I know that most of you here love the gold theory. But I think that despite gold being so great as a universal medium of exchange, Americans are better off using the US dollar.
To better understand my point we need to go back to 1945. This crucial date gave America an advantage of a life time. After WWII American emerged as the political, economic and military leader of the free world and the US dollar was to be use as the international medium of exchange.
Now, America has a monopoly in the issuance of US dollars. This makes it easier and cheaper for Americans to compete and trade in the international arena. Why would anyone ever even think of using Gold as a medium of exchange???
Well in my case I would keep things the way they were before nixon abolished it in 1971. Only because since that day inflation threatens the future of the US dollar.
Corporatism is using state means to enhance market share and profitability of a few favored firms, at the expense of the citizen.
wolfman: I simply pointed out that Americans are better off by using the US dollar because it is worth more than gold
How do you determine what I value a US dollar at compared to gold?
Explain to me how the relevance of your question to the topic being discussed.
Josh : wolfman: I simply pointed out that Americans are better off by using the US dollar because it is worth more than gold How do you determine what I value a US dollar at compared to gold?
wolfman:Explain to me how the relevance of your question to the topic being discussed.
Read my post again. I refer to Americans as the whole nation. What is worth to you and me is irrelevant and is not the topic here. But lets follow up. Let me assume you value gold more than your dollar. Who cares??
I do know that despite your taste for gold or high preferences for it in an intellectual point of view..........................when you go to buy your plasma tv and your nice car you pay with dollars. If a day comes when you have to pay for your products in gold...........trust me.....................you will pay more in real terms.
As an investment, hedge against inflation and stuff like that.............sure why not......................but as a currency............we all lose.
Josh : wolfman:Explain to me how the relevance of your question to the topic being discussed.You said the US dollar is worth more than gold. Maybe to you, but not to me. That's my point. How does your statement "Americans are better off by using the US dollar because it is worth more" make any sense when the US dollar is not necessarily worth more?
wolfman: Fact: Everyone else needs US dollars to buy good/services in the international market. I don't think you will ask me to explain this fact either.
Fact: Everyone else needs US dollars to buy good/services in the international market. I don't think you will ask me to explain this fact either.
This is not universally true.
You are right. The dollar level of universality is not the topic here.
But thank you anyways for reminding me the sky is blue.
Jonathan M. F. Catalán: wolfman: Fact: Everyone else needs US dollars to buy good/services in the international market. I don't think you will ask me to explain this fact either. This is not universally true.
I think the OP is saying that as long as
1. The Fed doesnt print more dollars, so that inflation doesn't strike,
and as long as
2. The rest of the world uses dollars as the medium of exchange in certain trades,
then what do we need gold for? Look at the great advantages of the dollar, mainly those stemming from 2.
Yes, it all sounds great. It's all logically true.
But it is like standing under a roof that is about to cave in any second and saying:
1. As long as the roof doesn't cave in, so we don't all die,
2. the roof protects us from the rain
then what need to move to a house with a solid roof. We are better off here.
The flaw is pretty clear, I hope. The roof IS about to cave in. A decent house would have a solid roof. This one is about to cave in and get everyone killed.
Similarly, the whole point of having paper money [from the point of view of those who print it] is to be able to print more and more forever and ever. They will, trust me. Or better yet, look at what they have been doing every single day till now. Nothing can stop them, except a gold standard.
Another example; It's like saying, as long as we ignore the fact that he has no hands, a double amputee has it better than someone with hands. He doesn't have to wash them, no need to buy gloves, it's great.
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It's easy to refute an argument if you first misrepresent it. William Keizer
FACT: Because everyone needs to buy US dollars they MUST trade with the US to obtain US dollars so they can trade with third parties.
I have been to foreign countries, and I didn't have to use US dollars to buy stuff there*. I didn't need US dollars to trade with third parties, and therefore did not need to trade with the US.
If you begin with a false premise "everyone needs US dollars to buy g/s in the international market", you will end up with a nonsensical conclusion.
*When I went to Australia, I exchanged NZD for AUD. When I went to Vanuatu, I exchanged NZD for VATU. Japan: NZD, yen. etc
wolfman:I simply pointed out that Americans are better off by using the US dollar because it is worth more than gold. Anyone can mine gold, only one can make US dollars
You do know that one ounce of gold is worth 1,120.90 dollars right?
'Men do not change, they unmask themselves' - Germaine de Stael
wolfman:when you go to buy your plasma tv and your nice car you pay with dollars.
