The Federal Reserve

Now, what news on the Rialto?
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Parodite
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The Federal Reserve

Post by Parodite »

_dmPchuXIXQ
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Parodite
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Re: The Federal Reserve

Post by Parodite »

Deep down I'm very superficial
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Parodite
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Re: The Federal Reserve

Post by Parodite »

iYZM58dulPE
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Miss_Faucie_Fishtits
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Re: The Federal Reserve

Post by Miss_Faucie_Fishtits »

The Federal Reserve is Satan's Cabinet, that's what my neighbour tells me. What we should replace it with, that part is not so clear......
She irons her jeans, she's evil.........
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NapLajoieonSteroids
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Re: The Federal Reserve

Post by NapLajoieonSteroids »

The problem is that there isn't enough gold (or precious metals) to base a currency on.

What else could be used? How 'bout...I don't know....carbon :o
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Re: The Federal Reserve

Post by Typhoon »

NapLajoieonSteroids wrote:The problem is that there isn't enough gold (or precious metals) to base a currency on.

What else could be used? How 'bout...I don't know....carbon :o
A basket of commodities in proportion to their global use.
May the gods preserve and defend me from self-righteous altruists; I can defend myself from my enemies and my friends.
Mr. Perfect
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Re: The Federal Reserve

Post by Mr. Perfect »

Where I will take issue with some comments here is that if the Federal Reserve were to die tomorrow, people would use alternatives without any central planning at all, as has been done many times in human history.

And while the Federal Reserve will not die tomorrow, it sure seems like they are trying to. :P I welcome their efforts toward that end.

And I have a pretty good guess what people would naturally turn to as an alternative.
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NapLajoieonSteroids
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Re: The Federal Reserve

Post by NapLajoieonSteroids »

:D I was being facetious but thanks for posting that site.

...the whole Fed is a headache, everything is a headache- including that zeitgeist video, which is thoroughly disreputed.
Last edited by NapLajoieonSteroids on Thu Jan 19, 2012 7:28 am, edited 1 time in total.
noddy
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Re: The Federal Reserve

Post by noddy »

land, gold and rum are traditional in australia but you could add energy now (oil,coal,gas et all)

the thing with money is that nebulous and hard to quantify aspect... trust...

which is why the absurdity of gold keeps coming back up... it has to be "trusted" by all countries across all cultures and politics certainly doesnt provide that.
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Re: The Federal Reserve

Post by Simple Minded »

NapLajoieonSteroids wrote:The problem is that there isn't enough gold (or precious metals) to base a currency on.

What else could be used? How 'bout...I don't know....carbon :o
EFFFING BRILLIANT!!!!

I'm writing in NapLajoieonSteroids for president!!!!! :) OF THE WORLD!!!!!!

Hopefully he will pick Al Gore for his vice presidental nominee...... ;) Worked last time....

If we all just make carbon or CO2 the new currency, everybody will be steadily getting richer either by eating too much and getting fatter or just by breathing.....

"Yeah Mr. Bankster, I understand I am a poor credit risk now at a puny 175 lbs, but in six months with enough effort, I'll weigh 300 lbs and then YOU will be sorry you didn't give more credit!!!"

Problem solved, Utopia at last!!!!!!!!

I want to be ruled by the Napster!!!!!
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Re: The Federal Reserve

Post by noddy »

might be a dumb question, im full of dumb.

why exactly is their not enough gold ?

wont it just get more expensive when the world economy grows ?
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Typhoon
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Re: The Federal Reserve

Post by Typhoon »

Regarding the US Fed.

Was it not created in response to periodic devastating bank runs and depressions [pre the Great Depression]?

Whether or not the proper organization was put in place is another question.
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Re: The Federal Reserve

Post by Typhoon »

noddy wrote:might be a dumb question, im full of dumb.

why exactly is their not enough gold ?

wont it just get more expensive when the world economy grows ?
It is amazing, but the total amount of gold in the world is a surprisingly small q­uantity. Here's how you can calculate the total amount that is available.
If you look at a page like this one, or if you look it up in an encyclopedia, you will find that the annual worldwide production of gold is something like 50 million troy ounces per year. Gold has a specific gravity of 19.3, meaning that it is 19.3 times heavier than water. So gold weighs 19.3 kilograms per liter. A liter is a cube that measures 10 centimeters (about 4 inches) on a side. There are 32.15 troy ounces in a kilogram. Therefore, the world produces a cube of gold that is about 4.3 meters (about 14 feet) on each side every year. In other words, all of the gold produced worldwide in one year could just about fit in the average person's living room!

This cube weighs 1,555,210 kilograms (3,110,420 pounds). A recent spot price for gold was $256.10 U.S. -- using that number, all of the gold produced in a year is worth $12,805,000,000. That's a lot of money, but not an unimaginable amount. For example, that's about how much the Pentagon spent launching the GPS satellite system. NASA's budget in 1998 was $13.6 billion.

