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GOLD VS DOLLAR watch!

youtube.com — The value of the dollar is dropping like a rock and this video is to show how this is affecting the prices of everything from gas to milk. This is the first of several videos to show what is really happening to the ecomy of the United States and why this country is in a lot of trouble financially.

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  • ControlcChris, on 04/05/2008, -50/+15I r poor.
    • ch1ck3n3, on 04/05/2008, -10/+4invest in gold, as the video suggests.
      • DaffyDuck, on 04/05/2008, -1/+5Yeah, if all you wish to do is match inflation. Otherwise, there are plenty of safe avenues to beat inflation by a long shot.
        • KibibyteBrain, on 04/06/2008, -2/+3Actually, when the economy does well, gold is often a very very bad investment, even vs. the bank.
        • Gir53457, on 04/06/2008, -1/+3Necessities are a better investment. Milk, sugar, eggs and livestock will always go up as long as the economy is going down. Leisure is another venue. Bars, alcohol, bowling alleys and movie theaters always did well in recessions.
      • Mothrog, on 04/05/2008, -4/+5Yeah. That's brilliant. Buy at a historic high and lose all your money when the price drops. Oh, and FYI, it isn't exactly easy for a private person to unload a lot of gold either.
        • YoctoYotta, on 04/05/2008, -2/+3Indubitably!
        • slezzzter, on 04/06/2008, -1/+1No problem, you can just wait for the government to confiscate it and pay you whatever it deems fit.
      • guntario, on 04/05/2008, -0/+2If I had money to invest, I might.
    • narcofiche, on 04/05/2008, -2/+6Yeah, I should have listened to Art Bell when he kept pushing the gold.
      • slezzzter, on 04/06/2008, -0/+1He's been pushing gold since the 90's and possibly before. If you keep predicting a catastrophe, you'll eventually be right.
    • rpgmaker, on 04/05/2008, -8/+10The US really screwed it up when they put aside the gold standard.
      • Lewie, on 04/05/2008, -7/+3As opposed to whom? Even Switzerland has stopped using a strict gold-backed currency. I think it's currently like 1:5 gold to chf right now.
        • Gir53457, on 04/06/2008, -7/+2I don't get the gold standard. Currency should be base on a county's industry and exports. Gold should remain as only a material and not currency. We need the rare stuff for electronics, surgical, and decorative purposes only.
        • guntario, on 04/06/2008, -0/+1Everyone else is going it! Great logic.
    • S1ngular1ty1, on 04/05/2008, -2/+4A depression is coming. Buy gold.

      http://www.youtube.com/watch?v=dR7h8NBQU3E&feature ...
  • santa7, on 04/05/2008, -33/+399People keep dropping this subject as conspiracy but it really isn't.
    • cheesejaguar, on 04/05/2008, -9/+30You're right. It isn't a conspiracy. But it still sucks.
      • wtfmate112, on 04/06/2008, -1/+3You know what's a conspiracy? This guy in the video sounds awful lot like Mr. Black who reviews movies on youtube. Strange it's coming from a different account.
    • NSResponder, on 04/05/2008, -21/+8Yes, it is. Google for videos by G. Edward Griffin, and learn all about it.

      -jcr
      • Chompy, on 04/05/2008, -6/+4Surprisingly, he also comes up if I google up "nutbar".
        • NSResponder, on 04/06/2008, -7/+4What you won't find is any substantive rebuttal of the points Mr. Griffin makes in his history of the Federal Reserve system.

          -jcr
        • Issius, on 04/06/2008, -2/+3I hate people who feel the need to electronically sign all of their comments.
      • bjornski, on 04/05/2008, -3/+8Would you stop with your stupid taglines? If we care who you are, we click your name. There's a reason Digg doesn't have a field for them.
        • NSResponder, on 04/06/2008, -13/+2"Would you stop with your stupid taglines?"

          Are you describing my four-character signature as a tag line?

          This is a signature:

          -jcr

          This is a tagline:

          "Bill Gates is just a white Persian cat and a Monocle away from being the villain in a James Bond flick" - Dennis Miller

          and since you asked: no, I won't be complying with your demand that I conform to your desires. Grow up and cope.

          -jcr
    • ufia, on 04/05/2008, -36/+18It's a conspiracy because the Federal Reserve is controlled by the jews, and 9/11 was an inside job. Google it!
    • Jenovaside, on 04/05/2008, -13/+36You are right. Anyone who knows anything about economics agrees a small inflation is a good thing. Gold slandered (mostly) stops that, and can cause deflation. deflation is bad.
      • heymike, on 04/05/2008, -1/+6I will agree with that. There was recent discussion though on a zero inflation rate target being ok as well. Evidence showed that, despite the theory, aggregate wages do adjust in deflationary times. Long-term debt remains stable of course so positive inflation does reduce the risk for people holding it, but I am starting to question if we should be target ting for 0.2% instead of 2.2% inflation. Money should be stable, a 2% compounding annual rise is not stable.
        • expert01, on 04/06/2008, -2/+2Wait... how is it good that my money buys me less than it did a few years ago, especially when cost of living is rising faster than inflation?
      • SOhp101, on 04/05/2008, -5/+4Not all deflation is bad--there are two types, and the kind that results from greater efficiency is great. Deflation that occurs by companies who lower their prices just to keep up with competition is a bad form of deflation.
        Deflation sucks most for borrowers though, and since we're a nation that thrives on debt it is bad for everyone.
        • PeppermintPig, on 04/06/2008, -1/+4Competition is good. Lower prices benefit the consumers. That's a good kind of deflation.

          Innovation is another type of good deflation. Innovation comes predominantly from competition.

          If inflation were so bad for the lenders, then they'd never give people flaky loans. But they do, because they practice fractional reserve banking and expect the Fed to print more money and manipulate interest rates.
        • SealandRes1, on 04/06/2008, -0/+1Innvation comes from technology and competition. ie.) nvidia 7950gtx costs $700 roughly about a year ago, and because of newer technology avaliable (nvidia 8xxx/9xxx series) and competition from ATi, the 7950tx now costs $100
      • TypeEE, on 04/06/2008, -0/+1I have to agree. One good example is your annual salary increase. Company usually give you 3-6% of salary increase that kind of equivalent to inflation which is like fake salary increase.

        Imagine in a world without inflation but your company would not give you an annual salary increase, how would you feel.
        • lane.montgomery, on 04/06/2008, -0/+2I would feel like I'm not being lied to.
        • SealandRes1, on 04/06/2008, -0/+1There is a little more to inflation than that, here's a little cliffs' notes version of inflation and deflation

          Inflation increases economic activity, (value of dollar is less, meaning people have more money, so they spend it before the prices adjust to reflect inflation) but it's essentially an invisible tax on anyone who holds the currency (the real value of goods are, in most cases unchanged while monetary value of goods have gone up), and there are costs (shoe leather/menu costs) associated with inflation. Inflation is bad for people who save money (people who save should buy gold if they plan to save), but because money is created from debt (fractional reserve banking), encouraging people to borrow is more important. Inflation is bad if things get of out hand, but it's probably the most oblivious type of tax ever known.

          Higher salary -> more spending (your morgtage doesn't reflect inflation)/more demand -> less supply -> higher prices -> more supply needed -> more investment into new factories/human resourses (employment)

          Deflation is general bad because people tend to save their money during a deflation. When the dollar value is high, people get less money, but their obligations (their mortgage) hasn't reflected the deflation, so they'll usually pay off the mortgage/debt first before spending their money, less spending means either more exports of goods or mass unemployment. (less money, less demand, supply will decrease to save costs and people get fired, high unemployment rates...)

          lower salary -> lower spending -> more supply (supply > demand) -> lower prices -> cutbacks -> more unemployment
      • ammundsen, on 04/06/2008, -0/+2Well I studied econ and never came to the conclusion that inflation is good for me or most Americans. It is great for the government, and large corporations. For the government it forces people into higher taxed income brackets and lowers the cost of paying off its deficit spending. It is a hidden tax. For corporations it makes their employees feel warm and fuzzy getting a paltry 3% raise that does not keep up with real inflation, especially after they pay taxes on that new money.

        Inflation is an increase in the supply of money. A price increase is just a price increase. Deflation is a decrease in the supply of money (something that is rare with Central Banks).

        The question to consider is how does inflationary money get into the system? Who gets this new money to spend? Hint, the government and financial institutions. They are the ones who benefit as the subsequent price increases that forces the common man to shell out more cash for his basic needs is the result of this new money haven worked its way through the system.
        • schlurp, on 04/06/2008, -0/+3same with the capital gains tax . Say you get 5% interest while inflation is 10% - you are actually losing money but the government still takes 25% of your pseudo winnings.
    • Elliuotatar, on 04/05/2008, -12/+23It is a conspiracy. It's a conspiracy to tax us without us being aware that we're being taxed, so they can tax us as much as they like without complaint or accountability.
      • armoreddillo, on 04/05/2008, -5/+7kinda like.. taxation without representation.
        Viva La Revolution!
        • Diderotten, on 04/05/2008, -3/+1Actually, people here vote for their representatives. Sure there are some cases of voter fraud, but it's mostly good. Not many will ever go for a violent revolution when a peaceable political one has the chance to work.
        • Cr00kie, on 04/05/2008, -2/+2You are joking right? In the USA we drop bombs for freedom.

