The Benefits of the Fair Tax
Post Reply
 
Thread Rating:
  • 1 Votes - 5 Average
  • 1
  • 2
  • 3
  • 4
  • 5
12-02-2014, 04:34 PM
RE: The Benefits of the Fair Tax
(12-02-2014 04:25 PM)frankksj Wrote:  Out of 3,000 attempts, the fiat currency has always failed within 50 years,

Have there *really* been 3000 failed attempts at fiat currency...that seems awfully high.

Softly, softly, catchee monkey.
Find all posts by this user
Like Post Quote this message in a reply
[+] 1 user Likes toadaly's post
12-02-2014, 04:43 PM
RE: The Benefits of the Fair Tax
(12-02-2014 04:25 PM)frankksj Wrote:  Totally wrong. The question is coherent, it just seems you don't understand the difference between money and currency. Money is some medium of exchange that has agreed upon value, normally gold, but could be anything. Currency is when a bank, as a service, holds onto your money (gold) and gives you as a receipt a piece of paper, a claim check, that can be taken back to the bank and exchanged for money. This is called 'representative currency'. Since paper is more convenient to carry than gold, people use those paper receipts as money, to exchange goods and services. And after a while people get so used to it they forget the currency is a claim check for money.

I'm aware of that distinction.

You are simply being myopic. What's so special about shiny rocks?

(12-02-2014 04:25 PM)frankksj Wrote:  But if the bank tries to print more currency (ie claim checks) than they have money for the bank will collapse when people try to redeem their currency for money. Before 1971, US Dollars were simply claim checks for money (gold) redeemable at $35/ounce. That is NOT a fiat currency. The problem is Nixon started printed a lot of dollars (ie gold claim checks) to pay for Vietnam since that was more politically convenient than taxing the public to pay for a hugely unpopular war. The French and others caught on and said "OK, we're handing in our claim checks, give us back our money (gold)." Since Nixon didn't have enough gold to redeem all the claim checks (dollars), he, essentially, confiscated everybody's money, and told them the claim checks (dollars) were no longer redeemable for anything. They're just pieces of paper, worth only what people think it's worth. THAT is a fiat currency. It's a claim check that's no longer redeemable for money--just a piece of paper with no inherent value.

Gold has no inherent value either.

Value is a social construct.

You do not appear capable of considering anything beyond the parameters you have already set for yourself.

(12-02-2014 04:25 PM)frankksj Wrote:  The only exception is Switzerland, which kept their franc pegged to gold throughout the 20th century. That's why Switzerland never had inflation, why gas, food, houses, etc., cost the same in 1990 as in 1970. As I mentioned in other posts, it also directly contributed to Switzerland's economic success.

Right.

(12-02-2014 04:25 PM)frankksj Wrote:  This fiat system HAS been tried repeatedly. The first time was the Song dynasty in the 11th century. And it was done for EXACTLY the same reason Nixon did it--so they wouldn't have to raise taxes to pay for an unpopular war. Out of 3,000 attempts, the fiat currency has always failed within 50 years, leaving in it's wake economic ruin and a lot of inequality with all the wealth concentrated at the top, particularly among the bankers who got all the newly printed fiat currency.

You do realize that the Song economy was more concerned with certain additional factors, right?

But, no, I'm sure your preposterously reductive analysis is all that need be said, and the entirely of human history is contained within monetary policy. Yup.

Have you actually read Chinese history? The late Ming did found their currency on silver reserves. And when their supply of silver was cut off the dynasty disintegrated. Funny, that.

(12-02-2014 04:25 PM)frankksj Wrote:  So, your comment that all currency is fiat is flat out wrong. Just look it up in a dictionary or on wikipedia. Fiat currencies are actually the exception--not the norm. For 90+% of human history the world has used representative currency--not fiat currency--since fiat currency has always been such a disaster.

You just don't seem to comprehend the point I was making.

What's special about gold?

... it's shiny?

Thousands of years of inherited cultural fetishism aside, it's just an element. So what?

... this is my signature!
Find all posts by this user
Like Post Quote this message in a reply
12-02-2014, 05:16 PM
RE: The Benefits of the Fair Tax
(12-02-2014 04:43 PM)cjlr Wrote:  Gold has no inherent value either. What's special about gold? ... it's shiny?Thousands of years of inherited cultural fetishism aside, it's just an element. So what?

