The Truth About The Economy And The Dollar

Sorry Bro I'm on dialup won't (don't have the time.)

 

Rev mitchell, again allow me to ask you in all seriousness.................
What is a dollar? And how can you arrive at the truth about the economy and the dollar without knowing exactly what a dollar is?
WHAT IS A DOLLAR?
Is the money printed in the good ol USA real money?
Are they real dollars?
Is it o.k. that the federal reserve bank inflates and devalue these so called dollars according to their own will?
Is the FED really FEDERAL?
Or is it a group of bankers that are controling our currency,for their own profit?
Is this O.K. with you?
Can you handle the truth?

 

>WHAT IS A DOLLAR?

It is a unit of economic value in the same way that "gallon" is a unit of liquid measure.

>Is the money printed in the good ol USA real money?

Wrong question. Same as "Is a gallon measured in the good ol USA a real gallon?"

You are living in the wrong century. It was a Republican president who took the world off the gold standard around 1970 and created the existing electronic transfer system.

You are right to complain about the dishonest book keeping done by the Fed and the govt. The U.S. Govt has never kept an honest set of books. Which country does?

 

Who here is in the Keynesian camp and who is in the Friedman camp? Just curious.

 

Gee thanks! So hows bout we try to do something to change that instead of just a tert reply"Which country does" don't you think its about time the good ol USA did?!

 

There is a huge difference between your two statements. You state the GDP expanded 1.9% in the Second Quarter.

Than you show where the Dept. of Commerce said the economy grew at a at 1.9% annual rate.

Big difference between the two figures.

 

Well, this is more for the Money Talk$ forum. I'm by no means "Keynesian" in a strict sense. I'm an Adam Smith guy, somewhat modified. Friedman definitely has his points.

I find people sometimes use these terms and have connotations different than what are actual and real.

 

The Nixon shock wasn't really a Republican ideal. We really went off the gold standard under FDR. The Bretton Woods system (supported in the U.S. by Keynes) was a quasi gold standard that was an attempt to leverage the newfound superpower status of the U.S. following WWII to maintain an international "gold standard" promise with the door wide open to inflation. Under the Bretton Woods system, the U.S. would promise to redeem 40% of U.S. dollars held by foreign banks in gold at $35 per ounce. Because of this promise, foreign governments could treat the USD with faith as if it were as good as gold, and they would hold USD's in their vaults and peg their currencies to the USD. The system would have worked fine in theory, provided that our government did not inflate. The Nixon shock did not represent the failure of a true gold standard to function properly and honestly; it represented the failure of the U.S. government to remain honest with a shaky quasi-gold standard.

Well, foreign adventurism with the Vietnam war and domestic adventurism with the Great Society, both pushed by Democrat Lyndon Johnson, caused massive inflation. The Bretton Woods system encouraged the hypothetical myth that we could have our "guns and butter," with our inflation exporting overseas. Foreign nations involved in the Bretton Woods system could choose between holding USD's that were obviously losing value or redeeming them for gold at a ridiculously low $35 per ounce opted overwhelmingly for the latter. The rapid loss in U.S. gold to foreign banks and the rapid influx of USD's back from abroad and spilled into the domestic economy, increasing the effects of inflation, resulted in the Nixon shock. The choice was clear: (1)maintain the Bretton Woods system by cutting back on spending, preventing the gold from exiting the country, and restore trust in the USD; or (2)dismantle the Bretton Woods system, default on obligations to redeem gold, continue the wreckless policy of "guns and butter," remove trust in the dollar, and allow foreign currencies to float and compete. Nixon followed the knee-jerk decision, first to invoke short-lived price fixing (which only reduced available supply to match demand), and later to default on Bretton Woods and give in to the spending demands of the government. Of course, this was a very tough decision, and I would not have wanted to be in his shoes, but nevertheless, it was not the honest decision.

