Why can't the US live within their means?

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When the Chinese and Japanese sell their stuff to the United States, what do they get in return? What is the only thing they can get in return? Oh, yes, that useless green paper they call American dollars. And what is the safest way of parking American dollars into interest-yielding form - why, purchasing American treasuries. Now, if they want to stop buying the treasuries stop selling to the Americans. Simple, isn't it?

When the economy is full of slack as it is now with depressed aggregate demand, increasing the money supply will help reduce that slack and more efficiently use the resources of the country. Right now they are underused because of insufficient money.

It is a right wing majority. The Blue Dogs and the DLC make this so. That the leadership of the Democratic Party has surrendered completely and is a tool of the new feudal class is without doubt. It doesn't matter what the people want, the media has a monopoly on propaganda on their behalf and the system of organised bribery sees to it that their agenda is followed in government.

A debt that has to be paid back. Banks can borrow freely from the Fed, but it has to be paid back, and likewise the banks can pump money into the economy but it has to be paid back. That it is a debt restrains the injection of money into the general money supply (thus low Fed interest rates tend to stoke inflation but not drive hyperinflation). But if you start massively expanding the money supply then you get hyperinflation. You can't create goods and services (real wealth) out of thin air.

I think you are confusing pumping the money supply to providing credit to parties who are capable of using the borrowed funds to either invent new stuff, create new plants or increase the production of goods and services with current capital. Credit means the borrower gets to spend and the lender waits for the new or additional stuff to sell so that the borrower can pay the lender back with interest. Printing money means the creator of new plant or product and all other parties compete with too much money for the amount of goods and services and there is no guarantee that increasing the money supply, by itself, will increase plant, or produce new/additional product or services. Study history. See what happened to the Weimar Republic when the printing presses ran overtime.

ruveyn

The majority of americans can't live within their budget because they are all brainwashed sheeple who can't think for themselves so they have to take what the TV tells them as the final word.

Actually, it is an important distinction. While, in theory, there is plenty more gold and silver to be had, it's in the ground, unprocessed. So, if you want to extract 20 tons of raw gold to make into "wealth" it will take a considerable amount of investment to do that.

Fiat currency, in contrast, requires nothing but the stroke of a pen and perhaps telling the printing press to run out an additional 20,000 pages of paper. Hardly the same thing by comparison.



Most anything could serve this purpose, but currency not backed by fixed and unalterable values of real and existing durable goods is currency that can be created out of thin air from nothing. This allows a banker to take something real (the product of your hard work...even if it's represented by fiat currency paid to you for your labor) in exchange for something the banker created from nothing at no risk to himself. It's theft...plain and simple.



Not really, you get the same problems, just different angles.

If you have 1,000 tons of pure gold backing $1,000,000 in currency, to print more currency without obtaining new gold to back it (or removing old currency from circulation) means you dilute the currency in existence. $1 which has half the gold backing it is now only worth $0.50. Prices go up accordingly.

The difference between the government just running the printing press and what is going on with central banks loaning money to governments is that the populace at large is ignorant at how badly they are being screwed over.

That's why smart people are buying gold, silver and other precious metals. They see what's coming.

The Federal Reserve Bank used to disclose how much currency was in circulation...both in physical and virtual forms as only a fraction of the currency in existence is ever printed onto paper. For some time, the amount of total currency in circulation has grown at exponnential rates, and the more of it there is out there, the faster it grows.

With gold-backed currency, you couldn't do that without disastrous results at every step because to choose to print more money without gold backing has an immediate effect on the economy. With fiat-based currency, nobody needs to what is going on if you can just hide the numbers....which is what is going on today. A few years back, the Federal Reserve Bank stopped reporting the total amount of currency in circulation. In my observation, that's when the rush for more and more people to buy precious metals took off. Those paying attention to the markets know the significance of when the central banks start withholding information.

Meantime, as long as the peons keep focusing on the fact that they go to work, get paid, and life seems to go on as usual, they get away with it.