I dare you to name one other substance on the planet that has all the attributes needed to be useful as a medium of exchange (ie money).


You will fail, of course, which shows the ignorance of your statement. Gold's inherent value is that it can be used as a medium of exchange!

I've explained it repeatedly, and you've obviously never read my posts. Imagine we're back in a time when humans were hunter gatherers and you're trying to help them evolve into a society with trade and commerce. You need to recommend something to use as a medium of exchange (money). So what are you going to recommend?

1. Food? Well that's dumb. Food spoils, so if you save it for 10 years it will be stinky and have no value. And the very concept of 'saving' will involve hoarding something humans need to survive, so people will be starving, while some families are hoarding food that's just going to rot.

2. Wood? It's too common. Why is somebody going to give you the fruits of their labor in exchange for wood, which is plentiful already.

3. Diamonds? No 2 diamonds are the same, so the value of a diamond is very subjective. And they're not divisible. How does someone buy a loaf of bread with a diamond? The baker would need to be a diamond appraiser to figure out how much bread your diamond was worth, and give you 'change' in the form of other diamonds that were worth slightly less. It's got to be something that, when pure, is consistent and easily divisible into discrete units of varying quantities, meaning it needs to be a solid at room temperature for convenient carrying, but with a reasonable melting point to divide it into smaller units.

4. Uranium? Uh, no. Your money shouldn't kill you. So far, the only substance that would work are metals.

5. Iron? It the metal can be found in abundance, the money supply will grow rapidly leading to inflation, which makes saving impossible since your money loses value, and it becomes impossible to make any long term deals since you don't know what your money will be worth. It has to be something that's distributed around the world in tiny flecks, that takes a lot of work to discover, so that even with concerted effort, the money supply grows around the same rate as the economy (around 1 or 2%/year).

5. Titanium? How are you going to know if something is really titanium or not? Most metals are gray and hard. You'd need to be an alchemist to test it, so counterfeiting would be rampant and people would stop accepting the money. It's got to have some unique qualities that a normal, unaided human could determine if it was real or not. For example, a unique color and soft texture that was unique only to this substance, and only when pure, so that people could know right away if it was genuine or not, just by looking at it and biting it.

Now, you tell me what substance you would recommend people use as a medium of exchange. If you cannot think of one, then you obviously never considered this before and the inherent value of gold is simply that it has all the required attributes to be used as a medium of exchange. However, if you read my post #25 I wrote that I'm not a fan of returning to a gold standard because I think something more modern like bitcoin would work better. This is essentially what Milton Friedman advocated too, when he was calling for some currency replacement the issuance of which would be naturally limited by a computer, without the ability to print it. There was another post where I mentioned that every time an alternative currency is introduced the US arrests the people involved to scare everyone into not using dollars. Someone challenged me on that saying the US hasn't done anything to stop bitcoin yet. But, if you read the news last month you'd see the US _DID_ start arresting bitcoin operators for running 'unlicensed financial services'. So, it happened right on cue, just like always, the government is trying to stop the use of any alternative currency. The claim that it's to prevent bitcoins from being used for drugs is absurd since bitcoins do ultimately leave a trail which the NSA is no doubt tracking, unlike US dollars that are untraceable. So anybody with a brain can see that if the government really cared about drug money they'd actually ENCOURAGE bitcoin, and the attack on bitcoin is because the dollar is in such a precarious position and risks imminent collapse.
Find all posts by this user
Like Post Quote this message in a reply
12-02-2014, 05:20 PM
RE: The Benefits of the Fair Tax
(12-02-2014 04:34 PM)toadaly Wrote:  Have there *really* been 3000 failed attempts at fiat currency...that seems awfully high.

It's the only estimate I could find, and the defenders of fiat currency are unwilling to provide their own estimate. Remember, though, that on average a fiat currency collapses every 29 years. But, there is such a tremendous allure to being able to walk over and hit 'print' to make all the money you need to buy anything you want, that the central banks keep trying to sell this scam to the public.

