I'm still a little confused, someone correct me if I'm wrong:

This dollar I have sitting in front of me is a promissory note.  It is suppossed to be a dollar (a measurement) of some material goods.  However this dollar is not a measurement of any material goods as we are not on any standard.  

So... this dollar is a loan taken out by the goverment on me based on my future tax reciepts?

Or... is this dollar just printed, handed out and assigned a different value depending on the whims of someone?

Maybe... this dollar actually represents our GNP and the value is determined by how hard I work.  So it's just based on my production and when I produce to much they take some currency out of circulation via taxes.

If so... Then when goverment taxes me, that money couldn't possibly be spent by them because that would inflate the prices because of the abundance of "paper" money available.  

However... if it takes the money right out of my paycheck couldn't it then just earmark those funds and print accordingly ie:  it knows I will produce 500 units so it pays me 450 and keep 50, thus those 50 are still valid and represent goods produced.  

But... this currency isn't based on any goods produced.

Wait... say I start with 500 and i loan it out for 50 in interest, then i loan that 550 out and take in 500 interest, then I take the 1050 and loan it out for 1000 in interest.  Multiply that by a thousand, wouldn't that mean that in a few years the credit comapnies would own all the money?

Eventually if you run yourself into debt you will to have continue to work to pay off the credit given.  But if your consumerism is outstripping your production it puts a strain on the system.   It can't last right?  

Huh, I don't get it???

[):)]
NSF

edit for clarity

You just gave me a headache.

Did you know you can get a 20 minute phone call with that buck?

Your paper money is not worth anything, thanks to the goberment. It's not based on any goods produced, so insted of giving it to the goberment, just send it to me, I need toilet paper.
Borg

The dollar is a medium of exhange for goods and services between parties.  Value of material goods are set between the parties.  CPI is often used to gauge the preceived value of money over time to determine if prices of goods are fluctuating due to efficiency in the market or demand.



Huh.....
The government taxes you in arrears, what you made in the past.  They have no idea what you are making in the future.



Actually yes, if you are talking about the person that actually handles the printing press.  However, the money supply is actually controlled by the Federal Reserve to meet demands of certain regions.



Money is nether created or destroyed, inflated prices are the result of increased prices due to demand.  



Credit card companies have expenses, losses, and investors to pay off.  They cannot eventually own all the money because the money supply is growing due to inflation.



I do not understand what you are talking about.  You give me a headache like my game theory professor in the past.

I'll do it!

Hey, this discussion is all nice and fine. But I could start another topic and call it "P@$$Y, I don't get it" and I could probably expect as many different theories as to why.

Think about it YoYo.

[:D]

Dude all dollars are bank notes backed up by gold.
It would suck if we had to keep a buch of gold with us so the gov made money.

It not just gold totay.now the GDP and other things can play a part in backing our money.
This is way the dollar can up and down.

Doesn't that dollar value fluctuate with the price of crude oil? So, we're on the oil standard?

Actually, dollars have absolutely nothing to do with gold anymore. If a dollar was equal to some amount of gold then the value of gold could never fluctuate with respect to the dollar could it? All currency now made for circulation is fiat money. A dollar is worth what you decide it is worth. If its worth two cokes to you then that is what its worth. It has no definable value.

Michael

Actually,  the dollar was backed by gold, however, I believe that it was Nixon (please correct me if I am wrong) who took us off the gold standard.

In reality, the dollar bill is just that, a piece a paper called a dollar bill.  There really is no backing other than the entity (in this case the US government) that has issued it.  So in the case of NSFjojo stating that it is a promissary note, unless it is a bill that is backed by either gold or silver (neither are being issued currently), I believe the term 'promissory note' is incorrect.

So... How does one derive the value on the dollar?  That is where the international currency exchanges come in.  Based upon investors belief on how the US is doing, they will either buy US dollars (thus creating more demand than supply) which drives the intrinsic value up.  If the investors believe that the US is not doing so well, they will sell US dollars, causing the intrinsic value to go down.

Therefor, the value of the dollar is based upon the world community's view of how the US is doing.  True, the Federeal Reserve can print or withhold monies to expand/shrink the money supply, but that is usually a very short term effect on the value.

Nope, gold standard went away a long time ago.

You are forgetting one item here, there are people who work at the company and are paid by the monies kept by the company.  Additionally, the owners of the company (shareholders if the company is public) will also get some of the monies in either dividends or increased share value.  Thus, the money does not just stay in one place.

The funny thing about money is that it is much like energy, once it is out there (save for the Fed), it cannot be destroyed.  For instance, when you hear that the market dropped and thousands of people lost money, you may be forgetting that thousands of people made money, but that news just does not sell.  Two sides to every transaction, a buyer and a seller...You just have to figure out who lost the money and gained it.

Just pay me in Firearms and Ammo.  

Your dollar bill is not worth anything in real terms. This is why we have so much inflation, because anytime the gov't needs money but doesn't want to raise taxes, they just print more money up.

What we need is to go back on the gold standard and abolish the central bank(the fed).

[img]http://www.imagestation.com/picture/sraid27/p3e4bf51be58376a72491cd0c6c334fa6/fe21c254.jpg.orig.jpg[/img]

All I have to do is figure out the "layer" thing.

I dare you to test that theory by tossing a twenty dollar bill into an incinerator. [:D]

Check out Professor Giacinto Auriti, he's an Italian gent (hence the funny name) who printed and circulated his own private money in the town he lived.  His currency is called the Simec.  It worked like this.

The mechanism adopted by the professor is simple. His customers are
given two simecs for every lira. Local businesses involved in the
project accept the simec as payment, giving the customer a 50 per
cent discount on the price. When the businesses cash in their simecs
at the end of trading, they are given a two-for-one exchange rate.
The difference is made up by the professor, a member of one of
Guardiagrele's wealthiest families. - lInformazione del Collezionista - n.16 -Giugno- Agosto - 2000 Augusto Ferrara

If you wish to know how money really works, he renders some interesting conclusions, primarily involved with induced value. Do a search on his name you’ll find plenty about money.

Luck
Alac

This was addressed here before.Our money(or claimed persistant lack thereof) guru LT, said it best.Its primary function is to PAY TAXES!... Then came the internet!...No sales tax from private sellers,the Gobmint will get theirs,[b]our cash in taxes[/b] someother way no doubt.[pissed]

"Actually, dollars have absolutely nothing to do with gold anymore. If a dollar was equal to some amount of gold then the value of gold could never fluctuate with respect to the dollar could it?"

Yes it can,it seems to all the time.

Anyway the dollar is not at all backed my gold now?
That may not be a good thing.

You are clearly an evil trouble-maker. Cease all questioning of our glorious financial system immediately. Go eat a donut or something.

Good to see ya Jojo - I haven't seen ya posting in a while.

Take care bro!

Tyler

OK, I think I understand a little.  Our currency is based on what other countries think our currency should be worth...

Ok, Yes I'm ok,  I just dont have frequent internet access.  I'll remedy that situation though.

[):)]
NSF

"Money can be exchanged for goods and services." -- Homer Simpson's brain.

OK, I think I understand a little. Our currency is based on what other countries think our currency should be worth...

Actually I think its "-based on what George Soros thinks its worth..." but close enough.

Luck
Alac

MONEY

"n. A blessing that is of no advantage to us excepting when we part with it... " Ambrose Bierce

[img]http://www.ar15.com/images/bioPics/libertyof76.jpg[/img]


"This is why we have so much inflation"?
Not so.

is that a pic of you?