Ok, so here it goes...the debate/argument last Thursday night, on money, or rather the USD (United States Dollar) ...yes very interesting. Several of you (everyone but me) said, in effect, that the dollar is worth nothing, but its weight in paper. Because it has been taken off the “Gold Standard” (correct me if I'm wrong). As my usual custom, I took the opposite position, that being, the dollar (like any other physical thing) is ONLY worth what you can buy/trade with it. Thats how the analogy of the cup came about. I said that if you won't sell me the cup for a dollar (or some amount of them) then it (the dollar) is worth nothing, even if backed by the“Gold Standard”. BUT if you sell the cup to me for a dollar then it becomes worth something!
My question to you is, how then can you say that the dollar it worth nothing?
Sorry I have to put this in, for those of you who like to mess with “hypothetically” or “possibly”, we are talking about now, not in a hundred years when you can't buy a cup with a dollar (possibly).
BTW the full Bible verse is 1 Timothy 6:10.
26 comments:
To begin with sir, I do not hold that the American dollar has only the value of it's weight in paper (or very near that amount) because of the abandonment of the gold standard. You see, the 'Gold Standard' was simply the use of gold and silver as the only accepted currency. Permit me to give a brief bit of history here, for the sole purpose of educating our various readers, after which we will discuss this issue in greater depth. The 'gold standard' is not what the United States of America first adopted. in July of 1785 the US formed a silver standard based on the "Spanish milled dollar". A long series of attempts to create a bimetallic standard for the US Dollar ensued, which continued until the 1930s.
Finally a true gold standard came to fruition in 1900 with the passage of the Gold Standard Act. This standard effectively came to an end in 1933 when President Franklin D. Roosevelt outlawed private gold ownership (except for the purposes of jewelery). The Bretton Woods System, enacted in 1946, created a system of fixed exchange rates that allowed governments to sell their gold to the United States treasury at the price of $35/ounce. "The Bretton Woods system ended on August 15, 1971, when President Richard Nixon ended trading of gold at the fixed price of $35/ounce. At that point for the first time in history, formal links between the major world currencies and real commodities were severed. The gold standard has not been used in any major economy since that time.
Ok, with the history leading up to this point covered, we can see that clearly, it was NOT the destruction of the gold standard that makes a modern paper dollar worth next to nothing.
We could delve into more history dealing with federal reserve notes, but it will suffice to say that, with the rise of fiat currency (currency not backed by any tangible substance)the dollar has lost its value.
We now have a piece of paper that is backed by absolutely NOTHING except the 'full faith and credit of the U.S. government', something on which I am currently running low.
So, intrinsically, they are worth the value of their ink and paper components, which is of some value I am sure, but not any more than my expenditures in going to Jackpine and printing it myself.
Your analogy of the cup is correct only in the aspect that the modern federal reserve note will obtain value when I decide to trade it to you for the cup. However, when the U.S. Treasury backed each and every dollar printed with one dollar's worth of gold, that dollar would have the value of one dollar regardless of whether or not I wanted to trade it for a cup.
Hopefully that cup is made of gold... at least a doller's worth anyway...
All I have to say right now is, that would be a small cup.
Ladies and Gents, both comments are the epitome of what I'm looking for when you debate/comment!!!
1-Informative (I learned something from the "brief history" {assuming its correct})
2-Humorous (some good subtle and not so subtle "lines" in it)
3-Clearly stating your argument (unlike some on Thursday {even though its wrong})
I'll try to explain why...
"with the rise of fiat currency (currency not backed by any tangible substance)the dollar has lost its value.
We now have a piece of paper that is backed by absolutely NOTHING except the 'full faith and credit of the U.S. government"
This is an inaccurate statement because they ARE BACKED by a "tangible substance" (your work). All the dollars in your wallet are worth something more then their "ink and paper components" because you worked for them, (maybe stole them JK) and you can buy the essentials of life with them.
Any object/service is only worth what YOU are willing to pay for it, either in time of your life, or an object in trade. If the a store/someone won't accept them, this also makes them worth nothing.
While I agree that when "backed" by a fixed amount (1OG=$35) they are worth "something", ($35=1OG) but that does not mean a dollar (not "backed" by gold) is worth nothing. It IS "backed" (cup=dollar)
For the record, the cup I'm talking about is not necessarily made of gold.