          Quick! Name the last peaceful political revolution that worked...
          • AKBryant54, on 04/05/2008, -0/+5How about every time a democratic country elects a different party into power?
        • lane.montgomery, on 04/06/2008, -0/+2In the US? How about every time we elect somebody that isn't an incumbent.
        • baldduck, on 04/06/2008, -0/+0We must find the mole!
    • waynetheman, on 04/05/2008, -2/+7Exactly. What's conspiratorial about it? It's all out in the open, on the public record, verifiable for anyone taking even a minute of their time to look into it.

      Like it or not, it's the truth. The fact that it gets shunned as "conspiratorial" just goes to show that people just parrot that phrase whenever they want to bury their heads in the sand.
      • Issius, on 04/06/2008, -1/+1Actually, most of us just find tinfoil very uncomfortable.
    • jfrumar, on 04/05/2008, -1/+2Have you guys seen zeitgeist Federal Reserve doco? Here, I've assembled it here: http://omnisio.com/v/PHx1HSidjhG/zeitgeist---the-m ...
      Is this all conspiracy too?
      • muckemuck, on 04/07/2008, -0/+1yes.. some of it is.. despite so much of it being fact it's over the top and hard for most people to swallow. People can't drink from a fire hose.
    • Thoraseya, on 04/05/2008, -1/+8It's not a conspiracy, no one denies it. The government deliberately pursues a slightly inflationary policy to encourage economic growth. Healthy inflation is anywhere from 1 to 2 percent a year. A reasonable amount of inflation helps people who borrow money, whether they are farmers, small business owners, or major corporations. That way, when they take out a loan, they have to pay the bank back less value. That encourages people to take out loans, which in turn leads to greater economic growth. Unfortunately, inflation hurts wage earners, who see their buying power diminished by a weaker currency. The government tries to find a balanced level of annual inflation. However, recently, there has been a lot of inflation (though the federal government says it is still 3% a year, they are most likely lying. Private sector analysts put inflation as high as 9% for this year.) and the economy is slowing down, which can have dire economic consequences for everyone.
      • PeppermintPig, on 04/06/2008, -2/+2The government wants people to spend more. Through inflation, they can spur more economic activity, but don't be mislead into thinking this activity is growth, especially for the people. If inflation were good, and the economy were truly growing, we wouldn't be seeing the marginalization of the middle class and industry moving overseas. You have natural growth as an extension of population growth, but the increased taxation and spending is not helping.
    • dougdiggerton, on 04/05/2008, -1/+1well it is a problem but the more normal people worry about it the worse it could become
    • S1ngular1ty1, on 04/05/2008, -0/+1http://www.youtube.com/watch?v=dR7h8NBQU3E&feature ...
    • themastersb, on 04/06/2008, -3/+1Times like this that I'm glad I live in Canada
      • pradaaddict, on 04/06/2008, -3/+1Canada has been off the gold standard since 1931. We went off it for a damn good reason too. The Gold Standard leaves no room for discretionary fiscal or monetary policy.
        • PeppermintPig, on 04/06/2008, -1/+2That's politic speak for 'leaves no room for government screw jobs'.

          People should live within their means and avoid piling up debt. Why shouldn't the government play by the same rules??
      • baldduck, on 04/06/2008, -0/+0Blame Canada! Blame Canada!
      • ltchimpo, on 04/06/2008, -0/+1You mean when you read articals about economic troubles in other countries? Wow, you must be glad you live in Canada a lot. I mean, the only time I'm consistently glad like that is when the nipple appears, man.... you sadist. :)
      • XanderDee, on 04/07/2008, -0/+1Canada has a Central bank and is doing the exact same things that America is doing did you notice that your dollar was at $1.10 but now it stayed around par after that? Well that means America's bad news with the dollar is your bad news as well.
    • youreh, on 04/06/2008, -1/+1so gold has value. so does platinum, titanium, copper, and palladium. or you could think of commodities that aren't mined: corn, soybeans, wheat. you pick whatever you want to make your 'standard'. it's all relative.

      yeah, the dollar is, relative to everything else, going down. picking gold as the 'standard' is an arbitrary choice (even if it was used historically).
      • TVarmy, on 04/06/2008, -0/+1Agreed. Metals with interesting properties could easily change in value. There was a time when states with a lot of copper were trying to find ways to practically give away surplus copper, and now it's a commodity people steal. Gold's highly conductive, so it's valued in electronics. For all we know, new technologies could come along that create a run on gold, driving up it's cost and making it as confusing a currency as our paper money.
        • PeppermintPig, on 04/06/2008, -0/+1Bank runs are people trying to get the money or backing out of a bank. But gold IS the commodity of value, so that's not possible. Perhaps you had a particular scenario in mind, in which case some detail/context would help me to understand your point.

          If people hold gold coin, and there is some new application that increases the value of gold, the holders may profit by selling it off... or they could hold it still and see how many more applications increase its value.. if the fluctuation is not reliable, they can sell high and purchase a lot of silver... or anything else they think holds value well.
    • DrIce926, on 04/06/2008, -1/+1The subject has been raised before, of course. But now it's finally getting a bit more serious as the framework of our quickly-grown-yet-partially-nonexistent economy begins to fall apart. If any of you wish to read more on this topic, peruse: http://www.freerepublic.com/forum/a3b47b8d82c72.ht ...
    • francisidada, on 04/06/2008, -1/+2Very very ignorant piece, and this goes to show the state of the American educational system. It is better to be totally ignorant and half educated.

      Monetary studies are very broad, but to educate readers, a currency of a country is used for internal payments, Gold is reserved for international settlements. Currency has existed since the babylonian times and even as far back as 3,000 years ago in Babylon. Gold as a system of payment only came in the roman times as currency ... the solidi ... because the roman rulers wanted a method of payment that couldnt easily be counterfeited. Current fiat currency resolves that problem making gold for internal payments unneccassary, but for international payments it still had value until after the world war when all developed nations decided to use the dollar as the international mode of payment.

      There is a lot more to it, but whoever puts in money in commodities would do well for the next two years, but would bleed after that when the stock market rebounds.
      • zombieball, on 04/06/2008, -1/+1Agreed very ignorant piece. Gold backing just doesn't make sense in this modern day and age. I am also amazed how many people can speak about how inflation is good or bad but not once mention the concept of "real wages", "real interest rates", "real gdp". In economics everything is relative!
    • Halgy, on 04/06/2008, -0/+1Firstly, it should be noted that I am not educated in economics (as I am sure that most of you not, either). In any case, I have noticed a few things:

      Firstly, I have been hearing the argument that the dollar is loosing i's value (called deflation). I do not deny this, but since income usually changes (albeit more slowly at times) to reflect this, no one is really out anything. In any case, a raise of less than the amount of inflation per year is not the fault of the 'evil banks', but perhaps a sign of individual company's greed. After all, deflation occurs and the dollar looses some purchasing power, the company would raise its price for any given item, which would leave them with the same amount of buying power (a larger amount of lower-power money). This is just fine, since the ratio of the values of goods never really fluctuates, at least not because of the value of the dollar. For example, bushel of corn is $5, and a twelve pack of beer $5. If the dollar deflates, then a bushel of corn may cost $8, but then the beer will also cost $8. In this case, the beer company will need to pay more for it's corn, but it will be making more from it's beer.

      Secondly, I have heard the argument that since inflation lowers the value of money, people who save money loose in the long run. However, this leaves out the fact that when money is saved (say, in a bank), this generates interest. Given the desired average inflation rate of 2% a year, saved money still generates about 2-3 percent a year (the exact amount generated by my PayPal right now is 2.88%, but I have seen it as high as 5.5%). Surely this would offset any money lost in deflation, wouldn't it?

      If anyone has some arguments against these, I'd love to hear them. I'm not saying I'm right, I'm just pointing these out...
      • KennMac, on 04/07/2008, -0/+2I can't take anyone seriously that thinks a sinking dollar is called "deflation" and can't differentiate the words "loose" and "lose".
  • RPliberty, on 04/05/2008, -5/+62Silver is at a good price right now - heavy resistance @ $17.
    • RomeyRome, on 04/05/2008, -2/+11I bought a ***** @ $4 5 years ago. I'm thinking it might it $30 the end of the year. If you look at a 5 year trend, whenever it drops $3-8, it rebounds over the course of the year and gains an additional $8-10 on top of the original price.
    • mrzack, on 04/05/2008, -1/+1you can't even buy decent silver at 17-18 bucks. Demand and quantity demanded for silver is so high dealers are selling silver at 23 bucks an ounce as of April 2008.
      • ArmandoM, on 04/06/2008, -0/+2Find a new dealer... APMEX is at like $1.40 over spot today on single ounces, less for larger pieces... not a great deal, but not 23/oz either.
    • devindotcom, on 04/06/2008, -2/+14What year is this?! How did these prospectors get on Digg?
  • somespecial, on 04/05/2008, -36/+14It's not just the US currency, it's all currencies. There is a reason for this. There is a limited amount of gold. There is not a limited amount of currency. I'm not sure there is enough gold in the world, for each person to have 1 coin.
    • Jereome209, on 04/05/2008, -7/+44That's why Gold is a rich mans money. Silver is the smaller denomination for middle class people. But really does it matter how much gold or even silver you have? you could make a paper currency that represents any weight you want. Gold or silver. But oddly there are still a lot of people who want to allow the government (or the Fed) to force us to use the worthless paper that THEY get to print. So don't be surprised when your government gets to powerful.
      • somespecial, on 04/05/2008, -18/+3There isn't any government anymore that uses a gold standard. I haven't thought this through, but there must be some reason for it. Perhaps, there is more wealth in the world, than the amount of gold. Money and gold are only used to buy items of value. The value we have created in the world, may be just too much, to use the gold /silver standard anymore. I remember reading there is only 4 Trillion dollars worth of gold. Well, there are banks out there that are worth 1 Trillion. So 1 bank is worth 1/4 the money in the world? Money/gold is not reality. You just give it to someone and they give you something back in exchange.
        • PeppermintPig, on 04/05/2008, -1/+3If money is not reality, then why are we having any problems with the economy? Perhaps you're referring to the perceived value?? If a nation chose to back its money with gold, supply would overcome demand. One supporting reason for this is that gold is not the only commodity of value in the world and people want to make exchanges which grow their wealth, because wealth is not limited as a commodity is.

