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Online Comics => Escape From Terra => Topic started by: quadibloc on November 04, 2010, 12:41:48 pm

Title: Ten Dollars!
Post by: quadibloc on November 04, 2010, 12:41:48 pm
This is shocking! Little Babette stole a whole ten dollars from her parents!

Of course, stealing is shocking. And I cheated a little when I said that. I didn't mean ten dollars in today's money.

And so in today's money, I suppose that is well over a hundred dollars. A pre-1933 dollar was worth approximately 15.3 grams of gold.

However, while using gold as currency in an AnCap society on Earth would make sense today, I would have thought that gold would be so common as to be almost worthless out among the asteroids - even if it's still a very useful metal for electrical contacts.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 04, 2010, 01:09:08 pm
This is shocking! Little Babette stole a whole ten dollars from her parents!

Of course, stealing is shocking. And I cheated a little when I said that. I didn't mean ten dollars in today's money.

And so in today's money, I suppose that is well over a hundred dollars. A pre-1933 dollar was worth approximately 15.3 grams of gold.


When I started posting this, the spot price for 1gm of gold is USD 44.40 (44.54CDN).  That makes her claim of 150-160gm of gold equivalent to  $6660-7104 in 4-Nov-2010 USD.
Title: Re: Ten Dollars!
Post by: J Thomas on November 04, 2010, 02:14:41 pm
This is shocking! Little Babette stole a whole ten dollars from her parents!

Of course, stealing is shocking. And I cheated a little when I said that. I didn't mean ten dollars in today's money.

And so in today's money, I suppose that is well over a hundred dollars. A pre-1933 dollar was worth approximately 15.3 grams of gold.

However, while using gold as currency in an AnCap society on Earth would make sense today, I would have thought that gold would be so common as to be almost worthless out among the asteroids - even if it's still a very useful metal for electrical contacts.

The belt probably doesn't have any gold from earth -- why would it get shipped up?

And it might often be more practical not to refine small quantities out of other metals in the belt. On earth one way is it dissolves in seawater etc, then melted with silicates, and extruded through cracks in other rock. Easy to separate gold from quartz. Maybe not so easy to separate gold from nickel-iron.

The value of gold today might be less relevant than the value of gold in 13th century china.

She said she wasn't sure she could pay it back, and Reggie looked shocked. That's two clues that it might add up to a lot.

Say it amounted to a significant amount of money today. Say, $50,000. Why was that much available for her to steal over a period of a few years? Why didn't anyone notice? What did she do with it?
Title: Re: Ten Dollars!
Post by: jamesd on November 04, 2010, 04:34:42 pm
This is shocking! Little Babette stole a whole ten dollars from her parents!

Of course, stealing is shocking. And I cheated a little when I said that. I didn't mean ten dollars in today's money.

And so in today's money, I suppose that is well over a hundred dollars. A pre-1933 dollar was worth approximately 15.3 grams of gold.

However, while using gold as currency in an AnCap society on Earth would make sense today, I would have thought that gold would be so common as to be almost worthless out among the asteroids - even if it's still a very useful metal for electrical contacts.

Over the past several thousand years, gold has roughly retained its value - improved technology for extracting gold being matched by increased monetary demand for gold.  Its labor value has fallen considerably, but its value in goods has remained roughly constant - our ability to produce goods improving at roughly the same speed as our ability to produce gold.

Today, 150gau is worth around $4000, which is a lot of stealing for a little kid.

The depicted society has a much higher standard of living, but on the other hand, much higher monetary demand for gold, since they seem to rely largely on actual gold coins, rather than bits of paper representing promises to deliver gold, so it is reasonably plausible that 150gau might be roughly as much to a kid in the depicted society, as a kid in our society
Title: Re: Ten Dollars!
Post by: SandySandfort on November 04, 2010, 06:29:17 pm
150 gau is not worth $10, $4000 or $50,000. Apparently, only NeitherRuleNorBeRuled had the good sense to actually look it up. (Kudos, NRNBR.) Just assume for the purpose of this exercise, that the kid stole the equivalent of about 7 grand in today's dollars.

For those of you who would like to observe the inflationary destruction of the dollar, you can check this site, and its sister sites, to see the price of precious metals go asymptotic:

   http://goldprice.org/gold-price-per-gram.html
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 04, 2010, 08:06:42 pm
150 gau is not worth $10, $4000 or $50,000. Apparently, only NeitherRuleNorBeRuled had the good sense to actually look it up. (Kudos, NRNBR.)

Thanks, Sandy.

The thing that really surprised me was that those who frequent this forum don't seem to be gold investors.  That's somewhat disappointing (but perhaps to my advantage  8))  since I'd like to see more AnCap prosperity, and it's difficult to find investments that even keep up with the rapidly eroding currency in the US (and many other places).

Then again, maybe they are, and just don't want anyone to know.  ;D
Title: Re: Ten Dollars!
Post by: ZeissIkon on November 04, 2010, 08:10:53 pm
I can easily see how a kid, in a society where "we do what we can, when we can", could rack up 150 grams over three years -- that's just about a gram a week, or less than 150 mg (equivalent to about $6.50) per day, pretty easily skimmed if she had jobs where the cash wasn't watched to the milligram.  And assuming a continued near-constant ratio of goods to gold, that's within the range of a moderate espresso drink habit (2-3 drinks a day), a weakness for arcade video games (ten or twelve plays a day), or a secret addiction to weekly pedicures -- all stuff an eleven year old girl might get involved in, and find it hard to quit.
Title: Re: Ten Dollars!
Post by: J Thomas on November 04, 2010, 10:05:40 pm
150 gau is not worth $10, $4000 or $50,000. Apparently, only NeitherRuleNorBeRuled had the good sense to actually look it up. (Kudos, NRNBR.) Just assume for the purpose of this exercise, that the kid stole the equivalent of about 7 grand in today's dollars.

For those of you who would like to observe the inflationary destruction of the dollar, you can check this site, and its sister sites, to see the price of precious metals go asymptotic:

The value of gold in the USA in current US dollars has nothing to do with the value of gold in the asteroid belt a long time from now.

But for your story you can set it however you want.
Title: Re: Ten Dollars!
Post by: SandySandfort on November 04, 2010, 11:34:35 pm
The value of gold in the USA in current US dollars has nothing to do with the value of gold in the asteroid belt a long time from now.

Actually, it does. A gram is a gram is a gram. What changes is the dollar, yen, euro or any other fiat currency. Just as there is no such thing as different gold prices in different countries, there will be no difference in the value of gold anywhere in the future solar system. The likelihood of tons of new gold being found, is essentially non-existent.

But for your story you can set it however you want.

Exactly, but do you know why it is what it is? It is a convention in science fiction to make "credits," "tokens," scrip or whatever "space money" to be in parity with whatever dominant currency exist when the story is written. The reason this is done is obvious. So too, with gold or silver. Unless you are writing a story in which the value of the currency is a serious plot element, you just KISS, by assuming that the value of the asset is close to what it is now.
Title: Re: Ten Dollars!
Post by: quadibloc on November 04, 2010, 11:57:44 pm
It is a convention in science fiction to make "credits," "tokens," scrip or whatever "space money" to be in parity with whatever dominant currency exist when the story is written. The reason this is done is obvious. So too, with gold or silver. Unless you are writing a story in which the value of the currency is a serious plot element, you just KISS, by assuming that the value of the asset is close to what it is now.
Makes sense. Sometimes, for greater realism, the credit might be worth 53 cents in current currency or $2.59, or money could be used so little in the story that it wouldn't really matter if a credit was 10 cents or 10 dollars.

But making currency a plot element makes sense. Thus, one could have an economy in which there are two currencies. A soft currency - called "credits" - which is what the proles get paid in for their jobs, and a hard currency - "dollars", which are worth gold at the pre-1933 rate. The proles get Foreign Exchange Ration Coupons, paid for by the taxes paid by the people with good export-oriented jobs, that let them buy bananas with credits as if they had dollars (not at 1 credit = 1 dollar, but at a rate somewhat better than the free-market exchange, from 2x to 10x).

I would expect that among asteroid miners, non-monetary gold would be dirt cheap. But space transport would still be too expensive to make it worth selling to Earth, where gold is expensive. But a gram of gold could be valuable still, if relations with Earth were amicable, and a "gram" meant not an actual gram of gold, but a credit in an Earth bank for a gram of Earth gold.

Obviously, you can't do it this way in this story.
Title: Re: Ten Dollars!
Post by: dough560 on November 05, 2010, 01:18:17 am
There was a book series about fifteen-twenty years ago describing asteroid mining using reflected sunlight.  The author postulated different materials cracked from an asteroid when the concentrated energy reduced asteroid material to a gaseous state.  Said material would be processed through a centrifuge.  His theory was for every hundred ton of refined steel, there would be X tons of copper, gold, platinum, silver, etc.   Essentially the "monetary" metals were impurities.

This author postulated early shipments of "precious metals" would be greeted with open arms.  Eventually Terran governments would  realize the "precious metals" were depressing world monetary standards and bar their import.

This would not limit "precious metals" used as monetary units off planet.  There's a lot to be said for accepted norms and habit of "accepted value".

Title: Re: Ten Dollars!
Post by: terry_freeman on November 05, 2010, 02:38:15 am
Historically, there have been periods of inflation in hard metals when supply outstripped demand, but not to the degree that is experienced with faith-based paper currency. Spain suffered a terrible bout of inflation due to imports from the Americas, for instance; this contributed to the downfall of a once-great empire.

Over longer periods of time, the technology for gold or silver tends to stay at par with the technology for producing other goods.

In an AnCap society, I'm going to assume at least a "free banking" rule where banks are not protected by law against bank runs, and therefore must have much higher reserve standards than are the norm today. An educated populace would demand - and get - 100% reserve banking. In a 100% reserve banking system, every transaction would be backed 100% by gold, silver, or some other acceptable medium of exchange. This would increase demand for gold and other precious metals. I'd expect a fair number of transactions using actual physical gold, for a variety of reasons: the joy of handling such beautiful coins, a desire to keep bankers honest, a preference for anonymity, and/or to avoid the fees of 100% reserve banks. ( A 100% reserve bank cannot possibly offer "free checking." )

People seldom think about how much pocket change they accumulate over long periods of time. I would guess anywhere between 5 and 10 dollars worth of change per week is typical. In a society where coins are preferred to paper, the amounts might be considerably larger.

If you haven't already done so, you ought to purchase some gold and/or silver. Compare these coins to the cheap junk now distributed, and you'll be amazed.

As I post this, the current price of gold is $44.56 per gram; little Babette made off with a fair bit of change.

100% reserve banking, zero money-from-thin-air, and no taxes would encourage savings - and most people, I suspect, would have substantial savings of tens or hundreds of thousands of grams of gold.
Title: Re: Ten Dollars!
Post by: Tucci78 on November 05, 2010, 04:50:30 am
The value of gold in the USA in current US dollars has nothing to do with the value of gold in the asteroid belt a long time from now.

Actually, it does. A gram is a gram is a gram. What changes is the dollar, yen, euro or any other fiat currency. Just as there is no such thing as different gold prices in different countries, there will be no difference in the value of gold anywhere in the future solar system. The likelihood of tons of new gold being found, is essentially non-existent.

Let's look at microgravity extraction of mineral resources as it will probably be practiced in the asteroid belt, and there begins to be some suspicion that the relative value of any precious metal (relative to finished goods and services, that is) will likely to be nothing remotely near what those metals are worth in the present economy. 

Decidedly non-libertarian SF author Alexis Gilliland wrote a series of novels set in the Rosinante plenum (for which he beat out David Brin in the voting for the 1982 John W. Campbell Award), and in the course of these works he observed - correctly insofar as I recall - that the sorts of very large-scale metals refining that can be managed in a very-low-Torr microgravity setting (employing sunlight focused by enormous mirrors floating in space to heat the metallic masses available for harvest) would blow the hell out of the precious metals market earthside. 

A certain appreciable percentage of any metallic planetesimal in the asteroid belt is going to be silver, gold, and platinum (just to select three of the substances used as "money" in Escape From Terra), and while these percentages are small, the total amounts of readily accessible source materials - and the ready availability of energy out there - is going to result (ceteris paribus) in a whole helluva lot of gold, silver, and platinum entering circulation, substantially devaluing coinage denominated in masses of these metals. 

The value of what Babette the Younger had pilfered over time might not even be equivalent to that of ten Federal Reserve Note substitutes for lawful money of these United States. 
Title: Re: Ten Dollars!
Post by: J Thomas on November 05, 2010, 06:49:28 am
The value of gold in the USA in current US dollars has nothing to do with the value of gold in the asteroid belt a long time from now.

Actually, it does. A gram is a gram is a gram. What changes is the dollar, yen, euro or any other fiat currency. Just as there is no such thing as different gold prices in different countries, there will be no difference in the value of gold anywhere in the future solar system. The likelihood of tons of new gold being found, is essentially non-existent.

The geological processes that concentrate gold, which result in gold strikes where gold is plentiful, will probably not exist in the belt. Unless they happened once upon a time. There could be other processes that concentrate gold. We don't know. In recent years it has been profitable to mine gold from sand in concentrations of one part in a million or less. It's possible to profitably mine a stream bed for a tiny amount of gold, leaving behind of course a mess. Would it be profitable in the belt to remove gold in tiny concentrations alloyed into iron. Not with current technology, but maybe later....

So the supply of gold to the belt would be uncertain.  Probably not much would come from terra, except in the form of thin films plated on equipment.

The demand would be arbitrary, since any amount could used for money, and an increasing amount would be used to make stuff that didn't get recycled right away.

I could have gotten an idea of the value of gold by watching for prices -- how much for a cup of coffee, for a meal at a restaurant, how much was a decent tip,  how much for 20 pounds of oxygen, for a decent hotel room, etc. But I wasn't paying attention.
 
Quote
It is a convention in science fiction to make "credits," "tokens," scrip or whatever "space money" to be in parity with whatever dominant currency exist when the story is written. The reason this is done is obvious. So too, with gold or silver. Unless you are writing a story in which the value of the currency is a serious plot element, you just KISS, by assuming that the value of the asset is close to what it is now.

Values are not really comparable in a place where air is not free and water doesn't run downhill, but still you're right.

And when a character buys a loaf of bread for a nickel, that gives you an idea when the story was written. I was struck by that last week when I took a new look at The Day the Machines Stopped which was reprinted in The Power of Illusion. Two men are arguing over a woman. One of them says, "And you make what, $5000 a year? I make $10,000. I can take care of her better than you can." The other man doesn't answer. He started at $5000 but his worth was quickly recognized and he was up to $6,500, quite a respectable sum.
Title: Re: Ten Dollars!
Post by: bjdotson on November 05, 2010, 08:09:05 am
Heinlein pointed out in one of his books, that the way to get a handle on the local currency is to see how many "tokens" (or whatever) it takes to buy a loaf of Bread. It would be nice to see that in this strip.

As to the gram is a gram is a gram; I really like this. I think the proper way to look at gold is to consider the price at any given time worldwide to be the same. It is the currencies that rise or fall against gold. I think people tend to forget that. Of course, the same can be said for Identical loaves of Bread. Gold has the advantage that it is easier to find identical grams of gold.

The actual worth of gold in this society is more or less irrelevant; the emotional response to the amount stolen is the important part of the story.
Title: Re: Ten Dollars!
Post by: SandySandfort on November 05, 2010, 09:25:44 am
I would expect that among asteroid miners, non-monetary gold would be dirt cheap. But space transport would still be too expensive to make it worth selling to Earth, where gold is expensive. But a gram of gold could be valuable still, if relations with Earth were amicable, and a "gram" meant not an actual gram of gold, but a credit in an Earth bank for a gram of Earth gold.

Obviously, you can't do it this way in this story.

See, http://bigheadpress.com/eft?page=25
Title: Re: Ten Dollars!
Post by: SandySandfort on November 05, 2010, 09:40:53 am
It is the currencies that rise or fall against gold. I think people tend to forget that. Of course, the same can be said for Identical loaves of Bread.

For years, the ECONOMIST has rated the relative value of currencies with their "Big Mac Index." It compares the cost of a Big Mac in different countries. It's done somewhat tongue-in-cheek, but it pretty much reflects other standards of relative value, such as gold. See:

   http://www.economist.com/markets/bigmac/

The actual worth of gold in this society is more or less irrelevant; the emotional response to the amount stolen is the important part of the story.

Double plus plus bingo!
Title: Re: Ten Dollars!
Post by: paddyfool on November 05, 2010, 10:02:59 am
I had been a bit puzzled about the use of grams as gold as currency in an economy based on asteroid mining, given predictions that various single asteroids hold more gold than has been mined in Earth's history, or, indeed could ever be excavated from the Earth's crust (http://news.bbc.co.uk/1/hi/sci/tech/401227.stm).  If these claims are accurate, then being able to harvest just one such asteroid should cause the prices of precious metals to go into freefall, without a huge upswing in demand.  And yes, living in space also gives us much more demand for metals in general... but does it really do so for gold?
Title: Re: Ten Dollars!
Post by: jrl on November 05, 2010, 12:03:25 pm
Somehow, I find the notion of constant value gold a bit hard to swallow.

On the average, the value of gold may be constant, and while the Government has been cooking the books on inflation rates, I don't think there has been 710% inflation since gold was pretty stable in the $280s around the turn of the century.

Now, the Government's claim of 27% inflation since 1999 is obviously bogus,  'cause I've been seeing price rises on things which aren't imported from China more in the realm of 60-100%, and in some cases even higher. (Think health care.)

But gold is subject to speculative bubbles: Think of the price surges in the '80s. . . The current price of gold is factoring in very high inflation expectations. Whether or not that inflation comes to pass remains to be seen.
Title: Re: Ten Dollars!
Post by: quadibloc on November 05, 2010, 01:03:32 pm
See, http://bigheadpress.com/eft?page=25
Ah, I had forgotten that page! And, incidentally, it shows that a gold gram must be a lot of money if two grams rents a hotel room for the night.

Also, while nickel-iron asteroids, like nickel-iron meteorites, do contain lots of platinum, iridium, and gold, I don't think they contain much in the way of silver. But I'm going from memory in saying this, so I could be wrong.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 05, 2010, 01:22:40 pm
I would expect that among asteroid miners, non-monetary gold would be dirt cheap. But space transport would still be too expensive to make it worth selling to Earth, where gold is expensive. But a gram of gold could be valuable still, if relations with Earth were amicable, and a "gram" meant not an actual gram of gold, but a credit in an Earth bank for a gram of Earth gold.

Obviously, you can't do it this way in this story.

See, http://bigheadpress.com/eft?page=25

That's the right idea; unfortunately, hotel room rates on Earth vary to the point (by up to two orders of decimal magnitude)  that it doesn't provide a very good basis for comparison.  In addition, relating it to other "currencies of convenience" (e.g. US Dollars, Continentals), the relative value of the unit measure varies widely even here on Earth.  How much does a "basic" 500g loaf of bread cost  in Dollars (US), Dollars (CDN), Sheckels, Baht,  Dollars (HK), Yuan,  Pesos, and Shillings (Ugandan)?  I'd be quite impressed with anyone here who could answer the question correctly without some research.
Title: Re: Ten Dollars!
Post by: ZeissIkon on November 05, 2010, 03:47:53 pm
Well, yes, hotel rooms vary tremendously, but the kind of hotels business travelers routinely stay in are remarkably consistent in price (even if not in quality) across a pretty broad cross section of the USA.  Overall, putting a near-the-port hotel catering to business travelers at 2 grams a night (equivalent of about $90) pegs the relative ration of gold to goods pretty close to where it is on Earth ca. 2010.  These days, that would include free wi-fi, cable TV, local phone calls, and might include a free breakfast -- similar amenities (relative to current technology) are likely to be essential to a hotel being able to attract guests.

The Big Mac Index is interesting, but it might take too much into account -- European/American white bread (and the ingredients to make it) is less common in, say, Beijing than in Buffalo, beef is significantly less common as a foodstuff in Delhi than it is in Detroit, and there are probably places you can buy a Big Mac where they have to import other ingredients (like the cucumbers to make the pickle particles in the Special Sauce -- or the Sauce itself, more likely).  Same for the loaf of bread index.  Beyond that, there are lots of places that use US Dollars where a loaf of bread costs a lot more than the roughly $1.95 I pay (buying a two-pack at Costco); think of the more remote towns in Alaska, where literally everything that isn't shot by the locals has to come in by plane or, at best, jet boat.  The same is likely true of the Belt; get out a away from Ceres Central and lodgings will run a good bit more than two grams a night (or be a great deal less accommodating -- going from something that resembles a hotel room on Earth or Mars to something more like the Japanese "coffin" rooms, with no change in price).
Title: Re: Ten Dollars!
Post by: Tucci78 on November 05, 2010, 07:12:30 pm
The geological processes that concentrate gold, which result in gold strikes where gold is plentiful, will probably not exist in the belt. Unless they happened once upon a time. There could be other processes that concentrate gold. We don't know. In recent years it has been profitable to mine gold from sand in concentrations of one part in a million or less. It's possible to profitably mine a stream bed for a tiny amount of gold, leaving behind of course a mess. Would it be profitable in the belt to remove gold in tiny concentrations alloyed into iron. Not with current technology, but maybe later....

So the supply of gold to the belt would be uncertain.  Probably not much would come from Terra, except in the form of thin films plated on equipment.

The demand would be arbitrary, since any amount could used for money, and an increasing amount would be used to make stuff that didn't get recycled right away.

I don't think you've got a very good grasp on High Frontier (G.k. O'Neill, 1976)/Third Industrial Revolution (G. Harry Stine, 1979) space-based resource extraction as predicated upon technology which had been current forty years ago

For example, in the almost-hard vacuum and effectively zero gravity prevailing in the volumes of the asteroid belt, zonal refining methods become practicable on a Brobdingnagian scale.

No gravity means that there is no real energy required to turn the mass of impure source material (as is necessary in a tubular zonal refining furnace here at the bottom of a gravity well, which severely limits the amount of stuff that can be refined this way), and the heat source need only be a huge mirror focusing the radiant energy of the sun into a small volume of the rock being processed by a gradual and careful push into and through the hot zone.

There doesn't have to be much monetary metal content in any particular non-carbonaceous hunk of planetesimal in the asteroid belt for that kind of machinery, once created, to run continuously until there is literally no more rock up there to feed into it. 

This means - as Mr. Gilliland had observed in his Rosinante novels - that "The geological processes that concentrate gold" on Terra are simply not relevant to our consideration of what will be the relative scarcities of gold, silver, platinum, or any other metal accessible to us killer apes once mining gets established up there. 

The "functions four" of money depend very much on the relative scarcity of the commodities in which monetary units are denoted.  High availability of any such commodity - whether it is gold or government fiat - is the essence of monetary inflation. 

For this reason, speculative fiction setting a precious metal standard as "a medium of exchange, a unit of account, a standard of deferred payment, and a store of value" in the asteroid belt is shaky as all hell. 
--
Title: Re: Ten Dollars!
Post by: terry_freeman on November 05, 2010, 07:45:56 pm
It may take little energy to melt down an asteroid using "free" solar energy, but there are still the costs of transport from "where the asteroid is" to "where the resources are wanted."

There is also the question of time. Unless you have a truly vast reflecting mirror, you only have a limited amount of solar energy to work with; it's going to take a while to melt down that humongous asteroid. Even if you do have a vast mirror, it will need some work to keep it focused on a tiny band.

It's easy to wave hands and say "theoretically, this should be a trivial problem", it's harder to solve the tough engineering and logistical issues.

Title: Re: Ten Dollars!
Post by: J Thomas on November 05, 2010, 09:00:29 pm
The geological processes that concentrate gold, which result in gold strikes where gold is plentiful, will probably not exist in the belt. Unless they happened once upon a time. There could be other processes that concentrate gold. We don't know. In recent years it has been profitable to mine gold from sand in concentrations of one part in a million or less. It's possible to profitably mine a stream bed for a tiny amount of gold, leaving behind of course a mess. Would it be profitable in the belt to remove gold in tiny concentrations alloyed into iron. Not with current technology, but maybe later....

So the supply of gold to the belt would be uncertain.  Probably not much would come from Terra, except in the form of thin films plated on equipment.

The demand would be arbitrary, since any amount could used for money, and an increasing amount would be used to make stuff that didn't get recycled right away.

I don't think you've got a very good grasp on High Frontier (G.k. O'Neill, 1976)/Third Industrial Revolution (G. Harry Stine, 1979) space-based resource extraction as predicated upon technology which had been current forty years ago.

No, I don't. I claim that this sort of speculation is usually done sloppily, and there's a very strong chance that if I studied it I would find some fundamental flaw that would keep the method from working as claimed. However, that does not matter. There's a strong chance that humans will find a way that works. If O'Neill and Stine got it wrong 40 years ago it won't make any difference in the long run. We will get it right, if there is a workable method.

Quote
This means - as Mr. Gilliland had observed in his Rosinante novels - that "The geological processes that concentrate gold" on Terra are simply not relevant to our consideration of what will be the relative scarcities of gold, silver, platinum, or any other metal accessible to us killer apes once mining gets established up there.

Yes, I was saying that those will not be relevant. People will concentrate scarce metals out of low concentration at some cost, or they will find high concentrations -- like maybe that mass concentration that was the mcguffin in the story just a little while ago. If we find places with high concentrations of gold etc then we will have the chance to figure out how they got concentrated.

Quote
The "functions four" of money depend very much on the relative scarcity of the commodities in which monetary units are denoted.  High availability of any such commodity - whether it is gold or government fiat - is the essence of monetary inflation.

For this reason, speculative fiction setting a precious metal standard as "a medium of exchange, a unit of account, a standard of deferred payment, and a store of value" in the asteroid belt is shaky as all hell.

Agreed. But if you use a commodity, what should it be? If gold is too common or too easily mined then it won't be good and people should pick some other commodity. Steel is not good because it is too common also.

Possibly oxygen? CO2 would be worth less because it takes an effort to convert it to O2. O2 is almost infinitely divisible. I have a good slogan for using O2 instead of Au.  "You can't breathe gold."

But probably oxygen would be too plentiful too.

Of course, lots of different forms of money are in use in the story. Consider for example the Coca Cola tokens. Each token is worth a set amount of Coca Cola. Until somebody cashes them in, they function as loans to the company that makes the cokes. It can pass as many as it wants of them, and it doesn't have to be able to make enough coke in one day to cash them all in that day.... The coke bottler is a bank!

So anyway, yes, if gold is too easy to mine then it will depreciate, and will be a terrible investment choice and an inflating currency. And if it keeps getting used for stuff faster than it gets mined, it will deflate and will be an investment and not much a medium of exchange. Some commodity will best fit all the criteria and will get exchanged a lot.
Title: Re: Ten Dollars!
Post by: quadibloc on November 06, 2010, 12:02:26 am
There is also the question of time. Unless you have a truly vast reflecting mirror, you only have a limited amount of solar energy to work with; it's going to take a while to melt down that humongous asteroid. Even if you do have a vast mirror, it will need some work to keep it focused on a tiny band.
That is a valid point, but for people to understand why it is valid, you actually need to expand on it a little.

The main reason that this could be a problem is that unless one is talking about robots attached to the giant mirrors that build other robots... the issue is how much capital is tied up for how much time in processing an asteroid.
Title: Re: Ten Dollars!
Post by: dough560 on November 07, 2010, 01:15:50 am
The emotional cost of the thefts and the restitution process will be interesting.  Her acceptance of her actions, shows an individual leaving childhood and understanding her responsibilities as an adult.  Her age is irrelevant.
Title: Re: Ten Dollars!
Post by: terry_freeman on November 07, 2010, 09:08:40 am
Quadibloc, you make a good point; this "free" refining process would involve a large amount of capital. Even self-assembling robots represent a large capital investment.

More to the point, when enough capital resources exist to make it possible to extract precious metals for low marginal costs, similar levels of technology will extract all other raw materials; odds are that prices in gold, silver, and other precious metals will continue to track other goods far better than prices denominated in bits of paper or electrons.

It has been said that in Ancient Rome, an ounce of gold could outfit a man with a top of the line robe, sandal, and other finery appropriate to a wealthy Roman. In 1913, an ounce of gold was worth slightly more than 20 paper dollars and could outfit a gentleman with a suit, shirt, tie, shoes, etc. The same ounce can turn the same trick today - but the value of a paper dollar has declined radically.
 
