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Very Hot Topic (More than 25 Replies) The Return to the Gold Standard (Read 702 times)
Snarky Sack
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Re: The Return to the Gold Standard
Reply #70 - Sep 19th, 2018 at 12:46pm
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SkyChief wrote on Sep 19th, 2018 at 11:48am:
All taxes are stupid. 

But this one is uniquely stupid because Gold and Silver American Eagles are coined by the U.S. Mint. They are Constitutional money.

Taxing coins minted by the US mint makes as much sense as taxing US postage stamps thinking that someday they might become collectible.


You're absolutely right.  But I'm afraid you may have given Jeff an idea.  I can see him writing his postmaster about this great new idea for another of his "morally justified thefts." 
  

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Jeff
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Re: The Return to the Gold Standard
Reply #71 - Sep 19th, 2018 at 3:38pm
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Snarky Sack wrote on Sep 19th, 2018 at 12:46pm:
You're absolutely right.  But I'm afraid you may have given Jeff an idea.  I can see him writing his postmaster about this great new idea for another of his "morally justified thefts." 
What are you babbling about now?


  
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Jeff
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Re: The Return to the Gold Standard
Reply #72 - Sep 19th, 2018 at 3:45pm
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SkyChief wrote on Sep 19th, 2018 at 11:48am:
All taxes are stupid. 

But this one is uniquely stupid because Gold and Silver American Eagles are coined by the U.S. Mint. They are Constitutional money.

Chief, they are correctly called "bullion coins". They are nothing but U.S. mint certified 1 oz. .9999 fine gold bullion in pretty form. If they garner any premium over certified gold bars of the same weight and fineness, it's because they are pretty and people will pay for that. Sometimes people will pay a premium if the edition of bullion coins is limited, because they have a better chance of becoming collectible if they are limited editions.

I won't swap you even up one of my 1oz. gold Pandas for one of your 1 oz. gold Eagles. Sorry.
  
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BobK71
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Re: The Return to the Gold Standard
Reply #73 - Sep 19th, 2018 at 3:56pm
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Jeff wrote on Sep 12th, 2018 at 9:08am:
I understand rising interest rates during an economic correction to be a natural process of free markets, just as it's natural for interest rates to fall during times of economic expansion.

I wasn't aware that the government had any power to set interest rates during the time when gold/silver was being used as money...

How did they do it?

Anyway, that's not to the point of my question, which asked if any government has ever deflated the supply of it's fiat money.


Sorry, just getting to this now...

Manipulating interest rates was also a part of monetary policy during the gold/silver standards era.  E.g. the Bank of England used the discount rate to influence the rates charged for loans secured by shipments of goods.  Every time gold started flowing out of your country, you raised policy rates to encourage money inflow and to lower prices to obtain more favorable terms of trade.

During the fiat period the same effect can probably be achieved by only a reduction in the rate of growth of the money supply.  (E.g. in the last 'taper tantrum' the Fed only had to open its mouth, and dollar shortages occurred all over the world -- much of the 'money supply' is not really base money but credit among too-big-to-fail banks.

Right now, emerging markets are once again suffering from dollar shortages.  You could say it's caused by 'quantitative tightening,' but my guess is whatever bonds the Fed sells (ie destruction of base money) is dwarfed by the money it creates and loans out to big banks to keep overnight interest rates at policy level.  So technically, the dollars never shrink, but the effects are generally similar as any tightening over the past centuries.
  
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Jeff
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Re: The Return to the Gold Standard
Reply #74 - Sep 19th, 2018 at 5:08pm
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BobK71 wrote on Sep 19th, 2018 at 3:56pm:
Sorry, just getting to this now...

Manipulating interest rates was also a part of monetary policy during the gold/silver standards era.  E.g. the Bank of England used the discount rate to influence the rates charged for loans secured by shipments of goods.
Isn't that exactly how they screwed things up?

Governments and their State Banks get into all kinds of crony deals and manipulate the economy so they can benefit in the instant, and they usually are willing to screw anybody to make it happen.

It's the inevitable result of too much concentrated power. When government can sell favors for bribes, non-cronies will be hurt.

The cronies don't care, especially if they are buying the law.