          Just because the wealth of individuals grow, that doesn't mean that the value of gold remains static because of it's limited availability in the market. If my wealth increases, I may have more buying power to purchase gold. If I do purchase gold, then I effect and increase the market value for gold by making it more scarce. In other words, money is not wealth. And fiat currency is exemplary in proving that the value of a currency is at the mercy of not only its scarcity, but faith in what it buys, which is faith misplaced when groups like the Federal Reserve can print new notes or create credit at any time they wish, such as when bailing out other banks. Fiat notes are not representative of some amount of redeemable commodity, but is merely marked by a number. I find it ironic, then, that people complain about price gouging when the Federal Reserve is the prime source of inflation: People must be allowed to judge what the currency is worth, gold or otherwise, so they can choose what kind of money they want to use. So while gold has a going rate, you should be free to make the decision for yourself, but you cannot force others to accept what you use.

          It is illogical for someone to argue there isn't enough gold in the world to meet demand, or that gold is too expensive, because they are contradicting arguments.

          I appreciate your spirit of interest on this subject, but would caution you to question what the government says on these matters. Despite governments of the world choosing fiat currency, people still value gold, because it is physically tamper proof. More gold may be discovered, but the substance is finite and scarce, as opposed to the fabrication of a paper bill, and we all know that paper is far from scarce.

          "If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be." - Thomas Jefferson
        • Dl1cool, on 04/06/2008, -0/+1Lol too much for just a comment.
        • SealandRes1, on 04/06/2008, -0/+1You clearly don't understand what money is, and what it stands for. Please read on some material about macroeconomics. You have to understand that the value of money is relative, the reason why a kit-kat candy bar costs more today than 5 years ago is not because it's more expensive to manufacture the candy, but because the value of money has decreased.

          Money represents wealth, and it's important to realized that what's constant here is wealth, not money. There is only so much gold/oil/ insert resources here / in the world, but there are unlimited ways for money to represent wealth.

          For example. let's say there are $2 in the world, this means that 1 of those 2 dollars would buy you literally one half of the world. If there was $200 dollars in the world, then $100 would buy you one half of the world. What's in the world hasn't changed, but the amount of money needed to buy the same thing has simply because there is more money in the world. A dollar's values is dependent on how many dollars exists, not by how much wealth we have.
      • Locke2053, on 04/05/2008, -0/+2Rich men keep their money in the form of business ownership (stocks), debt (bonds), real estate, and hookers and blow.

        They don't keep it in the form of shiny metal that pays no yield. Just ask Warren Buffett.
    • BlueSkyfish, on 04/05/2008, -20/+1Isn't there only something like 50 cubic feet of gold available in the world?
      • greenlight2001, on 04/05/2008, -1/+6no.
      • evilbunnys2, on 04/05/2008, -1/+1...
      • xadhominemx, on 04/06/2008, -0/+1I've read somewhere before that all the gold ever mined would from a cube about 80' on edge.
      • SamuraiGhost, on 04/06/2008, -0/+2You may be thinking of a 50ft^3 cube. Thats a hell of a lot more than 50 ft^3.
        Still is a bit low though: http://money.howstuffworks.com/question213.htm
        • BlueSkyfish, on 04/06/2008, -0/+1Yeah, that's it. I just remember hearing something like that on a game show a few years ago and didn't quite remember it well. Thanks for clearing that up.
      • SealandRes1, on 04/06/2008, -0/+1it doesn't matter how much gold we have, if there is less gold in the world, then the value of gold will increase accordingly. Increasing the value any currency that's linked to gold, thus requiring less gold to represent the currency.
    • AngryAmish, on 04/05/2008, -11/+3Paper money isn't worthless. How could it be worthless when you can buy 99% of the things in the world with it? You are making a common mistake, which is to assume that just because money isn't backed by anything makes it worthless. It doesn't need to be backed by anything when the entire world recognizes it as a medium of exchange, which it does.
      • suzywang3000, on 04/05/2008, -4/+6actually all currencies are backed by the assets of their issuer. In the case of the US dollar, they are backed mostly by gold and US gov't securities.

        read about the real bills doctrine here:

        http://www.csun.edu/~hceco008/realbills.htm
      • SealandRes1, on 04/06/2008, -0/+1It doesn't matter how many people use paper money, the value of money is so low that it takes you 10 million dollars just to buy a pen, and its price increases by 1 million dollars per day, then your currency is basically worthless.
    • AngryAmish, on 04/05/2008, -10/+2How can you say that paper money is worthless when you can buy 99% of the things in the world with it? You are making a common mistake, which is to assume that paper money is worthless because it is not backed by anything. Money does not need to be backed by anything when the rest of the world accepts it as a medium of exchange, which it does. We are much better off without a gold standard, as it limits wealth creation.
      • SOhp101, on 04/05/2008, -0/+2Paper money nowadays is backed by faith in that country's government and stability. It is not backed by nothing, otherwise it would have no value. Learn your basic economic principles before reaching such a hasty conclusion about the gold standard.
        • daguito81, on 04/06/2008, -1/+1I think what he meant is that, for example, you want to buy food you grab you dollars and you exchange that for food, every person in the world pretty much recognizes fiet currency as a medium for exchange and trade. If you think about it, gold itself has a value becasue we gave it a value, and when you buy gold you're having faith that someone else sometime in the future will want to trade something with you for that gold. So it might be more stable or not, but at the end with the huge world economy and globalization in general, fiet currency is as stable as it's going to get. (I hope)
      • Mothrog, on 04/05/2008, -1/+1Because most of the people that actually think the gold standard is a good thing are ***** idiots.
        • wedgemartin, on 04/05/2008, -0/+1I don't think the gold standard is necessarily bad, and I don't think it's the end-all solution... I think the biggest problem is that we've put our currency in the hands of a third party entity that makes money when our government needs more from it... They're warmongerers for a reason... we need them to print us more money on interest, and they in turn, have more power and control over what we do as a nation. That's my take on things, but I could be wrong.
  • billlyboobs34, on 04/05/2008, -13/+151This video is very depressing
    • LumpyRevolution, on 04/05/2008, -10/+16but honest.
      • brad3378, on 04/05/2008, -6/+22The only problem I had with the video was when they described Nixon as one of the worst presidents ever. I don't agree or disagree with this statement, but opinions don't sway people like facts.
        • Misogyny, on 04/05/2008, -8/+3"opinions don't sway people like facts"
          That's quite an opinion you have there.
          • AKBryant54, on 04/05/2008, -1/+3Or, is it a fact?

            Perhaps it's your opinion that his statement was an opinion, when his statement was, in reality, a fact. That would explain why your post (an opinion) is at negative diggs, and his is at positive.
          • Misogyny, on 04/06/2008, -0/+1AKBryant54,

            If it were a fact, there would be studies indicating such. If you look at anecdotal evidence, people are far more likely to believe non-factual information that appeals to their gut instinct, and emotions than factual information that reflects reality. Fox News is a good example, mainstream religion would be another.

            I would guess that I'm being Dugg down for exactly this reason. People like what brad3378 wrote, and viewed my reply as conflicting with his assertion. It feels good to punish my perceived transgression, so I get Dugg down. Not too hard to understand, really.
        • culbeda, on 04/06/2008, -0/+1"honest"? This is highly indigenously. I completely agree that the value of the dollar has devalued and continues to devalue, but this little snippet ignores every factor of besides the break from the gold standard. (A standard that no civilized nation continues to follow, mind you.)

