Why Issue Treasuries?

[DBTrek]

Can you describe the lower standard of living and death that Americans suffered until Nixon freed us from gold?

The short answer is - looking at things like infant mortality, GDP growth, housing availability, etc, etc, I’m not sure how to isolate what can be attributed to fiat currency vs other economic factors, which are legion.

The longer answer is economic inefficiency always results in a lower standard of living (obviously, because if the economy were more efficient less would be lost to overhead and more would reach the sellers/consumers).

The gold standard is less efficient than fiat currency. This is plainly obvious if we look at why the gold standard was abandoned in England and later, America. In England a run on banks led the banksters to fear that *all* of their gold would soon be depleted. Meaning panicked citizens would turn in all their money for all the gold (which the money represented) and then what?

No one knew what came next. We still don’t know. The head banker in England had a nervous breakdown and his peers said “Fuck gold, the whole economy is collapsing if we hand it all out to the public!”

That’s an inefficient and terrible way to run currency. Does fiat currency improve on gold’s shortcomings? It does. Bank runs can deplete cash reserves today, but it can’t deplete the single commodity upon which all currency is based. Boom. Improved efficiency. Better economic practice.

[Speaker to Animals]

You make a lot of assertions here as if they are some self-evident truth. Yet the truth is that there were no "economic inefficiencies" that led to "lower standards of living" when the USD was tied to gold. Nixon took the USD off gold because the French were abusing the terms of the agreement that allowed them to clear out our treasury. We abandoned it not because gold-backed currency was a bad idea but because of a dumbass agreement that simultaneously barred the American people from purchasing and selling gold assets of their own while allowing foreign powers to convert USD to gold, clearing out our national treasury. Indeed, in the 1960s and 1970s, our standard of living was far greater than any other nation on this Earth. You might take for granted now that places like Europe have caught up with, and in some cases surpassed, our standard of living, but in the 60s and 70s, it wasn't even close.

The reason the USD became the default reserve currency in the first place was because it was tied to gold and the failed Euro states then tied their currencies to the USD. We are just running on fumes at this point. The USD is not really that great for reserve currency status any longer. I wouldn't be at all surprised if somebody creates a gold-backed international reserve currency in our lifetimes.

[DBTrek]

I wouldn't be at all surprised if somebody creates a gold-backed international reserve currency in our lifetimes.

I would, because they’d be (briefly) returning to a less efficient economic model that would predictably hit the same hard limits as it did in the past, prompting it to be abandoned again.

[Speaker to Animals]

You still make assertions as if we all must accept them as facts, even though history contradicts you.

Was America languishing in "economic inefficiencies" and low relative standards of living in the 1960s?

[SuburbanFarmer]

When the government runs out of money in a gold-backed system, it's out of money. They then go "fiat" (which means made-up), to create more money.

The US first ditched gold in 1863, during the Civil War, when it went broke. Then went to silver. Everybody ditched the gold standard in WW1, when the reserves ran out. Then went back. Then everybody ditched it again in 1933, during the Great Depression. And went back. Bretton Woods linked everybody to the Dollar, which was linked to gold. Then Nixon 'freed the world' from having money of any inherent value. Eventually, it will collapse again, and we'll go back to gold.

Fiat is the "fuck it, money is whatever we say it is" system, when governments are broke. Eventually, it's recognized as worthless, and we go back to gold. Over, and over.

[DBTrek]

You still make assertions as if we all must accept them as facts, even though history contradicts you.

Was America languishing in "economic inefficiencies" and low relative standards of living in the 1960s?

History doesn’t contradict me at all, you’re simply comparing a less efficient America of the 1960’s to other nations even less efficient than us. It’s a false comparison. Like a guy who is twenty pounds overweight pointing at all the massively obese people and saying “look at that, I’m my body is optimized for maximum health because all those other bastards are fat as hell”. He might be less fat than his peers, but he’s not optimized.

[Speaker to Animals]

The problem with Bretton Woods was that the other currencies were pegged to the dollar, and Americans had their own gold assets seized by the government. Then we allowed foreign governments to convert dollars to gold, slowly clearing out our national treasury.

[Speaker to Animals]

You still make assertions as if we all must accept them as facts, even though history contradicts you.

Was America languishing in "economic inefficiencies" and low relative standards of living in the 1960s?

History doesn’t contradict me at all, you’re simply comparing a less efficient America of the 1960’s to other nations even less efficient than us. It’s a false comparison. Like a guy who is twenty pounds overweight pointing at all the massively obese people and saying “look at that, I’m my body is optimized for maximum health because all those other bastards are fat as hell”.

A less efficient America? How was the 1960s less efficient because the dollar was based on gold in the 1960s? You keep making these silly assertions without even attempting to formulate an argument to back it up, much less any credible evidence.

[SuburbanFarmer]

The problem with Bretton Woods was that the other currencies were pegged to the dollar, and Americans had their own gold assets seized by the government. Then we allowed foreign governments to convert dollars to gold, slowly clearing out our national treasury.

Yep. Traded everything for military dominance. And that dominance is the only thing holding us above the third world.

[DBTrek]

Bank runs being able to deplete the foundation of your currency is less efficient than that not being possible. What about that requires further proof?