Title: Re: Ten Dollars!
Post by: Karadan on November 07, 2010, 12:53:09 pm
I would expect that among asteroid miners, non-monetary gold would be dirt cheap. But space transport would still be too expensive to make it worth selling to Earth, where gold is expensive. But a gram of gold could be valuable still, if relations with Earth were amicable, and a "gram" meant not an actual gram of gold, but a credit in an Earth bank for a gram of Earth gold.

Obviously, you can't do it this way in this story.

See, http://bigheadpress.com/eft?page=25

Just noticed, he paid 24 oz for rooms that cost 12 g per week.  How long was he expecting to stay?

Edit: or is that his total account?  Seems odd they'd just display that outright.
Title: Re: Ten Dollars!
Post by: terry_freeman on November 07, 2010, 01:06:03 pm
It is strange for the room price to be quoted in grams, and the screen shows ounces. There is not enough information to be sure whether the screen is showing a debit of 24 ounces, or an account balance. Since the clerk says "looks like you came prepared", it may be the total account balance.

I've never run one of these credit/debit terminals, but I think they only give a go/no-go answer to a particular charge. For privacy reasons, I think most customers would prefer not to reveal their account balance to random clerks and cashiers.

Assume two rooms times 12 grams per week, that would be 24 grams per week. There are about 31 grams per ounce. The answer to your hypothetical would be approximately 31 weeks.

I'm guessing that's the cartoon equivalent of a typo. It is likely that "24 grams" was intended.
 
Title: Re: Ten Dollars!
Post by: quadibloc on November 07, 2010, 05:39:51 pm
Just noticed, he paid 24 oz for rooms that cost 12 g per week.  How long was he expecting to stay?
My guess is two weeks and it's a typo.
Title: Re: Ten Dollars!
Post by: SandySandfort on November 07, 2010, 07:35:42 pm
I'm guessing that's the cartoon equivalent of a typo. It is likely that "24 grams" was intended.

It's like herding cats, Terry, like herding cats.  ::)
Title: Re: Ten Dollars!
Post by: Karadan on November 07, 2010, 09:22:47 pm
I'm guessing that's the cartoon equivalent of a typo. It is likely that "24 grams" was intended.

It's like herding cats, Terry, like herding cats.  ::)
Meow?

Just think, now you can go back and correct it and the comic will be that much better :P
Title: Re: Ten Dollars!
Post by: NotDebonair on November 10, 2010, 05:25:32 am
In an AnCap society, I'm going to assume at least a "free banking" rule where banks are not protected by law against bank runs, and therefore must have much higher reserve standards than are the norm today. An educated populace would demand - and get - 100% reserve banking. In a 100% reserve banking system, every transaction would be backed 100% by gold, silver, or some other acceptable medium of exchange. This would increase demand for gold and other precious metals. I'd expect a fair number of transactions using actual physical gold, for a variety of reasons: the joy of handling such beautiful coins, a desire to keep bankers honest, a preference for anonymity, and/or to avoid the fees of 100% reserve banks. ( A 100% reserve bank cannot possibly offer "free checking." )

I would have two questions concerning this:

1)  How (this probably reveals my deep economic ignorance) would the bank make loans or any other profitable investment and still have said 100% reserve?

2) How would the banking public verify the 100% reserve's existence?
Title: Re: Ten Dollars!
Post by: J Thomas on November 10, 2010, 07:06:12 am

I would have two questions concerning this:

1)  How (this probably reveals my deep economic ignorance) would the bank make loans or any other profitable investment and still have said 100% reserve?

I can answer that one. Banks would not be in the business of making loans. However, any of their depositors who want to could lend their money to someone else. Banks might help to coordinate those loans. At least, if you want a loan and your bank connects you with a possible lender, you can be sure that your prospect does have the money.

Quote
2) How would the banking public verify the 100% reserve's existence?

I don't know. There are various possibilities. The bank might let somebody who's generally regarded as trustworthy look at all the money. If the bank is really conscientious, they could treat  your deposits as if they're in a safety deposit box, and always return to you the same coins you deposited. If you mark your coins in subtle ways and then confirm that you always get back the same coins you deposited, then probably everybody else gets back the same coins they deposited too. Whenever you deposit a check they would of course give you the coins and let you deposit them after you've held them.

I kind of like the idea of having webcams looking at all the gold. It doesn't really prove anything but it would probably increase confidence a lot.

If privacy isn't an issue you could have a database showing who each unit of gold belongs to. The database wouldn't have two owners for the same hundredth of a gram of gold, so it would be 100% reserves. If the bank says they have your money but the database doesn't say which money is yours, then they don't really have your money. However, you'd need some way to deal with heap fragmentation. And if you don't want anybody but you to know how much gold you have in the bank, then it doesn't work. If the bank knows who you are before they show you the database, the database could lie to you personally and you'd never know unless you compared notes with the wrong customer.

In general, if you keep depositors' information secret then you have the same problems you'd have proving that a secret ballot election was not rigged. For an open election that's mostly trivial, but for secret ballot it is not.

Remember the giant stone coins of Yap? They sit in one place and don't get moved, and people remember when the ownership of a fraction of one of them changes. They hardly fit common definitions of money, and yet everybody who finds out about them instantly knows that they are in fact money. Gold could be that way. You leave your gold deposited in the bank, and you spend tokens that represent your gold. What keeps it from being fractional reserve is that each token represents a specific location on a specific gold bar. Find two tokens that point to the same gold, and one of them must be counterfeit. How to prevent counterfeiting is an exercise left to the bank.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 10, 2010, 11:28:31 am
How (this probably reveals my deep economic ignorance) would the bank make loans or any other profitable investment and still have said 100% reserve?

I can answer that one. Banks would not be in the business of making loans. However, any of their depositors who want to could lend their money to someone else. Banks might help to coordinate those loans. At least, if you want a loan and your bank connects you with a possible lender, you can be sure that your prospect does have the money.

It's far more likely that banks would be in the business of making loans, given that much of the infrastructure for a 100% reserve bank would also be applicable to a fractional reserve bank.

Rather, one would expect most banks to offer accounts with a set of reserve levels: say 10%, 25% 50%, 80%, and 100% -- the 100% of course requiring the customer to pay for the service, and the lesser fractions providing both greater risk and rates of return.  Their may also be a dimension of risk beyond simply the reserved fraction, since not all loans have the same degree of risk.  Few people would want 100% fractional reserve banking for all their capital for extended periods of time, especially since limited liability public corporations (as we know them) would not exist and hence "stock markets" would be substantially different.
Title: Re: Ten Dollars!
Post by: macsnafu on November 10, 2010, 04:25:25 pm
How (this probably reveals my deep economic ignorance) would the bank make loans or any other profitable investment and still have said 100% reserve?

I can answer that one. Banks would not be in the business of making loans. However, any of their depositors who want to could lend their money to someone else. Banks might help to coordinate those loans. At least, if you want a loan and your bank connects you with a possible lender, you can be sure that your prospect does have the money.

It's far more likely that banks would be in the business of making loans, given that much of the infrastructure for a 100% reserve bank would also be applicable to a fractional reserve bank.

Banks would offer two different types of accounts: demand deposits and time deposits.  These are much like current checking and savings accounts, except...Demand deposits are not loaned out but are part of the bank's reserves, available on demand  (hence the name) by the account holder.  Time deposits, like a certificate of deposit, are loaned out, and interest is paid to the depositor, but the money is not available on demand, because it's been loaned out by the bank.  Much like a cd, the depositor could not access the money for a certain period of time, or possibly they can, but only with a heavy penalty for doing so.   

There's no need for fractional reserve banking.
Title: Re: Ten Dollars!
Post by: ZeissIkon on November 10, 2010, 05:16:04 pm
Even with verifiable (i.e. non-private) 100% reserve banking, there's still risk -- where will the bank find an insurer who can cover 100% of the value of their deposits against robbery or disaster?  Sure, if it's a small bank, they can probably find a bookie who'll give them livable odds -- but then, how do they know they can trust the bookie?  And after all, that's all an insurer is: a bookie who'll cover your bet against yourself at good enough odds to (you hope) be worth the vigorish.

Still, there were banks long, LONG before there were reserve requirements; Medici Florence had a banking system modern in all but issuance of plastic (and of electronic fiat currency) in the 15th century.  Those bankers were lenders, but their loans were backed by depositors (Lorenzo the Magnificent, for instance), as suggested above; those banks were also scrupulously honest, in a world in which making a major deposit feel fleeced or robbed was a death sentence for the bank manager.  I honestly don't recall how they insured against robbery (beyond having the biggest, nastiest bravos in town as lobby guards); it seems to me they did more lending than deposit banking (i.e. they had a few large depositors who gave permission to lend their money in return for keeping it safe).

In most of the rest of Europe in those days, BTW, lending was limited to an ethnic group who could be periodically rounded up and driven out of town, thus repudiating any debts they owned.  The Medici system was a huge improvement -- as long as you kept up with your payments.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 10, 2010, 09:02:35 pm

Banks would offer two different types of accounts: demand deposits and time deposits.  These are much like current checking and savings accounts, except...Demand deposits are not loaned out but are part of the bank's reserves, available on demand  (hence the name) by the account holder.  Time deposits, like a certificate of deposit, are loaned out, and interest is paid to the depositor, but the money is not available on demand, because it's been loaned out by the bank.  Much like a cd, the depositor could not access the money for a certain period of time, or possibly they can, but only with a heavy penalty for doing so.   

There's no need for fractional reserve banking.

There's no reason they might not also offer a time deposit based service, like a CD;  however, there is no reason that they wouldn't offer fractional reserve accounts as well.   Fractional reserve accounts would simply be another option that customers may wish to utilize, and offer a different balance of risk/reward.

There is nothing inherently wrong with fractional reserve banking.  The problem is that most people don't understand it, and hence assume that $X in such an account has a value of $X, when in fact it is somewhat less.

Fractional reserve banking is to money what virtual memory is to memory in an Operating System.  It gives the illusion, for the most part, of a greater amount of actual memory than is physically available on a given computer system.  It is somewhat slower (lower value) than an all real-memory system, and in some -- usually rare -- cases it can fail, with the result generally being a dramatic loss of "supposed memory" by one or more users.  With fractional reserve banking such a rare condition would be a "bank run" with depositors unwilling to wait for the money to become available.

Outside of "embedded systems" (e.g., the computer running your car's power train), most computers use Operating Systems  that implement virtual memory as the default.  Many of them also allow some or all of the memory to be fixed for a given process (running program -- more accurately, address space) such that real memory is always 100% dedicated to it.   In most cases, however, this isn't done because it is inefficient.

Similarly, most banks would reasonably be expected to offer a Fractional Reserve account as the default.  They would also be expected to make provision for some or all of a customer's account-set to be 100% backed.  Most customers would reasonably see that overly large amounts being 100% backed would be inefficient.

The exception in both would be where an unpredictable delay in accessing a memory location/portion of physical capital would be unacceptable.  In computer systems these are known as "real-time" systems.  Such systems explicitly accept the inefficiency in exchange for the guarantee; however these are less common than one might expect.

Title: Re: Ten Dollars!
Post by: wdg3rd on November 10, 2010, 11:02:59 pm

Fractional reserve banking is to money what virtual memory is to memory in an Operating System.  It gives the illusion, for the most part, of a greater amount of actual memory than is physically available on a given computer system.  It is somewhat slower (lower value) than an all real-memory system, and in some -- usually rare -- cases it can fail, with the result generally being a dramatic loss of "supposed memory" by one or more users.  With fractional reserve banking such a rare condition would be a "bank run" with depositors unwilling to wait for the money to become available.


"Oooh!!!  Virtual memory!  Now I can have a really big RAM-Disk!."  (It's not in the New Hacker's Dictionary aka Jargon File maintained by fellow anarchist ESR, I don't recall where I first heard or read it (probably back in the early 80s, when much of what I read (the best part) was edited by David Ahl or Wayne Green, I certainly didn't originate it).  But it's similar to what most current folks in banking and bank regulation seem to think they use.  And of course the investors and consumers who follow along.
Title: Re: Ten Dollars!
Post by: terry_freeman on November 11, 2010, 07:01:09 am
One possibility is that lending banks would act as brokers. You want to park some money for a period of time - say, five years. You agree to lend out your money for a comparable amount of time. The bank puts your funds into a "five year pool".

I believe there are already a few web sites based on similar ideas - they act a go-between. If you want to borrow $5000 for two years, ten or twenty investors take a piece of your loan. They base their decision on whom to lend to upon credit rating, term, interest rate, etc.
Title: Re: Ten Dollars!
Post by: J Thomas on November 11, 2010, 08:00:21 am
How (this probably reveals my deep economic ignorance) would the bank make loans or any other profitable investment and still have said 100% reserve?

I can answer that one. Banks would not be in the business of making loans. However, any of their depositors who want to could lend their money to someone else. Banks might help to coordinate those loans. At least, if you want a loan and your bank connects you with a possible lender, you can be sure that your prospect does have the money.

It's far more likely that banks would be in the business of making loans, given that much of the infrastructure for a 100% reserve bank would also be applicable to a fractional reserve bank.

Banks would offer two different types of accounts: demand deposits and time deposits.  These are much like current checking and savings accounts, except...Demand deposits are not loaned out but are part of the bank's reserves, available on demand  (hence the name) by the account holder.  Time deposits, like a certificate of deposit, are loaned out, and interest is paid to the depositor, but the money is not available on demand, because it's been loaned out by the bank.  Much like a cd, the depositor could not access the money for a certain period of time, or possibly they can, but only with a heavy penalty for doing so.   

There's no need for fractional reserve banking.


If a bank were to have demand deposits, it could get away with quite a lot of fractional-reserve on that, allowing them to loan more. It might be generally agreed that this is a crime.

If a bank lends time deposits, it could use them as fractional reserve also. There is a subtle philosophical difference between the two, but it needn't matter in practice.

Without fractional reserve, a bank couldn't lend from demand deposits, and could only lend timed deposits in a way that balanced out the times. It would be far harder to borrow money.

Is there any way to justify fractional-reserve banking? I think I can make a sort of justification for their results, if not for the particular way they achieve those results.

I'll talk as if our resources are only renewable or non-renewable, and our products are things that are either consumed, or are used without deteriorating.

At any one time, everybody owns whatever they happen to have and they can trade with each other. They can inspect whatever they want to buy and see whether it's really what they want. All fair, no big secrets. Nobody has to buy a pig in a poke. But what if you don't want something now, but you will want something in the future. You could make a future contract -- you promise to provide something the other guy wants then, and he will give you what you want then. Why should you make the agreement now, when neither of you truly knows what you will have to trade then? Why not wait and make the agreement when the time comes for it? Maybe you both have secret information that leaves you thinking you'll get a better deal now?

The worst case is when you have something to trade now, and what you want is a promise for later. You give up something that there is no uncertainty about, something you have right now, and in return you get a promise that might be kept or might not. Often that is still a good deal. If you have extra food, food that will spoil before you'll be ready to eat it, you can give it to somebody else and get a promise they'll give you food later. If they have extra food sometime when you don't have enough, you come out way ahead. And if it's a famine time and they're starving too, it cost you hardly anything to try. But when you get promises for the future, you never know how much they'll be fulfilled.

If you have something to use, that isn't harmed by use, and you're not using it -- why not let somebody else use it? You can get it back when you want it. They could give you promises in exchange for you letting them use your stuff now. And if you have consumables that you don't need, that will go to waste, why not let somebody else have them in return for promises? You have nothing to lose. And you'd rather get promises from the people who're most likely to redeem them.

Money *is* promises. It isn't specific -- you don't know how much it will buy of what you want until you find out. And you won't know what it will buy tomorrow unless you already have a contract for tomorrow. It's a general promise.

Bankers are promise specialists. They are good at deciding who is more likely to fulfill their promises. (And knowing lots of secrets, they can often decide who will be able to fulfill their promises. They can be a tremendous help to your competitors who want to drive you out of business, if they choose to.)

So, you leave promises owed to you with them, because you don't want to use them now. They use them and they decide who gets to use all the stuff that isn't currently being used by it owners. Your promises will still be waiting for you when you want to call them in. And it doesn't really matter to you that they are in the business of selling promises of promises, and their promises-of-promises raise prices for everybody. If you sell more than you buy then that's *good* for you. You collect more promises than you redeem, so when bankers inflate the promise supply ... maybe that isn't so good for you. If there were fewer promises-of-promises going around then your promises would be worth more. But that doesn't matter right now, because you aren't collecting on those promises anyway....

Well, if bankers see that there are lots of people who need stuff, who could redeem their promises if they got the stuff now that would let them make stuff -- stuff that would not be made otherwise because you're sitting on the resources and not using them -- why not create the promises that let those people create prosperity? If they make extra promises and keep them, then by the time you want to collect on your own promises there will be more stuff for you to have. What's wrong with that?

What's wrong is if it doesn't work out. You let bankers lend your promises to people who collect unused resources and make stuff, and then for one reason or another it does not work. They cannot redeem their promises on average, and the bankers come up short. There is not as much to go around when you want to collect. Grrrr.

Like the dot.com bust. A lot of people *believed* that there was a whole lot of money to be made. So they "invested" in stuff that in reality could not make money. The investments were gone. The loans could not be paid.

Or the housing bust. People were clueless how to make valuable stuff, but they thought their houses would keep getting more valuable, and the banks went along with it. As long as the houses kept selling for more, everybody had more promises to spend and to invest in better houses that would keep being worth more. Until there was nobody left to buy the cheap houses, so they had to find sucker who really could not redeem their promises to buy the cheap houses so the people who already had those could move up to the next level. Everybody should have known that it would fail. But each month they thought it wouldn't fail that month, so they could get a little more out of it. A massive failure of imagination, by people who saw no better alternative.

Was that because of bankers? They certainly had their part in it. But -- if we had some fixed number of promises, would that help? In a severe depression people find themselves stuck with the amount of cooperation, the amount of trading surplus stuff for promises, that they would have had without banks in the first place. It's like having a car engine that cuts out every now and then. That's bad, but if the alternative is an engine that cuts out *all the time*....

Fractional reserve banking might be getting us some good results. i wouldn 't at all mind finding some other approach to getting those same good results, or better ones.
Title: Re: Ten Dollars!
Post by: macsnafu on November 11, 2010, 09:06:03 am

Banks would offer two different types of accounts: demand deposits and time deposits.  These are much like current checking and savings accounts, except...Demand deposits are not loaned out but are part of the bank's reserves, available on demand  (hence the name) by the account holder.  Time deposits, like a certificate of deposit, are loaned out, and interest is paid to the depositor, but the money is not available on demand, because it's been loaned out by the bank.  Much like a cd, the depositor could not access the money for a certain period of time, or possibly they can, but only with a heavy penalty for doing so.   

There's no need for fractional reserve banking.

There is nothing inherently wrong with fractional reserve banking.  The problem is that most people don't understand it, and hence assume that $X in such an account has a value of $X, when in fact it is somewhat less.

I would agree that there's nothing wrong with FRB *if* fractional reserve notes can be easily identified.  Otherwise people receiving fractional reserve notes might think that they are receiving fully-backed notes.  If FRB money can be identified, then people have the option of not accepting it or taking the discount into consideration.   

But this raises a question: if, for example, a person tries to spend a fractional reserve note that's 50% covered, and the receiver discounts the face value of the note by 50%, then what is the point of having fractional reserve notes?  The only advantage of FRB is creating more "liquidity", or money out of thin air, and if the money out of thin air is discounted by receivers to nothing, then there's no reason to create money out of thin air.  It's only useful if you can persuade or defraud people out of that discount.
Title: Re: Ten Dollars!
Post by: J Thomas on November 11, 2010, 10:23:56 am

There is nothing inherently wrong with fractional reserve banking.  The problem is that most people don't understand it, and hence assume that $X in such an account has a value of $X, when in fact it is somewhat less.

I would agree that there's nothing wrong with FRB *if* fractional reserve notes can be easily identified.  Otherwise people receiving fractional reserve notes might think that they are receiving fully-backed notes.  If FRB money can be identified, then people have the option of not accepting it or taking the discount into consideration.

Say that you are buying a house in a place where there are hurricanes. Ttwo houses, one you buy as-is, one has insurance -- if your house is destroyed by a hurricane they rebuild it. How much more should you pay for the house with the insurance?

Bank failures in which people lose their bank accounts are rare -- kind of like hurricanes. And they tend to happen in big clusters -- kind of like hurricane damage. That insurance is worth something, but how much?

If the same bank is doing 100% reserves for some things but fractional reserves for others, the big problem comes when the bank is -- bankrupt. What if you find out they have no reserves left? It's a crime and you might get them punished, but your money is gone.

Better 100% reserve banks, or fractional reserve banks, but not both. Certainly not a single bank pretending it does both.

So, a 100% reserve bank. Unannounced inspections. They count the cash and they check the books that show how much depositors are owed. If it isn't cash but just money on the books, there's nothing to keep the bank from keeping 2 sets of books except the honesty of the employees. If it is gold coins, still what keeps them from having secret books with the real accounts?

I think the best and simplest way to make it work is gold coins, and public records. If everybody's bank accounts are on the public internet, there are no secret books. What the bank owes you is what everybody knows the bank owes you.

Alternatively, we could have a trusted organization that does banking, one that we can trust not to do fractional reserves, and that single organization would be so trusted that no other bank could compete. We could turn banking into a monopoly run by the federal government. 

 








;) ( I thought that joke was hilarious. Hope nobody took it too seriously.)
Title: Re: Ten Dollars!
Post by: terry_freeman on November 12, 2010, 03:52:13 am
Fractional Reserve Banks don't really deliver as much as promised; they're based upon an effort to "fool all the people all the time", since every FRB is fundamentally insolvent; it is never possible for all the depositors to have all their deposits at the same time.

As someone mentioned, if people could distinguish fractional notes versus 100% notes, fractional notes would be discounted sharply. This used to be the case when gold coins circulated as money - in inflationary times, paper prices would go up, gold prices would remain stable. California used gold coins during the War Against Southern Independence, and the competing Greenbacks were discounted.

FRBs exist because governments and "nobles" or "politicians" really hate to live within their means. For the rest of us, "liquidity" is not as important as one might suppose. I have not borrowed a single dime for about five years now - paying cash for everything, including big-ticket purchases such as computers and electronics. This eliminates interest costs and encourages more careful shopping. I am told that, where homes are usually purchased with cash, housing prices are much more affordable. As for "liquidity", it's just a matter of increasing one's preference for savings; it does not take long to build enough of a "rainy day fund" to manage life's little emergencies. My daughter and son-in-law paid for the birth of their fifth child with cash - and their income is below median income in the US of A. I used to live next door to a horse breeder who raised big draft horses; many of his customers were Amish farmers who paid large sums with suitcases full of cash.
Title: Re: Ten Dollars!
Post by: Apollo-Soyuz on November 12, 2010, 06:20:40 am
Quote from: terry_freeman

Fractional Reserve Banks don't really deliver as much as promised; they're based upon an effort to "fool all the people all the time", since every FRB is fundamentally insolvent; it is never possible for all the depositors to have all their deposits at the same time.

Assuming the FDIC does their job, that's just not true.

Let's say you deposit $1000 and the bank keeps $100 (as fractional reserve) and loans me $900 to buy equipment (let's say a pressure washer) to start a business. As long as the loan is secured by the equipment (And let's assume I put in $250 as a down payment and borrowed  $900), and as long as the equipment, sold used, is worth more than the outstanding balance on the loan, everything is OK. If you need your $1000 back, the bank can raise money by selling the loan. If I stop paying, the bank can seize and sell my equipment.

If the bank makes too many bad loans where the collateral is not worth the outstanding balance, the FTIC is suppose to step in, before the bank itself is insolvent, and take the bank over. In this case, the stockholders get hosed when the bank fails, but all the depositors are OK.  (usually the FTIC will sell all the loan paper on the open market, and then transfer all the deposits to another institution. Any profit left from the sales after paying off the depositers would then be split between all the stockhoders by shares. Of course, this assumes that the FTIC steps in before the bank gets insolvent like they are suppose to, they usually don't, and have to make the loss out of their own funds)

Of course, who watches the watchmen? When the banks make too many NINJA loans (or hell, too many no money down, 30 year loans to people not qualified) and the FTIC does not do it's statuary duty to step in to close the insolvent institutions, and when the failed banks get massively rewarded for their failure by a big government bailout, we are left with the mess we are in now.
Title: Re: Ten Dollars!
Post by: J Thomas on November 12, 2010, 07:26:16 am
Fractional Reserve Banks don't really deliver as much as promised; they're based upon an effort to "fool all the people all the time", since every FRB is fundamentally insolvent; it is never possible for all the depositors to have all their deposits at the same time.

A bank is a going concern, until it isn't. Banks started out as a sort of continuing ponzi scheme, and may have evolved to do some useful functions. Just as governments evolved out of robber gangs, to the point that they arguably do some good now and a society that didn't have one would have to create new ways to do the good things they do ....

It bothers me that banks seem to concentrate the wealth a whole lot. A bank can make a whole lot of money for awhile, and then when it fails its assets (unpaid loans etc) tend to go to surviving banks. I expect that the fraction of the nation's wealth that's owned by banks tends to go up day by day and month by month, in booms and in busts. So it seems to me that whatever good banks may do for the rest of us, it costs too much.

Quote
As someone mentioned, if people could distinguish fractional notes versus 100% notes, fractional notes would be discounted sharply. This used to be the case when gold coins circulated as money - in inflationary times, paper prices would go up, gold prices would remain stable. California used gold coins during the War Against Southern Independence, and the competing Greenbacks were discounted.

Sure. And in inflationary times, people traded with inflating greenbacks anyway, because they had them. And they tended not to trade with gold coins both because there weren't enough of them, and because they preferred to pass on the inflationary greenbacks first and keep their gold to use later. Until the inflationary money is inflating so fast it's an inconvenience, people prefer to pass it instead of gold. I'd expect it to go the same way with banknotes. Some banknotes would be discounted more than others, and the best of them wouldn't be discounted much. Because you can go in and get your gold now, if you care, and there's no problem doing it. Hypothetically if everybody did it at once there would be a problem, but that's like the hypothetical that a ship will capsize if all the passengers rush over to the same side. It doesn't keep people from getting onto ships.

Quote
FRBs exist because governments and "nobles" or "politicians" really hate to live within their means. For the rest of us, "liquidity" is not as important as one might suppose.

Like government, banks have inserted themselves so thoroughly into the system that there is no data about how to run a modern economy without them. So for example a public corporation that retained its earnings to build up funds for a big new project, would become a candidate for a hostile takeover. The argument is that by building up cash it is being fat and lazy, and a corporate raider who uses those funds to buy the company and then load it up with junk bonds is doing the nation a favor. It's safer for competent management to distribute the profits to stockholders or buy back stock or hide the money somehow, and take out loans for expansion. The rules of the game are designed to favor banks.

Quote
I have not borrowed a single dime for about five years now - paying cash for everything, including big-ticket purchases such as computers and electronics. This eliminates interest costs and encourages more careful shopping. I am told that, where homes are usually purchased with cash, housing prices are much more affordable. As for "liquidity", it's just a matter of increasing one's preference for savings; it does not take long to build enough of a "rainy day fund" to manage life's little emergencies. My daughter and son-in-law paid for the birth of their fifth child with cash - and their income is below median income in the US of A. I used to live next door to a horse breeder who raised big draft horses; many of his customers were Amish farmers who paid large sums with suitcases full of cash.

That sounds very good. And yet many people get stuck with credit card debt. They pay on it every month but never get free of the interest. It's very hard to get out of that trap once you're in it, and when a fraction of your paycheck goes to pay debts each month then any emergency puts you deeper in debt.

There was a time when we had a small loan "industry". If you needed money, you went to them and they decided whether to trust you. They gave you a lump sum and you paid it back in installments, at a total interest rate of around 24% per year. (The interest of 12% was calculated on the whole sum, but on average you kept the principle half the time you were paying for it.) If there were no small loans then people would wind up dealing with loan sharks who might charge as much as 20% per week.