          In short, this is another example of someone trying to drastically oversimplify a complex problem in order to attract like-minded, simple-thinking or intellectually incurious people to their cause.
    • insanebrain, on 04/05/2008, -3/+3yep. . reality hits you when you least expect it.
    • molecool, on 04/05/2008, -3/+6The truth often is...
    • mettaseva, on 04/05/2008, -0/+2It is discouraging if you think you have no options, but you do. Check out www.LibertyDollar.org to learn how you can go back to using voluntary gold and silver currency again. The government and banks (ironically) won't accept this real money, but you may be able to find merchants in your community who will.
    • fatlip, on 04/05/2008, -0/+1the depressingness was subliminal because of the requiem music in the background
      • Popson, on 04/05/2008, -0/+0Except there wasn't any music in this video. Perhaps you're commenting on the wrong video, the John Edwards Endorsement video used the 'Requiem for a Dream' theme song I believe. I digress. Best video I've seen today.
        • Verz, on 04/06/2008, -0/+1The song is really, really quiet. Hence his use of the word "subliminal."
          • Popson, on 04/06/2008, -0/+0I am pretty sure there is no music in the background. My sound system is fairly acceptable, I cranked it up like an old man and I still hear nothing. Perhaps I'm taking the word 'requiem' out of context, assuming he was referring to the (very depressing) film.
    • linuxrocks2007, on 04/05/2008, -0/+1Look at the 3rd last tag.
    • brianmuse, on 04/05/2008, -1/+4This video was obviously not made by an economist. How many countries even use he gold standard anymore? Does the OP realize that at $1000 per ounce, there's only 4 trillion dollars worth of gold that has ever been mined? The ability of a government to control the supply of it's currency to tailor to demand is crucial in avoiding economic crisis. Given you need a central government that is making overall good decisions. But to suggest that our methods are insuperior to the GOLD STANDARD? That's pretty inane.

      If you take macro econ 101, you will learn that in order to maintain the natural rate of unemployment, you need a constant inflation. In fact, we've been pretty damn good about hitting that exact goal.
      • yootubefan, on 04/05/2008, -1/+3The problem is that all you seem to do is think like someone who just got out of Macro Econ 101. There is a little more to this then just that class. I will do a follow up on this to make the point a little more clear. No matter what you say and what I say about this subject, it is just nice to see an open discussion on the subject. I dont have all the answers, just like you dont. I am very happy that people are looking at this video and discussing it then just watching the usuall "someone gets hit in the balls video". It is nice to see that people are interested in subjects like this as well.
      • Tommyhawk, on 04/06/2008, -2/+1Stable prices = full employment.
        • zephyr42, on 04/06/2008, -0/+1there will always be unemployment and never stable prices. that's what makes an economy
    • davidlow, on 04/05/2008, -0/+2It's not depressing if you're in debt like most Americans and like the government itself. If you owe dollars, the value of your debt is decreasing all the time.
      • PeppermintPig, on 04/06/2008, -0/+1But the cost of goods is increasing, so may need to take on a few more loans.
  • TomK88, on 04/05/2008, -109/+142Wow, there's something called inflation. It is actually a good thing as long as it is kept in a certain range (usually 2% is the target). The US is less than a percentage off from this goal and has been relatively stable for the past few decades.

    http://www.miseryindex.us/irbyyear.asp

    Quit believing everything you watch in some idiotic YouTube video. There are many reasons why no country in the world uses a gold standard. America should adopt inflation targeting monetary policy like the UK, Canada, Australia, and many other countries have if they want to keep a tighter control on inflation.
    • CSHYDRASHOK, on 04/05/2008, -12/+5WOW i still thought that the swiss used a gold standard however i checked and they stopped using the gold standard back in 1999 so i guess swiss bank accounts are not as great as they once were. Quite sad really. So if no country uses gold for money is it really worth anything?
      • AngryAmish, on 04/05/2008, -10/+7Yes, it is worth something simply because you can buy things with it. How can you say that money is worthless when you can buy pretty much anything in the world with it?
        • ralphthemagi, on 04/05/2008, -3/+6What can you buy with actual gold? Who takes gold as payment?

          If I take some gold coins to a car dealership to go buy a car they are going to look at me like I'm crazy, assume it's fake, and tell me to go find a place that will give me dollars for it.

          So then you are going to go have it inspected and certified, then bring it to a reserve bank to purchase it... and give you dollars.
        • sampanc, on 04/05/2008, -7/+13U don't understand the concept of currency. The reason we have Dollar Bills is to prove that it actually represents a certain value of gold that the bank, which issued the bill, has verified and is keeping. Well, that's how it used to be in the days of the gold standard. Now the Dollar Bills represent a certain "perception" of value in a country's economy that can be taken away as soon as the largest companies start to lose investors (stock market crashes).
      • roflcopters, on 04/05/2008, -0/+7The object itself is worthless. Money is a promise of wealth. And it's valuable because it is generally excepted to be, which is usually backed by law. If gold was considered invaluable, then it could not be used for money.
        • Parisjune, on 04/05/2008, -1/+3Gold is money and it is a store of wealth, not a promise of wealth. Federal Reserve Notes (US dollars) are currency not money. They are a debt instrument which is why they are called "Notes".
          • PeppermintPig, on 04/06/2008, -0/+2But they're not even notes, by definition, since notes are a promise to pay. Just debt.
          • daguito81, on 04/06/2008, -0/+1that's how it started, you would get this notes as payment, and whenever you wanted you could go to the fed or the government and turn in the notes for actual gold, that system is a bit outdated and just as you trade stocks and options you trade this "debt" notes even though nobody will actually go to trade them for gold. That s the beginning of fiet currency.
    • xerigen, on 04/05/2008, -16/+11Inflation reports you see today are false. They use the GDP in its calculation, and it gets distorted because the GDP increases when the money supply does.
      • TomK88, on 04/05/2008, -7/+18No they don't. They use the CPI. Nice try though.
        • kzgagne, on 04/05/2008, -3/+5Well its easy to hide inflation cause they changed the way they measured CPI in the late 80's... See this site http://www.shadowstats.com/alternate_data
          • mciampa1214, on 04/05/2008, -0/+2They have to change the CPI because it's a 'basket' of goods the typical family consumes, it needs to be changed to keep up with what people are actually consuming. Statistics coming out of China are experiencing this right now because there has been a sudden increase in wealth (broad generalization) in the time since the government has re-evaluated the goods used to calculate the CPI.
        • TomK88, on 04/05/2008, -1/+5How do they hide inflation? Be specific.
          • Clark3934, on 04/05/2008, -1/+9The Fed eliminated the M3 and now relies on the MZM to show the money supply.
            The CPI is also inaccurate because it doesn't take into account such things as the rising cost of housing.
            The core inflation they refer to doesn't take into account the cost of food or energy.

            Need I go on?
          • MURDERTRON, on 04/06/2008, -0/+2"There are many reasons why no country in the world uses a gold standard." ... "Be specific."

            Be consistent.
        • Peko, on 04/05/2008, -0/+8The US Core CPI does not include gas or food. So that means inflation is low as long as you don't eat or drive.
        • rizzo2008, on 04/05/2008, -0/+6Yeah Core CPI doesn't include food and energy. Oil is driving the price of many things up thus creating a stagflation situation similar to what occurred in the 70s
        • MURDERTRON, on 04/06/2008, -0/+1Go call John Williams of Shadowstats a liar, TomK88. You should be able to find something with which you disagree.
    • PeppermintPig, on 04/05/2008, -7/+26You act as if people shouldn't care about inflation because the government is determining what level of inflation constitutes a certain good. People can and will disagree with that.

      If the price of a given commodity rises, it is an individual's prerogative to determine whether they will buy it or not. People will economize on scarce resources. To the extent that government allocates scarce resources inefficiently, it is not economizing and in turn must raise taxes to adjust for the waste it creates.

      Individuals should be free to choose a currency that works for them. Do most people consciously choose to support their national currency? Do you believe that one or two people should have the power to enforce their opinion on others? Do you believe in persuasion, or force? I believe you've proven why fiat currency is so dangerous by not questioning what it is you actually support and assuming it is within everyone's self interest to support it.
      • TomK88, on 04/05/2008, -9/+4The whole point is that inflation is NEEDED and it's at an acceptable level right now. What are people complaining about?

        You don't have to use the dollar. Nobody is forcing you to. You can use a range of other fiat currency's. You can buy commodities. You can equity. There is a host of ways to hold your wealth.
        • vbullinger, on 04/05/2008, -3/+5It's only "needed" by the bankers that own the Federal Reserve so that they can continue robbing us blind.
        • TomK88, on 04/05/2008, -6/+4LEARN BASIC ECONOMICS. Inflation is a necessity. Without it, there are risks of deflation, and that is one of the worst things possible for an economy.

          http://en.wikipedia.org/wiki/Deflation_(economics) ...

          Educate yourself and quit believing all this scare-mongering on Digg.
          • diggduggjoe, on 04/05/2008, -0/+4A little inflation in order to make sure there is enough cash to keep the gears of the economy turning is understandable. Deflation is bad for the gears stop and everything can come screeching to a halt. However, these huge bubbles we are seeing are due to having too much in the system. It can create phony booms. The recent bailout dumped hundreds of billions of currency into the system. We need a different system in order to have some true control of it. Having a banking cartel tell us they know what is best without any method of feedback from the government or the people is very risky.
        • PeppermintPig, on 04/05/2008, -2/+4But currency is not wealth. People want to grow their wealth, and maybe the currency for practical purposes of exchange, but not by expanding the money supply artificially, which leads to inflation.

          I wasn't very impressed with the video, and some people who promote gold are scare-mongering, but that doesn't validate your argument that inflation is good. Inflation is an increase in the money supply, which hurts everyone by draining away wealth.

