I\’ve decided to do a new series. Most of the technorati post about amazing now gadgets that will change you lives. They get a free sample from a vendor, play with it for a week or two and tell you that you should or shouldn\’t spend your hard earn…

redeemable currencies issued by private banks and upheld as “property titles” by the common courts will lead to precisely the same situation as with the grand mughals: gold will come and go, as will goods and services, and the state will not even be able to collect balance of trade statistics. goodbye growth rate!

as for runs, if demand notes are not redeemed, the banker will go to jail and so for these kinds of notes there will be 100 per cent reserve banking - or very close. same with demand deposits. there can be notes with “option clauses” to redeem with penalty interest, after a said period of time. if these are acceptable to the public - at a discount - that will be another way to prevent bank runs. banks face illiquidity crises and not insolvency crises. the ‘option clause’ would give them time to call back loans and pay off their notes.

http://en.wikipedia.org/wiki/Gold_standard

In the international gold standard imbalances in international trade were rectified by requiring nations to pay accounts in gold. A country in deficit would have to pay its debts in gold thus depleting gold reserves and would therefore have to reduce its money supply. This would cause prices to deflate, reducing economic activity and, consequently, demand would fall. The resulting fall in demand would reduce imports; thus theoretically the deficit would be rectified when the nation was again importing less than it exported. This led to a constant pressure to close economies in the face of currency drains in what critics called “beggar thy neighbor” policies. Such zero-sum gold standard systems showed periodic imbalances which had to be corrected by rapid falls in output.

In practice however this could seriously destabilize the economy of countries which ran a trade deficit, because people tended to make a run on the bank to retrieve their money before gold reserves were exported, thus causing banks to collapse and wiping out savings. Bank runs and failures were a common feature of life during the period when the gold standard was the established economic system.

this is because NOTHING IS PUBLIC PROPERTY.

anything that is called public property is in fact under the control of some people who CLAIM TO REPRESENT THE PUBLIC.

test out this from palatial bungalows to ONGC, and you’ll know this to be a fact.

thus, the rest of his post is immaterial too.

In India, it is held by the govt - the Reserve Bank of India which is a government body

In most other countries too - it must be the government.

The US should move towards a reform to change the Fed from private to govt.

That would an early step in their evolution towards being a democratic country

But this moron is part of that private cabal, as his dad had been also

The US President who tried to do this first time was assasinated soon after and that assasination is a big mystery.

We wouldnt have cared if this didnt matter to us, but by twist of fate and our collective behaviour, that currency is very hegemonistic today.

If that currency is removed from the global oil trade, it will devalue overnight to third world levels.

Saddam wanted to shift to Euro and show the way to the OPEC to do this. Hence he was invaded.

Let us dump all the $ we have and trade in Euros or gold. And watch the fun - or the next big war!

a gold standard means that all notes MUST be convertible ON DEMAND into the base asset: gold. this means the end of inflation, ushering an age of SOUND MONEY.

the idea of hoarding gold as a means to raising the wealth of a nation was disproved by both hume as well as adam smith. hume gave us the ’specie flow argument’ according to which, when domestic bank vaults are full of gold, there will be domestic inflation, causing a fall in exports and a rise in imports - and a consequent outflow of gold.

adam smith said that the wealth of a nation is in the cheapness of all commodities and goods, so that every citizen is possessed of wealth: his possessions are of the best quality, obtained at the lowest prices - because of free trade.

if farmers in ap had clear titles to their land, they could get loans against their properties and try their hands maybe at some urban enterprise.
i suggest you read a little more. maybe yazad can help you with a reading list.

I also think that this is a great risk for a weak country as a war can really wipe out the whole buying power…. scary

Regards,
@mit