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Guest Post: Gold-Bugs And Anti-Gold-Bugs
Submitted by Gary North of the Ludwig von Mises Institute,
An article by David Weiner on the MarketWatch site reminded me of just how weak the economic arguments against the gold standard are. Its title: "A Fool's Gold Standard." I examine this article here.
The arguments by American critics of a gold standard all rest on this unstated presumption:
The economic outcomes of policy decisions made by a committee of 12 salaried bureaucrats, 7 of whom were appointed by the president of the United States, and 5 of whom were appointed by the largest regional banks that own a majority of shares of the 12 regional Federal Reserve banks, are better for the nation than the decisions of millions of owners of gold coins, who seek their own interests.
This is the argument in favor of a salaried bureaucracy in place of the free market. It assumes the superior wisdom and superior public interest of a committee of academics (Board of Governors) and commercial banking agents (regional Fed bank presidents). The mainstream opponents of a gold standard never put it this way, but this is the inescapable implication of their opposition.
The only exceptions within the anti-gold special-interest group are the Greenbackers. They assume the following, and are willing to say so:
The economic outcomes of policy decisions made by a congressional committee are superior for the nation to the decisions of millions of owners of gold coins, who seek their own interests.
But the Greenbackers refuse to admit that there is a second presumption:
The decisions of this committee will be faithfully implemented under the authority of the Department of the Treasury, which is under the authority of the president, and whose employees are protected by civil-service rules against being fired.
Ultimately, this debate is between the logic of the free market as a social organization versus the logic of central planning. The battlefield is monetary theory and monetary policy.
Faith in the Federal Reserve
There is one overwhelming reason why the mainstream media ridicule gold as an investment and also gold as a monetary standard. To buy gold is to vote against the Federal Reserve System.
These days, we read that "gold is too high, so don't buy it." Did even one of these supposed investment experts on gold publicly tell people to buy gold when it was under $300? Of course not. Bill Bonner of Agora Publishing did in 2000. I did in October of 2001, immediately after 9-11.
The mainstream-media experts are experts on when not to own gold: now. It is always now.
They complain that gold bugs are members of a religion. I accept this. Anti-gold bugs are members of a rival religion.
Gold bugs favor the religion of the free market. Anti-gold bugs favor the religion of central planning by means of central banking. The two camps have been at each other's throats for two centuries.
The anti-gold bugs have been dominant in academia for at least a century.
Dr. Roosevelt, Economist
The anti-gold bugs have been dominant in financial journalism ever since 1933, when President Franklin Roosevelt unilaterally made gold illegal for Americans to own. He issued an executive order on April 5, 1933. He gave Americans until May 1 to turn in their gold at $20 an ounce. Anyone who refused and got caught risked a $10,000 fine (at least $170,000 in today's money) and a decade in jail. The text is here.
Then, to complete the heist, the government hiked the price of gold to $35: the Gold Reserve Act of January 30, 1934. The government pocketed the difference: an increase of 75 percent. "Tough luck, suckers!"
Only one man was prosecuted under the executive order. If he had not contested the EO in court, no one would ever have known. So, the fearful and/or trusting citizens who obeyed the EO lost. Everyone who ignored it made 75 percent on his investment. This was consistent with the first law of federal politics: "You play ball with us, and we'll smash you in the teeth with the bat."
That was the end of the gold-coin standard in the world. It had ended for Europe in the weeks after the outbreak of World War I in 1914. Commercial banks began to experience runs by depositors on the gold coins stored in their vaults on behalf of depositors. So, the banks defaulted. The governments allowed this, just as Washington had allowed it in 1861. The central banks then confiscated the commercial banks' gold. Only England restored the gold-coin standard after the War in 1925. Then it reneged again in 1931. That left only the United States. FDR ended that loophole in 1933.
The financial world today regards FDR's action in 1933 as irrelevant, but legitimate. It was neither. It was a violation of contract. It was a concentration of wealth. It was confiscatory. Above all, it was undemocratic in the most fundamental way. His action removed from the general population the authority to impose negative sanctions — gold runs — on the fractional-reserve-banking system and the federal government.
Diluted Democracy
In political democracy, your party can get its way if it gets 50 percent plus one vote, and the counting is not rigged. You get one vote, but it is diluted.
In gold-coin currency democracy, where the government is not in the money business, you get as many votes as you have gold coins on deposit at a commercial bank. You can withdraw your coins or deposit new ones. Your vote counts for you 100 percent. There is no dilution of your vote.
If 10 percent of the depositors vote "no" by withdrawing gold coins, the bank must change its lending policies. It must reduce lending and build up coins in the vault. The process of withdrawing gold coins does not take 50 percent plus one for concerned depositors to get their way. The more fractionally reserved the bank, the fewer withdrawals that it takes to effect a change of lending policy: higher reserves, fewer loans.
The defenders of the Federal Reserve System want highly concentrated voting: a majority on the Federal Open Market Committee. This is 12 people. Seven are appointed by the president and must be confirmed by the Senate. After this, he has no authority over them. Five are members of the 12 regional, privately owned Federal Reserve Banks. One of the five is the president of the New York Fed, whose membership does not rotate.
Compare this arrangement with the US Supreme Court, which has nine members.
