Quote:
Originally Posted by mact3333
I am a big picture type of guy...I see many things as all being connected in some way...dont let the crooks blind you...at some point we must fight back and repeal the Fed Reserve Act and back our currency my a hard asset such as gold or silver...its the only way in the long run to maintain stability imho.
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Um...go read some economic history, and re-read your Intermediate Macroeconomics text. You will soon (re)learn that basing a currency's value on the value of a commodity puts the value of the currency in a position to collapse in value as commodity prices drop. If you don't believe me, look at the Dutch Tulip Crisis, and also read some about the economic collapse of the British Empire.
Generally speaking, the conclusion that despite the fact that we used fixed systems within the borders of individual countries and occasionally across international borders (A dollar in NY is the same as a dollar in CA, just as a Euro in Germany is the same as a Euro in Greece), we should favor a system where we have flexible rates of currency exchange. This is premised on the idea that flexible rates yield balanced trade and other efficiencies.
Whether or not we let currencies float or peg them to the value of another currency or commodity is in many respects, a secondary issue. While it is true that stable rates avoid the problems associated with volatility, it is not necessarily true that having a fixed rate yields stability. In the absence of measures to limit portfolio capital, speculative attacks may force governments to continue to move the peg into ranges they can defend, thus creating the very volatility they hoped to avoid....