How money is created

[GostHacked]

No, why would you say that? Our dollar now is at parity with the US. Where was it during the recession?

The Canadian dollar was also close to on par with the US dollar several times in the last 40 years. What is your point? In a couple points in time the Canadian dollar was actually worth more. Canada and the US have very close economic ties. So if the US is doing crappy our dollar goes up. I fail to see how this is growth for us because someone else tanks.

[M.Dancer]

The notes from the US treasury and the federal reserve had printed upon them a "promise to pay to the bearer on demand" the dollar amount specified on the note in gold or silver. As you know, the US Treasury is not a private bank and the Federal Reserve, although privately owned, is not a commercial bank but a central bank.

Pay to the bearer on demand, yes. But pay in gold, only on limited and not for general circulation notes.

The federal reserve is not privately owned.

Who owns the Federal Reserve?

The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5

[M.Dancer]

The Canadian dollar was also close to on par with the US dollar several times in the last 40 years. What is your point? In a couple points in time the Canadian dollar was actually worth more. Canada and the US have very close economic ties. So if the US is doing crappy our dollar goes up. I fail to see how this is growth for us because someone else tanks.

I'm pretty sure you know what my point is given that it is a response to your claim:

But when it is economy based, you are making the assumption that the economy will always grow.

Our economy was growing in 2007, what was the value of the dollar?

Our economy was in recsession last year, what was the value of the dollar?

Our economy is growing today, what is the value of the dollar?

[M.Dancer]

How does China keep it's currency undervalued?

By not allowing it to trade on the open market

How did Canada keep it's currency pegged at 92.5 cents for so long.

It didn't.

The market responds to what the governments do. The internatinal currency traders are guessing what is going to happen. Their actions in buying and selling only reflect the economic state of a country's currency. Large traders can certainly effect some changes through speculation but they are in the market to make money and they take risks which means they do not have control over the value of a currency. If they did it wouldn't be a market and there would be no risk they would always make money on their transactions.

Of course there is risk, hence the hedge funds. It is certainly more than guessing. They have the strength of expert analisys behend their decisions to but and sell and what to buy and sell. But when the collective mind sets in that a currency is over valued or under valued, the collective has more leverage than any national reserve.

[GostHacked]

I'm pretty sure you know what my point is given that it is a response to your claim:

Our economy was growing in 2007, what was the value of the dollar?

Our economy was in recsession last year, what was the value of the dollar?

Our economy is growing today, what is the value of the dollar?

If anything the value of the dollar is decreasing. I need more money now to buy the same item I bought this time last year.

[M.Dancer]

If anything the value of the dollar is decreasing. I need more money now to buy the same item I bought this time last year.

You are looking at the telescope through the wrong end. The item you bought last year is worth more this year.

Tell me, are computers cheaper now than they were 15 years ago? Using your analogy, the dollar must be worth 10x more than it did in 1995

[Pliny]

Pay to the bearer on demand, yes. But pay in gold, only on limited and not for general circulation notes.

If it stated it on the note it was a contract to do so. To not do so would be a breach of contract. Today's currency is not a contract but merely a token.

The federal reserve is not privately owned.

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5

That old story again. I guess I could say that because they "are organized much like private corporations--possibly leading to some confusion about "ownership." I was possibly led to some confusion about ownership.

What's that last about a 6% dividend?

[M.Dancer]

If it stated it on the note it was a contract to do so. To not do so would be a breach of contract. Today's currency is not a contract but merely a token.

If you can find an image of a general circulation gold standard note with "pay the beared on demand in gold or silver" or to that effect, I will happily concede the point.

To be a bank in the US, you must be a member and have deposits with the reserve. I assume the 6% is in consideration of the deposits. Which is okay if it's a savings account, poor return if it is money that can be re-invested.

[GostHacked]

You are looking at the telescope through the wrong end. The item you bought last year is worth more this year.

In some cases yes, in some cases no.