In theory, seven FOMC members and five justices run the United States of America. They determine policies. The FOMC determines monetary policy. It has a veto over the US government. The Supreme Court determines politics, justice, and almost everything else. It has a veto over Congress and the president.
The Court operates through the various executive bureaucracies. Its decisions can be resisted, but not overcome in the long run. The Court possesses legitimacy in the eyes of the voters. It will get its way.
The FOMC operates through commercial banks. But, when push comes to shove, seven people set policy. In theory, Congress or the president can tell the FOMC what to do. In practice, neither ever does this.
The independence of the Federal Reserve from the political system is hailed by defenders of democracy as necessary to reliable money. The independence of the Supreme Court from the political system is hailed by defenders of democracy as necessary to reliable laws.
In short, democracy is window dressing for elite control over the United States.
This is why control over the curriculum materials and methodology of a dozen law schools and a dozen business schools is the heart of rule by oligarchy.
In terms of the 6,000 people who shape policies internationally, control over two dozen universities in the world, most of which are in the United States, is basic to shaping the outlook of this elite. Read David Rothkopf's book, Superclass. About one-third of the 6,000 people who run the institutions that run the world attended one of these two dozen universities. If we take the top 40, about 50 percent of the elite attended.
I used Google to search for "independence" and "Federal Reserve System." The first page, which few people ever go beyond, are self-serving puff pieces by Federal Reserve Banks.
The bankers have been successful in persuading the people who discuss the issues of the day to defend the autonomy of the Fed from political interference. Typical is this article from CBS News (2009):
The hope is that an independent Fed can overcome the temptation to use monetary policy to influence elections, and also overcome the temptation to monetize the debt, and that it will do what's best for the economy in the long-run rather than adopting the policy that maximizes the chances of politicians being reelected.
Another example comes from Forbes, a major business magazine:
So before we rush to tampering with the Fed's independence, let's review why it is important. The answer is fairly simple. An independent central bank can focus on monetary policies for the long term; that is, policies targeting low and stable inflation and a monetary climate that promotes long-term economic growth. Political cycles, alas, are considerably shorter. Without independence from the political cycle the central bank would be subject to political pressures, which in turn would impart an inflationary bias to monetary policy. In this area politicians in a democratic society are shortsighted because they are driven by the need to win their next election. This is supported by empirical evidence. A politically insulated central bank is more likely to be concerned with long-run objectives.
A variant of the argument for central bank independence is that control of monetary policy is far too important to be put in the hands of politicians. As a group they have repeatedly demonstrated the lack of political will to make difficult economic decisions. But now they want to assert control over the Fed.
If you were to substitute almost any other special-interest group, conventional opinion would be outraged. Add the group to this sentence: "A variant of the argument for central bank independence is that control of [military, health, business, etc.] policy is far too important to be put in the hands of politicians." The main exceptions: law and education, where the elite control certification.
Gold Coins Convey Independence
When the public had access to gold coins prior to 1914, individuals controlled banking policy. They also controlled government fiscal policy. They could take their coins out of commercial banks if they did not approve of government policy. This is why national governments annul or restrict gold-coin redeemability whenever a major war breaks out. They do not want to face the citizens' veto.
With the repudiation of any gold-coin standard since 1914, citizens no longer understand the case for a gold-coin currency. They do not understand that widespread gold ownership was the number one restraining factor on the expansion of state power in the economy. The uncoordinated individual decisions of millions of people could overturn any government policy that required central bank inflation to fund it. The politicians resented this. So did the central bankers.
The politicians were under restraints: golden handcuffs. They decided that it was better to turn the money-creation power over to the bankers. The central bankers promised to buy government bonds at low rates: lender of last resort. This made the central bank the counterfeiter of last resort.
Politicians do not take the step of putting money-creation under the federal government. They could, but they don't. This is the Greenbackers' solution. They have failed to persuade the Congress ever since 1863, when Lincoln allowed the issuing of fiat money by the Treasury, but promised to veto any further rounds of monetary inflation.
Who will hold the hammer? Who will veto decisions by the federal government? The answer used to be twofold: the gold-coin standard and the jury system. The intelligentsia has been successful in undermining the first. It has tried to do the second, with judges instructing juries that they can decide only the violation of a law, not the lawfulness of the law itself. It has been less successful in this than in its war on gold.
Conclusion
The issue that divides the anti-gold bugs from the gold bugs is simple to state. The gold-coin standard places monetary authority in the hands of millions of economic participants who own gold. The gold bugs favor this. The anti-gold bugs oppose it.
The rival camps are divided by rival systems of economic sovereignty. The gold bugs favor the sovereignty of the free market. The anti-gold bugs favor the sovereignty of the banking cartel, which is the joint creation of the federal government (Federal Reserve) and the states (state bank licensing).
This is a replay of the arguments of Adam Smith against the arguments of the mercantilists. It is the logic of widespread, decentralized private ownership and voluntary contract versus the logic of government licensing, barriers to entry, and the legal right to counterfeit money.
The anti-gold bugs do not want to put it this way. This is why gold bugs should always put it this way.
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There are no gold bugs anymore.
It's people that have money.
vs
People that have credit on debt.
Who would you trust to be productive?
The Fed again, playing both sides of the coin!
Gary North is a economic God.