But it turned out cheaper to just give everybody some credit, and then give no more to the ones who abuse it. People will try very hard to protect their credit ratings. Much cheaper to lose a little when a customer loses his credit than to pay experts to guess which loans will go bad. So a citizen with a tarnished credit rating will go to great lengths to polish it. Take out small loans he doesn't need and pay them back with interest to show he's dedicated to being a good debtor....

So on the one side we have shining examples like you, who give people good advice about how to manage their finances. On the other side we have a whole lot of resources designed to train people to stay in debt their whole lives. Which side is winning on average?
Title: Re: Ten Dollars!
Post by: ZeissIkon on November 12, 2010, 05:20:15 pm
Let's say you deposit $1000 and the bank keeps $100 (as fractional reserve) and loans me $900 to buy equipment (let's say a pressure washer) to start a business.

Actually, I was taught it was much worse than that, in a fiat currency economy like that of the USA ca. 2010.  Customer Abel deposits $1000 (along with another 99 like him -- this stuff doesn't work unless there's enough of it that statistical behaviors overtake random chance); the bank keeps that whole $1000 as reserve, and then lends out $9000 to Customer Baker (again, multiplied by 100) -- actually, probably distributed among customers Baker, Charlie, David, Edward, and Fiona.  This, I was taught (in high school economics, back around 1977-1978 time frame) is how the banks create money -- and, in real economic terms, this is how the banks destroy the economy, requiring a bail-out from FDIC when they find out that as few as 5% of those loans are no good and start trying to take back and resell the collateral.  If you try to resell a bunch of pressure washers, you'll wind up writing off a big chunk of the bad debt because there just isn't enough market to absorb all those pressure washers (nor was there enough market to support all those pressure washing businesses, which is why the bank now owns a bunch of slightly used pressure washers worth approximately scrap metal value).  Problem is, if you do the same thing with houses, you depress the housing values -- which causes banks to start calling loans, because the collateral is no longer worth more than the debt it secures, which simply accelerates the decline in values.  Now, we're not talking about a bunch of pressure washers; we're talking about 2007-2008, when the "housing bubble" started to burst.

If banks hadn't had every dime they took in lent out nine times over, losing 5% of their home loans to defaults wouldn't have caused a panic -- in fact, they'd probably have been willing to let most of the loans ride if reselling them hadn't been the only hope of keeping the bank out of bankruptcy.  Problem is, reselling them just ensured all the banks wound up in the same boat, by knocking 20% or more off the value of all homes.  Next thing you know, it's 2009 and one American in ten has lost his job, with half those still out of work six months later -- all because, in the end, the banks were lending out, not 90% of what they took in deposits, but nine times their deposits, "creating" money like there's no tomorrow (which is the only way this scheme would look halfway sane).
Title: Re: Ten Dollars!
Post by: jamesd on November 12, 2010, 09:19:35 pm
Quote from: terry_freeman

Fractional Reserve Banks don't really deliver as much as promised; they're based upon an effort to "fool all the people all the time", since every FRB is fundamentally insolvent; it is never possible for all the depositors to have all their deposits at the same time.

Assuming the FDIC does their job, that's just not true.

Our fractional reserve system has gradually transitioned to government fiat lending system.  Most mortgages are today owned by the government - the result of the fractional reserve system imploding in the manner described by terry_freeman  during the period 2005-2007

In a fractional reserve system based on gold rather than government fiat, the implosion would be terminal, and the remedy would be to hang the bankers.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 12, 2010, 09:49:37 pm
Fractional Reserve Banks don't really deliver as much as promised; they're based upon an effort to "fool all the people all the time", since every FRB is fundamentally insolvent; it is never possible for all the depositors to have all their deposits at the same time.

While current FRBs don't go out of there way to explain how they work to customers (i.e., that in exchange for interest payments, there is no guarantee that the value represented in their FR account is redeemable "at will", although that will generally be the case), that is a far cry from an effort to "fool all the people all the time".  That's an error often propagated by opponents to Fractional Reserve Banking.  Once one understands how they work, they make a lot of sense.  The question then becomes one of assessing the risk vs. the reward.

Quote
As someone mentioned, if people could distinguish fractional notes versus 100% notes, fractional notes would be discounted sharply. This used to be the case when gold coins circulated as money - in inflationary times, paper prices would go up, gold prices would remain stable. California used gold coins during the War Against Southern Independence, and the competing Greenbacks were discounted.

What reason would a bank (or potential customers) have for issuing/purchasing Fractional Reserve Notes, other than perhaps as an investment instrument?  The notes that a bank might issue, for example as a loan, would be fully backed, or the gold itself would be loaned.  The fraction agreed to between the depositing customer and the bank would, of course, remain with the bank (or their agent; for example, a bank might contract out gold storage to a third party which specializes in this). 

If the bank were to issue notes that weren't fully backed either to depositors making a withdrawal or to borrowers taking out a loan, that would, of course, be fraud, and no one is arguing with that.

Quote
FRBs exist because governments and "nobles" or "politicians" really hate to live within their means. For the rest of us, "liquidity" is not as important as one might suppose. I have not borrowed a single dime for about five years now - paying cash for everything, including big-ticket purchases such as computers and electronics. This eliminates interest costs and encourages more careful shopping. I am told that, where homes are usually purchased with cash, housing prices are much more affordable. As for "liquidity", it's just a matter of increasing one's preference for savings; it does not take long to build enough of a "rainy day fund" to manage life's little emergencies. My daughter and son-in-law paid for the birth of their fifth child with cash - and their income is below median income in the US of A. I used to live next door to a horse breeder who raised big draft horses; many of his customers were Amish farmers who paid large sums with suitcases full of cash.

There is no inherent connection between FRBs and government; Governments, of course, tend to get involved with FRBs as they do with any other form of business, because they can.

Nor is there any assumption that most folks would tend to use credit on a regular basis.  While short term and very short term credit (e.g., running a short term tab that is resolved daily or weekly -- an extreme example would be the model used in a Restaurant, where the diners generally borrow the value of the meal until its end) is not unlikely to be that uncommon, any significant unsecured debt I would generally expect to be difficult and quite expensive to come by.  The most common form, I would expect, would be business loans for capital costs; in EFT a miner might take out such a loan for equipment purchase or rental backed by a demonstrated valuable claim that the business owners need to work said claim.

Finally, it's worth noting that there would be no reason for a bank not to offer Fractional Reserve accounts.  It provides a means for depositors to profit from their currently unused capital at a modest and controlled risk level (perhaps with different levels of risk being available), or at the very least minimize the cost of storage of that capital.  I hasten to add that it is unlikely that physical gold itself would be the primary form of transfer (rather than paper or electronic conveyance) given that the very act of carrying and transferring this gold will result in some degree of loss due to friction over time.
Title: Re: Ten Dollars!
Post by: jamesd on November 12, 2010, 11:11:27 pm
Just as governments evolved out of robber gangs, to the point that they arguably do some good now and a society that didn't have one would have to create new ways to do the good things they do ....

I read old books, and my strong impression is that the best government were robber gangs, and they have been going downhill ever since.

Government originated in piracy and brigandage, and the best government was that of the original pirates and brigands.

All organizations tend to fall apart.  It is simply difficult to have a large bunch of people efficiently coordinated.  It is hard to get a large group of people to work together such that the group has an intelligence that is not grossly inferior to the individuals that compose it. Organizations that are actually effective originate in intense competition, and sooner or later are apt to decay - Dilbert, red tape, the Peter Principle, Parkinson's Law, etc.

Absent intense competition, they decay very badly indeed.

Government originates in a stationary bandit, a bandit king, a bandit so successful he deters or exterminates all competition.  He now has an incentive to merely shear the sheep, rather than flay them.

So when the bandit is sufficiently successful, he becomes a good King.

The government at first consists of little more than the bandit himself.  Taxation consists of him suggesting that the eminent give him and his boys land and money, thus taxes, though capricious and erratic, are quite low. Laws are few, verging on nonexistent, but enforced with brutal efficiency, the main law being that no one else does any banditry.

Over time bureaucrats, laws, taxes, quasi governmental organizations, and regulations multiply like vermin.  Eventually, laws, taxes and
meddling bureaucrats become a serious burden, and the bureaucrats face the need to persuade everyone that a horde of bureaucrats is a good thing.

The left is the bureaucracy's PR apparatus - a collection of government  sock puppets. Its mission is to persuade us that six hundred pounds of fat is a healthy and handsome physique, and that government has never been better, that more laws are good for you, the government is here to help you, and more government will help you more.  Thus from time to time the story about what government is good for changes, yet the central theme, that government is good for you, never changes.

The bureaucracy is threatened from below from the people, and from the side by the army.  Thus the left hates the army and hates the people.

The pattern of colonialism was that the colonists were bandits and pirates, who in due course became stationary bandits.  European stationary bandits generally did a much better job that the preceding native stationary bandits, or the subsequent home country European bureaucrats, and were corresponding popular, and when these bold and cheerfully murderous bandits were replaced by bureaucratic little men, they were much missed, even though the bureaucrats implemented all sorts of reforms intended to benefit and uplift the natives, which reforms were seldom appreciated.

It was better for someone very far from the metropolitan center to be ruled by a local illiterate cannibal rapist despot than an Oxbridge educated expert located in London - the success of colonialism was due to brigands on the spot, such as Rhodes and Raffles, and not due to benevolent bureaucrats in London, the success of colonialism was due to replacing local stationary brigands who were apt to be naked rapist cannibals, with local stationary brigands who were cultivated educated westerners who promoted science and economic freedom.  Colonialism turned bad when London took charge of it.  So to this extent I support Mencius Moldbug's divine right program.  The success of colonialism prior to 1830 indicates that the Mencius divine right program is a lesser evil than democracy.

Title: Re: Ten Dollars!
Post by: jamesd on November 13, 2010, 12:15:49 am
What reason would a bank (or potential customers) have for issuing/purchasing Fractional Reserve Notes, other than perhaps as an investment instrument? 

1:  Assume a gold standard and assume honest fractional reserve banks, who keep their customers informed both of their solvency and their liquidity, their maturity mismatch, and have a contract specifying how they will fairly treat their customers in a liquidity crisis.  Then customers might go with them because they pay interest, while 100% reserve banks do not pay interest, and have lots of check transfer charges.

2.  Assume a gold standard and crooked fractional reserve banks, who mislead their customers as to their solvency and liquidity, and have no plan agreed as to how they will fairly treat their customers in a liquidity crisis.  Then people bank with them because they are suckers.  In due course, a maturity crisis ensues, which swiftly turns into a solvency crisis.  There is a run on the banks, and those last to show up are out of luck.
Title: Re: Ten Dollars!
Post by: paddyfool on November 13, 2010, 08:53:42 am
@Jamesd,

What are you basing colonialism being good news for the colonised on?  The experience of Native Americans?  Of Africans?  Of South Asians, East Asians, Australian Aborigines, or even the Irish?  I really don't see it, myself.

Independence, by contrast, has been a mixed bag, with extremes ranging from basket cases (the Democratic Republic of the Congo) to countries going from third world to first (Singapore, which in 1965 was viewed as a hopeless basket case itself).  But there are plenty more success stories.  Whereas, under colonialism, even once great countries stagnated (http://www.gapminder.org/videos/hans-rosling-asias-rise-ted-india/).
Title: Re: Ten Dollars!
Post by: jamesd on November 13, 2010, 02:29:08 pm
@Jamesd,

What are you basing colonialism being good news for the colonised on?  The experience of Native Americans?  Of Africans?  Of South Asians, East Asians, Australian Aborigines, or even the Irish?  I really don't see it, myself.

Well I grant you the North American natives and the Australian aboriginals, but you have read a version of history as ludicrously and grotesquely falsified as Winston Smith's account of capitalism in "1984".

Observe what happened in the Congo and in Rhodesia.  That was decolonization.  Colonization was the pretty much the same thing in reverse.  In the Congo, before colonization, they were eating each other.  After decolonization, they swiftly went back to eating each other.

To see colonization as it really was, read sources from the time, especially those before 1830 and not too long after.  Moderate falsification sets in in 1830 or thereabouts, and massive falsification, with today's political correctness, sets in in 1890.  For example we get the first version of "ebonics" - that black dialect was not a decayed and garbled version of white language, but a perfectly correct and grammatical language of its own, with rules different from, but just as valid as, standard English - which doctrine was eagerly embraced, and enforced from on high, without regard for whether it was true or false, with the same firm disregard of evidence and violent response to doubt that we see with global warming - any evidence on the issue being obliterated by the forceful measures applied to propagate the faith and eradicate doubt by any means necessary.

I particularly recommend "Translations from the Hakayit Abdullah" published 1874

Independence, by contrast, has been a mixed bag, with extremes ranging from basket cases (the Democratic Republic of the Congo) to countries going from third world to first (Singapore, which in 1965 was viewed as a hopeless basket case itself). 

Singapore was a basked case because of the collapse of colonialism:
Quote from: Lee Kuan Yew
Singapore was not a natural country but man made, a trading post the British had developed into a nodal point in their worldwide maritime empire.  We inherited the island without its hinterland, a heart without a body.

Quote from: Lee Kuan Yew
Indonesia was confronting us and trade was at a standstill.  The Malaysians wanted to bypass Singapore and deal direct with all their trading partners, importers, and expoerters, and only through their own ports.  How as an independent Singapore to survive when it was no longer the center of the wider area that the British once governed as one unit?

It was a basket case because it was expected to fall to the political forces that were making everything around it basket cases - to those that Lee described as anticolonialist fanatics.

Whereas, under colonialism, even once great countries stagnated (http://www.gapminder.org/videos/hans-rosling-asias-rise-ted-india/).

India is rising now, but it was not colonization that kept it down, for decolonization was followed by forty years of stagnation, decay, and poverty.

India was a suppurating wreck when the colonialists arrived.  How do you think it was conquered by an armed book keeper with a handful of troops?  It had been a great civilization before the Muslim conquests, but under the Muslims, had forgotten everything, mathematics and steel alike.
Title: Re: Ten Dollars!
Post by: paddyfool on November 14, 2010, 02:45:55 am
Observe what happened in the Congo and in Rhodesia.  That was decolonization.  Colonization was the pretty much the same thing in reverse.  In the Congo, before colonization, they were eating each other.  After decolonization, they swiftly went back to eating each other.

The DRC and Zim are interesting cases, because of being among the few countries to go backwards after the colonialists left. 

In the DRC, a hefty chunk of blame can be ascribed to the Belgians' unwillingness to allow the people they ruled any access to education (when they left, there were about a dozen literate indigenous men in the country).  Of the rule of brutality, by And a further chunk of blame can be divied out to the foreign powers who installed Mobutu Sese Seko. 

In Zimbabwe (and I use the term advisedly, to differentiate from Zambia, which was also part of the old Rhodesia), it is indeed a story of gross misrule.  But it is, at the same time, an exception in the present day. 

Independence, by contrast, has been a mixed bag, with extremes ranging from basket cases (the Democratic Republic of the Congo) to countries going from third world to first (Singapore, which in 1965 was viewed as a hopeless basket case itself).

Singapore was a basked case because of the collapse of colonialism:
Quote from: Lee Kuan Yew
Singapore was not a natural country but man made, a trading post the British had developed into a nodal point in their worldwide maritime empire.  We inherited the island without its hinterland, a heart without a body.

Quote from: Lee Kuan Yew
Indonesia was confronting us and trade was at a standstill.  The Malaysians wanted to bypass Singapore and deal direct with all their trading partners, importers, and expoerters, and only through their own ports.  How as an independent Singapore to survive when it was no longer the center of the wider area that the British once governed as one unit?

It was a basket case because it was expected to fall to the political forces that were making everything around it basket cases - to those that Lee described as anticolonialist fanatics.

Whereas, under colonialism, even once great countries stagnated (http://www.gapminder.org/videos/hans-rosling-asias-rise-ted-india/).

India is rising now, but it was not colonization that kept it down, for decolonization was followed by forty years of stagnation, decay, and poverty.

India was a suppurating wreck when the colonialists arrived.  How do you think it was conquered by an armed book keeper with a handful of troops?  It had been a great civilization before the Muslim conquests, but under the Muslims, had forgotten everything, mathematics and steel alike.
[/quote]

India is rising now, but it was not colonization that kept it down, for decolonization was followed by forty years of stagnation, decay, and poverty.

Some things decayed, yes.  But incomes and life expectancy actually increased, while they had been static under colonial rule.  So at the most fundamental level, things were getting better long before the 90s.

Quote
India was a suppurating wreck when the colonialists arrived.  How do you think it was conquered by an armed book keeper with a handful of troops? 

By which I take it you mean Robert Clive and the battle of Arcot?  That was just one small step in the gradual conquest of India, and an action moreover which was salvaged through the intervention of 2000 Maratha cavalry.

Quote
It had been a great civilization before the Muslim conquests, but under the Muslims, had forgotten everything, mathematics and steel alike.

Citation needed for the loss of technological knowhow.  However, I'll grant you that India was left open for conquest by some of the events that weakened the Mughal and Maratha empires before and during the British East India company's time in the country, such as the third battle of Panipat (http://en.wikipedia.org/wiki/Third_Battle_of_Panipat).

More importantly to the British legacy is what happened once they started to rule, and under British rule it was a story of repeated devastating famine, of a stagnant economy, and of the strangulation of Indian production of goods which might compete with British rivals, textiles in particular.
Title: Re: Ten Dollars!
Post by: J Thomas on November 14, 2010, 08:52:55 am

The DRC and Zim are interesting cases, because of being among the few countries to go backwards after the colonialists left. 

In the DRC, a hefty chunk of blame can be ascribed to the Belgians' unwillingness to allow the people they ruled any access to education (when they left, there were about a dozen literate indigenous men in the country).  Of the rule of brutality, by

I think there are at least a few words missing here.

Quote
And a further chunk of blame can be divied out to the foreign powers who installed Mobutu Sese Seko.

So, comparing colonialism versus post-colonialism, we must factor in colonialism's parting gifts.

Quote
Independence, by contrast, has been a mixed bag, with extremes ranging from basket cases (the Democratic Republic of the Congo) to countries going from third world to first (Singapore, which in 1965 was viewed as a hopeless basket case itself).

Singapore was a basked case because of the collapse of colonialism:

Sure, you establish a trading center and transportation hub that depends on the trade patterns under colonialism, and it's predictable there will be big changes later.

Quote from: Lee Kuan Yew
Singapore was not a natural country but man made, a trading post the British had developed into a nodal point in their worldwide maritime empire.  We inherited the island without its hinterland, a heart without a body.

Quote from: Lee Kuan Yew
Indonesia was confronting us and trade was at a standstill.  The Malaysians wanted to bypass Singapore and deal direct with all their trading partners, importers, and expoerters, and only through their own ports.  How as an independent Singapore to survive when it was no longer the center of the wider area that the British once governed as one unit?


Quote
India is rising now, but it was not colonization that kept it down, for decolonization was followed by forty years of stagnation, decay, and poverty.

Some things decayed, yes.  But incomes and life expectancy actually increased, while they had been static under colonial rule.  So at the most fundamental level, things were getting better long before the 90s.

JamesD pointed out that India was already suffering the effects of Muslim colonisation before the British took over. "There's a lot of ruin in a nation."

Quote
Quote
It had been a great civilization before the Muslim conquests, but under the Muslims, had forgotten everything, mathematics and steel alike.

Citation needed for the loss of technological knowhow.  However, I'll grant you that India was left open for conquest by some of the events that weakened the Mughal and Maratha empires before and during the British East India company's time in the country, such as the third battle of Panipat (http://en.wikipedia.org/wiki/Third_Battle_of_Panipat).

More importantly to the British legacy is what happened once they started to rule, and under British rule it was a story of repeated devastating famine, of a stagnant economy, and of the strangulation of Indian production of goods which might compete with British rivals, textiles in particular.

The british were generally mercantilists, who tried to manage trade with their colonies. Many colonialists were more extractionists, who tried to grab whatever they could grab. So for awhile Britain "strangled" Indian textiles, rather than setting up sweatships in India to make lots of textiles cheap which would then be easier to sell than british-made more-expensive stuff.

Comparing india under Britain to say Peru under Spain.... The British returned some value for what they took, and that was one of the reasons they faced so little opposition and could keep their tenuous control with so few troops.
Title: Re: Ten Dollars!
Post by: paddyfool on November 14, 2010, 01:48:45 pm
Apologies if that earlier reply was fragmented; let's bring it to a general point.

My view of things is that, as colonialists go, us Brits weren't the worst overall (the Spanish, Japanese, and Belgians could all be candidates for that; and doubtless others whose history I'm not so familiar with), although we did commit some of the worst atrocities.  But that about the best thing we did was to leave in a generally peaceful manner once we had bankrupted ourselves fighting something even worse (unlike, notably, the French).  And when we did rule, the best we did was when we left largely well alone, as happened due to enlightened management of Hong Kong, and also in countries that were landlocked, fairly resource-poor and thus hard to exploit anyway, such as Uganda (although that was another country we subsequently screwed over post-Independence, by sponsoring a coup by a certain fat sergeant).

And for the story of Indian textiles: us Brits wouldn't have had to set up sweatshops, as there was a thriving textile industry before we ever arrived (http://www.vam.ac.uk/collections/asia/south_asia_gallery/british_in_india/index.html).  But once India came under government, rather than corporate, control, the Indian textile industry was taxed to death to open up markets for British products.
Title: Re: Ten Dollars!
Post by: jamesd on November 14, 2010, 02:45:24 pm
That's an error often propagated by opponents to Fractional Reserve Banking.  Once one understands how they work, they make a lot of sense.  The question then becomes one of assessing the risk vs. the reward.

But historically, banks have not gone out of their way to explain to their customers how they work, nor have they made it easy for their customers to assess the risk versus reward.

Fractional reserve banking does not need to be done as a scam, but in practice it usually is.

Just as a ponzi scheme misleads people about their solvency, a fractional reserve bank usually misleads people about their liquidity.

There have been examples of fractional reserve banks where the customers entered into a contract specifying what was to happen, what was the customer's rights and banks obligations in the event of a liquidity crisis, but these have been the rare exception rather than the rule.

Perhaps if we had a rule that absent such a contract, the default implied contract is that the bank would never become illiquid, and in the event of the bank becoming illiquid the depositors could hang the bankers, then perhaps fractional reserve banking would work.
Title: Re: Ten Dollars!
Post by: terry_freeman on November 14, 2010, 03:12:25 pm
If FRB bankers were honest, I suspect they would find few customers.

Technically, FRBs are insolvent; they lend out money which is created out of thin air.

This "works" only because of a) large numbers of depositors who trust the FRBs, b) lack of competition with real money, such as gold and silver coins, c) legal tender laws, d) the lender of last resort central banks, f)judicious use of bank holidays, and e) government deposit insurance programs.

Not all countries insured deposits - the US of A established the FDIC quite a while back; England and Ireland only insured deposits a few years ago, in response to the crisis of 2008, if my memory is correct. They all, however, use central banks to bail out FRBs with - of course - faith-based paper "money" which is created ex nihilo.

In the past, paper and precious metals were convertible - prior to 1933, Americans could take a $20 bill to any bank and exchange it for nearly an ounce of gold. Prior to 1960-something, $1 bills could be exchanged for one-dollar silver coins. This kept the value of paper close to the value of the precious metals; when too much paper is printed, Gresham's Law drives precious metals out of circulation.

There are Austrian School theorists who advocate free banking, but would not require 100% reserve. These theorists posit that a contract which limits withdrawals, at the banks' discretion, and requires interest on such delays, would suffice to keep the banks from being crushed by bank runs. You might, for example, agree that you will "usually" have instant access to 100% of your deposits on demand, but that in "unusual" circumstances ( a bank run ), the bank has a right to hold your money for up to 30 days, at a cost to the bank of 1%.

I could live with that, provided that paper were always convertible to precious metals - and none of this goofy "capital gains tax" on paper "profits" either. Odds are that, under such a free banking regime, paper really would be "as good as gold" - because otherwise, nobody would use paper, unless a "legal tender law" made it mandatory.

The current faith-based fiat paper model has been the cause of numerous inflation/deflation crises, and is now breaking down. No paper currency has ever stood the test of time.


Title: Re: Ten Dollars!
Post by: J Thomas on November 14, 2010, 04:44:53 pm

In the past, paper and precious metals were convertible - prior to 1933, Americans could take a $20 bill to any bank and exchange it for nearly an ounce of gold. Prior to 1960-something, $1 bills could be exchanged for one-dollar silver coins. This kept the value of paper close to the value of the precious metals; when too much paper is printed, Gresham's Law drives precious metals out of circulation.

As I read it, at the same time they started printing Gold Certificates they also printed United States Notes which were not backed by gold or anything. People accepted both.

And I remember Silver Certificates. When I was a kid I could look at any bunch of dollars and something like 30% of them would be Silver Certificates and the rest would be Federal Reserve Notes. Nobody paid any attention to the difference. But then the price of silver got above $1. I read a humorous story by a man who converted $500 in silver certificates into silver coins which he put in a safe deposit box while he waited for the price to rise to the point it would be worth melting the coins down and selling the silver.

And it happened. People started collecting Silver Certificates and turning them in for silver. After awhile the government stopped redeeming Silver Certificates and made them the same as Federal Reserve Notes.

Since the government can at any time it chooses stop redeeming paper money for metals, paper money that is redeemable for metal is not completely safe. But in good times people don't care, it's almost completely safe. Just like in good times nobody cared about Federal Reserve Notes versus Silver Certificates. They were both just dollars.
Title: Re: Ten Dollars!
Post by: jamesd on November 14, 2010, 05:22:59 pm
Observe what happened in the Congo and in Rhodesia.  That was decolonization.  Colonization was the pretty much the same thing in reverse.  In the Congo, before colonization, they were eating each other.  After decolonization, they swiftly went back to eating each other.

The DRC and Zim are interesting cases, because of being among the few countries to go backwards after the colonialists left. 

Most went backwards.  The Congo and Zimbabwe are simply more prominent and famous because they were contested and disputed cases loudly held up as examples of the evils of colonialism.  In his autobiography, whenever Lee Kuan Yew visits a country after colonialism that he had previously visited during or very shortly after colonialism, he remarks on how everything has gone to hell in a handbasket.

What makes Zimbabwe and Congo prominent is not that their decolonization was exceptionally disastrous, but that their decolonization was exceptionally prominent - that they were the two biggest African causes among the anti colonialists.  The Congo is not obviously worse than Nigeria, Rwanda, Sudan, Central African Republic, Angola, Zambia, or Mozambique.  It is just more famous.  Uganda is doing OK now, but, like Rwanda, has been a lot worse than the Congo from time to time.

In the DRC, a hefty chunk of blame can be ascribed to the Belgians' unwillingness to allow the people they ruled any access to education

And in Rwanda, you conversely blame the Belgians for treating the native ruling elite as honorary whites or near whites instead of annihilating the long established native social order, the long established native political and economic institutions.

There were in fact quite a lot of educated blacks in the Congo - educated to the level of being numerate and able to speak, read, and write fluently in several western languages.  When people claim that none of them had an education they mean that none got put into western ruling elite universities to be trained to rule with members of the western ruling class, the way Mugabe was, and the way Smith was not. 

By and large, third word rulers, such as Mugabe, who associated with western ruling elite institutions like the London School of Economics have been utter disasters in the third world, blindly imposing politically correct socialism and causing famine and economic collapse.  Abdirashid Ali Shermarke is another good example of western elite institutions imposing dangerous crackpot ideologies on people who lack natural resistance to them.

If there had been more "educated" blacks in the Congo (which is to say representatives of the western academic ruling elite) the disaster would probably have been considerably worse.  They would have been afflicted with politically correct communist cannibals, instead of merely being afflicted with mere cannibals.

In the third world ruinous economic policies have come primarily from those educated in western ruling elite institutions, especially Harvard and the London School of Economics, and sound economic policies have come primarily from those educated in second tier universities.

  Of the rule of brutality
Before the colonists came, rulers in the Congo used cannibalism as an instrument of terror against the ruled.  After the colonists left, the rulers resumed using cannibalism as an instrument of terror against the ruled.  Who then was to blame for the rule of brutality?