Gold is impractical. It's telling people they can't expand their business or hire people because there isn't enough gold at Fort Knox. That's silly. The whole point of a monetary system should be to help produce things. A monetary system that arbitrarily blocks people from that is not a good one. Fiat currency systems are not constrained and do not block people arbitrarily from production so they are clearly superior. Money's value comes not from the value of material backing it, it comes from the fact that people must pay their taxes in it.

When the private sector refuses to spend or cannot spend because of crushing debt burdens and because of this "credit crunch", the sort of deleveraging spectacle on going, the public sector must deficit spend and in so doing this will create money that will restore the aggregate demand lost by the decline in private sector spending. Failing to do this will cause bankruptcies and the idling of production and unemployment and deflation. This is damaging to the economy and is immoral as well.

The failure in your reasoning is that FIAT CURRENCY IS BACKED BY NOTHING.

Currency only works if it's backed by something of fixed or reliable value. It could be gold, or silver, or oil, or hard wood, or anything that has quantifiable value. Gold withstands the test of time because you don't just find it lying around, it does not decay when exposed to most normal elements and the passage of time, and when purified to a given standard, it's value is predictable.

If you want monetary reform, you can not go to a credit-based system because the person allowed create the currency will profit from the productivity of those who work while the currency maker only has to sit back and wish the currency into existence.

Economic models exists for THOUSANDS of years without credit or fiat-based currency. To propose that we couldn't survive without fiat currency is laughable.

Neither does gold. Gold has little intrinsic value. You can't eat it and it won't keep you warm on a cold night. Gold's main value is its trade value and that is determined by nothing but the willingness of people to accept it in exchange for goods and services. Gold's main virtues are scarcity and durability. The gold supply cannot be jiggered by political means. There is just so much of it available at any given time. That being said, a gold system will work as well as a well behaved fiat system provided credit can be extended to people to help them create further real wealth. But this depends on how acceptable gold backed i.o.u. instruments are in the market place. In order for a system of money to work, there has to be the means of extending credit to those who can create wealth so they can pay back their loans.

ruveyn

I'm trying not to argue in circles, but that's my point exactly.

Gold's value is that you can't just snap your fingers and make more appear at whim. The current fiat currency scandal is not new. It happened in Europe on a lesser scale hundreds of years ago. When bank notes were used to represent gold on deposit, bankers learned that they could issue more notes than there was gold in the vault. So long as not too many people demanded their gold back or no authority came in to audit the gold deposits, they could enjoy wealth for what was essentially a con game.

You propose the idea of a "well behaved fiat system." I propose that it has been tried and failed more than once.

If there is only $1,000,000 worth of gold in the world to represent all currency, then prices might drop to fractions of a cent, but it would all work out in the end.

What you seem concerned about is "easy credit" which is simply bad business. You are extended a LOAN (credit = bad as it is value for nothing) based on your ability to repay. If a company needs $10,000 of "credit" at any given time, then a bank should be able to extend an open-end LOAN of $10,000, any or all of which can be used as needed and interest paid on whatever outstanding balance exists. A LOAN requires that the bank actually possesses $10,000 in physical assets to extend to the business.

As I keep saying, a fiat money system is backed by NOTHING. Being backed by nothing, how do you propose to keep it honest? Having $1,000,000 in circulation is no different than $10,000,000 or $100,000,000 or $1,000,000,000?

No, I don't think so. Any savvy person would know that if the money supply goes from $1,000,000 to $10,000,000, the value of a given note has dropped to 10% of what it was once worth. Only the fools who believe what someone tells them would accept $1 for $1 after such a shift. This is why the global players in the banking systems settle their account differences in gold bullion (something of substance that is accepted for value) and not any of the existing fiat currencies backed by nothing.

You do not want to go to work every day to accumulate currency. Currency is not wealth. You work to acquire wealth, and the only things that can represent real wealth are real goods of value. If the people who hold the wealth convince you that fiat currency = wealth, they win and you lose.

Think of it this way....say the currency you have in your bank fails due to poor economic policy. What can you do with it? Who will accept it in trade? What rights do you have? Now, what if you had gold? Your only concern would be if someone would not want to accept gold for what you want, but at least you have a tangible good to offer that most people would accept for value. You could replace "gold" with "wheat" or "rice" or "oil" and see the same point.

