View Poll Results: Should US Currency be pinned to a standard like weights and measures?

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  • Yes. Then money would always have exactly the same value.

    5 33.33%
  • No. Because then the government would not be able to print money it does not have.

    6 40.00%
  • Don't know. This is way to complicated for me.

    1 6.67%
  • Hmmm. What is a "standard"?

    3 20.00%
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Thread: Should the US Currency be pinned to a Standard like Weights and Measures are?

  1. #41
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    Re: Should the US Currency be pinned to a Standard like Weights and Measures are?

    Quote Originally Posted by Khayembii Communique View Post
    Squaring a circle is not a hard problem, it's impossible. Money doesn't have an absolute value, so it can't be "set".
    But one can develop a close approximation. For many problems that is good enough. So the solution need not be perfect. Just good enough.

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    Re: Should the US Currency be pinned to a Standard like Weights and Measures are?

    Quote Originally Posted by Misterveritis View Post
    Adam Smith struggled with the same issue. He even made very similar argument. You are in very good company. I have pondered it as well. He suggested grain, such as wheat, because it retained its value from year to year. It is clear to me that any chosen item will vary its value over time.
    yeah, if wheat were all that stable there would be no futures market in it.

    I do not have a solution. But the idea of currency whose value remains fixed is interesting.
    the problem is that against a rising economy, the "real" value of that currency would be depreciating.

    which is why i like the notion of trying to peg it to the value of the rise somehow. I don't really like GDP as a measure though, and I cast about for something else.

  3. #43
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    Re: Should the US Currency be pinned to a Standard like Weights and Measures are?

    Quote Originally Posted by cpwill View Post
    yeah, if wheat were all that stable there would be no futures market in it.
    Certainly. No one item would do it. I haven't read far enough to see what A. Smith's conclusion was. Still, not bad for 1775.

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    Re: Should the US Currency be pinned to a Standard like Weights and Measures are?

    No, because if the currency is pinned then there can't be any wage increases, if someone increases their wage then someone else have to decrease their wage or you have to cut into companies profits and investments. If companies stop investing, then you will ruin the economy.

    This was a problem under the gold standard. I'm quite sure public workers will keep giving themselves wage increases and never cut their own wage.

  5. #45
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    Re: Should the US Currency be pinned to a Standard like Weights and Measures are?

    Quote Originally Posted by Camlon View Post
    No, because if the currency is pinned then there can't be any wage increases, if someone increases their wage then someone else have to decrease their wage or you have to cut into companies profits and investments.
    I do not follow your reasoning. How does maintaining the currency at a certain value lead to any of that? I do not believe it does or it would. It does imply that inflation would not occur. So pay increases would be based upon merit instead of inflation. Is that bad?

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    Re: Should the US Currency be pinned to a Standard like Weights and Measures are?

    Quote Originally Posted by Misterveritis View Post
    I do not follow your reasoning. How does maintaining the currency at a certain value lead to any of that? I do not believe it does or it would. It does imply that inflation would not occur. So pay increases would be based upon merit instead of inflation. Is that bad?
    It depends on how you pin it. If you pin the amount of money available, then there will be deflation if there is any efficiency increases. Gold standard does that, because every single note is worth a certain amount of gold. So if you got 1000 bars of gold, and one paper note is worth one bar. Then you can only have 1000 notes. If efficiency increases you can still only have 1000 notes. Therefore we have a 50% deflation from 1800 to 1900. I would prefer this if it worked, because wages would be stable while prices increase or decrease depending on efficiency.

    You can pin the value, but then you will have to control the money supply and increase and decrease it to make sure it fits with the production value. Problem is, this give them the power to actually have inflation. Secondly, I think an inflation target of 2.5% makes more sense than a 0% inflation target. We don't really want deflation.

    If you pick the first one, you will have a problem because you can't have wage increases. But people won't get it and demand wage increases. This was a problem during the gold standard, especially during 1930-1940. Unions/politicans demand wage increases, and unemployment increases because companies can't afford it.

    Even the second one with a 0% inflation target, people don't get that they shouldn't get 2% wage increses every single year when efficiency hardly increases.

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    Re: Should the US Currency be pinned to a Standard like Weights and Measures are?

    Folks, has anyone seen the relatively old (1996) film "The Money Masters"?
    I think it explains quite well the current monetary system.
    Any thoughts?

  8. #48
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    Re: Should the US Currency be pinned to a Standard like Weights and Measures are?

    Quote Originally Posted by Misterveritis View Post
    I do not follow your reasoning. How does maintaining the currency at a certain value lead to any of that? I do not believe it does or it would. It does imply that inflation would not occur. So pay increases would be based upon merit instead of inflation. Is that bad?
    worse, it implies that deflation would occur at the same rate of economic growth.

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    Re: Should the US Currency be pinned to a Standard like Weights and Measures are?

    Quote Originally Posted by cpwill View Post
    worse, it implies that deflation would occur at the same rate of economic growth.
    I guess it depends on the assumptions.

    WE don't devalue each additional meter we measure because we have established that the value of a meter does not float.

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