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Post by triangleman on Aug 23, 2005 8:08:54 GMT -4
People might be interested in Norfolk Island as well. NI is a self-governing territory associated with Australia, with a population of about 2000. Is that Niue, or am I thinking of somewhere else?
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Post by PeterB on Aug 23, 2005 19:43:05 GMT -4
Niue and Norfolk Island are different places.
FWIW, the main population group on NI is descended from Bounty mutineers (apart from those who chose to stay on Pitcairn). The NI phone book is dominated by about seven surnames.
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Post by Dead Hoosiers on Aug 24, 2005 16:55:33 GMT -4
Turbonium is right. The Fed is privately owned. They print our money and sell it to us. According to our Constitution, isn't Congress supposed to be in charge of issuing currency (U.S. Const., Art. I, Section 8)? And if our money isn't backed by something of worth, like gold, then it has no value. It's fiat money. We actually owe the national debt to ourselves. Let's forgive ourselves this debt and kick the Fed out of the U.S.
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Post by echnaton on Aug 24, 2005 18:10:52 GMT -4
Turbonium is right. Listen up. The Fed is privately owned.
Let’s not beat this dead horse, it still won’t change the facts.
They print our money and sell it to us.
The don’t print our money. They don’t even print our currency. The Department of the Treasury prints the currency and sells it to the Federal Reserve. The Fed is a distributor for them.
According to our Constitution, isn't Congress supposed to be in charge of issuing currency?
It gives Congress the power to “coin” money. The Constitution does not even address paper money or bank deposits. It does not prohibit the delegation of that function to an agency of other agent. The Constitution does seem to give the Congress special prerogative over money that it does not have in many other matters. However, before the Fed, the Treasury department handled all of the functions. Managing money is really an executive function and not suitable work for a legislative body.
Besides currency is only a small portion of the money supply.
And if our money isn't backed by something of worth, like gold, then it has no value.
If it has no value to you then give it to someone that can get value from it. Besides what value does gold have? Like any other asset its value is set by what others will trade for it. It has limited intrinsic value because it has limited practical use. If you are facing starvation dirt, a hoe and some seeds will have far more value than any amount of gold. U.s. currency has a very special property that does give it value relative to all other assets. It is the most liquid and fungible commodity on earth.
It's fiat money.
That’s right, we can pay our taxes with it. As long as the government will accept currency, it will have value.
We actually owe the national debt to ourselves. Let's forgive ourselves this debt and kick the Fed out of the U.S.
Tell that to the foreign central banks that hold billions in Treasury notes. Or if you are not concerned about them then tell it to the millions of U. S. citizens that own an interest in Treasury securities. They might think otherwise about a plan to confiscate their wealth. A government that shirks its debt is in trouble.
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Post by Dead Hoosiers on Aug 24, 2005 18:16:59 GMT -4
Echnaton, is it your opinion that the way our government is currently handling our financial affairs (the Fed) will not lead to the kind of inflation that was suffered by pre-WWII Germany and South America and that we and future generations are going to be financially okay? I'm guessing your answer is no, since nobody could be so dead of conscience to the welfare of their children and grandchildren as to be concerned only with whether their fiat money can pay their own taxes.
P.S. I don't claim to have the solution to the problem, but that we have a serious problem is certain.
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Post by echnaton on Aug 24, 2005 18:42:15 GMT -4
I regularly watch the actions of the Federal Reserve because their actions affect the investment decisions I and my firm make. My short comment may not have been completely clear. Your guess is correct I do not believe that the current actions of the Fed will lead to runaway inflation for several reasons.
1) They do pay close attention to the money supply and have not let it get grossly out of proportion to the growth of the economy. They have tremendous latitude to reign in the growth of the money supply. Just act Paul Volker.
2) To my understanding, historically most runaway inflation is caused by the executive branch printing currency to pay its bills. The Executive branch in this county is limited in its ability to do this.
3) The U.S. monetary system is far more transparent than in prewar Germany or in many other countries today. Transparency is a great tool to keep honest people on track. The interests of most of the country and the world are closely aligned with a stable dollar. We can all see the effects of the Fed policies and make our interest known. The Fed does not act in a vacuum.
4) I see no evidence that the Fed Governors and employees are dishonest people personally trying to plunder the Treasury. Nor would an indvidual have much ability to inflict great damage do so if they desired it.
Do you have reasons you think that current Fed policies will lead to runaway inflation?
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Post by JayUtah on Aug 25, 2005 13:46:11 GMT -4
I can't discuss monetary policy intelligently, but I have to ask why those who have, on other subjects, argued that the U.S. government is hopelessly immoral and deceptive, now argue that this same government should now be given complete control over monetary policy?
I'm no fan of deception and greed, but in my experience there's nothing inherently in either a public or private system of governance that prevents it being manipulated by unscrupulous people for personal gain.