We need to "coin" a new term for those who support the gold standard. Allowing the opposition to define the terms is a mistake.
Edgar Allen Poe wrote his short story "The Gold-Bug" in 1843.
The story had nothing to do with baseless fiat vs. gold.
The economic outcomes of policy decisions made by a committee of 12 salaried bureaucrats, 7 of whom were appointed by the president of the United States, and 5 of whom were appointed by the largest regional banks that own a majority of shares of the 12 regional Federal Reserve banks, are better for the nation than the decisions of millions of owners of gold coins, who seek their own interests.
Comedic Caution: The above is NOT ironic
note: when you're cautioned not to act in your self interest, its because someone wants you to act in their self interest
note: #2. You can say that and still loathe Ayn Rand
Tar, feathers, hanging rope and molotov cocktails are the latest fad in currencies
they shouldn't be called gold bugs.
they should be called golden welfare queens when they wish gold to be legal tender because they're looking to steal value through holding deflationary monetary units -- monetary units which the government declares to be legal tender, as production halts and people and businesses go bankrupt and unemployed when such monetary units gain value against the value of debts, inventories, capital, assets, and other holdings. why should the "job creators" risk, economize, and produce when there is profit in doing nothing but holding monetary units and when anything else used to produce will lose value against the monetary unit? even the home owner loses value in their home when those who hold monetary units will gain value.
they should be called golden fools when they make gold a big part of their portfolio.
those who have a gold store should be called gold salesmen.
those who have gold in their portolio and are looking to sell it for a profit should be called pumpers and dumpers.
those who have a minor holding of gold among a diverse portfolio should be called investors. those who also read the quarterly report on gold should be called educated investors who do their own research.
i've read the quarterly report. i wouldn't be buying gold right now. i would take profits off the table and look for something with momentum. etfs stopped buying. it looks like the top of a speculative bubble. however, jewelry demand from india is suppressed so demand there will increase if the price drops, as recycling and mining supply would decrease if the price drops, so it is more sideways than anything. set tight stops and look for something that will run instead of holding dead weight. technicals and fundamentals look good for land. it is at a bottom and gaining some footing. land is better than gold. they don't make more land, it can't flee, and people actually need land.
Mr North is a highly readable and engaging writer, no question.
He does have his more batshit side, though. I suppose the most famous outbreak of this was his catastrophic predictions for Y2K (remember those days?). Then there's his fondness for stoning as a method of capital punishment.
It's people that have money. vs People that have credit on debt.
This is what J.P. Morgan had to say about money/debt:
Money is gold, and nothing else.
Q. If a man controlled the credit of a country, he would have a control of all its affairs? A. He might have that, but he would not have the money. If he had the credit and I had the money, his customer would be badly off.
http://www.bullionbaron.com/2012/11/jp-morgan-on-gold-and-credit-what-di...
I'd rather have the money/gold.
Jim Rickards: "Gold, is money. It backs currencies."
Tyler 'Obot' Mathison: "I thought beans were money."
https://www.youtube.com/watch?v=WHLJq3AwC3Y
"As a man of sense, I am a gold-bug and support gold-bug government and a gold-bug society. As a man of the world, I like confusion, anarchy, and war."- J.P. Morgan in a letter to his Brother Brooks.
the real job creators go into debt to build and grow their business. my employer just moved from a big bank to a small bank because the small bank offered him a loan to buy new equipment and grow his business into a new sector. we're talking about small business. not the billionaires on fox news who chase a return on financial capital. the small business owner buys a nice home, puts away money in a retirement account, and use their cash as collateral while they borrow money to purchase real capital.
Buy our book.
http://www.youtube.com/watch?v=QZg8E72xXFA
That and duckman. lol
$7.00.
Or maybe we see a non-conventional Gold monetary system such as freegold... http://www.bullionbaron.com/2012/11/freegold-gold-bubble-or-new-monetary...
+ 1
Yes
Another, FOA and FOFOA have pointed the way. No need to be a "gold bug" to benefit from a great re-pricing as physical reverts back to its role as perserver of wealth. Gold should NOT be linked to currency, let the fiat$ flow, let gold flow on its own.
Freegold will be a wonder to behold...
You might want to read his post before you give it a +1. (hint: he's skeptical)
I was going to address some of the incoherence of the concept with him, then I read his post, and saw that he sees it as far from the "inevitable" event described by Another.
My two cents? The Euro's "mark to market" of gold is meaningless, as it is only updated quarterly, while Another himself predicts a one-time instantaneous event will create the Freegold environment.
Meanwhile, FOFOA treats all critiques as "Westerners who just can't understand Freegold."
IMO, the concept of time is wholly unaccounted for in this model.
I thoroughly enjoyed reading all of Another and FOA, especially the history Another lays out. Thing is, he laid out the future too, and last I checked, human choice is not quantifiable. I see it as just another elite plan that cannot help but to fail.
(Oh, and I didn't junk you)
N/A, yes I should have read his post, sometimes I read just the post and NOT the links...
The Euro is really the only thing about FOFOA's case that I do not understand or agree with.
My own strong hunch is that while not inevitable (because I just do not KNOW), I believe that the 100 paper claims on each physical oz will lead to "Freegold".
TIME re gold was something I did not understand at all until bumping into FOFOA (2009).