          Falling prices are not an inherently bad thing. The problem is whether or not you have a good currency. If prices for goods go down, then wages may level off or fall in association with the cost of living, as determined by what the economy can sustain. Given that constant inflation occurs with the USD, which you also find acceptable to a degree, going on to cite deflation is actually a bogeyman. You are using scare-tactics yourself by appearing to conflate actual value with the number-price of goods as based in a fiat note system.
        • TomK88, on 04/05/2008, -4/+2Inflation is simply less harmful than deflation. It's about picking the lesser of two evils. That is why countries target inflation to be about 2%, not 0% because the risk of deflation is too high.
        • dagnome1984, on 04/05/2008, -1/+5"Inflation is simply less harmful than deflation. It's about picking the lesser of two evils. That is why countries target inflation to be about 2%, not 0% because the risk of deflation is too high."

          Yeah that would make sense in a period of ECONOMIC GROWTH. Right now we are hardly breaking one percent in terms of real growth. Real inflation is no where near 2% because you forgot that to mention fractional reserve banking which can increase the money supply by the creation of new debt. Real inflation is around 5% to 10%, but I wouldn't expect you to know that because you are talking out your ass.
        • Jenadae, on 04/06/2008, -1/+4inflation +falling dollar =! good
      • j1ggy, on 04/06/2008, -3/+2If a government can't keep any sort of control on the economy, the economy will fail at some point. Obviously the problem is a lack of responsible government.
        • PeppermintPig, on 04/06/2008, -0/+4I think you're giving too much credit to the government, LOL. Government isn't responsible for the success of private individuals.
      • daguito81, on 04/06/2008, -0/+1actually, if you look at Bill Gates or some of the richest men in the world, they don't have 40-60 billion dollars in cash in some account, they are just worth that much because of their stocks and we translate all of their possessions into an amount in $ but their worth is not really represented by these debt notes
      • Notasheeple, on 04/07/2008, -0/+1VERY well said!
    • molecool, on 04/05/2008, -14/+8HAHAAA!!! The digg.com market analyst strikes again. Alright, keep your money in dollars if you will - I'm in gold and have maintained my standard of living by not being tied to the sinking dollar.
      • TomK88, on 04/05/2008, -3/+8I have my money invested in stocks for the long-term. The money that I need in the short-term is in a high-interest savings account at 4%, which is higher than the rate of inflation.
        • Niocan, on 04/05/2008, -10/+1Seems like someone doesn't understand compound inflation. You need to be making profit margins of at least 80-90% on stocks if you want your money to stay the same in value, and that 4% "high interest" account you have is losing money due to inflation. Congrats on being fooled into false hopes.
        • TomK88, on 04/05/2008, -3/+5LOL what?

          If my money is depreciating at a rate of 3% per year but I have 4% more of it...I'm making 1%.
          • Clark3934, on 04/05/2008, -0/+5You really think inflation is running at 3%? That is laughable.
        • Niocan, on 04/05/2008, -5/+1*compound* inflation, key word. It's going up 1% per year, based on skewed readings, and that's been going on for just under 100 years... do the math.
          • mciampa1214, on 04/05/2008, -0/+2^ I really hope no one is paying attention to this fool
        • TomK88, on 04/05/2008, -3/+3LOL. And my bank account gives me 4%...per year...compounded. Moron.
        • displaced1, on 04/05/2008, -0/+2Niocan this is where you say "my bad, I made a mistake."

      • mavere, on 04/05/2008, -0/+4No you have your standard of living tied to the whims of nervous investors worldwide... like the dollar.
      • areyouserious, on 04/05/2008, -0/+2So thats where all the "old gold jewlery" went...
      • mike17032, on 04/06/2008, -0/+1Is living in your parents basement really that hard of a lifestyle to maintain TomK88?
    • itsradBrad, on 04/05/2008, -12/+13I don't know why he's being buried. Everything he said is true. Well except for implying that we're not in for a recession/depression (BTW those words are synonymous).

      Thats not to say that citizens shouldn't consider investing in something other than their savings account (gold included) to ensure they protect their assets.

      The gold standard was horrible for the economy in terms of stability. When we used it there were sharp fluctuations rather than rolling recessions that we see about every 10 years or so.
    • crimsonalucard, on 04/05/2008, -13/+80Yes theres a reason to why no country in the world uses the gold standard... Do you no the reason? No you don't. Lets get back to the basics:

      Since gold is inconvenient to store, banks are created. People put their gold in the banks then the banks give them a on-demand-redeemable note. So many people exchange their gold for redeemable notes which make the notes become so common that people start using the notes as a medium of exchange. The bankers see this and begin practicing something called fractional reserve banking. Since a note costs next to nothing to print out, they'll print out a note and use it as if it was worth something. Soon the amount of notes in circulation becomes MORE then the amount of gold in banks, hence the term "fractional reserve banking." Eventually after many generations people become so use to using the notes that the central banks can eventually make the notes non-redeemable and no one will notice/care. What you have to note is that the reason why no gold standard exists is not because the ruling party thought it was good for their economy. Fiat currency without a gold standard is a general anthropological trend that happens in all civilizations even BEFORE there was a thing called economics. Whether the thing of value is gold or grain or something else, for some reason storage banks/silos always form, fractional reserve banking becomes increasingly practiced until the fraction of value in the bank versus the cash in circulation becomes ZERO.

      Lets look at this from a logical perspective. Why is 2% inflation good? Who told you that? What is the logical basis for that? and Why does 2% inflation have to happen in the economy? If an entity in the economy owns value, say some commodity like water, ore, or metal does it make sense for that value of thto depreciate 2% a year for no reason? Value will fluctuate due to demand and supply but a consistent depreciation of 2% does not make sense. Now in our economy instead of actually holding the water, ore, or metal we are holding a piece of paper that represents same VALUE. To see this value depreciate 2% a year does not make sense EITHER, But it happens because somewhere out there some one is increasing the money supply by printing money and using it like a counterfiet dollar. This brings me to my main point: Why do people think a gold standard good? Because YOU CAN'T PRINT GOLD. The dollar becomes tied to gold SOLEY for the purpose of preventing the excess printing of money and hence stopping the crazy inflation we see today.
      • TomK88, on 04/05/2008, -19/+11Honestly...why open your mouth when you don't even know that inflation is a necessity in economy? They teach you that in first year economics. Hell, look it up on Wikipedia.

        http://en.wikipedia.org/wiki/Deflation_(economics) ...

        And the "crazy" inflation we have today is very low actually. But hey, you didn't even bother to look at the stats did you?
        • crimsonalucard, on 04/05/2008, -3/+8hey idiot, deflation is bad and inflation is also bad. Isn't stability what we want? I don't need a class to teach me that. Thats common sense.

          I bothered to look at the stats which is btw indicating heavy inflation. I don't know what the ***** your looking at it.
        • TomK88, on 04/05/2008, -7/+3http://www.miseryindex.us/irbyyear.asp

          Less than 3%. Most countries target about 2%.

          Deflation is terrible and absolutely devastates an economy. Inflation at a small rate (like it is now) isn't very harmful. How can you completely eliminate inflation? It is not possible without deflation. Inflation targeting at 2% is transparent, stable, and predictable.
          • crimsonalucard, on 04/05/2008, -0/+3I call BS on the Bush and the rest of the US government.

            http://hubpages.com/hub/Banking-and-the-Real-Infla ...

            Don't just trust that site. Open your eyes. Are things getting more expensive or are they not? Where are we getting money to pay for the war in Iraq?

            Also when I refer to stablitiy, I refer to a small healthy amount of deflation and inflation. A very small deflation isn't going to cause that cataclysmic positive feedback trend everyone seems so scared about. Continuose inflationary trends even small just doesn't make sense.
        • XXXXXXXXXXXXXX, on 04/05/2008, -5/+3A static money supply encourages an uneven distribution of wealth. A very slow rate of inflation prevents that.

          So no, "stability" is not what we want.
          • crimsonalucard, on 04/06/2008, -2/+7So according to you we must increase the money supply to make sure it isn't static. That makes sense. Who should we give all this newly printed money too? We should give all this printed money to the military industrial complex, the bankers and also the oil companies to make sure that the distribution of wealth more even.

            Think about it. Inflation by itself when the money is evenly distributed has no effect. But Are you seeing any of this money? No. The money is getting injected into a single part of the economy and this is when we all get *****.
        • Clark3934, on 04/05/2008, -0/+5Hey Tom. I'm assuming the 88 means you were born in 1988. That would make you a freshman in college.
          You're telling us to learn basic economics?
          How about you finish your stint in higher education and come back with a comparable B.A in Economics. Then we'll talk.
        • pingish, on 04/06/2008, -0/+3Apparently, 2% inflation is good because it says so on Wikipedia.
        • SealandRes1, on 04/06/2008, -0/+1Inflation encourages spending, because your debts are not adjusted for inflation. This stimulates the economy. The whole idea behind inflation is to encourage those oblivious to inflation to spend.
          • pingish, on 04/06/2008, -0/+1SealandRes1... but wealth is created by SAVINGS. And we get these savers to lend us their money when we pay them enough AND they deem what we do with their money as productive. Spending for the sake of spending is actually not good for the economy as we will see when we enter into a hyperinflationary period ahead.
      • dementia, on 04/05/2008, -2/+7Inflation is GOOD for people and bad for banks. When you take out a fixed rate mortgage your payment stays constant for 30 years. However, over time the purchasing power of the dollar falls. Over time, every mortgage payment represents less and less other things that you are giving up/can't buy with that money
        • crimsonalucard, on 04/05/2008, -1/+6What you meant to say is that its good for people who take loans. Overall though your money in the bank becomes less. So its bad.

