Gold.

[vanlose kid]

vk wrote:

i mean, the material form of money is such a non issue.
money is debt.

ok, but It's only a non-issue so long as the material forms in question don't significantly vary w/r/t their use value. Pure money would have no independent use value; it would only be held or exchanged.

let me try to untangle that. no offense. first, pure money doesn't exist. to even talk about it and to think that gold [or some other substance] is it is mightily confused. [i'm not saying that you're doing this, mind.] but, if we were to take the loose sense of your post and say that by e.g. legal definition, money can only be held or exchanged, does it then not have a use value?

so i take it that by independent use value you mean something like "pure money cannot be bought and sold", i.e. has no commodity value. which makes sense. only that sort of thing doesn't exist [unless you legislate against it, which isn't the same thing, which is to say "pure money" in your sense has no material existence, only legislative].

if whatever system of exchange (market) makes it possible to buy and sell money (monies, think Forex) that even if it were only digital (only had virtual existence) it would have use [commodity] value. so, the problem is not the (im)material form. right?

[point is: to think that converting to the gold standard will solve any problems (just because it can't be dug up fast enough or is practically impossible to fake) is a pipe dream. apart from that it seems a lot of people are making a killing in "fake" money pushing that dream. and i don't mean to disparage the use of gold altogether as a store of value, but it only has the value we give it. if things fall apart and no one sees value in gold then having it doesn't help. it takes a community.]

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edit: corrections and comments in [].

[vanlose kid]

notice the relation between inflation and interest?

100$ (with material representation say in the form of paper) in economy E grows to 1000 (900 of which only "exists" in account entries) than that 100 has to move faster for E to remain stable. (we haven't factored in jobs, nature, harvests, war, peace, mood, etc.) if it slows for whatever reason you have a liquidity problem. bills not paid here have effects way over there.

solution? QE, ZIRP, POM etc., on and on...

money is a commodity. usury is the price of money use. as long is this is the case...

the material form is not the problem.

*

[how do you get E back to a fully rep'ed 100$? (was a time 100$ was a lot of money.)]

*

[vanlose kid]

there's that story that pops up occasionally, about how one out of town guy stays over at an inn and gives the keeper 100$ and the whole town's debts are settled before morning when he gets it back from the keeper. IIRC.

how "big" was that economy?

*

[Stephen Morgan]

Knowledge is a three-edged sword: your side, their side and the truth.

[barracuda]

b, seriously, you're just playing around right?

i mean, the material form of money is such a non issue.

Yes, I ought to have posted this thread in the Economics Sub-Forum, but it's so damp and moldy down there.

100$ (with material representation say in the form of paper) in economy E grows to 1000 (900 of which only "exists" in account entries) than that 100 has to move faster for E to remain stable. (we haven't factored in jobs, nature, harvests, war, peace, mood, etc.) if it slows for whatever reason you have a liquidity problem. bills not paid here have effects way over there.

Yes, velocity of money.

[how do you get E back to a fully rep'ed 100$? (was a time 100$ was a lot of money.)]

You have to flush most of the excess or bad debt out of the system. Could the demand for PMs overwhelming a massively hyperinflated fiat note perform that function? The hyperinflation would allow everyone's debt burden to be trivialized. Then you'd just need to divorce the PMs from seigniorage and usury charges. Somehow. Forget it.

there's that story that pops up occasionally,

You mean this one:

A priest, a rabbi, and an Episcopalian deacon walk into a bar...

Oh wait, that's not it, try this:

One summer afternoon, a distinctly discriminating and moneyed traveler walks into the dingy hotel lobby in a small town, rings the tarnished desk bell, and plops down a $100 on the dilapidated counter, telling the junkie night clerk he wants to check the rooms upstairs in order to select one to make with the snoozing he wishes to partake of.

The night clerk gives him some keys and, as soon as the sleepy but picky traveler has walked upstairs and out of sight, the clerk snags the benjamin and bolts next door to pay his dealer. The dealer takes the C-note and runs down the street to repay his debt to his dealer. That dealer takes the same one-hundred smackeroos and heads off to pay his debt to his bookie. The bookie takes that benji and runs to pay his even HIS dealer as well. EVEN HIS dealer slips the cashola (100 dollars)along to the local hustler drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hustler then rushes to the hotel and pays off his room bill to the night clerk with the very same hundred-buck note! Thinking quickly, the clerk sneakily sets the $100 bill back on the counter so the persnickity traveller won't suspect anything, just as he comes down the stairs completely disgusted by the shabby and unkempt accomodations available in this fleabag hotel. Giving the clerk a look of affront, he plucks the loot from the counter and exits in a frustrated huff, getting tireder and tireder by the minute.

