I see you're not even reading my posts, so I question why I am bothering - I said this before, but if you really insist I'll take out my wallet and look at a bill

"This Australian note is Legal Tender Throughout Australia and its Territories"

Mhmm, it appears it doesn't actually say that at all.

Er.... this is a trival accounting identity. I'm not even sure what your point is.

I will give credit where it is due: the beast is well thought out- even though it still falls prey to the same fallibility.

It can, to an extent, take money out of the supply... but really, all it does is lock the debt up via bonds, usually held by a foreign country. That debt still exist, it just is not 'in the money supply', it is instead accruing interest for when it 'matures'.

It should also be noted that, like our local banks, we as a country only have to hold only a fraction of our debt. With the printing of trillions of new FRN's, if the dollars buying power dips to far- countries will not hold our debt. And last I looked China by herself held almost 10% of our debt. What do you think will happen if/when that debt is returned?

IMHO, The best banking system is one rooted firmly in intrinsic wealth, which has no fractional reserve allowance, with no 'central bank'- only the treasury- who acts in accordance to the Constitution and whom is regulated by Congress.

Ahhh, well, touché. For your defense of the Fed, I assumed you were American (and don't recall reading otherwise).

That's what happens when you assume... my apologies.

If you happen a US dollar, you will see Federal Reserve Note at the top. Of course, it is 'authorized' by the Treasurer's and Secretary's signatures... but that is about it.




This is by no means trivial. And I explained the significance.

second post in the thread. I just like to think I'm informed (IMG:style_emoticons/default/wink.gif) I actually have a bunch of US dollars for when I travel their but obviously I don't carry them around.




This is a serious problem that is going to burn the US government in the medium term. But its not created by the Fed at all, its created by a policy of running increasing government deficits. Almost all your debt has een brought by overseas investors.

However this is a fiscal policy issue.

The reason why the bit about money and debt is farscial is that now money IS debt. We've decided as a society that we don't actually need to pass gold bars around.

Of course not.
But when the source is an employee of the ministry of foreign affairs (and the PR department for that matter) and contributes the crisis to the American government not applying Russian policies, in a government-controlled newspaper, i'm taking an extra grain of salt with that.

There is nothing but fiat money. A thing is only worth what someone is willing to give for it, this is true for all things, including gold.

Gold, Silver, Platinum, these things have no intrinsic value, but some morons are willing to give them value because they're rare and shiny. Thus to say that money should be backed by precious metals is pure absurdity.

To drift back on topic:
Mr. Kruschoff says we will bury you
I don't subscribe to this point of view
This is the same blather the Soviets have been saying for 60+ years.

They would be SOL, they'd have to find a buyer of the note. As long as the contractual payments are made they can't call the loan (unless there are provisions for it, which there aren't any). If they did find a buyer, they would get less than the value of the note. If all the foreign governments dumped their US Govt backed Securities at once, it would be even worse for them. It is actually in their best interest to not let that happen.

Which is why fiat money came into being in the first place. Governments have things like real estate, historical artifacts, and other assets which made the tracking of a country's wealth by its gold/silver reserves pointless (especially now that gold, silver and platinum have industrial, particularly in electronics, as well as aesthetic value). THough I never recall a country using platinum to back its currency. The issue is that limiting money supply by gold or silver was problematic and led to alot of recessions in the early part of last century.

That's not accurate Warlordtheft, it was never a matter of 'pointless wealth tracking'...

Fiat money came from the broken promise that the FRN was 'good as gold'. The people bought into the lie, and systematically gold was removed from the equation from the inception of the Federal Reserve in 1913 to the end of its 20 year charter (1933)... which, not coincidently, gold was even made illegal for US citizens to own.

The 'good as gold line' was still being touted though- not for American citizens but for foreign countries- and this perception, mixed with the majority of the worlds economies crippled by WWII allowed the dollar to be set up as the world reserve currency during the Bretton Woods conference of 1944. Naturally as we swelled the money supply more and more, our ability to honor the 'good as gold' line became less and less possible, and in 1970-71 a few countries actually demanded us to honor our world... which we did not do. In 1971, through well worded contracts with OPEC, foreign oil (who contractually was bound to sell oil only in dollars) became the 'de facto' backing. Since the backing is based on oil transactions with foreign countries however, this is also the date when America became a true and complete fiat currency.

