Is the West in reality bankrupt?

No, and there’s no evidence of “increasingly worthless money.” Statements like that show a misunderstanding of what money is. Money is a medium of exchange to store value and reduce transaction friction. The value of money, though, comes from the strength of the economy upon which it is based. And the US economy is strong.

Just yesterday, Forbes announced that the current administration had done more for job growth than any administration in the last 40 years.

Why hoard gold or silver? You can’t eat either of them. And if the economy collapses, they won’t do you any good.

As @zenvelo pointed out, if money is worthless, why should you expect gold and silver to have value? Paper money is currency – it is what we trade for goods and services. Its value goes up and down in response to supply and demand, just as gold and silver do. There have been a number of discussions about this on Fluther over the years (quite a few of them when Glenn Beck was noticeably hawking gold for a living).

Morally, maybe.

Financially – not at all. Even the financial arguments above aren’t all that convincing to me.

The fact is that we (the West) have significant assets – land, water, food, intellectual motivation, etc. We are misusing them, to be sure. But we’re more than rich everything that we need to sustain the West. We need to think better. But we have the assets.

@zenvelo @dappled_leaves It surprises me that you 2 don’t believe that if the economy does collapse, a great deal of responsibility for the debacle. will fall on the Federal Reserve for churning out dollars. What I’m asking is: what happens when recognition sets in that the amount of money in circulation exceeds by orders of magnitude the value of our assets? Isn’t the skyrocketing price of precious metals in fact a tacit recognition of the obvious? Perhaps I should state that money is worth less rather than worthless. Even more startling to me is your assertion that in the event of the collapse of the currency, gold and silver will be useless Surely you can’t possibly believe this to be the case.

@stanleybmanly It’s turtles all the way down, I’m afraid. The value of gold as an “asset” is only high because we suspend our disbelief. Gold was originally valued because it was shiny and malleable. It was a metal like the sun. That it is still used to evaluate wealth is due to nothing more than tradition. Why should people stop believing in the worth of paper money, and yet still value gold?

@stanleybmanly What skyrocketing price of precious metals are you referring to? Gold is taking another drubbing today, it is 40% below its peak from the Bush era near-collapse. There has been a general decline in commodity prices for the last two years.

And the Fed is not churning out dollars. Who told you that?

@stanleybmanly The money supply is largely determined by private demand for money, and not by the Federal Reserve. The vast majority of money in circulation today is created by banks when they make loans.

Gold and Silver prices are about the lowest they’ve been in over 3 years.

”...what happens when recognition sets in that the amount of money in circulation exceeds by orders of magnitude the value of our assets?”

I’m guessing that you’re alluding to a hyper-inflation scenario. Most money in circulation is based on private debt. After the 2008 crash, there was a huge de-leveraging of debts, and the money supply shrank.

The Federal Reserve isn’t churning out money. There isn’t too much money in circulation.

@Kropotkin is right. Most of the money in our system is created via the Fractional-Reserve banking system. See this: Money Multiplier for an explanation.

@stanleybmanly

Gold and silver, like paper money, only have as much value as people are willing to place on them. The Aztecs, for example, used gold to make shiny pretties, but held it to have so little value that they were willing to simply give the Spanish as much as they wanted. Now let’s imagine a scenario where society has collapsed: I have a stockpile of food and you have a stockpile of gold. You want to trade some of your gold for my food. But why should I agree to that exchange? Of what value is that gold to me?

Gold and silver both have intrinsic value, they have industrial applications, very critical applications actually. Regardless of economics gold and silver will always have a value and can be used as a proxy for trade. When whatever currency you’re invested in dies if you have converted that currency into something like gold it can be one of the best vehicles to move into the next currency that people will use. It’s a way to confine a large amount of wealth into a small area that can be concealed, transported and readily converted into the newer currency. Any commodity: water, food, ammunition that have a readily recognizable attached value can be substituted for currency this way. Even things like toilet paper can be currency. High utility items (like T.P.) will have more value when things are very bad. When things get better that gold you hoarded will be worth a fortune again but not until people are beyond just trying to survive. What can’t get value back is symbolic money that has no intrinsic value. It’s probably a smart thing to have a stash of silver coins. Copper pennies, nickels and other coins actually have intrinsic value. At some point soon nickels will be worth more in metal value than in face value. People are already hoarding them. That’s pretty extreme but it is happening.

