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What is keeping OPEC countries and Russia from demanding gold as payment for their oil? It would seem that it would be the most stable form of currency given the volatility of fiat currencies. I can understand why some Arab countries want to continue the status quo given that they probably have security guarantees from the USA. But what about Russia
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[quote user="Harksaw"] Well, it could be, if you refunded 23% of 10,400 ($2,392) plus 23% of $2,392 (550.16) plus 23% of 550.16 (126.54) plus 23% of 126.54 (29.10) . . . . . .23+.23^2+.23^3+.23^4+.23^5+.23^6+.23^7 . . . . . Which equals just about 30% of 10,400, or $3120 [/quote] After I wrote that, I realized later that this was the case
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After reading Bruce Bartlett's newest critique of the FairTax, I decided to test the claim of the FairTax that the prebate will exempt all expenditures up to the poverty level. According to the FAQ, "All valid Social Security cardholders who are U.S. residents receive a monthly prebate equivalent to the FairTax paid on essential goods and services
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No, I'm not exchanging it. I'm providing the money to the villagers based on their wealth at the moment so they can get out of barter. As for Mises's regression theorem, I did not violate it because I set an exchange rate for the fiat dollars and distributed the fiat dollars according to the exchange rates that were present in the economy
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I said that money does not need to be backed by a "certain commodity," just by the belief that it can be exchanged for any commodity/service. Paper money is not just a certain amount of gold. It is also a certain amount of wheat, janitor's services and tvs. But my whole point was that a frozen paper standard was superior to the gold standard
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"Banks would stop accepting the dollar if it's not backed by anything." Money doesn't need backing of a certain commodity. All that is needed is the belief that I can use the dollar that I get for my goods and/or services to obtain other goods and services. After all, gold has nothing backing it up. People during the gold standard
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After giving it some more thought after some cogent criticisms, I believe that the frozen paper standard would be superior, yet no government would really ever try it for any period of time, as per DBratton's anecdote. The problem is that government does have the power to enforce legal tender laws and to tax, so any inefficiencies in production
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Jason Dean: I never believe I said that all gold is used in a purely non-monetary or non-hedged use. Some is used for consumer products and some is used as a hedge against inflation. What I said (or meant) was that a frozen paper standard would free up all gold used as an inflation hedge for consumer use. As for not being able to follow the rules, government
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Thanks for the thoughts, here are my counter-thoughts: 1. Rhys: "The advantage of a gold standard, is that it can react, albeit slowly, to changes in demand for money. When the price of gold goes up, so do production efforts. When the demand falls, so do production efforts. This would not happen with a frozen dollar..." -- The frozen dollar
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If the government decided that it wanted to stop printing physical paper dollars and enforce 100% reserve banking to prevent the private creation of money (through fiduciary media), would this not be better than the gold standard? I have heard it said many times by Austrians that no increase or decrease in the supply of money has any societal benefits