Herman Cain Drops Out

[BrooklynRedLeg]

Asperger's syndrome is a very serious disorder that seriously affects a great many people. Your casual use of it as a pejorative is frankly disgusting and hateful. I bet you make fun of kids with Down's syndrome when you're in your middle-school cafeteria, too. Of course, you thankfully lack the will and the physicality to escalate into full-on violence, bigot.

Yes, I'm so hateful. Tell me another one.

So? The Federal Reserve is still established by the US Government and its leadership is appointed in exactly the same way that any bureaucratic department is appointed. What you're saying is that the Post Office is unconstitutional because it, too, operates the same way- independently of the US Government, though its leadership is appointed by it.

Does it not yet compute that the Federal Government has no power granted to it to make us use FRNs. They only do so because they have guns and cages to throw people into when they don't.

Oh, I see your hatred of the autistic is such that you're putting on a little minstrel show about how you don't understand what "functionally equivalent" means and you resort to dictionaries. Go to hell.

Can't really go to a place that does not exist.

No it doesn't. If it did, it would refer solely to that. But it doesn't, because it also has the power to determine what every standard of measurement is, and even if we venture into Libertarian Land and accept that, it still doesn't ban paper or "fiat money" unless we go further into the realm of your insanity.

Are you serious? The Constitution's Necessary and Proper Clause only deals with those powers granted to the Congress.

Do you not understand syntax? Make refers to the power to alter. It doesn't say what you think it says unless you twist things to point due stupid. Here, let me put it to you this way- if I declare that I do not have the power to make anything except Cowrie Shells a tender in payment of debts, then does that mean that I can only accept Cowrie Shells in payment for debts?

State's are already forbidden from minting their own money. They can only accept Silver and Gold Tender in payment of debts.

So unless you can find some of the Purestrain Gold created in the Big Bang (not that Pon Raul believes in that) which is the only thing in the universe with intrinsic value, it's still FiAt MoNeY and unConStiTutIonAl. Don't you even know what truth is?

You still cannot fathom what in the hell he advocates, let alone what money is. Of course money has no intrinsic value as its merely a medium of exchange. Fucking beads are money if 2 or more people decide they are so. The difference is there isn't a goddamn gun pointed at your head (Legal Tender Laws) and a cage to throw you in if you decided not to play by some asshole bureaucrat's game.

[Simon_Jester]

Ah, hello, RedLeg. There were a few things I'd been meaning to ask you. Let me repeat some of the questions and comments I had earlier in the context of... whatever you want to call Paul's fiscal policy; the names you'd give it would be more charitable than the ones I'd give it.

...And the big point I have is that I don't see the payoff in agreeing to do this. Why would we stop using a single currency standard, which makes bookkeeping and record keeping easy, transactions predictable, and prices stable? How would the heavily electronicized economy function- how am I supposed to do credit card transactions?

And so on. It just strikes me as a colossal upheaval for no reward at all, the ultimate triumph of blue-sky theory over cold hard fact in politics.

Pursuant to this, what is the payoff for abolishing the single-currency standard? What changes for me, personally, in ways that I will be thankful for?

In which currency do my credit card transactions get carried out? Is this the same currency in which my bank accounts (at a credit union affiliated with a government agency) are denominated? Can Bank of America print its own money and choose to denominate its accounts in that currency? Can they take the accounts of existing customers and convert them into BoA Dollars?

Even assuming that after the smoke clears everyone will be using currency that's based on the silver standard, so that we have some way of interconverting different forms of currency reliably, that can't happen right away. Specie-backed currency would not emerge immediately, because most of the big players in the modern economy (banks, major investors, arguably the federal government) are not equipped to guard and distribute that much specie, and don't have it in stock.

So what happens during the transition?

After asking one of the moderators at the Facebook group, I Bet Ludwig von Mises Can Get More Fans Than John Maynard Keynes, he replied that it would basically be akin to switching from a MasterCard monopoly to a system where MasterCard, Discover, American Express, etc, have to compete for customers. He also pointed out the lack of sustained inflation prior to 1913. The credit card analogy could be better, though, since they all use the dollar.

The problem is that currencies don't have customers. They're simply used, or not used; a currency doesn't become stronger by competing with other currencies. There are no hidden efficiencies that the currency can tap into by having to compete with other currencies.

Also, a system of competing currencies lends itself to all kinds of horrible gaming of the system. I mean, look at what the currency exchange traders are like now; do we want to subject our own internal domestic economy to the same kind of bullshit they pull on an international level? Do we want our economy to be constantly siphoned by a bizarre cross between the currency speculators and the high-frequency traders?

Your moderator isn't thinking this through- from the way you've got him sounding, he's just going "competition good!" and "inflation bad!" And that's not good enough for me. Economics doesn't reduce to things that ridiculously simple.

Frankly, I feel the same criticism applies to advocacy of currency competition in general. I think you're using "competition" as a buzzword, without considering the context. Not all competition is good; sometimes it just means shipwreck survivors drowning each other in mutual attempts to stay afloat at someone else's expense.

Can you explain, in detail, how you (or Ron Paul) would avoid letting the financial sector game the domestic "foreign exchange" market? Or how, exactly, a currency is made stronger by direct competition with other currencies in a nation's internal economy?

[Panzersharkcat]

Or how, exactly, a currency is made stronger by direct competition with other currencies in a nation's internal economy?

It would be argued that more currencies would force them to be more honest about bank practices. The only way to get people to accept your issued currency would be to convince them that your money is actually worthy to use. If you try to screw your customers through inflation, even if that batch of people get screwed, it pretty blares out forever that you are not to be trusted to handle money again. If a central screws people with inflation, everybody goes down with the ship. That's the argument, at least. Whether you take it or not, well, *shrug*.

