Ron Paul's Predictions

[BlueStreak]

Okay. It's naptime now. Good talking to ya!

Dave

[Big_Bill]

Originally Posted by David Newman

This could very well be the case, my concern is that although honesty is an excellent attribute, it doesn't do us much good if his ideas won't help and I feel strongly that his desire to go back to a gold standard would set us back 80 years, in a very bad way. It would also make all of the unjustified concern about spending a reality.

Now we have a system where International Currency Speculation, determine the value of all currencies. This system can be played by huge bids on any currency or gold and silver. However Gold and Silver have an intrinsic value world wide that will stabilize sooner that paper currency. Today our currency is backed by the full faith and confidence in the Federal Reserve System, a group of private bankers, both foreign and domestic that , with only the trust of Congress do as they please ?

Now please tell me why you believe that going to the Gold or Silver Standard will set us back 80 years ? I'm really interested.

Sincerely,

Bill

[Rex E.]

Originally Posted by Big_Bill

Now we have a system where International Currency Speculation, determine the value of all currencies. This system can be played by huge bids on any currency or gold and silver. However Gold and Silver have an intrinsic value world wide that will stabilize sooner that paper currency. Today our currency is backed by the full faith and confidence in the Federal Reserve System, a group of private bankers, both foreign and domestic that , with only the trust of Congress do as they please ?

Now please tell me why you believe that going to the Gold or Silver Standard will set us back 80 years ? I'm really interested.

Sincerely,

Bill

I'd like to actually see the gold we don't have in Fort Knox.

[David Newman]

It sets us back 80 years because it puts constraints on the economy that are unnecessary (any commodity backed currency will). In any fixed currency system in the world that I am aware of, economic booms are boomier (my love for subwoofers is coming through) and down turns are steeper, harsher and longer lived. We've had 5 depressions in our country's history. IIRC, all 5 of them occurred during eras of fixed currency monetary system. Also, all of the concerns of insolvency become a reality rather than a misunderstanding of monetary operations.

[Big_Bill]

Originally Posted by David Newman

Up to our eyeballs in debt that simply represents the total private sector and foreign savings in the Federal Reserve that we can continue to issue and payoff on a daily basis as we have since 1971 and can continue to do without issue forever. I've used this example before, but if you ran a bank, would you worry about allowing people to deposit too much money into a savings account? Honestly, I'd like an answer to that.

Since we are the one borrowing this money, we must pay the interest and the principle on this money when due. We do not bank monies for others, we borrow from others and pay them interest on their moneys.

And today with a 14 trillion dollar debt, (not deposit), we pay $451,000,000,000 a year interest on that $14,000,000,000,000.

That's 451 Billion Dollars Interest on our 14 Trillion Dollar Debt.

The United States does not invest the money that we borrow, we spend it.

Bill

[David Newman]

Federal spending is not constrained by borrowing or taxes collected.

[David Newman]

Originally Posted by Big_Bill

Since we are the one borrowing this money, we must pay the interest and the principle on this money when due. We do not bank monies for others, we borrow from others and pay them interest on their moneys.

And today with a 14 trillion dollar debt, (not deposit), we pay $451,000,000,000 a year interest on that $14,000,000,000,000.

That's 451 Billion Dollars Interest on our 14 Trillion Dollar Debt.

The United States does not invest the money that we borrow, we spend it.

Bill

We transfer money back to reserve accounts on a daily basis + interest and there is no reason why we couldn't do so for eternity. There is no threat of involuntary insolvency in our monetary system. If we ever became insolvent, it would be purely voluntary.

[Big_Bill]

Originally Posted by David Newman

We transfer money back to reserve accounts on a daily basis + interest and there is no reason why we couldn't do so for eternity. There is no threat of involuntary insolvency in our monetary system. If we ever became insolvent, it would be purely voluntary.

If this were true, the United States would not have lost its AAA credit rating.
Due to concerns over our almost 15 Trillion Dollars of Debt, soon to be 15.5 Trillion Dollars in Debt, it was determined that we were not as credit worthy as other Governments. This action will cost every tax payer money, as the Government will need to pay higher interest rates for the monies that it borrowes.


(Reuters) - The United States lost its top-tier AAA credit rating from Standard & Poor's on Friday in an unprecedented blow to the world's largest economy in the wake of a political battle that took the country to the brink of default.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government's budget deficit and rising debt burden. The action is likely to eventually raise borrowing costs for the American government, companies and consumers.

"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics," S&P said in a statement.



Bill

[Bigerik]

Cept it didn't work that way.

[BlueStreak]

Originally Posted by David Newman

It sets us back 80 years because it puts constraints on the economy that are unnecessary (any commodity backed currency will). In any fixed currency system in the world that I am aware of, economic booms are boomier (my love for subwoofers is coming through) and down turns are steeper, harsher and longer lived. We've had 5 depressions in our country's history. IIRC, all 5 of them occurred during eras of fixed currency monetary system. Also, all of the concerns of insolvency become a reality rather than a misunderstanding of monetary operations.

Another excellent post. The radical boom and bust cycles of past versions of capitalism were the reason for adopting the Keynesian model in the first place.

Go back, and we will learn the hard way, why the old system was rejected.
Unfortunately, that is the only way some of us learn.

Dave

Dave