No, they have their own currencies to fall back on, which would suddenly get considerably stronger compared to the USD/FRN. We would be the ones SOL as sudden hyperinflation would decimate the economy completely.

It is naive to think that US consumption of goods is what 'drives the world economy'... places like China and India have enough people to take that role over, no problem, should the above happen.

And it should be noted, China works in terms of decades- and they have made the threat of returning our debt more then once. The most recent time was just before the bailouts began, and the legislation was changed from buying solely US toxic debt, the world toxic debt. Ten years from now, China may not just threaten us- they may be ready to act against us instead.

Err, no it wouldn't cause hyperinflation. You're still an insane conspiracy theorist.

What would happen if the world auctioned off 6 trillion dollars of US government debt would be (there is like 13 trillion of it out there)

A) The inability of the US government to incur more debt.

B) US government debt becoming the most attractive investment in the world, because yield rates would boom.

The US dollar would be forced down and everyone elses currency would be forced up, the chinese yuan would suddenly appreciate very rapidly and complete destroy china's export capability, s their margins at less than 3% and their currency would appreciate by 10% or more.

Selling off all the US government debt would completely destroy china's economy.

Note that that is a 6 trillion dollar sale, the Chinese only hold 500 billion dollars, which is less than 50% of the value of new securities that the US treasury auctions off every year. While a staged program to sell it off over a year would drive up yields, it wouldn't sink the US. It might get some jock rash, but not a huge issue.

It would sink china though, that 820 billion dollars has been brought to avoid letting the Yuan appreciate.

Socialism isn't communism. I guess that Marxist Socialism is close to Communism (or Marxism Communism to be exact) but it's just one kind of socialism. It was, arguably, the one the western bloc fought against during the cold war and I'd be surprised to see the USA adopt this one.

I think that the "socialist structure" you're thinking of is closer to Social Democracy. This one is common in Europe and could be found in Western Europe during the Cold War.

Upon reading the OPs quote the first thing I thought is that the Russian commentator had been gleaning idea from reading SR's history!

I really don't see the US collapsing any time soon, even if the economy continues to sink beyond the next couple of years. A degree of power and status will likely be lost, but the country itself will not break apart since there isn't enough localised identity; unlike the USSR, which effectively occupied a bunch of smaller countries, each with their own unique histories going back half a millenia or more. I dread to think that Russia would become the economic regulator in Europe. At present their influence comes mostly from their capacity to provide oil and gas to Europe, and that isn't going to last forever. Most of Europe is suspicious of Russia, so we are going to be extremely careful in our dealings with them.

iirc, marx argued that communism would be a stepping stone towards socialism proper.

also, he was a german, writing his thing based on, and aimed at, the conditions in germany during the 1800's...

one problem so far is that the nations that have tried to implement anything like what he describes have been anything but fit for the change.

russia was a pesant monarchy attempting to become a democracy and got dragged into a war it was in no way ready for.

china was not that much different.

cuba? im not even sure what it could be described as at the time castro and crew took over.

vietnam? long story...

north korea? same...

laos? no clue...

but most of those can probably be summed up in attempting to go directly from monarchy, or the equivalent, to communism. this then basically bypassing any kind of democracy, and missing out on making people used to voicing a opinion (the democracy stands and falls on people willing to hold and voice a opinion, no matter how contrary it is no the current leadership's official one).

as for seeing USA collapse. i guess it will only happen when people start referring to themselves as "state"-ian, rather then american...

This is a bit of a tangent, but hey, what else is new on Dumpshock?

I don't think western democracies ever fought against socialism, though the word has been tossed around as an equivalent to many types of dictatorship and totalitarianism against which there has been long-term global struggle.

