Freedom1Man
Regular Member
Then again there was never any law banning the private ownership of gold either. That too was an executive order.
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What a Trillion Dollars Looks Like
- Thread starter hjmoosejaw
- Start date
Then again there was never any law banning the private ownership of gold either. That too was an executive order.
Citizen
Founder's Club Member
I have come across information that Roosevelt went back and convinced Congress to pass the law after the executive order.
Venator
Anti-Saldana Freedom Fighter
I wish. The judge sent me a letter saying that she didn't know what federal reserve notes were but they would accept them as payment however if the bank did not recognize them as money that they would mark the fine as unpaid.
I paid with 1 dollar FRNs and a full mix of coins each type shorted enough that they would not be full rolls. They still had to count coins.
A mail order law degree? Or our public school system failing again?
davidmcbeth
Banned
Here is what a trillion buys you (well us via government procurement officials)
Hey, that's one fancy hammer ... buy 14 of them this year!
View attachment 9285
Hey, that's one fancy hammer ... buy 14 of them this year!
View attachment 9285
Brimstone Baritone
Regular Member
In the simplest terms, one merchant would write a check to another. That merchant could then present that check at a later date for payment, or could sign the check over to another merchant. The only way it could be said to "create" money, is if the original merchant didn't really have the assets with which to cover the check (like how the Fed loans money that doesn't exist).
Citizen
Founder's Club Member
Yes and no. It didn't create money in the sense that no coins were minted nor Federal Reserve Notes printed. True.
But, it did create a substitute for a commodity, which is all money really is. In this context, even gold and silver coin are just substitutes for the actual commodity. Also, the money in the system was not reduced by the amount needed for the transaction. The two merchants basically created their own money for this one transaction. The real question I have is whether these bills of exchange were then exchanged further with other merchants?
If two merchants invent their own money for one transaction, the only real affect on the larger system is that its volume of money is not reduced to accomplish the transaction. Now, this might not seem like much, but if you have a large city with numerous merchants scrounging up gold and silver coin to do big deals with each other, its gonna put a pinch on the availability of money for consumers and savers and so forth. Conversely, not scrounging up lots of gold and silver coin is going to leave lots more available for the rest of the system. In effect, bills of exchange in the merchant class would have had the same effect as banks creating paper money to supply the transactions.
But, if merchants started trading these bills of exchange with one another, then we not only the effect of creating new money, but the actuality.
So, I wonder.
hjmoosejaw
Regular Member
If somebody handed you a dollar every second, 24/7, to reach a trillion dollars, it would take 31,709.792 years. Multiply that times 16. You get 507,356.672 years. A dollar a second for over a half a million years.
One trillion dollars would pay the rent for every renter in the U.S. for three years. If I was one of the takers, I would be bitching. LOL!
One trillion dollars would pay the rent for every renter in the U.S. for three years. If I was one of the takers, I would be bitching. LOL!
Citizen
Founder's Club Member
This is how we knew TARP and QEII were BS. Literally, the Fed could have just given the newly created money directly to the people. I think it worked out to something like $2M each person for the first one. But, no, it went to the very businesses whose recklessness helped cause the mess.
Brimstone Baritone
Regular Member
As you say, money is just a stand in for other commodities. If one merchant writes an IOU, and the other merchant accepts it, and even trades it with a third for some other product, the total amount of wealth in the system stays the same. I can understand why you say it "creates money" because money is simply a more liquid way to represent the transfer of wealth. The bills of exchange take a tangible asset (let's say cows) and allow them to be traded more easily with others. You can offer me a good or service worth half a cow, and I can pay you in a way that doesn't require me to cut my cow in half, or purchase more of the good or service than I need.
The only time wealth is "created" (which is a more precise way of saying what I did in the previous post) is when a merchant commits fraud, and creates a bill of exchange for assets he does not possess. If I give you an IOU for half a cow, and someone else gives you another IOU for half a cow, you should be able to take those IOUs to someone with a cow and trade them for a cow. Paper money isn't inherently evil. It is evil men that commit fraud who give paper money a bad reputation.
A dollar is a debt instrument. When someone gives you a dollar, they are effectively saying "Somebody owes me a tangible asset. I can give this to you, and they will owe it to you instead." The problem, of course, is that the dollar no longer represents a tangible asset. That's not the dollar's fault, it's as much a victim in all of this as we are.
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Citizen
Founder's Club Member
As you say, money is just a stand in for other commodities. If one merchant writes an IOU, and the other merchant accepts it, and even trades it with a third for some other product, the total amount of wealth in the system stays the same. I can understand why you say it "creates money" because money is simply a more liquid way to represent the transfer of wealth. The bills of exchange take a tangible asset (let's say cows) and allow them to be traded more easily with others. You can offer me a good or service worth half a cow, and I can pay you in a way that doesn't require me to cut my cow in half, or purchase more of the good or service than I need.
The only time wealth is "created" (which is a more precise way of saying what I did in the previous post) is when a merchant commits fraud, and creates a bill of exchange for assets he does not possess. If I give you an IOU for half a cow, and someone else gives you another IOU for half a cow, you should be able to take those IOUs to someone with a cow and trade them for a cow. Paper money isn't inherently evil. It is evil men that commit fraud who give paper money a bad reputation.
A dollar is a debt instrument. When someone gives you a dollar, they are effectively saying "Somebody owes me a tangible asset. I can give this to you, and they will owe it to you instead." The problem, of course, is that the dollar no longer represents a tangible asset. That's not the dollar's fault, it's as much a victim in all of this as we are.
This pretty much aligns with my understanding.
An interesting point made in Political Economy for Beginners (1870) by Millicent Fawcett is that [real] money and money notes are not wealth. She writes to the effect that it is an error to call money wealth. She defines wealth as any commodity with an exchange value. Thus, she focuses attention on the valuable commodities--land, produce, manufactures--as the true wealth of a person and a nation, not the amount of money (real or made-up) in the nation. Given Bernanke's plan for massive counterfeiting, code-named QE3, I think she has a point.
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Freedom1Man
Regular Member
This is the general ideal of paper money.