Gold standard ftw.

1) yes
2) go to a monetary system backed by a variety of commodities

which will lead to warfare between nations.

Funny how all these permabulls who never see bubbles coming are so keen in sensing and calling golds current bubble.

You left off Dennis Kucinich who is one of the most vocal supporters of the option 2- government debt free money scenario along with the american monetary institute.

http://www.youtube.com/watch?v=v8OjgN-3ZDA

So you guys want there to be >1 forms of dollar? This might be a very stupid question.

Aren't there already????

How so?

A "dollar" is simply a store of wealth. It's no longer redeemable for gold or silver or anything, so the value of the dollar is simply in what it can buy. Euros can also buy things, so can the Peso, Yen, CA$, etc etc etc. What we would like to do is get rid of the laws that REQUIRE you to use US$ (And thus lose purchasing power every year) so that you could store your weather in whatever means you wanted to. If you want to have a bank account in Euros, for instance, you could do that. The result is that "good" money (that holds it's value and is universally accepted) forces "bad" money (that gets it's value inflated away) out of the market because nobody wants them.

http://www.measuringworth.com/ppowerus/result.php

Look how much value your "dollar" has lost. Would you hold your wealth in it if you had a choice?

Those guys aren't nearly as much traitors as people like Barrack Obama and George W. Bush. They need to get in line IMO.

But those are different countries and borders are magik.

Even without government control of any kind; it will remain IOU based paper or nowadays electronic IOU based credits.

Paper money evolved through a market, btw. It's not a very good idea carry around a bad of gold. You'll hand your car dealer a note from a gold keeper saying my bank owes you 10oz of gold, and he'll give it to Ford for another car or two. Eventually, the paper money (er I mean gold IOU's) will be overinflated and there will be a deflationary crash.

Of course, this doesn't mean this is a bad result or that things won't be better than they are now. An economic crash is can be a good but painful thing, same as a forest fire.

So you're saying you're soft on treasoners? We The People should just shrug and laugh about how this cabal has destroyed our once former great country of ours? You are ok with these criminals stealing your future and your kids future? Where are true American patriots? Let me clue you in - "patriotism" is NOT the act of blindly following your government's glowing news reports about how safe they've kept us from "terrorism" and economic meltdown.

I concur, however I also have yet to see - in almost 50 years now - any resolution to the Kennedy assassination. This is AT LEAST a conspiracy stretching back that far. I believe JFK was killed precisely because he was planning to get rid of the Federal Reserve system. A fellow looking very much like George H. W. Bush was photographed at Dealey Plaza that fateful day... and he later became top dog in the CIA... things that make you go "hmmmm..."

An important feature of "gold as money" is that paper notes redeemable in gold (i.e. "money") will need to be more than just a vague promise to deliver gold later (i.e. "debt"). "Money" will be very secure, relying the certification of many parties that it can in fact be redeemed for actual gold at any time, and that this promise is demonstrably true in practice. Debt, the unsecured, uncertified promise of future redemption, would need to be clearly identified as such under penalty of fraud. The deflationary crash you describe above is what happens when people mistake "debt" (as I've loosely defined it above) for "money" (as I've loosely defined above). Debt is naturally worth less than money because of the risk of default, the failure of the current banking system to differentiate between the two is a big, big deal.

No it was the Cigarette Smoking Man ldo.

Or you put the gold right on the bills We've got a prototype. Boro, the presentation please.

Even if we mark some bills as truly redeemable in gold, and other bills as I owe you gold, in the end, the two will be used interchangeably at least in times of plenty (i.e. bull market optimism), and therefore there will still be deflationary crashes when people turn pessimistic.

When you buy a car and pay in gold, you are actually paying with your services. Since the dealer doesn't need your particular skills, you convert your services into the medium of exchange which he can use to purchase the goods or services that he needs. Once the dealer has exchanged your gold for the services he needs, the gold is no longer relevant between the parties, and can be used to facilitate other transactions.

This is why it doesn't matter that there is less gold (or less M1 deposits for that matter) than the amount of transactions. So as long as people are confident the gold they are promised will be there in the future, they'll take the IOU.

I think we agree on almost everything. I just disagree with you to the extent you feel their will not be deflationary crashes if we move to gold as a currency. No matter what you do, the market will come to some type of fractional reserve banking on its own because it's more efficient, and that will eventually lead to excesses and then crashes to correct misallocations of capital created in the booms.

With the (extremely important) difference that money and debt will be different and identifiable. They will not be used interchangable, any more than in the current world bonds with a $20 face value can be used in place of a $20 bill. Fractional reserve banking can be defined as the disguising of loans as money, and that won't be permitted in a free market (any more than any other type of fraud is permitted).

Are you going to mandate by law that fractional reserve banking can not exist then when you say "won't be permitted"? Because unless you mandate it it will almost definitely occur.

When you deposit gold at a bank and get a receipt in exchange that receipt gains monetary value and is "money" in the most direct sense that the receipts work as an exchange medium that can be traded, has purchasing power etc. The receipts are not being disguised as money, they literally are money. This is the same thing as bonds....bonds are a type of money because they work as an exchange medium and have purchasing power. Sure they arn't universally accepted, the government won't take them in leu of taxes, but they very are a type of money.

But what is meant by saying "we shall use gold as money" is that devices will be made distinguishable from "money". When something is said to be "redeemable in gold", that means not that you have a 50% chance of getting gold, or a 75% chance of getting gold, or a 98% chance of getting gold, it means that you have a 100% claim on an actual piece of gold and if you don't get it then that's fraud, not a default on a loan.

I'll respond to this separately:

I am not interested in banning institutions from taking in money and loaning it out and paying interest to the depositors. But if they promise all depositors that they are 100% secure, and that they can come get all of their money at any time, and some or most of it is actually loaned out, then they are committing fraud. If the promise depositors that they can come get their money if they have enough on hand, and they might not, so the depositors know that they are in fact taking an investment risk, then they are not committing fraud.

Uhm... what does this have to do with my post?

I see so yes you are advocating top down prohibitions against banks and individuals engaging in this type of transaction. It is hardly fraudulent a priori, it is an invesment where a person exchanges gold for recipts which have some risk involved in a fractional reserve system but also offers rewards in the form of interest. Just as any business transaction between two consenting participants involves risks and rewards, such as loaning gold to someone who might go bankrupt.

Provided there isn't deception about what is happening on the part of the banks it is not fraudulent and merely a choice any participating indivual believes is +EV. If you want to argue for restricting peoples voluntary transactions you would be better suited arguing there is some kind of larger societal cost like too much systemic risk that requires a government to aleviate through regulations. Hardly a free market perspective though...

Yes, well, that's the key. People transact in fiat money held at the bank that has a default risk but they are persistently reassured that the risk is very small (only a run on the bank by "crazy" people can result in defaults on deposits) or the risk is zero (the government will insure all the deposits up to $x) and this results in people behaving as though they have 100% secured deposit, not like they have made loans. This aggregation of the role of the bank as warehouser of money and lender of money is a deception. The banks tell each of their depositors that they can come and take their money out any time they want. They cannot possibly keep that promise if everyone comes at once.