How Federal Reserve Notes Work

I agree with you. Federal involvement in monetary matters ought to be limited to minting coins in accordance with an established set of weights and measures. Law granting legal tender status to federal reserve notes, and making them irredeemable is ridiculous.

 

why bring government into it at all? The temptation will always be there for them to manipulate it. Let the market create money, that 'spontaneous order' that will establish standards without external measures.

 

what a joke, we both know you swallow the whole paul/austrian propaganda package

reason and logic don't dissuade paultards

 

You have presented neither reason nor logic, so it's hard to say whether or not you're right.

 

I'm fine with that.

 

Money cannot be "created" because money is a common commodity used to facilitate commerce based upon the barter system. Historically gold and silver have been the most common commidity used as money and we cannot "create" either gold or silver. For those that actually pay attention to the US Constitution I would point out simething from Article I Section 8.

First this states Congress has the authority to "coin money" and coining is the process of making tokens out of metal. It doesn't authorize Congress to "create" money but instead to take gold and silver, which were the established commodity used for commerce in the United States when it was founded (we were using Spanish gold and silver coins predominately and continued to do so until about 1830)and produce tokens to be used as money. So Congress was authorized to produce gold and silver coins which were money but it couldn't create gold or silver.

Next it states that Congress is the regulate the value thereof. This doesn't mean Congress can establish the relationship of money to goods and services but instead Congress has to regulate the relative value or gold coins to silver coins. Today a $50 American Gold containing one ounce of gold is equal to 50 $1 American Silver Eagle coins so Congress has "regulated" the value of silver to gold at 50:1.

It also allows Congress to regulate the value of American coins to foreign coins but Congress hasn't actually done that, at least not recently, but we assume that a one gold ounce gold Canadian Maple Leaf is equal to a one ounce gold American Eagle in the free market.

Finally the same clause in Article I Section 8 it delegates the Congress with the responsibility to establish weights and measures which ensure that all coinage is controlled by a common standard. A one ounce gold coin must contain one ounce as establish by our weights and measure system.

 

you're completely wrong

 

My mistake. I meant to say "Why not let the market decide what to use for the facilitation of exchange."
And I know that the Constitution is what allows for the weights, measures and all. I am saying only that the government is not needed AT ALL. Once we had agreed on certain basics, such as what a 'grain' is, then there is no need for a central issuing authority. the market will decide what works best for their needs.

 

people decided long ago that commodity money didn't work well

 

no they didn't. More assertion from the king of assertion.

You do know that FDR ordered Americans to sell their gold to the government. SO how in the world do you get that "people decided" when it was one man, Franklin Delano Roosevelt who decided for all. And not only did he use the power of the state to confiscate all the gold, he short changed the public by giving them $20.67 for an ounce, then, once he got the gold, he revalued it at $35 an ounce.

Dang, dude, you are pure comedy. All you do is assert. You haven't stated a single fact, figure or hard information yet. You have, OTOH, asserted, insulted, offered opinions and deny us any substance as to your thinking.
A true clown

 

sure they did, look at the predominant form of money used today

first of all, he's dead and he didn't decide for the whole world, yet the whole world uses paper money

 

Ever hear of the Legal Tender Laws?
So, the fact that the government won't allow us to use gold and silver means to you that we don't want to use them?

Actually, in the late 40s, the 'world' decided to use gold via the Bretton Woods agreements.

now, of course the world uses paper. That's because the governments WON'T ALLOW ANYTHING ELSE.

You really don't let facts interfere with your prejudices, do you?

The ultimate troll

 

people switched to paper money because inelastic, volatile commodities don't work well as money

if they did, people would still be using them as a primary currency

 

"People" didn't switch.
The government did.
Legal Tender Laws, dude, legal tender laws. The government will put you in jail for not using their currency.
You don't acknowledge reality very well.
In fact, I think you fail the Turing test.
You are a computer.
Prove me wrong.

So don't give any more nonsense about 'people' switching, That is a bald faced lie.

 

government is made up of people representing people

get a grip on reality, i already know for a fact that you are wrong

 

I agree with you that people in market will determine what is best used as money, so I'm for eliminating laws that give the government control over money. Such laws are a violation of our rights. They need to be repealed.

 

The link to your post in which you do everything you can to make yourself out to be an expert without calling yourself that is telling enough.

So either you have committed the fallacy of composition, or are relying on sophistry to imply guilt by association. Typical of your weak arguments.

 

I see "regulating the value" as being one of giving name to coins including to the weight and size. Ie. a dollar is 1/20oz of gold or 1oz of silver even if the two are not interchangeable in the market. Setting a ratio of gold to silver is extremely unwise and has cost the US dearly in the past when the exchange either caused gold or silver to flee the country, or the government to go broke trying to make good on the exchange (e.g. the Sherman Silver Act.)

 

That doesn't make it highly political. It is a school of thought having to do with human action in relation to economics, or, really, all human action. The Keynesian school, on the other hand, is highly political, as it relies entirely on government action action, or political force, to govern the economic actions of human beings. The Austrian school works outside of politics, but it also answers well what happens when political action is used, such as the effects of the business cycle when government manipulates the money supply.

 

what it says is that you don't know what you're talking about

 

You are right, of course. I was a bit frustrated at the lack of engagement from a certain other poster.

Force versus voluntary, that is the war we are fighting.

 

I'm not the one billing myself as an expert with an advanced degree in economics and more knowledge forgotten than anyone else here has learned.

 

Gold Coins aren't going to protect the value of anyone's net worth, if the US dollar , the safe haven currency, drops in value the world ends.

The best thing to do with federal reserve notes, is to spend them to stimulate the economy, thus bringing up their value. There is really nothing else they can do, because their value is dropping as we speak.

 

This is a ridiculous statement. Keynesianism is but a multi-faceted political economic school of thought; its origins focused on behavioural economic. Its usefulness is in understanding phenomena in capitalism and, assuming you see it as a good thing, reducing the threat of economic crisis. The Austrian school is pretty much useless. Zero understanding of the firm or the labour market. Its been skewed by right wing elements trying to manipulate the gullible.

 

you've already shown that you can't provide any evidence that i claimed to be an expert