# Think Tank > Austrian Economics / Economic Theory >  Why Is Money Printing Dishonest?

## DamianTV

This should be a Common Sense answer, but there is a complete shortage of Common Sense, thus, it NEEDS to be answered!  Why is Money Printing Dishonest?

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## juleswin

> This should be a Common Sense answer, but there is a complete shortage of Common Sense, thus, it NEEDS to be answered!  Why is Money Printing Dishonest?


Look at it this way, if I you did contract for me in my house and after the work is done, I proceede to pay you with money I made in my computer, would you take it? 

So, the money we have used to be backed by gold and silver and with time, it was switched to being backed by nothing while the govt expected us to continue using it like nothing changed. The idea of making value out of nothing is what is dishonest about printing money. Until the govt start printing stuff that is worth something(maybe a cheese burger), money printing will always be dishonest.

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## oyarde

How can unbacked currency be honest ?

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## timosman

> How can unbacked currency be honest ?


When you have military power to assure its universal acceptance. Think of it in terms of economic arrangements.

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## Swordsmyth

Because printed money's only value is scarcity, every dollar printed steals a tiny portion of every other dollar that exists.

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## devil21

> Because printed money's only value is scarcity, every dollar printed steals a tiny portion of every other dollar that exists.


Congrats!  You're learning about economics finally.  You're still at the Kindergarten level but ya gotta start somewhere.

Don't forget that currency's value is derived from the commodity that backs it.  Commodity values do not change.  Only the currency changes value relative to the commodity.  That commodity may be gold or oil or the sweat of a human ass.

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## Swordsmyth

> Congrats!  You're learning about economics finally.  You're still at the Kindergarten level but ya gotta start somewhere.
> 
> Don't forget that currency's value is derived from the commodity that backs it.  Commodity values do not change.  Only the currency changes value relative to the commodity.  That commodity may be gold or oil or the sweat of a human ass.


I'm way ahead of you, you still think that a country can produce nothing and import everything without destroying its economy and that foreign government intervention in the marketplace is beneficial.

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## devil21

> I'm way ahead of you, you still think that a country can produce nothing and import everything without destroying its economy and that foreign government intervention in the marketplace is beneficial.


I'll ignore that and just be happy for you that you're learning something of value finally.

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## Swordsmyth

> I'll ignore that and just be happy for you that you're learning something of value finally.


I've known that since I was a child but go ahead and puff up your ego and try to take credit if it makes you happy.

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## DamianTV

> Look at it this way, if I you did contract for me in my house and after the work is done, I proceede to pay you with money I made in my computer, would you take it? 
> 
> So, the money we have used to be backed by gold and silver and with time, it was switched to being backed by nothing while the govt expected us to continue using it like nothing changed. The idea of making value out of nothing is what is dishonest about printing money. Until the govt start printing stuff that is worth something(maybe a cheese burger), money printing will always be dishonest.


Fully agree.  But, Im gonna play Devil's Advocate for a moment and make a statement I don't actually believe.

If the money has value, IE, you can go out and spend it, what do you care if I just printed it?

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## Stratovarious

Why is Hillary Clinton not in Prison?

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## Stratovarious

> Why is Hillary Clinton not in Prison?


The answer to both questions is the same.

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## phill4paul

> Why is Hillary Clinton not in Prison?


  Why, if women are equal in the workplace, but are paid less, is there any men employed at all?

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## DamianTV

> Why is Hillary Clinton not in Prison?


Her and her criminal friends wont turn on their own at the demands of the public.  As long as her victims remain the public itself, they wont turn against her.  Same thing as the MONEY.  Our money is flat out criminal, and enables snakes like Hittlary.  Thing is, Hittlary is a Hydra.  Knock her down and another head will just take her place, and they have no shortage of heads.

Are you able to understand why Unlimited Fiat Currency Printing is Dishonest?  Can you explain that instead of asking derailing questions?

