I know this is a Canadian rx7 forum but you guys should atleast care about this stuff.
The Canadian currency is backed by the U.S dollar, NOT GOLD BACKED like most countries. If you check the US and world economy is doing its not looking good. so if things go the way of cypress and the other smaller EU countries. Harper is making it perfectly fine to just take our money to bail out the banks
this is complete bull! I know of another guy who's name starts with "H" that used this trick too in the early 30's......

Cyprus-Style “Bail-Ins” Are Proposed In The New 2013 Canadian Government Budget!

I need that money for car parts FFS

 

No country uses a gold standard - most went off in the aftermath of WWI. Gold standards make no sense because they tie the money supply, and thereby economic growth and activity, to supply of a rare metal - not to actual productive activities of the populace. Gold itself has become subject to huge volatility in value - meaning if nations depended on gold reserves to back their currency, and allowed convertability, there would be huge runs on reserves during times when gold prices rise sharply, as they have in the past decade. Most nations, other than the United States and Germany, keep instead a bread-basket of other currencies in reserve to defend the value of their own currency (the reason Germany and the US do not, is because their currencies are considered "safe havens", which are valued and stockpiled by other nations, so it makes no sense for them to hold their own or related currencies in large reserves).

The site you linked is an apocalyptic site, and serves up about as much truth as any apocalyptic website - their real stock-in-trade is FUD, and the promise they are letting you in on their secret foreknowledge of whatever Armageddon they are forecasting.

Curiously, the "article" actually does link to the 2013 proposed budget http://www.budget.gc.ca/2013/doc/pla...et2013-eng.pdf, but uterly confuses the "bail-in regime" proposed in the budget with what has happened to Cypriot banks and their depositors. What happened in Cyprus, to simplify, is that the government has essentially placed a levy of up to 25% on accounts larger than 100,000 euro - measure aimed at both restoring the liquidity of the government, and moreso at restoring some measure of sanity at Cyprus' largest banks - which due to acting as popular tax havens, control assets worth seven times the value of the entire Cypriot economy and are unstable, much like Wall Street but with even less regulatory controls and safeguards.

Those banks are dodgy (pun!), just like their customers. The partial seizure of large account holdings will of course cause a flight of remaining foreign tax-dodging capital out of Cyprus, which will leave Cyprus banks to actually function like rational, national banks making real investments, rather than playing high stakes poker with vast sums of other people's money, and threatening to collapse the Cypriot economy, and through its Eurozone tie, place other economy's, particularly Germany's, at risk should those banks (inevitably) make the same sort of dangerous plays as Wall Street did and does.

The "bail-in" referred to in the proposed 2013 Canadian budget does not refer to this sort of levy. It simply refers to what should have happened when the crisis of 2007-08 happened - which is that institutional investors - the bondholders who front investment banks the huge sums they play high-stakes poker with - would be front of the line for covering their own losses should the risks not play out. Instead of what actually happened, which is that taxpayers covered the bank's losses on bad credit risks, in particular the sub-prime mortgage and credit market. While ordinary citizens - those same people whose taxes paid for the bailouts - still faced foreclosures and bankruptcies in record numbers. So what a bail-in, as used in the 2013 budget proposal, is that regulators would step in to manage a failing large bank, the bondholders would be front of the line to absorb the losses, while account holders and borrowers would be protected to a greater degree from risk - because signing up for a savings account or a mortgage is not supposed to expose you to high-risk investing. In other words, the bail-in spoken of in the budget is sort of the opposite of what is happening in Cyprus.
Bail-In Definition from Financial Times Lexicon

 

I think what he meant to say was that U.S. had the means of direct convertibility of the United States dollar to gold, which was ended well after WW1.

Fiat currency is flawed, thus leading the US to have the largest national debt ever recorded in history. We will witness the greatest economical crash of the States, and see the rise of a country that will claim the new world currency.

What does this mean? Fd's will probably be had fro 6-7 grand easy. LOl. I personally wouldn't mind a MK4 TT, lhd, for 10 k

 

The US also has by far the largest GDP ever recorded in history - and can realistically pay down its debt in a reasonable span of time - the US was well on its way to doing so, and might have had its debt down to zero by about 2012. Of course, that was before BushII came along and ran up huge debts in foreign wars which not only were not funded, taxes were actually cut at the same time as huge military expenditures were added. The US is not facing a debt crisis, just politicians trying to manufacture one to further their own political ends.
If one can make the simplistic causal assumption fiat currency is the cause of the huge debt, then it is just as reasonable to say it is also the reason for the vastness of the US economy, and its domination of the post-WWII era.

