Tag Archives | gold standard

The Fantasy Of Apolitical Money

moneyYanis Varoufakis on Bitcoin and the fruitless dream of a de-politicised currency:

The Crash of 2008 has infused our societies with enormous scepticism on the role of the authorities, both government and Central Banks. It is quite natural that many dream of a currency that politicians, bankers and central bankers cannot manipulate; a currency of the people by the people for the people. While it is true that local communities have, in the past, generated successful communitarian currencies (that enabled them to improve welfare in their midst, especially at a time of acute economic crises), there can be no de-politicised currency capable of ‘powering’ an advanced, industrial society.

Since the second industrial revolution made possible the emergence of large, networked oligopolistic companies (the Edisons and Fords of the 1900s, and the Googles or Apples of today), capitalism became dependent on large credit spurts for the purposes of financing these capital corporations’ needs.

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State Government Of Texas Moves To Hoard Its Gold

Does a Texas legislative session resemble a Yosemite Sam Looney Toons clip? Because that’s what I’m picturing. The Fort Worth Star-Telegram reports:

Call it the Rick Perry gold rush: The governor wants to bring the state’s gold reserves back from a New York vault to Texas. A bill from Rep. Giovanni Capriglione would establish the Texas Bullion Depository, a secure state-based bank to house $1 billion worth of gold bars owned by the University of Texas Investment Management Co. and stored by the Federal Reserve.

The idea isn’t entirely new. Gold-standard-backing Ron Paul has raised repeated concerns about the safety of states’ gold supplies. “If you think gold is a hedge, or a protection, you always want it as close to the individual and the entity as possible,” Paul told The Texas Tribune on Thursday.

“If we own it,” Perry said, “It’s not someone else’s determination whether we can take possession of it back or not.”

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Arizona Moves To Approve Gold And Silver As Legal Currency

The return-to-old-timey measure follows a similar development by Utah. The Arizona Daily Star explains:

State senators voted [last] Wednesday to make gold and silver legal tender in Arizona. They persuaded Sen. Chester Crandell, a Heber Republican, to give privately minted gold and silver coins the same legal status to pay bills. The proposal, SB 1439, stems from concerns of some that the paper money is losing value.

The U.S. Constitution specifically prohibits states from creating their own currency. But supporters contend that does not preclude states from recognizing coins minted by private organizations. The legislation would not require anyone to accept these coins.

Crandell acknowledged his legislation probably is unworkable, for now. So he agreed to delay its effective date until after 2014, giving lawmakers a chance to work out any of the kinks. A final roll-call vote is needed before the measure is sent to the House.

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Don’t Know Much About History . . .

Yeah, volatility is usually considered a "bad thing" in economics.  It's basically the chance that the dollar you leave in your wallet tonight will be worth $0.50 or $1.50 when you wake up in the morning.  Makes decision making difficult.  Like living on a roulette table.

* Conversion of the U.S. dollar to silver and gold was suspended during the Civil War and discontinued entirely by 1972.  Covers the years for which full data are available (i.e., 1820 through 2009). This analysis excludes, for what I hope are obvious reasons, the years covering America's wars of existential crisis...
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What Do You Want Coins To Be Made Out Of?

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Hurry and respond before the April 4 deadline! The U.S. Mint wants the public’s thoughts and suggestions regarding what metals to use for producing the currency of the future. Personally, I’m pulling for tungsten, or anything that glows in the dark, really.

The United States Mint today announced that it is requesting public comment from all interested persons on factors to be considered in conducting research for alternative metallic coinage materials for the production of all circulating coins.

These factors include, but are not limited to, the effect of new metallic coinage materials on the current suppliers of coinage materials; the acceptability of new metallic coinage materials, including physical, chemical, metallurgical and technical characteristics; metallic material, fabrication, minting, and distribution costs; metallic material availability and sources of raw metals; coinability; durability; sorting, handling, packaging and vending machines; appearance; risks to the environment and public safety; resistance to counterfeiting; commercial and public acceptance; and any other factors considered to be appropriate and in the public interest.

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Requiem For The Dollar: Mourning The Gold Standard

Here’s a very insightful essay by James Grant, editor of Grant’s Interest Rate Observer. He’s a famous financial curmudgeon … but on this issue I think he’s 100% right, writing in the Wall Street Journal:

Ben S. Bernanke doesn’t know how lucky he is. Tongue-lashings from Bernie Sanders, the populist senator from Vermont, are one thing. The hangman’s noose is another. Section 19 of this country’s founding monetary legislation, the Coinage Act of 1792, prescribed the death penalty for any official who fraudulently debased the people’s money. Was the massive printing of dollar bills to lift Wall Street (and the rest of us, too) off the rocks last year a kind of fraud? If the U.S. Senate so determines, it may send Mr. Bernanke back home to Princeton. But not even Ron Paul, the Texas Republican sponsor of a bill to subject the Fed to periodic congressional audits, is calling for the Federal Reserve chairman’s head.

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