Because dollars are legal tender.
wolfman:As an investment, hedge against inflation and stuff like that.............sure why not......................but as a currency............we all lose.
If we went on a gold standard tomorrow, how would we all lose?
The US government does not really borrow US dollars from US banks to pay for its expenses. The US congress passes laws that authorize Federal Reserve Board (via Chairman Ben Bernanke) to buy some paper and then print a bunch of new interest bearing paper currency instruments in varying amounts with the promise of US government repaying these loans in US dollars at the future dates specified (when they become due). The FED then auctions off these freshly printed US Bonds, or other Securities at US Federal Reserve Bank public auctions (at discounts less than face value and/or less than present worth) to mostly foreign manufacturers, foreign banks and foreign individuals in China, India, Brazil, Pakistan, and other industrialized countries in return for the US dollars that these foreigners earned by making consumer goods for US citizens. The US government then spends these US dollars, plus US dollars collected by taxation, on various government expenses.
These freshly printed paper US Bonds and other security instruments that the US government sells to people in industrialized nations HAVE ABSOLUTELY NO VALUE WHATSOEVER, except that they are redeemable for title to privately owned businesses, factories, casinos, hotels, farms, land, ports, breweries, refineries, forests, ports, breweries, refineries, and other privately owned assets located in the USA that were created by previous US generations instead of Gold. Some US government sources estimate that the title to 25% of our assets with recorded deeds and titles are now listed as foreign owned (http://economyincrisis.org/articles/show/1072) and this percentage is increasing rapidly. Our payments to foreign oil and foreign raw material suppliers are paid with title to US assets in essentially this same manner. Most other foreign nations redeem their currency with gold.
Future generations of our children and our unborn grandchildren will have to work hard to pay off these US bonds and T-Bills when they become due and also buy back these privately owned assets if that is even possible. US citizens apparently believe that we are entitled to sit idle and not work in some dirty factory making the things that US citizens consume, when US citizens can obligate our grandchildren to work and pay for our easy non-productive lifestyle. This situation might end when the USA runs out of privately owned US property and other assets that foreigners will accept in return for the cash that US citizens paid to foreign workers in foreign factories to make the things that US citizens purchased and consumed.
We have met the enemy and it is ourselves. There is nothing more saddening or devastating than mass unemployment such as exists in countries such as Mexico or India. I have visited Asia many times on Business in the last century. Crime, family abandonment, divorce, selling your 12 year old (and younger) daughters to brothels, selling your 12 year old sons to rug weavers, and other bad things increase during these periods of unemployment. The poor families sell their children as indentured servants (the same as slaves) in order to feed the remaining children. Our basic industries such as steel, computer chip manufacturing, petrochemical refining, appliance manufacturing, tire manufacturing, automobile parts manufacturing, aircraft manufacturing, textiles, and etc. have been decimated and/or totally eliminated from this country by US government created Free Trade policies and Environmental policies.
The US International Trade Deficit must be corrected by any means possible! This is the basic structural economic foundation problem that will destroy the US economy in the very near future.
wolfman:Now, America has a monopoly in the issuance of US dollars.
wolfman:Only because since that day inflation threatens the future of the US dollar.
You mentioned "inflation" a couple of times during this thread, and seem to associate it with negative consequences for the dollar. What do you believe is the cause of inflation? What is "inflation" as you understand it?
"The market is a process." - Ludwig von Mises, as related by Israel Kirzner. "Capital formation is a beautiful thing" - Chloe732.
Let me get one thing straight here.
I am not "America." You are not "America." We're not even the "US."
A country's Government is not, I repeat NOT, equivalent to its citizens. The state's ability to print off dollars like mad may be good for the state, but it is not good for you or me.
wolfman: I know that most of you here love the gold theory. But I think that despite gold being so great as a universal medium of exchange, Americans are better off using the US dollar. To better understand my point we need to go back to 1945. This crucial date gave America an advantage of a life time. After WWII American emerged as the political, economic and military leader of the free world and the US dollar was to be use as the international medium of exchange. Now, America has a monopoly in the issuance of US dollars. This makes it easier and cheaper for Americans to compete and trade in the international arena. Why would anyone ever even think of using Gold as a medium of exchange??? Well in my case I would keep things the way they were before nixon abolished it in 1971. Only because since that day inflation threatens the future of the US dollar.
You are completely, one hundred percent right on this. I am so proud of you, in an act of unabashed generosity I will gladly take your golds in exchange for my monies.