The 100 to 1 claim which was pounced on by gold/silver bugs has mainly been supported by a misconstrued comment from Jeff Christian's about volume. He later clarified that he still thinks leverage of paper to physical was high (around 8 to 1):
http://www.jlnmetals.com/2012/10/five-minutes-with-jeffrey-m-christian-o...
And I guess it's possible that in a rush to metals that reserves may get used up crashing the paper market, but many of those using the paper market have no intention of taking delivery, they are often trading for short term fiat profits.
-1
Jeff Christian...LOL.
One of the biggest anti gold and silver trolls of all time. The guy is a first class douchebag.
Your personal feelings toward Jeff Christian are not really relevant. It's his comments that fueled the 100 to 1 leverage debate and he later clarified what he meant.
If you think that the gold/silver markets are leveraged 100:1 (paper to physical) I would be interested to hear your reasoning...
Wrong. Not my personal feelings. I have followed Jon Nadler and this clown for many years.
They have both deadpanned the gold and silver markets for the whole bull run (12+ years). Not only that, they also provided all kinds of disinformation and propaganda as well. Both deny any manipulation in the sector. Therefore, they should not be trusted as they have zero credibility.
And I dont know what the real leverage is. Nobody does. I would assume it is quite high.
Slip of the tongue. Momentary Lapse of Reason.
Whatever you want to call it, Jeffery C. forgot the audience he was addressing....and became drunk listening to himself.
He said 100:1 leverage.....because that is what he meant.
Sometimes the truth slips out accidentally.
Governments have been slow to react. More will ask for their gold back.
How many will be made whole?
Thank you for the link.
Christian had predicted "exploding" mine production, but he then clarified it in the interview as "running pretty flat".
Stands to reason, because the concepts of "exploding" and "running pretty flat" are near-identical, and it takes a canny metals expert like Christian to tell them apart. Thanks for that clarification, Jeff.
Another pearl of wisdom from Jeff:
" If you’re a bank, the OCC [Office of the Comptroller of the Currency] requires you to use a “prudent” reserve requirement. You decide what “prudent” is. If you are not a bank you don’t come under the OCC guidelines."
It is not possible to satirize this. It is beyond satire. Just ... beyond.
And in his interview, about gold, there was no mention of limitless re-hypothecation allowed in London, the primary gold market. No mention of MF Global-type super-muppet-fuck-overs that London facilitates. (Yawn) can't be important, then.
"five-minutes-with-jeffrey-m-christian" is about six minutes too much.
I am moreso skeptical of some Freegold advocates, rather than skeptical of the theory itself. Like you I don't see any particular path (to a new monetary system) as inevitable, although it is my expectation that Gold and Silver head to much higher prices than today in the short to medium term future.
Freegold is a paper scam invented by a bunch of delusional bankers trying to hold onto their printing press. Don't fall for that.
Deconstructing The Price Of Gold - Gold Bugs Better Sit Down For This One http://chartistfriendfrompittsburgh.blogspot.com/2012/11/deconstructing-...
thanks for the smirk, i think.
if gold goes down below 500 bennybux/oz. guess who's cashing out everything and buying a shitton more?
+1
In line behind ya jomama, IF there is any phyzz left...
Backing up the truck? Me too.
The chart of consequence is certainly not the gold in nominal terms, it's the gold/CPI chart. That has just begun its meteoric rise. Gold in dollars is a mirage anyhow. How much dog food does an ounce buy?
you can cash out,
but you wont buy any physical for that price. i can even see paper comex going to zero while bullion to infinity
Comex has the "emergency" powers to change the price, or any other contract condition, to whatever it wants.
Da Boyz will let the muppets play the game only as long as the Boyz are winning.
"When it becomes serious, you have to lie." - Juncker
"When it becomes serious, you have to steal." - Corzine
"When it becomes serious, you have to look the other way." - Gensler
Fullarton in 1844:
“The amount of hoards is not governed by the state of prices, but by the market-rate of (real) interest, which however it may be essentially identified with the rate of profits on capital, it is well known rises and falls in the first with every contraction and expansion of the medium through whose agency capital is distributed, where that be money or credit.” “No person who has ever resided in an Asiatic country, where hoarding is carried on to a far larger extent in proportion of the existing stock of wealth, and where the practice has become much more deeply engrafted in the habits of the people, by traditionary apprehension of insecurity and the difficulty of finding safe and remunarative investments, than in any European commonunity, no person who has had personal experience of this state of society, can be at a loss to recollect innumerable instances of large mettalic treasures extracted in times of pecuniary difficulty from the cofferes of individuals, by the temptation of high rate of interest, and brough in aid of the public necessities, nor, on the other hand, of the facility with which those treasures have been absorbed again, when the inducements which had drawn them into light were no longer in operation.” Now my take:Plus ca change et plus c est la meme chose.Given the market debt to GDP, there are too many financial assets to GDP, the dishoarding of PM will come when financial assets to GDP ratio shrinks either by massive bankruptcies (1929) or by massive reflation 1933-1950 or by massive positive interest rates (1981). As a reformated financial assets bug, fundamentals matter, chart is for inflection points but fundamentals are first.
