History Of FIAT CURRENCY Foretells '$' Destruction

POSTED BY: out2theblack
UPDATED: Monday, April 7, 2025 22:05
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SIGNYM

Tuesday, May 5, 2009 7:42 PM

I thought that I was simply using your logic about the famer and his oats. You tried to portray currency as being irrelevant (in that case) but relevant (in others cases).

My point is that its not the currency which makes the economy strong, but the other way around: It is the economy which makes the currency valuable. If you have a productive economy and people have to come to your for your goods, your currency can be cowrie shells and people will value them ... not because cowrie shells have intrinsic value but because those shells gain people access to goods they couldn't otherwise get. Now that the USA is no longer the predominant economy (no longer the sole post-war industrial producer)... now that other nations have similar industial technologies and productivities ... the currency will adjust to match.
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We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy

Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy

RUE

Tuesday, May 5, 2009 7:42 PM

"As the overall macroeconomy grows, so does the "amount" of the intagible fiat."

SignyM asked in different form a question that is relevant to that point. Here is the question, in my framing: find me an economic system (past or present) where the currency has become critically unstable, and where the PEOPLE thrive anyway due to intangible fiat, and barter.

***************************************************************

Silence is consent.

BLUESUNCOMPANYMAN

Tuesday, May 5, 2009 9:02 PM

Quote:
Originally posted by SignyM:
I thought that I was simply using your logic about the farmer and his oats. You tried to portray currency as being irrelevant (in that case) but relevant (in others cases).

No. In context was responding to Rue's proposition that fiat loses value because wealthy citizens hoard it. When I refuted this Rue attempted to demonstrate a 19th century example of horded coinages to which I pulled out the farmer and his oats to show how everything has value and the physical presence of a coin might facilitate the ease of a 19th century transaction, but that a transaction might still occur without it, thus the glory days of Chicago. This was to set up an understanding of the state of things today where the overwhelming majority of transactions occur in this manner. I am not paid in my salaries proated weekly value in silver coins handed to me in a bag at the end of a work week. I get a direct deposit of electronic fiat into a checking account.

This fiat is a numerical representation of what my knowledge and skill is worth in the marketplace. I would say it's worth more, my employer would say less. We meet at my salary. This represents one transaction. The sum total of all other identical transactions of pay plus the sum total of all purchases by all citizens of the nation plus the sum total of all assets owned by all citizens equals X, a sum called the National Equity. If the total debt obgliation of the nation exceeds X, there will be a problem. As long as the total national equity grows and stays larger than the obligation, the nation can continue to borrow all it wants. When the day comes that the debt is larger than the equity, the nation will falter but the house of cards can continue to climb until the moment the intrest on the debt cannot be paid by the sum of the equity. That will be the moment of absolute economic collapse. You often ask for real world examples. Look to Zimbabwe. Their national equity was already small because they were a third world nation. Their borrowing was no place near as large as the US's but in scale to their equity it was bad enough. The absolute collapse of their currency created a Mad Max 4th world country. Somalia is very close to this. It might as well be Lord Humguous telling the pirates to raid shipping vessels.

Quote:
My point is that its not the currency which makes the economy strong, but the other way around: It is the economy which makes the currency valuable.

Well then you and I actually agree because this is exactly what I'm saying when I describe National Equity. The equity (the economy as you say) is half of the calculation, the obgliation (National Debt) is the other. If you really feel that the economy makes the currency valuable (and I agree), then I cannot reconcile that with your belief that business promotes dystopia when it's business itself that IS the economy.

SIGNYM

Tuesday, May 5, 2009 9:43 PM

Quote:
when it's business itself that IS the economy.

There were economies before there were businesses. All of this gets to: What is an economy and what do we want it to do?

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We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy

Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy

RUE

Tuesday, May 5, 2009 9:59 PM

"In context was responding to Rue's proposition that fiat loses value because wealthy citizens hoard it."

You still have a FUNDAMENTAL error in answering what I posted. I said it would happen with ANY currency, not just fiat.
ANY ANY ANY ANY ANY ANY ANY ANY ANY ANY ANY ANY
Got that ? ANY currency - including gold coins.

"When I refuted this Rue attempted to demonstrate a 19th century example of horded coinages ..."

I did more than attempt. I showed a real life example - on the GOLD STANDARD.

"... to which I pulled out the farmer and his oats ..."

Aside from being a HYPOTHETICAL one, you have a fundamental misunderstanding of how the CBOT operates. "Trades are made in the pits by bidding or offering a price and quantity of contracts, depending on the intention to buy (bid) or sell (offer)." Trades are made in currency denominated value. NO ONE directly trades oats for a mules, or anything else.

I challenged you to show me a real life example of how people can thrive on physical fiat and barter when the currency is unstable. You have yet to show that it works.

***************************************************************

Silence is consent.

BLUESUNCOMPANYMAN

Tuesday, May 5, 2009 10:13 PM

Quote:
Originally posted by rue:
You have a fundamental misunderstanding of how the CBOT operates.

For statement like that from a socialist to a liberty activist, those may as well be fighting words.

You might as well say "Hey you know...your coat is kind of a brownish color" To which I might be inclined to reply that I didn't think you were burdened with an overabundance of schooling.

Hypothetically.

SIGNYM

Tuesday, May 5, 2009 10:22 PM

But you haven't answered Rue's question. (Or mine either for that matter!)

Anyway, I'm sure you're busy. Be happy to get back with ya on that.

----------------------
We should have strapped him into a glider, filled it nose heavy w/ explosives, and dropped his Allah lovin' ass into a large, empty field. After which, release wild boars into the area so they could make good use of his remains. Now THAT's justice.- rappy

Yeah, that's what Sheikh Issa said. Seems you both have a lot in common.- signy

RUE

Tuesday, May 5, 2009 10:25 PM

BSC

Show me - using facts - that traders at the CBOT trade one type of good directly for another - without an intervening currency-denominated value.

So, to recap -

You put the blame for all economic misery on fiat currency.

I showed that there was plenty of economic misery on the gold standard.

You then claimed that people could thrive on physical fiat and barter, but have yet to post an example of your own that demonstrates what you claim.

I said that economic misery could be attributed to concentration of wealth.

I posted a real life example of how that happens (even on the gold standard).

You have yet to show that that your preferred system (presumably capitalism and the gold standard) is robust enough to be self-sustaining.

***************************************************************

Silence is consent.

FREMDFIRMA

Wednesday, May 6, 2009 1:59 AM

From an external viewpoint, I don't think y'all realize just how MUCH in agreement on the basic roots (if not the details) that you really are.

Maybe you should work from that end instead of the other ?

Just a thought.

-F

ANTHONYT

Wednesday, May 6, 2009 2:38 AM

Hello,

If there are a finite number of coins, X

And people hoard Y number of them

Doesn't that make the value of each remaining coin X-Y

Greater?

And hence escalate the value of currency?

--Anthony

"Liberty must not be purchased at the cost of Humanity." --Captain Robert Henner

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