And a further chunk of blame can be divied out to the foreign powers who installed Mobutu Sese Seko. 
Mobutu was not installed by foreign powers.  He hated all white powers equally, Soviets as much as Americans, and was, for his lack of affection for white communists, demonized as a US creation - for which claim there is not a shred of evidence.

In Zimbabwe (and I use the term advisedly, to differentiate from Zambia, which was also part of the old Rhodesia), it is indeed a story of gross misrule.  But it is, at the same time, an exception in the present day. 

You should read "Native stranger" by Eddy L. Harris. An American black who can pass for an African black wanders through subsharan Africa, and everywhere he goes he find violence, tyranny, and economic collapse, the abandoned ruins left behind by colonialism.  Zimbabwe was, to him, an island of comparative civilization, a huge relief from poverty, disease, pervasive corruption and empty, wasted lives.  Harris tells us what a tremendous relief it was to enter Zimbabwe, how peaceful, civilized, prosperous, humane, and competent it was compared to the rest of black Africa.

Observe that after many years of violence and economic destruction, Zimbabwe is still more prosperous than most of its neighbors - therefore not an exception - it is just that you have managed to forget what happened in the rest of Africa when it was decolonized.  The only part of black Africa that was not a shattering and terrible disaster when decolonized was Botswana, where they elected the rightful King as president, and the rightful King then resumed the nineteenth century status quo ante his ancestors had had with the colonists, cutting the metropolitan colonial power out, to the advantage of colonists, in substantial part restoring colonist power at the expense of colonial metropolitan power.

India is rising now, but it was not colonization that kept it down, for decolonization was followed by forty years of stagnation, decay, and poverty.

Some things decayed, yes.  But incomes and life expectancy actually increased, while they had been static under colonial rule.  So at the most fundamental level, things were getting better long before the 90s.

Living standards in India had been improving rapidly under colonial rule.  They stagnated after independence, in that growth was slow, and that "growth" may well reflect creativity with statistics, rather than real growth.

More importantly to the British legacy is what happened once they started to rule, and under British rule it was a story of repeated devastating famine, of a stagnant economy, and of the strangulation of Indian production of goods which might compete with British rivals, textiles in particular.

Colonial India had no peacetime famines during the twentieth century or late nineteenth century.  The devastating Indian famine to which you refer was a war famine imposed by the Japanese army laying siege.  If Indian decolonization had been a mere disaster, rather than a complete catastrophe, you would not be reduced to such slight of hand.

By invoking famines, your argument is that Indians are better off after decolonization, than they were when the Japanese army was starving them into surrender, a less than glowing recommendation for decolonization.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 14, 2010, 05:28:57 pm
If FRB bankers were honest, I suspect they would find few customers.

Technically, FRBs are insolvent; they lend out money which is created out of thin air.

FRBs do not "create money out of thin air", any more than general purpose computer operating systems create memory out of thin air.

The money they lend is absolutely real; the balance given in any account is virtual.  In most common cases, the subset of depositors who wish to convert all or part of their account balance to real money (i.e., make a withdrawal) are able to do so on demand.  In some cases they may have to wait an arbitrarily long period of time (although some accounts may include a limit on that time period, in exchange for a lower rate of return).   Because of that period of time, the bank's debt to the customer is not due, and hence the bank is not insolvent.  

If you don't understand how this is the case, then by all means ask questions.  Otherwise, I must presume that you are willfully ignorant and not worth responding to.  It is unfortunate that those who insist on not understanding make so much work for those of us who do.
Title: Re: Ten Dollars!
Post by: jamesd on November 14, 2010, 05:35:25 pm
In most common cases, the subset of depositors who wish to convert all or part of their account balance to real money (i.e., make a withdrawal) are able to do so on demand.  In some cases they may have to wait an arbitrarily long period of time

You describe a fractional reserve bank that has a contract with its customers that covers the possibility of a liquidity crisis, defines what is to be done in a liquidity crisis, and presumably reveals to its customers the state of its liquidity.

While this should be the most common case, it does not seem to me that it was.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 14, 2010, 06:51:19 pm
In most common cases, the subset of depositors who wish to convert all or part of their account balance to real money (i.e., make a withdrawal) are able to do so on demand.  In some cases they may have to wait an arbitrarily long period of time

You describe a fractional reserve bank that has a contract with its customers that covers the possibility of a liquidity crisis, defines what is to be done in a liquidity crisis, and presumably reveals to its customers the state of its liquidity.

While this should be the most common case, it does not seem to me that it was.

Fractional Reserve Banking is done badly in much of the world today, not because the concept is bad, but rather because governments have insinuated themselves into the industry to the degree that there is little if any real competition, innovation, contractual openness, or failure risk.  The real problems are mandatory use of government-controlled central banking and onerous regulation that penalizes both consumers and potential new entrants into the market.

In and of itself, Fractional Reserve Banking is a technically sound and ethically neutral framework.  Those who do not (or worse, will not) understand it and misattribute problems caused by other, less sanguine, influences on it do a disservice to those who wish to attack the root cause of those problems -- government interference, and the encouragement of Crony Capitalism over Market Capitalism.

By doing so they provide fodder for those who wish to paint AnCaps and their libertarian and (even conservative) precursors as idiots.
Title: Re: Ten Dollars!
Post by: Xavin on November 14, 2010, 07:04:43 pm
England [...] only insured deposits a few years ago, in response to the crisis of 2008, if my memory is correct.

UK banking deposits started being insured when the Banking Act 1987 established the Deposit Protection Scheme (later brought under the Financial Services Compensation Scheme by the Financial Services and Markets Act 2000).

You are possibly thinking of the changes to that insurance in Oct 2007 and Oct 2008 following the nationalisations of Northern Rock and Bradford&Bingley respectively. Originally the scheme insured 100% of the first £2,000 of a deposit and 90% of the next £33,000. The Oct 2007 change was to 100% insurance of £35,000; the Oct 2008 change was to 100% of £50,000. As of 31Dec2010 that will rise again to £85,000.

(I offer this information purely in the interests of accurate reporting of the facts, not as an argument for or against your points)
Title: Re: Ten Dollars!
Post by: terry_freeman on November 15, 2010, 12:22:32 am
If FRB bankers were honest, I suspect they would find few customers.

Technically, FRBs are insolvent; they lend out money which is created out of thin air.

FRBs do not "create money out of thin air", any more than general purpose computer operating systems create memory out of thin air.

The money they lend is absolutely real; the balance given in any account is virtual.

For some definition of "real", this may be true. Please enlighten us. It is fairly obvious that, when a bank lends Mr. Smith $500,000 to buy a home, they are not lending him the use of 5000 $100 physical bills. Those physical bills don't even exist; it would be impossible to hand them to the banks.

In fact, the bank simply creates $500,000 in imaginary money, create a deposit entry for Mr. Smith, which is a "liability" on their balance sheets, and a $500,000 loan, which is an "asset." The books balance, the bankers are happy.

The only thing limiting the banks' ability to lend is the "reserve ratio" - a certain percentage of deposits must be backed by something tangible - which nowadays means, by a stack of paper which the Treasury prints out of next to nothing - as Ben
Bernanke says, "we have a technology called a printing press . . ."

Nowadays, American banks have on hand enough actual physical paper to satisfy about 3% of their deposits. The other 97% is nowhere in the system - not at the local bank, nor at the Federal Reserve Banks. The Federal Reserve holds some larger amount of imaginary "cash," but it consists of nothing but electronic entries. "There is no there there", as once was said about a famous but ditzy actress. 

Title: Page 571 - church discount
Post by: AlpineBob on November 15, 2010, 04:56:57 am
I think Babette is still a bit unclear on the concept - she is stealing money from Callahan for a party to celebrate paying back a theft!  Heck, Reggie told her to!  Bad priest!

Really, If she wouldn't let Reggie give her the use of his own space, she certainly shouldn't let him give CALLAHAN's profits away!

Some might say 'stealing' is the wrong word, but presumably Callahan gives a discount to the church either because he supports its work, or because it's a good repeat customer.  Babette doesn't qualify under either count, so taking the discount amounts to taking that amount of Callahan's normal one-time provider profit.

Heck, Callahan might have offered her a discount anyway, and Babs could certainly try to bargain with him - she seems to enjoy haggling - but taking a discount under Reggie's auspices is wrong.

That's how it seems to me, anyway...
Title: Re: Ten Dollars!
Post by: J Thomas on November 15, 2010, 06:54:59 am

FRBs do not "create money out of thin air", any more than general purpose computer operating systems create memory out of thin air.

The money they lend is absolutely real; the balance given in any account is virtual.

For some definition of "real", this may be true. Please enlighten us. It is fairly obvious that, when a bank lends Mr. Smith $500,000 to buy a home, they are not lending him the use of 5000 $100 physical bills. Those physical bills don't even exist; it would be impossible to hand them to the banks.

Would you feel better about it if they did hand him 5000 pieces of paper?

Quote
In fact, the bank simply creates $500,000 in imaginary money, create a deposit entry for Mr. Smith, which is a "liability" on their balance sheets, and a $500,000 loan, which is an "asset." The books balance, the bankers are happy.

The only thing limiting the banks' ability to lend is the "reserve ratio" - a certain percentage of deposits must be backed by something tangible - which nowadays means, by a stack of paper which the Treasury prints out of next to nothing - as Ben
Bernanke says, "we have a technology called a printing press . . ."

Yes. To my way of thinking, the government claims to hold a monopoly on creating money, but then it gives that right away to chartered banks. It gives them a license to steal. It should keep that right for itself and not just give it away to people who want to be rich. I mean if you have a government at all, based on its ability to force people and also on the trust those people have in it, why should it give those away to citizens who have no other purpose than to take everything for themselves?

Quote
Nowadays, American banks have on hand enough actual physical paper to satisfy about 3% of their deposits. The other 97% is nowhere in the system - not at the local bank, nor at the Federal Reserve Banks. The Federal Reserve holds some larger amount of imaginary "cash," but it consists of nothing but electronic entries. "There is no there there", as once was said about a famous but ditzy actress.

As people more and more use credit and debit cards, we head toward not only a checkless society but a cashless one. There is nothing particularly wrong with that. Checks are more tedious than debit cards, and the only big advantage of cash is that it does not involve anybody keeping records unless they want to. Once you get away from actual physical assets that are traded hand to hand, then it comes down to this sort of thing.

Anybody who holds a commodity for other people, who leave it with him until they need it, can play the fractional reserve game. He can sell part of their property and keep just enough reserve on hand to meet their actual needs. He can get in trouble doing that, but he makes money in the meantime.

Stockbrokers do this. When you buy 100 shares of stock, there is no physical stock certificate. Your broker credits you with the stock. And the stock exchange credits your broker with it. If your broker thinks the stock price will go down, he can sell your stock now. He can buy it back when he thinks it will go up. If it goes up before he expects it to and you sell, he can just credit you with the money. He points to a listed transaction and says it's yours. You leave stock with him and money with him, so you have loaned him both of those and he can use either for whatever he wants -- until you want them back. And can he predict the market better than you can? Probably. Particularly when you pay attention to his investment advice....

This can potentially work for any commodity that gets warehoused. But usually warehousers do not have laws to make it legal. Banks do. Stockbrokers do somewhat -- some forms  of stock banking are legal while others are not.
Title: Re: Ten Dollars!
Post by: Apollo-Soyuz on November 15, 2010, 07:47:26 am

Actually, I was taught it was much worse than that, in a fiat currency economy like that of the USA ca. 2010.  Customer Abel deposits $1000 (along with another 99 like him -- this stuff doesn't work unless there's enough of it that statistical behaviors overtake random chance); the bank keeps that whole $1000 as reserve, and then lends out $9000 to Customer Baker (again, multiplied by 100) -- actually, probably distributed among customers Baker, Charlie, David, Edward, and Fiona.  This, I was taught (in high school economics, back around 1977-1978 time frame) is how the banks create money -- and, in real economic terms, this is how the banks destroy the economy, requiring a bail-out from FDIC when they find out that as few as 5% of those loans are no good and start trying to take back and resell the collateral.  If you try to resell a bunch of pressure washers, you'll wind up writing off a big chunk of the bad debt because there just isn't enough market to absorb all those pressure washers
...

No argument from me for most of this but let's define some terms. A FDIC takeover is when the FDIC puts the bank out of business, sells all of it's assets, and transfers the accounts to a healthy bank. The stockholders usually lose their shirts. If the FDIC does this action promptly enough, they really don't need to dip into their own funds.

A bailout is when we reward failure and keep a bank in business.

Most of your analysis of the bubble is correct. The government and the federal reserve allowed the bubble to happen, people who could not scrape up the 20% down payment and didn't have the income to make regular payments still got loans, standards were lowered universally, fraud was committed throughout the industry, someone in congress was being blown by someone at fannie, etc...

The correction from all that BS would have been horrible, but we didn't do that.

We bailed out the banks. We failed to prosecute fraud on any level. We've allowed the banks to hold properties off their balance sheets. We've allowed banks to foreclose on houses, but allow them to sit on the properties instead of selling them at a loss. Now it looks like, to avoid fees, the banks all committed title transfer fraud. In doing so they have clouded the titles and deprived local governments of fees.

I'm expecting the lame ducks to "legitimatize" this behavior, just like they did, ex-post-facto, for the communication companies that helped the government spy on citizens without a warrant.
Title: Re: Ten Dollars!
Post by: paddyfool on November 15, 2010, 09:17:40 am
Observe what happened in the Congo and in Rhodesia.  That was decolonization.  Colonization was the pretty much the same thing in reverse.  In the Congo, before colonization, they were eating each other.  After decolonization, they swiftly went back to eating each other.

The DRC and Zim are interesting cases, because of being among the few countries to go backwards after the colonialists left. 

Most went backwards.  The Congo and Zimbabwe are simply more prominent and famous because they were contested and disputed cases loudly held up as examples of the evils of colonialism.  In his autobiography, whenever Lee Kuan Yew visits a country after colonialism that he had previously visited during or very shortly after colonialism, he remarks on how everything has gone to hell in a handbasket.

What makes Zimbabwe and Congo prominent is not that their decolonization was exceptionally disastrous, but that their decolonization was exceptionally prominent - that they were the two biggest African causes among the anti colonialists.  The Congo is not obviously worse than Nigeria, Rwanda, Sudan, Central African Republic, Angola, Zambia, or Mozambique.  It is just more famous.  Uganda is doing OK now, but, like Rwanda, has been a lot worse than the Congo from time to time.

The Congo is clearly worse than all of the countreis you've listed, with the possible exception of the CAR and parts of the Sudan.  Seriously, I've been there.  It comes a little ahead on life expectancy estimates of some of the others, but only because (a) its life expectancy estimates are derived purely from the capital, since nobody's counting the deaths in the bush, and (b) there's a lot less HIV there (for complicated reasons I'd really rather not go into).  Also, none of those other countries were recently home to the largest war in modern African history (http://en.wikipedia.org/wiki/Second_Congo_War).

Quote
And in Rwanda, you conversely blame the Belgians for treating the native ruling elite as honorary whites or near whites instead of annihilating the long established native social order, the long established native political and economic institutions.

Except that (a) I never mentioned Rwanda, and (b) that really wasn't what they did there anyway.  If you want a better idea of Rwandan history and where it led, may I recommend "We wish to inform you that tomorrow we may be killed with our families"?  Alternatively, pay it a visit.  It's pretty safe, and surprisingly smoothly running for a country that so recently imploded... although there is still a lot of tension below the surface.  It may help if you speak basic French, but it isn't really necessary.

Quote
There were in fact quite a lot of educated blacks in the Congo - educated to the level of being numerate and able to speak, read, and write fluently in several western languages.  When people claim that none of them had an education they mean that none got put into western ruling elite universities to be trained to rule with members of the western ruling class, the way Mugabe was, and the way Smith was not. 

Having only 12 people educated to degree level at independence is still an issue when you need doctors, engineers, etc.  Having had all the reins of power in the hands of a foreign elite who never trusted you with them beyond the level of village chiefdom and who then up and leave is also something of a problem.

Quote
By and large, third word rulers, such as Mugabe, who associated with western ruling elite institutions like the London School of Economics have been utter disasters in the third world, blindly imposing politically correct socialism and causing famine and economic collapse.  Abdirashid Ali Shermarke is another good example of western elite institutions imposing dangerous crackpot ideologies on people who lack natural resistance to them.

If there had been more "educated" blacks in the Congo (which is to say representatives of the western academic ruling elite) the disaster would probably have been considerably worse.  They would have been afflicted with politically correct communist cannibals, instead of merely being afflicted with mere cannibals.

In the third world ruinous economic policies have come primarily from those educated in western ruling elite institutions, especially Harvard and the London School of Economics, and sound economic policies have come primarily from those educated in second tier universities.

Never mind the politics, the issue was the lack of basic vocational training and administrative experience.

  Of the rule of brutality
Before the colonists came, rulers in the Congo used cannibalism as an instrument of terror against the ruled.  After the colonists left, the rulers resumed using cannibalism as an instrument of terror against the ruled.  Who then was to blame for the rule of brutality?

Quote
]Mobutu was not installed by foreign powers.  He hated all white powers equally, Soviets as much as Americans, and was, for his lack of affection for white communists, demonized as a US creation - for which claim there is not a shred of evidence.

Mobutu was very chummy with a string of American presidents - it took until the '70s for him to fall out with the US (as he went increasingly bonkers).  Whatever role the CIA did or did not have in Lumumba's assassination and Mobutu's rise to power is still a matter of secrecy, but it'll be interesting to learn of it as and when whatever records there are become public.

In Zimbabwe (and I use the term advisedly, to differentiate from Zambia, which was also part of the old Rhodesia), it is indeed a story of gross misrule.  But it is, at the same time, an exception in the present day. 

You should read "Native stranger" by Eddy L. Harris. An American black who can pass for an African black wanders through subsharan Africa, and everywhere he goes he find violence, tyranny, and economic collapse, the abandoned ruins left behind by colonialism.  Zimbabwe was, to him, an island of comparative civilization, a huge relief from poverty, disease, pervasive corruption and empty, wasted lives.  Harris tells us what a tremendous relief it was to enter Zimbabwe, how peaceful, civilized, prosperous, humane, and competent it was compared to the rest of black Africa.[/quote]

Ah.  Published in 1996?  Then he was there before things really went downhill (aside from a few early warnings, such as the 1980s massacres in Matabeleland etc.). 

Quote
Observe that after many years of violence and economic destruction, Zimbabwe is still more prosperous than most of its neighbors -

Actually, it really isn't: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita.  With an annual GDP per capita of $394 dollars, it's 9th from bottom in the IMF's rankings, behind all of its neighbours except Malawi.

therefore not an exception - it is just that you have managed to forget what happened in the rest of Africa when it was decolonized.  The only part of black Africa that was not a shattering and terrible disaster when decolonized was Botswana, where they elected the rightful King as president, and the rightful King then resumed the nineteenth century status quo ante his ancestors had had with the colonists, cutting the metropolitan colonial power out, to the advantage of colonists, in substantial part restoring colonist power at the expense of colonial metropolitan power.
 (http://therefore not an exception - it is just that you have managed to forget what happened in the rest of Africa when it was decolonized.  The only part of black Africa that was not a shattering and terrible disaster when decolonized was Botswana, where they elected the rightful King as president, and the rightful King then resumed the nineteenth century status quo ante his ancestors had had with the colonists, cutting the metropolitan colonial power out, to the advantage of colonists, in substantial part restoring colonist power at the expense of colonial metropolitan power.)

Botswana has been relatively successful right up to the HIV epidemic, yes, and on all measures but life expectancy it still is.  However, I'd quibble with your reasons (once again, it benefited from having been largely left alone, and thus not having the same harshness of transition; Uganda too was doing fine, until we sponsored a coup there).   

Quote
Living standards in India had been improving rapidly under colonial rule.  They stagnated after independence, in that growth was slow, and that "growth" may well reflect creativity with statistics, rather than real growth.

So if the stats disagree with your preconceptions, the stats must be wrong?  Really?

Quote
Colonial India had no peacetime famines during the twentieth century or late nineteenth century.  The devastating Indian famine to which you refer was a war famine imposed by the Japanese army laying siege.  If Indian decolonization had been a mere disaster, rather than a complete catastrophe, you would not be reduced to such slight of hand.

Heh.  If only.
http://en.wikipedia.org/wiki/Famine_in_India#British_rule
http://en.wikipedia.org/wiki/Great_Famine_of_1876-78

Quote
By invoking famines, your argument is that Indians are better off after decolonization, than they were when the Japanese army was starving them into surrender, a less than glowing recommendation for decolonization.

Nonsense, as it plainly wasn't just that particular famine I was talking about.  And, incidentally, if you're talking about India being starved into surrender... are you aware that it was a mainly Indian army that gave the Japanese army what was arguably the greatest defeat in its history, when they gave them over 50,000 casualties as they routed them at the battle of Imphal in 1944?

But to address your claims overall, a lot of formerly colonial countries went through strife, with civil war and border clashes with their neighbours and large numbers of people fleeing the country post-independence, from the USA onwards.  But overall, they've come up a lot faster than Europe ever did during the Industrial revolution (http://www.gapminder.org/videos/ted-us-state-department/), and plenty are doing fine now.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 15, 2010, 12:19:48 pm
FRBs do not "create money out of thin air", any more than general purpose computer operating systems create memory out of thin air.

The money they lend is absolutely real; the balance given in any account is virtual.

For some definition of "real", this may be true. Please enlighten us. It is fairly obvious that, when a bank lends Mr. Smith $500,000 to buy a home, they are not lending him the use of 5000 $100 physical bills. Those physical bills don't even exist; it would be impossible to hand them to the banks.

There is no reason, other than a lack of convenience, that the borrower does not get the $500,000 in physical bills, or in a civilized location, $500,000 in gold.  For simplicity, assume the bank offers only 50% fractiional reserve accounts (and does not lend from any other asset class); that means that $1.000,000 of depositor money is allocated for this; the other $500,000 is the 50% reserve.The depositors still have $1,000,000 in bank deposits allocated; however, that is virtual money, not real money.

No money is actually created by this action; it is obvious on its face.

Now there are ways to complicate this; for example, instead of buying a house, the borrower  already owns the house and puts it up as collateral; he then deposits this into a similar account.  The bank then loans out $250,000 of that money.

We now have $1,500,000 in bank deposits,  $750,000 in bank-held gold, and $250,000 gold in the hands of a second borrower.

Again, no money has been created.  At this point, the immediate demand value of the bank deposits is $750,000 -- which the bank(s) have 100% funded.

Now assuming that the bank(s) in question have other funds available, including funds that exceed their reserve margin, depositors may be able to withdraw some or part of their bank deposits immediately, on a 1:1 basis for gold.  The bank then allocates 50% of the amount withdrawn from available funds to the reserve account.

If insufficient non-reserve funds are not available when the depositor attempts to make such a withdrawal, she will not be able to make the full withdrawal at that time, having to either wait or to take a smaller amount immediately, or a combination of the two.  Since she knows that's how Fractional Reserve banking works, she understands.  Note that she may also opt to get a loan for some or all of the remainder -- given the nature of the loan (backed by her band deposits) she should be able to get a very favorable interest rate.

If the reserve rate is smaller, say %10 , the process is the same, however the size of the account deposits will be much larger relative to the actual gold available, the actual value in gold relative to the account deposits will be much smaller in proportion, the impact of a given default (and thus the risk) higher, and the likelihood of a large scale withdrawal being immediately satisfied lower.  However, no money has actually been created, all loans and withdrawals made can be satisfied by physical gold,  and the system still balances.  If paper (representing gold ownership) is transferred for convenience, the system remains the same.

The problem in today's world is that the government may come in and force the bank to make loans in exchange for a promise to pay it back, but without any real means to do so.
That, however, is orthogonal to the Fractional Reserve framework.
Title: Re: Ten Dollars!
Post by: jamesd on November 15, 2010, 04:07:37 pm
Fractional Reserve Banking is done badly in much of the world today, not because the concept is bad, but rather because governments have insinuated themselves into the industry to the degree that there is little if any real competition, innovation, contractual openness, or failure risk.  The real problems are mandatory use of government-controlled central banking and onerous regulation that penalizes both consumers and potential new entrants into the market.

In and of itself, Fractional Reserve Banking is a technically sound and ethically neutral framework.

Rather, it could be a technically sound and ethically neutral framework.  All forms of maturity transformation are potentially unstable.  Sooner or later you get a crisis.   Now if everyone involved accepted the likelihood of such crises, and had reached agreement in advance on how to deal with them, and accepted them as a unavoidable and necessary aspect of capitalism's creative destruction, then that would be fine, but that is not how these crises usually play out.

Perhaps the crises would play out in a technically sound and ethically neutral way if we were in the habit of hanging bankers when they did not.
Title: Re: Ten Dollars!
Post by: quadibloc on November 15, 2010, 07:43:44 pm
I see that I used a definition for the gold dollar before 1933 that actually applied to the gold Eagle (or $10 coin). So I was off by a factor of ten at the beginning - and I see by recent news stories that gold is now 'way up there at $1,400 a troy ounce!
Title: Re: Ten Dollars!
Post by: J Thomas on November 15, 2010, 08:00:02 pm
Fractional Reserve Banking is done badly in much of the world today, not because the concept is bad, but rather because governments have insinuated themselves into the industry to the degree that there is little if any real competition, innovation, contractual openness, or failure risk.  The real problems are mandatory use of government-controlled central banking and onerous regulation that penalizes both consumers and potential new entrants into the market.

In and of itself, Fractional Reserve Banking is a technically sound and ethically neutral framework.

Rather, it could be a technically sound and ethically neutral framework.

Here's a hypothetical case. You deposit $10,000 in a bank, and the bank pays you 5%/year to do that. Meanwhile the bank keeps 10% reserves, and it lends money at 10%/year simple interest. So in the ideal case they make $90,000 in loans which are all paid off from your money. The bank makes 90% on your money, and gives you 5%.

If people understood how the system works, would they risk their money for 5%? Would they instead insist on perhaps half the profits?

Or maybe, you put your checking-account money into a "bank" with 100% reserves and you pay a fee for that. And money you want to "invest" in a bank, you find a bank that will sell you shares. Your cash becomes bank capital. When you want to get your money, you sell the shares. If the bank has more cash than it knows what to do with, it buys back shares. Otherwise you find a buyer.

That way the system is definitely ethically neutral for depositors. The only possible ethical qualms are with treatment of debtors and of third parties.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 15, 2010, 08:16:24 pm
Here's a hypothetical case. You deposit $10,000 in a bank, and the bank pays you 5%/year to do that. Meanwhile the bank keeps 10% reserves, and it lends money at 10%/year simple interest. So in the ideal case they make $90,000 in loans which are all paid off from your money. The bank makes 90% on your money, and gives you 5%.

Your numbers are off; the bank could loan at most $9,000 of the customer's deposited money with a 10% reserve, not $90,000.   

There is a theoretical (initial deposit amount)/(reserve fraction) maximum deposit record possible, but only if each borrower in turn puts the borrowed money into a similar fractional reserve account; if this is repeated (each borrower putting the money into such an account), the total of the deposit records will approach, as you suggest, $90,000.

This is extremely unlikely in real life, however, since each such depositor would, of course,  pay more in interest to the lending bank than they would receive in interest from the depositing bank (note that the lending bank and depositing bank could be the same entity, but need not be).

Edit: fixed editing errors
Title: Re: Ten Dollars!
Post by: jamesd on November 15, 2010, 11:31:59 pm
What makes Zimbabwe and Congo prominent is not that their decolonization was exceptionally disastrous, but that their decolonization was exceptionally prominent - that they were the two biggest African causes among the anti colonialists.  The Congo is not obviously worse than Nigeria, Rwanda, Sudan, Central African Republic, Angola, Zambia, or Mozambique.  It is just more famous.  Uganda is doing OK now, but, like Rwanda, has been a lot worse than the Congo from time to time.

The Congo is clearly worse than all of the countreis you've listed

Uganda under Idi Amin was far worse than the Congo under Mobutu  Google up Idi Amin:  Anything Mobutu did, Amin doubled up on. At least Mobutu did not himself personally eat his enemies, delegating that to his lieutenants.  Indeed Idi Amin was a caricature of Mobutu in the way that Pol Pot was a caricature as Lenin.  Mobutu gave himself absurd self glorifying titles.  Amin gave himself self glorifying titles twice as absurd.  Mobutu had his enemies eaten, Amin himself ate them.

