ok. I'll explain it in computer engineering language. ..
I'm assuming that you know C/C++ and know about pointers. And forget for a moment that the problem scope is completely inappropriate. (programming is linear, economics is complex/network and adaptive)
Money is a pointer, it represents all sorts of things. But it must be completely strict and sound. If pointers shifted locations on their own, or changed without notifying anything, it's a big pile of mess. Variables and data structures. And if you did embedded C programming, you'd know that we can use pointers to jump the program counter and cause all sorts of runtime hazards and the resources are REALLY* tight.
But, while pointers can represent anything, even as a basket to transport things, we are not at liberty to make an infinite amount of pointers because of the limitations of the system. Of course, being engineers and using non sentient systems, we can exploit and abuse these things to our heart's content.
But pointers have very strict rules. Pointers are not permitted to be mutable, and there are structural hazards in using pointers to point to pointers to point to pointers ad infinitum.
As with currency, it is essentially debt that symbolizes debt, that symbolizes debt all the way until it hits gold somewhere. But in the modern world, this gold stopgap is removed completely. Therefore, the chain of symbols will go on forever all falling to their intrinsic value.
At the same time, pointers cannot be mutable meaning, it's is not ok to have one pointer pointer to one thing, and then have 2 pointers or multiple pointers point to the same thing (many to one) nor can we have a many to many situation, even with the very best accounting. Even in NUMA architectures, memory must be assigned strictly to their instructions, otherwise we have a huge mess.
The difference between the dollar and gold is that gold has intrinsically within it, these specific limitations that avoids these structural hazards. To substitute it for something else would introduce a whole other set of structural hazards which may or may not be conducive to a sound economic system.
The problems of economic is more like trying to isolate harmonics in a circuit network, rather than doing a top down design approach. The complex adaptive system model applies to economics in the manner in which each agent (humans) learns in their own microcosm which moves the entire economics.
If this didn't do any good, we're going to need a blackboard, a pint and lots of time.
"Industry will seek out less expensive metals to use in their products, lowering demand, etc."
This is not a monetary issue, this is a capital or consumer goods issue in the topic of production. And it's talking about the industrial uses for gold, not the monetary uses.
Can we agree that this doesn't apply to this debate?
"And that is true in the short run, however over the long run you will see institutions which coin money changing their standards, more gold mined, other metals substituting for gold and so on."
I'd like to request the source of your information for this statement. Because in my reading of economic history of the past 5000 years, it's been governments who seek out less expensive metals over time, not the minting companies, not the industry. Only governments can force people to accept this metal swapping for same value. Only governments can force people to accept this fraud; the classic bait and switch.
Gersham's law - "Bad money drives out good money if the exchange rate is set by law".
You see, it's nearly impossible to make people accept something as something else. You can't force people to accept a knockoff if there are other competitors who offer the real deal. To block out competitors is by definition a monopoly, which is IMPOSSIBLE in a free market. Even predatory pricing and such will injure, cripple or maim a company attempting it. Only government can create monopolies (joining of economics and state), and by definition, government IS a monopoly and MUST be a monopoly. You can't have two conflicting constitutions in the same community (prelude to anarchy).
"I also don't see how it would stop factional reserve banking"
The gold standard, by definition, would nullify fractional reserve because; what precisely is the reserve? What is it that the banks are putting on reservation? They are reserving gold/silver and the federal notes we call cash, are IOUs for that gold. Since 1971, Nixon completely separated all convertibility between gold and the dollar and the value of the dollar falls to it's intrinsic value; currently less than 4 cents. Adding the electronic dollar, the dollar can devalue to 0.17 cents, to 0.011 cents; read, each dollar is mere fractions of a penny.
Put it another way, the gold standard is a special case of frational reserve whereby the reserve requirement is 100%, not 10% [US].
"I think that [the gold standard] won't allow for the type of growth and large economy we have now"
It is a fallacy to think that the globe must have a billion to pay back a billion because it neglects the temporal component of capital and interest. Focusing solely on the financial and accounting, it is entirely possible to pay back a billion with the ENTIRE monetary supply limited to a million. Each payment is a million, until the full billion is repayed. This would be a 1000 term repayment.
The economic analysis of this must include the time component of interest and depreciation. And money is only a symbol. Inflation and all this funny money corrupts the symbol and introduces the "slippery slope" fallacy into the markets; purchasing power.
It is precisely the stability of the money which encourages economic growth. If you think we have growth now, growth with a stable currency would be absolutely mind boggling. With the blessing of the stable currency/money, one can plan extremely long range; ie 99 year leases.
"Money is a good servant, but a bad master". If people want large economic growth, then they would find the money to match it.
I also dispute your claim that we've had growth - but that's another debate.
Assuming that coins, regardless of content, becomes fiat.
What prevents the car price going from 1 coin to 1 trillion coins? (assuming that financing is not available)
What happens if in a village, you triple the money supply? The prices of things will rise 3x accordingly through the market as people figure it out through subsequent trades. This is inflation and is a monetary issue.
Part of the argument FOR the gold standard is that this currency expansion is NATURALLY LIMITED. It is simply impossible to whim gold into existence as we do with pushing the zero button on the computer. Gold is a much better limiter than electronic bytes.
This monetary stability is crucial for the longevity of a country's prosperity. When people work, they produce a certain amount of product or services and they trade that for some money or currency. This currency must be a store of value over long periods of time; purchasing power.
If there is 10% annual inflation (currency expansion), that means, I have to work 10% more to buy the same stuff. This means, that instead of a 40 hr work week, I must work 44 hours next year, less I get a 10% raise (which will not happen). This distortion will trickle through the markets until all 10% (or whatever is left) is used up.
Looking at inflation and hyperinflations in yugoslavia, hungary, zimbabwe, weimar, argentina (which is an interesting case) all did this "remarking" or "replacement" of their currencies and still failed to stop the hyperinflation precisely because they kept adding to the money supply more than the demand for cash. So much so that when you sit down for dinner, your bill would change and at 2 different rates. First the base meal price change, and then the tip charge, calculating when the waitress can get to the bank the next morning.
I'm not saying that the gold standard is the only solution, but it is by far the best solution we have on the table. In the study of money, humans have used just about everything, and it failed the test. Once there is currency stability, there is price stability, and people's purchasing power is preserved. I do not believe that sheer human will in fiat currency can limit the monetary supply. Therefore, we need something that is naturally limited; scarce. This is why in microcosm economies, it's always luxury items that are used for indirect exchange.
The error is confusing monetary inflation vs supply and demand.
I think you are trying to state currency devaluation. If I read it correctly, you're saying it's more temping to DEVALUE the currency and therefore INCREASE the money supply therefore the value of the money will decrease.
Currency devaluation still follows to the law of supply and demand. You are confusing the value of gold vs the value of coins. If there are only 100 ounces of gold, you can make 100 coins, or 100,000 coins. Each with either 1oz, of gold or 1/1000th ounces of gold respectively. But it is still 100 ounces of gold in the total money supply.
What you may not see is how inflation works, which is purely a MONETARY PHENOMENA. Say a a car costs 1 oz of gold. But over time, the government remints the gold content from 1 oz gold coin down to 1/1000thoz coin. This means that in the beginning the car costs 1 coin (1 oz gold). Later on, the price will be 1000 coins (STILL 1 OZ GOLD !!). Even if the price of the car goes from 1 coin to 1000 coin, this is inflation, however, if the coin has gold content, the effects of inflation are limited.
Now, say there are different countries that want this coin of ours, whether it is in the 1oz version or 1/1000th oz version, will INCREASE demand and therefore INCREASE the value of the currency - regardless of the gold content. This is the law of supply and demand.
I don't know who is claiming this, but hey haven't really thought it through...
Evolution is a process, not a final state. If you really think about it, EVOLVED = EXTINCT.
mankind isn't extinct, therefore not evolved. Mankind is EVOLVING; continuous process.
"Currency should be a gradual creation through market cooperation; not a standardization based on flawed principals that only become harder to fix over time."
I'm stating that gold and silver IS* a currency that was gradually created through market cooperation.
What you want, we already have, it already exists in the here and now and it's called gold and silver; market tested and apporved. I'm saying your position is in support of the gold standard and I was trying to explain why it is.
The history of gold and silver basically came about after just about everything else was tried and found insufficient. Each one that has been tried failed one of the 7 criteria for money as I listed above.
absolutely not. The company is an enterprise engaged in profit and LOSS. If it is protected from loss, by socializing it (taxing the people), it will continue to be mismanaged and become an even bigger black hole, sucking in ever more money.
The correction must happen and any attempt to 'fix it' will snowball the problem and delay it.
Would you have a bullet to the head or 5 to the chest and bleed to death?
Get it over with, quick and painless as possible so that we can get to rebuilding the broken mess.
It is not the responsibility of the government to regulate children's pants sizes. The government is only responsible for
1) courts (adjudicate disputes)
2) police (domestic defense against crime and fraud)
3) military (national defense, not offense)
that's it.
absolutely not. It introduces false signals and encourage malinvestment for which must be corrected in the after party recession.
DDo no give a kid a credit card "just for emergencies" because they will go looking for emergencies. Same concept.
"hey kid, did you know that you can buy your own corvette/mustang for your 21th birthday?"
can you imagine how the grades and income would improve??
I made $25/hr tutoring when I was 15 years old. I paid of my parent's mortgage and paid for my college tuition before I graduated. They basically rent the house from me at $0.
Usually, outsourcing is a good thing, but government regulations have made it much harder to gain profits. The only solution was to outsource which should never have happened to the degree it has.
We outsourced out of government imposed necessity, not by natural market forces.
Throughout the history of the human race, anything that is not individual sovereignty has failed. Only capitalism works within the confines of reality, scarcity and individual sovereignty and freedom.
Those who dispute this have not read economic history in earnest. The evidence is quite clear.
Is there anything better than capitalism? It is the best solution within the limitations of scarcity and the problems of distribution. Wealthy nations still have scarcity and distribution problems, but are MUCH further from the catastrophic collapse.
Unless we can completely remove the scarcity and distribution problem, nothing else will work better than capitalism.
Gold and silver were originally commodities because of their inherent traits, tested my market forces. Gold and silver are a
1) medium of exchange
2) unit of account
3) portable
4) divisible
5) durable
6) fungible
7) store of value (currency doesn't have this)
throughout the ages, just about everything was used as a medium of exchange because they had to overcome the dual coincidence of exchange. If I want eggs, then the egg guy needs to want my stuff. This almost never happened so I would have to go get a whole chain of supplies just to get what I want.
usually, luxury items becomes money. In prisons, cigarettes become money naturally on their own.
through 5000 years, gold and silver were proven to be the best money, and governments still inflate by mixing the gold/silver with different metals and recasting them (rome did this and fell).
With gold and silver, the prices of things tends to deflate at about 3% a year because of the capital investments made to make production more efficient.
I think you are against fiat currency, but in favor of market currency. Market proven currency is gold and silver.
If you see the spot price of gold and silver for the past 3 years, it was about to go parabolic, before the government started to manipulate the spot price via naked short selling. It's all about to change.
Keynes was a homosexual (FACT, not opinion), and homosexuals don't invest. They borrow and consume and keep the party going as long as possible.
Why? because homosexuals do not have families to invest for, no children to offer an estate or inheritance.
Keynesian economics is designed for ONE lifetime. Not multiple lifetimes as a country lasts for.
yes, but with the added ability to choose another teacher or another school or choose to be home schooled.
If the student is forced to be with one teacher, teacher grading will not be effective. Teacher grading with the freedom to choose another will be effective both by the teacher grade AND how many students the teacher has per year.
Finding the right teacher is important. Not everyone learns the same way, nor responds to same way to a single teacher. For example, some are autotelic, some are not and need more help.
competition cellist at the national level, I made recordings, performed all over the world as part of an orchestra, soloist and chamber group. Was a founding member of 3 chamber groups. All this was done before I left high school. I went on to work on super computers, philosophy, business and economics/investing.
Good investment? I'd say so. But, there is a caveat. Most parents think they will get their children a pet to teach them responsibility, but this never works out, In the same manner, don't expect music to teach magical things to the child/person.
Music gave me a way to express myself and develop my individuality. And this is golden as a child because I became a poor student by way of defending myself. Because I knew that I was being forced to learn things that were incorrect and was ordered to respect authority. If I had did that, I would never have become an enterprising young man who is able to invest in his intelligence and produce far more and understand far more than was presented to him.
I cannot say if I was originally a wisdom seeker, or that music helped me, in either case, I think I would have learned an instrument anyway.
the important thing is to play music with a small group. There is another plane of communication when playing music of any genre. There is the give and take, the cooperation and co-evolution of ideas and concepts while performing/rehearsing. This is a transferable skill called effective teamwork. To be proficient at one's own part, while integrating with the group.
Learning to communicate musically is what it's all about. There is a sexual advantage, but I'll skip that.
(minimum wage should be abolished. I do not understand why it says 'no' at the bottom)
Why isn't minimum wage $1,000,000 ? Why not grant a millionaire salary for everyone?
Why can't we all be millionaires? It's because most of us cannot produce at that level. Therefore, unemployment will be near 100%.
So then, it's not the wage that comes first, it is the labor. We first ask, how productive is the labor THEN we price it. Price never comes first. If the labor is unproductive, then the wage will fall. Minimum wage is a price control on labor and the most unproductive people, will be laid off. Precisely the people it was meant to help.
But who does it really help? It helps the ones already employed in senior levels. They don't have to worry about people coming onto their turf and lowering their salary via supply and demand. It's the same thing with licenses, it shifts the supply line to the left, thus raising prices (and their salaries).
Labor unions always love minimum wages, but they understand, they cannot raise the minimum wage too much, otherwise, free market forces will just lay them off later, or the company will be overcome by labor costs and forced to go out of business, laying off EVERYONE.
