Washington State proposed bill to make gold and silver legal tender

That didn't help Janice Joplin

 

Log in or Sign up to hide this ad.

Its amazing, because before I came to this forum, I had always thought that a sheckle was a coin, not just a weight. But with regard to the 10%, it was silver not gold (except when it was grain).



Ruben

 

.
MONEY
WHAT IT IS
HOW IT WORKS

Next Article

Home
.

Some Common
Misconceptions

Where does all the money go when stock prices plummet?

This question mistakes the monetary value of stocks for money itself. Stock prices simply reflect the current market value of the shares. At the end of the day, buyers own more shares and less money, while sellers own fewer shares and more money. Their aggregate financial wealth may be higher or lower, but the total amount of money they own remains unchanged in these transactions.

The government causes inflation when it prints too much money.

Money is literally printed by the government only to meet the demand for portable currency, i.e. Federal Reserve notes. The notes are issued to banks in exchange for deposits the banks hold at the Fed. The public acquires the notes in exchange for their own deposits at banks. The amount of currency issued is no more and no less than the public desires to hold as wallet money or rainy day money. It has no bearing on inflation.

Price inflation is mainly caused by too much money chasing too few goods.

The general price level is correlated with the money supply, but correlation should not be confused with causation. Prices are seldom driven by the money supply. More commonly, the money supply reacts to changes in the general price level which can be affected in many ways unrelated to the money supply. Money growth depends on the demand for bank loans and the willingness of banks to lend. The Fed can influence the demand through its control of the interest rate. Only if it sets the interest rate too low for an extended period would the money supply grow fast enough to put upward pressure on prices.

Banks lend the money of their depositors.

When banks issue loans, they create new deposits without disturbing existing deposits. That is precisely what causes the money supply to grow, and is what distinguishes bank lending from all other types of lending. A non-bank intermediary like a finance company lends what it has on deposit at a bank. It cannot create new deposits as a bank is able to do.

When a bank receives a new deposit, it can issue a new loan for ten times that amount.

The bank can loan that much only if its reserves at the Fed, including the amount received with the new deposit, is sufficient to cover a check written by the borrower for the full amount of the loan. It will lose that much in reserves to the payee bank when the check clears.

The money multiplier explains how much money banks can create.

The money multiplier has no predictive power. It is simply an after-the-fact observation of the ratio between aggregate demand deposits and banking system reserves. A bank's lending is constrained by its capital adequacy, not its reserves.

Bank reserves ensure that funds will be available for withdrawals by depositors.

Minimum reserve requirements on banks were once viewed as a protection for depositors. Many countries now impose no reserve requirement on their banks. Banks must hold sufficient reserves to cover withdrawals by depositors. But a solvent bank that is temporarily short of reserves can borrow them from the central bank or in the money market. Conversely a bank can hold ample reserves and still be insolvent. Protection for depositors against default is provided by deposit insurance, not by the reserves of the banks.

The Fed controls the size of the money supply.
A bank in the U.S. must hold reserves of base money in proportion to the amount of its demand deposit liabilities. However the amount a bank may lend is limited by its own capital, not its reserves. In order to maintain control of the Fed funds rate, i.e. interbank lending rate, the Fed must provide whatever reserves are required by the banking system as a whole. In fact if the Fed withheld reserves, it could imperil the liquidity of one or more banks. Thus for all practical purposes, the Fed cannot even control the amount of base money it issues.

Government deficit spending increases the money supply.

Deficit spending increases the net financial wealth of the private sector in the form of Treasury securities, not money. Every dollar the Treasury spends is money previously created by the Fed. The Treasury simply recycles the money it acquires from taxes and the sale of securities. In the aggregate, the public pays for Treasury securities out of the funds acquired from the deficit spending itself.

Government borrowing drains loanable funds needed within the private sector.

The government does not borrow to accumulate funds in the Treasury. It borrows only to cover its deficit spending, and thus does not affect the size of the private sector money supply on average. While government borrowing could temporarily reduce the supply of loanable funds within the private sector, that effect is short-lived and typically negligible.

The national debt is a burden on future generations.

This is based on the false premise that the national debt must be paid off by the private sector some day. In reality, the government itself pays to redeem its debt securities as they mature, using funds obtained by selling new securities to the public. This "rolling over" of the national debt can be continued indefinitely, since the government can pay whatever interest rate the market demands for its securities.

Interest paid on the debt reduces the funds available for other government spending.

There is no basic constraint on government spending in its own currency. Interest payments and the revenues that support them are part of the balanced reciprocal flow of funds between the Treasury and the private sector. Their only effect is a redistribution of financial assets, which of course is true of all government spending.