How would it even be feasible to tie the money supply to a commodity that itself varies wildly in value, and whose intrinsic value is largely a product of people thinking its valuable - until they change their minds again and the bottom falls out. Shiny penny, shiny penny! Why not oil? At least with a commodity like oil, it has real economic value. It can do work, it can be used to make plastics, it can be used to make machines to make things.

 

Gold has been universally accepted as means of trade, currency, and payment since God knows when. Second, Oil is not an infinite resource and can't possibly have a world value / acceptance grater than gold. As limited as gold is, it still has a physical presence, whereas oil will be depleted. you can't have a gold deposit equivalent of oil just sitting in some random location. it needs to be used.

GDP for America is what 15 trillion and change?

their US total DEBT is about hit 60 trillion dollars!
National debt is near 17 trillion dollars
Total personal debt is about 16 trillion dollars
Mortgage debt is 13 trillion dollars.
this certainly exceeds their GDP.

You can't keep printing money! This will not work. Fiat currency is flawed, nothing simplistic about this.

 

Why is it flawed? And what would a gold standard accomplish? The US had massive inflation in the 1850's and 1860's while on a gold standard - because the supply of gold changed dramatically (California!), and because of the civil war. So gold is no guarantee of stability. Likewise, after WWI, Britain, the US, and other nations tried in varying forms to go back on gold or silver standards - and it did nothing to prevent the inflation of the 1920s, or the massive deflation of the 1930s.
Gold-backed currency is not a panacea for sound economic principles, nor does it enforce any particular market discipline - 1929 and 2008 occurred on a gold standard, and off, respectively. A gold standard does benefit gold-producing nations. So Australia (with by far the world's largest government gold reserves), along with South Africa, and Russia, as the leading gold-producing nations would experience a massive windfall if nations returned to the gold standard - not because their economies are particularly vibrant or efficient, but simply by winning the geography lottery and ending up sitting on top of more gold than most countries.
Yet gold has little more to commend it's value than does fiat currency - it only has that value because people say it does, and until they stop - as happened in the 1970s with gold and silver (as well as considerable market manipulation), and again more recently. Gold experiences booms and busts - and so would an economy whose money supply was tied to physical gold reserves. That's why gold standards were abandoned in the first place. - they don't do what they are supposed to do, and they force nations to tie up considerable value in shiny metal hidden in vaults underground, rather than devote that value to productive economic activity. Taxes would have to be raised to buy the gold to back the currency. Rather than a fiat currency which uses the productive output of the economy to back the currency. The fiat US dollar is the "gold standard" of currency precisely because of the productivity of America and American workers and businesses.

 

Greg, great and rational explanations, but they require a nuanced understanding of global money markets, the difference between country debt loads and GDP and the main fact that if the US economy tanks and totally implodes to the point that gold really matters, then we are all basically doomed anyways.

There are no simple and easy answers to anything to dowith the basic economic fundimantals of any economy and currency valuations. The gold guys are almost s much fun as birthers and the Tea party.

Eric

 

In no way shape or form am i suggesting that backing up the dollar to gold is what should be done. Nor do i propose a solution to the problem at hand. But, as you said "Rather than a fiat currency which uses the productive output of the economy to back the currency.", the output is not meeting the supply of debt. you can't keep spending what you don't have to generate what you wont bring back.

paper money or fiat currency was attempted as far back as the Revolutionary War, the currency was called a continental. Well look how well that turned out


Zimbabwe adopted this same model, and though circumstances may have been different, being one of the wealthiest countries in Africa, is now next to worthless

You can't keep spending money you don't have . the more you print the more you devalue the dollar. No one is exempt form this, certainly not the States. You can not debate their national debt is beyond recovery, and will crash.

 

cancel this video post

 

 

...and here I thought money grew on trees, and was simply burned by internal combustion. I'm learning so much!

 

It's not related to the gold standard and I don't think we're facing apocalypse, but the addition to the 2013 budget is sketchy as ****

Page 144-145 - "The Government proposes to implement a ―bail-in regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital"

Those "certain bank liabilities" are your chequings and savings accounts, your parents' retirement money and your small business's payroll, among other things. It IS the same thing that happened in Cyprus, legalized in Canada's 2013 budget.
I don't expect it to happen, but it sucks that it's now a possibility here