Industrial applications are fine and well when you live in a society that supports those applications. Otherwise, no, gold has no inherent value.

Can you name anytime in history when gold had zero value?

Gold and silver are just as susceptible as money, or anything, in losing its value. If the public decides it isn’t worth anything, then it isn’t.

I have talked about on other Q’s how I find it ironic so many Republicans call Obama a socialist and think socialism and even worse communism are horrible government systems, but then the same people are fine with the rich getting richer and the poor and lower middle class struggling very badly. Having the masses barely able to get by, or unable to make ends meet altogether, is a recipe for socialism to be voted into office. I don’t believe Obama is a socialist, so I don’t want to get stuck on him, but I do believe that if we don’t employ and pay a decent salary to people at the lower spectrum of wage earners, eventually they might really rise up and vote in someone like Chavez in Venezuela.

There is this asinine notion that gold and silver have a fixed worth because we pretty much know how much of them there is and their uses are pretty much unchanged as time goes, problem is these materials have no actual practical value, so if you want to hoard anything i would suggest hoarding fertile lands and seeds, factories, materials, and then armies to protect them.

Economies make and break the money’s worth, everything else is just stuff people cling to because it looks more stable.

@ARE_you_kidding_me “Can you name anytime in history when gold had zero value?”

During a time of stable societies where people can value materials that have little to no practical use? No, I cannot. Now can you explain what practical value gold has in a downfall of society type situation, like I initially proposed above? Like I said – say we’re in a situation where society has collapsed. I have food, you have gold. Why should I exchange my food for your gold? Of what use will that gold be to me?

Read my first response. Gold is a proxy for wealth during good times. Nobody argues it’s value is diminished or removed when there is not enough food to eat.

@Darth_Algar The reason you will trade your SURPLUS food for gold is because it will be the universally understood and recognized medium of exchange that you can trade for other necessities.

@stanleybmanly that scenario posits a surplus of food. Since there would not be a whole lot of food coming in I would imagine there would be little if any “surplus”. What you have has to do you the rest of your life. You would be better off hoarding arrows than gold. At least with them you could try to take the food you so desperately need.

As to @ARE_you_kidding_me ‘s inquiry, I would guess that at any point before the advent of agriculture gold would have little if any value, same as if you had a massive economic collapse and few farming members of society left and everybody was scrambling to collect whatever canned goods were left on the shelves because they knew that once these were gone they were shit out of luck unless they could hunt or gather.

@stanleybmanly “The reason you will trade your SURPLUS food for gold is because it will be the universally understood and recognized medium of exchange that you can trade for other necessities.”

In a functioning society perhaps. That is not what I am speaking of however. In my scenario you gold is useless to me.

@Darth_Algar Precisely. As long as people are accepting currency, it does not matter one whit what the currency is. Paper will serve nicely – so easy to carry around in a wallet. If people stop accepting currency, then gold is useless – exactly because it is currency.

Why do people find this so hard to grasp? Oh yeah, shiny.

Governments, from municipalities to the Feds, have found some advantage to delaying necessary infrastructure repair or replacement since the sixty’s, if not before. Maybe they thought that the economy would continue to grow, so it could be done later, no need to fix what ain’t broke. Well, obviously, they were wrong. We need infrastructure repair and replacement. We have laborers ready and able to do the work. Spending more than your immediate income is a well-established business practice, as long as such expenditures will generate returns that will more than repay the debt.

Washington sort-of tried this by bailing out the “too-big-to-fail” banks with the expectation that the banks would in turn make low interest loans to start-up or expanding businesses. They didn’t, and they are still sitting on considerable cash, minus the bonuses they paid themselves.
Cost of living increases as income decreases. The West will never become bankrupt, only the majority of its population. When that happens, some will be trading their gold for guns and bullets.

Follow up on Gold: down another $11 today, to $1238.

&BIll1969 Yes with weapons you have the power over those with gold, food, water, etc…

@KNOWITALL we agree on everything except my handle on Fluther.

@Bill1939 LOL, sorry hard to read on mobile sometimes!

The United States has lost it’s AAA credit rating.

This is government’s doing.

The American people should be incensed.

“The United States has lost it’s AAA credit rating. This is government’s doing.”

@SecondHandStoke No. It’s actually the doing of the credit ratings agencies. The very same corporations that gave garbage securities AAA ratings that led to the 2008 financial meltdown.

The reason they downgraded the US is because the US didn’t follow the same insane austerity policies that much of the EU did.

This “punishing” of governments by spuriously downgrading their credit ratings (The US operationally cannot ever go bankrupt or go into any sort of sovereign debt—it issues its own currency!) is indicative of the power finance sector corporations have.

As for the idea that the people should be incensed. What proportion of Americans are hedge fund managers or even have significant investment in government bonds? It’s almost utterly irrelevant to every average person. The US won’t and cannot go bankrupt. The downgrading and its rationale was nonsensical and smacked of political manipulation.

@Kropotkin That’s not exactly correct; the US T Bills got downgraded when the Republican Congress shut down the government and wouldn’t raise the debt ceiling, which led us to the brink of a constitutional question on the Treasury paying its debts.

And the American people should be incensed that the Republicans took us that close to the edge, but that is what the Tea Party wants.

@zenvelo That’s not exactly correct. The US lost its S&P AAA rating in 2011.

The debt-ceiling crisis was in 2013.

No major credit rating agency downgraded the US government in 2013.

@Kropotkin You are right, it wasn’t the government shutdown, it was the 2011 Republicans fighting over the debt ceiling.

@zenvelo Read the rationales given by S&P.

It was because Obama’s plan to cut the deficit fell short of what S&P felt was necessary.

This in the very article you posted:

“On August 2, President Barack Obama signed legislation designed to reduce the fiscal deficit by $2.1 trillion over 10 years. But that was well short of the $4 trillion in savings S&P had called for as a good “down payment” on fixing America’s finances.”

Somebody blamed republicans and did you see the Lurve?

^^It’s a way of showing agreement and there are more progressives that conservatives on this site.

“Progressive.”

What does that even mean?

As an adjective it means: happening or developing gradually or in stages; proceeding step by step. the key words here being developing and proceeding as opposed to maintaining the status quo.

As a noun: a person advocating or implementing social reform or new, liberal ideas.

synonyms: innovator, reformer, reformist, liberal, libertarian

Politically it means forward looking, forward thinking and forward moving. A good start is to look at This which gives this basic, straightforward summary: ”...everyone gets a fair shot, everyone does his or her fair share, and everyone plays by the same rules. As progressives, we believe that everyone deserves a fair shot at a decent, fulfilling, and economically secure life. We believe that everyone should do his or her fair share to build this life through education and hard work and through active participation in public life. And we believe that everyone should play by the same set of rules with no special privileges for the well-connected or wealthy.”

Derived from the philosophy of Progressivism but basically Progressivism is a broad philosophy based on the Idea of Progress, which asserts that advances in science, technology, economic development, and social organization can improve the human condition. Note, don’t bother going to this website if you are inclined to whine about the authenticity or accuracy of Wiki, Look it up yourself in whatever source you will

@rojo

So what can we conclude from the fact that fascist Germany didn’t happen overnight?

@SecondHandStoke I am not sure what you are asking here ^^^? Are you saying that fascism is a form of progressivism? Are you talking about in the past (mid 20th century) or are you saying that Germany is presently a fascist state? Do you see fascism as the end result of progressive thought? Can you clarify for us? Thanks.

It seems to me that when there is a severe downturn in the economy the populace looks for paternal leadership (gender is irrelevant). They are willing to accept any political form that appears capable of producing economic stability. Charismatic individuals seeking political power play upon people’s unconscious desire to return to the sense of emotional security that they had in childhood by promising to return to the way of life people imagined existed then, the “good old days.” Unfortunately, when such individuals acquire control of their country the economic security they provide is for the wealthy who helped them achieve their ambition.