"...say the currency you have in your bank fails due to poor economic policy." If the deficit terrorists deflate the economy as they want this will surely undermine the market and is poor economic policy and why then trade in the currency of a has-been market?

If people are so concerned that the value of the currency will erode then put the money into something else. Isn't that what they want us good capitalists to do anyway?

People need to look at inflation as a tax, because it is. Our currency is backed by nothing, devalued by over 90% in the past 80 years. 1$ then would be 23$ in today's world. We cannot keep this debt ridden system, when you take out a loan.. the bank creates 9x that amount in inflation. With slavery you're required to house and feed your slaves, with economic slavery you aren't. We're manipulated through this Clandestine Empire that you helped build. Corporations own the world, central banks along with Corporations and governments rule without mercy.

The United States is the most aggressive in these regards. Free enterprise Capitalism, but what does that mean. It means that.. everything is looked at as being a profit. Gaining profits anywhere and everywhere possible, which enable scarcity and competition for profit. Poverty, crime.. universal ignorance to live beyond your means. We are programed to think this way, 4 Corporations own all the media and they work with each other. This is real life, not a fictional program you see on your tv. American corporations put whole nations into debt by helping them, then when they cannot repay the loans they privatize their Healthcare, or School Systems. Municipalities to American Corporations. Sell your oil for cheap to the corporations and let them build military bases in your country. This is the real world.

Typically the average human consumes around 1,000 calories a day. The typical American consumes around 3,000 calories a day. The foods contain chemicals, the water isn't even safe to drink. People flush pills and chemicals down the toilet, when it's re-treated at the sanitation plant it can't purify to 100%. Thing's won't change because this is the path the leaders have chosen for a one world, one order future. Capitalism, with it's promises of freedom, you'll get poverty, monopoly's that fix prices and interests. I suggest routing yourself back to the way it was. Grow your own food.. purify your own water or buy it. Don't watch tv and stop eating like gluttons ? !

Has the US ever lived within its means? Think about it... we were founded on slave labor, which was eventually abolished. Then we had excessive exploitation of the American worker until industries starting unionizing, then came the great depression, WW2, then we started exploiting cheap labor overseas. Have we actually had any period of peace and prosperity where we haven't been propped up by exploitative cheap labor?

"The money powers prey upon the nation in times of peace and conspire against it in times of adversity. The banking powers are more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy. They denounce as public enemies all who question their methods or throw light upon their crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe. [As a most undesirable consequence of the war...] Corporations have been enthroned, and an era of corruption in high places will follow. The money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed." —Abraham Lincoln

sure they do.
I mean honestly, we prolly don't need as much money put into military as there has been.
In irag & afghanistan we've been walking down easy street as compared to any of the real wars we've historically fought.
U.S. soldier casualties in the iraq war? Only around 5,000.
Iraqi civilian casualties not even including the actual enemy? Upwards of 100,000.
In my opinion, i think all that money we've just poured into our military is pretty much just overkill .
If anything we should've dumped more of that money into better security. I mean honestly, if we'd done that in the first place, 9/11 might not have even happened. I'm not saying we shouldn't be in iraq. I'm just saying there was prolly a more financially reasonable way to go about things. Bush put us trillions more dollars in debt with his spending. I imagine that if we hadn't spent those trillions, we might find much much better use for them right now, like bailing ourselves out. We don't even know if we have long-term success in iraq. It could well revert back to what it was in years to come. In which case, ours will have been a costly gamble.

However with any luck, the democracy we're setting up there will be successful and they'll be so grateful for solving their problems under the pretext of chasing terrorists & unseating evil dictators, that they'll give us a good deal on oil prices once they get their internal affairs in reasonable order (they have the second largest proven oil reserve in the world you know. Number one is saudi arabia. Also about 90 percent of iraq hasn't yet been tested for oil for various reasons, wars & such, and may possibly yield billions MORE barrels of oil.).