Interesting idea.. Robert F. Kennedy Jr. is proposing partially backing the U.S. dollar with bitcoin and gold if elected president to combat inflation and change course to support crypto.
https://www.thestreet.com/cryptocurrenc ... coin-taxes
RFK Jr. plans to combat inflation by backing the US Dollar with bitcoin and gold
RFK Jr. plans to combat inflation by backing the US Dollar with bitcoin and gold
Linux is user friendly, it's just picky about its friends...
Disclaimer: Please use caution when opening messages, my grasp on reality may have shaken loose during transmission (going on rusty memory circuits). I also eat whatever crayons are put in front of me.
๑۩۞۩๑
Disclaimer: Please use caution when opening messages, my grasp on reality may have shaken loose during transmission (going on rusty memory circuits). I also eat whatever crayons are put in front of me.
๑۩۞۩๑
Well this is concerning. We moved away from any sort of asset-backing standard a long while ago (the end of the Bretton Woods system in the early 70s) for a good reason; it seems like folks pushing for a return to it are refusing to look at history and just want to return to bad ideas. Especially when you throw in crypto, which is one of the most unstable assets you could peg an actual currency to.
Edit: Since I realize some folks don't really know why we ended the system - When you back a currency with an asset, you reduce your ability to respond to expenses by printing money. While this might seem like a good thing in the context of inflation alone, you end up with a massive problem as your population grows and the services demanded by society become more complex; you end up doing things in the US like shuttering social welfare programs to feed the DoD since we can't (under an asset-backed system) actually increase the government's total budget but one political party is constantly pushing to feed money to their preferred contractors. This will lead to a lot of agencies shrinking or being shuttered, ultimately causing an economic slowdown, recession, or even depression as the flow of money in the economy is choked off - when you limit the money supply, you are effectively doing the same thing as applying a tourniquet to a human body, after all.
The only way that you could really argue asset-backing as being a positive is if your goal is to reduce government spending overall. Asset-backing will absolutely do that and in a vaccuum (which classical economists love to do - ignore externalities with the ever-useless ceteris paribus crap) it might sound great, but again, remember that we live in a world where you can't just halt spending growth but instead should be looking at mechanisms such as raising taxes, establishing other taxing systems (such as a wealth tax), enforcing tax laws (especially on things such as capital gains), and etc.
Edit 2: Please note, I am a behavioral economist. That's where I focused my education and training - so yes, I am opposed to classical/"traditional" economic theories as they have been proven time and time again to be horribly inaccurate in all but the most broad (basic supply/demand level theory) cases.
Edit: Since I realize some folks don't really know why we ended the system - When you back a currency with an asset, you reduce your ability to respond to expenses by printing money. While this might seem like a good thing in the context of inflation alone, you end up with a massive problem as your population grows and the services demanded by society become more complex; you end up doing things in the US like shuttering social welfare programs to feed the DoD since we can't (under an asset-backed system) actually increase the government's total budget but one political party is constantly pushing to feed money to their preferred contractors. This will lead to a lot of agencies shrinking or being shuttered, ultimately causing an economic slowdown, recession, or even depression as the flow of money in the economy is choked off - when you limit the money supply, you are effectively doing the same thing as applying a tourniquet to a human body, after all.
The only way that you could really argue asset-backing as being a positive is if your goal is to reduce government spending overall. Asset-backing will absolutely do that and in a vaccuum (which classical economists love to do - ignore externalities with the ever-useless ceteris paribus crap) it might sound great, but again, remember that we live in a world where you can't just halt spending growth but instead should be looking at mechanisms such as raising taxes, establishing other taxing systems (such as a wealth tax), enforcing tax laws (especially on things such as capital gains), and etc.
Edit 2: Please note, I am a behavioral economist. That's where I focused my education and training - so yes, I am opposed to classical/"traditional" economic theories as they have been proven time and time again to be horribly inaccurate in all but the most broad (basic supply/demand level theory) cases.