  
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SkyChief
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Re: The Return to the Gold Standard
Reply #75 - Sep 19th, 2018 at 5:20pm
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Jeff wrote on Sep 19th, 2018 at 3:45pm:
Chief, they are correctly called "bullion coins". They are nothing but U.S. mint certified 1 oz. .9999 fine gold bullion in pretty form.

Call it whatever you like, Jeff.   They ARE money.   It says 50 DOLLARS on the "tails" side of the coin. (see image below)




Jeff wrote on Sep 19th, 2018 at 3:45pm:

I won't swap you even up one of my 1oz. gold Pandas for one of your 1 oz. gold Eagles. Sorry.

Im not interested in the numismatic value of Pandas or Eagles.  I only care about the weight and purity of the coin.

I sometimes use Silver Eagles as money. 

My tobacconist normally sells a custom blend pipe tobacco for $32/pound.

If I pay with ASEs, he drops the price of the tobacco to $2/pound. 

And sales tax is waived if I pay with silver coins.  Smiley
  
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Jeff
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Re: The Return to the Gold Standard
Reply #76 - Sep 19th, 2018 at 5:31pm
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SkyChief wrote on Sep 19th, 2018 at 5:20pm:
Call it whatever you like, Jeff.   They ARE money.   It says 50 DOLLARS on the "tails" side of the coin. (see image below)

https://www.monex.com/images/gold_american_eagles.png


Im not interested in the numismatic value of Pandas or Eagles.  I only care about the weight and purity of the coin.

I sometimes use Silver Eagles as money. 

My tobacconist normally sells a custom blend pipe tobacco for $32/pound.

If I pay with ASEs, he drops the price of the tobacco to $2/pound. 

And sales tax is waived if I pay with silver coins.  Smiley

The IRS probably calls that evading taxes due by law. Maybe just your State Bureau of Revenue, or whatever they call it. Maybe both.

If that was actually $50 U.S. Dollars, any bank would give me one of those pretty Eagles for $50 Dollars in U.S. currency.
  
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SkyChief
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Re: The Return to the Gold Standard
Reply #77 - Sep 19th, 2018 at 5:39pm
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Jeff wrote on Sep 19th, 2018 at 5:31pm:
The IRS probably calls that evading taxes due by law. Maybe just your State Bureau of Revenue, or whatever they call it.

No, its not Tax evasion.  We're just taking advantage of a Tax loophole.

When I trade two American Silver Eagles for a pound of custom blend pipe tobacco, it is done as a "barter", because no cash changed hands.

He puts the tobacco in a generic zip-lock bag with no business logo on it.  I don't get a receipt from the cash register, either.

It's all perfectly legit.
  
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Jeff
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Re: The Return to the Gold Standard
Reply #78 - Sep 19th, 2018 at 5:58pm
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SkyChief wrote on Sep 19th, 2018 at 5:39pm:
No, its not Tax evasion.  We're just taking advantage of a Tax loophole.

When I trade two American Silver Eagles for a pound of custom blend pipe tobacco, it is done as a "barter", because no cash changed hands.

He puts the tobacco in a generic zip-lock bag with no business logo on it.  I don't get a receipt from the cash register, either.

It's all perfectly legit.
OK, great.

Buy all the untaxed tobacco you want. I used to buy cigarettes from the Indians in South Florida.

Edit: About that deal, where I give you $50 in FRNs for your $50 gold Eagle?

I'l take all you are wiling to barter with me. Smiley Smiley Smiley
  
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SkyChief
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Re: The Return to the Gold Standard
Reply #79 - Sep 19th, 2018 at 6:23pm
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Jeff wrote on Sep 19th, 2018 at 5:58pm:
About that deal, where I give you $50 in FRNs for your $50 gold Eagle?

I'l take all you are wiling to barter with me. Smiley Smiley Smiley

Jeff, If you give me FRNs for a gold Eagle, that is not a "barter".

A Barter transaction is when no cash or money is an instrument of the trade.

And BTW,  I will require 1255 FRNs for each $50 gold Eagle I sell. 

"A [FRN] is a receipt for a claim check on an IOU." - Mike Maloney
  
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