Rwanda and Nigeria were worse than Uganda and the Congo, for they committed genocides, while Uganda and Rwanda did not.

Decolonization was a disaster everywhere except for Singapore and Botswana, and in most cases a catastrophe, as in Zimbabwe and the Congo.

There were in fact quite a lot of educated blacks in the Congo - educated to the level of being numerate and able to speak, read, and write fluently in several western languages.  When people claim that none of them had an education they mean that none got put into western ruling elite universities to be trained to rule with members of the western ruling class, the way Mugabe was, and the way Smith was not.  

Having only 12 people educated to degree level at independence is still an issue

It is an irrelevance.  If lack of college education was the cause of the disaster, Botswana would have imploded, and Zimbabwe succeeded.

when you need doctors, engineers, etc.

Tanzania under Nyerere  was flooded with foreign and local doctors and engineers in an effort to demonstrate the effectiveness of foreign aid based development.  Observe what happened.  Your theory has been tried and found wanting.

Having had all the reins of power in the hands of a foreign elite who never trusted you with them beyond the level of village chiefdom and who then up and leave is also something of a problem.
Yet the politically correct explanation of the Rwandan genocide is that the foreign elite did trust the local elite.

If there had been more "educated" blacks in the Congo (which is to say representatives of the western academic ruling elite) the disaster would probably have been considerably worse.  They would have been afflicted with politically correct communist cannibals, instead of merely being afflicted with mere cannibals.

In the third world ruinous economic policies have come primarily from those educated in western ruling elite institutions, especially Harvard and the London School of Economics, and sound economic policies have come primarily from those educated in second tier universities.

Never mind the politics, the issue was the lack of basic vocational training and administrative experience.

Idi Amin had administrative experience, and was worse than Mobutu.

Abdirashid Ali Shermarke and Muhammad Siad Barre had vocational training and administrative experience.   Barre's regime was a worse disaster than Amin's.  Shermarke's ideology caused Barre's regime. Western university education caused Shermarke's ideology.  

If the wisdom and benevolence of Western elite universities could have fixed things, Zimbabwe and Tanzania should have done fine.

Mobutu was very chummy with a string of American presidents

This is not true, and if it had been true, would not be evidence that he was installed by foreign powers.  The false claim that he was chummy with the US rests on the true fact that he was hostile to the Soviet Union - but he was hostile to the Soviet Union because all whites looked alike to him.

Whatever role the CIA did or did not have in Lumumba's assassination

If a white guy had shown up in the Congo at the time outside of a few heavily guarded places, all of them in extreme danger, Lumumba would have had Mobutu cut his head off, and Mobutu's staff would have eaten him.  Those circumstances were not conducive to foreign intervention.  How did the CIA intervene?  By beaming thought waves from America?

In Zimbabwe (and I use the term advisedly, to differentiate from Zambia, which was also part of the old Rhodesia), it is indeed a story of gross misrule.  But it is, at the same time, an exception in the present day.  

You should read "Native stranger" by Eddy L. Harris. An American black who can pass for an African black wanders through subsharan Africa, and everywhere he goes he find violence, tyranny, and economic collapse, the abandoned ruins left behind by colonialism.  Zimbabwe was, to him, an island of comparative civilization, a huge relief from poverty, disease, pervasive corruption and empty, wasted lives.  Harris tells us what a tremendous relief it was to enter Zimbabwe, how peaceful, civilized, prosperous, humane, and competent it was compared to the rest of black Africa.

Ah.  Published in 1996?  Then he was there before things really went downhill (aside from a few early warnings, such as the 1980s massacres in Matabeleland etc.).

If the rest of Africa was hellhole compared to Zimbabwe, then decolonization was a disaster in the rest of Africa, regardless of how long it took Zimbabwe to go bad,

Uganda too was doing fine, until we sponsored a coup there).  

Why would we sponsor a coup in Uganda to install a pro communist, pro Islamic terrorist, anti western, dictator who reliably voted with the Soviets and against Israel in the UN?

And how did the CIA give effect to their evil intention?  Did they beam brain waves at Uganda?  Were the elders of Zion involved?

Colonial India had no peacetime famines during the twentieth century or late nineteenth century.  The devastating Indian famine to which you refer was a war famine imposed by the Japanese army laying siege.  If Indian decolonization had been a mere disaster, rather than a complete catastrophe, you would not be reduced to such slight of hand.

Heh.  If only.
http://en.wikipedia.org/wiki/Famine_in_India#British_rule
http://en.wikipedia.org/wiki/Great_Famine_of_1876-78

Which fails to report any twentieth century or late nineteenth century peacetime famines, and neglects to mention that the 1943 famine was caused by the Japanese army laying siege

By invoking famines, your argument is that Indians are better off after decolonization, than they were when the Japanese army was starving them into surrender, a less than glowing recommendation for decolonization.

Nonsense, as it plainly wasn't just that particular famine I was talking about.

So what famines were you talking about?  Your claim was that living standards stagnated under colonialism - but since British colonialism eventually put an end to Indian famines after 1896, Indian living standards did not stagnate under colonialism.

Sen's argument is that the 1943 war famine could have been prevented if only the British had imposed socialism - but the record of socialism, particularly socialism during war, makes the claim improbable.  Socialism does not prevent famine, and men with guns cause famine.

But to address your claims overall, a lot of formerly colonial countries went through strife, with civil war and border clashes with their neighbours and large numbers of people fleeing the country post-independence, from the USA onwards.  But overall, they've come up a lot faster than Europe ever did during the Industrial revolution (http://www.gapminder.org/videos/ted-us-state-department/), and plenty are doing fine now.

The relevant comparison is how they were a decade or two before decolonization, as compared to how they were in the decade or two following decolonization.  Decolonization was almost everywhere a disaster, while colonization had almost everywhere brought peace and prosperity.  In India the immediate consequences of independence were civil war, massacres of civilians, and economic decline - and India was better than most.
Title: Re: Ten Dollars!
Post by: quadibloc on November 16, 2010, 12:36:09 am
Your numbers are off; the bank could loan at most $9,000 of the customer's deposited money with a 10% reserve, not $90,000.
No, those numbers are right, as was explained in another post.

The bank keeps all the cash deposited by the depositor as its reserve. That cash isn't loaned to anyone.

Someone comes for a loan with collateral worth $90,000 or more, and the bank lends him $90,000, which goes into a bank account. So no cash is lent; just numbers in the bank's ledgers.

Actually, it is true the loan will have to be very slightly smaller, though, since both the depositor and the creditor will, from time to time, take small amounts of actual cash out of the bank to conduct transactions. But most of the transactions engaged in by the recipient of the loan will just involve moving money from one bank account to another rather than putting cash in someone's pocket.
Title: Re: Ten Dollars!
Post by: terry_freeman on November 16, 2010, 02:36:02 am

There is no reason, other than a lack of convenience, that the borrower does not get the $500,000 in physical bills, or in a civilized location, $500,000 in gold.

There is every reason why you can't get physical bills. You do not understand how banks lend money. They do not lend physical bills, but merely accounting  entries. The banks have enough physical cash to provide one physical bill for every thirty on the books, or even less.

Recently, Casey Reports revealed that a firm which loads money into non-bank ATMs was told by several very large banks that cash in the quantities which the firm needed to do business, hundreds of thousands of dollars, would no longer be available. This firm was not requesting a loan; it was merely asking for the cash equivalent of the firm's accounts at the bank.

It is a well-known fact that banks have on hand merely 3% of the cash required to cash out deposits. There is not enough cash in bank vaults or regional banks or the Treasury to satisfy all deposits, and has not been for a very long time.

This is a serious problem. When anybody - bank or Federal Reserve or Treasury - creates money out of nothing, this distorts prices and investment decisions. Google up Austrian Business Cycle Theory for yourself. This is the root of the boom-and-crash cycle. Ben "Helicopter" Bernanke is now in the process of QE2, creating $600 billion out of nothing to monetize federal debt; this is setting up conditions for yet another distortion of prices and economic decisions, and a subsequent crash.
 
Milton Friedman studied the historical data and concluded that "inflation is always and everywhere a monetary phenomenon." - printing money leads to higher prices, with a variable lag. Exactly which prices lag is also variable, and depends upon a variety of conditions.

You can buy Zimbabwe $100 trillion dollar paper bills on ebay for a few US dollars. If Helicopter Ben keeps running the printing press, the US Dollar may trade at par with Zimbabwe dollars once again. We will all be debt-free, but shoppers will need $100 trillion to buy a loaf of bread and a quart of milk.


Title: Re: Ten Dollars!
Post by: J Thomas on November 16, 2010, 05:37:24 am
Here's a hypothetical case. You deposit $10,000 in a bank, and the bank pays you 5%/year to do that. Meanwhile the bank keeps 10% reserves, and it lends money at 10%/year simple interest. So in the ideal case they make $90,000 in loans which are all paid off from your money. The bank makes 90% on your money, and gives you 5%.

Your numbers are off; the bank could loan at most $9,000 of the customer's deposited money with a 10% reserve, not $90,000.   

There is a theoretical (initial deposit amount)/(reserve fraction) maximum deposit record possible, but only if each borrower in turn puts the borrowed money into a similar fractional reserve account; if this is repeated (each borrower putting the money into such an account), the total of the deposit records will approach, as you suggest, $90,000.

This is extremely unlikely in real life, however, since each such depositor would, of course,  pay more in interest to the lending bank than they would receive in interest from the depositing bank (note that the lending bank and depositing bank could be the same entity, but need not be).

People who borrow money usually spend it. There are exceptions -- people who borrow money because they need it in reserve in case they need to spend it. In that case they might put it into an interest-bearing account, provided they can withdraw it as needed.

So, you take out a loan. You spend it. The person who gets the money puts it into a bank who uses it as reserve. As you point out it might not be the same bank.

If the banks have $10,000 in reserves, they can lend up to $90,000. In that case the banks collectively are making 90%/year on their money in the ideal case of 10% reserves, and they can get all the loans they want demanding 10% interest, and nobody defaults.

Still, the way I stated it did sort of include a fallacy. They can only lend $9000 of your money. When they get the $9000 back it's deposited by somebody else and if the bank gives you interest on your $10,000, they will be giving the other guy interest on his $9000 too. So they only get 9% on *your* $10,000 and they pay you 5%, already more than half. Your interest is guaranteed, but their payments are not. Which is why you don't usually see banks offering 5% on deposits when they lend at 10%.

Title: Gold cirkulation?
Post by: vonAdler on November 16, 2010, 06:49:01 am
Hi.

I don't know if I am de-reailing an already derailed topic, but I have one question regarding the usage of gold in the EFT universe.

While I realise the advantages of a gold-based currency, why do people use actual gold in circulation? To me, it seems like a paper representation of said currency should have been introduced a long time ago, either by various financing/deposit companies or on personal basis?

The disadvantages of using actual gold in cirkulation are many;
It is soft. It seems like the belters use 24 carat gold which is very soft. just having a bunch of coins/cubes/units in your pocket wearing against each other will quickly start wearing them down. Circulation of gold coins actually removes a significant percentage of their weight every year. This would lead to deflation, as less gold is circulating, but above all it would mean that the belters would have to weigh or use some device to determine mass of the coins/cubes/units of gold in every transaction - a serious time delay and a cumbersome process, especially with every-day pruchases (such as lunch or a cup of coffee).

Any vaulable metal coin/cube/unit will also very likely be subject to shaving - this is a practice that has existed as long as valuable metal coins. Shave off a tiny fraction of a gold coin, most will still accept the gold coin for its face value, but you get some more gold - for free, until some poor schmuck lands with a coin that is so shaven that it is no longer accepted at face value. It is weighed and worth less.

It is heavy (maybe not so much an issue in the low-gravity enviroment of the belt) and bulky when making large transactions. Say you are a successful entrepreneur and decide, hey, I got money, I want myself a new, larger and much more luxurious seastead to give myself and my family some more comfort and perhaps also status - it is nice to show off that your hard work paid off, right? So I get together gold for $2 million or so for my mansion - that is a lot of gold to drag around.

The advantage of course is that you do not need to risk anyone making more bills than there is gold coverage for (something private banks did frequently in 19th century Europe), but with the level of trust in the ERF society, I think someone could be able to build up something like "First Belter Deposit and Safeguard House" where you for a small sum can deposit your gold and have it safely stored and get a written guarantee of this deposit (or several) that you can use as currency. They could be written as personal checks or individual bills I guess?

Why are the belters not using such a system?
Title: Re: Gold cirkulation?
Post by: ShireSilver on November 16, 2010, 07:49:55 am
The disadvantages of using actual gold in circulation are many;

The first thing I would say is that the belters are probably so much more educated than we are. I'd bet they have a much better understanding of the historic misuse of paper.

Second though, is that there may be alternatives to traditional bullion in use, such as Shire Silver (http://shiresilver.com), which alleviates many of the problems you mentioned. By encapsulating the precious metal in plastic, it prevents shaving and wear, while making much smaller amounts of precious metals easy to handle. It also confers most of the good advantages of paper, while avoiding the bad aspects.

Third, it makes a point for the story. When we see traditional bullion being used, we recognize it and all the implications pretty quickly.
Title: Re: Ten Dollars!
Post by: paddyfool on November 16, 2010, 07:53:03 am
The Congo is clearly worse than all of the countreis you've listed

Uganda under Idi Amin was far worse than the Congo under Mobutu  Google up Idi Amin:  Anything Mobutu did, Amin doubled up on. At least Mobutu did not himself personally eat his enemies, delegating that to his lieutenants.  Indeed Idi Amin was a caricature of Mobutu in the way that Pol Pot was a caricature as Lenin.  Mobutu gave himself absurd self glorifying titles.  Amin gave himself self glorifying titles twice as absurd.  Mobutu had his enemies eaten, Amin himself ate them.


I don't need to google up Idi Amin - I lived in Uganda for three years and am aware of its history.  And I was talking about "worse at the present time", although the Congo was also pretty shit under Mobutu, particularly in the later years.  

Quote
Rwanda and Nigeria were worse than Uganda and the Congo, for they committed genocides, while Uganda and Rwanda did not.

I think you've mixed up the countries you're talking about here... the only clear genoice from any of those countries has been in Rwanda, although the Biafran war and the Second Congo War both bordered on the genocidal.  Which countries did you mean?

Quote
Decolonization was a disaster everywhere except for Singapore and Botswana, and in most cases a catastrophe, as in Zimbabwe and the Congo.

You keep saying this, but please look at the evidence.

There were in fact quite a lot of educated blacks in the Congo - educated to the level of being numerate and able to speak, read, and write fluently in several western languages.  When people claim that none of them had an education they mean that none got put into western ruling elite universities to be trained to rule with members of the western ruling class, the way Mugabe was, and the way Smith was not.  

Having only 12 people educated to degree level at independence is still an issue

Quote
It is an irrelevance.  If lack of college education was the cause of the disaster, Botswana would have imploded, and Zimbabwe succeeded.

Lack of college education was just one facet of the ugly legacy left to the DRC, certainly, but it was a difference with Botswana, which had had ample people educated to university level (although largely in apartheid era South Africa, which was problematic; hence it set up its own university two years prior to independence).  Botswana had a history of largely running its own affairs before and during British protection, and so was quite capable of continuing to run its own affairs with minimal transition.  The DRC had never existed as a self-governing country before colonialism, united disparate groups over a wide, hard to navigate area, and had been ruled by brutal outside oppression for much of its colonial history (although relatively benign oppression after Leopold's time).  See here http://en.wikipedia.org/wiki/Bechuanaland_Protectorate and here http://en.wikipedia.org/wiki/Congo_free_state for a comparison of their colonial legacies.  Overall, I would say that Botswana, like Uganda, was saved the worst of colonialism partly by being inland and thus relatively tricky to exploit.

when you need doctors, engineers, etc.

Tanzania under Nyerere  was flooded with foreign and local doctors and engineers in an effort to demonstrate the effectiveness of foreign aid based development.  Observe what happened.  Your theory has been tried and found wanting.[/quote]

Yes, Nyerere was into collectivisation and repression, and repeatedly screwed over his own country's economy.  But at least Tz had infrastructure, services, food, and peace, even if it never grew rich; its history post-colonialisation is still way better than that of the DRC.

Quote
Having had all the reins of power in the hands of a foreign elite who never trusted you with them beyond the level of village chiefdom and who then up and leave is also something of a problem.
Yet the politically correct explanation of the Rwandan genocide is that the foreign elite did trust the local elite.

They created a puppet-elite out of one ethnic group over the other, and let them bear the resentment for colonial rule as opposed to the less directly-involved Belgians.  It's a clever strategy, and an old one - the Brits did something similar in Kenya and Uganda, only we installed Indians instead, and you can also draw parallels with the Spartans and the Helots if you like.  But the resentment that was created directly fed into the long cycle of massacres post-independence that led up to the genocide, and similar problems in Burundi next door, as they similarly fed into Idi Amin's persecution and expulsion of Uganda's South Asian population.


Never mind the politics, the issue was the lack of basic vocational training and administrative experience.

Idi Amin had administrative experience, and was worse than Mobutu.

One man versus another does not relate to one infrastructure versus another.  Besides, Mobutu arguably had more experience, as a long-term political type rather than as a random fat sergeant.

Quote
Abdirashid Ali Shermarke and Muhammad Siad Barre had vocational training and administrative experience.   Barre's regime was a worse disaster than Amin's.  Shermarke's ideology caused Barre's regime. Western university education caused Shermarke's ideology.  

Once again: the leaders, versus the general social experience.  If a country's used to running itself, it can do it better and cleaner than if it has to set up everything from the start.  Similarly, it can do it better if it can hire skilled people to run things; e.g. a doctor to run the health system, rather than some random political crony.  Or an experienced military officer to run the army, etc. etc.

Quote
If the wisdom and benevolence of Western elite universities could have fixed things, Zimbabwe and Tanzania should have done fine.

Look, I never said the presence of an educated elite was sufficient or even necessary.  But having people with skills, particularly doctors, engineers, etc., is very helpful.  Not having them becomes a problem.

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Mobutu was very chummy with a string of American presidents

This is not true,

http://en.wikipedia.org/wiki/File:Mobutu_Nixon.gif
http://www.reagan.utexas.edu/archives/speeches/1983/80483a.htm
http://www.heritage.org/research/reports/1989/06/zaires-mobutu-visits-america

Quote
and if it had been true, would not be evidence that he was installed by foreign powers.  The false claim that he was chummy with the US rests on the true fact that he was hostile to the Soviet Union - but he was hostile to the Soviet Union because all whites looked alike to him.

It's fair enough that this would not be sufficient evidence, and quite honestly, I can't be bothered to try to find it, but he was certainly chummy with the US.

Quote
Whatever role the CIA did or did not have in Lumumba's assassination

If a white guy had shown up in the Congo at the time outside of a few heavily guarded places, all of them in extreme danger, Lumumba would have had Mobutu cut his head off, and Mobutu's staff would have eaten him.  Those circumstances were not conducive to foreign intervention.  How did the CIA intervene?  By beaming thought waves from America?

Please stick to the evidence rather than conjuring up imaginary scenarios. The truth is that there's clear evidence that the Belgians were involved: http://www.amazon.com/Assassination-Lumumba-Ludo-Witte/dp/1859846181  To what degree they had the CIA's backing, however, remains a more open question.  http://www.usnews.com/usnews/doubleissue/mysteries/patrice.htm

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Which fails to report any twentieth century or late nineteenth century peacetime famines, and neglects to mention that the 1943 famine was caused by the Japanese army laying siege

Read it again.  There were famines in 1876-78 and 1896–97.  Besides, why overlook all of the other famines that happened earlier?

And I have to go now.  I'll return to the rest later.  But one quick point: to look at decolonisation only in terms of the short-term consequences of a difficult transition I think is a mistake.  You have to look longer-term as well.
Title: Re: Gold cirkulation?
Post by: vonAdler on November 16, 2010, 08:34:38 am
The disadvantages of using actual gold in circulation are many;

The first thing I would say is that the belters are probably so much more educated than we are. I'd bet they have a much better understanding of the historic misuse of paper.

Second though, is that there may be alternatives to traditional bullion in use, such as Shire Silver (http://shiresilver.com), which alleviates many of the problems you mentioned. By encapsulating the precious metal in plastic, it prevents shaving and wear, while making much smaller amounts of precious metals easy to handle. It also confers most of the good advantages of paper, while avoiding the bad aspects.

Third, it makes a point for the story. When we see traditional bullion being used, we recognize it and all the implications pretty quickly.

Storywise it makes a lot of sense, of course. For the sheer feeling of it, few things beat gold coins I guess (even if the lower weight in the low gravity of Ceres would lessen that feeling). As for the problem with paper money, even when fully backed 1:1 by gold, I think it is less subject to abuse than bullion. Who quality-checks and weighs the gold before it is encased in plastic, if you use that system? How do you check that a coin/cube/unit is genuine gold and not gold-plated led if it is encased in plastic?

The main advantage of money has since the invention of the concept been that it can be traded back and forth and stored without problem. Bartering only takes you so far. Unless you have someone you trust guaranteeing the value of the money, you will need to test the money for its value, meaning weighing and checking purity for a gold coin/cube/unit, making everyday transactions as we know it cumbersome. It might work for known patrons or steady guests, who can have an account they come in and settle once every two months or so, but the spaceport seem to have a steady influx of tourists, strangers and passer-bys, so it cannot be possible for everyone.

I guess electronic gold could be a viable alternative. "Frank's gold storage" would have 1000kg:s of gold stored, and all merchants and most people have accounts. When I come in to Babette's for lunch, I swipe my card and the computers at Frank's would update to show that 0,5g of gold more now belongs to Babette and 0,5g of gold less belongs to me (or whatever the lunch at Babette's cost). if one trusts Bob with keeping prisoners, bail and bond, I guess one could trust Frank with storing gold, if one knows Frank. He could keep his books open (with accounts anonymous, of course), so that all can check that he has the amount of gold in his vault his electronic cards guarantees.

While very good for the story, there's lots of practical problems with handling bullion in every-day transactions. That is why state coinage and eventually personal cheuqes and paper money replaced it - before ww1 often with an actual 1:1 gold backing. When the issuer of coinage/cheques/paper money/electronic cards do not have a violence monopoly, control the judiciary, the lawmakers nor the law enforcers (like a state), I think the ability to fake, dilute and over-print and get away with it is close to nil.
Title: Re: Gold cirkulation?
Post by: ShireSilver on November 16, 2010, 09:17:33 am
Storywise it makes a lot of sense, of course. For the sheer feeling of it, few things beat gold coins I guess (even if the lower weight in the low gravity of Ceres would lessen that feeling). As for the problem with paper money, even when fully backed 1:1 by gold, I think it is less subject to abuse than bullion. Who quality-checks and weighs the gold before it is encased in plastic, if you use that system? How do you check that a coin/cube/unit is genuine gold and not gold-plated led if it is encased in plastic?
Has there ever been even one single case of a paper currency not being debased? The closest thing I can think of is where a government has been overthrown and the people kept using the paper because they knew no more of it could be printed.

Who checks the gold and silver? The manufacturer would (I certainly do). But also, users can check as well. The stuff I make you can burn away the plastic with a cigarette lighter, then weigh the metal yourself. You can take the metal in to pretty much any jeweler and they can check the purity. (Note that the weight+volume test is insufficient if you want to be sure. You have to actually destroy the piece to have certainty. But statistically you only need to destroy a very small percentage to be reasonably sure.)

If just a few people occasionally test some, that should be sufficient to satisfy almost everyone. Those who aren't satisfied can check themselves. If the testers find that the masses or fineness are off, the market will severely punish the manufacturer.

Each manufacturer will, of course, brand their product. Even in a society opposed to intellectual property, fraud protection via brand identity will be used.

I guess electronic gold could be a viable alternative. "Frank's gold storage" would have 1000kg:s of gold stored, and all merchants and most people have accounts. When I come in to Babette's for lunch, I swipe my card and the computers at Frank's would update to show that 0,5g of gold more now belongs to Babette and 0,5g of gold less belongs to me (or whatever the lunch at Babette's cost). if one trusts Bob with keeping prisoners, bail and bond, I guess one could trust Frank with storing gold, if one knows Frank. He could keep his books open (with accounts anonymous, of course), so that all can check that he has the amount of gold in his vault his electronic cards guarantees.
Yep, as long as we can keep government out of it, electronic gold should work. That's pretty much why it hasn't taken off already.

I do envision the possibility of an open and auditable system of distributed warehousing where the actual warehouses aren't known. If someone can do this, then even governments won't be a problem.

When the issuer of coinage/cheques/paper money/electronic cards do not have a violence monopoly, control the judiciary, the lawmakers nor the law enforcers (like a state), I think the ability to fake, dilute and over-print and get away with it is close to nil.

Exactly. Once government is out of the way, we will almost certainly have honest money. Until then, we can use agorism to combat fiat.
Title: Re: Gold cirkulation?
Post by: SandySandfort on November 16, 2010, 10:20:29 am
While I realise the advantages of a gold-based currency, why do people use actual gold in circulation? To me, it seems like a paper representation of said currency should have been introduced a long time ago, either by various financing/deposit companies or on personal basis?

It was. Belters use a wide variety of moneys, such as:

   http://bigheadpress.com/eft?page=25

As you will note, the room rental was paid for with digital gold, not gold coins. While gold certificates aren't mentioned, they are in the mix, as well as silver certificates, hemp script and just about any sort of money you can imagine.

... It seems like the belters use 24 carat gold which is very soft.

Where did you get that impression? I do not recall the gold content of coins being discussed. I would assume most coins would be .900 fine. Presto, hard coins.

Any vaulable metal coin/cube/unit will also very likely be subject to shaving - this is a practice that has existed as long as valuable metal coins. Shave off a tiny fraction of a gold coin, most will still accept the gold coin for its face value, but you get some more gold - for free, until some poor schmuck lands with a coin that is so shaven that it is no longer accepted at face value. It is weighed and worth less.

I use this:

   http://www.fisch.co.za/home.htm

,,,I want myself a new, larger and much more luxurious seastead.... So I get together gold for $2 million or so for my mansion - that is a lot of gold to drag around.

Uh, why not just write a check on your gold account or have your bank issue you a gold cashiers check?

The advantage of course is that you do not need to risk anyone making more bills than there is gold coverage for (something private banks did frequently in 19th century Europe), but with the level of trust in the ERF society, I think someone could be able to build up something like "First Belter Deposit and Safeguard House" where you for a small sum can deposit your gold and have it safely stored and get a written guarantee of this deposit (or several) that you can use as currency. They could be written as personal checks or individual bills I guess?

Duh. Some advice: (1) Don't try to teach your grandmother how to suck eggs. (2) Don't build rococo or byzantine arguments based upon unsupported and indefensible assumptions (where have we seen that before?). (3) Use a spell checker.

Why are the belters not using such a system?

See (2), above.
Title: Re: Ten Dollars!
Post by: vonAdler on November 16, 2010, 10:31:59 am
Alright, sorry, it seems like I was mistaken. Me being a non-native English speaker seems also to have gotten the better of me. I shall remove myself from the debate.
Title: Re: Ten Dollars!
Post by: SandySandfort on November 16, 2010, 01:03:33 pm
... Me being a non-native English speaker...

In which case, I must say that your English is quite good. What is your native language? German? My experience is that German speakers who have learned English speak better English than the average American.

... seems also to have gotten the better of me. I shall remove myself from the debate.

Not really. Your assumptions are the important issues. Too often in this Forum, there are posters who waste bandwidth with verbose arguments based on one assumption or other they have made about the world of EFT (and the real world, as well). Alarms go off in my head when post start out with conclusions, masked as questions. E.g., "Since everyone knows gold is an archaic relic, how can the Belters... blah, blah, blah." (BTW, I know that is not your position. I was just illustrating the principle.) For what it's worth, your views are perfectly valid, but you are attacking a straw man as you are beating a dead horse he is riding.  :)   (Don't you just love English idioms?)