Hi Paft, thanks for the insight.
I am no economist, but the current rate of US Debt increase seems unsustainable either. Interest payments on the debt are one of the biggest expenses, estimated close to $400 billion this fiscal year, or 6.8% of all federal outlays. Our debt (as percentage of GDP) is more than most developed countries, maybe except Italy, and Japan being a notable exception. I am sure I am not the only one concerned about devaluation of the US dollar, and I view printing more money as simply tax on savings, without (political/partisan) government having to ask the people how or when to spend it.
Yes, asset-backing may be a backward move, and there is dire need for social programs and entitlements, but still, cost in the US seems to be much higher than other countries, and maybe some type of new/hybrid system could work well. I don't know the answer, I am just expressing a concern and I am sure there are much smarter people out there that can eventually figure it out.
As to the article, it seems more of another political move, his plan is to issue 1% of new T-Bills backed by gold/BTC, which probably won't have any meaningful effect either way - just signaling more crypto-friendly environment than the SEC lately I suppose.
I am no economist, but the current rate of US Debt increase seems unsustainable either. Interest payments on the debt are one of the biggest expenses, estimated close to $400 billion this fiscal year, or 6.8% of all federal outlays. Our debt (as percentage of GDP) is more than most developed countries, maybe except Italy, and Japan being a notable exception. I am sure I am not the only one concerned about devaluation of the US dollar, and I view printing more money as simply tax on savings, without (political/partisan) government having to ask the people how or when to spend it.
Yes, asset-backing may be a backward move, and there is dire need for social programs and entitlements, but still, cost in the US seems to be much higher than other countries, and maybe some type of new/hybrid system could work well. I don't know the answer, I am just expressing a concern and I am sure there are much smarter people out there that can eventually figure it out.
As to the article, it seems more of another political move, his plan is to issue 1% of new T-Bills backed by gold/BTC, which probably won't have any meaningful effect either way - just signaling more crypto-friendly environment than the SEC lately I suppose.
Linux is user friendly, it's just picky about its friends...
Disclaimer: Please use caution when opening messages, my grasp on reality may have shaken loose during transmission (going on rusty memory circuits). I also eat whatever crayons are put in front of me.
๑۩۞۩๑
Disclaimer: Please use caution when opening messages, my grasp on reality may have shaken loose during transmission (going on rusty memory circuits). I also eat whatever crayons are put in front of me.
๑۩۞۩๑
I agree that the current rate of increase of US debt is unsustainable. We've passed the crucial fiscal gap measure for sustainability; without changes we will default. You are 100% correct on that, as well as the inherent problems that come with printing more money - it's not a path that I would ever recommend the US do if we had other options, but utterly closing the door on our ability to do that (and thus react to, say, a nationwide economic crisis like Covid-19 was) ends up hurting us much more in the long run. I would argue that you are correct that a new system could work very well as long as that new system did not choke off the government's ability to act and goodness knows I'd love to see one in place that raised government revenues while lowering expenditures (like, for example, moving all DoD work in-house and killing the military contracting industry, saving the country over $400 billion per year all while implementing a wealth tax on wealth over, say, $5MM for individuals and $50MM for corporations to raise revenues substantially as well) and converting those funds to provide more public options across a wide variety of industries - creating jobs while lowering prices (which will help cool inflation overall) and forcing innovation. A lot like how the New Deal went in terms of emphasis on infrastructure, but don't stop there; making a truly hybrid system where private industry had to compete with the State in any but the most competitive markets. You'd also get the benefit of opening up markets to smaller businesses again, which tends to be the primary source for the US's tax base - something we want to encourage.Philip wrote:Hi Paft, thanks for the insight.
I am no economist, but the current rate of US Debt increase seems unsustainable either. Interest payments on the debt are one of the biggest expenses, estimated close to $400 billion this fiscal year, or 6.8% of all federal outlays. Our debt (as percentage of GDP) is more than most developed countries, maybe except Italy, and Japan being a notable exception. I am sure I am not the only one concerned about devaluation of the US dollar, and I view printing more money as simply tax on savings, without (political/partisan) government having to ask the people how or when to spend it.
Yes, asset-backing may be a backward move, and there is dire need for social programs and entitlements, but still, cost in the US seems to be much higher than other countries, and maybe some type of new/hybrid system could work well. I don't know the answer, I am just expressing a concern and I am sure there are much smarter people out there that can eventually figure it out.
As to the article, it seems more of another political move, his plan is to issue 1% of new T-Bills backed by gold/BTC, which probably won't have any meaningful effect either way - just signaling more crypto-friendly environment than the SEC lately I suppose.
I just hope that it's a political move for sure and that a majority of T-bills and other securities are still simple fiat.
Re: RFK Jr. plans to combat inflation by backing the US Dollar with bitcoin and gold
So basically, had we not taken the USD off of the gold standard, we would have choked off useless government and our dollars would be worth the same as they were in the 1970s. Oh gee! Granted, we would need to spend more but on that system, we would have bought more gold to back the dollar. Imagine if we sold all our weapons to countries and demanded gold in return.. Novel idea. Now we have nothing backing the dollar and China, Iran and Russia are stockpiling all the gold.
We have an out of control government, spending more than we ever have, in a currency not backed by anything other than our military might. Our interest payments alone are more than we can drum up in a year.
I think if anyone objectively looks at the situation, the US is fucked.
The only way we get out of this is if the Nation somehow increases GDP to a point where we leave the rest of the world in the dust. I'm talking multiple orders of magnitude growth. We end up so flush with money that we pay back all our debts and end up being the only stable economy in the world. In essence, putting the USD back on the stage as the only viable reserve currency that everyone clamors to possess. What will make that happen? AI? Chips? Genomics? Taylor Swift?
There needs to be a serious attempt by the US to separate itself technologically from everyone else or we're just gonna get left in the dust and everyone else will just call the debt. Not sure how that happens unless Elon's pipe dreams become reality overnight. Because the US died decades ago when they let all their innovation get stolen by China just so they could purchase it back with weakened dollars.
Gosh I miss these late night, wine fueled rants.
I've really missed y'all.
We have an out of control government, spending more than we ever have, in a currency not backed by anything other than our military might. Our interest payments alone are more than we can drum up in a year.
I think if anyone objectively looks at the situation, the US is fucked.
The only way we get out of this is if the Nation somehow increases GDP to a point where we leave the rest of the world in the dust. I'm talking multiple orders of magnitude growth. We end up so flush with money that we pay back all our debts and end up being the only stable economy in the world. In essence, putting the USD back on the stage as the only viable reserve currency that everyone clamors to possess. What will make that happen? AI? Chips? Genomics? Taylor Swift?
There needs to be a serious attempt by the US to separate itself technologically from everyone else or we're just gonna get left in the dust and everyone else will just call the debt. Not sure how that happens unless Elon's pipe dreams become reality overnight. Because the US died decades ago when they let all their innovation get stolen by China just so they could purchase it back with weakened dollars.
Gosh I miss these late night, wine fueled rants.
I've really missed y'all.
Re: RFK Jr. plans to combat inflation by backing the US Dollar with bitcoin and gold
Good to see you around FunK 
What saves the current US dollar imho is that our currency "printing" is comparatively slower than most of the other dominant currencies, so its' relative stability and comparatively low inflation are what keeps it afloat for the time being.
Yes, we seriously need to balance the budget.
Yes, the USD dominance will diminish somewhat with BRICs, EUR, digital versions of FIAT currencies, etc.
What saves the current US dollar imho is that our currency "printing" is comparatively slower than most of the other dominant currencies, so its' relative stability and comparatively low inflation are what keeps it afloat for the time being.
Yes, we seriously need to balance the budget.
Yes, the USD dominance will diminish somewhat with BRICs, EUR, digital versions of FIAT currencies, etc.