O.T. [at-l] Regulation

[sloetoe@yahoo.com (Sloetoe)]

--- Jerry Goller <trailtrash@hotmail.com> wrote: 
> Actually, the only reason gold has value is because we've decided it
> does. 
### OK, but not precise. It's not that we've decided, but that we bid back
and forth. It's the bidding.

> It really doesn't matter what medium of exchange we use as long as the
> buyer and seller agree on its relative value.
### OK, but not precise. It's the 'price' that we agree about with
successful voluntary trade. We don't need to know uses, value to either
trader, shortages or surpluses, only an agreed upon price, which itself
carries as its kernal all available market information.

> The value of a $20 bill is only what we all agree it is. The day we stop
agreeing on it is the day it changes. It doesn't matter what the
government does. Money only has the value we place on it.
### Nope. It may be removed from individuals a few degrees, but the value
of money in our economy is carefully monitored and metriced. Originally,
it was a note good for a claim on gold held in reserve (a reserve note),
but if I recall (and macroeconomics gives me gas, so please don't ask me
to recall), the US holds only about 20% of its circulating money value in
gold at any one time. The rest is, in accounting terms, in Accounts
Receivable and other assets. For the government, this includes regular
taxation ability, held Social Security surpluses, held Treasury Bonds and
Notes, etc. Long before Richard Nixon freed the US from the gold standard,
economists had been observing that these assets had much more weight in
valuing a government's issued currency than government-held gold. And this
is no different from a corporation that issues a bond: bond holders don't
want to see the money sitting in a bank account somewheres, they want to
see the corporation going out and using the bond proceeds to secure
income. THAT, bondholders recognize, is much more likely to guarantee the
repayment of the bond. Smart governments do the same things, and the
smarter they act, the more the currency rises against other currencys.

> Economics is the most amazing Voo Doo I've ever seen.
### True 'nuff.

> Amazing...money is a self-filling prophecy.
### Not true. Just watch what happens the next time you hear of some
country's "currency crisis" on NPR. There may be a short term *cycle*, but
it will be broken by govenment attention to the "public accounts"
mentioned above. And valuation will climb.

> People are oppressed by a government for just about as long as they
> decide to be. Once the people refuse to be governed...no matter what the

> consequences.. it's over. The central government may as well pack their 
> tents and steal away. It's just a matter of time.
### Jerry, my brother, I'm proud to call us both Americans. Just don't
mutter these words in the wrong corner of the globe, or you'll disappear
to a shallow grave. Freedom is a valuable, valuable thing, and it can
vanish, even in this country, in the blink of an eye.

### Sooooooo, anybody want to hear why the most important brake (to have
beefed up) on a bicycle is on the front, or why some motorcycle road
racers never even *touch* the rear brake?

Sloetoe
(economist, motorcyclist, 
bon vivant, man-about-town,
speaks good english, chews food 
with mouth mostly closed)

=====
There is little use for the being whose tepid soul knows nothing of the great and generous emotions of the high pride, the stern belief, the lofty enthusiasm, of the men who quell the storm and ride the thunder.

T.Roosevelt 4/23/10

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