From: Josh Norton Area: Thelema To: Jonathan Blake 24 Feb 95 18:49:00 Subject: Gold Standard UpdReq Thus said Jonathon Blake concerning Radical Rhumba: Hi Jonathan! Looks like nothing's off-topic in Thelema. Well, Libertarianism is philosophically related to Thelema, I guess. JB> The best long term solution. JB> Make the US dollar fully convertible with gold at the rate of JB> $10^10 dollars per ounce of Gold. ^^^^^^ Did I hear that right? "Ten to the tenth" dollars per ounce???? Ten _billion_ dollars per ounce??? Surely you jest. There are a lot of problems with having a single standard for backing currency. Here's a couple, off the top of my head: 1. Right now, there's not enough gold in the world to serve as a 100 percent backup to the currencies in circulation. Not enough to back 2 percent, I'd bet. Certainly no government ever held enough gold to fully back it's currency, even when it was supposedly convertible at a fixed rate. At the best of times it was a sleight-of-hand, in which the success of the certificates depended upon no one ever cashing them in. The fact is, currencies backed by _any_ single real commodity simply couldn't handle the needs of the world economy today. 2. The reason gold worked as a standard in pre-industrial and early industrial economies was that it was pretty, hard to get, and was almost useless for practical purposes. Not so today; gold is still hard to get, but is widely used in electronic and electrical products, among others. What happens to your economy when the currency keeps getting taken out of circulation and incorporated into various consumer products? Ans: a progressively severe state of _deflation_ in which the value of gold skyrockets, and the value of everything else crashes. An expanding economy or sudden increases in productivity would have the same effect in any economy with a single standard, the extent dependent upon the usefulness of the commodity. Imagine this (simplified) scenario: An entrepreneur gets a bank to loan him 100 ounces of gold to pay for the manufacture of his product. By the time his product gets to market the value of gold has increased, and his sales only produce a return of 95 ounces. But he still owes the bank 100 ounces plus interest. The bank forcloses and is stuck with a business that can't pay for itself, and probably can't be sold. This was partly the cause of the boom-and-bust U.S. business cycles in the pre-Federal- Reserve days. We're probably better off with the current situation, if a couple of small modifications are made. Money -- even gold-backed money -- really isn't anything more than a tally of the value being exchanged between the producers in an economy. It has no intrinsic value, but serves as a symbol for the value of the trade, and as a neutral, portable intermediary stage for the many instances where a direct trade of products or services would be inconvenient. It is (forgive the pun) a spiritual medium, in which the value is only in the minds of its users. The problem with ethereal money is to find some way to keep a consistent relationship between the number of tally-symbols in circulation and the real productivity of the economy in which they are used. If the tally- symbols increase faster than productivity, you have inflation; if they don't keep up with productivity, you have deflation. In a half-assed way, the Federal Reserve actually does this. "Half-assed" because they think they are doing something else, and because taxes siphon off too many tally-symbols into paying for non-productive activities. The other problem is that ethereal money allows the possibility of ethereal profit-making, which has little or nothing to do with the actual state of the economy (and contributes nothing to it) but depends mostly on abstract "rules of the game", invented by their sellers. E.g., junk bonds with unrealistic promise of return, many sorts of "futures" trading, derivatives, etc. All of these are really sorts of gambling and should be labeled as such. JB> Demand that all outstanding debt to the US be paid now. JB> Reduce american foreign aid to ZERO Dollars worldwide. JB> Pull the USA out of the UN, the World Bank, NATO, SEATo, GATT JB> & NAFTA. JB> Let the rest of the world die in the resulting financial JB> blood bath. Nice thought, but the U.S. would die along with the rest. Our economy can't exist without the rest of the world's, and hasn't been able to for a long, long time. Remember, most of those "debtor" nations supply the raw materials on which your comfortable lifestyle depends. If they go belly-up, so do you. Besides, most of the debts aren't owed to the U.S. government, but to various private banks here. The government only provides guarantees that the banks will be paid even if the debtors defaults -- which means that us taxpayers will get hit again if it happens. ... No one expects the Spammish Repetition! Spam! Spam! Spam! --- Blue Wave/QWK v2.12 * Origin: Access! Information Services (93:9000/2) SEEN-BY: 31/11 102/943 107/946 109/235 202/311 215/9393 401/0 666/119 1000/1 SEEN-BY: 1000/3 1100/0 2000/1 4 11 9000/2 4 6 8 10 9007/0 9008/0 9010/0 SEEN-BY: 9020/0 9030/0 9040/0 9060/0 9070/0 9080/0 9090/0 9100/0 9200/0 SEEN-BY: 9300/0 9400/0 9430/0 9500/0 9600/0 2 7 9606/0 9608/0 9609/0 9610/0 SEEN-BY: 9620/0 9630/0 9640/0 9650/0 9660/0 9697/0 9800/0 9900/0 201434369420143436942014343694201434369420143436942014343694718 From: Christeos Pir Area: Thelema To: Rose Dawn 24 Feb 95 11:22:40 Subject: Re: 777 UpdReq -=> Rose Dawn sent a message to Kt on 23 Feb 95 07:33:21 <=- -=> Re: Re: 777 <=- Do what thou wilt shall be the whole of the Law. RD> How're you liking the new Book 4? I wish I could afford a copy. :/ Wish we could afford to send you one. :-( IIo inits coming up weekend of Mar. 17th-19th (Alma may not be able to get off work -bummer- and might have to wait a month or two for hers); I'll give ya a ring afterwards. How's the schooling going? Can I send mine out to you? Love is the law, love under will. - V - ... I will burn through the great city in the old and desolate land; 201434369420143436942014343694201434369420143436942014343694718