Re: US dollar: modern history

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Date: Fri, 2 Jul 2004 21:58:49 -0500

<royls@telus.net> wrote in message news:40e25f76.49948261@news.telus.net...
> On Tue, 29 Jun 2004 22:02:04 -0500, "smithaa02" <asdf@asdf.net> wrote:
>
> ><royls@telus.net> wrote in message
news:40e1b08e.5164783@news.telus.net...
> >> On Mon, 28 Jun 2004 19:50:21 -0500, "smithaa02" <asdf@asdf.net> wrote:
> >>
> >> ><royls@telus.net> wrote in message
news:40e04e30.688816@news.telus.net...
> >> >> On Sun, 27 Jun 2004 13:11:20 -0500, "smithaa02" <asdf@asdf.net>
wrote:
> >> >> >Gold has for nearly all its life existed in fractional form
> >> >> >and has been supported by government legal tendar laws.
> >> >>
> >> >> Flat false. Through most of history, there _were_ no legal tender
> >> >> laws, and gold and other metal coinage was valued on its weight and
> >> >> purity.
> >> >
> >> >Taxes are a subset of legal tendar laws.
> >>
> >> False and stupid.
> >
> >Legal tender dictates the store of value you use for taxes.
>
> Nope. It dictates what you use in trade. Tax law dictates what you
> use for taxes.

>From http://www.ustreas.gov/education/faq/currency/legal-tender.html on
legal tender: "All coins and currencies of the United States, regardless of
when coined or issued, shall be legal-tender for all debts, public and
private, public charges, taxes, duties and dues."

> >> >So the impetus is on you to find a
> >> >nation that supported a gold standard while not demanding their taxes
be
> >> >paid in gold.
> >>
> >> The Eastern Roman (Byzantine) Empire is just one example of many.
> >
> >I found sources like the following on the net:
> >
> >www.bitsofhistory.com/ace/contest_lots/Essay/lot9.doc
> >
> >"As emperor, Constantine began the important administrative reforms. He
> >reorganized and separated the civil and military authority. He gave the
> >Senate back their powers they had lost in the third century. Constantine
> >moved the capitol from Rome to Constantinople. He had to maintain Rome's
> >privileges and the new senate in Constantinople had a lower rank. He did
> >that because he did not want to upset the old senate of Rome. He issued
new
> >gold coins that remained the standard of exchange until the Byzantine
> >Empire. Constantine's tax laws were hard for the people. The citizens
were
> >supposed to pay the taxes in gold or silver. The people who were too poor
to
> >pay was beaten or tortured"
>
> Thank you for posting the proof that you were wrong. The Eastern
> Roman Empire issued gold coins that were an international standard for
> 700 years, but accepted tax payments in silver (and most of the time
> in other forms, too).
>
> You are proved wrong. As always.

The link I provided stated they accepted taxes in gold. Here is another
link that proves the Byzantine empire was not a tax-less gold wonder:

"Constantinople itself had similar splendours, not least in the great church
of Haghia Sophia, completed for Justinian in 537. Besides mosaics and wall
paintings, the internal columns of the brick-built church were covered with
gold leaf. "In the evening the interior was so radiant that one could
suppose the sun was shining," a visitor reported. The Emperor's own palace
had a throne room lined with gold mosaics and in the courtyards around
goldsmiths plied their trade (as they still do today in little workshops
around Istanbul's great churches and mosques). The emperors sought to
preserve their wealth by insisting on taxes being paid in gold, which could
then be used for building, for paying their armies, civil servants or
foreign subsidies."

http://info.goldavenue.com/Info_site/in_arts/in_civ/in_civ_byzantine.html

> >>In
> >> fact, were there any gold standard countries that _did_ require
> >> payment of taxes in gold? I can't think of any. Gold was usually far
> >> too scarce for most taxpayers to ever _have_ any of it.
> >
> >In these gold economies of yours...what did they pay taxes in?
>
> Often in silver or even in kind.

Prove it with a link.