          Theoretically inflation would be bad for the banks too, because like you said the morgage payment value becomes less. However, when the federal reserves prints money, the money goes to the banks first. Bear stearns?
        • compulsive1, on 04/05/2008, -1/+9Inflation doesn't matter to the banks as the amount of the loan they give you is created from nothing. They give you 200k for your house in return for a promise to repay about 400k-500k over 30 years. But, the kicker is, the bank doesn't own the money they give you for your house. So, anything you bring back to the bank is pure profit- regardless of inflation. It's 500k they didn't have. As you repay your mortgage, they use your money as basis for more loans at 10:1 ratio. For every dollar you bring back, they by law can lend out 9 to other people- at interest again. If you grasp this concept, you will realize that this creates an ever accelerating curve representing the amount of money in circulation-thus inflation. The system only works if constant loans are issued, otherwise there is not enough money in the system to repay the old loans with interest. That's why, when loans go bad the economy suffers so dramatically. Not only are the principals not repaid, but the lack of interest payments interrupts the necessary for normal function net growth of money in the system.
          If you consider that promise to repay a mortgage is used as the basis for issuance of up to 100 times the amount of new credit or leverage, no wonder the economy as a whole suffers when millions of mortgages go bad.
        • crimsonalucard, on 04/06/2008, -0/+2I like your description. Its' a little more complex though. Only the central banks do this. Regular banks cannot do this.

          Regular banks have competitors thus they can't practice fractional reserve banking at the extreme levels you indicate. If a bank has one dollar in reserve and it lends out ten dollars; when that ten dollar check is cashed back into the same bank that lent it out, nothing will change since the bank can just say that the persons account increased by 10 dollars or issue the guy a 10 dollar bank note (check). However, If the check is cashed at a seperate competitor bank, that other bank is going to demand a massive 10 dollar withdrawel of legal tender from the original bank. If the original bank only has one dollar in reserve, well, they are *****: Bankrupcy. Thus private banks tend to lend out money at a more reasonable ratio, probably 7:10.

          However, in the same way the banks lend money to people, the central bank functions as the lender to the banks. In short, the federal reserve is the bank of the banks.

          The three bad points of the Fed are that the Fed has no reserve, it has the power to print out legal tender to lend to the banks, and, since its central, the Fed has no competition. Thus the Banks will borrow extraordinary sums of money from the central reserve so they can lend out more money and hence make more profit off interest.

          This means that the currency that backs your money in the bank is actually printed money from the federal reserve loaned at a zero fractional reserve ratio.

          This is bad news as explained by compulsive1
      • da_bradler, on 04/06/2008, -2/+2I dugg you up when I meant to digg you down.

        The problem with the gold standard is you get to a point where all the gold is in circulation then the value of the gold in circulation goes up which is called deflation which causes the entire market to collapse.

        People who support the gold standard think there smart for some reason like there the first ones to come up with it. Every country has at some time tried to use gold as a standard of currency and it always fails. If there is no way to keep re-injecting money into an economy it fails since resources are constantly created and if no extra currency is created then injecting more resources into an economy drives the value of currency up which is bad.

        Think of it this way. Lets say in thew whole world there are 10 gold pieces and there are 10 pieces of resources. 1 resource is worth 1 gold. You can't create more gold because it's already all in the system, but you can create more resources. so then after a few years you have 10 gold pieces but 20 pieces of resources. so now all the worlds resources are worth half as much and the worlds gold is worth twice as much so you need to start dividing the gold into smaller and smaller pieces to account for the added resources, then it gets to a point where it is just unmanageable since gold becomes worth such an incredibly large amount.
        • pingish, on 04/06/2008, -2/+1What was bad about $1.80/gallon gasoline?

          What was bad about $4.75 movie tickets?

          All you people saying deflation is bad can't explain why cheaper prices are good. They are for me...
        • crimsonalucard, on 04/06/2008, -1/+1The gold standard does not mean people will be trading gold bars. The gold standard only means that the government must have gold ready every time you want to use your dollar to redeem it.

          The money supply can still be manipulated to a reduced extent. The government must practice fractional reserve banking. They can reduce or increase the money supply to the point where they can back up 90-100% of the cash in circulation with gold. They don't have to maintain a constant 100% fractional reserve ratio.

          Also your economic model (which is very similar to the way I think of it), is flawed. First of all resources disapear just as fast as they are created. Look at most of the stuff in your room. Almost all the products there will never again participate in the economy. You buy the stuff, the stuff gets old and broken, you throw it away. Some of that stuff may be resold on ebay or something like that, but even then there's an upper limit to the amount of times a resource can participate in the economy before it becomes worthless. A good example of a resource that disapears almost instantly is gasoline. That ***** is gone as soon as you put it in your car and drive it away. An example of a resource that takes a bit longer to disapear is a car or a computer. The value of a car or computer is constantly going down until someone decides its time to take the stuff to the junk yard. Then that resource disapears.

          Thus an alternative way to think of your model is to imagine a world where there are 10 pieces of gold and a bunch of hidden oil wells (resources) all over the place. The amount of resources in the world will forever be fluctuating entirely determined by how fast we use up the oil, how fast we find the oil, and how fast we're able to extract the oil. I tend to visualize a little bar graph in my head where one bar represents gold (that bar is more or less fixed) and another bar representing oil which is fluctuating like crazy. According to your model, on the otherhand, the bar graph on the right will constantly go up forever and ever and ever.
        • mmd643, on 04/06/2008, -0/+1Thank you for your posts. They are fantastic.
      • Notasheeple, on 04/07/2008, -1/+2Listen. You are making way to much sense and using your logic far too often. The average American can't even deal with complexities of their tivo programming. How in the hell do you expect them to understand anything that is simplistic and straight forward? You need more fancy, long words to make others think you know what you are talking about.

        Just kidding...........Nice post man!
    • SOhp101, on 04/05/2008, -4/+7OR... maybe the US should stop spending so much money and accumulating such a large deficit. That might encourage people's faith in the USD value. I know one way of spending less: end the Iraq occupation.
    • Clark3934, on 04/05/2008, -1/+6You're telling us to learn basic economics and admit that the inflation is a good thing?
      "There may be few instances in which the superstition that only measurable magnitudes can be important has done positive harm in the economic field: but the present inflation and employment problems are a very serious one."
      -Friedrich Hayek. Nobel Prize Winning Economist and staunch supporter of the gold standard

      Maybe you should be the one researching. You're taking a very superficial look at monetary policy.
      • cheeselord, on 04/06/2008, -0/+0You seem to have a problem with debating the facts of an argument.

        Anyway your quote has nothing to do with the type of inflation previously mentioned. What Hayek was talking to was inflation during the 70's... which by most estimates topped out at around 13%. Slightly more then what is seen as a healthy level.
        • afruff23, on 04/06/2008, -0/+1Yeah, inflation is at a low level when you exclude the 2 most important things from it: food and energy.
    • aps234, on 04/06/2008, -0/+4You are extremely naive if you believe that the rate of inflation is only 2%. The government bases the rate of inflation off of the CPI (Consumer Price Index) which is based on goods and services, but NOT food and energy (gasoline). This makes no sense at all because food and energy is something that every single American uses every single day. The CPI was invented by the government just so they could lie to you and get away with it. Look at the price of a barrel of oil in the last few years. It's almost double from what it was two years ago.

      I think we're lucky if the rate of inflation is only 12% for this year alone. Don't base your idea of inflation on the CPI which the government gave you; base it off of your own life experience of buying things you buy every week like a tank of gas and a gallon of milk.

      Gas price history: http://en.wikipedia.org/wiki/Oil_price_increases_o ...
      CPI: http://en.wikipedia.org/wiki/Consumer_price_index
    • MURDERTRON, on 04/06/2008, -1/+1"Quit believing everything you watch in some idiotic YouTube video." Such strong regard for the harmless beliefs of strangers makes me question your motives. At least your salary won't keep up with inflation.
    • JohnFromChicago, on 04/06/2008, -0/+4It doesn't matter whether the gold standard is wise or not. Article 1 Section 10 of the United States Constitution says it shall be so. No amendment has been passed to change that. End of discussion.
      If we are a nation of laws, our institutions must be lawful. The Fed and the monetary system we have now is NOT lawful.
    • thecoolestguy, on 04/06/2008, -0/+2Inflation is not a necessity. That's a totally false and absurd comment. The United States had virtually zero inflation for over 160 years, and in that time it became became the world's largest and most powerful economy.

      When gold was the currency, new gold was discovered and mined at roughly the same rate as the economy grew, meaning the ratio between gold and GDP remained constant and thus prices remained constant.