Also, there is no property inherent in fiat money over hard money that enables fiat money to deal in electronic transactions. There are plenty of digital gold currencies today that are fixed to gold and transfer just as liberally as "paper" currencies. A gold standard or any other commodity-based or hard money standard is no different from an inflationary fiat currency in its ability to be transferred in any medium. The only difference between them is that a fiat currency is backed only by government order and promise, whereas a commodity currecy is backed by a promise to redeem in said commodity.

American pride should be about what is right, that truth and honesty work, and that free market capitalism works. There is no virtue or excuse in being like other countries in an aspect of dishonesty and corruption. I can accept the fact that things are the way they are; however, I will not agree with or condone things as being right or necessary just because they are the way they are. I will do my part to fight against it with my voice and with my vote.

 

I'm not against a free market. In fact, I'm for it. However, keep in mind if we went to an actual free market system how many industries that are dependent on Government (such as psychologist and psychiatrist along with case workers) would be out of a job? Also what would happen if we did away with most favored trade status of other countries.

 

There are two parallel economies and two parallel inflations. The two economies are the economy for lenders/owners and the economy for borrowers/workers. The two inflations are money inflation and work hour inflation. The lender economy can be good while the borrower economy is terrible. This happens during stagflation, what we now have. Jobs and wages are tanking while at the same time the real rich people (maybe not the paper profit rich people) are doing just fine.

The lenders are not workers in the normal sense of the word. A moderate money inflation, say 3%-4% - hurts lenders because they can buy less stuff with the money interest they receive from the borrowers. A moderate money inflation helps the borrower because he pays back his loans with cheaper money.

Work hour inflation describes the increase in hours a person must work to buy stuff. Except for meds, food, and energy, all this time the money has been inflating the working class has been working less and less to buy basic manufactured goods.

Since WW2, a blue collar worker has been able to buy a family car for about a half year's pay - and the cars are much more dependable and the parts last much longer. Even a person making 10 bucks an hour can (almost) buy a low end new car with a 50,000 mile warrantee for a half year's pay ($11,000).

Clothing and tools are much cheaper. Computers and electronic toys are much cheaper. Low end furnishings and household goods are much cheaper in terms of hours worked. (Yes, I HATE stuff made out of chip board.)

LAND is much more expensive because of zoning and building codes. When I was a kid, the land was about 25% of of house purchase. My 5000 sq ft city lot is now worth much more than the house on it.

If people were satisfied with 1950 meds and medical treatments I think medical costs would be much lower than back then.

 

I also support free market capitalism. But there are some things that inherently require regulation. The current mortgage crisis is a very good example of that. When financial firms are allowed to take extreme risks without notifying their stockholders and then get bailed out by the government when they fail it's obvious that regulation is necessary.


Paulson admits deregulation has failed us all
Commentary: Mortgage proposals spell end to decades of looking other way
By MarketWatch
Last update: 1:00 p.m. EDT March 13, 2008

WASHINGTON (MarketWatch) -- You know things are very very bad on Wall Street when a guy like Henry Paulson -- Treasury secretary, solid Republican, and former Goldman Sachs CEO -- joins the crowd calling for more regulation over the financial markets.

Paulson spared no one in his criticism Thursday of the excesses of deregulation that has now created the worst global financial crisis in a generation, threatening the health of the U.S. economy, the savings of millions of Americans, and the survival of some of the biggest financial institutions in the world. See full story.

Wall Street and Washington both failed big time, he said. Wall Street invented new ways to make money by selling securities so complicated that no one could really follow which shell the pea was under. Fortunes were made on the paper Wall Street sold.
At the same time, Washington's watchdogs were dozing, tranquilized by the false assurance that Wall Street would police its own.

 

Paulson admits deregulation has failed us all
http://www.marketwatch.com/news/sto...x?guid={4AEF15AC-3966-4656-8108-C96712A88D68}
Ineresting read.
Jim Cramer states that the market has bottomed out and is ready to rise again.
Time will tell.
There does need to be some kind of guidelines the governement shouldn't bail out these financial instituion just because they decided to play fast and loose .
I find it repulsive that our tax dollars will go to bail Fannie and Freddie while the common working stiff is forced to take there lumps.