Imagine if you were a banker or a politician wanting to spend without having to tax, you'd also look for any excuse to have a fiat currency. How awesome would it be that you want a new private jet, so you just walk over to your terminal, type in $60,000,000, hit 'print', and voila, you've got a new jet. And what you've done is, effectively, taken $60 million from everybody else--but they don't even notice. They just see you flying around in your jet wondering how you got to be so rich.
Find all posts by this user
Like Post Quote this message in a reply
12-02-2014, 05:39 PM
RE: The Benefits of the Fair Tax
(12-02-2014 05:16 PM)frankksj Wrote:  
(12-02-2014 04:43 PM)cjlr Wrote:  Gold has no inherent value either. What's special about gold? ... it's shiny?Thousands of years of inherited cultural fetishism aside, it's just an element. So what?

I dare you to name one other substance on the planet that has all the attributes needed to be useful as a medium of exchange (ie money).

Literally anything.

(12-02-2014 05:16 PM)frankksj Wrote:  You will fail, of course, which shows the ignorance of your statement. Gold's inherent value is that it can be used as a medium of exchange!

That quality is shared by every material on the planet.

I will be extraordinarily generous and guess you mean to say scarcity when you are actually saying "value". Since you cannot actually articulate this yourself, it is a presumption.

If so, then sure. Some materials are scarce. So what?

(12-02-2014 05:16 PM)frankksj Wrote:  I've explained it repeatedly, and you've obviously never read my posts. Imagine we're back in a time when humans were hunter gatherers and you're trying to help them evolve into a society with trade and commerce. You need to recommend something to use as a medium of exchange (money). So what are you going to recommend?

Yes, because that's how things developed. When one person unilaterally invented them.

But no, let's run with this deranged fantasy.

(12-02-2014 05:16 PM)frankksj Wrote:  1. Food? Well that's dumb. Food spoils, so if you save it for 10 years it will be stinky and have no value. And the very concept of 'saving' will involve hoarding something humans need to survive, so people will be starving, while some families are hoarding food that's just going to rot.

Various societies in ancient times did use rations as a form of payment. I shouldn't have to specify, but for you I will, given your talent of mischaracterisation, but that is not ideal. It was nonetheless a very useful innovation in its time and place.

Do we have to add "history" to the list of subjects you are ignorant of?

(12-02-2014 05:16 PM)frankksj Wrote:  2. Wood? It's too common. Why is somebody going to give you the fruits of their labor in exchange for wood, which is plentiful already.

Common where, precisely?

Finland? Yes.
Arabia? No.

Where is your irrelevant fantasy occurring?

(12-02-2014 05:16 PM)frankksj Wrote:  3. Diamonds? No 2 diamonds are the same, so the value of a diamond is very subjective.

Yes, much as the value of - oh, let's say, bits of metal.

(12-02-2014 05:16 PM)frankksj Wrote:  And they're not divisible. How does someone buy a loaf of bread with a diamond? The baker would need to be a diamond appraiser to figure out how much bread your diamond was worth, and give you 'change' in the form of other diamonds that were worth slightly less.

Yes, much as with - oh, let's say, perhaps, bits of metal.

(12-02-2014 05:16 PM)frankksj Wrote:  It's got to be something that, when pure, is consistent and easily divisible into discrete units of varying quantities, meaning it needs to be a solid at room temperature for convenient carrying, but with a reasonable melting point to divide it into smaller units.

You really are stuck down the rabbit hole.

Where, in the parameters you yourself have provided, is it necessary that the chosen material be separable via melting?

You are implicitly working towards your own predetermined conclusion. Which isn't particularly honest...

This is you:
frankksj: Gold is a good medium of exchange. Therefore any other good medium of exchange must have the same properties of gold. Gold has the same properties as gold. Therefore it is a good medium of exchange. QED!

This is your patented "logic" again, isn't it?

(12-02-2014 05:16 PM)frankksj Wrote:  4. Uranium? Uh, no. Your money shouldn't kill you. So far, the only substance that would work are metals.

Uranium is a metal.
(but, then, we have already recalled today how physics and science are subjects on which your total ignorance does not prevent comment)

(12-02-2014 05:16 PM)frankksj Wrote:  5. Iron? It the metal can be found in abundance, the money supply will grow rapidly leading to inflation, which makes saving impossible since your money loses value, and it becomes impossible to make any long term deals since you don't know what your money will be worth. It has to be something that's distributed around the world in tiny flecks, that takes a lot of work to discover, so that even with concerted effort, the money supply grows around the same rate as the economy (around 1 or 2%/year).