Tell me, are computers cheaper now than they were 15 years ago? Using your analogy, the dollar must be worth 10x more than it did in 1995

Is that not something called supply and demand that determines what an item will cost from one year to the next? Computers are cheap these days because they are everywhere and used to everything. If the level of demand for computers today was the same as 15 years ago, then no the cost would not be as cheap/inexpensive as it is today. It might still be cheaper, but marginally so. They would still be expensive because companies like Dell and HP would not be able to mass produce them for cheap. Less demand means you pay more an item. There is not much profit to be made on computers on the whole as it is. Companies like Dell and HP make money by volume.

[Pliny]

By not allowing it to trade on the open market

Gosh!

It wouldn't have a value in relation to other currencies if it couldn't trade on the open market. It obviously does.

It didn't.

It did. Between 1962 and 1970 it was pegged at 92.5 cents.

Of course there is risk, hence the hedge funds. It is certainly more than guessing. They have the strength of expert analisys behend their decisions to but and sell and what to buy and sell. But when the collective mind sets in that a currency is over valued or under valued, the collective has more leverage than any national reserve.

While there may be some speculative influence on value, that influence is only encouraged by government monetary policy or the state of the national economy (usually a result of interventionist policies).

[M.Dancer]

In some cases yes, in some cases no.

Tell me, are computers cheaper now than they were 15 years ago? Using your analogy, the dollar must be worth 10x more than it did in 1995

Is that not something called supply and demand that determines what an item will cost from one year to the next? Computers are cheap these days because they are everywhere and used to everything.

Demand forces prices up...not down. competition forces prices down.Demand for the Canadian dollar forces the price of the dollar up...competition from other currencies with growing economies (including the US) keeps the dollar from going though the roof.

What I am saying is, while one item you but meay cost more, a strong dollar means many items you buy will be less. Especially items made in the US like, lettuce....

[M.Dancer]

It did. Between 1962 and 1970 it was pegged at 92.5 cents.

Sorry, I thought you were talking about the 90s.

[M.Dancer]

The quote feature is flummoxed...

But it has been frozen since August 2008.

http://www.chron.com/disp/story.mpl/hotstories/6916388.html

China does not allow the currency to float...so in effect they do not allow it to trade openly.

[Pliny]

If you can find an image of a general circulation gold standard note with "pay the bearer on demand in gold or silver" or to that effect, I will happily concede the point.

I have many examples of them.

1928 US Treasury Note

or

1957 Silver certificate

At the bottom of the 1928 note it states payable in gold coin to the bearer

You should read what many of the notes used to say and compare them to today.

You have to remember as well that the definition of a "dollar" used to be a specific weight in gold or silver.

You may have caught that before I edited it as a Federal Reserve note. It is a US treasury note. The federal reserve note, of which I have a book with a picture of one, states on the left hand side, "Redeemable in Gold on Demand at the United States Treasury or in Gold or Lawful money at any Federal Reserve Bank"

Edited April 6, 2010 by Pliny

[GostHacked]

Demand forces prices up...not down. competition forces prices down.Demand for the Canadian dollar forces the price of the dollar up...competition from other currencies with growing economies (including the US) keeps the dollar from going though the roof.

The demand for computers today is greater than ever, why does that not drive up the price?

What I am saying is, while one item you but meay cost more, a strong dollar means many items you buy will be less. Especially items made in the US like, lettuce....

Have you checked what produce prices these days? I am not paying less for the lettuce.

Edited April 6, 2010 by GostHacked

[M.Dancer]

I have many examples of them.

1928 US Treasury Note

or

1957 Silver certificate

At the bottom of the note it states payable in gold coin to the bearer

Yes and neither of these are general cirulation notes.

[M.Dancer]

The demand for computers today is greater than ever, why does that not drive up the price?

Competition. In the 80s there were only a few brand names (IBM, Compaq, HP...and a few dozen clones. Today there are 100s.

Have you checked what produce prices these days? I am not paying less for the lettuce.

You will next week.

[GostHacked]

Competition. In the 80s there were only a few brand names (IBM, Compaq, HP...and a few dozen clones. Today there are 100s.

