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Gold Is Money Interview

Reggie Middleton's picture




 

Below I discuss the problems in our banking system with GoldMoney’s Alasdair Macleo, stating that the current zero-interest rate policy being pursued by the Federal Reserve (often referred to as “ZIRP”) is masking problems with banks, but not solving them. I point out the basic truth that money-lending institutions make money off of interest, and that as long as rates remain artificially suppressed, this will constrain lenders’ profits. This is an issue all over the world — something that makes investing in this sector tricky. We argue that the European situation is particularly fraught, on account of their being “too many chiefs and not enough Indians... See the original interview posting on Gold is Money.

 

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Mon, 09/03/2012 - 14:44 | 2758221 JeffB
JeffB's picture

One thing I might disagree with from that interview is your assertion that the banking institutions, which I assume includes credit unions, savings & loans etc., that would fail and should be allowed to fail if we suddenly forced them back reality, deserve to fail, that they require "propping up" to survive proves there are too many banks &/or that they were inefficient, incompetent, etc.

Under normal circumstances, I would agree with you. Perhaps it is even true that the banks that would fail were too inefficient or incompetent, but I think their predicament was at a minimum exacerbated by, the government, and their partners in crime, the Federal Reserve and other central banksters around the world. It seems to me that at least some of them are, or would be, victims of the elephants stomping around in the room.

In the U.S. the government was forcing them to make loans to people and companies that didn't meet their normal credit requirements. Multi-million dollar fines were assessed against those deemed not to meet governmental standards for getting more people into houses (that they couldn't afford).

It was the Federal Reserve's flooding of the market with money and artificially suppressing interest rates that caused the bubbles such as that in the housing and commercial real estate markets, and pressured them to make loans at artificially low prices for assets at artificially inflated prices with artificially lowered lending standards if they were to keep up with their competitors and to comply with government regulations.

It was the government and the Federal Reserve that caused the artificial boom that led to the inevitable bust we are currently living in.

I'm sure many of the banks that would go bust "deserve" that fate, maybe even all of them do, but I don't think that's a given, and I don't think "the Free Market" "proves" that, because they didn't get into their predicament in a free market environment, but a twisted and distorted market artificially induced by the government and the Fed. You may well agree, but just didn't want to go into that type of detail, but it seems like a pretty important distinction to me.

 

Mon, 09/03/2012 - 11:07 | 2757685 JohnKozac
JohnKozac's picture

All I know is gold has more then doubled in value since 2007 while house prices have sunk 40% (or more).

With the miner strike in SA and money printing across the globe, the yellow metal is set to doubel again while joblessness and stagnant wages will keep pushing house prices lower and lower as Shiller predicts for some of the same reasons.

Sun, 09/02/2012 - 22:31 | 2756963 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Reggie Middleton is the African-American man who should be President.  

Not the present phony with the phony birth certificate.

Mon, 09/03/2012 - 03:02 | 2757162 Clint Liquor
Clint Liquor's picture

Who cares where Obama was born? It's where he lives right now that's the problem.

Sun, 09/02/2012 - 11:52 | 2756258 Vendetta
Vendetta's picture

I have multiple gold and platinum cards, its the same thing right?  /snark

Sun, 09/02/2012 - 10:51 | 2756199 LMAOLORI
Sun, 09/02/2012 - 12:17 | 2756282 labestiol
labestiol's picture

As to the monetary replacement, it is called Bitcoin :

For thousands of years, gold has been one of the safest stores of value. Many people hold gold to reduce their fiat risk. Bitcoin has many advantages over gold:

  • Gold is not divisible : You can not easily cut up gold to give people small amounts. Bitcoin is easily divisible to 8 decimal places.
  • Gold is not instantly assayable : You can’t instantly tell if gold is pure. You can instantly prove you have real Bitcoins.
  • Gold is not instantly weighable : You need a scale to weigh gold. You can instantly prove how many Bitcoins you have.
  • Gold is not transmittable over the Internet : Sending gold notes has counterparty risk. Bitcoins are easily sent on the Internet.
  • Gold can be outlawed and confiscated : The US government can and has in the past made it illegal to own gold. You can memorize your Bitcoin private key.
Sun, 09/02/2012 - 12:32 | 2756299 GeezerGeek
GeezerGeek's picture

What if, in the name of national security, the government closes the internet? What if a hurricane comes (or a major ice storm) and the power is off for days at a time? What if an EMP strike fries everything electronic? 

Sun, 09/02/2012 - 12:44 | 2756322 labestiol
labestiol's picture

What if, in the name of national security, the government closes the internet?