Please stay in the debate; you clearly have something to contribute. Just don't jump to conclusions on the basis of a questionable "clue" or two.
Title: Re: Ten Dollars!
Post by: paddyfool on November 16, 2010, 01:09:24 pm
@jamesd,

Quote
So what famines were you talking about?  Your claim was that living standards stagnated under colonialism - but since British colonialism eventually put an end to Indian famines after 1896, Indian living standards did not stagnate under colonialism.

One more famine for you: http://en.wikipedia.org/wiki/Indian_famine_of_1899-1900.  But seriously, I had no idea that by "late 19th century", you were talking about "after 1896" - it sounded much more like you meant the second half or so.

Quote
Sen's argument is that the 1943 war famine could have been prevented if only the British had imposed socialism - but the record of socialism, particularly socialism during war, makes the claim improbable.  Socialism does not prevent famine, and men with guns cause famine.

Not really, as I read it, not that I was basing my opinion of the general association between British occupation and famine in India on Sen's work or that specific famine anyway.  But as it happens, there was a lot more to the Bengal famine than the actions of the Japanese (again, wikipedia because I'm lazy that way: http://en.wikipedia.org/wiki/Bengal_famine_of_1943) and I also think you're rather misrepresenting Sen's case anyway.

Quote
The relevant comparison is how they were a decade or two before decolonization, as compared to how they were in the decade or two following decolonization.  Decolonization was almost everywhere a disaster, while colonization had almost everywhere brought peace and prosperity.  In India the immediate consequences of independence were civil war, massacres of civilians, and economic decline - and India was better than most.

To take just the period immediately before independence and compare it to that immediately after is cherrypicking.  There's a lot more to the history of most colonies than that on both sides.  After all, if someone were to write an analysis of whether the USA had been a success comparing only 1782-1802 with 1755-1775, and draw scathing conclusions based on the flight of former loyalists, the Indian wars, the Shay's rebellion, the failure of the Continental Congress to establish a currency, the Whiskey Rebellion etc., or the depressed economy for much of the period immediately after independence (http://en.wikipedia.org/wiki/File:GROWTH1850.JPG), would you agree with them?
Title: Re: Gold cirkulation?
Post by: jamesd on November 16, 2010, 01:53:04 pm
The disadvantages of using actual gold in cirkulation are many;
It is soft. It seems like the belters use 24 carat gold which is very soft. just having a bunch of coins/cubes/units in your pocket wearing against each other will quickly start wearing them down.

Coins that are actually used, and jingle in pockets, should be 11% copper, 89% gold - which alloy is golden red and much stronger than pure gold.  Bulk gold, that is regularly weighed, or rarely used coins, should be pure, because of the uncertainty of measuring the exact purity.

Such alloy coins have fine decoration on all surfaces, such that when the decoration gets noticeably worn, the coins have not sweated much gold.

Another solution is to use pure coins, but to sheath them in a thin layer of plastic.

When paper money goes bad, as in Zimbabwe, people just measure gold by weight, and estimate the purity with a touchstone.

Title: Re: Ten Dollars!
Post by: terry_freeman on November 16, 2010, 08:43:16 pm
Who quality-checks the gold before it is encased in plastic? Manufacturers know that anyone can test the gold, and would be careful of their reputation. Historically, there have been mints which were extremely reliable, and mints which were not; it did not take long for customers to discover which was which. At one time, it was the norm to write contracts in terms of "so many ounces of Moffat gold" or "so many ounces of Bechtier gold" - two well-known private mints with unblemished reputations for high quality.

Gold is one of the most dense materials known; I urge the naysayers to take a break from their orgiastic faultfinding long enough to actually purchase a tenth or an ounce of gold, and directly experience the density for themselves. Even in low gravity, objects have inertia; the difference will be noticed. I recently handed a one ounce gold coin to my broker; it was the first time he had held an ounce of gold, and he immediately noticed the sheer density. This is not your government's cheap zinc trash.

The same objection applies even more strongly to paper or electronic substitutes. It is likely that these will exist, especially for large transactions, but one must ask "how do we trust the Bank of Whatever to actually have gold backing their digital or paper certificates?"

The best answer is this: Bank of Whatever must immediately trade digital or paper certificates for actual tangible gold on demand, in unlimited amounts, on demand. Customers who insist on the actual tangible stuff will help to ensure the honesty of the warehouse certificates.

Regarding the softness of 24 carat gold, many gold coins have been minted with about 10% of some other, harder metal for that reason. I conjecture that they would be stamped with the weight of actual gold content and the purity. The edges of some coins are milled to prevent clipping. Odds are that, in the near future, some impervious outer case may become the norm - it would certainly prevent silver from tarnishing, and would eliminate clippage.
Title: Re: Ten Dollars!
Post by: jamesd on November 17, 2010, 03:50:27 am
The Congo is clearly worse than all of the countreis you've listed

Uganda under Idi Amin was far worse than the Congo under Mobutu  Google up Idi Amin:  Anything Mobutu did, Amin doubled up on. At least Mobutu did not himself personally eat his enemies, delegating that to his lieutenants.  Indeed Idi Amin was a caricature of Mobutu in the way that Pol Pot was a caricature as Lenin.  Mobutu gave himself absurd self glorifying titles.  Amin gave himself self glorifying titles twice as absurd.  Mobutu had his enemies eaten, Amin himself ate them.

I don't need to google up Idi Amin - I lived in Uganda for three years and am aware of its history.  And I was talking about "worse at the present time"

The fact that seventy years after decolonization, some African countries are less hellholes than they used to be, and some are worse than others, is irrelevant.  What is relevant is that after decolonization, all the colonies went to hell in a handbasket except for Botswana and Singapore.  What is relevant is that they generally enjoyed rapidly rising levels of prosperity and civilization under colonialism, and most of them have stagnated since.

India was decaying before colonialism, and stagnated for forty years after colonialism.  The fact that now it is doing OK is not an argument for decolonization.

Rwanda and Nigeria were worse than Uganda and the Congo, for they committed genocides, while Uganda and Rwanda did not.

I think you've mixed up the countries you're talking about here... the only clear genoice from any of those countries has been in Rwanda, although the Biafran war and the Second Congo War both bordered on the genocidal.  Which countries did you mean?

I meant to say Rwanda and Nigeria were worse than Uganda and the Congo, for Rwanda and Nigeria committed genocides, while Uganda and the Congo did not

Decolonization was a disaster everywhere except for Singapore and Botswana, and in most cases a catastrophe, as in Zimbabwe and the Congo.

You keep saying this, but please look at the evidence.

If your success story is India, you are mighty hard up for success stories:  Immediately following independence they got civil war, followed by forty years of economic stagnation.  Your argument that decolonization ended Indian famines is in fact an argument that they were better off decolonized than they were when the Japanese were trying to starve them into submission, a less than glowing commendation for decolonization.

If that is your evidence, you are mighty short of evidence.

The DRC had never existed as a self-governing country before colonialism, united disparate groups over a wide, hard to navigate area, and had been ruled by brutal outside oppression for much of its colonial history (although relatively benign oppression after Leopold's time).

King Leopold ended cannibalism, and though replacing private slavery with slavery to King Leopold was no improvement, neither was it worse than what the Congo had before King Leopold.  So your argument reduces to saying that they were too backward for independence.  Congratulations.  I am sure King Leopold, and all the whites murdered after independence, would agree.

I suppose you are making the point that the colonialists could have benevolently prepared the Congo for independence, and conspicuously failed to do so - but Rwanda and Somalia were benevolently prepared for independence, which preparation contributed to their disasters.  With less preparation for independence, Rwanda might have succeeded the way Botswana did, by continuing the quite functional and prosperous pre colonial social order which those benevolently preparing Rwanda for independence destroyed.

Overall, I would say that Botswana, like Uganda, was saved the worst of colonialism partly by being inland and thus relatively tricky to exploit.

And to what then do you attribute the success of Singapore and Hong Kong?

The most inland and hardest to exploit countries in Africa are the Congo and the Central African Republic - which are among the worst hell holes of Africa.

Botswana contains a lot of white colonists.  They went there for the diamonds.  In the early days of colonialism, they ruled under the supervision of a black king, and after decolonization, the metropolitan power left, but the white colonists remained, and once again they rule under a black king.   Botswana was run, and until very recently still was run, as a De Beers franchise. De Beers rules through the King, and the King rules through DeBeers.  Most positions of authority, for example the coach of their football team, are occupied by whites or by people who, despite black names, somehow do not look very black at all.

Having had all the reins of power in the hands of a foreign elite who never trusted you with them beyond the level of village chiefdom and who then up and leave is also something of a problem.
Yet the politically correct explanation of the Rwandan genocide is that the foreign elite did trust the local elite.
They created a puppet-elite out of one ethnic group over the other

The Tutsi ruled Rwanda long before the colonists arrived, and ruled it well.  When the colonists came, the colonists decided to refrain from fixing what was not broken.  It was the metropolitan progressive decision to smash the long established existing social order and apply affirmative action to the Hutu - which affirmative action eventually escalated into genocide.

If Tutsi rule was a colonial creation, would not the colonists have reported it? before racial inequality became politically incorrect, they would have had no reason to lie about it.  Instead, the colonists reported a country well run by a superior black race competently ruling over an inferior black race.  The older version is told by people who had no reason to lie. (http://books.google.com.au/books?id=WNYDAAAAMBAJ&pg=PA70&dq=Watussi+OR+Watusi&hl=en&ei=PZ7jTKSJDoLKvQOOtuXDDg&sa=X&oi=book_result&ct=result&resnum=3&ved=0CC4Q6AEwAjgK)  The new version, that the Tutsi were a colonial creation, comes from people who have reason to lie - to conceal their guilt in creating mass murder.

Abdirashid Ali Shermarke and Muhammad Siad Barre had vocational training and administrative experience.   Barre's regime was a worse disaster than Amin's.  Shermarke's ideology caused Barre's regime. Western university education caused Shermarke's ideology.  

Once again: the leaders, versus the general social experience.  If a country's used to running itself, it can do it better and cleaner than if it has to set up everything from the start.  Similarly, it can do it better if it can hire skilled people to run things; e.g. a doctor to run the health system, rather than some random political crony.  Or an experienced military officer to run the army, etc. etc.
  But Barre was an experienced police officer.

If the wisdom and benevolence of Western elite universities could have fixed things, Zimbabwe and Tanzania should have done fine.

Look, I never said the presence of an educated elite was sufficient or even necessary.  But having people with skills, particularly doctors, engineers, etc., is very helpful.  Not having them becomes a problem
Which seems like a compelling argument for continuing colonialism.

Whatever role the CIA did or did not have in Lumumba's assassination

If a white guy had shown up in the Congo at the time outside of a few heavily guarded places, all of them in extreme danger, Lumumba would have had Mobutu cut his head off, and Mobutu's staff would have eaten him.  Those circumstances were not conducive to foreign intervention.  How did the CIA intervene?  By beaming thought waves from America?

Please stick to the evidence rather than conjuring up imaginary scenarios. The truth is that there's clear evidence that the Belgians were involved: http://www.amazon.com/Assassination-Lumumba-Ludo-Witte/dp/1859846181

At the time, every white person had fled the Congo, and any Belgian apparatus in the Congo had collapsed suddenly in chaos - indeed all institutions in the Congo had collapsed suddenly in chaos.  This make Belgian intervention, or any outside intervention, improbable.  The country had fallen apart in violence and disorder, making foreign intervention impractical, and endangering the survival of anyone in the Congo in any position of authority.  Before he was killed, Lumumba's authority and his ability to influence events was collapsing, had arguably collapsed.  When the official ruler of the country is demonstrably unable make the army obey, foreign plots are entirely redundant as an explanation of his cause of death.

 There were famines in 1876-78 and 1896–97.  Besides, why overlook all of the other famines that happened earlier?

Before colonialism, famines were the normal condition.  During colonialism, famines ceased.
Title: Re: Ten Dollars!
Post by: paddyfool on November 17, 2010, 04:58:19 am
The fact that seventy years after decolonization, some African countries are less hellholes than they used to be, and some are worse than others, is irrelevant.  What is relevant is that after decolonization, all the colonies went to hell in a handbasket except for Botswana and Singapore.  What is relevant is that they generally enjoyed rapidly rising levels of prosperity and civilization under colonialism, and most of them have stagnated since.

Singapore had a very ropey experience of independence the first time around, and only got it right on their second shot.  Botswana was never fully colonialised.  And Uganda was doing OK, until we sponsored Idi's coup

Quote
India was decaying before colonialism, and stagnated for forty years after colonialism.  The fact that now it is doing OK is not an argument for decolonization.

It decayed or over a century under colonialism besides.  Takes a while to get going after that.

Quote
I meant to say Rwanda and Nigeria were worse than Uganda and the Congo, for Rwanda and Nigeria committed genocides, while Uganda and the Congo did not

I would say that Nigeria's experience, overall, regardless of Biafra, has been much better than that of the Congo, while still certainly having problems

Decolonization was a disaster everywhere except for Singapore and Botswana, and in most cases a catastrophe, as in Zimbabwe and the Congo.

You keep saying this, but please look at the evidence.

If your success story is India, you are mighty hard up for success stories:  Immediately following independence they got civil war, followed by forty years of economic stagnation.  Your argument that decolonization ended Indian famines is in fact an argument that they were better off decolonized than they were when the Japanese were trying to starve them into submission, a less than glowing commendation for decolonization.

If that is your evidence, you are mighty short of evidence.

The DRC had never existed as a self-governing country before colonialism, united disparate groups over a wide, hard to navigate area, and had been ruled by brutal outside oppression for much of its colonial history (although relatively benign oppression after Leopold's time).

Quote
King Leopold ended cannibalism, and though replacing private slavery with slavery to King Leopold was no improvement, neither was it worse than what the Congo had before King Leopold.  So your argument reduces to saying that they were too backward for independence.  Congratulations.  I am sure King Leopold, and all the whites murdered after independence, would agree.

I suppose you are making the point that the colonialists could have benevolently prepared the Congo for independence, and conspicuously failed to do so - but Rwanda and Somalia were benevolently prepared for independence, which preparation contributed to their disasters.  With less preparation for independence, Rwanda might have succeeded the way Botswana did, by continuing the quite functional and prosperous pre colonial social order which those benevolently preparing Rwanda for independence destroyed.

The colonial history of Rwanda was anything but benevolent.  And Somalia was fundamentally screwed over by one man's ambition.

Quote
Overall, I would say that Botswana, like Uganda, was saved the worst of colonialism partly by being inland and thus relatively tricky to exploit.

And to what then do you attribute the success of Singapore and Hong Kong?

The context of city states is very different to that of nation states, but the specific feature of being largely left alone did contribute to Hong Kong's success, although due to enlightened policy rather than geography.  Singapore, meanwhile, had already been through one very ropey attempt at independence (http://en.wikipedia.org/wiki/Post-war_Singapore), and was lucky enough to profit from the experience with generally enlightened leadership (outside of a lack of respect for individual freedoms) who did it better the second time around.

Quote
The most inland and hardest to exploit countries in Africa are the Congo and the Central African Republic - which are among the worst hell holes of Africa.

I'm not so familiar with the CAR, but they, like the DRC, had an experience of being brutally subjugated and looted.

Quote
Botswana contains a lot of white colonists.  They went there for the diamonds.  In the early days of colonialism, they ruled under the supervision of a black king, and after decolonization, the metropolitan power left, but the white colonists remained, and once again they rule under a black king.   Botswana was run, and until very recently still was run, as a De Beers franchise. De Beers rules through the King, and the King rules through DeBeers.  Most positions of authority, for example the coach of their football team, are occupied by whites or by people who, despite black names, somehow do not look very black at all.

It contained powerful colonialist factions, certainly, but it never experienced the same kind of brutal subjugation under colonial influence as was present in the DRC, Rwanda, or the CAR.  The colonialists that arrived there were invited as investors, rather than coming in by force as invaders; their status in the British empire was as a "protectorate" because they did a deal with us Brits to be under their umbrella rather than open to assimilation by the more powerful South Africa or Southern Rhodesia.  Basically, they ran themselves.

Having had all the reins of power in the hands of a foreign elite who never trusted you with them beyond the level of village chiefdom and who then up and leave is also something of a problem.


Yet the politically correct explanation of the Rwandan genocide is that the foreign elite did trust the local elite.

No, it isn't.  They weren't trusted and left alone, but used as accessory looters and specificaly favoured.  Two different things.

Quote
The Tutsi ruled Rwanda long before the colonists arrived, and ruled it well.  When the colonists came, the colonists decided to refrain from fixing what was not broken.  It was the metropolitan progressive decision to smash the long established existing social order and apply affirmative action to the Hutu - which affirmative action eventually escalated into genocide.

If Tutsi rule was a colonial creation, would not the colonists have reported it? before racial inequality became politically incorrect, they would have had no reason to lie about it.  Instead, the colonists reported a country well run by a superior black race competently ruling over an inferior black race.  The older version is told by people who had no reason to lie. (http://books.google.com.au/books?id=WNYDAAAAMBAJ&pg=PA70&dq=Watussi+OR+Watusi&hl=en&ei=PZ7jTKSJDoLKvQOOtuXDDg&sa=X&oi=book_result&ct=result&resnum=3&ved=0CC4Q6AEwAjgK)  The new version, that the Tutsi were a colonial creation, comes from people who have reason to lie - to conceal their guilt in creating mass murder.

There were considerably more Tutsi than Hutu among the ruling group pre-Belgian occupation, but the Belgians pushed the dichotomy considerably further under their rule, explicitly favouring the Tutsi over the Hutu, partly yes, out of racist ideology, to gain their support and redirect resentment their way, while using them to practice a similar kind of raubwirtschaft (http://en.wikipedia.org/wiki/Raubwirtschaft) against the Hutu as they had for some time longer been practicing against the Congolese.

Abdirashid Ali Shermarke and Muhammad Siad Barre had vocational training and administrative experience.   Barre's regime was a worse disaster than Amin's.  Shermarke's ideology caused Barre's regime. Western university education caused Shermarke's ideology.

Shermarke was assassinated after only two years in power, after travelling to a drought-hit region in spite of warnings of conspiracies against him, and I can't seem to dig up much more on his policies than a "non-aligned foreign policy".  So how did his ideology, whatever it was, cause Barre's regime?

Barre's regime was caused quite simply by Barre's ambition, and his need to assassinate the democratically elected leader to take power.  Young democracies are often fragile to ambitious men in this way, from Latin America through Europe, Asia, etc. 

If the wisdom and benevolence of Western elite universities could have fixed things, Zimbabwe and Tanzania should have done fine.

Why are you reposting points I've already answered without including my replies?

If a white guy had shown up in the Congo at the time outside of a few heavily guarded places, all of them in extreme danger, Lumumba would have had Mobutu cut his head off, and Mobutu's staff would have eaten him.  Those circumstances were not conducive to foreign intervention.  How did the CIA intervene?  By beaming thought waves from America?

By sending a guy over to poison him, according to that article I linked.  Except the Belgians got there first anyway.

Quote
Before colonialism, famines were the normal condition.  During colonialism, famines ceased.

The history of colonialism in India goes back to 1770, and of the British Raj specifically to 1858, not 1900. 
Title: Re: Ten Dollars!
Post by: ShireSilver on November 17, 2010, 05:21:02 am
The same objection applies even more strongly to paper or electronic substitutes. It is likely that these will exist, especially for large transactions, but one must ask "how do we trust the Bank of Whatever to actually have gold backing their digital or paper certificates?"

The best answer is this: Bank of Whatever must immediately trade digital or paper certificates for actual tangible gold on demand, in unlimited amounts, on demand. Customers who insist on the actual tangible stuff will help to ensure the honesty of the warehouse certificates.

I have often thought that most currency systems are backwards. That is, we should be using coins for the bigger amounts and paper for the small change. If someone passes a counterfeit 10 cent note to you, are you really going to be all that upset? Is anyone going to go to all that expense just to counterfeit 10 cent notes?

Regarding the softness of 24 carat gold, many gold coins have been minted with about 10% of some other, harder metal for that reason. I conjecture that they would be stamped with the weight of actual gold content and the purity. The edges of some coins are milled to prevent clipping. Odds are that, in the near future, some impervious outer case may become the norm - it would certainly prevent silver from tarnishing, and would eliminate clippage.

Originally I thought an impervious shell would be good, but it would prevent inspections of the underlying metal. More important, I believe, is that any tampering be immediately evident.
Title: Re: Ten Dollars!
Post by: J Thomas on November 17, 2010, 07:58:02 am
Decolonization was a disaster everywhere except for Singapore and Botswana, and in most cases a catastrophe, as in Zimbabwe and the Congo.

You keep saying this, but please look at the evidence.

Quote
Quote
King Leopold ended cannibalism, and though replacing private slavery with slavery to King Leopold was no improvement, neither was it worse than what the Congo had before King Leopold.  So your argument reduces to saying that they were too backward for independence.  Congratulations.  I am sure King Leopold, and all the whites murdered after independence, would agree.

I suppose you are making the point that the colonialists could have benevolently prepared the Congo for independence, and conspicuously failed to do so - but Rwanda and Somalia were benevolently prepared for independence, which preparation contributed to their disasters.

The colonial history of Rwanda was anything but benevolent.  And Somalia was fundamentally screwed over by one man's ambition.

Yet the politically correct explanation of the Rwandan genocide is that the foreign elite did trust the local elite.

No, it isn't.  They weren't trusted and left alone, but used as accessory looters and specificaly favoured.  Two different things.

Quote
If Tutsi rule was a colonial creation, would not the colonists have reported it? before racial inequality became politically incorrect, they would have had no reason to lie about it.  Instead, the colonists reported a country well run by a superior black race competently ruling over an inferior black race.  The older version is told by people who had no reason to lie. (http://books.google.com.au/books?id=WNYDAAAAMBAJ&pg=PA70&dq=Watussi+OR+Watusi&hl=en&ei=PZ7jTKSJDoLKvQOOtuXDDg&sa=X&oi=book_result&ct=result&resnum=3&ved=0CC4Q6AEwAjgK)  The new version, that the Tutsi were a colonial creation, comes from people who have reason to lie - to conceal their guilt in creating mass murder.

There were considerably more Tutsi than Hutu among the ruling group pre-Belgian occupation, but the Belgians pushed the dichotomy considerably further under their rule, explicitly favouring the Tutsi over the Hutu, partly yes, out of racist ideology, to gain their support and redirect resentment their way, while using them to practice a similar kind of raubwirtschaft (http://en.wikipedia.org/wiki/Raubwirtschaft) against the Hutu as they had for some time longer been practicing against the Congolese.

If the wisdom and benevolence of Western elite universities could have fixed things, Zimbabwe and Tanzania should have done fine.

Why are you reposting points I've already answered without including my replies?

Finally a question I can answer. I don't know much about the history of africa or india or singapore, indonesia, malaysia, or in fact most of the places you talk about. I have read some about independence movements in various of those places, which required some knowledge of the colonial systems they were facing etc, but not nearly enough.

So when you guys argue about the details of what happened in 19th century africa I'm lost. But in both cases I find myself wondering how either of you knows. Did you go there and listen to people tell their oral history? Did you read people's accounts of what they saw? Read official histories? It sounds like a blind-men-and-elephant story. Were the sources lying? Did they have an incomplete picture? Surely yes, to both questions.

And the two of you believe different stories. JamesD has read the old romantic stories that colonialists wrote, wonderful tales of derring-do, where the civilized people began to impose civilization on inferior savage races. He believes those stories. He disbelieves the later stories written by people who themselves were not colonialists, people who had ideological reasons to tell the story different. People who, not being colonialists themselves, instinctively wanted to make colonialists look bad.

Is he right? I haven't even read the literature, so I have only a notion about it. My notion is that colonialists who wrote books they hoped to sell for money and to get famous, would tend to tell gripping imaginative tales that made them look good. I would not expect them to be particularly truthful. And colonialists who might get in trouble if they told the truth would surely play CYA (Cover Your Ass). I would not expect them to be particularly truthful. Perhaps we could depend more on statistics? There are lots of statistics from the colonial period, right? Exports and prices, colonies that export more value are doing better, maybe? And census data. A colony whose native population is rising fast is doing better, obviously. Surely we can depend on colonialists to keep accurate census data in africa. Well no, we can't.

Did you know that King Leopold eliminated cannibalism? He said he did, and you believe him don't you? If you believe that I have another one for you -- Red China eliminated houseflies! They told all their people to swat flies, and it worked! No more flies. They said so.

When you quote facts that JamesD doesn't like, he believes they're lies. He's looked at the real facts, the ones the colonialists printed at the time or in their memoirs. If your facts disagree with their facts, he knows your facts are wrong.

So Britain eliminated famine in India. There was famine yesterday, and famine tomorrow, but never famine today. In my ignorance, I would guess the following about India. I would guess that even in good years, the poorest of the poor starve there. They are people that nobody much cares about. It's baseline, and it's been that way for a very long time. In bad years, more people get poor and more people are poor enough to starve. Under colonialism and before, the poor people didn't even have official IDs and nobody particularly counted them. Unless a famine was extra big it might not even get anecdotal evidence. But you could sort of track such things by the price of wheat.

Of course each new government in India claims they have eliminated the hunger that the last government promoted through their unwise policies. So of course when India gave up on socialism the new government made the same claim. India now feeds everybody, there's no starvation! The poorest of the poor can afford plenty of food because food is so cheap now! They can pay for it easily because there is no longer any socialism to give them money or food. Could it be that many small Indian farmers are being pushed off their land, to join the ranks of the underemployed urban poor? Are the poorest of the poor still starving? I dunno. Tune in next government.

Back to the original argument. Foreigners come in and establish a government through military force. They change the economy around to produce what they want, which they export to the home country and get wealthy. The question is whether you are better off. Eventually the invaders get pushed out, typically when it becomes more expensive for them to hold onto your land than the wealth they get from doing so. At that time you get a new government, and things get better or worse. If things get worse it can be argued that this shows the foreign occupation was a good thing. If they get better it can be argued that the foreign occupation prepared them for independence.

In almost all cases you get armies running around killing people and blowing stuff up. During colonialism. After colonialism. Armies that back some government. Some government that people don't support well enough without armies fighting to force people.

You can make an argument that colonialism is sometimes a good thing. You can similarly make an argument that slavery is sometimes a good thing. Face it, if you personally had a truly good master you would be better off than you are as a free man. And if you had a truly good government you would be better off than you would be in an AnCap society. If you had a doctor who could actually make you eat right and exercise and take your medications at the right times etc, you would be healthier than you are now. If you had a good employer you would be better off than you would as an independent contractor. BUT once you get a master, or a government, you don't get to choose again. If you don't get a good one then you are kind of stuck.

Here you and JamesD are in an AnCap forum, arguing about a large number of very very bad governments, and arguing which of them were worse, and JamesD is arguing that some of them were very good.
Title: Re: Ten Dollars!
Post by: paddyfool on November 17, 2010, 10:20:31 am
@J Thomas,

Wow, good response.  Yes, this whole debate is a little out of place here, and I apologise for my part in the derail.  You raise a few points I'd love to debate, but I'm going to rein myself in for now.  All the best,

Paddy
Title: Re: Ten Dollars!
Post by: macsnafu on November 17, 2010, 11:03:14 am
This whole de-colonization thing is disturbing.  Whether or not locals are better off or worse off, forcibly conquering and controlling a nation of people is still morally unjustified, moreso if it is a government that is doing it (involuntary taxation and spending of their citizens' money).  There are ways to help locals without conquering them.
Title: Re: Ten Dollars!
Post by: macsnafu on November 17, 2010, 11:04:36 am
For what it's worth, your views are perfectly valid, but you are attacking a straw man as you are beating a dead horse he is riding.  :)   (Don't you just love English idioms?)

Straw men ride dead horses?  I don't remember seeing that in The Wizard of Oz!   :P

Title: Re: Ten Dollars!
Post by: SandySandfort on November 17, 2010, 02:43:50 pm
Straw men ride dead horses?  I don't remember seeing that in The Wizard of Oz!   :P

Of course not. That's a gift horse of a different color.   ::)
Title: Re: Ten Dollars!
Post by: J Thomas on November 17, 2010, 03:41:47 pm
@J Thomas,

You raise a few points I'd love to debate, but I'm going to rein myself in for now.

