Musicmystery
Posts: 30259
Joined: 3/14/2005
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Wow. Misunderstanding at every level.
quote:
ORIGINAL: Termyn8or
"The legal debt limit is arbitrary, and means little. "
Oh ? If it's OK to create money from thin air then it should be just fine to do the same to create the interest payments on the debt. Problem solved. Shit, national debt gone with the stroke of a pen.
What's holding them back ? What is it that I misunderstand here.
All of it. You lifted the quote out of the context of the argument it addressed, his argument that gold solves all these problems, when the debt ceiling is, in fact, an arbitrary limit, not a monetary principle.
Second, money gets created anyway, and has since goldsmiths started issuing certificates for the gold in their safes. Your point about interest payments is just irrelevant, since the same applies to all money; your contention that the national debt is gone with the stroke of a pen shows a misconception about what the money creation means--specifically, you're confusing money creation with printing currency. Not at all the same thing, as the first requires an active economy, while the second is merely inflationary. And the Fed's job is to control that inflation. You, on the other hand, are addressing fiscal policy, for which the Fed has no duties whatsoever--that's a function of the Treasury, which has nothing to do with monetary policy. They are separate for the very clear purpose of preventing exactly the kind of political short-term inflation you mentioned. That's what's holding them back. And gold would change none of it--inflation would just come all at once when the currency is forced to devalue by arbitrage differences between real value and official pegs relative to currency and commodities.
quote:
Why do so many see this doom and gloom when you see rainbows and pots of ___________ ?
This is a complete misrepresentation of anything I've posted. Yes, I counter the gloom and doom exaggerations. They serve no purpose but to lead to foolish "solutions." Neither did I paint any rosy pictures anywhere. I could--it's what I do professionally, and successfully--but not in a garden of preconceptions like the ones posted here.
quote:
If it's OK to just print money, why did we borrow any in the first place ? Why issue bonds and bills ? Just give away the money. As long as we have paper and ink.
First, as above, nowhere did I advocate just printing money--you are confusing printing with creating money through fractional banking. You are also confusing monetary policy (the Fed) with fiscal policy (Congress and the Treasury).
We issue bonds and bills to cover deficits, obviously. We don't just "give away the money" because to do so would devalue the currency and inflate prices. It would amount to a default, and the U.S. has never defaulted in its history.
quote:
It's amazing how many people, expert and layman alike see some sort of big problem when the answer is right here. Print baby print.
Again, cute rhetoric, but a complete misunderstanding of monetary policy, fiscal policy, printing money, and money creation, including broad confusion among them.
quote:
T^T
It's also all irrelevant to the topic. Gold would solve none of that. It would just add a layer of complexity (relative valuations) while papering over it with fictional simplicity.
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RE: FORBES: RETURN TO GOLD STANDARD WITHIN 5 YEARS - 
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