-> Internet is too valuable to the government. Plus no unique government controls the Internet.

What if a hurricane comes (or a major ice storm) and the power is off for days at a time? What if an EMP strike fries everything electronic?

-> Internet has been designed to resist nuclear attacks. Internet is global. If the problem is global, we'll have other problems. But I agree and I'll still own some precious metals, just in case this ultra low probability comes true.

Mon, 09/03/2012 - 04:23 | 2757236 Ar-Pharazôn
Ar-Pharazôn's picture

about closing internet i m not that sure...

 

Mubarak during the "revolution" shut down internet with previous agreement with providers

Sun, 09/02/2012 - 08:17 | 2756050 SoundMoney45
SoundMoney45's picture

Reggie, thanks for the insights, spot on once again.

Sun, 09/02/2012 - 07:12 | 2755993 Setarcos
Setarcos's picture

No metal is money/medium of exchange unless minted/coined and stamped with a face 'value' that's at least somewhat arbitrary and/or fiat.

Currently a one ounce gold coin would have to be assigned a 'value' of about $1600 in order to be exchanged for goods, services, etc..  And that is not a viable medium of exchange for most purposes, such as buying groceries and most things people require from day to day.

Currently a one ounce silver coin would have to be assigned a 'value' of about $40 in order to be exchanged for goods, etc..  And that is viable, BUT it is no different from gold-as-money, because the metal itself (as a commodity) may or may not cost, e.g. in production, what is involved in mining and so on.  Same principle applies to copper, etc..

Bottom line is that no metal has 'intrinsic value' ... no more than paper does, unless printed/stamped with a 'face value'.

BTW I have no idea why this interview is headed, "Gold is Money Interview", because the subject was hardly mentioned ... it was nearly all about interest rates and, in that context, I find little to fault Reggie on.

Mon, 09/03/2012 - 10:17 | 2757601 masterinchancery
masterinchancery's picture

That has never  been true--you must have parachuted in from fiat fantasyland.

Sun, 09/02/2012 - 07:38 | 2756012 Zero Debt
Zero Debt's picture

**No metal is money/medium of exchange unless minted/coined and stamped with a face 'value'**

No. There is nothing wrong with using only weights. Face values are only honest weights and measure if they are linked to the commodity, hence, unless they are manipulated, they are redundant definitions.

Defining a face value is the first step of drawing the attention away from the weight of commodity backing. It is a purely communication strategy intended to deceive holders of giving away the commodity in exchange for irredemable paper receipts. This is as old as history.

A corollary: There is nothing wrong, impossible or unusual about exchanging X oz of gold or Y oz silver for Z oz of bread.

Only an idiot would use a 1 oz gold coin with a face value of 50 dollars to purchase anything.

Sun, 09/02/2012 - 08:18 | 2756038 Setarcos
Setarcos's picture

And who is going to be voluntarily honest without regulation of weights and measures?

Gold has a long history of dishonesty, not least with the originators of modern banking robbing gold depositors.

And where did you get the idea of "a 1 oz gold coin with a face value of 50 dollars" from?  I stated that such a coin would have to have a face value of about $1600 today.

What is your problem with that?

BTW have a go at exchanging any gold coin for a loaf of bread, if you are so confident ... up to you, of course, to haggle with a shopkeeper about whether he should give you change for either $50 or $1600, depending on the current commodity price for the raw material.

Sun, 09/02/2012 - 10:46 | 2756184 Zero Debt
Zero Debt's picture

It's true that the value of 1 oz of gold is near 1600, sure, but it is impossible to modify the notional values of coins that "have already shipped" (as Steve Jobs would have said).

My example is not far fetched. Here is an example. The Australian Mint issues the half-ounce Kangaroo gold coin which contains .50 ounce .9999 pure gold with a face value of A$50. The one-ounce coin has a face value of A$100. AUD is at near parity with the USD. Read more: http://www.cmi-gold-silver.com/australian-kangaroos-gold-coins.html#ixzz25K3l7Gub

These coins are redeemable at face value at at the Reserve Bank of Australia. Read more: http://www.perthmint.com.au/minting_services_guidelines_australian-coins...

So yes, you are indeed able to buy a loaf of bread with a gold coin as it is legal tender, and the face value is used in the exchange. There is absolutely no need to haggle with the shopkeeper, why shouldn't they deal with you, it is their business to do so after all, as they can turn around and resell it for a multiple more AUD: 100 AUD of face value but over 1600 AUD value of the metal itself. If I would be a shopkeeper, I would accept it readily. It makes economic sense.