At the risk of drawing renewed worry from south of the border, I would point out that Canada is in many ways a socialist state. Not Communist, not totalitarian. Quite democratic and stable and a damn fine ally in the UN, NATO, etc. (And NO, dammit, the 9/11 bombers did NOT come through here! Straighten out that Limbaugh asshole, will somebody?)

Oddly enough, I see people setting democracy and communism as opposites. They are not. Communism is an economic worldview that grew in opposition to the rampant capitalism of Europe in the 1800s. A democracy could just as easily be communist as it could be capitalist. Nobody has tried it yet. I'm sure you see what a hard sell that would be, though.

Peter

Uh ... East Germany? It was tabula rasa, society-wise, it was German, it was full of educated and overwhelmingly socialist-minded people. Still, it failed. Hm. Can't, of course, be the theory. Must be the fact that the country wasn't ready.

Damn humans. They ruin all ivory tower social theories. DAMN YOU HUMANS!


It has been tried. It failed. Democracy doesn't work well with an overbearing, all-controlling state, because said state will never take the people controlling it.

As for the OP ... Russia as Europe's regulatory power? Dream on, Russkies. You're already enemy number one in Europe. And if Russia gets more cocky (which, given how oil and gas prices just collapse, it hardly can afford any more; Russia's headed for a very hard economical landing itself), it will only reaffirm the border nations it occupied for the last century to distance themselves even more.

As for the russian settlers in the Baltics, Ukraine and Belarus? I see Belarus being assimilated into Russia, the Settlers being grudgingly accepted in the Baltics, and Ukraine separating. I'd also not be surprised if Russia fragemnts even more, or is torn by long-lasting civil wars as Moscow tries o prevent this. I could also see China taking over much of Siberia. But Russia as a regulatory power? Please. Any 'analyst' who claims this is making a fool of himself.

Socialism, at least so long as it remains moderate (the most extreme form tolerable being Chavez' brand) goes surprisingly well with democracy. However, socialism has to account for free markets, at least in some sectors, or you have the whole stagnation, maladministration and corrpution problem of the Eastern Block again. It's difficult to balance and has to be readjusted regzularily, but so far, it works fairly well.

Where has a democratic, communist state been tried?

Communism is not synonymous with 'overbearing, all-controlling state'. Totalitarianism is. There have been totalitarian states that professed the ideology of communism, but did not practice it.

Here is an axiom you can chew on for a while:

True communism has failed to be fully expressed anywhere for the same reason true democracy has failed to do so. Each requires full commitment and participation from every member of society. Any social organization that approaches the size of a modern state cannot be either democratic or communist. They collapse into something else from the weight of the population.

If you want a look at an American society that one can argue has come closer than any to a democratic state (don't know as yet about communist, need to think some more), take a gander at the Iroquoian Confederacy before and during the early years of contact with Europeans.

Peter

Actually I just read a book by LE Modesitt JR called Adiamante that touches on almost every point raised in this thread. He uses a concept called "Comptime" for currency which is essentially a faith agreement between the individual and socity to repay for the resources that individual is using.

East Germany tried (and failed). There was an experiment in Africa too, but I fail to remember which one of them. Israel's Kibuzzim were fairly successful initially, actually, but in the end failed too because comminism never can keep up with market conomies, economically, and in the end, they just weren't economically viable any more.


True ideologies always fail. Goes for true theocracy too. Because Reality always demands compromises.


Don't know the Iroquis confed, but the truest democracy I know would be Switzerland with it's very direct popular votes on fairly everything and it's consensus model of government.

The US isn't faring too badly, but the electoral system, especially for the presidency, redices too many votes to toilet paper, and while strong regions make this huge nation surprisingly stable, the various agencies and their far-reaching authority are downright creepy. Also, the two-party system makes independent presidents impossible.

The US don't realy have a two-party system from an European point of view, as the democrats and republicans aren't real parties in the traditional sense, more like a loose alliance of vaguely like-minded, but independent and sometimes competing political entrepreneurs.
It's not about the official party line, fraction discipline and establishing a rigid, but mostly reliable organisation that espouses a certain political point of view, but about individuals with clearly identifiable political positions (which may differ vastly from the party line in general), who can directly be held accountable for their decisions.
It's not about organizations as representatives of political believes, but about individuals competing for power.
Which, not coincidentaly, works out nicely for the US.

