Posted on 05/29/2007 4:06:42 PM PDT by processing please hold
But the dollar's privileged status as today's global money is not heaven-bestowed. The dollar is ultimately just another money supported only by faith that others will willingly accept it in the future in return for the same sort of valuable things it bought in the past. This puts a great burden on the institutions of the U.S. government to validate that faith. And those institutions, unfortunately, are failing to shoulder that burden. Reckless U.S. fiscal policy is undermining the dollar's position even as the currency's role as a global money is expanding.
(Excerpt) Read more at foreignaffairs.org ...
If that makes any sense to you. I know what I want to ask, it just isn't coming out clearly.
Is everybody stupid (the world) or just more comfortable not asking the question?
Nixon stopped backing the dollar with the gold standard when france called in their chips and wanted gold since the dollar was backed by gold, correct?
Ok, that's more than one question, sorry.
ML/NJ
>>>>”turn out dollars as fast as they can print them.”
So that is propaganda then?
It is very hard to sort through what is and isn’t true if one doesn’t have a background in this stuff.
Thank you!
Well, the quick answer would be by force of arms.
"What keeps it from crashing?"
The fact that people who need money to survive are willing to accept and use the FRN's as they would genuine money. Somewhere down the line the face value of the FRN's will eventually have to be paid by someone somewhere.
Remember, an FRN is an I.O.U. -- a promise to provide future labor or deliver lien-free goods or services in exchange for the goods and services you are trading it for today.
It's really that simple. Buy today, pay tomorrow. The FRN is not payment, but only a promise to pay -- a simple little debt contract dressed up in all those pretty colors and pictures to make it look more impressive than money itself. (Yea, verily, more valuable than gold itself.) ;>
So if someone gives you an FRN, you have an option of trying to cash it in right away by presenting it to the person(s) whose signature is on it, demanding that they stop what they are doing and start mowing your lawn or painting your house or repairing your car until the full face amount of the FRN is satisfied by their labor (or goods and services) . . .
or
you can pass on the FRN to someone else for goods and services and let them worry about cashing it in.
Naturally, everyone opts for passing it on to someone else to worry about, and that is what keeps the wheel of debt turning. Besides, it's illegal to force the government agents (employees) who created the FRN to mow your law, etc. They are protected.
"Is everybody stupid (the world) or just more comfortable not asking the question?"
I'm guessing that half the people don't know how to frame the question and the other half don't know there is a question to be asked.
"Nixon stopped backing the dollar with the gold standard when france called in their chips and wanted gold since the dollar was backed by gold, correct?"
Wouldn't you want gold in payment rather than someone's I.O.U. too? Of course! Because gold represents labor already performed and can be exchanged for lien-free goods and services, whereas the FRN is evidence of a lien remaining on the goods and services because they were purchased on credit.
(Trying to keep things simple, but the principle holds.)
Thank you. Does the Fed. Reserve get it's marching orders form the Treasury, vice versa, or are they both independent from one another? One of those have to be top dog.
Silly me, I should have thought of that.
The fact that people who need money to survive are willing to accept and use the FRN's as they would genuine money. Somewhere down the line the face value of the FRN's will eventually have to be paid by someone somewhere.
You've thrown a new one at me. I had to google what it was. FRN, I'm assuming you were speaking about 'Floating Rate Note' as there are a couple of abbreviations to choose from.
Looking further, Wikipedia also explains what it is.
Now, that's out of the way, how do you collect on an FRN-with paper dollars? It makes me dizzy, but I like trying to figure it out.
You have been so helpful and I thank you.
I think they work together, but the system is sufficiently obscured so that its hard to tell. The Treasury prints notes (or bonds) and the Fed prints FRNs. Then they exchange them and each considers the paper from the other an asset. (I like to think of this paper as a bunch of IOMes.) It sort of an interesting aspect of our current monetary system that if the National Debt were paid off there would be virtually no more "money." This is because if the IOMes are returned to their original printer they disappear from the system.
ML/NJ
ML/NJ
That's my belief, they are a hand-n-glove partnership.
but the system is sufficiently obscured so that its hard to tell.
I also believe that is why it's so obscured, to make it harder to draw a connection between them.
It sort of an interesting aspect of our current monetary system that if the National Debt were paid off there would be virtually no more "money."
Has our National Debt ever been paid off? If so, I don't recall what century.
Thank you. Now I’ll go back and read exactly what they are for.
ML/NJ
Meant to ping you.
No problem, I saw that.
I’m bookmarking this whole thread. You all have added some great info.
Thanks.
Bump.
I do. I was so embarassed for having posted that, but I couldn't retract it. Thanks for bringing it to everyones attention. lol
So, should someone ever tell me I don't know the value of a dollar, I can stand tall, lift my head and say with absolute confidence....'of course I do- it's value is worth the cost of the paper and ink that's used.'
I'll never look at money the same way again.
Truly the history of US coinage would have been much happier had there been no statutorily fixed connection between the value of a gold eagle and a silver dollar (letting the market set the respective values between the two). However, the reality is that Congress did define the dollar value of gold coins.
Much as I share your admiration for Jackson's successful campaign against the Second Bank of the United States, it cannot be said that he removed the power to adjust the nation's money supply from the hands of private bankers. In killing off Biddle's Bank, he certainly removed control of the money supply from a small clique of private bankers, and left it more generally under the control of the market. Yet, the remaining influence and effect of private bankers (en masse) on the money supply was not small.
Thank you. I'll remember that.
I don't think I ever suggested that they didn't. They still do. According to our government 1$ = 0.0237 oz. gold. Everything has a "dollar value," gasoline, copper, roast beef. But a dollar is not some amount of gasoline or copper or roast beef. It is some amount of silver.
And if you think this is just semantics, you might take comfort in the fact that this is what the government wants you to think. When FRN's were first issued (in 1913) they were not legal tender, but they were redeemable in gold or lawful money. As they kept changing the rules they made sure to make the changes as obscure as possible to the general public. (Pictures of predecessor FRNs here. Compare with the ones in your pocket today.) Now they are legal tender (meaning merchants/creditors must accept them) and they are not redeemable for anything.
ML/NJ
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