I'm not sure where you got the idea that the rate of increase of global stockpiles is somehow more constant for gold than for other given metals - or worse yet, only constant for gold as opposed to other materials, but suffice to say, that's pure fantasy.

(12-02-2014 05:16 PM)frankksj Wrote:  5. Titanium? How are you going to know if something is really titanium or not?

Indeed. How might one know if something is really - oh, let's say, any particular metal?

(12-02-2014 05:16 PM)frankksj Wrote:  Most metals are gray and hard.

Not in their naturally occurring forms. But how is that relevant?

(12-02-2014 05:16 PM)frankksj Wrote:  You'd need to be an alchemist to test it, so counterfeiting would be rampant and people would stop accepting the money.

Shucks, it's almost like you'd have to have centrally regulated little pieces of metal to avoid some of those issues.

A little like - oh, let's say, gold.

(12-02-2014 05:16 PM)frankksj Wrote:  It's got to have some unique qualities that a normal, unaided human could determine if it was real or not. For example, a unique color and soft texture that was unique only to this substance, and only when pure, so that people could know right away if it was genuine or not, just by looking at it and biting it.

Yes.

Because no one has ever passed counterfeit gold coins. That sure never happened ever in ancient times.

(12-02-2014 05:16 PM)frankksj Wrote:  Now, you tell me what substance you would recommend people use as a medium of exchange. If you cannot think of one, then you obviously never considered this before and the inherent value of gold is simply that it has all the required attributes to be used as a medium of exchange. However, if you read my post #25 I wrote that I'm not a fan of returning to a gold standard because I think something more modern like bitcoin would work better. This is essentially what Milton Friedman advocated too, when he was calling for some currency replacement the issuance of which would be naturally limited by a computer, without the ability to print it.

It's good that you've finally left the realm of deranged fantasy.

Let us consider the only relevant point you have almost made - you have not managed to say so clearly, but the only attribute you are seriously considering is scarcity.

And we see that ascribing value to something which exists transiently as computerised data - so, y'know, exactly like existing monetary systems - would in fact be a-okay with you, so long as the supply were controlled differently.

The actual unit of exchange when one deals in, say, bitcoins, is just as much a consensual hallucination as any other medium of exchange. It has value because it is agreed to have value.

Which is precisely what I just said, and you thoroughly failed to understand.

(12-02-2014 05:16 PM)frankksj Wrote:  There was another post where I mentioned that every time an alternative currency is introduced the US arrests the people involved to scare everyone into not using dollars. Someone challenged me on that saying the US hasn't done anything to stop bitcoin yet. But, if you read the news last month you'd see the US _DID_ start arresting bitcoin operators for running 'unlicensed financial services'. So, it happened right on cue, just like always, the government is trying to stop the use of any alternative currency.

That's not what unlicensed financial services means.

That means you're offering unlicensed financial services. It doesn't matter what currency you're offering those services in...

(12-02-2014 05:16 PM)frankksj Wrote:  The claim that it's to prevent bitcoins from being used for drugs is absurd since bitcoins do ultimately leave a trail which the NSA is no doubt tracking, unlike US dollars that are untraceable.

The foundational premise of bitcoins is that they are cryptographically secure.

So, the precise opposite of what you just said.

(12-02-2014 05:16 PM)frankksj Wrote:  So anybody with a brain can see that if the government really cared about drug money they'd actually ENCOURAGE bitcoin, and the attack on bitcoin is because the dollar is in such a precarious position and risks imminent collapse.

Oh, so we're back to deranged fantasy.

... this is my signature!
Find all posts by this user
Like Post Quote this message in a reply
[+] 2 users Like cjlr's post
12-02-2014, 05:44 PM
RE: The Benefits of the Fair Tax
Can you elaborate more on how Dollars are untraceable Frank?

I can see why you see Bitcoin as an alternative because it is finite. However it starts to come undone when you see other alternative "coins" being released (peercoin, litecoin, namecoin etc) so potentially this is not finite. It becomes "fiat" to the degree that it is not issued by the government but it has faith applied to its value and usage.

For no matter how much I use these symbols, to describe symptoms of my existence.
You are your own emphasis.
So I say nothing.