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## Stratovarious

> Her and her criminal friends wont turn on their own at the demands of the public.  As long as her victims remain the public itself, they wont turn against her.  Same thing as the MONEY.  Our money is flat out criminal, and enables snakes like Hittlary.  Thing is, Hittlary is a Hydra.  Knock her down and another head will just take her place, and they have no shortage of heads.
> 
> _Are you able to understand why Unlimited Fiat Currency Printing is Dishonest?  Can you explain that instead of asking derailing questions?_


lol , It's a plain d###### question to begin with , '' why is it dishonest'' why is stealing, misrepresentation, fraud, embezzlement  dishonest ?
Derailing,?, right, well _Hillary_ is a good answer; We are not in charge, they don't give a ff about justice 
or honesty, 'Legal'  means the fed can print all the fiat they  wish, there is no accountablility, 
Equal Justice under the law means that the wealthy and connected at the top in America
 never face Prison, Hillary will never see the inside of a prison cell, and The Federal Reserve will continue the smoke and mirrors , we don't have a say in any of it, no one that I know doubts the abject dishonesty with 
fiat currency, again , how do you explain why theft, and fraud are dishonest, wtf do you start.
I would love to be proved wrong, 'believe you me' .

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## Stratovarious

> Why, if women are equal in the workplace, but are paid less, is there any men employed at all?


Excellent point, and fact.
If the job is shoveling #### and a woman shovels 10lbs for the man's 5 , she should be paid more.
Where a woman brings in 12 closed deals and the man brings in 12 closed deals of 
the same value, their commissions should certainly be the same etc...........
Problem is, liberals don't think like that, they feel' ha ha that's about all they do, they 
'feel' like; where a woman works filing claim forms she should be making what 
the attorney or broker  in the same office makes, I mean they're in the same office aren't they.....

Its all a distraction anyway IMV, keeping the population focused on anything and 
all things divisive is the goal , as I'm sure you and everyone here realizes, that 
keeps the focus off the important issues; Governmental and Political Corruption.

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## Zippyjuan

If printing money is dishonest, wouldn't that make all money illegal?  Maybe the government should impound all that illegal currency from everybody.

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## devil21

> If printing money is dishonest, wouldn't that make all money illegal?  Maybe the government should impound all that illegal currency from everybody.


Since it's not actually money, it's _different_.

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## Superfluous Man

It's only dishonest if you're dishonest about it.

When the makers of Monopoly do it, it's not dishonest.

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## Superfluous Man

> If printing money is dishonest, wouldn't that make all money illegal?


That question presupposes that whatever is dishonest is illegal, which is obviously not true.

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## CaptUSA

It's like adding inches to the same ruler.  The ruler is the same size, but now your inches are smaller.  And the one who created the new inches gives them to his friends.

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## Superfluous Man

> How can unbacked currency be honest ?


By honestly saying that it's unbacked.

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## Zippyjuan

> It's only dishonest if you're dishonest about it.
> 
> When the makers of Monopoly do it, it's not dishonest.


Is it a secret that more money is being printed?

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## Brian4Liberty

> Because printed money's only value is scarcity, every dollar printed steals a tiny portion of every other dollar that exists.





> Congrats!  You're learning about economics finally.  You're still at the Kindergarten level but ya gotta start somewhere.
> 
> Don't forget that currency's value is derived from the commodity that backs it.  Commodity values do not change.  Only the currency changes value relative to the commodity.  That commodity may be gold or oil or the sweat of a human ass.





> It's like adding inches to the same ruler.  The ruler is the same size, but now your inches are smaller.  And the one who created the new inches gives them to his friends.


If I had to guess, I’d WAG that only 10% of the population understands that concept.

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## Swordsmyth

> Is it a secret that more money is being printed?


Printing more is dishonest even if you admit it is unbacked because it steals the value of every other dollar in existence.

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## Zippyjuan

> Printing more is dishonest even if you admit it is unbacked because it *steals the value of every other dollar in existence.*


So maybe the best thing to do is to have one coin for the entire world.  It would be so scarce it would have massive value (but commerce would not be able to conduct any transactions except by barter).

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## Swordsmyth

> So maybe the best thing to do is to have one coin for the entire world.  It would be so scarce it would have massive value (but commerce would not be able to conduct any transactions except by barter).