In this particular version of the fable, the size of economy of the town is $800, because it is defined by eight payments of $100 each, if you count the deposit and subsequent withdrawal of the bill by the traveler as two payments. And, happily, none of those individuals tried to charge any vigorish, or fuck each other over with ruthlessness, and all was right and good among them. For some reason.

Knowledge is a three-edged sword: your side, their side and the truth.

...and probably some fourth thing, too. I know - the handle. You forgot the handle of the sword.

There's four sides to every coin - the obverse, the reverse, the edge and the inside. Or something like that.

[Elihu]

odd.
weird.
[inarticulate sound]
reading this, it's as if the graeber/debt thread never happened.

he has received the honorarium of titling the thread. he came out of the london school of.. whatever? is that close to threadneedle st? ; )

i mean, the material form of money is such a non issue.

if this were true, then why is it necessary to use the force of law to constrain currency to notes issued by private corporations? i'm just asking. somebody, other than me, obviously sees the issue differently.

money is debt.

if you want it to be. embraced by it's victims?

[Elihu]

You have to flush most of the excess or bad debt out of the system. Could the demand for PMs overwhelming a massively hyperinflated fiat note perform that function?

it's inevitable. we could deal with g&s honestly (humbling, painful, corrective) or continue to pretend they're a joke (crack-up-boom).

The hyperinflation would allow everyone's debt burden to be trivialized. Then you'd just need to divorce the PMs from seigniorage and usury charges.

free coinage at the mint!

Somehow. Forget it.

you're on the right track, don't give up.

[Canadian_watcher]

This is all very interesting philosophically speaking, however nothing is ever going to replace fiat .... okay, more/different fiat will, of course but nothing 'of value' will ever replace it, because the ones with the most of it will never stop brainwashing the ones with the least of it. And easily.

Labour and goods are the only things of value, and the Monied Class produces neither. You think they'll let nuggets or sweat come close to usurping their control? Never. Going. To. Happen.

The best us peons can do ATM is try desperately to beat inflation.

[Elihu]

This is all very interesting philosophically speaking, however nothing is ever going to replace fiat .... okay, more/different fiat will, of course but nothing 'of value' will ever replace it,

that's true. not with the current economic and political structure intact. in that context, this is a philosophic discussion (which tend to be long and tedious). there will be no orderly reconsideration by the banksters. they don't care. this discussion has revealed the incoherency of the masses victimized by the banksters so a focused popular movement is unlikely. however, if the banksters are repealing natural law by no other means than illusion, that doesn't repeal natural law. those that can understand what they are doing, can oppose them by discerning their best interest outside the illusion. there's the contest. it's not on tv and it's not in politics. but it's happening...

The best us peons can do ATM is try desperately to beat inflation.

it's a numbers game. most won't.

[Canadian_watcher]

This is all very interesting philosophically speaking, however nothing is ever going to replace fiat .... okay, more/different fiat will, of course but nothing 'of value' will ever replace it,

that's true. not with the current economic and political structure intact. in that context, this is a philosophic discussion (which tend to be long and tedious). there will be no orderly reconsideration by the banksters. they don't care. this discussion has revealed the incoherency of the masses victimized by the banksters so a focused popular movement is unlikely. however, if the banksters are repealing natural law by no other means than illusion, that doesn't repeal natural law. those that can understand what they are doing, can oppose them by discerning their best interest outside the illusion. there's the contest. it's not on tv and it's not in politics. but it's happening...

The best us peons can do ATM is try desperately to beat inflation.

it's a numbers game. most won't.

I concur with your analysis.

It's very difficult to watch as everyone chases security these last few days when there really is no security. Certainly there are opportunities to cash in on these flights: sell treasuries now, buy metals now (or soon) etc. But the underlying theme I'm getting from all of it is that TPTB don't like Geithner's latest move and they are in punishment/harvest mode. The little guy in this scenario is in a lose-lose position. But, like you said, 'they' don't care. It moved beyond logic, even as the way I see there is a bit of an end game being approached. As usual, it'll result in the fat cats getting unimaginably fatter. I can only hope that a French Revolutionary climate will result in most countries.. that's where we are going to be at the end of this.

We have recently sold out of everything. I mean everything. We had accidentally good timing, I guess.. believe me I do not have a firm grasp on anything I'm talking about (probably obvious), but we're in cash right now and hoping to buy just enough, save just enough, to hedge against inflation. I think that barring utter insanity in the reliable areas we might be able to keep our earnings at par with inflation. (at least the reported inflation which, where I am, was 3.1% last month.) If we do it'll be beginner's luck for sure, and have nothing to do with market savvy and everything to do with intuition.

