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FreeMarkets (99.23)

Why Agreements Aren't Necessary

Recs

11

October 23, 2010 – Comments (16)

Yes, I picked a bad day to blog, but rec's aren't important to me, educating you is (and yes, I'm being sarcastic).  That said, news today from the G20 "The world's leading advanced and emerging countries vowed Saturday to avoid potentially debilitating currency devaluations"

What a nice agreement.  Let's see if everyone adheres to it.

But agreements wouldn't be necessary 120 years ago, during the hey day of the gold standard.  Devaluing your currency, either by putting less gold into your coins or by making artifically low interest rates, only sent MORE of your gold to other country's.  To stop the loss of all your gold, you had to strengthen your currency.

Gold has one serious weakness and it became its ultimate downfall as a currency standard, it really isn't suited towards war.  Of course we could argue that is golds flaw, its a flaw in humans.  None-the-less, long wars make gold a poor commodity to back up a currency.  The other flaw is that paper is well accepted while the war goes well.  German marks were in high demand from 1939-early 1942.  This gives politicians cover when embarking on crazy ideas like killing millions of people, but that's another discussion entirely.

16 Comments – Post Your Own

#1) On October 23, 2010 at 8:39 AM, dragonLZ (99.34) wrote:

Yes, I picked a bad day to blog, but rec's aren't important to me, educating you is.

Alstry, is that you?

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#2) On October 23, 2010 at 10:58 AM, dbjella (< 20) wrote:

Great question dragonLZ!  I would even go as far to ask if WhereamInow, Alstry, FreeMarkets and TMFSinchiruna could be the same person with a split personality disorder :)

Seriously, I wonder if a gold standard could ever work anymore.  Society is moving more towards a paperless currency and I just can't reconcile in my small brain how it would work.   

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#3) On October 23, 2010 at 11:18 AM, Valyooo (99.82) wrote:

Why is gold bad during war?

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#4) On October 23, 2010 at 11:32 AM, ETFsRule (99.90) wrote:

This blog didn't teach me why agreements aren't necessary.

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#5) On October 23, 2010 at 12:11 PM, whereaminow (70.26) wrote:

Ouch, Doug.  You put me in the same cat as alstry lol.  I'm hurt, brother.

The best part of G20 "agreements" is watching them collapse. 

"Trees are tall to overlap rival trees [not to be closer to the sun].... If only all the trees in the forest could come to some agreement - like a trades union restrictive practice - to grow no higher than, say, 10 feet, every one would benefit.  The entire community - the entire ecosystem - could gain from the savings in wood, and energy, which are consumed in building up those towering and costly trunks." - RIchard Dawkins, The Greatest Show on Earth, p.377-378

Alas, like trade union practices, cartel schemes, and G20 'agreements'. it is simply not in a trees nature to act on behalf of other trees.  Self interest is a part of nature, not just human nature.

Likewise, these 'agreements' always spectacularly fail.  It's fun to watch - to point out what self delusional losers these people are.  But it's simply always the case that people - even noble government overlords - are going to act in their self interest.

David in Qatar

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#6) On October 23, 2010 at 1:22 PM, cthomas1017 (38.79) wrote:

I've long known that altry & whereaminow were the same person with a split personality disorder.  Has anyone here seen them post at the same time?  I certainly haven't.  And neither of them has given a full accounting of their whereabouts in November of 1963.  A coincidence!?!  I think not!

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#7) On October 23, 2010 at 1:28 PM, cthomas1017 (38.79) wrote:

I am adding FreeMarkets & TMFS to my watch list as well.  Very good point, dragon.  Of course, your tactic of tying all these together could be a diversionary move motivated by disinformation & reverse psychology.  YOU too are now on the "they are all one" watch list.

Perhaps TMF can reverse lookup and determine that all these screen personalities are originating from a single IP address located inside wikileaks.  The probability is high.

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#8) On October 23, 2010 at 3:08 PM, FreeMarkets (99.23) wrote:

It's true, I agree a lot with David in Qatar (whereaminow), but he is an anarchist and I am a Constitutional Libertarian.  I believe the U.S. gov't has authority.

As for alstry, I wrote a series of blogs from October 2009 through November 2009 mocking Zombulation day.

But its obvious that people would rather discredit the poster than the message.  A good sign that we are a nation in decline.

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#9) On October 23, 2010 at 3:12 PM, FreeMarkets (99.23) wrote:

#3.  Gold is bad during war because HUGE trade deficits are created (and for good reason, war can be the end of your nation).  A gold standard removes the gold from your reservers and sends them to the nations selling you stuff.  When the gold runs out, you're done - no more money and no way to buy what you need.

But there's a solution - print paper.  Why people accept paper, I don't know, considering you may bet on the wrong side.  For example, after our Civil War the debts of the Confederate States were ignored.  Every product sent to the Confederates was paid for in a paper currency that was worth absolutely nothing.  To think people will risk sending guns, food, wood, etc. in return for a piece of printed paper when so many have lost it all (there's a losing side to every war).

But, there's a sucker born every minute and history tends to repeat itself.

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#10) On October 23, 2010 at 3:31 PM, dbjella (< 20) wrote:

whereaminow noticed that I wrote "could be" the same with person with a "personality" disorder.

Your still my favorite blogger.  Just having a tiny bit of fun at your expense.  

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#11) On October 23, 2010 at 3:39 PM, dbjella (< 20) wrote:

FreeMarkets

I am sorry.  

Seriously though, given that we are mostly an electronic currency what would be your backing for that currency and why?

I remember a blog that whereaminow wrote that referenced a time when people had to pay banks to hold their money to keep it safe.  

Thanks, I enjoy your blogs. 

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#12) On October 23, 2010 at 3:55 PM, kdakota630 (33.31) wrote:

FreeMarkets

I loved your alstry-mocking blogs.  They were funny.

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#13) On October 23, 2010 at 4:00 PM, whereaminow (70.26) wrote:

dbjella,

Just having a tiny bit of fun at your expense.

I know. I didn't take it personally =D 
But..... yes... I do have a personality disorder. One day, maybe we'll meet up and you can ask my better half about my real split personality.  She calls him "dante" lol, and she does not like him at all ;)

Your still my favorite blogger

Thanks man!

David in Qatar

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#14) On October 23, 2010 at 4:02 PM, whereaminow (70.26) wrote:

I remember a blog that whereaminow wrote that referenced a time when people had to pay banks to hold their money to keep it safe.  

Those were the original money warehouses of Europe. They served that function, but also - and probably more importantly - they made international trade more convenient.  At times when the European monarchs debased their currencies, these warehouses were a safe haven for merchants. 

David in Qatar 

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#15) On October 23, 2010 at 7:15 PM, FreeMarkets (99.23) wrote:

#11 - I honestly believe that the U.S. could amend the Constitution with a dollar system based on the population.  This would limit the amount of dollars in circulation, but allow it to grow as our population grows.  It has elasticity and could be based on the Census conducted every 10 years.  Then the Treasury (not the FED, which I would eliminate) could expand the money supply on an annual basis.

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#16) On October 24, 2010 at 1:41 AM, Valyooo (99.82) wrote:

So basically we sell equity to other countries during war time and dilute the f!@# out of them

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