    • phatphing, on 04/06/2008, -0/+2Did you even bother watching the video?
      The argument there is that the phenomenon of "inflation" is not that prices are going up, but that the value of the currency is going down.
      The "price" of a gallon of gasoline has not changed from its worth in 1964, measured by the silver content of an American quarter! But measured against the paper money, it has risen over 1200%!
    • Nizerifin, on 04/06/2008, -3/+1Also, deflation would be worst. People would see the dropping prices and would wait instead of buying to ultimately get the lowest price on the item they want. That would have a severe toll on our economy. The only bad thing about inflation is an UNEXPECTED change. Then wealth shifts around and we don't like that (unless it goes in your favor.)
      • JohnFromChicago, on 04/06/2008, -0/+1Yes yes ... you can see this in the computer industry. The prices drop while the features and power go up ... it's just horrible. People are refusing to buy anything for fear of missing out on the next thing. Companies everywhere are going bankrupt, Bill and Steve come over all the time just to bum food. Sad ... Good thing the Fed has saved the rest of the economy from such peril
    • wynja, on 04/07/2008, -0/+1Your a dumb *****. According to the US government's own assessment. Inflation was at 6.1% last year.
    • kemp34, on 04/10/2008, -0/+2Inflation is not good you nimrod.
  • jacklebak, on 04/05/2008, -34/+4why i hate america: case and point.
    • DontEatTheFish, on 04/05/2008, -3/+6I am America: (and so can you)
    • forgiste, on 04/05/2008, -3/+7Why hate the ground you walk on? It's the administration that you should hate.
    • SRSco, on 04/05/2008, -7/+8It's "case IN point" not "case AND point".

      This guy in the video doesn't even know what he's talking about. If you hate the US for anything its that there are so many Paultards out there that believe this *****. That's just sad.
  • kalleanka, on 04/05/2008, -73/+323Lol, what a ***** stupid example "if we would have gold standard, you could buy this nice car for only $1.200".
    Well that's all fun and game until you realize that your salary would have been around $2.12 a day if we kept the gold standard.

    I'm not saying the gold standard is good or bad. I just say the example he gave like that was completely ***** and misleading.
    • yootubefan, on 04/05/2008, -20/+43It is not misleading at all. It is a fact that this is what is happening. You are making a correlation to something that was never meant to be. You are making it seem like I stated that everyone would own a covette or 2 of them. I was merely stating that this is the inflation and devaluation rate that people can see with a buying of a product that they are all familiar with. You are right that we would surely be making a LOT less money. That we can agree on.
      • Pake, on 04/05/2008, -5/+23"You are right that we would surely be making a LOT less money."
        That's EXACTLY why it's misleading. The video makes it seem like we'd make the same numerical income (let's say $35,000 for a low paid employee) as we do now, but somehow the car would be only $1,200.
        • Elliuotatar, on 04/05/2008, -5/+7While it may be true that you would be making less money, the money you make is losing value every moment you hold onto it because the value of the dollar is dropping. And the value of the dollar is dropping because it's not tied to gold and the government can just print money whenever it wants making the money already out there, owrth less. Effecitvely, every time they print money they're reaching into your wallet and taking a dollar and you're not even aware of it.
          • Pake, on 04/05/2008, -3/+4And that's entirely beyond what I'm talking about. All I'm commenting on is the car's value and nothing more.
        • Parisjune, on 04/05/2008, -0/+7You are confusing a low wage with low purchasing power. American's purchasing power is lower now than it was in 1912. Back when you could buy a new car for $1200, it took fewer payments to do so. Taking five years, or more, to pay off a car would have seemed crazy to your great-grandparents.
        • MURDERTRON, on 04/06/2008, -1/+1"The video makes it seem like...," or "Failing to instantaneous understand all relevant facets, my indignation turns to rage upon discerning my logical error. Rage at the imagined trickery compels me to prematurely dismiss any real arguments presented in the video and I vow to avoid future intellectual pursuits lest I feel pressured to rely again on my own discernment. "
          Which is it?
      • Pake, on 04/05/2008, -4/+1Oh, and don't take it like I'm saying we shouldn't use the gold standard. I personally feel like we should, but I'm just doing like Kalleanka did and pointing out how the video is misleading.
    • wissler, on 04/05/2008, -7/+26The problem you don't seem to grasp is that if the value of the dollar is constantly in flux, it wrecks people's bank accounts and makes it impossible to make sane economic decisions on any scale.
      • jamesLankford, on 04/05/2008, -7/+4that is the dumbest thing anyone has ever said look at all the millionaires in the United States, look how many rich people are in New York City, apartments in NYC are easily going for over one million dollars, so there must be plenty of people taht can afford them, "impossible to make sane economic decisions" what an idiot
        • 15charmaxwtf, on 04/05/2008, -0/+3I dugg wissler up, even though, he used the word impossible in error. Perhaps it makes it more difficult, for sure, but not impossible (especially if they have inside knowledge?)
      • dood, on 04/05/2008, -0/+2I don't know if that is the case for many Americans. For example, a lot of people have mortgages and loans that they are paying off. The principal balance doesn't change, so as the dollar declines in value they will (ideally in this scenario) be receiving more dollars, which can allow them to pay off the loan for less "money."

        That's not to say that there aren't problems with the system, but I don't think it's doing much damage to people's bank accounts. Especially when you consider how piss poor our savings rate is.
        • SealandRes1, on 04/06/2008, -0/+1wait.. it's not doing damage to peoples' bank account because they have piss poor saving rates and their account's real value is shrinking?

          That's like adding fuel to the fire!
      • BESTenemy, on 04/05/2008, -0/+3He picked a bad example that does not provide any perspective. To analyze the historical value of gold, we have to examine basic necessity goods that have always existed and can be compared.

        In the age of roman empire you could get yourself a good gown, a belt, a pair of shoes and eat out for the price of 1 oz of gold. Today the same 1oz would buy you about the same - a well made suit and a trip to a restaurant.

        Historically the price of gold fluctuates very little. It will always buy you the same amount of goods.

        Gas is a bad example, because the value of it changes over time, not just because of the currencies, but because of the varying amount of supply, refining capacities, exploration costs etc.

        The video presented is on the right track, but it does use the worst examples imaginable to prove the points.
        • minoss, on 04/06/2008, -2/+1*****. Value of gold over last 30 years:

          http://goldprice.org/30-year-gold-price-history.ht ...

          Yea, not much fluctuation at all.
          • BESTenemy, on 04/07/2008, -0/+2Currency is not a commmodity. All the charts are showing is where one currency stands against the other and not the purchasing power of either of the items presented. Currency emerges naturally in a marketplace. It's a token of trade. As long as there is sufficient amount of wealth being generated to sustain the population needs, the value of the currency that cannot inflate will go hand in hand with the value of the basic package of goods. If you are to examine gold value, better compare it to Bread Index or to any commodity that had been roughly unified throughout the years. Keep in mind, also, that gold had existed in the market place for 6000 years and that most banks still use precious metals for backing their fiat currencies at a fractional reserve ratio. It is here to stay. It is stable. The mining rates have never spiked to the point of generating excessive supply. The only time the value had been "fixed" in the past is during the times of speculative segregation about 1400 years ago. Today segregation is next to impossible, as the global markets are tightly integrated and the gold is distributed throughout them making it difficult to control the supply.
        • SealandRes1, on 04/06/2008, -0/+2ehhh... that like you posted is showing the fluctuations of non-gold based currencies and uses gold as the standard to illustrate the fluctuations of the different currencies presented.
      • minoss, on 04/06/2008, -1/+1And the value of gold has been constant? The value of gold is extremely volatile.
        • SealandRes1, on 04/06/2008, -0/+2Are you talking about the real value of gold or the monetary value of gold?
    • MAGZine, on 04/22/2008, -9/+6Kallenka.

      The issue isn't that its the $1,200 car, the issue is that way back when, you could buy this car for the same price at the same price when the new currency was introduced, and has since fallen dramatically. If you don't realize, when you get a ***** of gold, and you give someone a piece of paper worth $0.02, I think you just made an assload of money.

      He is pointing out the weakness of the economy, and the blindness of the people who don't realize what has happened.
    • Kardall, on 04/05/2008, -0/+6The concept or idea that I have problems understanding (and I'm not sure if anyone could properly grasp it), is if the US dollar was stil on the Gold Standard where that car is worth $1,200 and your (as you stated) income would be $2.12 a day, everything else should follow suit and actually we wouldn't notice any difference. Like, how can you put yourself in that timeframe and realistically experience what would happen if the US currency was still on the Gold Standard today, and how does it affect the way you live. That's what I want to know. Anyone know of a clip like that, that could show you what it's like?
      • RobotLeAwesome, on 04/05/2008, -1/+3If the gold standard was around today, we could actually save money - saving money now is actually not helpful in the long run, because the money sits in the bank losing value.

        • dementia, on 04/05/2008, -2/+3Have you ever heard of interest?
        • Boooohjoke, on 04/05/2008, -1/+3Bank interest is lower than inflation, therefore you slowly lose money while its in the bank.
        • Hamletlere, on 04/05/2008, -1/+2Except for that little thing called interest. My bank has a savings account interest rate of around 4%, which is higher than the current inflation rate.
        • HonestAbe, on 04/06/2008, -0/+2Which bank do you have that is higher than inflation?
      • da_bradler, on 04/06/2008, -0/+2The problem is the economy would keep producing more and more cars but there would still be no more gold. We have more resources in the economy today then we did ten years ago so if you didn't add money into the economy to compensate for those added resources the resources all become worth less and less.

        example: lets say the United states produces 100 pounds of iron a year and the US has 100 pounds of gold and one pound of gold is worth one pound of iron. Well next year the US produces another 100 pounds of iron but there still is only 100 pounds of gold, so all the iron that gets produces is worth half as much or rather everyones money is worth twice as much when it comes to buying iron. To compensate for the decreased worth of iron mine companies would have to lower there employees wages by half and the next year when more iron is added they would have to decrease wages again and again. This puts a penalty on increased growth and absolutely ***** up economies.
    • 15charmaxwtf, on 04/05/2008, -2/+1It was perhaps a bit confusing, I agree.

