Potential Panic About Gold (page 3)

hoser

Money management is not taught in School. The watchtower certainly doesn't teach it. With a Fiat currency much wealth can be created for a common person if he/she figures out how to play the game.

Not everyone can live from speculation and rent seeking. Some people have to actually do value adding work in order for the system to function. The proportion of rent seekers to workers has reached unsustainable levels, which is one of the reasons for the current crisis of capitalism. Extracting value from others is not only unethical it is unstable in the long term. In a truly democratic system rent seekers will simply not exist.

hoser

slimboyfat

People who derive income from their assets through the various ways the system legally encourages (property, financial assets, investments) rather than from their labour. I realise most people derive income from both, but nevertheless most ordinary people derive most of their income from labour during the course of their lives while a minority derive most of their income from rent seeking. Rent seeking is obviously the more attractive option but as their numbers increase it undermines the system itself.

hoser

Not everyone can live from speculation and rent seeking.

I looked up rent seeking and you are correct this is not sustainable. And for speculators for someone to win, someone has to lose, or lose the potential gain and it is all inflation related anyway.

What I am getting at is that with a Fiat currency the suppy of capital is not restricted to a fixed supply commodity, such as gold.

A perfect example of creating new wealth is that of a farmer.

A farmer needs to grow a crop but he is low on funds due to last years drought. Under a gold standard all the capital(money) that he needs to maximize his farms potential may not be available to him. It might be loaned out to other farmers or industries.

under the Fiat system where the money supply is unlimited he can borrow all that he needs to buy the best seed, fertilizer, fuel and other inputs he needs to grow the best potential crop. new wealth is created(crop)

The only drawback and it isn't really for the farmer is that the loan is created out of thin air creating more inflation.

hoser

An example of rent-seeking in a modern economy is political lobbying for government benefits or subsidies, or to impose regulations on competitors, in order to increase market share.

hybridous

Point of interest, R. Paul is not an advocate of re-linking the dollar to gold, per se.

He's an advocate of legalizing alternate currency, to compete side-by-side with FRN. Presumably, a new legal currency would be commodity based, in some fashion, giving us savers a place to store our purchasing power, while the FRNs are inflated into oblivion...

talesin

It's hard to believe someone bought those 10 oz. bars without testing them .... DOH! ANYONE buying gold who doesn't test it, is just not thinking right. Especially that size,, it's a simple procedure. Yes, I bought and sold gold for 10 years.

1000oz bars? no, the standard is 400 Troy oz. (about 27.5 lbs.)

sbf - so true what you say... it's amazing to me that ppl don't learn in 1st year philosophy that capitalism implodes for the very reasons you explain above.

tal

Potential Panic About Gold

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