Tell me if you think that financial assets to GDP is low now, or that interest rates can be increased massively in real terms, or if we have removed financial assets by massive bankruptcies. THe reason why the Gold to Dow ratio holds both in inflation and deflation is that the excess of financial assets to GDP can be removed by banruptcies (1929 Dow-Gold to 1-2) or by massive reflation and compression of multiples 1981 (Dow-Godl to 1)
Develeraging can happen with hyperinflation, stagflation or bankruptcies. Deleveraging is the process by which financial assets shrink in relation to real assets. They can shrink while going up because they go up slower, or they can shrink by going down because they go down faster. There is no easy way out of debt you just get to choose the sauce in the shit sandwhich but you still have to eat the shit sandwhich. I will move back to financial assets (my initial area) when it looks like there is a leveraging cycle up going on (Russia, North Korea?, Burma? Angola? all of those have large leveraging up cycle in front of them, buy finanical assets there!)
fail. the pittsburgh genius thinks that paper gold at c.500$ is the same as bullion being available for purchase at 500$.
ok, I'm sitting down...I'm taking a rest from stacking...it's hard and dirty work you know.
In your dreams....
CME declares Force Majeure on Gold Depository in Mannhattan (WOW, Black Swan!)Now depositories are losing their gold underwater. Who would of imagined?
FWIW: Brinks will be handling contractual obligations and delivering the bars to the customers.
Hmm, what about all those Stawks & Bonds in the care of DTCC??
More of the same old Eliott Wave bullshit .
Peter Bernstein's "The Power of Gold" I find to be well worth reading. Any ZH'ers read that one? ..it's more for historical context of gold and civilization.
The best context for today was the difference in how the big wigs back in the 1920's and 1930s thought so highly of hte gold standard, especially in britain. Contrast that to today... think when Ron Paul asked Bernanke about gold and his reply was something like "tradition."
That book was very interesting to me as well, even though I caught a whiff of dislike of gold from the author. Even so, if it useful to read ANYTHING about any topic you want to know a lot about, even if you disagree.
Gold is appreciated in the East as the preserver of wealth. Only 1% of Americans agree.
Only Asia? The whole Old World
TRUE Ghordius! I saw for myself in Italy not long ago...
http://tinyurl.com/ckffdn3
In the absence of real consequences for bad behavior, the system, any system, will fail, period. Common fucking sense, no books required assholes.
Anti gold bugs? How about just stupid fucking Keynesian assholes instead?
sorry ass paperbugz.
“In the absence of real consequences for bad behavior, the system, any system, will fail, period.”
Well put.
Unrestrained deviant behavior.. unrestrained fiscal policy.. nuclear fission.. same laws of physics..
It all blows up in the end.. turn your head and don't look at the flash.
Hmm.. maybe this is where that pillar of salt thing came from.
There is no problem holding gold as a wealth asset , I do .
But fiat in its most simple terms means fiat of the King or congress.
You cannot live in a nation without fiat money power.
Mixing up (taxable) fiat with gold and bank credit is a no no ............
These are very different types of money /credit.
Warning: This article is not recommended for those who consume William Volker Fund and Rockefeller Foundation propaganda on a daily basis from the Ludwig von Mises Institute. It is recommended you see a doctor for a prescription of anti-psychotics and a 90-day detox at minimum from the propaganda you consume on a daily basis. After that is done, you should look up the definition of the word “fiat” and consider staying away from Ludwig von Mises Institute and related propaganda for a minimum of 2 years. I spent 5 years to detox from the Ludwig von Mises Institute and all political propaganda.
https://libertyrevival.wordpress.com/2010/06/22/honest-and-sound-critici...
+ 1, D O C, I always like to read your comments.
Gold is best used to preserve wealth, not as a currency, so a Gold Standard is NOT the best way forward. Let the currency flow freely, let the gold flow freely. The people will speak and act as they learn.
LOL, yeah right. What bullshit that is.
"Actually, it is difficult to envision in this regard any other criterion, any other standard than gold. Yes gold, which does not change in nature, which can be made into either bars, ingots or coins, which has no nationality, which is considered, in all places and all times, the immutable and fiduciary value par excellence. Furthermore, despite all that was possible to imagine, say, write or do in the midst of major events, it is a fact that even today no currency has any value except by direct or indirect relation to gold, real or supposed. Doubtless, no one would think of dictating to any country how to manage its domestic affairs. But the supreme law, the golden rule, ...is the duty to balance, from one monetary area to another, by effective inflows and outflows of gold, the balance of payments resulting from their exchanges."
French President Charles de Gaulle (Feb 1965)
+1
"the golden rule" indeed. Shame de Gaulle got the prison shower treatment by Nixon, wonder if he ever recovered?
Well, this is exactly what happened in 1971. The US refused to redeem their currency in gold to anyone at any "price".
Gold is a wealth reserve asset.
Does one want to save gold, or promises?
In the rude vernacular: You want pussy or the promise of pussy?
You might want to rethink that response. The error is hidden in the text you provided.
Any system can be manipulated. It is the WHO, not the WHAT. Surely fiat systems are more pliable in this regard, but gold is not immune. It is in the "Effective inflows and outflows..." Control the flow and you control the currency.
Of all ideas, I do think freegold has some real merits. Which is why I doubt it will come to be unless the current banking cartel loses power and fails to retake the stage.
Fair enough, point taken.
I was actually responding to DOC's post, not DoChen's.
