epic economic fail
Feb. 9th, 2012 04:16 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
winterbadgerI came across a random blog while looking for something else, and read this entry because of the unusual title.
Are states really trying to create their own coinage? Yes, apparently so.
But the blog author seems to be, to put it gently, rather simple-minded.
"Why not have a universal state coin..."
Probably because there is only one authority or agency capable of regulating the financial actions of all states at once--the federal government. Which already has a perfectly adequate currency and coinage.
"By virtue of the coins being made of gold or silver they would have more perceived value and worth than a piece of paper."
But neither gold nor silver have any more *real* value than paper currency. Because there is no such thing as absolute value. Value is not fixed; it depends entirely on relative accepted worth.
"The coins would be minted similar to coins that are minted at different presses now under strict standards and supervision."
It's difficult to prevent counterfeiters from producing false currency with only one system and federal control. With as many as fifty different sets of coins (presumably of various denominations), is anyone really going to trust that all will come out to comparatively equal values? I wouldn't.
And what's to stop states from debasing their coins in order to inflate the value of their precious metal holdings? Or just to make them usable. A coin actually made out of (only) gold or silver would be worth so much, at current precious metal prices, that it would be useless for day to day spending. If the metal is degraded down to make the coins at all useful, the concentration of metal in them will be very low. Why not just push it close to nil, thus stretching a state's metal reserves that much further?
"I submit that it would also create more jobs with people accepting the coins, moving back to handling commerce face-to-face and locally versus the Internet. "
Bwuh? The stupidity here is too great to easily address. For one thing, even if this were true, it would be tremendously destructive to the economy. We get huge benefits in efficiency from being able to buy and sell all over the country. If we had to conduct all business face to face, it would cripple the economy. If we could only buy things from people we could walk over and see, our entire commercial transportation network would be destroyed, and thousands, maybe tens of thousands of people would lose their jobs.
But don't worry--there's no way that banks could be kept from allowing customers to stash coins with them and then transfer portions of their value electronically or by paper bank draft or check. It's what banks have always done, even back before the greenback existed. After all, I never see most of the dollars I am paid--they don't exist in paper form, but go from my employer's bank to my bank over a giant system of tubes and then go the same way to most of the people to whom I owe money, via the medium of my swiping a card, writing a check, or inputing data in a computer.
"I wouldn’t like to see it devolve into dozens of states with their own currencies – that would make us as messy as Europe or the early United States."
Erm, OK, apparently the author doesn't know that (most of) Europe uses a single currency now. And they also don't seem to grasp that just what they are saying they don't want to see--dozens of different states having their own separate forms of money--is exactly what is being mooted.
"The American dollar does work great as a tool for commerce, thanks, but it wouldn’t hurt to actually deal with gold and silver just in case."
In case of what? This is what baffles me about the whole movement. The US dollar is not going away. Yes, it buys less than it did in 1789, but so does every currency on earth. A salary of £50 per annum in 1890 would be roughly equivalent to a salary of £20,000 today according to the calculators at Measuring Worth. But the dollar has survived over 200 years of crashes, depressions, recessions, and bank failures. It's not going anywhere.
Are states really trying to create their own coinage? Yes, apparently so.
But the blog author seems to be, to put it gently, rather simple-minded.
"Why not have a universal state coin..."
Probably because there is only one authority or agency capable of regulating the financial actions of all states at once--the federal government. Which already has a perfectly adequate currency and coinage.
"By virtue of the coins being made of gold or silver they would have more perceived value and worth than a piece of paper."
But neither gold nor silver have any more *real* value than paper currency. Because there is no such thing as absolute value. Value is not fixed; it depends entirely on relative accepted worth.
"The coins would be minted similar to coins that are minted at different presses now under strict standards and supervision."
It's difficult to prevent counterfeiters from producing false currency with only one system and federal control. With as many as fifty different sets of coins (presumably of various denominations), is anyone really going to trust that all will come out to comparatively equal values? I wouldn't.
And what's to stop states from debasing their coins in order to inflate the value of their precious metal holdings? Or just to make them usable. A coin actually made out of (only) gold or silver would be worth so much, at current precious metal prices, that it would be useless for day to day spending. If the metal is degraded down to make the coins at all useful, the concentration of metal in them will be very low. Why not just push it close to nil, thus stretching a state's metal reserves that much further?
"I submit that it would also create more jobs with people accepting the coins, moving back to handling commerce face-to-face and locally versus the Internet. "
Bwuh? The stupidity here is too great to easily address. For one thing, even if this were true, it would be tremendously destructive to the economy. We get huge benefits in efficiency from being able to buy and sell all over the country. If we had to conduct all business face to face, it would cripple the economy. If we could only buy things from people we could walk over and see, our entire commercial transportation network would be destroyed, and thousands, maybe tens of thousands of people would lose their jobs.
But don't worry--there's no way that banks could be kept from allowing customers to stash coins with them and then transfer portions of their value electronically or by paper bank draft or check. It's what banks have always done, even back before the greenback existed. After all, I never see most of the dollars I am paid--they don't exist in paper form, but go from my employer's bank to my bank over a giant system of tubes and then go the same way to most of the people to whom I owe money, via the medium of my swiping a card, writing a check, or inputing data in a computer.
"I wouldn’t like to see it devolve into dozens of states with their own currencies – that would make us as messy as Europe or the early United States."
Erm, OK, apparently the author doesn't know that (most of) Europe uses a single currency now. And they also don't seem to grasp that just what they are saying they don't want to see--dozens of different states having their own separate forms of money--is exactly what is being mooted.
"The American dollar does work great as a tool for commerce, thanks, but it wouldn’t hurt to actually deal with gold and silver just in case."
In case of what? This is what baffles me about the whole movement. The US dollar is not going away. Yes, it buys less than it did in 1789, but so does every currency on earth. A salary of £50 per annum in 1890 would be roughly equivalent to a salary of £20,000 today according to the calculators at Measuring Worth. But the dollar has survived over 200 years of crashes, depressions, recessions, and bank failures. It's not going anywhere.
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no subject
Date: 2012-02-10 12:01 am (UTC)no subject
Date: 2012-02-10 12:09 am (UTC)no subject
Date: 2012-02-10 04:26 pm (UTC)Well, that's the thing. I think that it's a very muddled idea (as, IMO, metallism is in general). They want the currencies to be accepted at face value, but they believe that people will have confidence in the face value because of the metal content.
Of course, as soon as there's any sort of financial squeeze, they will start debasing the coins (decreasing the amount of silver or gold in them and upping the amount of other materials) so as to stretch their rare metals further. Every government that coined throughout history has done this. Which leads to devaluation of the currency and inflation that *cannot* be easily reversed when the economy improves (as one can with currency). So in trying to address a minor problem (the temporary weakness of the dollar) they make matters much, MUCH worse.
Of course, the libertarians would like everyone to go back to barter. Which essentially means everyone makes their own medium of exchange, either by using goods or by creating individual currencies. Chaos, anarchy--groovy, right? *rolleyes* Thomas Hobbes, here we come!
And what is the standard of value -- the dollar, right?
Well, maybe, but not the US dollar. The Tennessee dollar. Or the South Carolina dollar. Or the Joe Smith dollar.
Jeeziz, who are these freaks? Are they as batshit as I think they are...
Yes.