Or you could just print a certain high number that you announce and leave it at that, you could always divide some that you take in in taxes into ever smaller fractions if deflation made commerce awkward.

Or you could use gold or silver and let the market value encourage or discourage mining.

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## Superfluous Man

> Is it a secret that more money is being printed?


No.

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## Zippyjuan

> Or you could just print a certain high number that you announce and leave it at that, *you could always divide some* that you take in in taxes into ever smaller fractions if deflation made commerce awkward.
> 
> Or you could use gold or silver and let the market value encourage or discourage mining.


So it is OK to create more money.

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## Swordsmyth

> So it is OK to create more money.


No, dividing things while leaving every other copy just as large isn't creation, it is division.

You don't end up with any more money and I don't end up with any less if you exchange all of your dollars for quarters.

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## Krugminator2

Money printing isn't inherently dishonest. The money supply should grow by roughly the average rate of population growth + economic growth. The money supply would expand greatly even under Ron Paul's competing currencies. There is nothing free market or moral about holding the money supply fixed.

Most people don't realize the money supply increased greatly under the gold standard.




> I like to take the example of the United States. In 1775, the total amount of currency in circulation (primarily gold and silver coins) was an estimated $12 million. In 1900, it was $1,954 million – an increase of 163x!
> 
> During this time period, the amount of gold in the world increased by about 3.4 times, due to mining production.
> 
> However, a gold standard system can make available any amount of currency, as is appropriate given economic needs and the fixed parity value. Just as the U.S. economy grew enormously in the 1775-1900 period, the gold standard system allowed the money supply to also grow enormously, as was appropriate at the time.


https://www.forbes.com/sites/nathanl.../#698df0136c09

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## Superfluous Man

> Money printing isn't inherently dishonest. The money supply should grow by roughly the average rate of population growth + economic growth.


It seems like it should be enough just to factor in economic growth, since population growth is already included in that.

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## Swordsmyth

> Money printing isn't inherently dishonest. The money supply should grow by roughly the average rate of population growth + economic growth. The money supply would expand greatly even under Ron Paul's competing currencies. There is nothing free market or moral about holding the money supply fixed.
> 
> Most people don't realize the money supply increased greatly under the gold standard.
> 
> 
> 
> https://www.forbes.com/sites/nathanl.../#698df0136c09


Printing allows just one person/group to print as much as they feel like without doing any work, that is immoral, gold/silver mining allows anyone who can to supply demand in the market by doing work, that is far more moral.

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## Zippyjuan

> Printing allows just one person/group to print as much as they feel like without doing any work, that is immoral, gold/silver mining allows *anyone who can to supply demand in the market by doing work, that is far more moral*.


So everybody should be allowed to print money then.  Does this "one person" get to keep all the money they print?

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## Swordsmyth

> So everybody should be allowed to print money then.


NO, anyone should be allowed to MINE precious metals, the market will determine whether it is profitable to do so.





> Does this "one person" get to keep all the money they print?


Yes they do, they spend it on anything they want and cause distortions in the market and misallocation of resources.

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## Krugminator2

> Printing allows just one person/group to print as much as they feel like without doing any work, that is immoral, gold/silver mining allows anyone who can to supply demand in the market by doing work, that is far more moral.


1. People wouldn't use a currency that people printed as much as they felt like 
2. Gold mining has little to do with what gives gold its value or the supply of money.




> Usually you hear a couple things about the "money supply" with a gold standard. The first thing you hear is that it is determined by gold mining. The second thing you hear is that it is limited to the amount of gold held "in reserve," whatever that means. Sometimes you hear that it is determined by the "current account balance." All of this is bunk.
> 
> Why did the total currency in circulation expand by 163 times? Because the United States was an expanding economy. The population of the U.S. was 5.24 million in 1800 and 76.21 million in 1900. Plus, each of those people got a lot more wealthy during that time as well, due to the Industrial Revolution. Also, financial systems became a lot more complicated, so there were a lot more monetary transactions. 
> 
> A gold standard is a system where supply is expanded (or contracted) to meet the demand for money, such that the value of money remains stable


http://www.24hgold.com/english/news-...r=Nathan+Lewis

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## Swordsmyth

> 1. People wouldn't use a currency that people printed as much as they felt like


People aren't as smart as you give them credit for and allowing one person/group to print money for nothing is immoral, to the extent that you are right that is one reason people wouldn't want to use such a currency, they don't like being robbed.