Gold itself is an intert metal and is neither honest or dishonest, it just "is". To claim that gold has a long history of disonesty is to attribute characteristics to a metal that it does not have. Who is gold to be attributed dishonesty as a characteristic? Gold as a monetary system is an institution, created by men, and any institution is vulnarable to abuse and corruption. What is open to abuse is people who let governments and central banks inflate the money supply unchecked. This is about the marginal utility that the issuer of the currency has by issuing more units. The behavior is easy to explain and to blame this on gold is just silly. It happens without gold backing as well but far less so.

Meanwhile, it is possible to issue debt free money without gold backing and still avoid inflation. The Bundesbank did a pretty good job at that before the Euro. They did not insist on full gold backing and the German economy did very well anyway. So even without gold, you could do well anyway. The point of gold is that if you assure that gold is backing the currency, it keeps politicians in check (just like other checks and balances, like a constitutional court, etc). Whaver system you have, it has to be an honest one.

Sun, 09/02/2012 - 11:36 | 2756243 Doña K
Doña K's picture

The face value of a one oz gold coin is just that, 1oz. of .99999 pure gold 

Sun, 09/02/2012 - 12:35 | 2756306 Zero Debt
Zero Debt's picture

Absolutely not the case, please don't abuse definitions.

The face value is by definition the value stated on the face of the coin = what you can see on the side of the coin next to the engraved graphics. http://en.wikipedia.org/wiki/Face_value

The unit of the face value of the coin is not a weight measure, but an undefined unit, "dollar". And this issue is at the root of today's economic problems.

The Perth Mint clearly states:

"Uncirculating coins are sold at a premium to their face value to cover the cost of materials, production, distribution and sale of the coins and to provide the Mints with a profit on their activities."

This issue goes well beyond 1 oz gold coins. See www.coinflation.com for more examples.

In general: IF (MeltValue > FaceValue) { Print("Monetary fraud detected!"); }

Sun, 09/02/2012 - 10:18 | 2756163 i-dog
i-dog's picture

Simplistic thinking that has been covered here before ... over and over again. Go back over old gold threads, or, even better, see on Utoob how barter is carried out in Africa using gold particles, not coins. Even uneducated gold miners of old also knew the simple answer to your objections.

Sun, 09/02/2012 - 21:59 | 2756926 HardAssets
HardAssets's picture

Youre right . . . not enough people do their basic homework on the topic.

I wonder if they thought gold miners used to punch little 'face values' on the gold dust they brought out of the mines ?  Then it couldn't have been worth anything, could it ?

One of the best introductions to money & gold  - "What has the government done to our money?" by Murray Rothbard - - and his wiritings on a 100% gold backed dollar. His writing is excellent.

They can be downloaded for free (no fiat or PMs required !)  www.mises.org

 One hint:  governments didn't invent or declare money into existence. Governments aren't necessary for money to exist.

Sun, 09/02/2012 - 02:40 | 2755910 AnAnonymous
AnAnonymous's picture

Too many 'Americans', not enough Indians...

Sun, 09/02/2012 - 13:56 | 2756408 akak
akak's picture

Too many Chinese Communists, not enough Tibetans ...

Sun, 09/02/2012 - 01:31 | 2755874 dunce
dunce's picture

As armchair revolutionary pointed out, lenders make money on the interest rate spread, but i would add that happens only when the loan is paid back. Most of the paper floating around has no real "collateral" behind it so they amount to non recourse loans even or especially  in the case of sovereign debt.

Sat, 09/01/2012 - 21:30 | 2755702 oldman
oldman's picture

 

OT but ontime

@pi-rat/3.14161416------------pi-rat

 

James Joyce has nothing on you.

I am re-posting yours from 8/30/12 below because you put words to the grinding in my belly that occurs every time I read the comments here; I think it should be posted several more times so that the few old-timers that are still here can remember what it was like a year ago and more at zh.

Thank you for continuing a battle as diligently as is required----I can't seem to get past my disgust at the senseless trash that is the common fare today in the comments. Yeah, I'm a 'pussy' as I am certain someone will accuse me of being. I am also very disappointed in the shift that has occurred in pandering to the norm. I think tyler knows what he/she is doing and she/he is right---there are more of 'them' than there are of 'us', so the hits keep increasing and the bank is kept well-fed with deposits.

Enough of my stuff, though-----for those who missed this most well-written and articulate piece that is so sophisticated as to be nearly unintelligible to a simple-minded oldman, please dig into the feast that the pi-rat has left---------------

     

Thu, 08/30/2012 - 11:55 | 2749640 slewie the pi-rat

almost all the posts today are addressing basic issues covered here months ago

b/c of all the trolling, lying and political and bankstereng misinformation published here since we went "chat room ready"  to war in GROUPS of bots or the few other actual persons here who readiliy gave up their anonymity for "new friends", tyler may have, as i've been trying to point out to others for a long time here now, a c.r.e.d. problem

se he hasta try to re-establish his cred on the way to the bank this morning

ther's another article explaining the ltro and the EU "jumping over its own knees" fiscal problem too!  trying to re-establish some meaning for himself here after after becoming one of the most heinous douchebags of propaganda vomit in interwebs history

b/c of the typhoon in theGulf, one of his prop-agents didn't get the memo that the schedule had been changed and published the "evilFED" hit-piece without the political action with which it was s'posed to dove-tail

and i just steam-rolled them both for using zH as a toilet for mittens

speaking of trolls and asswipe propagandist, this is where million$cunt's post would be if he hadn't jumperd the string again (or tried to--somebody hit "save" before he did there, see it?) for his formulaic "joke" vomit

to tell us about "printing" so over-simplistically again and feed the people who can't think straight here (about 75% of the humansl 92% of the total  'bloggers')

in fairness to mil$cuntster, he did reply to someone about a week or so ago and it was quite intelligent;  everybody wondered wtf was going on here, too

he stepped out of character and slewie would say that the people who pay him to fuk up our work here below the line were very displeased b/c they took him down for a while and he didn't get paid while down, propably, did he?

so now he is back to "innocent" and again, only 1-2 people understand the actual REAL dynamics here

so the efforts to re-establish c.r.e.d. are well underway here and i applaud THAT

unfortunately, the rupublicunts are doomed and may not be given control of the USA for many elections to come

when your last 4 'winners' consist of nixon1, reagan2, CIA bushI3, and skell&bones harvard ignoramus bushII4 and theParty shit-canned rPaul for neoCon mittens whose career was also launched by drug-goonie money from central/south america, you are now unelectable

the fact that the criminals running the GOP (or can't one figure where "lindaGreen" was created and why?) are just thugs and not smart enuf to win at this point probably makes their "convention" a bit less that "bubbly"

but they were strong enuf to take rPaul down while he was "serving" them (and tyler) with gobs of money when people see nixon, reagan bush & bush, and a solvent and our strong nation go totally BK in 5 years of "war on terror" under them,  even americans might say:  what's that?  coffee?

perhaps even tyler and the other mindless republicunt trolls here are now "getting" that their precious mittens in unelectable

the party of rockefeller is the party of the manchurian candidates, ya know;  nixon DID go kiss mao's ass to get jMcCain out the hanoiHilton;  reagan went propwash on rusiia, NOT china, and under bush I & II america was economically gutted and her military put under the control of the NWO, as well as our CFR

and the bankster may have been given a "pass" b/c they all have "diplomatic immunity" as agents of our debt-holders;  or did you conclude they were working for "american interests" and just "made a mistake"

now i won't stick up for billClinton as an apologist for the WTO;  he marginalized ALL the intelligent young people who knew in their hearts and guts it was a sell-out and gave china "favored nation status" in 96 (just in case he didn't "win" 5 months later

by jCarville hit the "economy styooopid" theme and get him back in there, didn't he?

in fairness to the repubs, the Ds are so "nannified" they just don't "get it"

however if they are gonna govern or try to, for the next 4 years, i think the citizenism might see the danger of losing OUR sovereignty to DEBT

this is why greece hasn't been slammed isn't it?  the NWO wants to wait till after november before nation of TV-controlled "goodies" is shown theRealityShow on that one!

it will be "Pay or Consequences" 

but america has already been BK'd under bushII, hasn't it?  the capital structure and what's left of the economic engine has been "bailed out" by putting it all into the NWO holding company and annuitizing it.  can you say "manchurian candidates" or can't that be true either b/c the TV doesn't "know" it?

but unless ya turn off yer TV you will not be "able" to see it, b/c the MSM doesn't want you to see it;  neither does million$cunt, btw, you moronic shitheaded asswipes!

anyone with the most rudimentary understanding of the geopolitics of the vietNam (2nd indo-china war) knows that the mekongDelta is the "breadbaskets" of the north and of chin, too;  kennedy went after it, hard, and was taken out, as were both his brothers, one with a gun, another with a dead woman and a narrow bridge on matha'sVineyard

and now the US breadbasket is under the control of the internationalists, also, thru corpo-fascist organization and the "tax codes"

food is pretty important economically;  even debt-slaves hafta eat;  but the constant propaganda about OIL (and tyler is certainly not unique in pandering to this illusion) mans the TV doesn't hafta even mention the politics/economics of food which (golly) just "happens" to be about the only "markets" with any real action which i try to advise people of continually, btw

go ahead and take a nap if you wish;  tyler has to get back to basics now and see if he has a site and ANY cred salvageable'  i think it does

but is fightClub really for our tyler?  or is it just a "theme" which the spooks dreamed up for him to play offa?  and us too.  of course

Sun, 09/02/2012 - 18:16 | 2756729 shovelhead
shovelhead's picture

Both you guys sound like beavis & butthead overdosing on erectile dysfunction medication.

Never a pretty sight.

Get help Oldman.

Sun, 09/02/2012 - 10:20 | 2756149 i-dog
i-dog's picture

Typical incoherent pi-rat ramble ... full of inaccuracies, platitudes, and misdirections to assorted puppets.

It's a rant that is just as full of "basic issues covered months ago" as those he accuses others of contributing.

I'll take him seriously when he can get beyond kindergarten name-calling of right-left puppets and start both looking into and naming those who actually do the work of planning the strategies, launching the international planning groups, financing the think tanks, controlling the education agenda, grooming and promoting the authors, controlling the MSM, leaking to the bloggers, selecting the puppets, keeping the puppets in line and, finally, hoping to be in control of the sheep after everyone has been told that the west has run out of debt-building capacity. The rat still thinks it was an "accident" ... or caused by a half-wit left in charge of a desk and a signing pen for a few years!

The pi-rat is just another dumb fucking sheep!!

Sun, 09/02/2012 - 07:21 | 2756003 Setarcos
Setarcos's picture

Sorry "oldman", but I find your comment also unintelligible and/or "Joycish"

Sat, 09/01/2012 - 20:41 | 2755641 Coldfire
Coldfire's picture

Fuck you, Bernanke.

Sat, 09/01/2012 - 20:04 | 2755581 Radical Marijuana
Radical Marijuana's picture

Nobody "owned" any gold, unless there were organized systems of lies, backed by violence, to maintain that concept of ownership. There is NO money, and NO private property, other than within systems of public violence, that maintain the established systems of lies and robbery. 

ALL of the established political parties are factions of the "private property party" that has been developing as long as Neolithic civilization has ... That was ALL based on organized lies, backed up by organized violence. There has never been any private property, in the form of gold, or money, or whatever else, without being made and maintained within militarism.

Those insights are extremely important after we developed weapons of mass destruction, to sustain our established sovereigns.

Those sovereigns privatized their power to make money out of nothing (since they were based on their relative ability to monopolize robbery, through legalizing that as their taxation). The sovereign powers to rob, backed by murder, enabled the development of money to transform from gold and silver coins, to become fractional reserve banking based on paper representing that metal, then enabling there to be more paper than metal, until finally the pretenses of that paper money being backed by being redeemable in those metals were abandoned, and then we had pure paper fiat money, based on nothing but "faith" (backed still by sovereign power to deem legal tender as that which one must pay taxes in) ... which them morphed to become electronic money based on nothing but encrypted, coded bursts of electricity, still backed up by sovereign power, i.e. weapons of mass destruction.

There is NO going back to gold based money! The electronic and atomic powers are not going back into the false fundamental dichotomy delusions that somehow "private property" can exist outside of itself, which is some system of public violence. The combined money/murder systems of Neolithic civilization, promoted by the factions of the "private property party" that runs ALL our governments, are ALL based on organized lies, operating organized violence. The "rule of law" is always inside of its paradoxes of enforcement.

Money was, is and always will be based on robbery, backed by murder. That was always true, and will always be true. The problem is that the established systems of organized frauds and robberies have evolved to become global fiat money frauds, backed by atomic bombs, which were amplified to become literally quadrillions of times bigger.

That is the magnitude of what has gone wrong! The runaway money-as-debt systems, which have driven sovereigns into insane paradoxes of musical chairs of indebtedness, are due to being able to maintain systematic delusions.

The ONLY ways forward are to change the murder systems, to change the debt controls, to understand more about human and natural reality. Going backwards to some old-fashioned past ideology about "money" is a non-starter!

Having created a market which became a gambling casino, able to create endless fiat money, out of nothing, to gamble with, was only possible because it continued to be backed up by real and credible threats from mass destruction weapons.  THAT is the basic problem we face!!!

Swords and coins, paper and gunpowder, are no longer remotely close to the reality of electronic fiat money frauds, backed up by atomic bombs. Anybody who suggests we go backwards to resolve problems by ideas that worked in the days of swords, or the days of gunpowder, as the supreme weapons, is as out-of-date as those weapons are in a REAL world with mass destruction weapons, that make all of those swords and guns become utterly trivial and insignificant in comparison to atomic bombs, or biological weapons, and so forth.  We are rushing forwards to nanotechnology, automated robotic weapons, as fast as we possibly can. Meanwhile we are absurdly believing that somehow our money/murder system problems can be resolved by going backwards to ideas that worked in the days of swords or guns???

The basic problem is that physics and biology have advanced, while most of those doing politics and economics are hide-bound to want to go backwards to find their solutions!

The established elites are getting away with huge lies about what they are really doing, while their controlled opposition are almost totally reactionary revolutionaries, who do good historical analysis of the problems, up until the point where their proposed conclusions collapse back to old-fashioned bullshit.

There is no way around the basic problem. Money is based on murder, and our global electronic fiat money frauds are backed by the threats from REAL atomic bombs. Those have been amplified by QUADRILLIONS of times, and there are no genuine solutions that do not directly deal with that deeper REALITY.

We are going to have to develop radically different death controls, in one way or another. There must be nothing less than having militarism actually adapt to weaons of mass destruction, so that that murder system backs up the money system that depends upon it, and which pays for it.

Nothing less is enough.  It does not matter if that seems almost practically impossible. We are still stuck with this emerging reality. The basic concept of "private property," within which money, and the physical possession of gold, or whatever, must and does exist, should be on the table to be renegotiated! Private property always is due to public violence. The difference is that public violence is now built on the threat of weapons of mass destruction. That is what enables our money system to become runaway debt insanities. Going back to gold is an utterly absurd thing to propose as some kind of solution to that problem!

Sun, 09/02/2012 - 07:29 | 2756009 Zero Debt
Zero Debt's picture

**There is NO going back to gold based money!**

Who are you to decide what I want to use as money?

**The ONLY ways forward are to change the murder systems, to change the debt controls, to understand more about human and natural reality.**

Where did I hear the word "change" in a political campaign last time?

**There is no way around the basic problem. Money is based on murder, and our global electronic fiat money frauds are backed by the threats from REAL atomic bombs.**

No, money evolved in the marketplace from bartering, where a commonly agreed medium of exchange that everyone values is used to avoid direct exchange of goods. Later, the medium is co-opted by a derivative of said commodity in the form of redeemable paper receipts, backed by said commodity. Later the backing is removed and redeemability is lost, and then the amount of receipts is increased until the scam is revealed.

**The basic concept of "private property," within which money, and the physical possession of gold, or whatever, must and does exist, should be on the table to be renegotiated!**

Forgive my ignorance but this sounds like taken right out of the Communist Manifesto.

 

Mon, 09/03/2012 - 01:48 | 2757126 Radical Marijuana
Radical Marijuana's picture

All voluntary contracts were inside of a context of involuntary contracts. The only way one can freely barter is if one is safe from simply being robbed instead. There had to be some kind of rule of law maintained by a sovereign, within which a bartering market was possible. Otherwise, there was simply robbery instead. However, that sovereign was then simply the supreme robber.  There is no way to escape from the inherent paradoxes of the enforcement of the rule of law, which is necessary to regulate a market to allow bartering.

It is a superficial idea to think that money evolved from bartering as a means of exchange. That was only part of the story, while there was always a bigger and more important context, in which that developed, as I just said in the previous paragraph. I agree with your brief summary of how fiat money evolved. However, again, it is the sovereign power to rob (called taxation) that made fiat money work.  Money is that which you are forced to pay your taxes in, as the deemed legal tender.  Thus, the power of the the rule of law, backed up by the police, and then the military forces, are what makes fiat money be money.

It is naive nostalgia to think that "money," as it originally meant silver and gold coins, was not supported first by steel swords, and then gunpowder weapons. Now we have global electronic fiat money, sustained by the threats of mass destruction weapons.  The idea that money is a medium of exchange, and that having inherent or intrinsic value in that medium would be a good idea, are first approximations to a truth standard in our money. However, the subsequent steps towards that truth standard in money lead directly to murder.

The current money system was made and is maintained by the best organized, supreme gang of criminals, the international banksters. They effectively control all the world's major governments through the application of the methods of organized crime, i.e, bribery, intimidation and assassination, etc..

I am NOT the one telling you that you can not use gold as money. They are, by controlling the power of your governnment. Your government gave away the power to make money out of nothing to private banks. It did that due to the history of the triumphs of organized crime, being implemented through the political processes, primarily as a feebback between the funding of politics, in the context of the money system in general. They only had to fool enough of the people enough of the time, and kill the rest. Thus, what made War King, made Fraud King. Their only problem is the paradox of final failure from too much success at controlling civilization with huge lies.

As I also said in another reply below. I agreed with the scientific Marxism, although that seems antiquated and antique now, but I never agreed with the messianic Marxism, such as presented in the Communist Manifesto.  I NEVER believe that we can stop human reality from being based on organized lies, operating organized robbery. We can ONLY, perhaps, have greater use of information and higher consciousness or self-awareness that we are doing that.

Sun, 09/02/2012 - 06:41 | 2755974 buckethead
buckethead's picture

Forgive me, but within this post I see the concept of property rights as being artificial, immoral, and unworkable. Later in the post I see the use of the term "robbery" which is a technique used by those in control. If robbery exists, then so do property rights. (You cannot steal that which is not owned)

 

I like what you've posted, but the absolutist terms seem irreconcilable.

Mon, 09/03/2012 - 01:20 | 2757113 Radical Marijuana
Radical Marijuana's picture

I use the basic English definition of "robbery" as meaning to take by force.

I regard murder as a limit case of robbery, applying force to kill something.

All of that depends upon the deeper idea of subtraction, which defines things as separate from their environment. There has to be that defined separation before there can be boundaries across which forces can be perceived to act.

I am absolutist with respect to the Oneness of the Whole, but that is meaningless, since there is no finite content. Only relatively subtracted things, which are necessarily relative illusions, or relative "lies" can be perceived, and then, only those transact, by having energy flow across their boundaries.

I am NOT against the concept of private property, but rather attempt to define it to be what it actually is.  Perceiving that everything human beings do is organized lies, operating organized robbery, and that human societies are operated according to the principles and methods of organized crime is consistent with all the historical facts. In that sense it is consistent with "Marxism." However, I am then NOT Messianic in proposing anything that ever can stop that from being the case.

Primarily, I am attempting to make political science consistent with physics and biology, and more deeply with thermodynamics and information theory. However, that results in profound paradigm changes throughout all those realms, since ALL of their ideas similarly are revealed as relative illusions, which, themselves, must also be organized systems of lies and robbery. One of the most significant ways to appreciate that is to notice that an arbitrary minus sign was introduced into the entropy equations. All information and power is actually negative. They all depend on relative subtractions. From that subtraction follows the relative boundaries, across which robbery takes place.

Thereafter, everything from epistimology to economics can be built up, as another edifice of perhaps more self-aware lies and robbery. A higher consciousness of those basics is the best we could do. We could not change those fundamentals of subtraction and robbery, as the basis of all other possible understanding.

Sun, 09/02/2012 - 01:10 | 2755863 DoChenRollingBearing
DoChenRollingBearing's picture

Radical M, pls email me @ my name (dot) gmail.com.  Very interesting you have been over the past couple of days!

Sat, 09/01/2012 - 16:24 | 2755355 Peter Pan
Peter Pan's picture

We know that gold is money but the hard bit is to convince people that money must be gold or silver.

To say that fiat is money is the equivalent of saying that confetti is snow.

People are mesmerised by their credit cards and will continue to be so until the system does a Corzine on them and their money dsappears.

Sun, 09/02/2012 - 08:07 | 2756041 Jafo
Jafo's picture

With all the new government regulations to track your spending and your wealth gold could very well become the currency of choice for the black economy in the near future.  The more that the politicians try to tighten their grip on the people the more likely it will be that gold is established as the preferred medium of the people.  Deplore their actions by all means and prepare for the worst that they can do but cheer them on at the same time.

Sun, 09/02/2012 - 11:30 | 2756236 Doña K
Doña K's picture

<<<<for the black economy>>>>

Once gold/silver bartering starts, it's no longer black, it turns gray and then.....

Sun, 09/02/2012 - 07:49 | 2756025 Winston of Oceania
Winston of Oceania's picture

Paper monies and credit cards are only desireable when people will provide either goods or services in exchange for them. Once their faith in the usefulness of either credit or paper/fiat currency is damaged they begin to return to gold. We had to pass a law when this worthless script was created because some people refused to buy into it.

Sat, 09/01/2012 - 17:01 | 2755404 Zero Govt
Zero Govt's picture

".. but the hard bit is to convince people that money must be gold or silver.."

Don't try to teach or preach to society as a mass. Begin by leading by example. Start trading in metals or any other medium of exchanging value (try a foreign currency etc) in your locality

begin trading and others will catch on thereafter

Sat, 09/01/2012 - 16:17 | 2755337 Dead Canary
Dead Canary's picture

"NOT ENOUGH INDIANS!" 

Racist! Racist!

