openourminds-deactivated2013022 asked: simply the point is that this whole fucked up system could be solved by our govt. issuing it's own currency. paying off the fiat debt with fiat currency that the banks didn't EARN - they simply loaned profit into existence with no labor, OFF the backs of real laborers - get rid of the the 2 houses and instill a democracy - but that's not the reality. so we must loosen the FED grip first. how? STOP BORROWING. best way? pay the debt back? how? NOT by austerity. lol. look at the EU.
You are a perfect example of why I barely answer asks on here.
The notion of THE Coin is not the federal government minting and using it’s own sovereign currency. The whole idea behind it is to create a fiat asset and use that to get more of the Federal Reserve’s fiat currency (the one thing you don’t want to happen).
THE Coin would not be used to pay off debt to the banks, which you seem to be targeting. THE Coin would essentially be used to pay off debts the government has to other people, like the military, post office, social security and medicare.
We don’t even try to pay off our debt. I’m not even sure we are paying off any principle at the moment. I think we barely pay the interest like a broke college student paying minimum payments.
As for the rest of your ideas, you want to dump the House of Reps and the Senate? Oh god. As if we don’t already have a dictatorship… Besides, America is NOT a democracy, it is a Democratic Republic. It was founded as a Republic, but that has slowly changed.
Stop borrowing? Yes, I agree.
Pay back the debt? I disagree. Pay back other sovereign nations? Sure. Pay back the people (social security and private bond/bill holders)? Sure. But I don’t think we should pay back any of the debt obligations to the banks/Fed. Fuck ‘em. Let’s take a page out of the Icelandic Revolution and tell the banks to scram.
openourminds-deactivated2013022 asked: i'm sorry. you know everything. even the potential outcomes of anything. but you're right; there is no want to end the grasp on the fed from the outside. if there is, they can send us whirling down depression like the did post JFK... duh.. hence obama not passing the trillion dollar coin. had he, your fear of leveraging the FED more would have been far from reality for if that were true it would be a lot less opposed. if THE coin did so: it would have passed under obama. but he doesn'thave balls
I never said I know everything.
But I do know that creating a fiat asset out of thin air in order to use it as leverage to borrow more of a fiat currency from a private bank is no way of ending the stronghold of that bank.
It’s the equivalent of needing more money from your bank so you forge a paper that says you own China and taking that to the bank as an asset to secure a loan against. You don’t actually own China, just like THE Coin wouldn’t actually have a trillion dollars worth of assets behind it. If the US Government actually had a trillion dollars worth of assets, they would just use them and not have to mint a stupid coin in the first place.
The entire reason we need to mint THE Coin is because we are going to hit the debt ceiling and the House might not allow the Federal Gov’t to borrow anymore money so since it can’t borrow anymore, it will just invent it’s own money, because it has the power to still mint certain forms of currency like a platinum coin, and then it will send that coin to the Federal Reserve as a deposit so that it can write out checks.
I don’t understand why this much is hard to understand and where you’re getting the ridiculous idea that minting THE Coin would be the start of ending the Fed. It would not be. Not in any way, shape or form. We would use THE Coin as a deposit with the Federal Reserve bank.
Here’s the grim reality: We (The Federal Gov’t) have already spent money. We are now being invoiced for our expenditures. The problem is that we are flush out of cash. We need to borrow more to pay for what we’ve already consumed. The problem is that the House, the arm of government that must approve all spending, won’t let us use the credit card anymore (borrowing) by not increasing the debt ceiling. So we have one of two choices, find another way to pay for these items or default on the debt. So Obama can, in theory, ask the Treasury, who he personally appoints the director of, to help him out and go around the House and the legislation.
This is like going to a restaurant with your wife, ordering all sorts of things you aren’t going to eat and then when the check comes, you have no cash in your pocket to pay for it. In fact, you have no money at all, your bank accounts all read zero and you don’t even have a single red cent in your couch cushions. So, you now have to ask your wife, who has all the family credit cards, to hand one over, but even these are maxed out because you’ve been spending like crazy. So you ask her to call and ask for a higher spending limit and she says ‘no way’.
But you have to pay for the dinner some how, right? And you’re running out of options. So you ask your son to help you out, and he will, because you pay his allowance and he’s on your side. So your son fabricates a deed for an item you don’t actually own and uses it to borrow money from the bank and gives it to you to pay for dinner.
Well, that’s exactly where this country is right now. We already ordered and ate our dinner but we haven’t paid for it yet and we probably can’t unless we either have our wives get another credit card or invent another fiat asset.
So, in short, no, the trillion dollar coin is a stupid idea but so is a debt ceiling when dealing with a fiat currency and so is dealing with a fiat currency when you have zero fiscal responsibility or recourse.
In other words, the whole system is bullshit and the possibility of THE Coin being a real thing proves it.
Have you ever read Confessions of an Economic Hitman?
Did it change your political beliefs? Did it flip your world view upside down and inside out?
