Re: Question regarding the budget deficit

"Tom White" <tominator@xxxxxxxxxxxxxxxxxxxxxx> wrote in message
news:dghqp0$hm9$1@xxxxxxxxxxxxxxxxxxx

>
> Before the US went off the gold standard, you could take a
> twenty, a ten, and a five and demand the US government give
> you an ounce of gold. The government isn't obliged to give
> you anything for the money it issues now. So what's the
> value of money today? Somehow we all just agree on what
> it's worth. I don't know how or why that works, and I can't
> guess what will make it quit working, but whatever will break
> our monetary system has stayed away for thirty plus years.

If you tie gold to the dollar, you can't print more than the gold you've got
in reserve. I'm not sure what happened in 1971 but apparently the last
semblance of being tied to anything of value was taken away completely.
Now, of course, a dollar is a dollar. It's just a word, and we can get
something for it because of, well, because you can. Tradition and
confidence. But there is nothing behind it, as you and I both know. So
they can now print as much as they want. And the more that is released into
circulation, the less each dollar is worth.

I was just engaged in a thread about this with Chris from Texas. I said
that I didn't think one person in a thousand understands what inflation is.
Inflation is NOT rising prices. Rising prices is a RESULT of inflation. It
is an EFFECT of inflation. Inflation is an INCREASE IN THE MONEY SUPPLY.

Then I said that calling rising prices inflation is like saying that wet
streets cause rain. Soon, Johhny D. replied to the post and provided a
definition from an online dictionary. Sure enough. That dictionary is
wrong. I've know for some time now that they revised the meaning of the
word just as they revise true history in so many examples. It's just wrong.
Inflation is an increase in the money supply. And rising prices in an
effect.

-Paul G.


.

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