Posted on 01/04/2011 9:49:48 AM PST by Toddsterpatriot
In the new Congress, Ron Paul (R-Texas) will head the House committee that oversees the Federal Reserve. Thanks to the title of his book, we know he wants to end the Fed and paper money. But what will he replace it with? The short answer: metal-based currencies.
I recently participated in a hour-long radio debate on the Progressive Radio Network's Freedom News Hour with two Paul supporters who wanted to take me up on the challenge of being proven wrong in my disagreements with seven of Paul's points about the Fed. I really enjoyed this debate and learned some important things.
Of these, none is more significant than what my debate partners believe Paul would do if he could end the Fed. According to them, Paul isn't ready to go directly back to the gold standard. Instead, he wants to keep the dollar and add three more currencies. Those would be based on gold, silver and copper.
(Excerpt) Read more at dailyfinance.com ...
In the old days, walk in with an ounce of gold, walk out with $20. Walk in with $20, walk out with an ounce of gold.
Who is going to accept 20 different commodities (or store the commodities to exchange for the $20) when you want to get your $20?
Sounds a little clunky.
That prohibition is from Article 1, Section 9. The prohibition on Congress issuing paper money is found in Article 1, Section 8.
A major reason why gold is considered stable is because it isn't really used for anything else. It doesn't tarnish in its purest state, nor corrode. Put it in a fire, and it comes out gold. It does have its place as a store of wealth, but not as currency in an economy of scale anymore.
Its very clunky. But so is gold. I don’t have much use for an ounce of gold, other than its easier to carry than $1400 worth of cheeseburgers.
In any case, even if we used a gold standard, we’ll likely never handle the metal. Same thing for commodities.
All things considered, I guess it work something like a money market account. You have “shares” (dollars) of the commodity basket. If the quantity of that commodity basket goes up, so does the value of the shares.
To read later.
That’s a pretty good thought. My thoughts regarding tying it to a different set of commodities is that if you have a real SHTF situation, commodities like grain and oil would be directly bartered, increasing demand and thus, pulling up the price of the currency tied to it. It could actually result in a faster stabilization in one of these situations.
Are you imagining things again?
In 1933 we had circulating-----
Currency is about $917 billion. M1 is about $1824 billion. M2 about $8834 billion.
most money is created out of thin air by the Federal Reserve and supplied to banks electronically
Actually, most money is created out of deposits by banks when people take out loans.
So then currency and coinage is roughly 10% of M2. So much US currency circulates outside of America that this 10% is off too
Yes.
So much US currency circulates outside of America that this 10% is off too
The 10% is not off. If you want to talk about how much of the money supply in the US is currency, the percentage is lower. I've seen estimates that between one-half and two-thirds of our paper money is held outside the US.
Where exactly in Article 1, Section 8 of the US Constitution is the specific, enumerated power for Congress to print or authorize the printing of paper money?
You do believe in the principles of “enumerated powers” as set forth by our Founding Fathers dont you Todd?
L
Where exactly in Article 1, Section 8 of the US Constitution is the proof for your original claim?
So when I deposit 100 dollars someone else borrows that 100 dollars and that creates money?
Yes.
So what happens when I take the 100 I deposited out of the bank?
Did the bank have excess reserves of more than $100?
No. It only had my 100 dollars.
Then it couldn’t loan $100 in the first place. Only $90, with the 10% reserve requirement.
So if they loan out 90 and I come in and try to withdraw my 100 what happens?
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