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Originally Posted by jyl
Get serious. These are not practical ideas. They are crackpot ideas.
Take, for example, #3b. Every bank borrows short (i.e. takes deposits) and lends long (i.e. mortgages). How else do you expect loans to be funded? How many people are going to walk down the bank and put their money in a 30-year CD? - ZERO. How many people can afford a 30-day mortgage? - ZERO.
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Then you can continue to expect to have "boom and bust" business cycles created by artificial credit expansions and contractions caused by the double-entry bookkeeping (which would be considered as fraud in any other business) practiced by bankers.
People buy 30-year government bonds, why do you think people wouldn't buy 30-year CDs?
Quote:
Originally Posted by jyl
And #2. There is not enough gold in Fort Knox to replace a fraction of the USD $ in circulation. There is not enough gold in the world to replace a fraction of the euros, yuan, swiss francs, US dollars, etc in circulation. The world has grown beyond gold.
You might as well say we should all use anti-gravity.
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Nonsense. You can use any amount of gold to back all the outstanding fiat currencies -- it is all just a matter of what ratio of gold-to-fiat currency you use.
When something like gold backs a currency, and banks are prohibited from issuing more notes than they have gold deposited, you do not have price inflation in the economy, nor the boom-bust cycles created by inflation of the money supply.
With a non-inflating currency, savers and thrifty are rewarded, as the currency would be
appreciating in value as the economy grows.
Those who live irresponsibly, consuming large amounts of assets before they have produced an equal amount of wealth to trade for their consumption -- using the easy credit offered by the banking system -- would be penalized with an appreciating currency.
(Let me guess, you're living with large amounts of debt? Which would explain your objections to the forced fiscal responsibility a precious metals backed currency would require.)