Pick another no-fee forum anywhere you like and I'll follow you. Maybe JamesD will too.
Title: Re: Gold cirkulation?
Post by: ZeissIkon on November 17, 2010, 04:03:20 pm
Who checks the gold and silver? The manufacturer would (I certainly do). But also, users can check as well. -snip- You have to actually destroy the piece to have certainty. But statistically you only need to destroy a very small percentage to be reasonably sure.)

It's actually possible (since the 1990s, at least) to non-destructively test coins for internal content by a number of methods.  One method (which can be done in a scanning electron microscope) erforms spectral analysis of x-rays emitted under electron bombardment of the material -- this reads the surface content very accurately, but can't read below the top few nanometers.  Neutron activation can read (with low spacial resolution, but very good content accuracy) through several centimeters of even a dense material like gold, at the cost of rendering the target very slightly radioactive (less so than the tritium capsules in a set of night-visible iron gun sights).  Lasers can vaporize a bit (including, if you like, a hole smaller than a hair all the way through a coin) and read the emissions of the vapor produced (and the apparatus for this is cheaper than either an electron microscope or a neutron activation system) -- technically, very slightly destructive, but we're talking potentially picograms vaporized (and the vapor can, in principle, be recaptured).  Give another century, there'll be several other ways to verify the content of a coin without cutting or drilling it...
Title: Re: Gold cirkulation?
Post by: SandySandfort on November 17, 2010, 05:10:43 pm
High-tech is cool, but testing gold coins is really child's play. You weigh it and measure its diameter and and thickness. If it weighs less than a standard coin or is wider or thicker, it is counterfeit. The only theoretical way to counterfeit a gold coin is to create a blank out of tungsten, somehow stamp it and then plate it with gold. Tungsten has the same specific gravity as gold, so it would meet all the parameters of a pure gold coin. Tungsten-copper (or other) allowing, could be used for less-than-pure standard coins such as the Krugerrand.

So far, no such hypothetical coin has ever turned up. Why? Because tungsten is extremely brittle and hard to shape. An ordinary die would not be able to stamp an image into it. Supposedly, gold-clad, tungsten bars have been discovered, but the evidence is anecdotal. In any case, a coin would be much more difficult fake.

It's actually possible (since the 1990s, at least) to non-destructively test coins for internal content by a number of methods.  One method (which can be done in a scanning electron microscope) erforms spectral analysis of x-rays emitted under electron bombardment of the material -- this reads the surface content very accurately, but can't read below the top few nanometers.  Neutron activation can read (with low spacial resolution, but very good content accuracy) through several centimeters of even a dense material like gold, at the cost of rendering the target very slightly radioactive (less so than the tritium capsules in a set of night-visible iron gun sights).  Lasers can vaporize a bit (including, if you like, a hole smaller than a hair all the way through a coin) and read the emissions of the vapor produced (and the apparatus for this is cheaper than either an electron microscope or a neutron activation system) -- technically, very slightly destructive, but we're talking potentially picograms vaporized (and the vapor can, in principle, be recaptured).  Give another century, there'll be several other ways to verify the content of a coin without cutting or drilling it...
Title: Re: Ten Dollars!
Post by: terry_freeman on November 17, 2010, 05:24:26 pm
There will be ways to non-destructively be 100% sure of a coin's content, but in the meanwhile, a simple density test can tell a lot. Anyone remember that famous "Eureka" moment?

There is no need to test every coin; any statistically valid random sample is enough to keep a mint honest. This is not speculation; this is historically what kept Moffat and Bechtel Mints honest and prosperous for a lot of years, and led shady competitors to ruin.
Title: Re: Ten Dollars!
Post by: jamesd on November 17, 2010, 08:36:22 pm
The fact that seventy years after decolonization, some African countries are less hellholes than they used to be, and some are worse than others, is irrelevant.  What is relevant is that after decolonization, all the colonies went to hell in a handbasket except for Botswana and Singapore.  What is relevant is that they generally enjoyed rapidly rising levels of prosperity and civilization under colonialism, and most of them have stagnated since.

Singapore had a very ropey experience of independence the first time around,

Due to everywhere around it falling apart when decolonized.  They had to separate themselves from failure.

Botswana was never fully colonialised. 

Botswana was never fully metropolitanized.  It was, and is, full of whites running things - old style colonialism, before bureaucrats from London set to doing good at gunpoint to people far away of whom they new little.  The place is still largely a DeBeers franchise.  When Zimbabwe invaded and seized some Botswanan cities, how did they defeat Zimbabwe?  Suddenly a whole bunch of white people showed up on the battle field to stiffen up the seemingly quite black Botswanan army.   Looks to me more like it was never fully decolonized - that is what the Zimbabwean government said when they went in, and I am pretty sure that is what the Zimbabwean army thought when they got chased out.

What makes Botswana valuable is diamonds.  It is a diamond mine and game park with an army and a flag.  When black guys with guns came in for the diamonds, white guys with guns chased them out.  Who then really has the diamonds?  Officially the deal, originally negotiated by the king in 1920, is half white, half black.  After independence the first president, who by amazing coincidence happened to be the rightful heir to the throne, renewed the deal according to the 50/50 status quo ante of his ancestors, and the reality looks like the white share is considerable.

And Uganda was doing OK, until we sponsored Idi's coup

The CIA fired off invisible brainwaves turning the population into raging vampire bats from outer space?  How did we sponsor Idi Amin's coup?  By what physical corporeal mechanism of material cause and effect did we cause Idi Amin to gain power?

India was decaying before colonialism, and stagnated for forty years after colonialism.  The fact that now it is doing OK is not an argument for decolonization.

It decayed or over a century under colonialism besides
Railways, roads, cloth manufacture, education, the end of famine, peace, security of property.  Colonialism brought British civilization, law, education, technology, and industry to a backward people.  When the British arrived, the Indians were burning widows.  You guys have orgasms over how the communists supposedly developed Russia, but Russian roads and railways scarcely grew under the communists.  Most of Russia is still inaccessible when the season turns the roads to mud,.  Today, in India, when Indians travel, they are usually traveling on rails built during the colonial period by East India rail.  Sixty years after independence, colonial infrastructure is still quite conspicuous and heavily used.

Here is a statement from 1856 on the many things the colonists were doing for India:  http://books.google.com/books?id=2cQMAQAAIAAJ&pg=RA1-PA1138#v=onepage&q&f=false (http://books.google.com/books?id=2cQMAQAAIAAJ&pg=RA1-PA1138#v=onepage&q&f=false) one small part of which reads:
Quote
The ryots continue, as from the beginning, to show the best proof of satisfaction and confidence, by flocking back to tracts of country which were rapidly becoming desert and jungle, owing to the population being driven away, either by oppression practiced on themselves, or by the feuds and ravages of the zemindars in the neighborhood.  I have no doubt this confidence will spread and increase with the progress of our three years temporary settlement, teaching them, as it will, that their rent henceforth will be fixed and moderate, and that everything they possess beyond that rent will be their own without fear of extortion

I would say that Nigeria's experience, overall, regardless of Biafra, has been much better than that of the Congo, while still certainly having problems

What is a teeny weensy bit of mass murder, genocide, and artificial famine, between friends? 

In Nigeria, as in the Congo, they have resumed eating people.  Not a good advertisement for decolonization.  The difference between one decolonization where they returned to cannibalism, and another decolonization where they returned to cannibalism, is not great enough to care about. 

Decolonization was a disaster everywhere except for Singapore and Botswana, and in most cases a catastrophe, as in Zimbabwe and the Congo.

You keep saying this, but please look at the evidence.
If your success story is India, you are mighty hard up for success stories:  Immediately following independence they got civil war, followed by forty years of economic stagnation.  Your argument that decolonization ended Indian famines is in fact an argument that they were better off decolonized than they were when the Japanese were trying to starve them into submission, a less than glowing commendation for decolonization.

If that is your evidence, you are mighty short of evidence.

The DRC had never existed as a self-governing country before colonialism, united disparate groups over a wide, hard to navigate area, and had been ruled by brutal outside oppression for much of its colonial history (although relatively benign oppression after Leopold's time).

King Leopold ended cannibalism, and though replacing private slavery with slavery to King Leopold was no improvement, neither was it worse than what the Congo had before King Leopold.  So your argument reduces to saying that they were too backward for independence.  Congratulations.  I am sure King Leopold, and all the whites murdered after independence, would agree.

I suppose you are making the point that the colonialists could have benevolently prepared the Congo for independence, and conspicuously failed to do so - but Rwanda and Somalia were benevolently prepared for independence, which preparation contributed to their disasters.  With less preparation for independence, Rwanda might have succeeded the way Botswana did, by continuing the quite functional and prosperous pre colonial social order which those benevolently preparing Rwanda for independence destroyed.

The colonial history of Rwanda was anything but benevolent. 

You are basing this claim on the fantasies of those who are responsible for genocide.  It is like claiming the Jews were making war on Germany.  How do you know it is true?  You are relying on claims made by people with rivers of blood on their hands.  The people you are demonizing have no obvious blood on their hands.  They fairly peacefully cut deals with the existing rulers of what is now Rwanda, deals that left the existing establishment in enjoyment of what was theirs.  The people whose testimony you rely on instituted a brutal affirmative action system that shattered the social fabric, destroyed the economic system of Rwanda and eventually escalated into terror and mass murder, which terror and mass murder continued to receive substantial western military and economic support until the Tutsi started winning.

And Somalia was fundamentally screwed over by one man's ambition.

Socialism needs killing fields. 

Somalia was screwed over by the export of western ideology through western universities through western created black socialist rulers.  One man was no more responsible for disaster in Somalia than one man was responsible for the disaster in Russia.  The disaster in Somalia was 100% caused by socialism, and socialism in Somalia was 100% caused by western anti colonialist anti capitalist activists located in western academia and western metropolitan government.  Today, Somalia's troubles largely come from Islamist ideology spread by mosques, but the original and biggest disaster came from socialist ideology spread by western universities.

Overall, I would say that Botswana, like Uganda, was saved the worst of colonialism partly by being inland and thus relatively tricky to exploit.

And to what then do you attribute the success of Singapore and Hong Kong?
The context of city states is very different to that of nation states,

Bullshit.  Taiwan imitated Hong Kong, got the same results as had happened in Hong Kong.  Shanghai imitated Hong Kong, was such a big success that today China is imitating Hong Kong.  When the Vietnamese asked Lee Kuan Yew what they should do to develop, he said, "imitate Singapore".  He should know.  And in part, they did.

I'm not so familiar with the CAR, but they, like the DRC, had an experience of being brutally subjugated and looted.

The Belgians built vast amounts of infrastructure in the Congo, which infrastructure is now everywhere collapsing and falling into ruin.  The people who built and maintained that infrastructure fled massacre and rape.  Who then is doing the brutal subjugation and looting?  The Congo presents the same picture as Zimbabwe and now South Africa - the decaying ruins of an abandoned civilization.

The entire downtown area of Johannesburg, which used to be the central business district, is now a ruin occupied by feral humans, Barbecues made of old oil cans blaze in the marble foyers of what used to be the headquarters of banks and airlines. There are goats tethered in the hallways

Ponte City, a gigantic skyscraper with a magnificent view over all of Johannesburg, originally containing highly desirable offices, apartments, and a shopping center, intimately connected to a university, is now an abandoned slum, with a handful of low lifes hanging out in the ruins. Supposedly it is being redeveloped, but it has been being redeveloped for a long time. The black redevelopers cannot seem to get the lifts working properly. They are mostly redeveloping the ground floor.
Title: Re: Ten Dollars!
Post by: jamesd on November 17, 2010, 09:02:06 pm
Botswana contains a lot of white colonists.  They went there for the diamonds.  In the early days of colonialism, they ruled under the supervision of a black king, and after decolonization, the metropolitan power left, but the white colonists remained, and once again they rule under a black king.   Botswana was run, and until very recently still was run, as a De Beers franchise. De Beers rules through the King, and the King rules through DeBeers.  Most positions of authority, for example the coach of their football team, are occupied by whites or by people who, despite black names, somehow do not look very black at all.

It contained powerful colonialist factions, certainly, but it never experienced the same kind of brutal subjugation under colonial influence as was present in the DRC, Rwanda, or the CAR.  The colonialists that arrived there were invited as investors, rather than coming in by force as invaders; their status in the British empire was as a "protectorate" because they did a deal with us Brits to be under their umbrella rather than open to assimilation by the more powerful South Africa or Southern Rhodesia.  Basically, they ran themselves.

Brutal colonial subjugation?

http://www.time.com/time/world/article/0,8599,1713275,00.html (http://www.time.com/time/world/article/0,8599,1713275,00.html)
Quote
Le Blanc and I are into our 500th kilometer on the river when he turns my view of modern African history on its head. “We should just give it all back to the whites,” the riverboat captain says. “Even if you go 1,000 kilometers down this river, you won’t see a single sign of development. When the whites left, we didn’t just stay where we were. We went backwards.”

 “The river is the artery of Congo’s economy,” he says. “When the Belgians and the Portuguese were here, there were farms and plantations — cashews, peanuts, rubber, palm oil. There was industry and factories employing 3,000 people, 5,000 people. But since independence, no Congolese has succeeded. The plantations are abandoned.” Using a French expression literally translated as “on the ground,” he adds: “Everything is par terre.”

It’s true that our journey through 643 kilometers of rainforest to where the Maringa River joins the Congo at Mbandaka, has been an exploration of decline. An abandoned tugboat here; there, a beached paddle steamer stripped of its metal sides to a rusted skeleton; several abandoned palm oil factories, their roofs caved in, their walls disappearing into the engulfing forest, their giant storage tanks empty and rusted out. The palms now grow wild and untended on the riverbanks and in the villages we pass, the people dress in rags, hawk smoked blackfish and bushmeat, and besiege us with requests for salt or soap. There are no schools here, no clinics, no electricity, no roads. It can take a year for basic necessities ordered from the capital, Kinshasa, nearly 2,000 kilometers downstream, to make it here — if they make it at all. At one point we pass a cargo barge that has taken three months to travel the same distance we will cover in two days. We stop in the hope of buying some gasoline, but all we get from the vessel are rats.

Even amid the morbid decay, it comes as a shock to hear Le Blanc mourn colonialism. The venal, racist scramble by Europeans to possess Africa and exploit its resources found its fullest expression in the Congo. In the late 19th century, Belgium’s King Leopold made a personal fiefdom of the central African territory as large as all of Western Europe. From it, he extracted a fortune in ivory, rubber, coffee, cocoa, palm oil and minerals such as gold and diamonds. Unruly laborers working in conditions of de facto slavery had their hands chopped off; the cruelty of Belgian rule was premised on the idea that Congo and its peoples were a resource to be exploited as efficiently as possible. Leopold’s absentee brutality set the tone for those that followed him in ruling the Congo — successive Belgian governments and even the independent government of Mobutu Sese Seko, who ruled from 1965 to 1997 and who, in a crowded field, still sets the standard for repression and corruption among African despots.

Le Blanc isn’t much concerned with that history; he lives in the present, in a country where education is a luxury and death is everywhere. Around 45,000 people die each month in the DRC as a result of the social collapse brought on by civil war, according to a study released in January by the International Rescue Committee. It estimated the total loss of life between 1998 and April 2007 at 5.4 million. For many Congolese like Le Blanc, the difficulties of today blot out the cruelties of the past. “On this river, all that you see — the buildings, the boats — only whites did that. After the whites left, the Congolese did not work. We did not know how to. For the past 50 years, we’ve just declined.” He pauses. “They took this country by force,” he says, with more than a touch of admiration. “If they came back, this time we’d give them the country for free.”

Having had all the reins of power in the hands of a foreign elite who never trusted you with them beyond the level of village chiefdom and who then up and leave is also something of a problem.


Yet the politically correct explanation of the Rwandan genocide is that the foreign elite did trust the local elite.

No, it isn't.  They weren't trusted and left alone, but used as accessory looters and specificaly favoured.  Two different things.

The colonists settled Rwanda the way they settled Botswana, without blood on their hands, without disrupting the existing social order.  The decolonizers have blood on their hands.  They destroyed the existing social order, creating chaos, bloodshed, and economic collapse.

The Tutsi ruled Rwanda long before the colonists arrived, and ruled it well.  When the colonists came, the colonists decided to refrain from fixing what was not broken.  It was the metropolitan progressive decision to smash the long established existing social order and apply affirmative action to the Hutu - which affirmative action eventually escalated into genocide.

If Tutsi rule was a colonial creation, would not the colonists have reported it? before racial inequality became politically incorrect, they would have had no reason to lie about it.  Instead, the colonists reported a country well run by a superior black race competently ruling over an inferior black race.  The older version is told by people who had no reason to lie. (http://books.google.com.au/books?id=WNYDAAAAMBAJ&pg=PA70&dq=Watussi+OR+Watusi&hl=en&ei=PZ7jTKSJDoLKvQOOtuXDDg&sa=X&oi=book_result&ct=result&resnum=3&ved=0CC4Q6AEwAjgK)  The new version, that the Tutsi were a colonial creation, comes from people who have reason to lie - to conceal their guilt in creating mass murder.

There were considerably more Tutsi than Hutu among the ruling group pre-Belgian occupation, but the Belgians pushed the dichotomy considerably further under their rule, explicitly favouring the Tutsi over the Hutu, partly yes, out of racist ideology,

English and American travellers passing through remaked that Tutsi were superior to other blacks and were fairly close to whites, suggesting that they were descended in substantial part from ancient Egyptians or ancient Hebrews, most likely ancient Egyptians.  Why woud they have a racist ideology to make a distinction between one black and another.  Surely if they erred through racism, they would think all blacks alike?

Tutsi rule worked well before colonialism, combined white and Tutsi rule worked well during colonialism.  Black Hutu rule was a catastrophe.  Affirmative action was a catastrophe that shattered the economy.  When the Tutsis regained power, and the Hutu lost power, then things worked well again.  Manifestly, the Tutsi really are superior, and colonists simply accepted this reality, which enabled them to deal with the Tutsi as near equals.  And, being able to deal with the Tutsi as near equals, that is what they did.  In the Congo, the colonists were dealing with a bunch of cannibal savages, so had to civilize them with gun and rhinoceros hide whip.  In Rwanda, the colonists were dealing with a better class of people, so employed more civilized means. 

The decolonizers, hower, employed barbaric means, trying to create equality with gun and whip.  Yet no matter how brutally they lashed out, somehow the races remained unequal.  So clearly, they had to lash out even harder. 

Which they did.

to gain their support and redirect resentment their way, while using them to practice a similar kind of raubwirtschaft (http://en.wikipedia.org/wiki/Raubwirtschaft) against the Hutu as they had for some time longer been practicing against the Congolese.

This story would sound a lot more persuasive if it was not coming from people whose hands are covered in blood.  Colonist rule in Rwanda was largely peaceful, and as in Botswana shared authority with the traditional black ruling class, who as in Botswana retained dignity and authority, and as in Botswana ruled with the consent of the governed.  Decolonization in Rwanda was violence, brutality, destruction, and the brutal exercise of power.

Colonialism in Rwanda, as in Botswana, was built on compromise with the native rules, and the consent of the governed to those traditional native rulers.  Decolonization was extremely violent.  You say there was violence and oppression, that the natives were being subjugated, but somehow they failed to notice that submission to their traditional rulers was subjugation until a bunch of foreigners told them so.

Abdirashid Ali Shermarke and Muhammad Siad Barre had vocational training and administrative experience.   Barre's regime was a worse disaster than Amin's.  Shermarke's ideology caused Barre's regime. Western university education caused Shermarke's ideology.

Barre's regime was caused quite simply by Barre's ambition,

Socialism needs killing fields. (http://jim.com/killingfields.html)  The ideology that the west exported to Somalia as part of preparation for independence needs killing fields.  Barre was trained in the west to produce killing fields for the greater good of humanity and the liberation of the oppressed masses.

and his need to assassinate the democratically elected leader to take power.

Terror and mass murder set in under the democratically elected leader.  He wound up creating a police state, was forced to rely on the police, rely on Barre.  Barre discarded him because the measures he was forced to employ had destroyed his legitimacy.

Somalia is analogous to Rwanda.  In Somalia, the socialism of the decolonizers led to terror and mass murder.  In Rwanda, the affirmative action of the decolonizers led to genocide.

Why are you reposting points I've already answered without including my replies?

You may believe you have replied, where I merely saw the ludicrously inappropriate re-affirmation of politically correct ideology without argument, evidence, or explanation.  Your account of Rwanda sounds to me like a Nazi explaining the death camps as self defense against attack by Jews.  The peaceful people were according to you engaged in terrible acts of violence, despite the lack of bloodshed, and the violent people were according to you entirely peaceful, because all the rivers of blood that they shed, the terror, the murder, and the torture, the ruin, the economic destruction, was in self defense against the evils of racism.

If a white guy had shown up in the Congo at the time outside of a few heavily guarded places, all of them in extreme danger, Lumumba would have had Mobutu cut his head off, and Mobutu's staff would have eaten him.  Those circumstances were not conducive to foreign intervention.  How did the CIA intervene?  By beaming thought waves from America?

By sending a guy over to poison him, according to that article I linked.

Lumumba was not removed from power by death, but by imprisonment.   To argue that Lumumba was murdered by foreigners is ludicrous, because he lost power through the collapse of his state, and the rebellion of his army, lost power through very public mass events, not some dinky little conspiracy, and was alive and well and in prison when he had entirely ceased to be relevant or significant.  Why would the CIA murder a prisoner, and if they did what difference would it have made?  If the had CIA sent a guy over from America to kill Lumumba, he would have had trouble even finding Lumumba. 

As a prisoner, Lumumba was moved from one place to another, because of Mobutu's inability to protect prisoners from capricious violence by random people. According to you guys he was executed by Belgian firing squad - but there is a small problem with this story, in that all the Belgians had fled, due to widespread disorderly violence against white people.  Prisoners in the Congo tended to get eaten, and it is quite possible that Lumumba was eaten in lieu of salary by people who had no idea who he was, and would not have cared had they known.  No one actually knows how he died, because he had ceased to be important in the Congo, and had in fact been mislaid and forgotten, no matter how loudly the Russians remembered him, in an environment where mislaid and forgotten prisoners tended to disappear.


Title: Re: Ten Dollars!
Post by: jamesd on November 17, 2010, 09:35:52 pm
So when you guys argue about the details of what happened in 19th century africa I'm lost. But in both cases I find myself wondering how either of you knows. Did you go there and listen to people tell their oral history? Did you read people's accounts of what they saw? Read official histories? It sounds like a blind-men-and-elephant story. Were the sources lying? Did they have an incomplete picture? Surely yes, to both questions.

And the two of you believe different stories. JamesD has read the old romantic stories that colonialists wrote, wonderful tales of derring-do, where the civilized people began to impose civilization on inferior savage races. He believes those stories. He disbelieves the later stories written by people who themselves were not colonialists, people who had ideological reasons to tell the story different. People who, not being colonialists themselves, instinctively wanted to make colonialists look bad.

In the case of Rwanda, I rely on stories not by Belgian or German colonists, who surely have an axe to grind, but by nineteenth century and early twentieth century English and American travellers, who had no motive to lie.  They report a mostly peaceful country where colonists reached an accomodation with an able and decent black ruling class, whose racial and feudal inferiors peacefully consented to an unequal but well run and productive social order, peacefully accepting the rule of those more advanced than themselves.

Paddyfool relies on stories by those whose hands are covered in the blood of innocents.

Paddy's account of Rwanda, like his account of the Congo, is wildly contrary to public events.  The Hutu government was increasingly violent and coercive affirmative action with increasingly disastrous economic consequences.  When the Tutsi regained power, everything was fine.  Therefore, Paddyfool's story, which makes the Tutsi into evil bad guys who caused all these problems at the sinister behest of evil white guys, to make good progressives look bad, is as crazy as a German explaining that the death camps were self defense against the Jews attacking Germany.

It simply obvious that the Tutsi are the good guys, and are a superior race to the Hutu, and the inferior Hutu are the bad guys who are a lot better off under the status quo ante, better off as subjects of the wise and competent Tutsi, just as they were before the colonists arrived and proceeded to stir up trouble with these silly ideas about racial equality.

Similarly for Paddyfool's account of the Congo, which has the evil CIA, or the evil Belgians, overthrowing Lumumba - but whites had fled the country, Lumumba's state apparatus had collapsed, and Lumumba's army had rebelled, which makes evil CIA overthrow or evil Belgian overthrow both impractical and redundant.

I doubt that anyone knows how Lumumba died, but possibly he, like a great many other prisoners of Mobutu, was simply mislaid in the chaos and disorder, and eaten in lieu of salary by some random people who did not know who he was and would not have cared had they known.
Title: Re: Ten Dollars!
Post by: paddyfool on November 18, 2010, 02:50:40 am
James,

I've tried to leave this with good grace, but one point for you:

What about the simple fact that the Belgian government have acknowledged and apologised for their predecessors' assassination of Patrice Lumumba? (http://news.bbc.co.uk/1/hi/world/africa/1805546.stm)
Title: Re: Ten Dollars!
Post by: jamesd on November 18, 2010, 11:10:36 am
James,

I've tried to leave this with good grace, but one point for you:

What about the simple fact that the Belgian government have acknowledged and apologised for their predecessors' assassination of Patrice Lumumba? (http://news.bbc.co.uk/1/hi/world/africa/1805546.stm)

What you mean is that some Belgian politicians have accused other Belgian politicians of assassinating Lumumba - but nothing a politician says is true, particularly about his enemies.

Under the circumstances, it was impossible for foreigners to execute Lumumba, and not easy for his captors to keep him alive

The circumstances being that all whites had fled, the state had collapsed, the army had rebelled, the army had taken Lumumba prisoner, and army discipline had collapsed.  Under these circumstances it was impossible for outsiders to have much effect on events, and even those supposedly in authority had little control.

The point of claiming that Lumumba was assassinated by whites is to claim he was overthrown by whites - but he was overthrown by army rebellion, or rather he was overthrown by his state collapsing underneath him and the collapse of military discipline with the result that he was taken prisoner by mutinous soldiers who disliked him.

These were big spectacular public events, not secret hidden events.  The assassination story part of a narrative that has him overthrown by secretive hidden event - that he was assassinated is part of a narrative whose big important point is a very obvious lie.

That he was assassinated by whites is part of a narrative that he was overthrown by whites.  Since, very plainly, he was not overthrown by whites, one lie, therefore all lies.
Title: Re: Ten Dollars!
Post by: NeitherRuleNorBeRuled on November 18, 2010, 02:30:53 pm
[...] but nothing a politician says is true, particularly about his enemies.

Unfortunately, this isn't really correct.  Politicians can and do say truthful things -- if it helps them achieve their goals
Title: Re: Ten Dollars!
Post by: paddyfool on November 18, 2010, 03:25:44 pm
Fine, politicians often lie.  The whole commission that came up with the conclusions that forced that confession could also have been lying, perhaps.  But what incentive would there be for these politicians to lie about events 40 years old in a way that sheds a bad light on their country?
Title: Re: Gold cirkulation?
Post by: ZeissIkon on November 18, 2010, 04:11:14 pm
High-tech is cool, but testing gold coins is really child's play. You weigh it and measure its diameter and and thickness. If it weighs less than a standard coin or is wider or thicker, it is counterfeit. The only theoretical way to counterfeit a gold coin is to create a blank out of tungsten, somehow stamp it and then plate it with gold. Tungsten has the same specific gravity as gold, so it would meet all the parameters of a pure gold coin. Tungsten-copper (or other) allowing, could be used for less-than-pure standard coins such as the Krugerrand.

So far, no such hypothetical coin has ever turned up. Why? Because tungsten is extremely brittle and hard to shape. An ordinary die would not be able to stamp an image into it. Supposedly, gold-clad, tungsten bars have been discovered, but the evidence is anecdotal. In any case, a coin would be much more difficult fake.

Density testing alone is still inadequate for alloyed coins, however -- plus, I know of at least one method, almost certainly cost effective (from the standpoint of producing a counterfeit that's significantly less expensive than a true coin) to form tungsten into a passable (i.e. very accurate) replica of a struck gold coin: sintering is used to form almost everything made of tungsten, because tungsten is too refractory to cast and, as you note, too hard/brittle to forge.  Compression sintering could easily produce a coin faced with replicas of a true coin's striking, without any need to attempt to actually strike a tungsten blank.