Hundreds? No. There are only a few more PC makers than 15 years ago. There are definitely not 100s of computer manufacturers. If you can list them all, go for it. And let's stick with computers for sale to the general public, because for server environments, that field gets narrowed down even more.

I will help

IBM

Dell

HP

Sony

Toshiba

Acer

Gateway

Macintosh

Panasonic

E-Machines (real quality there lols)

Asus

Samsung

You will next week.

Only if the lettuce is on sale.

And all this by no means determines what the real value of the dollar is.

Edited April 6, 2010 by GostHacked

[Oleg Bach]

Money is just another religion, a belief system..a doctrine of submission. THOSE that are "established" create money by decree..They declare they are superior and have wealth and the rest of us believe them- so a master servant relationship forms..we submit and we serve and they get some paper or plastic and declare it is worth something when it is in fact just a chunk of paper. PRIME example is with AMERICAN banks that admitted they had no real money and it was an illusion and in fact they were over extended..and we the poor people send them our money through hard earned tax dollars...................THEN THE BASTARDS LEND US BACK OUR OWN MONEY AT AN INTEREST--OR WORSE..THEY REFUSE TO LEND AND HORD WHAT IS NOT THEIRS.

[M.Dancer]

I will help

IBM

Dell

HP

Sony

Toshiba

Acer

Gateway

Macintosh

Panasonic

E-Machines (real quality there lols)

Asus

Samsung

Those are only name brands. There are literally hundreds of clones...go anywhere on College near Spadina...You might even find a good IPM.

[maple_leafs182]

Better off building your own computer.

Money is just another religion, a belief system..a doctrine of submission. THOSE that are "established" create money by decree..They declare they are superior and have wealth and the rest of us believe them- so a master servant relationship forms..we submit and we serve and they get some paper or plastic and declare it is worth something when it is in fact just a chunk of paper.

Yes, exactly.

If you control the oil you control nations, if you control the food you control the people, if you control the money you control the world.

-Henry Kissinger

It's just oligarchs trying to control the world.

[Pliny]

Yes and neither of these are general cirulation notes.

Get out. Of course they are.

Show me a general circulation note then - Prior to 1957 that is.

There are only two sources of dollar bills. Those are dollar bills from the US Treasury.

The other source is the Federal Reserve. You can look at a Federal Reserve Note if you like.

Look at "any" bank note issued prior to 1957 by the US treasury and they will all say they are redeemable in gold or silver.

Even if they just said redeemable in dollars - which the Federal Reserve notes say since they they abandoned specifying gold or silver - dollars meant the specified weight in gold or silver.

Today they don't bother saying "redeemable". They aren't.

Edited April 6, 2010 by Pliny

[M.Dancer]

Get out. Of course they are.

Show me a general circulation note then - Prior to 1957 that is.

There are only two sources of dollar bills. Those are dollar bills from the US Treasury.

The other source is the Federal Reserve. You can look at a Federal Reserve Note if you like.

Look at "any" bank note issued prior to 1957 by the US treasury and they will all say they are redeemable in gold or silver.

Even if they just said redeemable in dollars - which the Federal Reserve notes say since they they abandoned specifying gold or silver - dollars meant the specified weight in gold or silver.

Today they don't bother saying "redeemable". They aren't.

It is my understanding that these notes were only used between governments.

[Pliny]

It is my understanding that these notes were only used between governments.

Well, those notes I posted were in general circulation.

Between '63 and the cancellation of Bretton-Woods in 73 that was indeed the case. After Bretton-Woods it was entirely paper.

Edited April 6, 2010 by Pliny

[M.Dancer]

http://upload.wikimedia.org/wikipedia/commons/f/fe/US_%2410_1934_Note_Front.jpg

Notice there is no mention of gold...

Before 1964, some notes were "backed" by silver and before 1933, by gold: that is, the law provided that holders of Federal Reserve notes could exchange them on demand for a fixed amount of metal (although from 1934–1971, only foreign holders of the notes could exchange the notes for gold on demand).

http://en.wikipedia.org/wiki/Federal_Reserve_Note