfalls. As soon as that is accomplished there is no need to worry about either bank being unable to redeem notes because each bank now has collected the circulating notes that they themselves issued and therefore don't need to be redeemed.

Confident Learner Joined: Jun 09, 2008 Posts: 68

Jason_Harvestdancer wrote:

It is not undetectable though. If you have two different banks issuing notes against their gold reserves, their notes will say which bank issued said notes. The banks will accept as deposit the notes of other banks knowing that the other banks are doing so in return and that at clearing time the notes would be exchanged for each other and any shortfalls made up in gold.

That was the way it actually happens before central banks are instituted. That's the way it actually did happen in the USA or in the UK before central banks were instituted.

Sorry I’m not from the US can you explain in detail how banks control eth other ? I’m from Poland and we just jumped from having gold coins to paper money we did have something about the introduction of paper currency for a measure of transportation.
How exactly are banks going to monitor if I’m not giving people bogus paper peces ? Is someone going to count them ? I understand that they will have a number of a bank of issue or something can you explain it in detail ?

Jason_Harvestdancer wrote:

You still haven't explained how one person is going to buy all the gold, or one bank is going to accumulate all the gold, which is the key point in your argument. It is only possible now because of the massive amounts of gold collected by the central banks during the forced conversions from backed to unbacked currency, which isn't exactly a strong argument against backed currencies.

So, what is this person who is collecting all the gold doing with it other than storing it in a vault? What is he eating? Where is he living? What is he paying his taxes with? How is he convincing people to do business with him instead of his competitors?

It can be a group or multiple non connected people deciding for unrelated reasons to start depositing and then spend their money its named "saving money".
BTW: 10% isn’t all the gold.

Jason_Harvestdancer wrote:

And the amount of gold involved is beyond the stock offerings of a particular company. Meanwhile this individual is parting with currency to collect the stocks, while in a backed currency system what is the collector parting with to collect the currency?

Goods its simple , however we have goods that are consumer goods and services that cant be collected . If you pay a dude to make your hair where is this service going after 20 days puff gone. How about a cheeseburger puff eaten like I have shown some goods and all services cant be accumulated therefore its able to manage to collect gold. However Its not a answer I can run a business and instead of a new pair of shoes put my gold peaces in a volt I can do this others spend it on a hair cut I put it in a volt.
This is the biggest problem of money systems especially of resource based ones deflation and then inflation.

Jason_Harvestdancer wrote:

Which is different from passing federal reserve notes back and forth how exactly?

Please read that I have simply pointed a logical fallacy that you have committed appeal to ridicule is not a valid argument.

Jason_Harvestdancer wrote:

You have aptly describecd the current system, but the problem is you include the hidden premise that it is the only possible system.

O LOL If you only know the truth , sorry I cant stop it actually I have a personal socio economical view with is a combination of opposing political views (Fcom) I’m actually for abandoning money all together Very Happy

its strange that you have identified me with someone who supports the current system especially that I personally that I support the free market ideas and all libertarian like ideologies.
I never mentioned it I’m simply curious about your views however you must remember to not label somebody based on his disagreeing with you.
In a socialist VS capitalist discussion I’m the WTF side
its like having a Creationism + YEC VS Evolution + Scientific model discussion and I’m a young earth atheist LOL

http://www.youtube.com/watch?v=h1lBxrUFbZ8

(I’m not a young earther however I’m a atheist )
I’m the most neutral person you can find.

Jason_Harvestdancer wrote:

That is the reason banks wanted to switch away from a gold standard, because if they lent too much in fractional reserves, the depositors would notice and want redeption. That is the second check on the ability of a bank to lend out too much gold. So far I've only written one, you introduced the second.

.....

What you described is simply a part of the standard operation of a bank wherein Bank B has notes of Bank A. For a large sum, Bank B will contact Bank A for redemption, and when it comes through will be able to supply the customer. It happens today if you try to deposit a check over $5000 and then use the money right away. The bank holds the deposit pending redemption. For smaller sums the bank will redeem on the spot and later Bank B will contact Bank A for redemption. Usually that redemption is Bank B and Bank A trading paper notes, and gold only is used to shore up any shortfalls. As soon as that is accomplished there is no need to worry about either bank being unable to redeem notes because each bank now has collected the circulating notes that they themselves issued and therefore don't need to be redeemed.

One problem if multiple people try to redeem their money with a lesser sum a bank panic can occur and I whose referring more to this scenario or a real bank panic despite the bank having enough paper money they don’t have it in this division and this can give a nasty rumor about this bank not being able to redeem and more people start running to other banks to get their gold especially if you have stated that there is a possibility of phony papers however its not a situation because your deposit banks do not invest the money and I think this spatial bank panic that will lock like a bank panic for normal people , and will only disturb the banking system and people lives not massive damage however it can make a distrust for the banking system and push some banks out of business. There is off curse the possibility of there being really phony papers and some people can not get their money back and because the bank is disturbed via people demanding their gold back it can be complicated to detect or find the source.
This isn’t my argument agents recourse based money my main concern are deflation + inflation waves.

Best wishes carx

Grand Poster Joined: Apr 22, 2005 Posts: 1033

carx wrote:

I’m from Poland and we just jumped from having gold coins to paper money

Although "zloty" means "golden" I believe you'll find that Poland has had paper banknotes in circulation since the 18th Century, so maybe you've been asleep for a couple of hundred years. Poland has also had times in history when only foreign (i.e. Russian) currency was legal tender.

Confident Learner Joined: Jun 09, 2008 Posts: 68

Stuz719 wrote:

I believe you'll find that Poland has had paper banknotes in circulation since the 18th Century, so maybe you've been asleep for a couple of hundred years. Poland has also had times in history when only foreign (i.e. Russian) currency was legal tender.

Maybe , however the polish education system didn’t mention it we only got a short explanation besides its a side issue the main concern of stable monetary systems are the deflation and then inflation waves that can be costly for the economy.

And again a monetary system is not a economy system so I have no idea why the OP included it here. You can have a gold standard in capitalism or socialism or a non resource based system in capitalism and socialism. The monetary policy is of little significant to the economy system of a country/organization its at best a side issue.

BTW what makes you think that gold is real money people ? What makes it valuable or more valuable then a hand full of sand ? Its only the general acceptance if every person decided tomorrow that gold is worthless and demanded sand instead of gold your gold reserves are shit. Again what makes people think gold is “ real money “?

Grand Poster Joined: Apr 22, 2005 Posts: 1033

carx wrote:

BTW what makes you think that gold is real money people ? What makes it valuable or more valuable then a hand full of sand ? Its only the general acceptance if every person decided tomorrow that gold is worthless and demanded sand instead of gold your gold reserves are shit. Again what makes people think gold is “ real money “?

Money is a generally accepted medium of exchange which (as a consequence) has a generally accepted value.

There's nothing to stop you using grains of sand as a currency, but you would probably find that their abundance would rather limit their individual value and hence their practicality as a currency.

Confident Learner Joined: Jun 09, 2008 Posts: 68

Stuz719 wrote:

Money is a generally accepted medium of exchange which (as a consequence) has a generally accepted value.

There's nothing to stop you using grains of sand as a currency, but you would probably find that their abundance would rather limit their individual value and hence their practicality as a currency.

Thanks however I understand the definition of money Wink

however the fraise “Real money” is used , whets the difference between “Real money” and “normal money” ?
Sands a stupid example lets say other metal like titanium is titanium "real money" ?

Posted: Thu Jul 17, 2008 10:47 pm

MockingGods wrote:

I personally don't see any "economic system" being a solution to humanities major obstacles. In my opinion, our only real solution is some type of rational population control. As long as resources and energy are limited to a small percentage of our ever growing population base, we’ll always have difficulties that no reciprocal based system can or will solve.

Unless this energy and resources is stolen then something is being given in return for them.

If every person lived in a free society--politically and economically--nearly everyone could live very comfortably.

Posted: Thu Jul 17, 2008 10:54 pm

kmisho wrote:

Capitalism works well for frills

If you believe this you do not understand why people work and produce things and why capitalism has outperformed every other system tried.

carx wrote:

but not for necessities or anything that it could be argued that people deserve just for being people, such as medical care.

Medical care is not sunlight or some magical unlimited resource--it is the work and skills of people. Nobody can "deserve" or be entitled to the work and skills of others.

carx wrote:

It only seems to be working reasonably well for these things right now because the barrel of capitalism is nearly empty so there is a lot of fluidity for those who reside in the barrel. But if the barrel filled up, capitalism's impotence in the face of fairly distributing necessities would become readily apparent.

"Fairly" is an idea unique to the individual. I find capitalism much more fair than some government body deciding what someones work is worth to someone else. The seller and the buyer do not need a middle man swinging his "fair" bat to make a trade beneficial to both of them.


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