Alloy your gold with (say) 5% copper and 5% silver (to harden it enough to stand circulation without changing the color significantly) and you reduce the density enough that a castable copper-tungsten alloy could pass -- or even a pressure-formed tungsten-epoxy composite might fill the bill (no sintering, much cheaper to produce because the mold need not stand sintering temperature, which is above the melting point of iron -- one could even use carefully made plaster molds taken from an actual coin).

The old trick of biting a coin would easily distinguish one of pure (.990 fine or better) gold from any same-density substitute (anything you could make from nearly pure tungsten will be vastly harder than pure gold), but the same is not true of gold hardened for circulation by alloying -- even American gold coins, from when they were minted here, were too hard to reliably test with teeth.

So, we still have an issue with verifying the content of coinage; something along the line of x-ray fluorescence (spectral analysis of the re-emission from a target bombarded with x-rays) or neutron activation seems the only method more sophisticated than a bite and a density measurement that could reasonably be applied on demand and at reasonable cost.

Of course, there is one low-tech test that will easily distinguish a plated, density-matching counterfeit and doesn't discard any gold (assuming reasonable care): simply clip the coin in half.  Gold will clip easily and neatly (even circulation alloys), and show the same color through the core, while tungsten will fracture, and the core will be dark and quite blue compared to the gold surface plating.  Even tungsten-epoxy won't look right inside.  And when you're sure your coin is good, you can have it melted back into a single piece and restruck if you like (though in practice it's likely coinage would be replaced by bullion, as any piece can be verified this way, still valued by weight, and no value lost or cost incurred in verification).
Title: Re: Gold cirkulation?
Post by: ShireSilver on November 18, 2010, 04:23:12 pm
Of course, there is one low-tech test that will easily distinguish a plated, density-matching counterfeit and doesn't discard any gold (assuming reasonable care): simply clip the coin in half.  Gold will clip easily and neatly (even circulation alloys), and show the same color through the core, while tungsten will fracture, and the core will be dark and quite blue compared to the gold surface plating.  Even tungsten-epoxy won't look right inside.  And when you're sure your coin is good, you can have it melted back into a single piece and restruck if you like (though in practice it's likely coinage would be replaced by bullion, as any piece can be verified this way, still valued by weight, and no value lost or cost incurred in verification).

How about sonic detection?

I can tell by ear the difference between the sound of a .999 fine silver coin and a .90 silver coin when they're dropped on a hard surface. I'd bet a sonic detector could be fairly easily built, and programmed with expected results of known coins. Hook that into a cash register, and people can drop coins in until the bill is paid, with the detector sending mass and purity to the register.
Title: Re: Ten Dollars!
Post by: J Thomas on November 18, 2010, 04:43:57 pm

Under the circumstances, it was impossible for foreigners to execute Lumumba, and not easy for his captors to keep him alive

The circumstances being that all whites had fled, the state had collapsed, the army had rebelled, the army had taken Lumumba prisoner, and army discipline had collapsed.  Under these circumstances it was impossible for outsiders to have much effect on events, and even those supposedly in authority had little control.

....

These were big spectacular public events, not secret hidden events.  The assassination story part of a narrative that has him overthrown by secretive hidden event - that he was assassinated is part of a narrative whose big important point is a very obvious lie.

That he was assassinated by whites is part of a narrative that he was overthrown by whites.  Since, very plainly, he was not overthrown by whites, one lie, therefore all lies.

That story sounds very similar to Allende in Chile. There was a mlitary coup, and Allende was apparently killed more-or-less by accident. The Americans who sponsored the coup claimed they hadn't wanted him killed. The Chileans who carried out the coup said they didn't want him dead. Maybe he shot at the soldiers and they shot back. I dunno.

http://en.wikipedia.org/wiki/Patrice_Lumumba#Death

Wikipedia is often a good source to show what is commonly believed, or at least what no one has bothered to object to. It gives very specific information about Lumumba's death, and says the death was not announced for 3 weeks. If you suppose that the details were forged then we have the 3 week period as a time Lumumba could have been lost in the prison system and been killed at random.

We  have declassified reports that CIA and Belgium both were trying to kill Lumumba before he was deposed. It makes sense they should no longer care about him after that, but bureaucracies often take awhile to adapt to changes.

Looking at Wikipedia versus your story, I can see how you could reach your conclusions once you choose which data to throw out. Not like you invented it from scratch. I don't see why anybody but you would choose to throw out the particular parts you did. But when trying to make a coherent story out of disconnected conflicting facts, there's always a strong esthetic element in our choices of which biases to accept.
Title: Re: Ten Dollars!
Post by: quadibloc on November 18, 2010, 05:18:02 pm
What about the simple fact that the Belgian government have acknowledged and apologised for their predecessors' assassination of Patrice Lumumba?
I thought it was an established historical fact that Lumumba was an evil dictator, and the U.N. was on the wrong side in helping him suppress the escape of Katanga from his evil dictatorship.
Title: Re: Gold cirkulation?
Post by: NeitherRuleNorBeRuled on November 18, 2010, 05:36:21 pm
Of course, there is one low-tech test that will easily distinguish a plated, density-matching counterfeit and doesn't discard any gold (assuming reasonable care): simply clip the coin in half. 

How about sonic detection?

How about testing electrical resistance?  Getting both the density and resistance to match seems like it would be rather difficult, and I expect a pocket tester could be built and mass produced rather cheaply.
Title: Re: Gold cirkulation?
Post by: ShireSilver on November 18, 2010, 08:24:50 pm
How about testing electrical resistance?  Getting both the density and resistance to match seems like it would be rather difficult, and I expect a pocket tester could be built and mass produced rather cheaply.

My understanding is that electrical tests like that can be fooled by having just enough of the pure stuff coating the outside. Of course I haven't looked into it thoroughly enough to be sure.
Title: Re: Gold cirkulation?
Post by: wdg3rd on November 18, 2010, 09:54:01 pm
Of course, there is one low-tech test that will easily distinguish a plated, density-matching counterfeit and doesn't discard any gold (assuming reasonable care): simply clip the coin in half.  Gold will clip easily and neatly (even circulation alloys), and show the same color through the core, while tungsten will fracture, and the core will be dark and quite blue compared to the gold surface plating.  Even tungsten-epoxy won't look right inside.  And when you're sure your coin is good, you can have it melted back into a single piece and restruck if you like (though in practice it's likely coinage would be replaced by bullion, as any piece can be verified this way, still valued by weight, and no value lost or cost incurred in verification).

How about sonic detection?

I can tell by ear the difference between the sound of a .999 fine silver coin and a .90 silver coin when they're dropped on a hard surface. I'd bet a sonic detector could be fairly easily built, and programmed with expected results of known coins. Hook that into a cash register, and people can drop coins in until the bill is paid, with the detector sending mass and purity to the register.

Sonic detection.  It is to laugh.  Ask any cartoon character Mel Blanc voiced.  Wait for the Earth-shattering Kaboom.

There are folks who claim to detect by ear my mother's and my sister's voices.  Good luck, I can't.  Mom spent her first 18 years in New Hampshire, something well over 15 in California, and since in New Hampshire.  My sister spent her first 15 years in Los Angeles, has spent the rest in New Hampshire (at least half of that in jails that I have an ethical problem with, but I'm not willing to kill her yet to keep her out of them).  She steals from Mom and so do her sons.  Cocaine "addict" (I know that coca isn't any more addictive than hemp, but that's the way it's played in the press).

Mom and Vickie have the same voice to within the parameters you'd judge a real Beatles tape and a "we're not sure" Beatles tape.  The c u n t (sorry to spread that out, but I know the software mistranslates things so I'll put both in parentheses) the cunt (whatever word appeared in front of this parenthesis is was what I'd spread out, I need to test this forum software) has stolen from our mom ever since I left for college over 35 years back.  And taught her bastard twin sons to do more.  Since well before she spawned and as much as she (and they, once she trained them) since.  (By the way, I do not describe relatives as "bastards" in ignorance -- I came close and would have preferred that status as I would have likely grown up in San Francisco rather than in Whittier).  My family name is being carried purely because of bastardy, I had nephews from all three sisters before I ever had a brother-in-law, I chose not to breed, but some of my relatives shouldn't have the choice).  (I'm told I have a bunch of grand-nephews/grand-nieces [illegitimately] courtesy of the twins -- happy happy joy joy).

I avoided my family for two decades.  La Esposa insisted on meeting the gene pool I'd crawled out of (and avoided for reasons she claims she understands, but her parents were nice folks) but she says they're family.  She'll learn.  Lovecraft did.  (She's says she finally figured out Vickie and the bastard twins, maybe she'll see reason some day).

But don't claim that all contrefait cons can be judged by sonic attack.  That dog doesn't hunt.  I'm not sure who claimed sonic stuff did the the job, sometimes I miss a parenthesis, blame it on senility..
Title: Re: Gold cirkulation?
Post by: wdg3rd on November 18, 2010, 10:26:54 pm
How about testing electrical resistance?  Getting both the density and resistance to match seems like it would be rather difficult, and I expect a pocket tester could be built and mass produced rather cheaply.

My understanding is that electrical tests like that can be fooled by having just enough of the pure stuff coating the outside. Of course I haven't looked into it thoroughly enough to be sure.

Any single test can be fooled (ask Dr. Wasserman).  Run a second based on a different standard.  Something those who "determine the standards" won't allow.

I knew how to make Aqua Regia from scratch way back in junior high (along with a bunch of other things that involve nitric and sulfuric acids, but you gotta make them first).  Yeah, when the info was in any public library.   Knowledge of such is now considered terrorism.  Last I checked, terrorism is an attack on civilians to make a government change its actions.  As a kid I made (probably illegal) fireworks.  About ten years before i was born, Truman killed hundreds of thousands of people in cities with no military industries (aside from a couple of POW camps).  Who is the terrorist?  Which Bush (or the sad sack between them) wasn't?

That _is_ the definition of terrorism.  Defending from attacking troops (even with improvised devices) is not terrorism, whatever any government says.  Sorry kids, I'm an atheist and I'd side with the defenders and I don't care their religion.

Yeah, I change the subject.  So does almost everybody else.
Title: Re: Gold cirkulation?
Post by: quadibloc on November 19, 2010, 12:15:59 am
Defending from attacking troops (even with improvised devices) is not terrorism, whatever any government says.  Sorry kids, I'm an atheist and I'd side with the defenders and I don't care their religion.
For most people in Afghanistan under the Taliban, life was miserable. Under their fanatical rule, for example, women could not receive medical assistance if they became ill, because naturally only a man could be a doctor, and for a male doctor to heal a woman would be immodest.

The Afghans, therefore, were ruled by a bunch of fanatical thugs. The United States, and other countries, invaded, thus pushing those thugs out of the way. The overwhelming majority of the Afghan people would welcome the ability to resume living their lives in peace - but they are adversely affected, just as NATO troops in Afghanistan are affected, by the violence of the Taliban thugs trying to regain their hold on the country.

If the United States invaded Afghanistan to rob or enslave its people, yes, resistance would be legitimate, even by guerilla warfare. But that is not what is happening. They invaded because the Taliban thugs conspired with Osama bin Laden in his attempts to escape justice.

So their acts of hostility towards NATO troops are part of this conspiracy - they don't need to be terrorist in themselves, they are being done to facilitate terrorism. Which the attacks of September 11, 2001 definitely were.

I don't happen to personally know anyone who lost loved ones in the attacks of September 11, 2001, but I'm sure that many Americans, if they don't know such a person themselves, know someone who does. Given that, objectivity is, of course, difficult - but if it is attempted, it should be well thought out.
Title: Re: Gold cirkulation?
Post by: J Thomas on November 19, 2010, 06:31:49 am

How about sonic detection?

I can tell by ear the difference between the sound of a .999 fine silver coin and a .90 silver coin when they're dropped on a hard surface. I'd bet a sonic detector could be fairly easily built, and programmed with expected results of known coins. Hook that into a cash register, and people can drop coins in until the bill is paid, with the detector sending mass and purity to the register.

Sonic detection.  It is to laugh.  Ask any cartoon character Mel Blanc voiced.  Wait for the Earth-shattering Kaboom.

Electric currents do tend to depend on the surface coating, so they may miss a tungsten or other center with a gold outside layer.

If you can measure how much a coin bends when you bend it slightly, then you can detect a center slug. It won't bend the same. You might likely detect that by sound -- it won't vibrate the same. Or ultrasound -- a sudden boundary might cause an echo.

There are lots of ways to get the average density the same as gold. And various surface tests can be fooled by a thick gold surface. It's a lot harder to get the density and also the elasticity right at the same time. The more radically different tests you apply the harder it is to satisfy them all. At some point it's not worth making the perfect forgery. Particularly for things like bullion which are not actually money, where people record who they got each one from.
Title: Re: Gold cirkulation?
Post by: paddyfool on November 19, 2010, 10:56:46 am
Last I checked, terrorism is an attack on civilians to make a government change its actions. 

Personally, I prefer slightly more open definitions along the following lines:

"the calculated use of violence (or the threat of violence) against civilians in order to attain goals that are political or religious or ideological in nature; this is done through intimidation or coercion or instilling fear"
wordnetweb.princeton.edu/perl/webwn

It isn't always the government's actions that terrorists seek to influence through fear; it can equally be those of the populace, of businesses, etc.  And it is quite possible for governments themselves to terrorise people, and hence be terrorists themselves...
Title: Re: Gold cirkulation?
Post by: J Thomas on November 19, 2010, 11:54:47 am
For most people in Afghanistan under the Taliban, life was miserable. Under their fanatical rule, for example, women could not receive medical assistance if they became ill, because naturally only a man could be a doctor, and for a male doctor to heal a woman would be immodest.

Be careful whose propaganda you believe. Ask, why do most afghan women still not get official medical assistance when they need it? Because they live too far from clinics, and travel is too slow. Why are there so few female nurses? Largely because they've had so much war. Why are there so few midwives? If you were a midwife in Afghanistan, would you tell the government? Why do so many women die so young, particularly during childbirth? Malnutrtion is the major cause. If every malnourished pregnant afghan woman had US-style healthcare they could survive their pregnancies much better. But they don't get enough food, much less advanced medical care, particularly because of the war. Also, how much should we trust the statistics about this sort of thing? Some of them are US statistics. Some of them are UN statistics. How well was this data collected?

Quote
The Afghans, therefore, were ruled by a bunch of fanatical thugs. The United States, and other countries, invaded, thus pushing those thugs out of the way. The overwhelming majority of the Afghan people would welcome the ability to resume living their lives in peace - but they are adversely affected, just as NATO troops in Afghanistan are affected, by the violence of the Taliban thugs trying to regain their hold on the country.

When you occupy with a bunch of foreign troops who mostly don't speak the language, you've got to expect a lot of violence. What we hear about is only Taliban versus collaborationists. But there could be other important nationalists groups who stay entirely under our radar. We think some of them are Taliban and we think others of them are colalborationist, because those are the only two pigeon holes we have to put them in.

Quote
If the United States invaded Afghanistan to rob or enslave its people, yes, resistance would be legitimate, even by guerilla warfare. But that is not what is happening. They invaded because the Taliban thugs conspired with Osama bin Laden in his attempts to escape justice.

I'm kind of unclear on the story. I sort of heard that we told Taliban to give us bin Ladin for crimes, and they asked him whether he did it and he said no. So they quite reasonably asked us if we had evidence, and we said we had complete proof but we wouldn't tell them about it. They should just give him to us and we'd take care of him, apparently without shoiwing our proof to anybody even at a publc trial. If the government of Afghanistan had demanded we give them Bill Gates on that basis, would we do it? Would we do it very quickly?

Quote
So their acts of hostility towards NATO troops are part of this conspiracy - they don't need to be terrorist in themselves, they are being done to facilitate terrorism. Which the attacks of September 11, 2001 definitely were.

The links in your chain of causality look pretty weak to me. But maybe if I was more certain about the story they would look stronger.

Quote
Given that, objectivity is, of course, difficult - but if it is attempted, it should be well thought out.

Facts are often more slippery than fish. I like to maintain a lot of tolerance until the facts get pretty clear, because it's really better not to get into a 10-year war halfway around the world by accident, through a misunderstanding that keeps digging itself in deeper.
Title: Re: What is "Terrorism"?
Post by: NeitherRuleNorBeRuled on November 19, 2010, 02:13:00 pm
Personally, I prefer slightly more open definitions along the following lines:

"the calculated use of violence (or the threat of violence) against civilians in order to attain goals that are political or religious or ideological in nature; this is done through intimidation or coercion or instilling fear"
wordnetweb.princeton.edu/perl/webwn

I really like that definition.

Quote
It isn't always the government's actions that terrorists seek to influence through fear; it can equally be those of the populace, of businesses, etc.  And it is quite possible for governments themselves to terrorise people, and hence be terrorists themselves...

I'd go so far as to say that it's unusual when governments don't use terrorism against both foreign and domestic individuals.
Title: Re: Gold cirkulation?
Post by: ZeissIkon on November 19, 2010, 04:25:41 pm
If you can measure how much a coin bends when you bend it slightly, then you can detect a center slug. It won't bend the same. You might likely detect that by sound -- it won't vibrate the same. Or ultrasound -- a sudden boundary might cause an echo.

I like this method, and it's probably the most difficult quality of high purity metals to match.  Fine gold (better than 99% pure) has very little elasticity compared to virtually anything -- it will bend, permanently, much more easily than you can apply a bend that will rebound elastically (the elastic flex will take less force, but the difference is small enough it'd take a machine to do one without the other).  Still, there are cost-effective machines that can detect (for instance) the very first onset of plastic deformation (aka yield) when torquing a bolt, working only from a rotation encoder and a torque meter; it should actually be a little cheaper to put together a stepper motor and gear reduction driving a screw, rotary encoder (from a mouse) to count the turns, and strain gage force measurement to detect when a coin starts to take a permanent bend -- that'd very reliably separate any same-density substitute from fine gold, even from coin-alloy gold (or even coin-alloy silver or copper, come to that, both of which are harder than gold but still have little gap between elastic and plastic deformation).

The thing that might throw a wrench in the works for this one is work hardening -- every time you test a coin, it gets a minuscule amount harder (though the deformation needed for a test is so small that thousands of tests might only produce a few percent change in yield strength).  On the other hand, annealing a coin wouldn't damage it (unless it's plastic coated; annealing would damage or burn off the plastic), and precious metals are easy and quick to anneal (heat and quench, unlike steels that harden with this treatment and require a slow, careful cooling to take the softest state).

Best part of a yield-strength tester is it doesn't require any new technology -- you could build one in a week or two, if you've got the skills and equipment to build and test electronic devices, program microcontrollers, and build small gear trains (or repurpose ones from sources like cordless power tools).
Title: Re: Gold cirkulation?
Post by: NeitherRuleNorBeRuled on November 19, 2010, 04:52:34 pm
How about testing electrical resistance?

My understanding is that electrical tests like that can be fooled by having just enough of the pure stuff coating the outside. Of course I haven't looked into it thoroughly enough to be sure.

I think this is significant only for AC (the "skin effect"); for DC it is much less significant.  Any issues could probably be solved by having a three-point contact; one hot and two grounds; one ground would be near the hot contact on the same side of the "coin", the other on the opposite side of the "coin".  By "coin" I mean a relatively flat solid that has two large parallel "sides" and the rest being thin enough to be considered "edge".  It need not be round for this to work.
Title: Re: Ten Dollars!
Post by: quadibloc on November 19, 2010, 07:08:22 pm
My understanding is that electrical testing for coin composition usually involves things like eddy currents. The skin effect has to do with conduction of AC by a metal wire; if one is instead looking at the response of a metal object to a changing magnetic field, that is only kept at the surface of the object if it's superconducting.

Thus, U.S. coins made of cupronickel and copper do simulate the behavior of silver coins in a vending machine, but they did so through a layered construction. (Although the test was crude enough that a copper coin or a cupronickel one might have passed too.)
Title: Re: What is "Terrorism"?
Post by: paddyfool on November 20, 2010, 02:29:08 am
Quote
It isn't always the government's actions that terrorists seek to influence through fear; it can equally be those of the populace, of businesses, etc.  And it is quite possible for governments themselves to terrorise people, and hence be terrorists themselves...

I'd go so far as to say that it's unusual when governments don't use terrorism against both foreign and domestic individuals.

Of course, we should acknowledge that as popularly used, it's tyranny if the government do it, and terrorism if anyone else does it.  But I've never been entirely clear on why it's necessary to make the distinction.
Title: Re: Gold cirkulation?
Post by: J Thomas on November 20, 2010, 05:53:36 am
How about testing electrical resistance?

My understanding is that electrical tests like that can be fooled by having just enough of the pure stuff coating the outside. Of course I haven't looked into it thoroughly enough to be sure.

I think this is significant only for AC (the "skin effect"); for DC it is much less significant. 

There is a general tendency for charges to take the path of least resistance, and other things equal that tends to be near surfaces. But I'm sure there are tricks to get around that.

So, the more different tests you have, the more expensive it is for a forger to get past all of them. Density, electric conductivity, elasticity, thermal conduction, thermal capacity, etc. It's pretty easy to detect surface alloys, so a decent fake needs a layer of gold on the outside. If that layer is too thin then it might fail a hardness test. So you must have a reasonably thick honest layer on the outside and something else inside. But then it could fail a thermal expansion test. Heat it a little, and if the inside expands at a different rate the surface will get a bit distorted.

Nondestructive tests don't have to be definitive. If it fails a preliminary test then you can do more, even cut it in half or melt it down.

Each cheap test that is expensive for a forger to pass, is a win for the good guys.
Title: Re: What is "Terrorism"?
Post by: quadibloc on November 20, 2010, 10:38:42 am
Of course, we should acknowledge that as popularly used, it's tyranny if the government do it, and terrorism if anyone else does it.  But I've never been entirely clear on why it's necessary to make the distinction.
Why do we make a distinction between climate and weather?

Living under tyranny has been the natural condition of most of humanity for most of history. Terrorism is an occasional annoyance, usually practiced by demagogues who, when they win, create a worse tyranny than what they replaced. Thus, those great thinkers of the past who were allowed to survive by the tyrannies of the past advise us that we should endure tyranny with patience, but abhor terrorism.

Not making the distinction may be a corrective to the obvious systematic bias in their advice, but on the other hand they may also have had a point.

While I, too, am willing to settle for less than anarcho-capitalism, I favor being ambitious enough to shoot for liberal democracy, with all its imperfections. So I find the distinction useful, although I hold both tyranny and terrorism to be great evils.
Title: Re: Ten Dollars!
Post by: SandySandfort on November 20, 2010, 03:02:28 pm
I did a little research on spot-the-fake-gold-coin issue.

The speed of sound in gold and tungsten is significantly different and is (apparently) easy to measure:

 http://www.rfcafe.com/references/general/velocity-sound-media.htm

Tungsten is basically the only metal you could use to spoof gold. All the other metal as heavy as, or heavier than, gold, either cost more or are radioactive.

Here is a good discussion of counterfeiting gold coins and bars. Why he does not like the Fisch, is a mystery to me. His solution is not something you can slide in your back pocket. Nevertheless, he has a good handle on the subject:

 http://www.greenenergyinvestors.com/index.php?showtopic=3782

Here is a site that specifically discusses the use of tungsten to make fake gold bars and coins. And remember, no one has ever seen a fake gold coin with a tungsten center. I doubt we ever will. All other fake gold coins require that you be an idiot to be taken in:

 http://beforeitsnews.com/story/1/443/IMF_Sells_Tungsten_Gold_Bars_to_India.html

Finally, here is a site that is just plain weird. They do sell gold plated tungsten items, but nothing that could be taken for a real gold coin:

 http://www.tungsten-alloy.com/en/alloy11.htm

So in summary, it is very easy to protect yourself from fake gold coins without the need for elaborate equipment. Low tech is more than sufficient. I'm satisfied with this understanding. Anyone who wishes to deal with this as a useless, though interesting mental exercise, knock yourself out.   :)
Title: Re: Ten Dollars!
Post by: jamesd on November 20, 2010, 03:15:47 pm
I did a little research on spot-the-fake-gold-coin issue.

The speed of sound in gold and tungsten is significantly different and is (apparently) easy to measure:

 http://www.rfcafe.com/references/general/velocity-sound-media.htm

So, to non destructively determine a coin is OK, need a handy little device that measures volume, mass, and ring, and, to be on the safe side, eddy current decay.
Title: Re: What is "Terrorism"?
Post by: paddyfool on November 21, 2010, 04:20:13 am
Of course, we should acknowledge that as popularly used, it's tyranny if the government do it, and terrorism if anyone else does it.  But I've never been entirely clear on why it's necessary to make the distinction.
Why do we make a distinction between climate and weather?

Living under tyranny has been the natural condition of most of humanity for most of history. Terrorism is an occasional annoyance, usually practiced by demagogues who, when they win, create a worse tyranny than what they replaced. Thus, those great thinkers of the past who were allowed to survive by the tyrannies of the past advise us that we should endure tyranny with patience, but abhor terrorism.

Not making the distinction may be a corrective to the obvious systematic bias in their advice, but on the other hand they may also have had a point.

While I, too, am willing to settle for less than anarcho-capitalism, I favor being ambitious enough to shoot for liberal democracy, with all its imperfections. So I find the distinction useful, although I hold both tyranny and terrorism to be great evils.

I suppose.  I wonder if it isn't also that the specific tools used to cause fear in each instance tend to be a little different (imprisonment vs abduction; airstrikes vs suicide bombers; etc.).
Title: Re: Gold cirkulation?
Post by: ShireSilver on November 26, 2010, 06:14:36 am
So, the more different tests you have, the more expensive it is for a forger to get past all of them.
...
Nondestructive tests don't have to be definitive. If it fails a preliminary test then you can do more, even cut it in half or melt it down.

Each cheap test that is expensive for a forger to pass, is a win for the good guys.

One of the points I try to make is that most small units aren't economically feasible to counterfeit. How many fake one dollar bills are out there? How many fake dimes? Compare that to how many fake 20 dollar bills are out there. It seems to me that the only people who would think it worthwhile to counterfeit smaller units would be governments.

But I do like hearing all the ideas being tossed around, and I think that there might be a market for such devices. I hope someone takes up that challenge.

My dream scenario is a cash register with a built in detector. The clerk scans all your items, and you see the cost on a screen. You drop your coins, bullion, whatever, into a slot and the device determines the mass, purity, and type of precious metal; looks up the value; and changes the amount owed accordingly. You keep dropping PMs into the slot until your amount owed is zero. The clerk doesn't open a drawer or anything, the PM just drops right into the proper location.
Title: Re: Ten Dollars!
Post by: terry_freeman on November 26, 2010, 07:46:58 am
We are already getting close to such automatic cash registers; newer ATMs at Wells Fargo and Bank of America automatically count dollar bills and scan checks on the spot. I see no reason why such machines could not accept multiple forms of currency, including precious metals. Given a few more years, they'll be standard equipment everywhere a cash register is now used.

A recent news item reported that a firm with large holdings of precious metals in London, New York, and Hong Kong is now using ultrasound and other measures to scan their entire bullion inventory. I wonder if any tungsten-cored bricks will actually be discovered, and if so, who was responsible for their creation?

By the way, there are people in Malaysia who are promoting gold and silver coinage; I'll see if I can find the youtube video. One of the folks points out that the price of a chicken or a goat, measured in gold or silver, is pretty stable, even as the price in faith-based paper changes depending upon how much paper is printed.

 
Title: Re: Ten Dollars!
Post by: ShireSilver on November 26, 2010, 07:57:53 am
By the way, there are people in Malaysia who are promoting gold and silver coinage; I'll see if I can find the youtube video. One of the folks points out that the price of a chicken or a goat, measured in gold or silver, is pretty stable, even as the price in faith-based paper changes depending upon how much paper is printed.

Yep, I heard about this project several years ago.
http://en.wikipedia.org/wiki/Kelantanese_dinar (http://en.wikipedia.org/wiki/Kelantanese_dinar) and http://www.islamicmint.com/ (http://www.islamicmint.com/) are useful links.

Glad to see that my prices are better than theirs, at least on the silver  ;D

I wish them luck, but they are making the same mistake that the U.S. founding fathers made, that of naming a unit of trade instead of just using masses of precious metal.