> 2. Gold mining has little to do with what gives gold its value or the supply of money.
> 
> http://www.24hgold.com/english/news-...r=Nathan+Lewis


It has much to do with it and the other factors involved (like people melting down jewelry) all use gold/silver that was mined in the past.

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## Dr.3D

> Printing more is dishonest even if you admit it is unbacked because it steals the value of every other dollar in existence.


And that is how they rob the savings of people who are trying to get enough money to retire.

The government doesn't even have to take their money out of the bank, they just make it worth less by diluting it with more and more inflation caused by printing money.

Those who are retired, find the money they have to spend every month, it worth less than it was the last year.   

They are being robbed by those who print money.

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## Superfluous Man

> So everybody should be allowed to print money then.  Does this "one person" get to keep all the money they print?


By the same token, if it's immoral for everybody else, then it's still immoral for the government.

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## Zippyjuan

> By the same token, if it's immoral for everybody else, then it's still immoral for the government.


Stamping out metal coins or making paper money is still the government printing money.  Both are "fiat" because the government declares what the value of each should have.

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## Swordsmyth

> Stamping out metal coins or making paper money is still the government printing money.  Both are "fiat" because the government declares what the value of each should have.


Wrong, coins are only fiat if their face value isn't determined by their weight and purity.

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## Zippyjuan

> Wrong, coins are only fiat if their face value isn't determined by their weight and purity.


All coins have  a face value which isn't determined by their weight and purity.

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## Swordsmyth

> All coins have  a face value which isn't determined by their weight and purity.


No, that isn't true.

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## Zippyjuan

> No, that isn't true.


Examples? Does this contain $50 worth of gold? 



Is the metal in this coin worth one cent?

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## Swordsmyth

> Examples? Does this contain $50 worth of gold? 
> 
> 
> 
> Is the metal in this coin worth one cent?


THIS contained 1$ of sliver:

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## Zippyjuan

> THIS contained 1$ of sliver:


Because government declared that the amount of silver in it was worth $1. They set the market price by fiat- thus "fiat" money.  If silver was above that price, people could buy silver from the government instead of a dealer.  In a free market is the price of a metal always  the same? No.

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## Swordsmyth

> Because government declared that the amount of silver in it was worth $1. They set the market price by fiat- thus "fiat" money.  If silver was above that price, people could buy silver from the government instead of a dealer.  In a free market is the price of a metal always  the same? No.


Defining a dollar as X weight of X purity of silver isn't fiat, it is a definition and silver can't be above or below that price, X weight of silver of X purity IS 1 dollar and 1 dollar is X weight of silver of X purity, nobody will sell or buy silver at a different price unless some other factor is involved than the weight and purity.

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## Zippyjuan

> silver can't be above or below that price,


Why can't the price of silver not be above or below a certain price?  Not because of a free market but because the government declared it should be so.

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## Swordsmyth

> Why can't the price of silver not be above or below a certain price?  Not because of a free market but because the government declared it should be so.


Because a dollar would BE an oz. of pure silver or whatever the designated weight was.

How can an oz. of silver be worth more or less than an oz. of silver?

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## Superfluous Man

> Stamping out metal coins or making paper money is still the government printing money.  Both are "fiat" because the government declares what the value of each should have.


I'm not quite clear on what you're talking about here. But to keep it simple, again, if whatever it is you're talking about is something that would be immoral for a common person to do (such as printing his own US dollars to use as something the law requires people to accept as legal tender), then it's immoral for the government to do.

In the case of metal coins, if you're talking about gold and silver, then it is not true that the government can declare what they are worth. Those coins will always be worth what the market determines, which will be a function of the market value of the gold and silver in them. The government doesn't have the power to alter that.

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## Superfluous Man

> Why can't the price of silver not be above or below a certain price?  Not because of a free market but because the government declared it should be so.


This is absurd.