Inflation exists on a gold standard.
Even on a gold standard, you can print more notes that represent each asset of gold.
Even if you made gold coins, you can still maintain the same amount of pure gold (by content) and mix in other metals into each coin…
If I may defend the gold standard, (although I am hardly a worthy representative) the inflation that is suffered may not be an issue as inflation isn’t too harmful in the long run, (as far as I know at least), and if it only happens in small amounts, then perhaps that would be the benefit to the gold standard? From what I understand the danger of inflation is that initially it hurts a certain group of people, hurting the economic system before it balances out. Thus if inflation only occurs when a group collects and mints more gold, wouldn’t this be a rare enough occurrence to be insignificant?
The problem with inflation comes from unexpected increases in inflation. The name of the game with inflation is expectations.
And fiat currency has a stable inflation rate in the long run, so long as the inflation rate stays within expectations (as inflation itself can be a self-fulfilling prophecy; if people expect inflation to be X they’ll write in price increases of X in their contracts and prices will increase by X).
So inflation doesn’t hurt the economy per se - only if the inflation is unexpected.
Note: I think inflation’s effect on deterring savings is negligible with an inflation rate of 2%. There is, of course, the hidden tax of inflation, but that’s why I think we should embrace the Friedman rule or CPI targeting.
We’re all talking about monetary inflation (from increased liquidity/money supply) right? Just making sure.
I think that inflation itself is a gimmick, especially if you have a monetary system who’s value is tied to production/confidence and not to a particular asset, like gold.
Inflation in the short term doesn’t really hurt anyone but it sure does benefit those who get their hands on the money first. They are able to use money that most aren’t (physically) aware exists yet. (Even if you have knowledge of the money being circulated, until the increased liquidity impacts your own spending, it’s moot).
Once that money has a chance to enter the market and people are spending more and more willing to pay higher prices, that’s where short term inflation has an impact. But this usually doesn’t last too long.
What happens is that businesses get to spend cheap money to increase production or expand or whatever and now that people can afford to spend more, businesses can charge more. Businesses increase prices since demand is up and ability to ask for those prices is possible. The reaction of increased prices is, eventually, a demand for increased wages, until the equilibrium is found once again. The negative impact on the majority of people is minimal to null in the short term and the positive impact on businesses can easily be seen.
In the long run, there is a major negative impact, even with expected inflation levels. If I earn $1,000 today and put it in a safe, I most likely won’t have equal value 10, 20, or 30 years down the line, even at a 1% rate of inflation (very low), my money with devalue 10%, 20% and 30% respectively.
Even if I put the money in the bank in an interest baring account, Inflation, even when expected, usually outpaces interest rate returns, slowing down my losses but not stopping them.
Now, as I was saying before, the reason I think inflation is a gimmick is because the money supply is said to be increased to meet demand. But if there is more demand and static or less supply, economics tells us that the value/price will increase. Deflation is a good thing.
If this creates a physical shortage, don’t print more bills, remove large bills and print smaller bills. (Remove 1 $100 note and introduce 100 $1 notes). Fractionally swap the value of notes without increasing the overall value in circulation.
This prevents the ill-effects of long-term inflation. Your $1,000 earned 10 years ago not only won’t lose value, it will increase in value.
The reason we don’t have this system is because the system is built and run by the same banks who benefit from money introduction, like QE3. If we took my approach, these banks would never have those short-burst moments to increase profitability through.
This wasn’t a really good write-up, but this is why I think inflation is a gimmick.
I don’t think I agree.
If you think about the inter-connectivity of the Fed, the fiat dollar, the world’s reserve currency, the petrodollars and the wars we fight to maintain the hierarchy and value of the dollar, you realize that all of it is connected right back to how the dollar and it’s valuation is the foundation of our imperialism.
But I agree that as American citizens, we do, somewhat, benefit from the US Dollar.
While I do think our wars are imperialistic, I don’t think that they are used to maintain our position as the world’s reserve currency. The dollar being the world’s reserve currency really follows Bretton Woods and the second world war. The dollar stays strong because of the weakness of other currencies.
The dollar is still staying strong thanks to the failures of the Eurozone and the Euro as a currency.
That being said, we benefit greatly from having a vehicle currency. That keeps our country from being Greece with our near 100% Debt:GDP ratio.
But the dollar is used as the currency of trade for most all trade, including almost all oil transactions.
Just look at the history of which OPEC or Oil rich countries decided to stop selling oil in dollars and which countries we’ve invaded over the past 15 years.
Iraq - Euro, Libya - Gold/Rum, Iran - Gold (Currently selling to India and China in gold instead of dollars).
Then there’s America consistently trying to get involved in Africa because the Chinese have already moved in and are quickly making allies and raking in resources.
The real problem is that our dollar, like you said, is based on the strength of the country, both economic and military. This means that we must continuously flex our muscles and take over emergent markets to keep the dollar strong. If not, we just become another run of the mill, Western currency.
You don’t see this system as a problem?