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Post by Dead Hoosiers on Aug 25, 2005 15:13:55 GMT -4
I'm no fan of deception and greed, but in my experience there's nothing inherently in either a public or private system of governance that prevents it being manipulated by unscrupulous people for personal gain. Sad but true.
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Post by Joe Durnavich on Aug 25, 2005 23:42:07 GMT -4
I have to ask why those who have, on other subjects, argued that the U.S. government is hopelessly immoral and deceptive, now argue that this same government should now be given complete control over monetary policy?
I have been wondering about this myself. What I find ironic is that, historically, monetary policy is one area governments often have deserved mistrust and critical scrutiny.
there's nothing inherently in either a public or private system of governance that prevents it being manipulated by unscrupulous people for personal gain.
I believe the failings of government in monetary policy, when they have occurred, were not due primarily to immorality and deception, but due to the inefficiencies and misguidance inherent in large bureaucracies.
Banking and money are integral and natural functions of business and are best handled by the market. The government is best at legal protection and arbitration. Together they provide the best protection to the consumer from unscrupulous people. The unscrupulous in the marketplace, in general, will either lose business, get sued, or go to jail.
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Post by turbonium on Aug 26, 2005 0:34:14 GMT -4
I have to ask why those who have, on other subjects, argued that the U.S. government is hopelessly immoral and deceptive, now argue that this same government should now be given complete control over monetary policy? No, that is not what I am advocating.
..monetary policy is one area governments often have deserved mistrust and critical scrutiny.
Yes - that is correct - they indeed have deserved mistrust, and so must come under mandatory critical scrutiny.
The crucial point I have been repeating about economic reform is the absolute necessity of implementing checks and controls on issuance of currency and related economic policies. And, imo, it must be done only through apolitical, limited term, transparent and fully audited bodies which have the duty of monitoring lower Congress (the issuing body of currency as written in the Constitution) for optimal circulation levels of currency, to prevent or correct inflationary indicators.
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Post by turbonium on Aug 26, 2005 1:17:28 GMT -4
You asked at the beginning of this thread if any of us care about our finances. I do! I want to be able to retire one day, Joe, you posted this early on in this thread. I certainly believe you are being sincere about this. Well, I too care about my finances. I don't think many of us here do not have concern for our future well-being, financially.
What I am really hoping for from this thread is not an argument over ideologies, but something positive we can all agree on that could improve our lot in life - as a community on up to a flourishing, debt-free nation.
I am not a fanatic, wanting a change for changes sake, or a paranoiac seeing "sinister" shadow people trying to destroy us. I have owned a successful business, for over ten years, involved in developing, manufacturing and selling hi-tech OEM medical devices. I've been in the medical device industry for 25 years. I take finances and the economy seriously, and I'm sure many others here do as well.
What do you see in the future at our current rate of spending, and our current economic policies and monetary system? What alternative system do you propose that would reverse our increasing debt nightmare? Do you have one in mind you could outline? And, has it been in use successfully before somewhere?
I have outlined my views, are there any others that would or could work as a variant on our current system or an alternative system?
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Post by Joe Durnavich on Aug 26, 2005 20:50:51 GMT -4
What I am really hoping for from this thread is not an argument over ideologies,
One of the reasons I joined this discussion was because I suspected my libertarian ideologies would throw you a curve ball. I figured you were used to seeing respondents argue for the Federal Reserve. I saw an opportunity to not only argue against the Fed, but to argue against your replacement system as having all its worst qualities.
I don't think many of us here do not have concern for our future well-being, financially.
Well, Jay, I think, is sitting on a gold mine. But he lives in Salt Lake City, Utah, where there probably is a lot of gold in the ground (among all that copper).
What do you see in the future at our current rate of spending, and our current economic policies and monetary system?
I see our citizens continually asking the government to spend more on them, and I see the government spending itself larger in the process.
What alternative system do you propose that would reverse our increasing debt nightmare? Do you have one in mind you could outline?
I think the challenge for any monetary system and any related system of financing the government is to limit it such that it does not provide a means for the government to continually grow. For that to happen, you need to limit the rate that money can be created. Historically, this has required the monetary system to be backed by metals such as silver and gold. Metallic standards present their own problems, including occasional inflation and deflation, but generally, the supply of them have tended to be more stable than the policies behind fiat money.
Governments don't like metallic standards because it limits their spending. To finance wars, for example, some would take the country off a metallic standard temporarily and print currency, which they could inflate easily.
And, has it been in use successfully before somewhere?
Yes. Much of human civilization before the Fed.
In this country, during the, oh, 1830s to 1860s the money supply was backed by gold and silver, and banks were private (but not free from the meddling of state governments). In terms of metrics used to judge the health of the banking system such as capital adequacy, asset quality, liquidity, and profitability, the banking system was at its soundest. That doesn't mean there were no failures, but in general, the system was on good financial footing. In fact, capital adequacy from 1838 to 1862 actually improved, the only era in our banking history to do so. However, I don't know enough about economics to know if the Fed can be "undone". I have seen plans on how the country might move back to a metallic standard and the banks de-centralized, but I don't know if any such plan can be implemented in today's world.