A side note...if there are any of those dollars you think are worthless laying around, kindly save them for me and I'll pick them up next time I'm there. LOL JK
Most honourable spyder-slayer,
Qouting you:
Any object/service is only worth what YOU are willing to pay for it, either in time of your life, or an object in trade. If the a store/someone won't accept them, this also makes them worth nothing.
To begin, I hope you understand that we are discussing value as opposed to worth.
Having attained that mutual agreement, I will continue to respectfully disagree with the rest of your arguement.
You seem to admit by the above statement that the federal reserve note (FRN)has NO inherent value until it is deemed worthy by someone or something as an equal trade for their product/service. This is my entire case in a nutshell; the FRN that I pull out of my wallet has NO inherent value whatsoever; zip, zilch, zero.
It is only when I decide that it is worth trading for the cup which you desire to exchange, that the dollar obtains the value of a cup (TO ME).
So you are partly correct, but I will continue to contend (because the truth is worth defending... lol) that there is no inherent value in and of the FRN; exusing it's ink and paper components.
AAAHHH my first reply got deleted (connection timed out)
Note to self (6) Save your work.
Second try...
You seem to admit by the above statement that the federal reserve note (FRN)has NO inherent value until it is deemed worthy by someone or something as an equal trade for their product/service.
Yes, the same as any object on earth (IMO this is "worth")
My argument is with the people (I think this includes you) who think that the FRN has no value (only "it's ink and paper components") because its not backed by gold. On this point I disagree, here's why...the argument that a dollar's value is dependent on a backing of gold only is self-defeating argument. Why can't the dollar be backed by something else, your work for example?
Quoting from your last sentence, "that there is no inherent value in and of the FRN; exusing it's ink and paper components." Does your truck's value come only from the metal used to make it. The answer is no, because its a truck!
The same applies with dollar, if you don't value it, why do you work for it?
And the quotation marks are missing from the first quote, quoted.
Sorry about that, I can't win!
Looking back through the comment I'm missing more then just " ". Looks like an "a", a few ","s, (lol) and some other things. If you find them hanging out some place, please return them. Thank you
Mr. S-S,
Once more quoting you, "I can't win" This statement is entirely correct. You can't.
The point that I am trying to make is this; suppose we have a FRN fresh off the printing press... This bill has NO value at all, saving its ink and paper components. Correct? It has not been worked for or exchanged in any way, for any reason: it is not backed by any tangible substance in the U.S. Treasury or any place else, so it has no value aside from its ingredients... Let me know if you agree.
Yes sir,(about wining) I'll be on Halo at 7:00, no wait, I'll be headed to your church at the time.
Going back to the truck argument, is a truck worth nothing right out of the factory(for all the reasons you listed with the dollar)???
Don't lose me now folks I'm going somewhere with this...
I'm not sure how your truck analogy applies to this discussion S-S!
There are many differences between trucks and FRNs... For instance, trucks are not accepted currency, nor are they legal tender for all debts, public and private.
While FRNs are printed by the federal government, naturally causing inflation, (lol) trucks can only be crushed, not inflated. (the windows would probably break if you attempted this maneuver, so I would not suggest trying to prove me wrong on this point)
FRNs also have people's faces printed on them, while trucks, as a general rule, do not. We could continue stating the variations between these two, but I will desist since I think you probably see my point.
jimmy-
"There are many differences between trucks and FRNs... For instance, trucks are not accepted currency, nor are they legal tender for all debts, public and private."
I don't know I think they have a lot in common, like lets say, they can both be green, and I have seen people's faces printed on both,(they can do a lot with a pant job these days),(and if you just hit someone with your tuck....)(jk).
"While FRNs are printed by the federal government, naturally causing inflation, (lol) trucks can only be crushed, not inflated."
Have you never had an inflatable truck,(like pool toys and such)
Ok ok I wasn't looking for differences, the question was, (and is) "is a truck worth nothing right out of the factory?"
And once again "Don't lose me now folks I'm going somewhere with this..."
OK these are just some things I thought I'd throw out...
"Even the gold-backed currency of the Revolutionary War period became worthless when it could not be traded.
"Fort Knox houses much of the U.S. gold supply in special vaults. At one time the Federal Reserve was limited in the amount of money it could produce by the government's supply of the metals it used to back money; however, changes in economic philosophy have increasingly caused government to move away from the gold standard to issue inflationary dollars not backed by gold or silver."
I just thought this was funny: "Major Federal Reserve banks have gold storage vaults with compartments assigned to various nations. International debts are paid by moving the gold from one compartment to another."
So what are my thoughts on all this? Well in my mind money has no value, now that does not mean I will not use it, because I do, it would be hard going about trying to not use it, and I don't think it's that big of a deal.
So right or wrong, that's what I think.
Oh! and one more thing, here is what Jesus had to say ...
Matthew 6:19-21 "Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal: 20.But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal: 21.For where your treasure is, there will your heart be also."
So the dollar, backed or not, is it of any worth???
Even the gold-backed currency of the Revolutionary War period became worthless when it could not be traded.
Once again, we are discussing value, not worth here. It may have been worthless in that it was not accepted in trade for a particular item, but it still held the value of one dollar in gold.
OK, there are 5 times that worth is mentioned in the original post.
So if that is not what you all are talking about then why didn't s-s say value rather then saying worth????
Keep in mind that I didn't here the original conversation, so therefore I do not know all of what y'all have covered already.
BSBT, I think this might be where some of the confusion is coming from. The original conversation on Thursday night was about value (correct me if I'm wrong)... I continued on this track, but you are right in that the original post uses worth.
bsbt-I'm sorry, there's a general understanding that I'm using both words in the same way (they can be used for both purposes, and I have thrown in some bonuses on "worth")
Jimmy-So we have an agreement on the meaning of the words, please define what they mean (to you) as they apply to the debate. You still haven't answered my question on trucks. Thanks.
Excuse me, but... What does Trucks have anything to do with The US Dollar????
Just a question.
-Amber
"Just a question" and a very good one. I intend to answer that when jimmy answers my question LOL.
Ok guys, very sorry about the delay in commenting. I have been very busy of late, but now I am back (in all my glory!)
lol
I have given this subject much thought, and I must admit, I was wrong. My case up to this point has been invalid for one huge, glaring reason that somehow I missed in my initial assesment of the subject.
You see, it may be argued that modern fiat currency has only the value of its ink and paper components because it is backed by no tangible substance, as opposed to gold or silver certificates. However, the very gold and silver has no inherent worth or value, but only that which it obtains when any given individual deems it to be a worthy trade for his/her product/service. So, in a nutshell, I would have to concede, and confess that you are right in arguing that currency of any sort, whether it be gold, silver, paper or pumpkins, gains its worth only when considered to be of the same value as the object of trade.
Thanks for the great discussion all who participated; I don't know how in the world I overlooked such an obvious error...
However... (Going by both illustrations) If someone Were to steal a Truck that had just been finished out of the factory it would be worth something because it has Use... But if someone were to steal a Dollar...??? (Since that is what is referred to, I will use a single dollar bill.)
What could you do with it?
There is no Use for it.
You could get a Taco at Taco Bell at the Most.
Trucks and Money = not the same thing.
But nonetheless... A very interesting Debate.
Well this is very interesting.I agree with both sides and disagree at the same time.The US dollar is becoming more and more worthless each hour and so on....Why is this?? Heres the simple truth. When a nation,government or in the Us's situation....a private corporation can create a currency that has no backing except its reputation it is just a matter of time before it becomes useless. Thats right....the federal reserve is a private corporation. The value of any currency can be debated but the true barometer of a currencies worth is twofold....A. What does it trade for and how does it hold its value in the world market...and B. If the nation or country that issues the currency fails or is destroyed....what its the worth of said currency? Hypothetical situation...If the Us Government were to fail tommorrow.....what do you think you dollar would be worth? Now instead of the Us dollar put gold and silver in that same scenario. So to say the that the current Us dollar isn't worth the paper its printed on is incorrect but it is based on a completely intangible and unbased system. Just because we live here and are so brainwashed to the fact the green paper in our pockets is money doesnt mean that the world economy sees it that way.And seeing how we are on this subject...anyone care to chime in on the inflation fiasco underway in our country? Oh nevermind its all the same thing....the FRS creates currency out of thin air and backs it with nothing....i wonder why our dollar is failing against every major currency in the world.
VERY well said!
BTW, ss... YOU didn't answer my previous question.
If you read jimmys last comment I think you will realize the point I was trying to make. He just beat me to commenting.
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