this doesnt look good for Obama
- Thread starter omegafarmer
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anotherchance
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Doctor Pot
Well-Known Member
Well, the value of the dollar has been falling, but it's still relatively stable. If we deregulated the value of money, then the law of supply and demand would tear our monetary system a new one. Since by definition the money supply is held more or less constant, if there is an increase in demand for any particular currency, the supply can't go up to compensate. While fluctuating commodity prices are what makes the free market work, fluctuating money values fuck up the market, since money is supposed to be the standard by which everything else is measured.
Imagine if you had a tape measure that constantly changed size. It'd suck for measuring stuff because people would have to know what time you took the measurement in order to have any idea how long it was. Now say, you got sick of your tape measure and went out to get a different brand. But now let's say, that other brand of tape measure got longer each time someone else bought one, and shorter when other people used them to measure stuff. This new tape measure isn't any better, and this gives a general idea of the problems inherent in creating a currency.
The federal reserve acts as a stockpile of tape measures. When the tape measures start to get too long, they raise the prices, and when they get too short, they lower prices.
If you can't follow my analogy, I'll admit, it's not great, and if I think of a better one I'll write it down.
Imagine if you had a tape measure that constantly changed size. It'd suck for measuring stuff because people would have to know what time you took the measurement in order to have any idea how long it was. Now say, you got sick of your tape measure and went out to get a different brand. But now let's say, that other brand of tape measure got longer each time someone else bought one, and shorter when other people used them to measure stuff. This new tape measure isn't any better, and this gives a general idea of the problems inherent in creating a currency.
The federal reserve acts as a stockpile of tape measures. When the tape measures start to get too long, they raise the prices, and when they get too short, they lower prices.
If you can't follow my analogy, I'll admit, it's not great, and if I think of a better one I'll write it down.
anotherchance
New Member
before the latest fuck up the $$$ was worth 3 cents compared to its value of 1913 when the fed came into being
anotherchance
New Member
so what does that tell you
Doctor Pot
Well-Known Member
Inflation is essentially a tax on people who don't invest their money, and is a separate component of the money supply. Every nation in the world has a currency system experiencing inflation, just the rates are different. Ideally, the rate would be lower rather than higher, but the important thing is that it be consistent and predictable.
anotherchance
New Member
you live in a complete fantasy land. how is jacko anyway
ViRedd
New Member
anotherchance
New Member
so then all of the inflation like houses or anything else is really just the devaluation of the currency
Doctor Pot
Well-Known Member
You seen the price histories of precious metals lately? It's a regular roller coaster. Gold is down 20% from two weeks ago. Precious metal prices also go crazy when various industries get contracts for stuff like electronics or catalytic converters that use a lot of precious metals.
anotherchance - no, prices change respective of currency. In fact, that's the point. The value of currency is supposed to stay fairly stable.
ViRedd
New Member
Are central banking interests controlling the price of gold?
FSU Contributor: "How Central Bankers Control the Gold Price" by Adrian Ash 10/01/2007
Central bankers and options traders weigh down gold's price. - New York Times
Vi
anotherchance
New Member
the only reason it has any value is that collectively we value it and when we dont its done
ViRedd
New Member
How can the value of currency stay stable when the government, in coordination with central bankers, is in control of the printing press?
Again, in 1920 a $20 American Gold Eagle would have bought a nice suit of clothes. Today, a $20 American Gold Eagle will still buy a nice suit of clothes.
In 1920, a $20 Federal Reserve Note would have bought you a nice suit of clothes. Today, a $20 Federal Reserve Note wouldn't buy you a carton of cigarettes or a decent bottle of Scotch.
Vi
anotherchance
New Member
some people just will not get it and that means they get to be happy slaves, it can have its ups
Doctor Pot
Well-Known Member
So? That's why people keep their money in banks (or gold, I guess) instead of in cash. And by banks, I'm going to mean CDs or FDIC-insured savings accounts, which were not hit nearly as hard by the banking crisis. By stable, I mean it has a value that is not constantly fluctuating. The value of the dollar declines steadily, but predictably, which is better than what gold does if your goal is to have some sort of standard to measure prices with.
The whole job of the Federal Reserve is to stabilize the value of currency. That's what they do. I'm not saying they always do a good job of it, but at least they're responsible to the people by way of the US government. If the value of the dollar was fixed to something else, it'd be a lot easier for unregulated bankers to manipulate currency values for profit.
anotherchance
New Member
its not necessarily steady by any imagination if you are watching global exchanges. and its manipulated how ever the big banks want to do it. you just have a misplaced faith it it like its a religion.
Doctor Pot
Well-Known Member
The point is, it may not be entirely steady but a) it's way more stable than gold or precious metals and b) what's good for banks is usually good for people, since banks want people to invest in them.
anotherchance
New Member
banks should be like utilities and not operated like any other business is. and precious metals are stable compared to the fiat $$$