Re: OT: RADIO LIBERTY newsletter September 2007

Howard Duck wrote:

On Wed, 07 Nov 2007 21:40:54 -0500, "Francis A. Miniter"
<miniter@xxxxxxxxxxxxxxx> wrote:


And let us not forget that during the second Clinton administration, the budget was balanced every year.


That doesn't mean any of the outstanding debt was paid off.

Debt service by definition includes the principal sums payable within the fiscal year.

And this
nation DOES run on a debt-currency system of money, but that the
currency is fiat money is also evident in that it is not redeemable in
any form of commodity with inherent value. There is no argument that
currency backed by gold can be in economic trouble,

I keep giving you a prominent example. There are others. But you ignore them.

but if you or I
have a saving in gold-backed currency, then we have the assurance that
our savings can be converted into gold (as long as a public accounting
system can honestly verify the government's holdings in gold).

Not necessarily. The bank or government may have (will have, actually) loaned money itself. That is why the amount of borrowing not whether money is fiat or gold standard is the relevant consideration. What you really want, Howard, is to eliminate borrowing. But then no one can buy anything unless they have saved cash. Consequence: a huge economic crash.

Example. 1929-32. A gold backed currency exists in the US. Banks borrow money by taking bank deposits from customers. They loan the money out to borrowers who buy houses. But for wholly unrelated reasons, there is a crash in the economy and homeowners lose their jobs and cannot pay the mortgage loans back. The banks cannot pay their customers. There was in fact a run on the banks and the banks had to shut down for a number of days. It was after that that Roosevalt threw out the gold standard.

There
is no assurance of what politicians will do, but if the Constitution
were followed, Congress would determine the inherent value of
currency.


??????


Francis A. Miniter
.

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