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A universal currency

DetectableNinja
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11/3/2011 7:57:16 PM
Posted: 5 years ago
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?
Think'st thou heaven is such a glorious thing?
I tell thee, 'tis not half so fair as thou
Or any man that breathes on earth.

- Christopher Marlowe, Doctor Faustus
CosmicAlfonzo
Posts: 5,955
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11/3/2011 7:59:25 PM
Posted: 5 years ago
I'll say this, universal communication brought on by the internet makes it a lot harder to make a buck at the pawn shop.
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I-am-a-panda
Posts: 15,380
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11/3/2011 8:07:30 PM
Posted: 5 years ago
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?

Effectively disastrous. A major reasons for the Europe-wide economic problems is that the EU's economies are performing differently constantly. When Ireland needed higher interest rates to dampen inflation and uncontrollable growth, it got low European set rates because Germany and France's economies were sluggish Now Germany is fine, but it took time for the interests rate to be suitable lowered to spur more growth.

A quick currency devaluation could have seriously aided the Irish economy, but couldn't happen because the ECB set's the amount of money in supply. Essentially, the Euro has causes numerous problems for Ireland.

Now, multiply that worldwide. Chinas and other rapid growth economies need higher interest rates before they crash, while the U.S. and Europe need lower ones to stimulate growth. Seriously, the currency would collapse far quicker than the Euro.
Pizza. I have enormous respect for Pizza.
Greyparrot
Posts: 14,305
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11/3/2011 8:07:31 PM
Posted: 5 years ago
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?

no.

see greece.
darkkermit
Posts: 11,204
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11/3/2011 9:20:38 PM
Posted: 5 years ago
At 11/3/2011 8:07:30 PM, I-am-a-panda wrote:
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?

Effectively disastrous. A major reasons for the Europe-wide economic problems is that the EU's economies are performing differently constantly. When Ireland needed higher interest rates to dampen inflation and uncontrollable growth, it got low European set rates because Germany and France's economies were sluggish Now Germany is fine, but it took time for the interests rate to be suitable lowered to spur more growth.

A quick currency devaluation could have seriously aided the Irish economy, but couldn't happen because the ECB set's the amount of money in supply. Essentially, the Euro has causes numerous problems for Ireland.

Now, multiply that worldwide. Chinas and other rapid growth economies need higher interest rates before they crash, while the U.S. and Europe need lower ones to stimulate growth. Seriously, the currency would collapse far quicker than the Euro.

this
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bluesteel
Posts: 12,301
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11/4/2011 6:45:28 AM
Posted: 5 years ago
Pros:

lower transaction costs when traveling or trading across borders

Cons:

everything else
You can't reason someone out of a position they didn't reason themselves into - Jonathan Swift (paraphrase)
MyVoiceInYourHead
Posts: 260
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11/4/2011 3:53:51 PM
Posted: 5 years ago
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?

In many respects it wouldn't matter. It's not what makes up the currency that matters, it's who controls the quantity of money. At the moment it's being (poorly) controlled by the banking sector who lend way too much in the booms and not enough during a downturn. Western governments can produce very little of their own money at no interest to nobody. 97% of UK money and 99% of US money has been borrowed into existence from private banks at interest so that we effectively have a rent-a-currency! Very little of our money stock is debt-free (i.e. cash or its electronic equivalent). And the world leaders are running about like headless chickens not knowing their arses from their elbows. Until they solve the debt- saturation problem in the system through the simple process of money reform they can't do anything. And the banks hold all the cards - remember Proverbs "The borrower shall be servant to the lender."
darkkermit
Posts: 11,204
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11/4/2011 4:05:27 PM
Posted: 5 years ago
At 11/4/2011 3:53:51 PM, MyVoiceInYourHead wrote:
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?

