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"If there’s one thing that militias and Tea Partiers hate more than “fiat money” that’s not backed by gold, it’s fiat money that exists only in electronic form,

by fixxer 11y ago

"If there’s one thing that militias and Tea Partiers hate more than “fiat money” that’s not backed by gold, it’s fiat money that exists only in electronic form, where it can be easily tracked and controlled by the government." Ugh. Good article until the author felt the need for this asinine political gem. I am neither a militia member nor a tea party republican, but I recognize the flaws of a system in which a bureaucracy controls money supply based on arbitrary theory rather than some index immune to manipulation. Therefore, I must be a militiaman. Cheap thrills kill copy, journo.

thaumasiotes 11y ago
In what sense is tracking an index, or some function of an index, not basing the money supply on "arbitrary theory"? There's no law of nature that says the money supply must have X relation to any index -- if there was, the whole concept of "control of the money supply" would be ill-formed.
- fixxer 11y ago
  Sure, let's go with that. It is all subjective. What political color am I now? My real argument is that the article had merit until the subtle mud slinging and big reveal of the author's bias.
cgearhart 11y ago
> ...some index immune to manipulation. Commodity money and representative money aren't any more immune to manipulation than fiat money. It doesn't matter whether you use gold, silver, or marshmallow peeps -- the value of your holdings are pegged to the value of the assets, which sway with the market. And the central bank can still manipulate that value, they just have to buy and sell the asset to do it. Fiat money gives nations a central mechanism to manipulate their own currency without hoarding gold and silver. Commodity & representative currency allow other countries to manipulate the currency. In _any_ monetary system, losing control of your money supply causes bad things to happen (see also: Greece).
- fixxer 11y ago
  I recognize those flaws as well, so I presume by the author's definition I am a progressive militiaman. Or maybe I'm just an intelligent individual. Big "maybe" there, admittedly.
  - ska 11y ago
    You are affirming the consequent, as is the parent.
- msandford 11y ago
  > And the central bank can still manipulate that value, they just have to buy and sell the asset to do it. Yes, true. But the fact that there is SOME LIMIT is pretty nice. In other words, the Fed could create as many dollars as there are bits to represent them without much effort at all. Only once you start overflowing a 64 bit integer does there start to be any kind of restraint on the amount of dollars created and only for a year or two until all the software gets migrated to use 128 bit long long long longs! Commodities -- especially gold and silver which have widespread historical precedent as money -- can't really just be made up. Yes they're vulnerable to the vagaries of the market, but that market is at least based on some reality! And before you say "but the central bank can just make the prices go to infinity" thus achieving their price goals anyhow, I would respectfully disagree. The point of commodity backing of paper notes is that if you lose faith in the value of the notes you can always demand the commodity and hold that instead.
  - gcb0 11y ago
    they can be made up when you have enough of them. just look how usa dictated crude oil prices at will or how the diamond business work for the last couple of centuries.
    - msandford 11y ago
      First thanks for replying instead of just downvoting. I might argue that the commodities you're referencing and precious metals are a little different. What you want to look at is the size of the stores versus the yearly production. I don't know what the crude stockpiles are worldwide above ground, but they don't amount to much more than a few months worth of consumption. So if you were going to pick a single commodity to use, you probably wouldn't pick crude. Because there's very little buffer, supply or demand shocks quickly work their way into prices. This is not ideal. http://en.wikipedia.org/wiki/Global_strategic_petroleum_reserves http://en.wikipedia.org/wiki/Global_strategic_petroleum_rese... Diamonds do satisfy the "large reserves relative to production" as DeBeers supposedly has many decades worth of diamonds locked