[BrooklynRedLeg]

...And the big point I have is that I don't see the payoff in agreeing to do this. Why would we stop using a single currency standard, which makes bookkeeping and record keeping easy, transactions predictable, and prices stable? How would the heavily electronicized economy function- how am I supposed to do credit card transactions?

Actually, the heavily electronic economy would function easier. Its not like someone wouldn't make an App or other piece of modern software to make conversion easy. It would be whatever currency some merchant decided to value their merchandise. It might even make prices cheaper for certain goods. Nothing would stop you from using a Fiat Currency if you chose to and so on. The difference is that you wouldn't be penalized for not using FRNs (paying taxes upon silver/gold tender etc).

And so on. It just strikes me as a colossal upheaval for no reward at all, the ultimate triumph of blue-sky theory over cold hard fact in politics.

Pursuant to this, what is the payoff for abolishing the single-currency standard? What changes for me, personally, in ways that I will be thankful for?[/quote]

One thing it might do is make the Federal Reserve reconsider its Inflation-fueling policies in favor of keeping (or attracting) customers.

In which currency do my credit card transactions get carried out?

In whatever currency you and your credit card decide upon using. Most will probably remain with FRNs.

Is this the same currency in which my bank accounts (at a credit union affiliated with a government agency) are denominated?

It might be, it might not.

Can Bank of America print its own money and choose to denominate its accounts in
that currency?

They could, but its value would only be as strong as their corporation. Though they are unlikely to break from the Federal Reserve System.

Can they take the accounts of existing customers and convert them into BoA Dollars?

They could. Would depend on how stable their currency was and remained.

Gotta go..will try and answer the rest later (probably in a day or three as I dont have a regular internet connection).

[Bakustra]

Guess what, RedLeg?

All governments rely implicitly on the monopoly of force as part of maintaining their legitimacy to rule. So you aren't really talking about the Fed, but about the entirety of the functions of government, which raises a number of questions as to why you care about the wording of the US Constitution. So how does the US government declaring that one currency is legal tender different?

[Zinegata]

Or how, exactly, a currency is made stronger by direct competition with other currencies in a nation's internal economy?

It would be argued that more currencies would force them to be more honest about bank practices. The only way to get people to accept your issued currency would be to convince them that your money is actually worthy to use. If you try to screw your customers through inflation, even if that batch of people get screwed, it pretty blares out forever that you are not to be trusted to handle money again. If a central screws people with inflation, everybody goes down with the ship. That's the argument, at least. Whether you take it or not, well, *shrug*.

Except that you assume you can easily change your Bongo Dollars for Pattycake Pesos when the Bongo Dollars collapse due to inflation. More likely than not, those with Pattycake Pesos will refuse to trade for your Bongo Dollars and you'll be stuck with worthless paper.

Multiple currencies are a terrible, terrible idea.

[Shroom Man 777]

Why the hell would you want to make your lives all the more horribly complicated with more kinds of dollars, coins, quarters, and shit?

[Panzersharkcat]

Or how, exactly, a currency is made stronger by direct competition with other currencies in a nation's internal economy?

It would be argued that more currencies would force them to be more honest about bank practices. The only way to get people to accept your issued currency would be to convince them that your money is actually worthy to use. If you try to screw your customers through inflation, even if that batch of people get screwed, it pretty blares out forever that you are not to be trusted to handle money again. If a central screws people with inflation, everybody goes down with the ship. That's the argument, at least. Whether you take it or not, well, *shrug*.

Except that you assume you can easily change your Bongo Dollars for Pattycake Pesos when the Bongo Dollars collapse due to inflation. More likely than not, those with Pattycake Pesos will refuse to trade for your Bongo Dollars and you'll be stuck with worthless paper.

Except I do note the possibility that those people will be completely screwed in the bolded portion. What you say about being stuck with worthless paper applies just as much to central bank money, the difference being that fewer people get screwed if somebody in a competing currency system decides to make his money completely worthless. However, if I had my way, such a system would also have it such that those who do screw their customers like that over be liable to be prosecuted for fraud or whatever appropriate charges it would fall under.

[Simon_Jester]

Central bank money is incredibly unlikely to leave people truly screwed over the way hyperinflation does. No major government's self-printed money has gone bust that was in... practically in living memory. Sure, there's been inflation, but not to "wheelbarrow of cash" levels. Hyperinflation is the precinct of relatively small and feckless nations, with only a few exceptions, and countries with large economies that are otherwise healthy don't get involved in it.

Whereas private currencies can suffer from 'worthless paper' levels of inflation so easily it isn't even funny. That used to happen quite a bit back when we had private currencies, which was one of the reasons those private currencies from individual banks were never very popular and ultimately the dollars from the central bank and treasury became the universally preferred medium of exchange.


Another question: has anyone asked the people who would theoretically be issuing private currencies whether they want to be doing so? I'd think that if, say, Bank of America is going to start printing BoA Dollars to compete with the US Mint, they would like to be consulted ahead of time, and would have some ideas about whether or not it would be worth letting them do that. It's not like major financial interests (or minor ones) are shy about telling people what would be in their interests.


Me, I think Ron Paul's just suffering from sticker shock because his ideas of what things ought to cost were formed in the 1930s...

[Panzersharkcat]

Me, I think Ron Paul's just suffering from sticker shock because his ideas of what things ought to cost were formed in the 1930s...

As good an explanation as any. And with that, I think I'll shut up for now about the currency thing.