Figuring out the total amount of gold that has been produced by man is a little harder. To get at some kind of estimate, let's figure that the world has been producing gold at 50 million ounces a year for 200 years. That number is probably a little high, but when you figure that the Aztecs and the Egyptians produced a fair amount of gold for a long time, it's probably not too far off. Fifty million ounces * 200 years = 10 billion ounces. Ten billion ounces of gold would fit into a cube roughly 25 meters (about 82 feet) on a side. Consider that the Washington Monument measures 55 feet by 55 feet at its base and is 555 feet tall (17 x 17 x 170 m). That means that if you could somehow gather every scrap of gold that man has ever mined into one place, you could only build about one-third of the Washington Monument.
Source

I think that there is little correlation with gold discovery and mining and general economic activity. It takes years to bring a new mine into production.
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Re: The Federal Reserve

Post by noddy »

a badly worded question, im aware their is a relatively small amount but thats why its "precious".

what is intrinsicly wrong with that small amount going up in price to cover the "alleged" worth of the economic system today ?

a wee bit more searching and i find this.

http://goldnews.bullionvault.com/Goldbu ... d_18175976
According to Sharekhan.com, India accounts for around a fifth of the world's gold off-take in any given year. The metal is an important part of ceremonies in India, such as weddings.

In terms of the metal's usage, around 70 per cent of gold is used for making jewellery, 11 per cent is used for industrial purposes (dental uses, electronics), and 13 per cent is used for investment, both institutional and individual.
according to wikipedia the figures are somewhat different

http://en.wikipedia.org/wiki/Gold_reserve
World gold holdings (2008) (Source: World Gold Council)[22]
Holding Percentage
Jewelry 52%
Central banks 18%
Investment (bars, coins) 16%
Industrial 12%
Unaccounted 2%
i spose we wouldnt want to go making all them indians and houswives instant millionaires now would we :)
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Re: The Federal Reserve

Post by noddy »

nevermind, their is alot of "human" involved in economics which doesnt always grok well my highly reductionist and explicit programmers headspace.

the whole "relative versus absolute" value of money with inflation slowly ticking away is another part of this.
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Alexis
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Re: The Federal Reserve

Post by Alexis »

noddy wrote:might be a dumb question, im full of dumb.

why exactly is their not enough gold ?

wont it just get more expensive when the world economy grows ?
You're right of course.

The fact that gold is priced today low enough that all gold produced to date wouldn't be enough to be used as monetary reserve for the world's economies is a reflection of the fact that trust in fiat currencies is still alive, even if shaken, or moribund.

As a back-of-the-enveloppe calculation:
- US Fed balance sheet is presently roughly 20% of US GDP (3 T$ compared to 15 T$)
- ECB balance sheet is presently roughly 29% of Eurozone GDP (2.7 T€ compared to 9.2 T€)
- Taking the lower value that is 20% for the 63 T$ world economy, the necessary global monetary reserve should be valued at 12.6 T$
- 5.4 billion ounces of Gold have been mined since beginning of humankind, among which 86% are theoretically available (given 12% industrial use + 2% unaccounted for), yielding a gold valuation of circa 2,700 US$ / ounce
- If only gold in central banks vaults is taken into account, that is circa 0.95 billion ounces (excluding therefore both jewelry and privately owned bullion), gold valuation of circa 13,200 US$ / ounce results
- Gold spot price is presenly (12/01/25) 1,655 US$ / ounce
Last edited by Alexis on Wed Jan 25, 2012 3:23 pm, edited 1 time in total.
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Re: The Federal Reserve

Post by Alexis »

NapLajoieonSteroids wrote:The problem is that there isn't enough gold (or precious metals) to base a currency on.

What else could be used? How 'bout...I don't know....carbon :o
Jokes aside, it's a very solid bet that if trust in ability of present fiat currencies to act as store of values was to disappear, then gold & silver would emerge as alternative stores of value (not necessarily alternative means of payment). To rephrase the content of the referenced link:

Gold and silver as monetary metals are human constructs.

What differentiates them from dollars, euros and the other yens is that these are millenia-old constructs, which became used as monetary metals in different places and civilizations independently (the fact that gold and silver were used in that role in what is now Turkey and Greece five centuries before Christ is independent of the fact they were used in the same role at the same time in China), and proved numerous times to remain trustworthy stores of value through currency crises and various upheavals. Also, and not coincidentally, these metals are rare, available reserves are limited and physically difficult and long to enlarge, meaning that inflation in those monetary metals is slow (gold extraction adds every year about 1.5% to available gold reserves)

As a consequence, it's a much safer bet that gold and silver will still hold such value five centuries from now - or ten years ... - than the bet dollars and euros will still have anything like their present value five centuries, or even ten years from now.

It remains a bet, yes. Conceivably a meme ("gold is money") which dominated human minds in most civilizations for most recorded history could suddenly disappear. Or an asteroid holding billions of tons of readily exploitable gold could be discovered close enough to Earth for exploitation to be possible, leading to massive inflation of the gold supply. It's just that the probability of such events appears quite small...
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Re: The Federal Reserve

Post by Parodite »

But does not a rush on gold mean that the price of will go through the roof? A LOT of value is being pumped into the indeed limited amounts of gold and silver.

Then the situation is a devalued economy... a thin chicken with loads of fat stached away in gold and silver. What happens then?
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Re: The Federal Reserve

Post by Enki »

Typhoon wrote:
NapLajoieonSteroids wrote:The problem is that there isn't enough gold (or precious metals) to base a currency on.

What else could be used? How 'bout...I don't know....carbon :o
A basket of commodities in proportion to their global use.
Yup.
Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.
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Re: The Federal Reserve

Post by Nonc Hilaire »

Enki wrote:
Typhoon wrote:
NapLajoieonSteroids wrote:The problem is that there isn't enough gold (or precious metals) to base a currency on.

What else could be used? How 'bout...I don't know....carbon :o
A basket of commodities in proportion to their global use.
Yup.
Who gets to hold the basket? We already rife with fraud in the futures markets - naked shorts, blatant lying about the amount of metal behind SLV and GLD, etc.
“Christ has no body now but yours. Yours are the eyes through which he looks with compassion on this world. Yours are the feet with which he walks among His people to do good. Yours are the hands through which he blesses His creation.”

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Parodite
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Re: The Federal Reserve

Post by Parodite »

Nonc Hilaire wrote:
Enki wrote:
Typhoon wrote:
NapLajoieonSteroids wrote:The problem is that there isn't enough gold (or precious metals) to base a currency on.

What else could be used? How 'bout...I don't know....carbon :o
A basket of commodities in proportion to their global use.
Yup.
Who gets to hold the basket? We already rife with fraud in the futures markets - naked shorts, blatant lying about the amount of metal behind SLV and GLD, etc.
Yea, sounds like easy way to make money with cheating on the numbers.
Deep down I'm very superficial
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Enki
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Re: The Federal Reserve

Post by Enki »

Nonc Hilaire wrote:
Enki wrote:
Typhoon wrote:
NapLajoieonSteroids wrote:The problem is that there isn't enough gold (or precious metals) to base a currency on.

What else could be used? How 'bout...I don't know....carbon :o
A basket of commodities in proportion to their global use.
Yup.
Who gets to hold the basket? We already rife with fraud in the futures markets - naked shorts, blatant lying about the amount of metal behind SLV and GLD, etc.
A central bank overseen by Congress and not private enterprise.
Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.
-Alexander Hamilton
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Nonc Hilaire
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Re: The Federal Reserve

Post by Nonc Hilaire »

Enki wrote:
Nonc Hilaire wrote:
Enki wrote:
Typhoon wrote:
NapLajoieonSteroids wrote:The problem is that there isn't enough gold (or precious metals) to base a currency on.

What else could be used? How 'bout...I don't know....carbon :o
A basket of commodities in proportion to their global use.
Yup.
Who gets to hold the basket? We already rife with fraud in the futures markets - naked shorts, blatant lying about the amount of metal behind SLV and GLD, etc.
A central bank overseen by Congress and not private enterprise.
The problem with that is today Congress IS private enterprise.
“Christ has no body now but yours. Yours are the eyes through which he looks with compassion on this world. Yours are the feet with which he walks among His people to do good. Yours are the hands through which he blesses His creation.”

Teresa of Ávila
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Marcus
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Re: The Federal Reserve

Post by Marcus »

Nonc Hilaire wrote:The problem with that is today Congress IS private enterprise.
Bingo! Or maybe better said CORPORATE enterprise.
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Re: The Federal Reserve

Post by Miss_Faucie_Fishtits »

noddy wrote:might be a dumb question, im full of dumb.

why exactly is their not enough gold ?

wont it just get more expensive when the world economy grows ?
Yes..... which will result in global deflation and this isn't good. Lookie here.......

"......It's a sort of Malthusian problem: production grows geometrically (if not exponentially) while metal supplies grow arithmetically if at all. There is no diminishing return in the mining of fiat money, no environmental depredation, no slave labor, no need to go to war to get fiat money. Fiat money has its temptations, but like most gold bugs, you don't even acknowledge that there are two pans on the gold standard scale. Metal-backed money has lots of negatives, chief among them the inability to keep up with the output gap....."
She irons her jeans, she's evil.........
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