up in vaults. This is to keep the price higher than it otherwise would, made possible by demand they manufactured through advertising. So while diamonds do have the buffer we want, they aren't divisible. Take a barrel of crude and pour it into two different containers. Each is now worth basically half of the first container. But split a diamond in half, and its value isn't cleanly divided in two. Diamond prices are based more on the carat square or cube (http://forums.udacity.com/questions/100166221/power-law-or-exponential http://forums.udacity.com/questions/100166221/power-law-or-e...) so dividing a diamond in half makes each of the halves worth 1/4 of the whole. Not a good feature of something monetary; getting change for a dollar doesn't destroy any value. Gold and silver on the other hand are divisible, fungible, and have high value relative to size and weight. Gold doesn't tarnish at all and silver very slowly and whatever oxide it does produce is protective. Also the yearly production of gold and silver from mining only represents a few percent of world stockpiles so supply or demand shocks have to be very large indeed to make drastic price changes; also a nice feature. Diamonds aren't fungible nor divisible. Crude doesn't have large stocks and has much lower per-unit value.
fche 11y ago
No, the logic error is yours, not theirs. They said "tea-partier ERGO fiat-money-hater". You're asserting the straw-man opposite.
- fixxer 11y ago
  But apparently we share a common platform, so at what point am I de facto tea party? Serious question.
  - deleted 11y ago
    [deleted]
  - ctdonath 11y ago
    When your core sociopolitical axioms are generally dominated by strict Constitutionalism, Judeo-Christian ethics, Randian objectivism, and austere governmental fiscal policy (including gold/silver-based currency), you're probably a "tea party" type. Serious answer.
    - fixxer 11y ago
      2/4. You're not helping. Need a tie breaker.
      - ctdonath 11y ago
        Let's try some litmus-test questions (don't downvote if you don't agree with them, not looking to argue about their validity, I'm just identifying the "are you a tea partier?" line). Do you agree: the government may not operate beyond what the Constitution clearly grants & empowers? short of actual declared war, government should spend no more than tax revenue? currency should be commodity-backed (gold preferably)? direct federal taxation of citizens should be repealed? human life, including right of continued existence, begins at conception; the "choice" is to create human life, not end it? short of adjudicated felons & mental defect, ownership of weapons in defense of self/family/state shall not be restricted? short of conspiracy to commit non-victimless crime, contracts are binding and upheld, if needed, by the state? capitalism is, on the whole, superior to all other socioeconomic systems? insofar as capitalism isn't perfect, government should only interfere (minimally at that) to resolve chronic systemic problems? voter identification is a valid administrative process (ensuring only you vote as you, and you are entitled to)? financial "entitlements" are unconstitutional/inappropriate and should be ended (society has better solutions to the issues addressed)? government exists to protect & facilitate rights, not limit/suppress them? freedom *of* religion != freedom *from* religion? That's a start at trying to hit key points.
adamlett 11y ago
> Therefore, I must be a militiaman (A ⇒ B) ⇏ (B ⇒ A)
- aidenn0 11y ago
  TFA uses a cheap rhetorical trick to imply that since those opposed to central currency share something in common with a low-status group, then opposing central currency lowers your status. You know who else liked central currency? Hitler!
hnnewguy 11y ago
In what way does that sentence imply that you are a militia man or Tea Partier, given your beliefs? The sentence reads: "Militia men and Tea Partiers hate fiat money". Not "people who hate fiat money are Tea Partiers or militiamen". Some people love to be offended, I guess.
- JackFr 11y ago
  I'm not a offended, but it's a throwaway line. It's both irrelevant and unsupported by any facts in the article. (And in general only supported by anecdotal evidence at best.) The author uses its merely to identify his personal bona-fides to his intended demographic.
- fixxer 11y ago
  No, not really. I just find the constant injection of political labels tiresome.
- deleted 11y ago
  [deleted]