 

Revenue Act of 1861 - taxed income over $800.00

The Wilson-Gorman Tariff Act passed in 1894 taxed income over $4000.00

16th Amendment
Proposed 7/12/1909 passed 02/03/1913

Federal Reserve created 12/13/1913

FDR takes US off gold standard 06/05/1933

 

As a farmer, you only had to worry about the first fruit and in addition, I think you couldn't use any fruit of trees for the first 5 years.

 

Sales taxes or income taxes? Why don't your first actually read what has been posted and get the context before responding to a topic.

 

You Said:

So you contend that goverment can change the value of money by increasing or decreasing spending relative to taxation. Furthermore since financial worth of an asset is expressed by interest rates, you contend that it will affect interest rates as well. So many posts later provided us a link to an opinion site as proof that you know your business. That you are in fact, posting facts.

So I had a look at this site. And, oh my it says this.....

Oh my. What's this? The expert that you cite says you are wrong. In fact he said it was what? A False proposition. But I'm a fair person. Maybe you just didn't understand that part. So we will try another of your statements:

Surly your stated source of learning must agree with you this time. But he says this.....

Oh Dear. How could this be? The party that you cite as proof that you present facts, not your personal opinion, says you are wrong again. Mind boggling. Really. (forgive me for stealing your line, lol) Now here is a fact, which I will repeat again, and which you have absolutely proved by your own standards:

 

This should work fine with a gold backed paper currency, as opposed to using gold as the actual currency. You earn money, you pay taxes, they get the income tax and spend it how they like. The only difference is that the value of the currency is tied to the gold supply.

 

You are the one that mentioned "transactions". Why don't you choose your words more carefully.

 

We're done with that. We are now talking about the Half Shekel that we used for a Census. Would that be considered a sales tax or an income tax???

 

No, I'm telling you as a FACT that if the US Government increases taxes then Poof go the dollars from the market and their value goes up. THAT is called fiscal policy and underscores the point that the government can't go broke. It can do whatever it damn well wants with dollars. It can print them, share them, shread them, lend them, paster I-95 with them, whatever it decides it right. The sole value of dollars is that they are the only and official payment that the government accepts for payment and the sole means it will use to make payments.


The rest of your rant I clipped.

Ruben

 

What in the world are you talking about. This is the biggest jumble of incoherent thoughts I'd read in a few decades. Go back and study that link I gave you for a few months, and then come back and play economist.

 

That link from the physics teacher is simple enough to understand. Maybe you should go back and read it some more since it, as I posted above, contradicts everything you have said here. (which isn't really that much) You said that better economic policy from the government would make money worth more. That site disagrees. You said gold was worthless as money, that site disagrees. This is the problem when you google up websites after the fact. Google won't interpret them for you. Next time try reading it first.

I keep saying. The proof is in the pudding.

 

The link from the "physics teach", as you put it (snicker snicker), is over 75 pages (probably about 500 pages of paper text) of detailed accountable and documented information about banks, money and economics. It is physically impossible even for a miracle worker like yourself to have read it, let alone to have studied it.

Saying that you've read, frankly puts your character into question, and certainly puts into question the whole value of having any further discussion with you UNTIL you have at least gotten the most basic education in the topic at hand.

Anyway, its passover so you have about 2 days to fluster and blow smoke at everyone before i can respond back to your absurd "theories" about the gold standard and income taxes and whatever.

Ruben

 

No - I didn't say that which, BTW, by my counting is the THIRD time you misrepresented what I said in the last 48 hours. I'm just saying this because I don't want you to think I didn't notice.

Ruben

 

This is what he says he is.

This is an opinion. What did you say earlier? Oh yeah. "I don't care about your opinion".

Obviously if you are unable to comprehend what I posted here, then I draw the conclusion that you are a slow reader or might have some other disability. Nothing to be ashamed of. Some people take months to understand a website, others, such as myself, can do it much faster. It didn't take me that long to see where it simply stated that you are wrong.

 

First time you have posted something factual. I can certainly see how you have managed to be closing in on 12,000 posts yet only 16 of them have been liked on this forum. Not a very good record given that you have multiple dozens of posts in this topic and all I can see is that you said something about government taxation and the value of money and that you think gold isn't money. Everything else that you have posted has been litany of irrelevant posts that demonstrate nothing but rude and bad forum behavior. You post opinion as fact, you bully others, you can't prove anything you say, post weblinks that turn out to be googled up after the fact, etc etc. If you are so anti everything and everyone, why are you on a gold & silver bullion forum?

 

What you posted is that you read the link and understood it. Evidently, you failed to do either.

Ruben

 

BTW - that is another misrepresentation which completely underscores your questionable character. Nobody here, Fatima, is going to buy into this.

 

Fatima, The "Like" system was not operative until recently, and Ruben has been MIA from the board for a long time. The vast majority of his posts were pre-Like status. Just saying that many times numbers are misrepresentative, unless their true origins are known.