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SkyChief
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Re: The Return to the Gold Standard
Reply #120 - Nov 5th, 2018 at 10:00pm
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Jeff wrote on Nov 5th, 2018 at 5:11pm:
I have some other gold I didn't sell, I'm hanging on to it as a store of value.

This is wise.

Its always better to place one's wealth assets in precious metals. (or real estate - even gemstones or fine art.)

Those who trust their assets in phony Federal Reserve Notes will be sorry suicidal when they realize their FRNs have been devalued due to inflation.

  
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BobK71
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Re: The Return to the Gold Standard
Reply #121 - Nov 7th, 2018 at 1:23pm
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Snarky Sack wrote on Nov 5th, 2018 at 11:08am:
Can you explain why cryptocurrency is a good medium of exchange?  I have a situation in which I am paid for certain services in bitcoin and my biggest challenge right now is converting it to fiat before it bleeds value.


I don't see cryptos as a good medium of exchange (the blockchain is too slow, by its trust-free nature.)  You could make a case it's a good store of value as the new gold and silver, and some have.

My investment thesis in crypto is that the Western elites are supporting its value, if they didn't create it secretly in the first place.  See my reasoning here:

http://www.libertariansforum.com/cgi-bin/freedom/YaBB.pl?num=1491483597/0

Snarky Sack wrote on Nov 5th, 2018 at 11:08am:
Also, I believe the ideal backing for the dollar besides precious metal would be Jack in the Box tacos.  they're the same 2 for $.99 as when I was a teenager forty years ago and they are nature's perfect fast food!


We'll have to discuss this in great depth.
  
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Jeff
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Re: The Return to the Gold Standard
Reply #122 - Nov 7th, 2018 at 1:28pm
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BobK71 wrote on Nov 7th, 2018 at 1:23pm:
I don't see cryptos as a good medium of exchange (the blockchain is too slow, by its trust-free nature.)  You could make a case it's a good store of value as the new gold and silver, and some have.

My investment thesis in crypto is that the Western elites are supporting its value, if they didn't create it secretly in the first place.  See my reasoning here:

http://www.libertariansforum.com/cgi-bin/freedom/YaBB.pl?num=1491483597/0


We'll have to discuss this in great depth.
99 cent tacos are bulky, hard to carry in your pocket without ruining your pants, and they don't keep well. Besides, some dogs like to eat them! Shocked

I don't see them catching on as a medium of exchange or a store of value (they rot and stink!) or as the next world reserve currency.
  
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BobK71
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Re: The Return to the Gold Standard
Reply #123 - Nov 8th, 2018 at 8:52am
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Snarky Sack wrote on Nov 5th, 2018 at 11:08am:
Ideally, we could have gold money coins and paper currency backed by gold coins or bullion along with silver coins for portability.  No "dollar" just 5 Oz., 1 Oz, .5 Oz, .1 Oz, etc. silver or gold.  Contracts to specify medium of payment.

Many contracts did just that which is why the Republicans and Democrats screwed so many people when this happened:
...


That is good to know, thanks.  I never thought of the contract issue.  (But note that the ban against gold/silver contract terms doesn't apply to cryptos.  The whole cycle could start all over!)

Absolutely, power 'begets' power...  And it works on all sides!  The John Boltons of the world keep kicking dust in the Iranians' face until they do something bad.  Then the public are told we need someone with a proven track record of being tough on Iran, with no trace of irony!

Modern elite control of money causes more claims to wealth to exist than actual wealth.  I.E. there are many more monetary and financial assets than products and services, at current prices.  To maintain confidence in the paper wealth going forward, we must have some combination of the following:

- Default and deflation to clear out bad debt - painful loss of wealth
- Devaluation of currency and inflation to ease the pain
- Market manipulation and deception
- Financial repression
- Economic growth

There's no way around it.  They've sold more tickets than seats in the house, and the only ways out are refusal to honor some tickets (default), making 3 seats out of every 2 seats (inflation), offering free drinks to keep guests in the waiting hall for now (manipulation), and 'temporary' closing of the doors (repression.)  That is, short of adding enough good seats.

The elites hope for the 'good' times when growth is the only obvious feature.  Unfortunately, the incentives of the system always push members of the elites to destabilize their own system.  (Hyman Minsky's hypothesis that 'stability breeds instability.')

During the Great Depression, confidence was so completely lost that all of deflation (bank closures), inflation (devaluation against gold and New Deal stimulus) and obvious financial repression (confiscation of gold from Americans) had to be used to keep the system stable and to keep the US elites in power. 
  
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BobK71
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Re: The Return to the Gold Standard
Reply #124 - Nov 8th, 2018 at 11:01am
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Snarky Sack wrote on Nov 5th, 2018 at 11:08am:
Can you explain why cryptocurrency is a good medium of exchange?  I have a situation in which I am paid for certain services in bitcoin and my biggest challenge right now is converting it to fiat before it bleeds value.


One more point I wanted to make (which didn't make it into the linked writings) is that, while I've been discussing Bitcoin and gold on the same basis, there are a couple of good arguments for Bitcoin over gold, at this time.

Bitcoin is much cheaper.  I've calculated that, for the market cap of cryptos to reach the same level as gold (which as we know has been heavily suppressed,) Bitcoin would have to reach $120K/coin, assuming Bitcoin will have 1/3 of total crypto market cap (which seems reasonable, based on price history and the logic of systemic stability.)

Also, the Western elites have probably lost most of their gold over the decades to manipulation, but I bet they have plenty of Bitcoin.  Again, as I've said, money as practiced is not about what is right or wrong, but about what gives power to the elites.
  