> >> ROTFL!! If it had utility of 50, who would pay 100 for it?
> >
> >People like Roy, people facing tax liabilities denominted in gold,
>
> When have tax liabilities ever been denominated exclusively in gold?

Probably the same number of instances by which gold has existed in 100%
backed fashion... That government accepts gold abeit in a fractional
standard with sometimes competition from other monies, is enough to propel
gold into fiat status and make it a popular store of value.

> >people
> >facing private liabilities to external parties in gold, etc...
>
> Sounds like 100 utility to me.

If one party lacks bargainning power they may be forced to purchase
something (like gold) with labor that exceeds its percieved inherent
utility.

> >> >How can can a defense of gold be that it can be used in the real
economy,
> >> >when currency traders disagree and use it as a store of value?
> >>
> >> A store of value is also a use in the real economy.
> >
> >Not if the people put more into that store of value then they get out of
it.
>
> Which they don't.

They do put more into the store of value then they take out, because gold is
a private commodity sold for profit (else gold could not act as a store of
value).

> >> >> >You can't have your cake and eat it too. It's real simple. The
> >> >> >demand for gold as a currency will drive up the price beyond what
its
> >> >> >current uses were for non-gold utility uses, such that a portion of
> >its
> >> >> >price will reflect gold's ability to tally wealth
> >> >>
> >> >> So? That's not overvaluation. That's the market's _accurate_
> >> >> valuation of gold as a medium of exchange, store of value and unit
of
> >> >> account.
> >> >
> >> >A natural market you have yet to illustrate with an example from
history.
> >>
> >> <yawn> Every time and place where gold coins and bullion have traded
> >> freely is an example.
> >
> >Gold notes and watered coins aren't a free trade of gold as a store of
> >value,
>
> Sure they are. Gold notes can trade in a gold standard economy, and
> gold alloy coins have often been traded and valued according to weight
> and purity.

If you accept fractional notes, deposits, and impure gold coins as store of
values, then why not go all the way and accept non-commodity money as a
store of value?

> >nor is gold that has to have government enforce its use as a store of
> >value.
>
> Gold doesn't need any help in that regard. Governments more often try
> to stop people using gold as a store of value.

How?

> >The onus is on you to provide a historical example to the contrary.
>
> There were active gold coin and bullion markets in Europe and the
> American colonies in the 16th-19th C, in feudal China and Japan, etc.

And taxes in gold or gold based fractional money.

> >> >> Why would it be surprising that a commodity's price would
> >> >> rise as a result of an additional use being made of it? Just like
> >> >> silver's value fell when it was no longer used for coins.
> >> >
> >> >This is sort of the problem... If gold is not rising in demand to
tooth
> >> >fillings, speaker wire, and other non-store-of-value uses then such a
> >rise
> >> >in price must be fiat.
> >>
> >> Nope. Flat false. Use as a store of value is just as legitimate as
> >> any other use.
> >
> >Which gold isn't because it must raise its price in order for it to act
as a
> >store of value
>
> Flat false. As usual.

If gold is to become a common store of value, then demand will have to
increase, right?

If demand increases, then shortages will result if the given prices aren't
raised, right?

> You seem to have some sort of bizarre, animistic notion that gold
> itself is an active participant in economic affairs. It's not. It's
> just an inanimate metal. It can't raise its own price. It doesn't
> care what its price is. It's a perfectly good store of value even if
> its price does not increase.

The sellers of gold will raise prices in reaction to high demand.

> >(and on the flip side lower its price when its empties its
> >store of value).
>
> Incoherent gabble.

Say those that stored their value in gold, then want to take it out. This
will create more demand for the things gold buys, thus driving down the
price of gold. As the price falls on the selloff, the people who put their
wealth into gold as a store of value realize less then they put in.

> >> >That raise in price is what the gold holders are
> >> >fleecing from the public in the name of a commoditized-currency.
> >>
> >> Garbage. The gold holders paid for the stuff to be extracted, refined
> >> etc. They paid for an increase in total real wealth. It's not
> >> "fleecing the public" to bet that real wealth will hold its value
> >> better than fiat currencies.
> >
> >Don't you see how your land arguements contradict your gold arguements?
>
> Nope. Gold is produced by labor. Land is not. You are spouting
> garbage.