In many respects it wouldn't matter. It's not what makes up the currency that matters, it's who controls the quantity of money. At the moment it's being (poorly) controlled by the banking sector who lend way too much in the booms and not enough during a downturn. Western governments can produce very little of their own money at no interest to nobody. 97% of UK money and 99% of US money has been borrowed into existence from private banks at interest so that we effectively have a rent-a-currency! Very little of our money stock is debt-free (i.e. cash or its electronic equivalent). And the world leaders are running about like headless chickens not knowing their arses from their elbows. Until they solve the debt- saturation problem in the system through the simple process of money reform they can't do anything. And the banks hold all the cards - remember Proverbs "The borrower shall be servant to the lender."

You do realize that debt will exist in any place with financial markets right? It doesn't matter where the origin came from. It's a meaningless statistic to state that "99% of money is debt" That's like saying "99% of houses are debt" What does that mean? Money is money.
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MyVoiceInYourHead
Posts: 260
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11/4/2011 5:59:52 PM
Posted: 5 years ago
At 11/4/2011 4:05:27 PM, darkkermit wrote:
At 11/4/2011 3:53:51 PM, MyVoiceInYourHead wrote:
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?

In many respects it wouldn't matter. It's not what makes up the currency that matters, it's who controls the quantity of money. At the moment it's being (poorly) controlled by the banking sector who lend way too much in the booms and not enough during a downturn. Western governments can produce very little of their own money at no interest to nobody. 97% of UK money and 99% of US money has been borrowed into existence from private banks at interest so that we effectively have a rent-a-currency! Very little of our money stock is debt-free (i.e. cash or its electronic equivalent). And the world leaders are running about like headless chickens not knowing their arses from their elbows. Until they solve the debt- saturation problem in the system through the simple process of money reform they can't do anything. And the banks hold all the cards - remember Proverbs "The borrower shall be servant to the lender."

You do realize that debt will exist in any place with financial markets right? It doesn't matter where the origin came from. It's a meaningless statistic to state that "99% of money is debt" That's like saying "99% of houses are debt" What does that mean? Money is money.

A certain amount of debt in an economy is healthy particularly if it is geared towards self-liquidating debt rather than consumptive debt. The trouble with debt is that it is simply a claim on future human labour.

The 99% statistic is not meaningless at all. In 1950, 50% of our money supply was debt, 50% was cash (debt-free). Our debt-money system has ensured that the amount of interest-bearing debt has increased so much that it is almost the entire money supply. Do you think that is healthy when in the UK our average APR interest (govt, personal, business debts) is about 6% and yet we have only 3% debt-free money to pay it off? UK plc is borrowing to pay interest. So is the US and every other western country. It's the interest that's killing us.

Debt-free money (cash or its electronic equivalent) is simply an asset to people and the government. Debt-based money is both an asset and a liability.

Money is "trust inscribed." It is a means of exchange. The problem is that the financial sector has a monoply on our one and only means of exchange. And they skim off their profits and give little back in the form of taxes. Under the present system, they are net wealth extractors from the economy. Nothing but parasites. If I robbed a bank I would go to jail. When the banks commit the biggest drive-by mugging in history, they get bailed out and get bonuses. Nice work if you can get it.
sadolite
Posts: 8,838
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11/5/2011 10:00:01 AM
Posted: 5 years ago
A universal currency is only as good as the most corrupt and incompetent people in charge of handling its value.
It's not your views that divide us, it's what you think my views should be that divides us.

If you think I will give up my rights and forsake social etiquette to make you "FEEL" better you are sadly mistaken

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darkkermit
Posts: 11,204
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11/5/2011 11:27:16 AM
Posted: 5 years ago
At 11/4/2011 5:59:52 PM, MyVoiceInYourHead wrote:
At 11/4/2011 4:05:27 PM, darkkermit wrote:
At 11/4/2011 3:53:51 PM, MyVoiceInYourHead wrote:
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?

