The Trillion Dollar Coin Is a Great Idea!
SF Gate explained in a recent editorial that the "'trillion dollar coin' idea is worthless."
But, of course, it's not. It's a great idea! I'll tell you why in a minute.
The SF Gate editorial gives us the background. "The idea of a 'trillion-dollar coin' came from the Internet, where a few political observers noted that the White House might be able to avoid the upcoming fight over our national debt ceiling by simply minting a platinum coin with a face value of $1 trillion."
These observers understood that legally the Treasury could mint and issue platinum coins in any denomination it chose. Thus evolved the idea that the Treasury could simply create a coin and deposit it with the Federal Reserve of the Bank of New York to cover significant US debts.
This is because the US government owes the Fed and other debt-holders trillions. If the Congress refuses to pass a debt-ceiling increase then the US is technically defaulting and could lose its current strong rating, which would cause the cost of money to rise.
The SF Gate editorial labels such an idea "crazy." Here's more:
Unfortunately, the fact that Washington is gearing up for a fight over the debt ceiling is equally crazy - so the "mint the coin" movement moved from the Internet to the Beltway at warp speed, and it's become an element of political strategy. At a Jan. 9 news conference, White House spokesman Jay Carney wouldn't say that a coin was illegal or that the idea of minting one had been ruled out.
The coin might sound like a great idea to Democrats, who are rightly frustrated with House Republicans for threatening a showdown over the debt ceiling. And it would be absolutely calamitous for Congress to refuse to raise the debt ceiling, which would mean a U.S. default on bills to creditors all around the world. Failing to raise the debt ceiling would have massive consequences for the United States in terms of our credit rating, our interest rates, and our global credibility.
But the problem with the coin is that it takes a political problem - Congress' inability to act responsibly - and turns it into a financial one. The United States can't just print money just because Congress doesn't want to behave responsibly. The world's most powerful nation can't afford to act that way.
"Minting the coin" comes with its own legal and political dangers, too. It could terrify investors, possibly leading to a dip in our credit rating and a spike in interest.
SF Gate claims that the solution is not printing a trillion dollar coin but "political responsibility." However, I'm glad the trillion dollar coin idea has been brought up.
I think it's a good idea not from a practical standpoint but an educational one. It draws attention to the one thing the mainstream media – and the power elite that stands behind the media – never, ever wants to discuss. And that is the "power of the purse" that governments have created for themselves over the past century.
Today, unlike in the past, over 150 central banks print money recklessly. The Federal Reserve is surely the worst offender because of the dollar's reserve status. Because nations need dollars to buy oil, officials around the world need to hold dollars. The US can print massively without feeling the immediate result from price inflation.
Of course, price inflation happens – and is happening. More is yet to come because US officials have been so reckless. That's why I think the trillion dollar coin idea is a good one. It illustrates the insanity of the modern money system where people accept bits of paper as money simply because they've been printed by the government.
Money, ultimately, is NOT paper, not historically anyway. For thousands of years the market determined that the best medium of facilitating trade and servicing a transportable store of value is gold and silver. Not one or the other, but both.
Historically, gold served as the primary money metal for larger transactions and storing larger amounts of wealth. Silver, on the other hand, tended to better serve smaller transactions. Together they worked to satisfy the basis of trade and commerce around the world and left unhampered, they would still do that today.
However, there are others more desirous of using the levers of monetary control to manipulate the financial system and, like parasites, feed off the productive, thus draining the wealth and productivity of nations. And they have done a great job of spreading their government-sanctioned central banking disease all over the world.
You see it today in the Middle East and throughout North Africa where the US Department of State, hiding behind various front groups such as the Alliance for Youth Movements (AYM) is hastily building an Islamic Crescent to support the "war on terror."
The real reason the US – the world's leading Bad Boy enforcer – along with NATO and the rest of the Western Powers (and yes, Russia and China are part of the same crowd), is because the intergenerational families that set up the central banking edifices in the first place use its powerful benefits to fund their control of mainstream media and the larger military-industrial-political complex.