[bks]

vk wrote:

let me try to untangle that. no offense. first, pure money doesn't exist. to even talk about it and to think that gold [or some other substance] is it is mightily confused. [i'm not saying that you're doing this, mind.] but, if we were to take the loose sense of your post and say that by e.g. legal definition, money can only be held or exchanged, does it then not have a use value?

so i take it that by independent use value you mean something like "pure money cannot be bought and sold", i.e. has no commodity value. which makes sense. only that sort of thing doesn't exist [unless you legislate against it, which isn't the same thing, which is to say "pure money" in your sense has no material existence, only legislative].

if whatever system of exchange (market) makes it possible to buy and sell money (monies, think Forex) that even if it were only digital (only had virtual existence) it would have use [commodity] value. so, the problem is not the (im)material form. right?

Yeah, I had digital money in mind - money with no commodity value as you put it. I'd prefer to keep use value and exchange value separate. In the example you offer, I don't see how digital money has any use value whatsoever. It's not real, it's not a materialization of anything. It's only "use" is in its capacity to exchanged [or held, to be exchanged later].

[point is: to think that converting to the gold standard will solve any problems (just because it can't be dug up fast enough or is practically impossible to fake) is a pipe dream. apart from that it seems a lot of people are making a killing in "fake" money pushing that dream. and i don't mean to disparage the use of gold altogether as a store of value, but it only has the value we give it. if things fall apart and no one sees value in gold then having it doesn't help. it takes a community.]

Largely I agree with this, particularly the community part and you rightly sussed that I wasn't angling for a return to the gold standard. ANY standard would be nice, though, something along parecon lines preferably.

For me owning PMs isn't about things completely falling apart. I imagine there will be plenty of people seeing value in gold then, but only because things REALLY haven't fallen apart yet, at which time there won't be a "we" to give it value. Per Tainter, collapse refers to a collapse in political complexity. Should that happen, there's likely to be no basis for a uniform mode of exchange across what used to be the society. It's a matter of what communities value after that point.

But before things fall completely apart [like right now, for instance, and the next 10-25 yrs], gold and PMs are a good bet IMO despite their relatively high turbulence, so long as you think its going to take awhile for the STcompletelyHTF. If you have money to put aside, I don't see a problem with buying PMs with money you don't expect to need, sitting tight [could be for many years] and then cashing out if/when PMs go up big while asset and/or commodity prices are dropping [whatever you're into at that time].

If PMs don't go up in price, well, what were you going to do with your paper money in a collapsing society anyway? PMs are a bet on a reduction in social complexity. But get out before it blows

Clearly the equity and commodity markets are gamed and I neither have enough money nor enough stomach to try to outguess the bunch of criminals running the show. The only advice I would be comfortable giving anyone is: make as few moves with this stuff as possible. Buy expecting to hold, not to sell short-term on a bet prices go up. Then you're playing their game.

[Elihu]

well said bks.

[Elihu]

I concur with your analysis.

i'm sorry if i sound like a robot;

It's very difficult to watch as everyone chases security these last few days when there really is no security. ... .....

........

It moved beyond logic, even as the way I see there is a bit of an end game being approached.... I can only hope that a French Revolutionary climate will result in most countries.. that's where we are going to be at the end of this.

....

....I mean everything. We had accidentally good timing, I guess..

don't believe in things that are of doubtful existence : )

believe me I do not have a firm grasp on anything I'm talking about (probably obvious)

yes that was confusing

, but we're in cash right now and hoping to buy just enough, save just enough, to hedge against inflation.

be blessed...

I think that barring utter insanity in the reliable areas we might be able to keep our earnings at par with inflation

Praise God you are blessed : )

(at least the reported inflation which, where I am, was 3.1% last month.)

without comment...

If we do it'll be beginner's luck for sure

be confident!

and have nothing to do with market savvy and everything to do with intuition.

the # in hand and/or weight on scale may be of assistance.

[barracuda]

from a practical standpoint as we have discussed before, the only way to transition is to legalize a standard gold (and silver) coin as payable for debts alongside the currently protected federal reserve notes, at the totally free option of the parties. if they don't agree, no deal and no one's gold or silver can be taken away without going through a court first. the us gold reserves should be dispersed to the citizens via tax return information at the IRS. they should not be the conduit however.

Can we examine this again for a moment? Here's your more fleshed-out description of the transition to the use of gold coins as currency you spelled out in the Ron Paul thread:

Okay. take the "official" US gold holdings (temporarily confiscated in 33) said to be about 8300 tons (check for tungsten). that is about 290 - 300 M troy ounces. divide by the number of 1040 tax returns filed current or under extension for 2010. doesn't matter if they owe, only if they filed. refund that amount of gold to each person/family (my guess is about 1.5 t-oz each). immediately allow gold (alongside paper dollars - either / or) to be payable for all debts public and private at the going market rate at the option of the debtor. let gold and frns compete fairly. immediately open the US mint to the coining of gold tendered by anyone that shows up free of charge. then stand back and watch....

If the use of gold or currency in transactions is at the option of the debtor, why would anyone use gold? I mean, yes, people who only have that one ounce of gold would have to spend it to live on almost immediately, and from then on would be right back to using fiat for everything.

Most companies would presumably rather not deal in gold at all - it's too bulky for even smaller large transactions, such as buying a house, and there's simply not enough of it to fill the needs of businesses anyway. For example, a company such as Exxon by themselves has yearly revenues around $350 billion had recent yearly profits in excess of $40 billion, and a market value of $450 billion. The don't really want gold. And the same attitude would be scaled down to my corner grocery store. The vast majority of their business would be conducted in fiat.

Let do some math. What percentage of the aggregate US annual household income is represented by the amount of gold held by the government? (I'm sort of assuming here that we don't really want folks to melt down their wedding rings to buy food.) How would such a small percentage actually be able to affect the debt-based economy? Wouldn't debt still be required to do business?

What is the mechanism by which the prevalence in circulation of that percentage of PM coinage could possibly inflate or hyperinflate the fiat currency? Are you assuming that people will want to use PM more than fiat? Why would they, exactly?

[Elihu]

Can we examine this again for a moment?

Here's your more fleshed-out description of the transition to the use of gold coins as currency quote="Elihu" Okay. take the "official" US gold holdings (temporarily confiscated in 33) said to be about 8300 tons (check for tungsten). that is about 290 - 300 M troy ounces. divide by the number of 1040 tax returns filed current or under extension for 2010. doesn't matter if they owe, only if they filed. refund that amount of gold to each person/family (my guess is about 1.5 t-oz each). immediately allow gold (alongside paper dollars - either / or) to be payable for all debts public and private at the going market rate at the option of the debtor. let gold and frns compete fairly. immediately open the US mint to the coining of gold tendered by anyone that shows up free of charge. then stand back and watch....

If the use of gold or currency in transactions is at the option of the debtor, why would anyone use gold? I mean, yes, people who only have that one ounce of gold would have to spend it to live on almost immediately, and from then on would be right back to using fiat for everything.

they would have to sell it for cash. the resulting 30K would take most people awhile to spend. on edit: i forgot to include the caveat, "assuming the price shoots up to 30k".

Most companies would presumably rather not deal in gold at all - it's too bulky for even smaller large transactions, such as buying a house, and there's simply not enough of it to fill the needs of businesses anyway. For example, a company such as Exxon by themselves has yearly revenues around $350 billion had recent yearly profits in excess of $40 billion, and a market value of $450 billion. The don't really want gold. And the same attitude would be scaled down to my corner grocery store. The vast majority of their business would be conducted in fiat.

it's entirely optional. give em a 30 day grace period to get ready or they accept fiat exclusively.

Let do some math. What percentage of the aggregate US annual household income is represented by the amount of gold held by the government?

original back of envelope calculations: 300m troy ounces times $1650 per kitco today = about $500 billion dollars. could they get off their a$$ and do that?

(I'm sort of assuming here that we don't really want folks to melt down their wedding rings to buy food.)

gold and silver bling immediately come into play b/c they can now be freely and openly coined. so if you didn't get a gold refund, there's still hope for you. workers of the world negotiate/calculate your services in silver ounces (and then move some of it into silver)

How would such a small percentage actually be able to affect the debt-based economy?

depends on the 30 day closing price. 500 billion today at 1650 is substantial. hank paulsen walked out the front door with 700 B in his coat pocket.

Wouldn't debt still be required to do business?

yes the dispersal frees creditors to accept gold or notes as payment in whole or in part. whatever they can negotiate. discount comes to mind.

What is the mechanism by which the prevalence in circulation of that percentage of PM coinage could possibly inflate or hyperinflate the fiat currency?

i don't think it will cause wild gyrations. 8300 to known supply is small but significant. there's more gold out there than that. and silver too, don't forget silver.

Are you assuming that people will want to use PM more than fiat? Why would they, exactly?

. silver is for spending. 2 ounces would buy you and a date a nice dinner out and if you're frugal, maybe coffee and ice cream too : ) on edit: i assume the economy would continue for some indefinite period of time using a triad of gold, silver and federal reserve notes. all three will be transacting back and forth. the better to make peace with the banks and empire without a revolution.