My bad. Sorry.
He was talking about Gold in the context of international trade in real goods............
But a sov goverment should have the right to print whatever it needs within its own bounderies.
The gold standard of old (pre 1914) was not really a Gold standard ...........it was really a sterling standard.
They could "print" gold because they controlled both South africa & Canada.
Only uncontested superpowers can live with a Gold standard.
No such power exists today.
In 1914 the UK did not hold much above ground gold.......but it could print the stuff.
Both friendly France & hostile Germany held the above ground reserves.
This is not unlike today where the US can print treasuries with Japan (friendly) and China (hostile) holding much of these reserves.
Infact the US is in very much the same situation that the UK found itself in 1914.
The UK was in chronic real goods deficit in 1914 - despite the gold standard
This is where FOFOA comes in to try to explain this to yee chaps.
Dear Dork, your comment "But a sov goverment should have the right to print whatever it needs within its own bounderies." is revealing. Since we do not print our own currency (the Federal Reserve does...NOT a part of our Treasury) I guess that means we are not a sovereign nation.
@Donsluck
You got it baby
The US $ is a reserve ( global banking) asset.
You traded sov power for cheap external oil.
As I said the Uk was in a very similar position back in 1914.
Why don't you try and present a critique that isn't filled with ad hominem attacks? Surely there's one out there, isn't there? Or am I to believe that only sophists care about this subject?
BTW, I've read about half of the book you recommended, Hayek's "Denationalization of Money." While I've still yet to find it to be anything but the EXACT OPPOSITE of what you claimed it was, I'm sure by the end of the book, he'll change his tune, right?
Sorry bud, but anyone who would claim that Hayek's book is written in support of a Euro-style currency is either ignorant or disengenious.
Perhaps you might want to consider a new id here? This one is no longer of any value to your troll ambitions. If nothing else, you should at least remember to only make accusations that aren't easily debunked by such pesky things as facts.
Gold exists as money because people can not be trusted.
cbs-mw
=
Cheerleading
BS
mw....= nothing but a bunch of performance chasing shoe shine boys n girls "REPORTERS"
i may listen to them and do the OPPOSITE of their "rec"
http://www.marketwatch.com/story/buy-the-stock-markets-next-dip-2012-11-26?link=MW_home_latest_news
The battlefield is everoyone's lives; will they be ruled by fiat and central control or sound money and individual choice?
The FED has decided fiat and central control, but when that Ponzi unravels sound money will be the only choice.
hmmm, maybe that Ron Paul guy was on to something.........
*Yawn
Christ can we just get on with the film now, these trailers are starting to get tedious
"To buy gold is to vote against the Federal Reserve System" CHECK
"Gold bugs favour the religion of the free market" CHECK
"...democracy is window dressing for elite control over the United States(world)" CHECK
"Gold Coins Convey Independence" CHECK,CHECK,CHeck,cHECk,chEcK....blaaaaa.
Very nicely and understandably stated. Be prepared for the resident anti-goldbugs to go all FMD, Jr. on you!
I don't always see eye to eye with Gary North but he consistently presents his positions in a clear and rational manner.
Yep. Mr. North tends to get cranky with those who don't gulp his particular brand of kool-aid. When he's brilliant, he's brilliant.
+1 but I'll object to the term "kool-aid." The man sugar coats nothing. Nor does he water it down.
You've all corrupted the definition of fiat with the help of Rockefeller funded Von Mises and Ron Paul.
What happens when they enact the gold standard and whoopsie...no gold in Fort Knox?
You think the American people will be sitting in that chair when the music stops?
I do hold gold and silver.
Got any documentation for that?
Free market? Mr North, the worlds central banks own a vast majority of the worlds gold. An ad-hoc change to a gold standard would provide no more of a "free market" than we have now.
Are you guessing? Where's your documentation?
http://en.wikipedia.org/wiki/Gold_reserve
How many people make up that 52%?
How many central banks make up that 18%?
Concentration of wealth. Lack of ubiqutiy will cause with the same problem you're all bitching about. Once again, very few controlling the money supply.
I suppose that the remaining 30% was lost in a boating accident.
Lack of ubiquity is what can solve the problem we're all talking about. That would be the problem where the little guy gets screwed and the economy goes to hell because the entire world is papered over with fiat scrap. If the elites want our labor and ingenuity they have to pay us. Better to be paid in a rare commodity rather than infinitely created and ubiquitous paper backed by nothing.
You're just shy of 1/5 of the supply of gold in the hands of a very, very, very few and the other 4/5 in the hands of so many it's almost a negligible number when divided up to the individual person.
How much control over the supply of money does it give to very few? The same problem will occur. I am not knocking gold as an investment;BUT, a strict gold standard will not solve the problems of control over the supply of money by the very few.
Peg the currency to what each state is able to produce. This would include labor. SO now the problem of ubiquity and fungibility are solved.
I am unconvinced by strictly fiat and strictly gold standard....Maybe the fruits of our labors are the money.
Maybe society just has a warped sense of what wealth is.
Your post was nonsensical.
The whole worlds 'wealth' in gold which would fill 1 olympic sized swimming pool today? Theres going to be a whole lot of 'wealthy elites' who will feel their 'wealth' shrink....todays multi billionaire would be lucky to remain a millionaire. And what is gold really, what is it useful for, jewelry and some electronic applications? I like gold and silver, but to base a whole worlds economy on it today seems pretty unworkable.
dang, so much for Article 1, section 10.
Well, we're obviously well past those waters now anyway, along with the rest of the constitution. Hey like I said in above post, you want to make a world economy based on a gold standard? Well FINE, but just dont expect there to be $1.2 Quadrillion worth of gold and silver backing out there! Thats my point!
If you stop thinking in terms of fiat valuations -- which are simply numbers attached to nothing -- it all makes sense. For example, if you burn all the fiat and transact in gold you'll find that the gold supply is sufficient for the task.
So, you're in the "there's not enough gold" camp. Much of that "quadrillion" will disappear soon enough since it's not really "money" anyhow. Sigh. How many times does that have to be shown to be a defective position before you'll buckle to simple logic? This really gets old.
"Well FINE, but just dont expect there to be $1.2 Quadrillion worth of gold and silver backing out there! Thats my point!"
But there IS that much gold and silver backing out there! It just has to be priced correctly. Your $1.2 quadrillion divided by the total number of gold ounces ever mined (roughly 165,000 tons, or 5,280,000,000 ounces) gives us a gold price of approximately $227,000 an ounce. With gold at $227,000 an ounce, your $1.2 quadrillion will be fully backed by gold...
There will be no gold standard in our lifetime at least not for the plebes.
We live in a world which is governed by admiralty law. Governments are in fact corporations and they are run by a small group of insiders. Because under admiralty law they have the right of taxation and redistribution, there is a total and utter distortion of the value of all labor, goods and services. Patents, monopolies, free shit from govCorp and the regulation nation. I would propose that if there were ever a gold standard before it could really go into effect all existing contracts would have to be invalidated especially union contracts and entitlement contracts. All goods and services would have to be revalued and that is going to create a lot of winners and losers. The problem is the losers because they won`t be happy. When there is 50 or more percent of the public that recieves more from the fiat state than it contributes there can only be a continuation of said benefit or extinguishment of all benefit. Trade will halt untill trust can be established in whatever payment mechanism is agreed too. Japan better start buying a lot of gold because they need stuff from everyone else. Its gonna suck for anybody or country that has nothing to trade or is at an extreme imbalance. Does war make sense now.
I wonder if poverty would make western women sweeter and not look like water buffulos.
For some strange reason gold is still highly prized by the elites and remains at the center of the financial system. Even if the public hoard is gold plated tungsten, it proves thet it is valuble that somone would try to counterfit it Modern day alchemy.
The rival camps are divided by rival systems of economic sovereignty <--- This is an important point and one that explains the dissapearance of all the gold in the world into private hoards. The other day someone here posted fiat is for spending and gold is for saving.
I recently had a encounter with the local city government and the official told me directly that the " town of abc" was a corporation. I would guess that many people think that they are the government so to speak when they can't govern without consent. The phrase " rival systems of economic sovereignty" is exactly what the difference between fiat money and gold is. One is the money of corporate law/admiralty law and the other is the money of naturally born free men or the common law. Corporate law is socialism because the socialist requires your consent for taxation to occur so the .govCorp can distribute to the small and large as they see fit. This is why socialism is a farce but socialism buys off every whineing group of wankers. I think welfare in whatever form pays people to be lazy because the crime rates would be higher if some weren`t paid to sit around and get fat.
God bug/Not is the MSM reframe of what I have said. I think we can forget about ever seing a gold standard because it would throw the statist corpgov model on it head. They will fight or when the bennies spigot stops flowing there will be chaos.
I would like to see more discussion here at ZH about the rights we all have under common law. There will always be those amongst us to strive to rule the rest. I think its genetic to some degree as alphas will always be ruthless and 90 percent of women want them. Taxation for the distribution to the marxist feminists. If we do not educate ourselves about the common law no one will. The school system won`t.
As todays article about the texas school system reframeing the Boston TP as a terrorist act, what intelligent person would keep their kids in that system. The statists control the school system. Consent is indoctrinated and to not consent is to waive all benefit. You want to collect social security, you consent when you cash the cheque.
intersting stuff here http://robcourtofrecord.wordpress.com/
Well said overall but I'd dispute this:
My impression is that women are attracted to lazy idiots who already have kids with several other stupid, stupid women. The really odd thing (or not) is that that can be linked to monetary policy (not to mention the welfare state and the immoral consumer culture made possible by current monetary policy).
Great point. The common law comes from the rights we are given by GOD. Oaths of office are governed by Canon Law. You swear before God...................... . Marrige is a union before God. That era of german society for the most part believed in God.
Today we have somthing closer to your example and the chaste nature of a God fearing society has been replaced by skankporn trailer court debasement. The dumbing down of western society is making us more animal like than God like. There is a growing Pick Up Artist community. They'll hit anything, married, single or otherwise and they laugh about it. Womens rights are admiralty law.
http://heartiste.wordpress.com/
http://rationalmale.wordpress.com/
Common law used to allow men to protect women regardless of station even against the depredations of enforcement officials. Consider the case of Anne Dekins:
excellent.
why do resonably smart women try so hard to be men?
They've been mislead to believe that men have kept them down whereas in reality the pre-industrial world kept them down and the men along with them.
