Federal Reserve Admits: We Have no Gold!

[Julius_Seizeher]

Interest should be illegal? You have no business talking about money.

Using your logic, you should send me whatever money you have, because I say it should be illegal for you to have it.

Why the hell would anyone lend money if they weren't able to profit from it?

Are banks just supposed to exist as a "friendly social resource"? They couldn't. Any bank (or any man) that is forced to act against its own interest can only end in failure and destruction.

And that is exactly what happened in the 08-09 crisis-for years the government had been forcing banks (through Fannie and Freddie) to make bad loans. Then, when this fraud collapsed, instead of telling the truth, the politicians and the worthless street bum you elected to the white house have washed their hands by crucifying the same bankers they had forced to write the sh!t loans in the first place. But what is on the front of every newspaper and every outlet of the liberal media? "The evil bankers did it."

You are a mindless sucker if you buy their bullsh!t.

What we need is not the government to regulate society, to somehow magically make it possible for everyone to buy a house-we need the government to shrink so the private sector can expand. This industrial expansion (ie: creation of jobs) is what will rebuild our society and subsequently make it possible for everyone to buy a house.

 

[Kerpal]

People start lending with interest (an act that should be illegal really)

Lending with interest should be illegal? How do you propose loans get made? What incentive would I have to loan money to someone when I won't even be compensated for inflation?

 

[JustLurk]

Oh, and if we want more gold, all we have to do is destroy the worthless EPA (Economic Privation Agency) and get these mining projects rolling.

Did you just say we should dissolve the environmental protection agency? If people like you were ever allowed to lead the country you would **** us up worse than a thousand Bushes.
How about the FDA while you're at it. Hahahah. Do I even have to link to the vaious hellish contamination problems that killed people/diseases people that were slightly, SLIGHTLY muted by some small fine of the FDA/EPA?
These agencies are weak in the face of large corporations and basically only manage to regulate well enough to keep the norm stable. Take that away... Cheap Chinese goods that do not need to conform to FDA regulations, hahaha. No more drug testing, LOL. No more pollution restritions or emmision laws, ha! Even China has some environmental regulation. 10 years of no EPA, and parts of the US will be smoggier than Beijing.

 

[JustLurk]

I agree that "theoretically" if the supply of goods and services kept growing to the point where just a spec of dust of gold could buy you a house then yes, it would be a major problem. However history and research shows that such a thing would never happen. There is PLENTY of gold and silver and copper to run daily transactions, even today.

Even that wouldn't be a problem. Have the specs encased in airtight "currency" "coins" stamped by a measuring and purity test authority. Spend it without worrying about weighting it or having to make sure you don't lose dust. :yes: Transparent plastic coins? Maybe with a hole in the middle and a unique code that can verify weight check with an external authority and anti-tampering methods.

 

[Alle_Gory]

As for the argument for/against gold I feel its a moot one. Take England for example. Through much of its history the people grew wealthy using wooden sticks as currency. Yes you read that right. Wooden. Sticks.

Our economy is also based on wooden sticks. The whole purpose of a currency is that it grows with the economy. If you print money and devalue the currency (or gather more sticks from a forest) then suddenly you have ridiculous inflation.

The medium of money is irrelevant, it's just a means of establishing value between two parties.

The medium is very important. You want a form of currency that cannot be printed out. Whoever own the printers owns the economy. Gold makes a better form of currency than printed paper but there are some definite problems like I mentioned before. It's simply too scarce.

What causes the system to collapse is greed.

People start lending with interest (an act that should be illegal really) and banks start up with their fraction reserve lending, then you have folks hedging bets on the sidelines with derivatives and *KABOOM*, everything falls apart.

Derivatives and hedge funds are something else altogether. Interest however is what gives an incentive to lend money and contribute to growth. It's what prevents people from hoarding and locking their money away and instead they take a risk and put that money to work. In return they receive interest which is dependent on the risk. More risk = more interest and a potential to earn more money.

As far as derivatives, that's just a clever way of chopping up securities. Hedge funds are a real problem however especially when you consider that the value of most hedge funds is greater than the value of the underlying assets. When the bubble bursts, we will see a crash like never before.

 

[Kerpal]

Derivatives are simply a way to transfer risk from one party to another. There's nothing inherently bad about that. In fact, they've been an incredibly useful device throughout history for people who need to protect themselves from risk.

There's nothing wrong with hedge funds or other parties who use derivatives as long as they have to pay their own way and are not insured by or bailed out with taxpayer money. When you know someone will bail you out, there's no reason not to take huge risks.

 

[FoolsCause]

Distinguish between a strictly gold monetary system and a gold standard based on fiat money being tied to gold at a ratio adjusted by the government. The problem isn't that we use paper money, or electronic balances for that matter, rather that it's no longer tied to gold.

 

[FoolsCause]

According to the Fed official in the video, the gold went to the Treasury. I'd rather have it there than a quasi-governmental entity operated by private bankers. But does the Treasury still have it?