by fixxer 11y ago

thaumasiotes 11y ago

In what sense is tracking an index, or some function of an index, not basing the money supply on "arbitrary theory"? There's no law of nature that says the money supply must have X relation to any index -- if there was, the whole concept of "control of the money supply" would be ill-formed.

fixxer 11y ago
Sure, let's go with that. It is all subjective. What political color am I now? My real argument is that the article had merit until the subtle mud slinging and big reveal of the author's bias.

cgearhart 11y ago

> ...some index immune to manipulation. Commodity money and representative money aren't any more immune to manipulation than fiat money. It doesn't matter whether you use gold, silver, or marshmallow peeps -- the value of your holdings are pegged to the value of the assets, which sway with the market. And the central bank can still manipulate that value, they just have to buy and sell the asset to do it. Fiat money gives nations a central mechanism to manipulate their own currency without hoarding gold and silver. Commodity & representative currency allow other countries to manipulate the currency. In _any_ monetary system, losing control of your money supply causes bad things to happen (see also: Greece).

fixxer 11y ago
I recognize those flaws as well, so I presume by the author's definition I am a progressive militiaman. Or maybe I'm just an intelligent individual. Big "maybe" there, admittedly.
- ska 11y ago
  You are affirming the consequent, as is the parent.
msandford 11y ago
> And the central bank can still manipulate that value, they just have to buy and sell the asset to do it. Yes, true. But the fact that there is SOME LIMIT is pretty nice. In other words, the Fed could create as many dollars as there are bits to represent them without much effort at all. Only once you start overflowing a 64 bit integer does there start to be any kind of restraint on the amount of dollars created and only for a year or two until all the software gets migrated to use 128 bit long long long longs! Commodities -- especially gold and silver which have widespread historical precedent as money -- can't really just be made up. Yes they're vulnerable to the vagaries of the market, but that market is at least based on some reality! And before you say "but the central bank can just make the prices go to infinity" thus achieving their price goals anyhow, I would respectfully disagree. The point of commodity backing of paper notes is that if you lose faith in the value of the notes you can always demand the commodity and hold that instead.
- gcb0 11y ago
  they can be made up when you have enough of them. just look how usa dictated crude oil prices at will or how the diamond business work for the last couple of centuries.
  - msandford 11y ago
    First thanks for replying instead of just downvoting. I might argue that the commodities you're referencing and precious metals are a little different. What you want to look at is the size of the stores versus the yearly production. I don't know what the crude stockpiles are worldwide above ground, but they don't amount to much more than a few months worth of consumption. So if you were going to pick a single commodity to use, you probably wouldn't pick crude. Because there's very little buffer, supply or demand shocks quickly work their way into prices. This is not ideal. http://en.wikipedia.org/wiki/Global_strategic_petroleum_reserves http://en.wikipedia.org/wiki/Global_strategic_petroleum_rese... Diamonds do satisfy the "large reserves relative to production" as DeBeers supposedly has many decades worth of diamonds locked up in vaults. This is to keep the price higher than it otherwise would, made possible by demand they manufactured through advertising. So while diamonds do have the buffer we want, they aren't divisible. Take a barrel of crude and pour it into two different containers. Each is now worth basically half of the first container. But split a diamond in half, and its value isn't cleanly divided in two. Diamond prices are based more on the carat square or cube (http://forums.udacity.com/questions/100166221/power-law-or-exponential http://forums.udacity.com/questions/100166221/power-law-or-e...) so dividing a diamond in half makes each of the halves worth 1/4 of the whole. Not a good feature of something monetary; getting change for a dollar doesn't destroy any value. Gold and silver on the other hand are divisible, fungible, and have high value relative to size and weight. Gold doesn't tarnish at all and silver very slowly and whatever oxide it does produce is protective. Also the yearly production of gold and silver from mining only represents a few percent of world stockpiles so supply or demand shocks have to be very large indeed to make drastic price changes; also a nice feature. Diamonds aren't fungible nor divisible. Crude doesn't have large stocks and has much lower per-unit value.

fche 11y ago

No, the logic error is yours, not theirs. They said "tea-partier ERGO fiat-money-hater". You're asserting the straw-man opposite.

fixxer 11y ago
But apparently we share a common platform, so at what point am I de facto tea party? Serious question.
- deleted 11y ago
  [deleted]
- ctdonath 11y ago
  When your core sociopolitical axioms are generally dominated by strict Constitutionalism, Judeo-Christian ethics, Randian objectivism, and austere governmental fiscal policy (including gold/silver-based currency), you're probably a "tea party" type. Serious answer.
  - fixxer 11y ago
    2/4. You're not helping. Need a tie breaker.
    - ctdonath 11y ago
      Let's try some litmus-test questions (don't downvote if you don't agree with them, not looking to argue about their validity, I'm just identifying the "are you a tea partier?" line). Do you agree: the government may not operate beyond what the Constitution clearly grants & empowers? short of actual declared war, government should spend no more than tax revenue? currency should be commodity-backed (gold preferably)? direct federal taxation of citizens should be repealed? human life, including right of continued existence, begins at conception; the "choice" is to create human life, not end it? short of adjudicated felons & mental defect, ownership of weapons in defense of self/family/state shall not be restricted? short of conspiracy to commit non-victimless crime, contracts are binding and upheld, if needed, by the state? capitalism is, on the whole, superior to all other socioeconomic systems? insofar as capitalism isn't perfect, government should only interfere (minimally at that) to resolve chronic systemic problems? voter identification is a valid administrative process (ensuring only you vote as you, and you are entitled to)? financial "entitlements" are unconstitutional/inappropriate and should be ended (society has better solutions to the issues addressed)? government exists to protect & facilitate rights, not limit/suppress them? freedom *of* religion != freedom *from* religion? That's a start at trying to hit key points.

adamlett 11y ago

> Therefore, I must be a militiaman (A ⇒ B) ⇏ (B ⇒ A)

aidenn0 11y ago
TFA uses a cheap rhetorical trick to imply that since those opposed to central currency share something in common with a low-status group, then opposing central currency lowers your status. You know who else liked central currency? Hitler!

hnnewguy 11y ago

In what way does that sentence imply that you are a militia man or Tea Partier, given your beliefs? The sentence reads: "Militia men and Tea Partiers hate fiat money". Not "people who hate fiat money are Tea Partiers or militiamen". Some people love to be offended, I guess.

JackFr 11y ago
I'm not a offended, but it's a throwaway line. It's both irrelevant and unsupported by any facts in the article. (And in general only supported by anecdotal evidence at best.) The author uses its merely to identify his personal bona-fides to his intended demographic.
fixxer 11y ago
No, not really. I just find the constant injection of political labels tiresome.
deleted 11y ago
[deleted]