Furthermore, an independent chancelor in Germany would be about as unlikely as an independent US president- what the political system of the USA really prevents are smaller parties and coalitions.


BTW, as far as i remember, democracy in Eastern Germany was intended as window-dressing from the very beginning.
It was a clear case of top-down decisions orchestrated by Soviet Russia, not a real attempt at democratic communism (plus, the GDR always referred to itself as socialist and being less advanced on their way to communism than the USSR).

So our SPD and CDU/CSU aren't either?

Yes, they don't have this sect-like character that's really beginning to worry me about German parties. I mean, take the Ypsilanti SPD: They blatantly break a promise not to work with the Commies, and those who keep that promise are cast out, mobbed, and covered in law suits. That's how Scientology would deal with dissenters, not a democratic party. The US parties are, for all their faults, closer to the ideal of the democratic party than Germany's cheer-and-blindly-follow-the-secretary-general parties.


actually sums up a democratic party's makeup fairly well.


These organisations are, in Germany, also only vessels for the powerrmongering of their respective leaders. The SPD and Commies are the most obvious examples, but the Christian Democrats and Liberals aren'T much better. The greens are different insofar as they spend much energy on fighting each other, but even they were, during Fisher's reign (who NEVER held any official position in the party), little more than good old Joshka's personal cheerleaders.

I really don't see where this works better and more democratic than the US' system. That system, for all it'S faults, still is more democratic than ours. Every member of congress, for instance, is far more directly responsible for his direct constituency. They dion't have party lists for all I know, everyone is elected directly, and hence, every citizen in the US has their respective member of parliament to adress. In Germany, in turn, there's this mix of direct and list mandates. Lots of MoP are there without having any constituency to answer to (and those usually are the power hungry and detached elitarian types like Andrea Ypsilanti and her cronies, Scheer and Thomas Whatshisface. Where's that more democratic?


Sure, I never said our system is better, which it isn't, though it has it's upsides, too. As there are less votes that are toilet paper thanks to the multi-party parliament we have, and a rather standing for the strong opposition thanks to how comittees and stuff are staffed. Neither system is ideal, of course, but like I said before, Ideals and Reality don't mix at all.


No, before Ulbricht's stalinist Commies took over, it wasn't. Neither was the USSR born a stalinist state, by the way. It's just that democratic communism never works, and always collapses in authoritarianism.

This has become a really cool thread.



You seem to be under this impression that 1) US consumption is needed for the rest of the world to survive economically and 2) the USD cannot be removed as the 'world reserve currency'. And you have the audacity to call me, who speaks of historical precedence, the 'conspiracy theorist'?

I see a hyperinflation period coming. Others see a major bank-hoarding deflationary period. I guess time will tell which is correct... but neither is going to be fun. Best case scenario America starts playing by sensible monetary practices and the recession last only a few years. Worst case however... well... let's just say the Yuan would be the new world currency and there is a good chance the USD would need to be completely replaced.




There is actually a working currency called Ithaca hours out of New York that is based in this principle.

Not sure how well it would work beyond the local level- but it has survived for nearly twenty years at that level.



Well said.

Much less than the democrats and republicans.
In Germany, the party comes before the individual politician, in the US, it's the other way around.
The very idea of fraction discipline (for those Americans who still read this : the idea that all members of a party vote the same way for a certain proposal in parliament) would be abhorrent to an American senator.
In US parliaments, members regularly vote for proposals made by the other party, in Germany, this is avoided at all costs.



I didn't say it would.
Unlike many other Germans, i refuse to see the USA as a pseudo-democracy, because they very clearly aren't.
They just have a different approach towards the electoral system.
Not the best one (i personally prefer the single transferrable vote system used in Ireland, as it leads to the highest percentage of votes not "being reduced to toilet paper", to use your words), but it certainly fits the political culture in the US and has proven to be stable for a longer time than any other democratic system.