In many respects it wouldn't matter. It's not what makes up the currency that matters, it's who controls the quantity of money. At the moment it's being (poorly) controlled by the banking sector who lend way too much in the booms and not enough during a downturn. Western governments can produce very little of their own money at no interest to nobody. 97% of UK money and 99% of US money has been borrowed into existence from private banks at interest so that we effectively have a rent-a-currency! Very little of our money stock is debt-free (i.e. cash or its electronic equivalent). And the world leaders are running about like headless chickens not knowing their arses from their elbows. Until they solve the debt- saturation problem in the system through the simple process of money reform they can't do anything. And the banks hold all the cards - remember Proverbs "The borrower shall be servant to the lender."

You do realize that debt will exist in any place with financial markets right? It doesn't matter where the origin came from. It's a meaningless statistic to state that "99% of money is debt" That's like saying "99% of houses are debt" What does that mean? Money is money.

A certain amount of debt in an economy is healthy particularly if it is geared towards self-liquidating debt rather than consumptive debt. The trouble with debt is that it is simply a claim on future human labour.

The 99% statistic is not meaningless at all. In 1950, 50% of our money supply was debt, 50% was cash (debt-free). Our debt-money system has ensured that the amount of interest-bearing debt has increased so much that it is almost the entire money supply. Do you think that is healthy when in the UK our average APR interest (govt, personal, business debts) is about 6% and yet we have only 3% debt-free money to pay it off? UK plc is borrowing to pay interest. So is the US and every other western country. It's the interest that's killing us.

Debt-free money (cash or its electronic equivalent) is simply an asset to people and the government. Debt-based money is both an asset and a liability.

Money is "trust inscribed." It is a means of exchange. The problem is that the financial sector has a monoply on our one and only means of exchange. And they skim off their profits and give little back in the form of taxes. Under the present system, they are net wealth extractors from the economy. Nothing but parasites. If I robbed a bank I would go to jail. When the banks commit the biggest drive-by mugging in history, they get bailed out and get bonuses. Nice work if you can get it.

Again, I ask you what you mean by "debt-free money". And money supply. There are multiple ways to measure the money supply. There's monetary base (MB) actually coins and currecy, M0(money on hand), M1 (m0+checking accounts), M2 (M0+M1+checking and savings), and M3 (M0+M1+M2+long term deposists such as CDs)

The US debt is greater then GDP.

Tracking the origin of where money comes from is nearly impossible. How would you know whether your current account came from open market transactions, fractional reserve banking, or discount window (FED acting as lender of last resort)?
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SuperRobotWars
Posts: 3,906
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11/5/2011 11:41:22 AM
Posted: 5 years ago
What do you plan on backing it with? I do understand the importance of fiat currency but fiat only works well when you actually have multiple currencies. Maybe you could just make one universal currency [UN Note{?}] to work alongside the regular national currencies [USD, EURO, { . . . }].
Minister Of Trolling
: At 12/6/2011 2:21:41 PM, badger wrote:
: ugly people should beat beautiful people ugly. simple! you'd be killing two birds with the one stone... women like violent men and you're making yourself more attractive, relatively. i met a blonde dude who was prettier than me not so long ago. he's not so pretty now! ha!
:
: ...and well, he wasn't really prettier than me. he just had nice hair.
PARADIGM_L0ST
Posts: 6,958
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11/5/2011 11:54:55 AM
Posted: 5 years ago
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?:

There has been a universal currency for thousands of years in the form of precious metals; most notably, gold. Because there is intrinsic value attached to it, gold is good anywhere in the world. However, in instances where the currency is a fiat, we see rampant inflation.

A worldwide currency under our CURRENT economic system is completely untenable. A scaled down example of how and why this doesn't work is seen with the Euro.
"Have you ever considered suicide? If not, please do." -- Mouthwash (to Inferno)
MyVoiceInYourHead
Posts: 260
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11/5/2011 5:07:26 PM
Posted: 5 years ago
At 11/5/2011 11:27:16 AM, darkkermit wrote:
At 11/4/2011 5:59:52 PM, MyVoiceInYourHead wrote:
At 11/4/2011 4:05:27 PM, darkkermit wrote:
At 11/4/2011 3:53:51 PM, MyVoiceInYourHead wrote:
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?

In many respects it wouldn't matter. It's not what makes up the currency that matters, it's who controls the quantity of money. At the moment it's being (poorly) controlled by the banking sector who lend way too much in the booms and not enough during a downturn. Western governments can produce very little of their own money at no interest to nobody. 97% of UK money and 99% of US money has been borrowed into existence from private banks at interest so that we effectively have a rent-a-currency! Very little of our money stock is debt-free (i.e. cash or its electronic equivalent). And the world leaders are running about like headless chickens not knowing their arses from their elbows. Until they solve the debt- saturation problem in the system through the simple process of money reform they can't do anything. And the banks hold all the cards - remember Proverbs "The borrower shall be servant to the lender."

You do realize that debt will exist in any place with financial markets right? It doesn't matter where the origin came from. It's a meaningless statistic to state that "99% of money is debt" That's like saying "99% of houses are debt" What does that mean? Money is money.

A certain amount of debt in an economy is healthy particularly if it is geared towards self-liquidating debt rather than consumptive debt. The trouble with debt is that it is simply a claim on future human labour.

The 99% statistic is not meaningless at all. In 1950, 50% of our money supply was debt, 50% was cash (debt-free). Our debt-money system has ensured that the amount of interest-bearing debt has increased so much that it is almost the entire money supply. Do you think that is healthy when in the UK our average APR interest (govt, personal, business debts) is about 6% and yet we have only 3% debt-free money to pay it off? UK plc is borrowing to pay interest. So is the US and every other western country. It's the interest that's killing us.

Debt-free money (cash or its electronic equivalent) is simply an asset to people and the government. Debt-based money is both an asset and a liability.

Money is "trust inscribed." It is a means of exchange. The problem is that the financial sector has a monoply on our one and only means of exchange. And they skim off their profits and give little back in the form of taxes. Under the present system, they are net wealth extractors from the economy. Nothing but parasites. If I robbed a bank I would go to jail. When the banks commit the biggest drive-by mugging in history, they get bailed out and get bonuses. Nice work if you can get it.

Again, I ask you what you mean by "debt-free money". And money supply. There are multiple ways to measure the money supply. There's monetary base (MB) actually coins and currecy, M0(money on hand), M1 (m0+checking accounts), M2 (M0+M1+checking and savings), and M3 (M0+M1+M2+long term deposists such as CDs)

The US debt is greater then GDP.

Tracking the origin of where money comes from is nearly impossible. How would you know whether your current account came from open market transactions, fractional reserve banking, or discount window (FED acting as lender of last resort)?

The measure of choice for money reformers is either M2 or M4. By these measures, the amount of debt-free money in the UK is 3% as a fraction of M4 or 5% as a fraction of M2.

Debt-free money is as I have said cash (notes and coins) or its electronic equivalent (i.e. the govt could intruct the Bank of England to type in some numbers on their giant computer (the Real Time Gross Settlements processor) and hey presto, we have debt-free money, created at no interest to no one. They are kind of doing this anyway via Quantitative Easing (QE) but this goes to the banking sector who turn it into loans at interest. Both of these methods would be inherently inflationary under the debt-based money system that we have and FRB. Abolish FRB and have full reserve banking. An independent body at professional arms length to the govt (in the UK it would be the MPC) could define, measure and control the quantity of money in the economy directly. Banks would recycle existing money & could loan out their own money at interest but cannot create money out of nothing. The result - price stability, no more boom and bust, bankers getting mre realistic bonuses, more money freed up to be earnt and spent.

All the politicians at the moment are just rearranging the deckchairs on the Titanic but have failed to notice the giant iceberg-shaped hole in the hull.
MyVoiceInYourHead
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11/5/2011 5:11:17 PM
Posted: 5 years ago
At 11/5/2011 11:54:55 AM, PARADIGM_L0ST wrote:
At 11/3/2011 7:57:16 PM, DetectableNinja wrote:
I'm not too familiar with economics (I plan to take IB Economics as part of the full IB diploma), but I just thought of a discussion question for those who ARE economically savvy:

What would be the consequences of establishing a worldwide, universal currency? Is it a good idea? Why?:

There has been a universal currency for thousands of years in the form of precious metals; most notably, gold. Because there is intrinsic value attached to it, gold is good anywhere in the world. However, in instances where the currency is a fiat, we see rampant inflation.

A worldwide currency under our CURRENT economic system is completely untenable. A scaled down example of how and why this doesn't work is seen with the Euro.

A return to the Gold standard would be even worse than the situation we find ourselves in. It would mean even greater inequality. e.g. Ancient Rome was built on cheap copper coinage. Then Julius Caesar came along and introduced the gold standard and demonetised copper. The Empire then began its inexorable decline. Inflation is mostly caused by fractional reserve banking (FRB) not fiat currency. It doesn't matter what backs the money. What's essential is who controls the quantity of money.
darkkermit
Posts: 11,204
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11/5/2011 5:29:14 PM
Posted: 5 years ago
At 11/5/2011 5:07:26 PM, MyVoiceInYourHead wrote:

The measure of choice for money reformers is either M2 or M4. By these measures, the amount of debt-free money in the UK is 3% as a fraction of M4 or 5% as a fraction of M2.

Please tell me your source.

Debt-free money is as I have said cash (notes and coins) or its electronic equivalent (i.e. the govt could intruct the Bank of England to type in some numbers on their giant computer (the Real Time Gross Settlements processor) and hey presto, we have debt-free money, created at no interest to no one.

Notes and coins can "originate" from debt. I'm asking what methodology you would use to figure out what "debt-based" money is. "Debt-based" money will exist even in a full-reserve banking system that uses CDs as fiannce, If you consider CDs part of the money supply.

All the politicians at the moment are just rearranging the deckchairs on the Titanic but have failed to notice the giant iceberg-shaped hole in the hull.

Fractional reserve banking has existed for thousands of years.
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MyVoiceInYourHead
Posts: 260
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11/5/2011 6:06:59 PM
Posted: 5 years ago
My sources of research:

Bank of England website: Financial abstracts
www.positivemoney.org.uk
The Money Masters website - by Bill Still
Book called Grip of Death by Michael Rowbotham
Book called Where Does Money Come From (2011)?
New Economics Foundation
The work of Professor Richard Werner - Southampton University
The UK Money Reform Party - Anne Belsey
darkkermit
Posts: 11,204
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11/5/2011 6:13:42 PM
Posted: 5 years ago
At 11/5/2011 6:06:59 PM, MyVoiceInYourHead wrote:
My sources of research:

Bank of England website: Financial abstracts
www.positivemoney.org.uk
The Money Masters website - by Bill Still
Book called Grip of Death by Michael Rowbotham
Book called Where Does Money Come From (2011)?
New Economics Foundation
The work of Professor Richard Werner - Southampton University
The UK Money Reform Party - Anne Belsey

Great, I was actually hoping you could provide me a link that showed that "99% of the money supply is debt-money" and WHAT methodology they used.
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SuperRobotWars
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11/6/2011 9:34:40 AM
Posted: 5 years ago
Gold Pressed Latinum, enough said.
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: At 12/6/2011 2:21:41 PM, badger wrote:
: ugly people should beat beautiful people ugly. simple! you'd be killing two birds with the one stone... women like violent men and you're making yourself more attractive, relatively. i met a blonde dude who was prettier than me not so long ago. he's not so pretty now! ha!
:
: ...and well, he wasn't really prettier than me. he just had nice hair.
16kadams
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12/7/2011 7:07:58 PM
Posted: 5 years ago
that would be terrible, a universal currency would make traveling simpler, but may also lead to disasters, especially with the American inflation, the euro-zone, most of the middle east. It would be detrimental.
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"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
16kadams
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12/7/2011 7:10:55 PM
Posted: 5 years ago
i am just trying out my new signature
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"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross