More articles about local currencies

[rexmerdinus]

http://money.cnn.com/2012/02/21/pf/loca ... ?iid=HP_LN

http://money.cnn.com/galleries/2012/pf/ ... index.html

[mbailey1234]

If they are exchanging one of their local dollars for one US dollar's worth of merchandise what is that going to gain them? It may help stimulate their local economy I guess but that's about it. When the dollar evaporates, so will the local currency buying power.

They need a local, or better yet state, currency that is based on gold or silver to really get my attention.

I wonder how many of these are catching some heat from the IRS or our government? I guess if they are reporting the income, what can they say about it?

[Z00]

They need a local, or better yet state, currency that is based on gold or silver to really get my attention.

OK, this is something that has occupied my mind a bit lately.
HOW can you issue a currency "backed" by anything that has such a daily volitlity as precious metals?
I could issue a certificate or token tomorrow that is redeemable for 1 gram of silver.
It would be "backed" by the fact that only 1 is issued for each gram in a vault someplace.
Using the price of silver set in US dollars on the market, the "value" of that gram would fluctuate from it's issued value of abt. 1.09, to 1.12 tomorrow, and possibly .96 next week.
The same problem exists even if you issued the tokens made out of the metal itself. In addition to being very small.
You tell me how to overcome this problem and I'll start issuing silver backed tokens in 2 weeks.

[Engineer]

They need a local, or better yet state, currency that is based on gold or silver to really get my attention.

OK, this is something that has occupied my mind a bit lately.
HOW can you issue a currency "backed" by anything that has such a daily volitlity as precious metals?
...
You tell me how to overcome this problem and I'll start issuing silver backed tokens in 2 weeks.

If PMs are acting to back currency, the currency also backs the PM to an extent. This helps to eliminate volatility.

Central bankers will tell you that currencies can't be backed by PMs because of their volatility, but the bankers move away from PMs is the reason they're volatile in the first place.

On the small scale you're talking about...it wouldn't work because you'd be at the mercy of the market movers (ie: bankers).

[Engineer]

They need a local, or better yet state, currency that is based on gold or silver to really get my attention.

OK, this is something that has occupied my mind a bit lately.
HOW can you issue a currency "backed" by anything that has such a daily volitlity as precious metals?
...
You tell me how to overcome this problem and I'll start issuing silver backed tokens in 2 weeks.

If PMs are acting to back currency, the currency also backs the PM to an extent. This helps to eliminate volatility.

Central bankers will tell you that currencies can't be backed by PMs because of their volatility, but the bankers move away from PMs is the reason they're volatile in the first place.

On the small scale you're talking about...it wouldn't work because you'd be at the mercy of the market movers (ie: bankers).

[Z00]

The price of the metal would have to be frozen. Without that freeze it would not be feasible even on a state level for everyday commerce.

[Aqualung48]

If the currency is backed by PMs on a one to one basis, neither would fluctuate in value that much. The laws of supply and demand might affect the prices of individual items, but overall, there would be not much change. Consider a few examples of how the buying power of gold has remained the same. How many $20.00 gold coins would it take to buy a car in 1920? How many of those same coins (or substitute 1 ounce AGE's to make the math easier) would it take to buy a car today? Another example is the price of gas. In 1964, a 90% quarter would buy you a gallon of gas almost anywhere here in the USA. The same quarter will still buy you a gallon of gas because of its melt value. PM backed currency stabilizes the value of money. This works to the detriment of a government that spends without worrying about tomorrow. The only way it can hope to pay down those massive deficits, is to use deflated money. If our national debt was in ounces of gold, instead of dollars, I doubt we could ever pay it without severe austerity measures. The last time the US government had no debt was in 1835, during the Andrew Jackson administration. Andrew Jackson hated paper money.

[Z00]

What you describe is the classic inflationary spiral. It just goes to reinforce the fact that once you have to purchase an item outside of the closed loop of a local trading area, a PM backed currency would not work unless there was a constant revaluing on a daily basis. The value of the PM would have to be at a frozen level relative to the currency being traded in.

[Aqualung48]

My examples show how the value of the precious metals has remained the same in many categories without the price being fixed. Investing your money in PM's protects its value. No way does it need to be a fixed amount. In fact, while the US government did fix the price of gold at about $35.00 a ounce, inflation actually devalued the purchasing power of gold. Once that artificial control of the gold market was removed, the gold's purchasing power was restored. While anyone can cite exceptions to my examples, most notably high tech stuff like computers, my premise that the purchasing power of a given amount of gold remains the same throughout history is supported by the facts. Price fixing is government manipulation that we can all do without. Ron Paul in 2012!

[rexmerdinus]

If the currency is backed by PMs on a one to one basis, neither would fluctuate in value that much. The laws of supply and demand might affect the prices of individual items, but overall, there would be not much change. Consider a few examples of how the buying power of gold has remained the same. How many $20.00 gold coins would it take to buy a car in 1920? How many of those same coins (or substitute 1 ounce AGE's to make the math easier) would it take to buy a car today? Another example is the price of gas. In 1964, a 90% quarter would buy you a gallon of gas almost anywhere here in the USA. The same quarter will still buy you a gallon of gas because of its melt value. PM backed currency stabilizes the value of money. This works to the detriment of a government that spends without worrying about tomorrow. The only way it can hope to pay down those massive deficits, is to use deflated money. If our national debt was in ounces of gold, instead of dollars, I doubt we could ever pay it without severe austerity measures. The last time the US government had no debt was in 1835, during the Andrew Jackson administration. Andrew Jackson hated paper money.

+1 Yeah, what he said!

[Engineer]

Ron Paul in 2012!

My biggest problem with Ron Paul and implementing the gold standard right now is the fact that we haven't gone bust yet. I'm all for a hard backed currency, but I'd rather see the bankers go bust in a national default than letting the taxpayers shoulder the burden that made the bankers rich in the first place. If the banksters start hurting hard enough, I might even be able to buy one of their private islands some day.

I'm guessing TPTB will try to push the idea of a hard backed currency AFTER they've gotten us into as much debt as possible, but before we can pull an Iceland. We need to fight against that...

[Aqualung48]

My biggest problem with Ron Paul and implementing the gold standard right now

All the candidates have issues if you look too closely. Ron Paul has seen more naked women than all the other candidates combined, yet we never hear of one complaining. Sometimes, when I vote, I think of Obi Wan Kanobi, from Star Wars when he said "use the force, Luke".

I can hardly see how having a currency backed by a PM, whether Gold or Silver, is going to make things any worse for the average citizen. While inflation could be worse, now, compared to what has happened in other countries, our current economic state is certainly no picnic. As the value of the dollar continues to decrease, it is taxation by inflation to those who have kept money in FRNs.

[IdahoCopper]

Ron Paul in 2012!

My biggest problem with Ron Paul and implementing the gold standard right now is the fact that we haven't gone bust yet. I'm all for a hard backed currency, but I'd rather see the bankers go bust in a national default than letting the taxpayers shoulder the burden that made the bankers rich in the first place. If the banksters start hurting hard enough, I might even be able to buy one of their private islands some day.

I'm guessing TPTB will try to push the idea of a hard backed currency AFTER they've gotten us into as much debt as possible, but before we can pull an Iceland. We need to fight against that...

The banks own the politicians (except of course, Ron Paul) so they will keep getting bailouts until the end of time.... which could be 21 Dec 12, lol.

[rexmerdinus]

I like Ron Paul too, but one of the things that I think killed his campaign in 2008 (aside from being seen as the "Crazy Old Man" of the Republican party) is that he rattled his saber about going to back to the gold standard, but didn't offer any mechanism for doing so, i.e. how to determine in the short term how much a loaf of bread would cost in terms of silver or gold. I read an opinion somewhere that using legislation to peg the dollar to a particular fraction of an ounce of gold would be fine--it's been done before--but to do so would in a way be ruling the currency's value by fiat, which would eventually lead right back to where we are today. Thoughts?

[Aqualung48]

Ron Paul has not spoken about fixing the price of gold or silver to FRNs or fiat currency because that is against his free market philosophy. He also knows the history of government artificially fixing the price of PMs and the loss of buying power caused by inflation. He is an easy candidate to understand. If there is language in the US constitution to support a law or act of congress, he is in favor of it. He is one of few candidates who have actually read the US Constitution. Putting the USA on the gold standard means foreign countries can demand their foreign exchange or payment of debts in gold. It means we could no longer print money to pay off our debts. If we continue down our present road of deficit spending without worrying about tomorrow, soon we will no longer be able to afford the oil for the printing presses.