They do this with but one agenda ... to create WORLD GOVERNMENT. But there is one factor they didn't expect: The Internet and today's Reformation – the Internet Reformation, if you will – that is spawning an awakening.
This is giving millions of people (who choose to see) an understanding of how Dominant Social Themes have been used to cement memes into our collective brains. Today, hope is in the air for millions who are waking up. The "reformation" is inspiring many to act. And they should!
At the very least people should transfer out of harm's way by exchanging devaluing paper money for real honest money – gold and silver. There is no time to delay.
In my book, High Alert, soon to be released in a 4th edition and available free to all members of The Daily Bell, I postulated that the 2 percenters were the battleground where most of the "great discussion" has traditionally occurred – far outside the mainstream living rooms around the world. As the truth began to circulate on the 'Net, it would become inevitable that we would experience an addition to the 2% number.
Anyway, like the Gutenberg press before it, the Internet is blowing a wind of truth across the world. People feel it and as they become aware, they want to free themselves from the "machine." And as they are becoming free they are dumping the "inflationary" monopoly paper money and moving into the "unable to be created out of nothing" honest money.
I strongly encourage readers looking to protect themselves and hedge against the "system" to transfer out of the devaluing mess and obtain physical holdings of gold AND silver.
Buy it from an honest dealer with no intent on leveraging you into speculative coins – numismatics – or leveraging your currency exchange (because that is what it is) into gold and silver weight that you cannot afford should the price of either metal go down in the short term. Just keep it simple. Transfer out of the monopoly fiat into gold and silver on an even up basis.
Thanks to the Internet, in particular, there are plenty of illuminating arguments about what money is and should be.
I have nothing against competing money systems – even fully fiat ones – within the context of monetary competition. But we've always written that gold and silver would likely find their rightful place within monetary competition, as they have for thousands of years.
People trust gold and silver because they are malleable, beautiful, transportable and rare. Money competition long ago decreed these two metals as "winners." And today they remain as much in demand as ever.
Some things never change.
P.S. – Later this week I intend to release a new Special Report in which I will introduce my recommended source for physical gold and silver purchases in the Member Zone. If you aren’t already a member, click here to register – it’s free.
Posted by Bischoff on 01/14/13 12:24 AM
WEEBLY: "Either way, Gold is pretty cool to look at, but there just isn't enough of it around to store for spending when one reaches old age."
BISCHOFF: You don't actually save physical gold. You invest your redeemable currency in gold bonds. When they mature, you get back gold. In the meantime, you earn as a minimum 2.5% to 3% per annum (the natural interest rate).
Posted by Bischoff on 01/14/13 12:16 AM
WEEBLY: "Why not trade with Real Gold instead?"
BISCHOFF: That's when you turn gold into currency, which does not work. Gold is a lousy currency. I just explained that... ...
Posted by taxesbyanyothername on 01/13/13 11:44 PM
You didn't stop the thread, it has run over long as has the time. You don't seem mad but I must dispute bankers being bonkers. They know exactly what they are doing to us. Besides bonkers is funny and bankers are $%^*(&^%$.
Pete's post was wonderful but they are overly polite way down there, which is of course why he didn't include Kiwis in the salad.
If there really were a $trillion coin you couldn't carry it in your hand. You couldn't even carry it in a Terex Titan. If you could, might as well digitalize it like the rest.
Posted by Agent Weebley on 01/13/13 11:20 PM
Oh my, I seem to have done it again! Why does thread stopping seem to be my specialty, or if in the UK: speciality? Hopefully it will self-heal soon.
I loved your post, by the way, Agent Pete 8. You can catch me if you can in Wormhole 7 . . . this is way too much fun to come home right now!
Deliver . . . the . . . message . . . do you understand?
Wormhole 7: Click to view link
Posted by Agent Weebley on 01/13/13 10:50 PM
Man this thread and your answers are quick tonight! I missed Agent Pete 8's response, and your 2nd response. HI, AGENT PETE 8!
Are you suggesting that we legislate bankers to be honest?
And are you also suggesting that people save for their old age using Gold or paper scrip based on Gold?
Either way, Gold is pretty cool to look at, but there just isn't enough of it around to store for spending when one reaches old age.
Did you read anything else I wrote?
I'm completely mad, you know.
Posted by Agent Weebley on 01/13/13 10:42 PM
But bankers are bonkers! I don't trust a banker to hold his urine, let alone hold my Gold and give me a piece of paper instead.
And your Real Bills are just scrip. Why not trade with Real Gold instead?
Posted by Bischoff on 01/13/13 10:42 PM
WEEBLY: "Ingo . . . there are too many people on this planet for gold to be used as a medium of exchange."
BISCHOFF: I couldn't agree with you more. Gold makes for a lousy medium of exchange. The shortage of gold does not allow gold to circulate as currency. That problem has been accute for at least 250 years. That's why George Clymer and Benjamin Franklin, among others, founded The Philadelphia Bank in 1750 to create the Pennsylvania Pound against Bills of Exchange.
Read Adam Smith's "Wealth of Nations". You'll find the Pennsylvania Pound mentioned in there for the consistancy of keeping its value, even without a redemption requirement. In those days, bankers had honor. They would never create currency against non-existing Real Bills. There was never any concern that the The Philadelphia Bank would not redeem its currency for specie.
By sharply containing its circulation, it was the British Parliament which in the end killed the Pennsylvania Pound, and thereby destroyed the prosperity it had bought the American colonies. This more than anything else led to the American Revolution.
However, gold is not necessary for use as currency. 90% of currency is used to house and maintain oneself. These transactions can easily be cleared with Real Bills or the paper currency created against them. Only generally 10% of the currency is set aside as savings. It is there were gold is needed.
It is the superiority of gold as a store of value which is ideal for savings. With a redeemable currency, people can save for old age.
With a "managed" currency, which we have had since 1935, people need "Social Security" (created in 1935) to survive in old age.
Posted by Agent Pete 8 on 01/13/13 10:40 PM
Just a suggestory note on the collegial decorum we find here at the DB, and the textual habits of those ramming their barrow(s) so passionately in the face of others;
Folks who SHOUT the words THEY wish to EMPHASISE, paragraph after PARAGRAPH, usually reach my deaf side, knowing they lack consideration for others.
Like the hard-baked comments typicallly seen at Infowars, or Puffington Host, where many choose to capitally punish other readers with such shoutiness.
I think it is a symptom of feeling they are not being heard, but also of not accepting the reality that others think and operate differently, and the process of realisation takes time - to grow.
Perhaps it is more grammatically correct, and polite/considerate/accepting that "emphasis" can be simply quoted; 'single' or "double".
Then they wouldn't manifest like hysterical rabid AIPAC-style manipulatrices, rather appearing as someone who could be invited to dinner, without upsetting the other guests.
Mint anyone, or is it time for pudding?
P.S. I like the idea of a fruit salad of currencies available anywhere: Apples, Oranges, Bananas...
Posted by Bischoff on 01/13/13 10:19 PM
WEBLEY: "You would want to give them paper scrip, so you could resolve the debt at the end by not giving away your gold."
BISCHOFF: The paper currency I propose to be restored uses Real Bills and gold held by banks against which they create a REDEEMABLE paper currency. As such it carries the value standard of gold, hence the name gold standard currency.
Real Bills are 90-day non-credit, negotiable, commercial instruments. When they mature, the currency exspires.(It has to do with Real Bills being clearing instruments, not credit loans.) Therefore, RBD currency will never be inflationary.
Posted by Agent Weebley on 01/13/13 10:01 PM
Hi Ingo, taxesbyanyothername, and tonight's Mod Squad [solid modding, real solid modding, by the way] . . . and now some recent additions: bionic mosquito and pauloportugal.
I think I am going to have to get Politenessman to whip out his steel hankie and let it rip!
The Trillion Dollar Coin, with roughly the same current face value as gold, is still a debt instrument. Anyone holding one would ask themselves . . .
'What is this I hold in my hand? Something the US Gov gave me must be able to purchase something in USD . . . ' And then one day, when you least expect it, they will come a knocking and buy whatever assets the $1T coin will buy them at that time.
The real issue is not so much the debt and paying it off, but the huge quantity of money and electronic money, e.g.: $1.2 Quadrillion ($1200T) on investors' balance sheets as derivatives. The recent money printing of another $15T, which is sitting on the bankers' balance sheets, is also disconcerting . . . all that free money they got due to a shell game they pulled from 2001 - 2007.
I never got any.
Money is like holding stock. If you have a share split, then the shareholders get the split, not some bankers! That's bonkers! Sorry, I could not resist calling bankers bonkers.
If any of that vast quantity of money ever goes on the market at a high rate of speed to buy up US assets, or anything where the USD is accepted as payment, then all hell will break loose on upward price movement - too much money chasing too few goods.
A tiny US GDP of $15T puts it in perspective.
It's pretty obvious that people that create money are playing games with money, and they use the balance sheet to do it. The balance sheet is where that huge amount of money sits, tax free.
Now we come to Ingo and his 'gold as money' . . . Ingo, how come you want to print paper based on the gold you have? I know exactly why . . . the same reason my 5oz will not be used for exchange unless that is the last asset I have . . . it would take a lifetime to get it back if I used it to buy something. I own 5oz, which is 6.66 times the 0.75oz that we would each have, if it were distributed equally to 7 billion people. Most people hold no gold, and would not lose their grip on it, if they got some. You would want to give them paper scrip, so you could resolve the debt at the end by not giving away your gold.
Ingo . . . there are too many people on this planet for gold to be used as a medium of exchange. It is merely a store of wealth for a few people; that is all. 0.75oz is just not enough to do all the things one wants to do in life . . . it's like running your life on just under 3 days pay!
To make a long story short, the balance sheet is where the action is. Honest money is easily produced using small amounts of paper money from a large amount of people . . . let's say 86.2 million Irish and Irish Diaspora invest $1 each . . . and viola, the fiddler would be fiddling on the roof with $86.2 TAX FREE million . . . so that the money printing and the peace process can begin.
Oh, did I mention that the money is destined for a new game? A Limited Edition Print ARG (Alternate Reality Game,) and distributed to all people for free, as a marketing and promotion tool. All completely legal, tax free (in Canada,) and endorsed by Rothschild himself, MI6, CSIS, HRH and David Cameron, although David Cameron doesn't matter so much, since he is just an elected person . . . but he does have connections.
The issue is who will be trusted to print the ARG money? That person . . . or 4 persons would have to be above reproach. And when the printer accepts the game money as payment for the print jobs, the whole thing goes Overunity . . . then the quadrillions of existing US money becomes irrelevant, along with all governments.
Click to view link
snip - - - The Fiddler is a metaphor for survival, through tradition and joyfulness, in a life of uncertainty and imbalance. - - - snip Click to view link
Posted by Bischoff on 01/13/13 09:17 PM
POP: "POP: Both rulers and scales were market creations that widely accepted for various obvious reasons. Is it feasible, and in fact likely, that gold is the ideal form of money as selected by the market? Yes. But it is up to the market to make that determination."
BISCHOFF: Markets do not decide measuring devises. Markets exist by using measuring devices.
POP: "But to suggest that it must be standardized is incorrect."
BISCHOFF: Here I agree with von Mises, who has a very different view of gold as money from the view I hold. Yet, von Mises clearly states that without the gold standard capital valuation for financial statements to aid in longterm investment is impossible. The value of the present "managed" FRN currency as a unit of account is in constant flux, depending on the interest rate policy of the FED. Longterm capital investment is almost impossible to plan, because of its impact on amortization and depreciation schedules. It is suprising that you support such system. I am truly amazed.
POP: Bischoff saying: I don't know how I can make it any more clear to you, it is NOT I who insists on a single standard of value. IT is LOGIC. Your reply is: Whose? Yours?
BISCHOFF: See, this is what I mean. I stated that I don't insist on the standard, that it is logic which demands it. Now, you ask me whether I have a subjective logic system all my own. You really know how to subtly accuse someone of suffering from schizophrenia, don't you... ???
POP: "That's because you can't. You are filled with contradictions and are a half-witted blowhard statist loving Georgist who postulates arguments against monetary historians such as Rothbard - and when pushed admits, as you have here before, that you really hadn't read a lot of his work! But yet you profess to know "reality" and be the wise German with all the answers. Why the DB allows you and your 1960s mugshot to monopolize their forums is beyond me."
BISCHOFF: There, there... I knew it !!! You couldn't contain your veilness from slipping out. Judging from your comments, readers should have little problem to decide the kind of person you are.
I think too much of the service Tony Wile provides with the DB, evenso he and I disagree vehemently on many a subject, to answer you in kind. As I said, readers can figure out for themselves who is a half-witted blowhard, and sycophant clinging to the "Austrians". Enough said.
Posted by bionic mosquito on 01/13/13 08:48 PM
DB: Try to keep it civil.
Posted by taxesbyanyothername on 01/13/13 08:42 PM
Math is the only exact science. I am sorry that you are stuck.
Posted by bionic mosquito on 01/13/13 08:23 PM
DB: Please don't call names. Mr. Bischoff doesn't
BM: Now DB, that just isn't true.
Click to view link
Posted by Bischoff on 02/20/12 06:17 PM
Of course, not to excuse the practice. Logic will suffice, or shutting windows to keep out the wind.
Reply from The Daily Bell
OK. No one should. Try to keep it civil.
Posted by pauloportugal on 01/13/13 07:59 PM
Bischoff: Is it not logical to have a standard for measuring something. We have a ruler for measuring linear distance, we have a calibrated scale for measuring weight, why can we not have a commodity whose value is serves as the measuring devise to measure the value of other goods and commodities?
POP: Both rulers and scales were market creations that widely accepted for various obvious reasons. Is it feasible, and in fact likely, that gold is the ideal form of money as selected by the market? Yes. But it is up to the market to make that determination.
Bischoff: If you do numerical accountng, you have to decide the measuring standard for your accounting system. You can convert feet to meters, or kilos to pounds, or gold standard to silver standard, but whatever you convert to, you have to be consistent in that measurement for your financials to be of use.
POP: Yes, it would seem that it only makes sense for the market to sort out consistent means of accounting. But to argue that the system of measurement must be "consistent" is foolish. Obviously in a free market where personal responsibility is embraced by the individual, whatever is considered "satisfactory" in terms of full, true and plain disclosure (assuming the reader of the financials actually cares and performs due diligence), is entirely up to the receiving party - not without consequences to the originator of the financials, naturally. But to suggest that it must be standardized is incorrect. It does not. It could develop, but the market should decide what is best today, tomorrow and so on. Kind of reminds me of the government forcing the "seatbelt" solution of the major car manufactures before THEY were ready to introduce the seatbelt option in their cars - in the name of satisfying their consumers desire for better safety. As soon as the Fedgov got involved thousands of children were unnecessarily disabled and killed as a result.
Standards should never be imposed, the market should derive whatever it feels best to satisfy the needs of the individual, community, or what have you.
Bischoff: I don't know how I can make it any more clear to you, it is NOT I who insists on a single standard of value. IT is LOGIC.
POP: Whose? Yours?
Bischoff: To argue that value is subjective, (which by the way it is not. It is utility which is subjective. That's were Menger comes in. I say no more
POP: That's because you can't. You are filled with contradictions and are a half-witted blowhard statist loving Georgist who postulates arguments against monetary historians such as Rothbard - and when pushed admits, as you have here before, that you really hadn't read a lot of his work! But yet you profess to know "reality" and be the wise German with all the answers. Why the DB allows you and your 1960s mugshot to monopolize their forums is beyond me.
Reply from The Daily Bell
Please don't call names. Mr. Bischoff doesn't.
Posted by Bischoff on 01/13/13 07:29 PM
TAXES: "Locke was a smart guy but he didn't figure out everything, and the age of an axiom or practice, does not give it veracity or utility."
BISCHOFF: Quite true. However, what about logic? Is it not logical to have a standard for measuring something. We have a ruler for measuring linear distance, we have a calibrated scale for measuring weight, why can we not have a commodity whose value is serves as the measuring devise to measure the value of other goods and commodities?
Linear distance is expressed in feet or meters, but they are not the same measuring devise. Weight is expressed in kilos and pounds, but the measuring devise varies. You can express value in terms of aliquot parts of gold, or in aliquot parts of silver, but they are not the same.
If you do numerical accountng, you have to decide the measuring standard for your accounting system. You can convert feet to meters, or kilos to pounds, or gold standard to silver standard, but whatever you convert to, you have to be consistent in that measurement for your financials to be of use.
To argue that value is subjective, (which by the way it is not. It is utility which is subjective. That's were Menger comes in. I say no more) and that therefore there cannot be a fixed standard is wrong.
To argue that you can value anything in terms of gold and silver without using either as the standard is analogous to a dog chasing its tale.
Posted by Bischoff on 01/13/13 07:13 PM
DB: "But just as we predicted, your insistence on a single market standard for money and accounting contradicts the lip service you pay to "markets." You are entirely predictable, Ingo. The more agitated you become, the longer your rebuttals get. That doesn't improve their accuracy though."
BISCHOFF: I don't know how I can make it any more clear to you, it is NOT I who insists on a single standard of value. IT is LOGIC. I am entirely predictable, because I try to use logic in presenting my point. You seem to want to fight logic in favor of your preconceptions.
My replies to you become more lengthy as I try desperately to appeal to reason. Again, and again I take the time to lay out a reasonable argument for my point hoping that I get back a reasonable counter argument. It never happens. You always seem to question my motives instead of addressing yourself to my argument.
I have reluctantly come to the conclusion that the only thing which will change your mind on the subject is reality. However, as long as the present "managed" currency is protected by a "legal tender" law, you won't have to worry that reality will come knocking.
In the meantime, I am happy to hold onto your view, and I wish you luck with yours when you have to face reality some day soon.
Reply from The Daily Bell
You are not logical; you are opinionated.
Posted by taxesbyanyothername on 01/13/13 07:08 PM
Markets do not settle things once and for always. They decide what a price should be at the moment. As soon as conditions, or what is known changes, the market's decisions may change.
Every regulation, no matter what it is, is a government saying: 'no, this is not a market.'
The relative value of silver and gold will continue to vary, and if governments will butt out, it will be no problem. It appears to me that platinum, and eventually perhaps other metals, will be coined. And if governments keep their hands off, that will still be no problem.
Locke was a smart guy but he didn't figure out everything, and the age of an axiom or practice, does not give it veracity or utility.
Setting the ratio of value between the two metals at precisely the ratio that exists in the posession of mankind is another way of saying that the total quantity of gold possesed by us is precisely equal in value to the total quantity of silver possesed by us. Since both are used as currency and jewlry, and silver has many other important uses, this seems absolute bunk to me. Industrial use of silver has brought the ratio down to about ten to one. In a SHFT situation, which we may very well soon have over major portions of the globe, silver's use as a water purifier will make it even more valuable compared to gold than it is now.
This suggests to me that without manipulation of the markets, and gold priced as it is now, that silver should be over $200/Oz. Now. The huge discrepancy between the actual situation and that last also suggests to me that the price of both of them has less to do with standards, or honest market decisions, than disinformation and timed buys and sells by those manipulating the price of both metals. This is probably at least as large a theft as the libor manipulation.
Posted by Bischoff on 01/13/13 04:14 PM
DB: "As predicted, Ingo. You insist on a single standard that "everyone will follow." It as if you are not at all familiar with F.A. Hayek and the idea of spontaneous organization. Yes, there CAN be more than one solution - and, yes, the market itself can provide ways to integrate those solutions."
BISCHOFF: I DO NOT insist on a single standard, because I want it that way, but because logic and mathematics dictate it.
My insistence that a single commodity be used as the STANDARD OF VALUE is not something unique with little old me. I am citing the same quote I cited earlier in my retort to Dave, Jr.'s comments:
"Money is the measure of commerce... and therefore ought to be kept (as all other measures) as steady and invariable as may be. But this cannot be, if your money be made of two metals, whose proportion ... constantly varies in respect of one another.'
--John Locke (1632 - 1704), English Philosopher
This comment about a single STANDARD OF VALUE by a noted philosopher precedes my comments by 300 years. It certainly isn't something which found original concern with me.
If you think about it, the insistence on a single STANDARD OF VALUE is based on simple logic. This is something poor, old William Jennigs Bryan could never get through his head.
The Congress set a fixed ratio of gold to silver with the 1792 Coinage Act of 1 : 15. It was later revised to 1 : 15.5. This ratio worked when at the time silver was found along side gold as deposits and both were mined together in the same effort.
However, once large silver finds were made, such as the Comstock Lode in Nevada, the value equivalent of 1 : 15.5 no longer held. Rich, pure silver veins were much less laboreous to mine, than to mine the silver found along side gold.
In the late 1800s, silver prospecting was all the rage. The State of Nevada was the greatest lobbyist for maintaining the 1 : 15.5 value equivalent between gold and silver.
The relatively little amount of labor needed to mine and refine 15.5 ounces of silver from a pure silver vein in comparison to the amount of labor needed to mine and refine 1 ounce of gold, which in many cases amounted to four and five times the amount of work, simply no longer logically supported the value equivalent of 1 : 15.5.
William Jennings Bryan and his supporters simply could not get that through their head. Their contention was that by law silver miners should be able to demand from the banks 1 ounce of gold for every 15.5 ounces of silver they delivered up.
Do you really think that government interference in setting a fixed ratio and to enforce it was warranted... ??? If you do, then you are the statist, NOT I...
If you love silver, make silver the STANDARD OF VALUE. It will not work as well as will gold as the STANDARD OF VALUE, but go ahead... .advocate it. I could care less.
DB: "Yes, there CAN be more than one solution - and, yes, the market itself can provide ways to integrate those solutions."
BISCHOFF: That statement gets no opposition from me. Yes, let the markets decide what works. However, markets have to deal with reality. They cannot ignore universal truth. To call an apple an orange is illogical, but markets can usually settle such illogic in seconds. They need no help from me, or from you for that matter.
Reply from The Daily Bell
You must know after all this time that we advocate a floating ratio between money metals. In other words, the insistence of the US Congress on stating the ratio between gold and silver was a big mistake. The market should set the price, not the government.
But just as we predicted, your insistence on a single market standard for money and accounting contradicts the lip service you pay to "markets." You are entirely predictable, Ingo. The more agitated you become, the longer your rebuttals get. That doesn't improve their accuracy though.
Posted by AlSledge on 01/13/13 03:51 PM
Always enjoy stopping by The Bell. Wish I had the time to do it more often. While opinions vary widely, most are intelligently stated. Some posts here today however degrade to nearly name calling, which wastes my valuable (to me) time.
On the subject matter, once platinum reaches $1T per ounce, and if the coin weighs one ounce, the coins will disappear "as bad money drives out good" (Greshams Law). Ah, but my high tech solution would be electronic coins where the Fed could simply remark the coin at will, such as $1T, and change it to $10T or any other value at the flip of a switch! No need to recall the money or transport it in a wheel barrow such as 1924 German notes. Plus it would save energy!
The only possible better solution might be to eliminate fractional reserve banking as well as the Fed, and allow the market to define "money". I like the idea of gold coin, but marked as the weight, rather than dollar denominations. Government control of the money has worked out rather poorly in all countries. I agree we need something that works and SDRs will not be it either.