-Bemore.
Find all posts by this user
Like Post Quote this message in a reply
12-02-2014, 05:46 PM
RE: The Benefits of the Fair Tax
(12-02-2014 05:16 PM)frankksj Wrote:  I wrote that I'm not a fan of returning to a gold standard because I think something more modern like bitcoin would work better. This is essentially what Milton Friedman advocated too, when he was calling for some currency replacement the issuance of which would be naturally limited by a computer, without the ability to print it.

The problem I see with bitcoin, other than the fact that governments are trying to undermine it, is that there is nothing preventing the introduction of an unlimited number of crypto-currency copycats. Several have already popped up. Once a few of them get established, it will make it that much easier for even more. Pretty soon, you'll have as many crypto-currencies running around as colas in the supermarket, and they'll all start reverting toward their production cost.

IMHO, people will look back on the bitcoin runup the same as we do Tulipomania.

Softly, softly, catchee monkey.
Find all posts by this user
Like Post Quote this message in a reply
[+] 1 user Likes toadaly's post
12-02-2014, 05:48 PM
RE: The Benefits of the Fair Tax
(12-02-2014 05:44 PM)bemore Wrote:  It becomes "fiat" to the degree that it is not issued by the government but it has faith applied to its value and usage.

I was about to say that if he didn't get it when I said that I don't see why he'd get it when you say it, but, knowing him? That's actually possible.

... this is my signature!
Find all posts by this user
Like Post Quote this message in a reply
12-02-2014, 05:54 PM
RE: The Benefits of the Fair Tax
(12-02-2014 04:25 PM)frankksj Wrote:  Before 1971, US Dollars were simply claim checks for money (gold) redeemable at $35/ounce. That is NOT a fiat currency. The problem is Nixon started printed a lot of dollars (ie gold claim checks) to pay for Vietnam since that was more politically convenient than taxing the public to pay for a hugely unpopular war. The French and others caught on and said "OK, we're handing in our claim checks, give us back our money (gold)."

except that we stopped using the gold standard in 1913, WAY before Nixon. And we abandoned the gold standard again after the great depression.

In 1913, the Federal Reserve was created to stabilize gold and currency values. Before it could get up and running, World War I broke out (NOT VIETNAM), and European countries suspended the gold standard so they could print enough money to pay for their military involvement. Unfortunately, printing money created hyperinflation. After the war, countries realized the value of tying their currency to a guaranteed value in gold. For that reason, most countries returned to a modified gold standard. (History.com, "Gold Standard"). The

Gold Standard Made the Great Depression Worse

Once the Great Depression hit with both barrels, countries once again had to abandon the gold standard. When the stock market crashed in 1929, investors began trading in currencies and commodities. As the price of gold rose, people traded in their dollars for gold. It worsened when banks began failing. People started hoarding gold because they didn't trust any financial institution.

You are a fucking idiot.

The Federal Reserve controls inflation by managing credit, the largest component of the money supply. (This is why people say the Fed prints money.) The Federal Reserve can restrict credit by raising interest rates and making credit more expensive. This reduces the money supply, which curbs inflation.

A little rudeness and disrespect can elevate a meaningless interaction to a battle of wills and add drama to an otherwise dull day - Bill Watterson
Find all posts by this user
Like Post Quote this message in a reply
12-02-2014, 05:57 PM
RE: The Benefits of the Fair Tax
(12-02-2014 05:39 PM)cjlr Wrote:  
(12-02-2014 05:16 PM)frankksj Wrote:  I dare you to name one other substance on the planet that has all the attributes needed to be useful as a medium of exchange (ie money).
Literally anything.

So predictable. I've gone on the record, laying out my opinion clearly, subjecting it to criticism, saying that the best physical substance I can think of to use as a medium of exchange is gold. You say that's dumb, so I ask you what you think is a better medium of exchange, and you...
refuse to list anything specific, so that your answer can never be subjected to criticism.

Everybody can see this means you're backed into a corner again. If you really were able to think of a better substance to use, you'd obviously have told us what it is and showed us how smart you were.

Regarding the attributes, like melting, like I said, please enlighten us and tell us WHAT substance you propose would make a good medium of exchange, and, in an old low-tech society, how to divide your substance into smaller units that are easily recognizable.

Pick a substance, or admit that, despite your bashing me for picking gold, you honestly can't think of a better one.
Find all posts by this user
Like Post Quote this message in a reply
Post Reply
Forum Jump: