|
Post by brandt on Jan 18, 2012 15:05:37 GMT 10
Care to back up your assertions? When did real money disappear and the money from fiat appear? Was it the free market that did that or government-banking cabals?
|
|
|
Post by Tamrin on Jan 18, 2012 16:08:10 GMT 10
1) Once currency was its own reserve: Coins were worth the metal from which they were made. 2) The metal was debased and minted coins were given an assigned vaue (Cleopatra was the first). 3) Eventually there was a switch to paper currency. 4) Government issued cash (notes and coins) did have asset backing (some private banks also issued their own currencies). 5) However, from the start, banks typically lent more than they received in cash (money they do not have), effectively increasing the money supply: This excess has no backing other than the banks' reputation ( Money multiplier) and is the biggest Ponzi scheme going. 6) Bank reserves were subsequently mandated to minimize the effect of runs on banks.
|
|
|
Post by brandt on Jan 19, 2012 1:29:46 GMT 10
There was once a death penalty over here for debasing currency. I guess it was important to have real money. The central banking system though, and the fiat currency necessary for fractional reserve banking, is necessary for government stimulus (dumping money into the system).
How could anyone think that fiat currency is better than real money? How could the printing press be better than gold?
|
|
|
Post by maximus on Jan 19, 2012 2:08:42 GMT 10
Fractional reserve banking, the key to the socialist paradise. Yet it is more a feature of unregulated (free market) banking systems!? Please point out an "unregulated, free-market banking system." Please do not say the United States, because we have no such thing.
|
|
|
Post by Tamrin on Jan 19, 2012 13:34:02 GMT 10
There was once a death penalty over here for debasing currency. I guess it was important to have real money. The central banking system though, and the fiat currency necessary for fractional reserve banking, is necessary for government stimulus (dumping money into the system).
How could anyone think that fiat currency is better than real money? How could the printing press be better than gold? You are putting words into my mouth. My point was simply that: Fractional reserve existed long before the Bretton Woods meeting of 1944 (it was a major factor leading to the Great Depression of the 1930's).
|
|
|
Post by Tamrin on Jan 19, 2012 13:36:03 GMT 10
Please point out an "unregulated, free-market banking system." Australia.
|
|
|
Post by brandt on Jan 19, 2012 15:01:21 GMT 10
Australia is very far from that.
If had put words in your mouth it was unintentional. I was under the impression that you thought that my not liking the power of the printing press, and your hope that the U.S. government did not follow my lead, was an indication of your preference for it.
|
|
|
Post by Tamrin on Jan 19, 2012 16:03:24 GMT 10
Max's question was about banking systems: I suggest you click on the link provided above (Reply #27).
|
|
|
Post by Tamrin on Jan 19, 2012 16:19:42 GMT 10
...your hope that the U.S. government did not follow my lead... My hope was that the WORLD didn't heed your advice (the US would go under). For the sake of the US, let's hope the world doesn't heed your advice.
|
|
|
Post by brandt on Jan 20, 2012 1:22:35 GMT 10
So, should the world simply print money?
|
|