The preferred phrase:

"Too many tribal leaders and not enough oppressed aboriginal Americans"

Git your shit together Reggie. I am deeply disappointed.

Sat, 09/01/2012 - 18:38 | 2755506 Boxed Merlot
Boxed Merlot's picture

aboriginal Americans...

Ab, i.e. abba father - as in father Abraham

Original, as in first, etc.

Americans, is that north, US, central, south?

And if one looks closely at WB7s reprinted mormon document, you'll notice on the bottom where the laminites and others predate what many take to be the indigenous peoples that were dwelling / migrating across the geography now claimed by Washington DC.  Thank goodness for the golden tablets or we'd never know the true history of the land!

 

Maybe that’s why mormons like reid have taken to the casino thing.  (Not that that’s a bad thing I suppose.)

 

Sat, 09/01/2012 - 15:50 | 2755312 supermaxedout
supermaxedout's picture

Yuan slowly killing the Dollar in international trade.

http://www.chinamedia.com/2012/09/01/taiwan-signs-yuan-clearing-deal-wit...

http://www.cnbc.com/id/48838061

My opinion: China can now buy ailing European debt with newly printed Yuan. This should bring the interest rate for Italy and Spain significantly down.  Problem solved. At least for now.

 

Sat, 09/01/2012 - 15:47 | 2755309 ArmchairRevolut...
ArmchairRevolutionary's picture

Lenders make money on the spreads between the interest they pay and the interest they lend; not the actual rate of interest.

Sat, 09/01/2012 - 14:09 | 2755213 DavidPierre
DavidPierre's picture

 

Roast bear!

The smell of roast bear and the action yesterday has been encouraging for a couple of reasons.

The most obvious is that any time Bernanke opens his pie hole it has historically been a bad day for the PM sector.  A lot of the action this week was in anticipation of that fact, and it sure looked like some traders were going short to catch yet another raid.  Anyone that tried that got burned this time around.

However on a long term perspective things look even better.

Going back over a year since the start of this downtrend in gold and silver, there were several attempts when gold and silver rallied to test the down trend resistance. Each time there was a massive selloff that tooks months to recover.  With the retest of that downtrend line last week in play, and then having to put up with commentary from the Bernanke, plus the usual month end silliness related to options expiry, it is very encouraging that both metals have been able to plow higher.   It appears something is different this time around and that perhaps the rally will have some clout to power to much higher levels in the weeks ahead.

The fact that some of the best performing stocks in the PM sector today were the same stories that led the market higher during the last big uptrend.  This could also be the work of traders re-establishing positions after taking the summer off.  A few more days of big volume gains to feel more confident that this is more than just a short covering rally.

Temper your enthusiasm because the elephant in the room remains JPM and the grip they have on this sector.  If indeed the short exposure continues to rise, fading the rally with greater leverage at each bump higher, then we are just going to see the same game played out again later this fall as a new line in drawn in the sand.   For now the action to finish the month, and the hint that the worst seems to be over for the corrective phase. IF the trench warfare resumes from a new level in a few weeks or months, then so be it.

I bought more bullion on several occasions during the year. I hope others that understand exactly what is really going on were able to do so as well.

http://www.lemetropolecafe.com

Sat, 09/01/2012 - 15:18 | 2755286 Its_the_economy...
Its_the_economy_stupid's picture

What he said.

Sat, 09/01/2012 - 14:02 | 2755202 Lokking4AnEdge
Lokking4AnEdge's picture

Hey Reggie,

What's up with "PEI"?..

They managed to re-finance and the stock is going up almost daily...

Are you still recommending it as a short?

Thanks

Sat, 09/01/2012 - 14:01 | 2755200 akak
akak's picture

Purely an aside here, but why are so many black men so fond of the hypershort, hyperpruned, Clark Gable-style moustache?

Sat, 09/01/2012 - 15:38 | 2755301 SAT 800
SAT 800's picture

It's to attract the attention of people like you; who are Gay, but don't know it.

Sat, 09/01/2012 - 15:49 | 2755311 akak
akak's picture

Not, of course, that there is anything wrong with that.

Sat, 09/01/2012 - 13:44 | 2755122 DavosSherman
DavosSherman's picture

Gold WILL be money, no matter what Bernanke & the rest of the morons do.  

Fuck you banksters!

Fuck you insider traders calling yourself politicians.  

Fuck you technocrats taking bribes from lobbyists and getting re-elected with bread and circus shows which do nothing but rack up debt ($83 trillion Medicare, $20 trillion Prescription Drugs, $16 trillion Social Security).

You dickheads can't print gold like you print Monopoly Money that you call FRNs.

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