The government can do things that manipulate the market, and thus affect the price of silver. But if the government declares by fiat that one of its dollars shall be exchangeable for one ounce of silver, then it's the value of the dollar that the government is setting, not the value of the silver. The value of the silver is determined by the market.

If, after a time of setting a dollar at the value of one ounce of silver the government changes the law so as to set two dollars to be the value of one ounce of silver, all they will have done is devalue their dollars by one half. The prices of everything in dollars will double. But the prices of everything in ounces of silver will stay the same. Apart from those dollars, what was exchangeable for one ounce of silver before the change will still be exchangeable for one ounce of silver after it. If an ounce of gold was worth 20 ounces of silver before the change (or 20 dollars), it will still be worth 20 ounces of gold (or 40 dollars) after the change.

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## Superfluous Man

> Examples? Does this contain $50 worth of gold? 
> 
> 
> 
> Is the metal in this coin worth one cent?


In both cases, those coins can be exchanged in the market for other things that the market prices as equal to the value of the metal in them, regardless what number of dollars or cents the government prints on the coin. The government is not able to stop us from being able to use that gold coin in the marketplace as a medium of exchange that is actually worth over $1000 of US currency just by printing the words "50 dollars" on it.

And note that the government itself will not give you one of those gold coins in exchange for 50 of its dollars, despite the fact that it prints that on them. It will only sell those coins at prices that are determined by the market value of the gold in them.

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## devil21

> If printing money is dishonest, wouldn't that make all money illegal?  Maybe the government should impound all that illegal currency from everybody.


Well, a "license" is actually a permit to do something that is otherwise illegal.  The FRN is printed by the Treasury but is licensed to the Fed.  So that means that the printing of FRN is actually illegal (and Constitutionally it is, gold and silver coinage notation) but a license has been issued to allow the illegality for a period of time.




> And note that the government itself will not give you one of those gold coins in exchange for 50 of its dollars, despite the fact that it prints that on them. It will only sell those coins at prices that are determined by the market value of the gold in them.


But notice that the Treasury values gold at $42.22 per ounce in statute.  Seems to me the Treasury is saying that the real MONETARY value is different than the FRN price.  FRNs are not money but are instead debt instruments aka promises to pay later in lawful money.  The higher that gold climbs in FRN, the bigger the debt is, while the lawful monetary value stays fixed at $42.22.  The $42.22 figure is a positive value while the FRN price is a negative value.  Hard concept to explain clearly though.

Hmm....if someone could figure out how to receive gold from the Treasury at statutory value and then arbitrage it on the FRN market, one would be instantly FRN wealthy.  I wonder....

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## Superfluous Man

> the Treasury values gold at $42.22 per ounce in statute


Source?

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## devil21

> Source?


https://www.law.cornell.edu/uscode/text/31/5117

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## Superfluous Man

> https://www.law.cornell.edu/uscode/text/31/5117





> The Secretary shall issue gold certificates against *gold transferred under subsection (a) of this section.* The Secretary may issue gold certificates against other gold held in the Treasury. The Secretary may prescribe the form and denominations of the certificates. The amount of outstanding certificates may be not more than the value (for the purpose of issuing those certificates, of 42 and two-ninths dollars a fine troy ounce) of the gold held against gold certificates. The Secretary shall hold gold in the Treasury equal to the required dollar amount as security for gold certificates issued after January 29, 1934.


Notice that that price is not for Gold in general or in perpetuity, but strictly for Gold that was transferred under subsection (a) of that section of the Code.

For dealings in Gold at the present that the Federal Government engages in, there are other statutes that govern what it pays and charges for it, such as the following:



> The Secretary shall pay not more than the average world price for the gold mined under subparagraph (A).





> Each gold bullion coin issued under this subsection shall be sold for an amount the Secretary determines to be appropriate, but not less than the sum of—
> (A) the market value of the bullion at the time of sale; and
> (B) the cost of designing and issuing the coins, including labor, materials, dies, use of machinery, overhead expenses, marketing, and shipping.


https://www.law.cornell.edu/uscode/text/31/5112

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## kfarnan

The issue is fiat money.  Making a money by decree is tyranny.  There should be free market vote on what is an acceptable system of "money".

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## devil21

> Notice that that price is not for Gold in general or in perpetuity, but strictly for Gold that was transferred under subsection (a) of that section of the Code.
> 
> For dealings in Gold at the present that the Federal Government engages in, there are other statutes that govern what it pays and charges for it, such as the following:
> 
> https://www.law.cornell.edu/uscode/text/31/5112


Yes but that was the gold and the certificates that represent that gold that was transferred as part of the 1930 bankruptcy after the gold confiscation.  The "legacy" American gold, if you will, that was put into the Trust that was created and still exists today (that we are all part of, actually).  That 8000 tons that's repeated so often.  Obviously miners aren't selling new gold for GAEs to the Treasury for $42.22.  In other words, Fort Knox (eg) gold is valued at $42.22.  Newly minted US Mint gold issues that you buy on the open market is not.

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## VIDEODROME

Is money meant to be a commodity?  Or any finite material as to guarantee a fixed supply. What if you wanted to buy some gold for electronics manufacturing?  Would this be considered a destruction of our limited currency?  

Or what if someone performed a service and I replied with an I.O.U. note saying I would return the favor?  Is that kind of limited money by decree or does that IOU represent a "Promise to Pay"?  

Is our current system a nationally recognized was of IOU notes and is that necessarily a bad system?  It has flexibility to change with the size of our economy and yes unfortunately it can be abused, or sometimes I think the Fed is trying to do damage control in response to the actions of Congress.  

As for Printing Money well does that just get passed out to friends or is that just to beef of lending power of banks?  Or in some cases reduce that "Credit"?  



Language is metaphor in the sense that it not only stores but translates experience from one mode into another. Money is metaphor in the sense that it stores skill and labour and also translates one skill into another. 
― Marshall McLuhan, The Gutenberg Galaxy

I think we're trying to turn Money into something it's not really meant to be.  It isn't a commodity product but meant just a means of exchange.  With that said, it can be recongized that we do use Metal for coins, but as Zippy is trying to point out, this has nothing to do with the Metal value of those coins.

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## nikcers

Monetary inflation is theft. Ron Paul calls it the inflation tax. It's a different sort of inflation than how people normally define it. It distorts the cost of interest and allows them to sell money for more money while everyone else loses the value of their money to pay for the printed money. The price inflation is delayed and the governments purposely teaches people not to understand math and pit us against eachother so people are forced to help the government cheat other people out of their money so they won't go hungry.

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## r3volution 3.0

> Money printing isn't inherently dishonest.  The money supply should grow by roughly the average rate of population  growth + economic growth. The money supply would expand greatly even  under Ron Paul's competing currencies. There is nothing free market or  moral about holding the money supply fixed.
> 
> Most people don't realize the money supply increased greatly under the gold standard.
> 
> https://www.forbes.com/sites/nathanl.../#698df0136c09


The money supply never _needs_ to increase or decrease* (in the sense that some economic problem will result if it doesn't), but there's also no problem in the money supply changing, provided it's changing for the right reasons. If money is a good (like gold) as opposed to a pure medium of exchange (like dollars), an increase in the money supply is a result of increased production of that good, and the people who benefit from the new money are those who produced those goods and sold them to willing buyer in a mutually beneficial exchange. It's no different than people producing gold now (when it is not money), thereby profiting, while driving down the price - nothing wrong with that at all. In contrast, if money is a pure medium of exchange, _which people are being compelled to accept_, the new money spenders are getting something for nothing. The money might as well be a note from the Army saying "give this guy your $#@! or we'll going to jail you."

*Unless money is a physical good, in which case the supply of the good either needs to increase over time, or society needs to turn away from the physical good and toward notes redeemable for increasingly small quantities of that good, since otherwise prices would be too low for the smallest denomination of money to be practically useful (i.e. a gold coin can only be made so small, as a practical matter).

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## kfarnan

Zippy thinks in simplistic terms.  It sounds like a troll just playing dumb.

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## Swordsmyth

> Zippy thinks in simplistic terms.  It sounds like a troll just playing dumb.


If it quacks like a duck..........................

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