      But on the plus side, if it was a true laissez-faire economy then you'd be able to buy a car better than that for the equilvant of today's dollars.
    • Zera, on 04/05/2008, -0/+3Kalleanka, the POINT isn't that we'd have made less total money, and thus we could buy a corvette for 1200, what this means is that through this time frame, ALL ASSETS OWNED, specifically invested MONEY is has been devalued 98% What that means is that it is one more form of tax that is essentially invisible, and hurts anyone who has money invested anywhere. And investments are good! Investments keep everything going. Investments make loans possible, investments start businesses.

      The point is that the government shouldn't be allowed to ***** with the economy in this way.
    • hypergodzilla, 2 hr 48 min ago, -0/+0That's because you have no understanding about economics!
  • GoodNewz, on 04/05/2008, -40/+57Very inaccurate in stating the facts....Whoever made this video needs a lot more education in economics and has no basci understanding of the subject whatsoever. The value of gold has not increased in value and has actually decreased(accounting form inflation) from the 1980 until now. And has a long way to go before reaching the level it was in 1980s. Be careful when you watch videos like this and ask your local economist of what the facts actually are. There are a lot more inaccuracies in this video.
    • yootubefan, on 04/05/2008, -12/+10Your right, this video is completely inaccurate. The price of gold is still $20 and the 90% silver quarter is still only worth 25 cents. I think it is you who needs the education. You just keep listening to the politicians tell you we are not in the middle of a recession while Bear Sterns and the likes will go under because of the instabilities that are out there created by the banking industries and the Fed. I know all about the 1980's price of gold and how silver hit $50 an ounce.
      • wc3452, on 04/05/2008, -3/+7How about you stop listening to other diggers and learn something about Economics? $20 today is not worth the same as $20 twenty years ago, i don't care if the value of gold is held constant, I care if the purchasing power of it is still the same.
        • zomgflamer, on 04/05/2008, -2/+3The point of the video is to tell you that gold has remained constant relative to the dollar. Because the Fed ***** out so much money out of their ass to pay for debt and crap it devalues the dollar while there was no commodity exchanged for that dollar. THe fact is dollar indeed was worth something because it was exchanged for commodities. But when you print out money for banks to loan to people like it s no tomorrow its eventually going to be worthless compared to oil, gold and commodities hence dollar loses its true value. It mainly has to do with debt and loans bank throws away like nothing that today's economy so ***** but the main problems i government having too much power to print these out whenever they want to keep business in check so people like us don't sell the shares of them companies.
      • delmar14, on 04/05/2008, -1/+1Agh...the price of anything--be it gold, dollars, or dildos--is determined by the demand (i.e. how much will people pay given various supply scenarios) relative to the supply (i.e. how much of the item exists) in the open market. Since the supply of gold is relatively stable, it will retain its true value during inflation whereas the dollar will not.
        • rlbond86, on 04/05/2008, -0/+1Yeah, just like during the Great Depression.
        • darkedict, on 04/07/2008, -0/+1The supply is stable but the DEMAND is not. This is the difference. What the hell do people want gold for? It does NOT pay a dividend, and you cannot eat it, and the commercial demand for it is not enough to sustain the last 5 years worth of appreciation.
    • 15charmaxwtf, on 04/05/2008, -3/+3"Ask an economist".

      I'm sorry, but because economics is such a political subject it is probably actually worth trying to make up your own mind by reviewing many sources, rather than relying on an "expert." This isn't physics or maths, it is a social science. After all, two people don't get Nobel prizes for contradictory findings in physics, like they have done in economics.
      • JohnFlux, on 04/05/2008, -0/+5> After all, two people don't get Nobel prizes for contradictory findings in physics, like they have done in economics

        Actually, one guy won the nobel prize in physics for proving that light was a wave. Then his son won the nobel prize for proving that light was a particle :)

        (Okay, so not actually a contradiction, but I love the way how his son won the nobel prise for saying the opposite of what his dad did)
        • delmar14, on 04/05/2008, -1/+4Not the opposite at all, but rather a greater depth of understanding. Light is a particle that can exist as a wave, so both theories were true.
    • t3rmv3locity, on 04/05/2008, -3/+9I don't think people people understand the purpose of inflation (or even Macroeconomics for that matter).

      I'll start here: Banks Create Money. The loan out about six times as much money as they actually possess, and if they were to stop our economy would CRASH. All businesses rely on loans to grow, and without the banks there to smooth that process with loans, our economy would slow to a standstill and we would enter another great depression. ANY economist would tell you going back to the gold standard is the stupidest ***** thing any country could do. We have a fundamentally different economical model where banks create large amounts of money to help new companies grow, and those companies employees turn the economic wheels.

      The gold standard is an outdated economic model, and any modern country which attempted to use it today would fail. Inflation is just the price which is paid for a flourishing economy.
      • zomgflamer, on 04/05/2008, -1/+2I think the main problem is as a country we are racking up "bad debts" instead of "good debts". Basically our dollar right now is taking a hit to payoff that interest and loss from the debt. It comes in a form of failed businesses, war that sucks in more money than it yields out, and losing to competition in economic race. When more countries begin to rise economically and adopt the capitalistic system their currency gets in the mix of business and bought by other countries. Eventually, there will be less people wanting the dollar and the price of it drops, although right now its happening because of the war has scared off many investors from investing in the dollar,
    • Trichomonas, on 04/05/2008, -3/+9I'm not sure why you're being dug down because you're completely right. This video is extremely inaccurate and still managed to make the front page...that's very sad but I guess it shows you the mindset of diggers.

      And Banks do create money (NOT currency or Fiat money) but money in the depository sense by loaning it out to people. Having your economy tied to a gold standard is a very bad thing indeed.

      Also, Nixon may have been a bad president but that has nothing to do with him taking the economy from the gold standard. The video is misleading the viewers. All you need to do is go to the Federal Reserve website and you'll find accurate and informative material.
    • richmomz, on 04/06/2008, -0/+3The price of gold moves, just like every other commodity. It's true that if you compare today's price with the inflation adjusted high in 1980 gold is still worth about half as much as it was then. A better comparison would be with other currencies. When the Euro was introduced 80 cents got you 1 Euro. Ten years later, it will now cost you $1.55 for 1 euro, meaning that the dollar is worth HALF as much as it was just ten years ago relative to the Euro (and many other currencies as well). And it's still dropping - even a quick trip to the gas station or grocery store will prove this, if you think back to what things cost just 10 years ago. But don't take my word for it, do some research on your own and you will quickly realize that our currency is in serious trouble.
    • Gamer2k4, on 04/06/2008, -0/+1He lost all credibility with me when he said that Nixon was the worst President ever.

      http://en.wikipedia.org/wiki/Nixon#Legacy
      Nixon was a great President in a lot of aspects, but everyone only remembers the Watergate thing.
  • Lephtovermeet, on 04/05/2008, -17/+7People aren't making roughly the same amount of money. Wages, historically go up.
    • yootubefan, on 04/05/2008, -4/+10Yes wages do go up, but they are not going up at nearly the rate that the dollar is going down. Most of the serious damage to the dollar has been done in the last 30 years. Wages have increased, but the rate of difference between the two are staggering.
      • Hamletlere, on 04/06/2008, -0/+1What does the value of the dollar matter, other than in international investments? I realize that it would make importing items more expensive, but that would be included in inflation, which hasn't been excessive. Prices of all imported goods certainly haven't risen 25%, as the dollar has fallen, so what effect does it have on me?
    • Quakee, on 04/05/2008, -0/+210 years ago gas was about a third of what it is now. Did salaries go up 3 fold? Did minimum wage? Nope.
  • BeeArePro, on 04/05/2008, -12/+240Like my great great great grandfather used to say..."They invented paper money to take my gold, and then they invented plastic to take my paper money."

    Wise words, they were.
    • brad3378, on 04/05/2008, -1/+64What comes after plastic? paypal?
      • godseyeview, on 04/05/2008, -1/+12yap then implanted microchips
      • Chordinator, on 04/05/2008, -0/+2Finally, they invent skynet to take your implanted microchips... and your life!
      • MAGZine, on 04/22/2008, -0/+1"They invented paper money to take my gold, and then they invented plastic to take my paper money. Now they're inventing the internet to give me nothing."
      • richmomz, on 04/06/2008, -1/+1Nope. 666
      • BruceDude, on 04/06/2008, -0/+1Eyeball scanners/
    • greenlight2001, on 04/05/2008, -6/+12They had credit cards back in the 1820s?
    • suzywang3000, on 04/05/2008, -1/+4you can buy gold with paper money and you can buy paper money with plastic money.
    • BESTenemy, on 04/05/2008, -0/+3At least we are not living in post-depression days when gold possession was made illegal. We can still buy gold and we can use it for transactions. Those of us that have invested into gold since the 70's aren't complaining about the inflation... as long as the government allows us to keep what we own.
    • Wakuko, on 04/06/2008, -0/+0Then they invented "Lindens" and the world as we know it came to an end.
  • scamerica, on 04/05/2008, -24/+63The Federal Reserve is a system that transfer real wealth created by the people to the creator of money (worthless paper). They feed on us like parasites.