Gold like most land examples you give is a mixture of land and labor. Using
your gold logic, because a farmer drains a swamp for farmland, then they
should own that farmland.

> >> >On the
> >> >flip side when a 'commodity' like silver falls out of favor as a store
of
> >> >value, its price returns to reality taking with it all those fools
that
> >> >bought into its market price at that time.
> >>
> >> Well, silver is not as good a store of value as gold, so it is riskier
> >> to bet that way. So what?
> >
> >Silver, gold, whatever...
>
> Ignorance. Gold is _uniquely_ suited to use as money.

Why?

> >When it stops being used as a store of value, the
> >result is the same and the ponzi balloon pops.
>
> There is no similarity between gold currency and a Ponzi scheme.
> None.

The gold owner can only redeem their store of value if they find another
person willing to be a gold owner. When people no longer want to be gold
owners, the price drops, thus taking the value the gold store with it.

> >> >> >(a fiat currency just like paper notes).
> >> >>
> >> >> False and stupid. You can't multiply gold coins or bullion by ten
by
> >> >> adding a zero.
> >> >
> >> >Governments would print arbritrary numbers on gold coins all the time.
> >>
> >> That is not a gold standard, and in point of fact, governments
> >> _have_not_done_as_you_claim_. When did any government ever get away
> >> with stamping "10 oz." on a 1-ounce gold coin, or even _try_ it?
> >>
> >> I'm waiting.
> >
> >You needn't wait long...
>
> Liar. I am still waiting.
>
> >http://www.mosler.org/docs/docs/innes.htm
> >
> >The ancient coins of Rome, unlike these of Greece, had their distinctive
> >marks of value, and the most striking thing about them is the extreme
> >irregularity of their weight. The oldest coins are the As and its
> >fractions, and there has always been tradition that the As, which was
> >divided into 12 ounces, was originally a pound-weight of copper. But the
> >Roman pound weighed about 3271 grammes and Mommsen, the great historian
of
> >the Roman mint, pointed out that not only did none of the extant coins
(and
> >there were very many) approach this weight, but that they were besides
> >heavily alloyed with lead; so that even the heaviest of them, which were
> >also the earliest, did not contain more than two-thirds of a pound of
> >copper, while the fractional coins were based on an As still lighter. As
> >early as the third century B. C. the As had fallen to not more than four
> >ounces and by the end of the second century B. C. it weighed no more than
> >half an ounce or less.
>
> None of that was about gold. You lied. As I knew you would.

Copper was used to water down the gold and silver. If you are truely
interested in this matter read the link:
http://www.mosler.org/docs/docs/innes.htm in its entirety.

> >> >As
> >> >would private consumers assign arbritrary amounts of real wealth to a
> >> >corresponding weight in gold.
> >>
> >> ??? Stupidity. The things you claim _must_ happen have in fact
> >> _never_ happened.
> >
> >A wants to trade a services with B. C has the gold by which such trade
can
> >take place. Prove objectively how C will get his exact quantity of
service
> >in ratio for gold.
>
> ?? Incoherent gabble. What "exact quantity"? Do you think there is
> some sort of objective, permanent exchange rate of gold for labor?

Don't you?

> >Switzerland is renown for being the hot money haven for the
> >world.
>
> It's the hot money haven for the world _because_ its currency is so
> strong, _because_ it is backed by more gold than other currencies.

No, it's because the bankers don't ask too many questions.

> >> >so this is the real source of their strong currencies and
> >> >not their preference for gold.
> >>
> >> Garbage. Germany is another example. Every actual fact of monetary
> >> history proves you wrong. You have provided _no_ facts to support
> >> _any_ of your wild claims.
> >
> >Germany's Mark tended to be a competitive store of value on the
> >international market because their central bankers had been leery of
> >inflation.
>
> Which kept their gold reserve ratio high. _Get_it_?

Nobody traded for the Mark because they wanted gold.

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