Michael Angelo Tata, PhD
mtata at ipublishingllc.com
Fri Apr 24 08:50:25 EST 2009
Thanks for clarifying!
Michael Angelo Tata, PhD 347.776.1931-USA
From: cbr at cbrubin.net
Date: Wed, 22 Apr 2009 18:34:40 -0400
To: empyre at gamera.cofa.unsw.edu.au
Subject: [-empyre-] NIxon, not FDR - Geflecht
Without getting into the argument here, it was Nixon who took the USA off the gold standard in 1971. Some of us even remember when this happened!
I recommend Thomas Friedman's column written in 1994, just after Nixon's death:
The World; A Nixon Legacy Devalued By a Cold War Standard
On Apr 22, 2009, at 3:11 PM, Nicholas Ruiz III wrote:
From: jeff pierce <zentrader at live.ca>
To: -empyre- <empyre at lists.cofa.unsw.edu.au>
Sent: Thursday, April 9, 2009 10:41:30 PM
Subject: Re: [-empyre-] Geflecht
Fiat money is money declared by a government to be legal tender. Fiat currency achieves value because a government accepts it in payment of taxes and says it can be used within the country as a "tender" (offering) to pay all debts. In effect, this allows it to be used to buy goods and services. The most widely-held reserve currency, the US dollar, is a fiat currency. Federal Reserve Notes receive no backing by anything. In another sense however, they are "backed" by all the goods and services in the United States economy because they are declared legal tender by the Federal government.
The one thing that all fiat currencies have in common is they all fail in the end, as they really aren't worth anything and inflation takes over, in the most severe cases hyperinflation. The US dollar used to be backed by gold but FDR so unwisely took us off that back in 1933. In fact, he also made it illegal for private citizens to even hold gold as required everyone to turn in their gold for a predetermined amount set by government. Some fear that the US government are going to try that trick again and that's why so many investors hold their gold offshore. I couldn't believe it the first time I heard that.
One other note to pay attention to in the definition above is it says the currency is backed by "all the goods and services in the United States economy", and the big problem is that we don't really export much these days. Most manufacturing has went abroad and we are now mostly a service based economy. Seems like everything is made in China, India, or Mexico so it makes you wonder, what really is backing our currency?
The only thing that makes it worth anything is because the government says so and everybody goes along with that. We are currently the world's largest debtor nation with China holding a massive amount of US dollars. Things could really get bad for the value of our dollar when they start dumping their dollars. China has already voiced concerns about a new reserve currency because their scared about US defaulting on it's debt.
We're about to hit critical mass soon regarding the amount of debt this country has taken on. Just think about the interest that the government owes to the Federal Reserve, it's staggaring to comprehend. If Obama continues down this path of insane fiscal policies, you're going to see taxes on the public double soon.
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