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Post by turbonium on Aug 27, 2005 3:20:54 GMT -4
I think the challenge for any monetary system and any related system of financing the government is to limit it such that it does not provide a means for the government to continually grow. For that to happen, you need to limit the rate that money can be created. Historically, this has required the monetary system to be backed by metals such as silver and gold. Metallic standards present their own problems, including occasional inflation and deflation, but generally, the supply of them have tended to be more stable than the policies behind fiat money.
Governments don't like metallic standards because it limits their spending. To finance wars, for example, some would take the country off a metallic standard temporarily and print currency, which they could inflate easily.
And, has it been in use successfully before somewhere?
Yes. Much of human civilization before the Fed.
In this country, during the, oh, 1830s to 1860s the money supply was backed by gold and silver, and banks were private (but not free from the meddling of state governments). In terms of metrics used to judge the health of the banking system such as capital adequacy, asset quality, liquidity, and profitability, the banking system was at its soundest. That doesn't mean there were no failures, but in general, the system was on good financial footing. In fact, capital adequacy from 1838 to 1862 actually improved, the only era in our banking history to do so. Despite all of our arguing tooth and nail, Joe, your position is really not that radically different from mine.
The need to monitor and limit currency is a necessity. The backing by precious metals is a problem because the majority of it is mostly owned today by a small number of people, who can therefore control and greatly manipulate the value of any currency based upon it. That is the main drawback to reverting to a gold backed dollar, unfortunately, and I see no solution for it. Fiat money of course we have outlined the problems inherent with using. But there must be a way to ensure against those dangers through creating, for example, independent monitoring agencies, non-affiliated with the Gov't. Neither of us obviously would trust the Gov't to be left to run the monetary system unchecked and covertly operated.
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Post by Joe Durnavich on Aug 27, 2005 11:27:56 GMT -4
Despite all of our arguing tooth and nail, Joe, your position is really not that radically different from mine.
I am completely opposed to your position. I am opposed to the centralization, nationalization, or socialization of economic functions and that includes banking and the money supply. You recommend that the Fed take that last step towards full socialization. I think that is the wrong direction to move. I argue for a private, non-central banking system in which the money supply is constrained by reserves of specie.
The backing by precious metals is a problem because the majority of it is mostly owned today by a small number of people, who can therefore control and greatly manipulate the value of any currency based upon it.
The 260+ million ounces of monetary gold supply is still owned by the U.S. Treasury. If we moved back to a gold standard, these gold assets would become the possession of the private banking system. Banks would be obligated once again to redeem currency and deposits in gold. In effect, if you held a dollar bill, or if you had a dollar in a bank account, you would have rights to a particular weight of gold. But there must be a way to ensure against those dangers through creating, for example, independent monitoring agencies, non-affiliated with the Gov't. Neither of us obviously would trust the Gov't to be left to run the monetary system unchecked and covertly operated. You have yet to describe how a central planning committee could effectively monitor and regulate the money supply. If you could solve that problem, a Nobel prize in economics awaits you. When it comes to economic functions, don't you think it is better to implement a free system over a non-free one? Why force everybody to use a single banking system when we can have a system where we consumers decide which banks get our business?
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Post by JayUtah on Aug 27, 2005 12:18:40 GMT -4
My experience has been that there is no such thing as an "independent governing body". Whether a body is part of The Government or simply has power to affect something, there is the potential for corruption, ineptitude, and simple difference of opinion.
America's Founding Fathers tried to set up a system wherein, through checks and balances, certain elements of the government were set at enmity with the others, the goal being that the whole would be kept honest. The problem with this or any such model is that the balances are contrived, and the success of the entire system is based on the willingness of each party to stay true to the ideals of the model and respect the abitrary restrictions. Often this doesn't happen. At the one extreme, adversarial branches cooperate to negotiate away the meat of a check or balance. At the other, a check or balance is misused to gain political or individual advantage.
One advantage of any market-driven system is that it relies on checks and motivations that are inherent to human nature, not invented and contrived. People are greedy by nature. So instead of trying to combat that greed, pit one person's greed against another. Obviously there are problems with that approach too, since competition can go off the deep end. So you set boundaries across which the system cannot legally pass.
The difference between that and a centralized planning approach is that the centralized approach is like painting a single line down the road and saying you have to be on that line with a minimum of divergence. The market-driven approach is like painting two lines on the edges of the road and saying that you can be anywhere between those two lines. Maybe that's too abstract. The centralized approach is where the course is charted, and you just have to hope that course is the right one. The market approach is where the course can change naturally and automatically, from time to time as needed, so long as it stays within the broad boundaries.
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