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BobK71
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Re: The Return to the Gold Standard
Reply #125 - Nov 8th, 2018 at 11:46am
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The Opposition wrote on Nov 5th, 2018 at 11:11am:
They simply position themselves to seize large amounts of real property each collapse.

Because they don't do anything, or produce anything, they need this property to slowly sell off at a premium to fund their increasing wealth.

When regular people start accumulating wealth from labour, they will hit the red button again, cause collapse, and seize it all yet again.

There's a lot that we don't know about the exact organization of power or mechanism of harvesting wealth among the very top elites.  At one extreme of the possibilities, we could have a very small, tight-knit group of well-connected people who are neither rich nor hold high official positions.  But they know things, work hard, and run the world at the core level by: 1. making suggestions to the powerful people they know; 2. effectively allying with this or that power block and social/moral force at various times, but making sure the rivalries give them the balance of power at all times; 3. making sure they have the best data; etc.

In this scenario, the dirty work of using deception, etc. to prop up bubbles is done by their powerful allies.  At the same time, they nurture anti-bubble forces, so that when a bubble becomes so big that it endangers the entire system, they are able to pull the plug (which always happens, BTW, due to the incentives to worsen bubbles at all times.)

In this case, the boom and bust cycles are not so much a means to enrich the elites (but which I'm sure is a side effect!) as they are a necessity for allowing a small group of people to leverage their smarts into a very disproportionate level of power.

Now contrast this to the Chinese imperial bubble around 1000 AD, where the state elites did have the hard power required for outright theft, by beheading anyone who used anything other than their paper money.  That was a very different beast.

The Opposition wrote on Nov 5th, 2018 at 11:11am:
And I still have to put this disclaimer on every post I make to this effect: They are doing this without aggression and should be lauded for it; they absolutely should not be punished. But Jeff, the big libertarian, will still attack me because libertarians can't stand when truth is told, even if no one advocates punishing those not guilty of aggression.


There is also the matter of what constitutes immorality.  You believe anything nonviolent is OK, while I don't.  For example, mislabeling products to deceive consumers is wrong, but there are people (most famously Greenspan) who believe the market will ultimately take care of those problems.  My view is that, even if it does, it's not written in stone that the very simplest set of rules is always better than a richer set.
  
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Jeff
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Re: The Return to the Gold Standard
Reply #126 - Nov 8th, 2018 at 1:29pm
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BobK71 wrote on Nov 8th, 2018 at 8:52am:
The John Boltons of the world keep kicking dust in the Iranians' face until they do something bad.
Our problems with Iran go way back, but it's certainly a childish simplification to blame the U.S. for Iran's behavior. I don't think it's our fault they want to nuke Israel and bring on Armageddon.

Personally, I blame it on the Muslims for overthrowing the Persian Empire in the mid-600s and installing a Shia religious monarchy.
  
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Jeff
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Re: The Return to the Gold Standard
Reply #127 - Nov 8th, 2018 at 1:31pm
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BobK71 wrote on Nov 8th, 2018 at 8:52am:
(Hyman Minsky's hypothesis that 'stability breeds instability.')

Sort of like daylight breeds darkness?
  
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Jeff
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Re: The Return to the Gold Standard
Reply #128 - Nov 8th, 2018 at 1:43pm
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BobK71 wrote on Nov 8th, 2018 at 11:46am:
There's a lot that we don't know about the exact organization of power or mechanism of harvesting wealth among the very top elites.  At one extreme of the possibilities, we could have a very small, tight-knit group of well-connected people who are neither rich nor hold high official positions.  But they know things, work hard, and run the world at the core level by: 1. making suggestions to the powerful people they know; 2. effectively allying with this or that power block and social/moral force at various times, but making sure the rivalries give them the balance of power at all times; 3. making sure they have the best data; etc.

In this scenario, the dirty work of using deception, etc. to prop up bubbles is done by their powerful allies.  At the same time, they nurture anti-bubble forces, so that when a bubble becomes so big that it endangers the entire system, they are able to pull the plug (which always happens, BTW, due to the incentives to worsen bubbles at all times.)

In this case, the boom and bust cycles are not so much a means to enrich the elites (but which I'm sure is a side effect!) as they are a necessity for allowing a small group of people to leverage their smarts into a very disproportionate level of power.

Now contrast this to the Chinese imperial bubble around 1000 AD, where the state elites did have the hard power required for outright theft, by beheading anyone who used anything other than their paper money.  That was a very different beast.


There is also the matter of what constitutes immorality.  You believe anything nonviolent is OK, while I don't.  For example, mislabeling products to deceive consumers is wrong, but there are people (most famously Greenspan) who believe the market will ultimately take care of those problems.  My view is that, even if it does, it's not written in stone that the very simplest set of rules is always better than a richer set.
Tyranny takes many forms and new ways to tyrannize people and steal from them can be developed by new technology, but it's all the same thing happening; Sovereigns and sovereign governments claim powers to control everyone else, and those who can and are permitted to, work with the governments and the Sovereigns. Power struggles within the tyrannizing structure are unavoidable, and sometimes no one knows who is really in charge until they make themselves known by declaring themselves Sovereign, which they don't always do.
The American idea, to not make the government sovereign but rather a servant of the people is the only idea I know of that has any chance to end the exploitation of the people.

To the last point, the laws must be few, and simple enough to be understood by any person of average intelligence. If the laws become so complicated (or so extensive) that only 'expert's can understand them, they will be used as instruments of tyranny.
  
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SkyChief
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Re: The Return to the Gold Standard
Reply #129 - Nov 9th, 2018 at 3:48am
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deleted.    Smiley
  
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