Industrialisation didnt do much for either gender as it turns out, and impacted much more on our basic social structure that raises children.
Okay let's say , some day , quite soon - five years from now 2017 -China India and the asian tigers - are fed up of holding their reserves in cash (US $ mainly ) since they are payed for their US T bonds in devaluated-thanks to inflation - US $.So they launch the Asian tiger currency ( a mixed basket ) wich represents a group of nations with rock solid balance, little debt, lot of export surplus, . They will gradually withdraw from the US $/ T Bonds . Your US national dbt will explode, hper-inflation will step in ( 30-40% pr year ) and you'll be compelled to switch back to a leaner economy, no more crazy consumption, much less credit, the no.1 goal will be to restore the credibility of the US $ . The gold bugs think " how wise we were " to stach gold. But there is someone who needs the gold, (your gold ) much more desperately than the individuals savers; it's the govt. Holding Gold will be prohibited and exchanging it for bank notes will be severely punished.Actually bank notes will be totally prohibited, only credit card settlements will be allowed. You'll be authorized to keep coins, small change but no fat rolls of cash.Those good old days will be gone.So your gold will be worthless. . THink of it seriously : when the situation get extreme all democratic-freedom-individual delicatesses are gone. I can tell that here in Europe , the use of bank notes is more and more restricted, that there no privacy at all in your bank account, the state can open it by a mouse click. So in a near perfect dictature the state apparatus will easily track the bank accounts who received extra income or on the contrary are too modest. So gold is really an hedge but if its use is restricted, then there is no more gold bugs, only gold suckers. Maybe a bunch of survivalist will cling to their gold , guns , but their life won't be easy.
I didn't junk you
China India it doesn't matter. All paper is admiralty law crap. There still seems to be a pecking order with the USD/30y Treasury at the top with the rest standing below and to one side or other. I heard a story that Reagan got together with the Saudi's to get them to over produce oil which resulted in all opec countries overproducing driving oil down to 6-12 dolar range. The soviet unions only source of hard currency was oil exports and what they needed from the west had to be paid by hard currency. The soviets burned up their entire gold reserve because they didn't have enough dolars. It didn't take long for them to collapse, funny dat. point is, at that time the soviet ruble was pure shit as compared to the perception of the usd being hard currency.
Confiscation is a tough one because it is illegal under the common law but do you have the balls to stand up to the might of the state when they have all the dumbest well paid goons with the best hardware to kick your ass with. will they force your consent - admiralty law. Roosewelch's confiscation was bogus and as stated in the article none were ever tried in court. 80 years later we are way dumber as a society and whats the number again for those who recieve some benefit and thereby give their consent.
Other voices have said that a hyperinflation is a matter of the loss of faith in a currency. Its hard to see(prognosticate) that event and those leading up to it. Its all a big fucking fabrication under admiralty law. consumerism is drying up. china and india do not have the romm for the retarded style of development that we do in the west, like californication. India is a disaster with their caste system. They have to squat in the street because there is no sewer system. the next messiah will be a communist
Its all admiralty law crap and the wanksters know it. Thats why they laugh and keep accumulating all the gold while their propaganda ministry the MSM kep trying to tell us that gold is a useless commodity.
keynes's "Barbaric Relic" will go down in history as one of the greatest marketing slogans ever.
some one smarter than me should do a breakdown of the canadian economy since trudogh. Mulrony sold off the canadian stash so that at present canada only has a 4 tonne reserve. mulrony drove the CD down to $0.67usd. How was that facilitated when canada is a resource powerhouse.
"Corporate law is socialism because the socialist requires your consent for taxation to occur so the .govCorp can distribute to the small and large as they see fit."
I never consented to the 16th Amendment. Does that mean I don't have to pay any Income Tax and I can keep all the fruits of my labor, and pay only for those services that I personally deem worthy of my money?
If I pay an Income Tax that I never consented to, then I fund things I never have nor ever would consent to, such as drug wars and bank bailouts. Certainly this cannot be called "consent". Or did I misread you?
https://www.youtube.com/watch?v=hj7yaqBFCh0
https://www.youtube.com/watch?v=Fkn6itUI4yA
Its all made posibleby the admiralty law fiat money. the problem is you use it.
Billy Jack uses his feet. He seems like a common law kind of guy.
One Tin Soldierhttps://www.youtube.com/watch?v=qswm7lHp7oY
Fiat = debt slave, gold = free man; any questions?
Got any bacon?
bippity boppity!
http://www.youtube.com/watch?v=CaK9bjLy3v4
That's bullshit. Fiat can be issued without debt. Gold does not equal a free man when the power of its supply is concentrated in the hand of a few.
How? The only way I can think of is if bankers directly purchased goods and services with their newly printed paper. You'd have to sell directly to bankers to get currency or wait in line to earn it from someone who had earned it from bankers. But you could never get enough fiat into the economy in this manner to make it a going concern. Coupled with legal tender laws a fiat currency which could not be a acquired by debt would leave all those destitute who can not earn it directly from the banks or from those who earned it from the banks.
If such a system could be made successful it would leave the banks sitting on a of pile real goods minus any goods or services they had consumed valued at an amount equal to all the fiat in circulation. That would constitute a serious misallocation of resources.
If direct purchase from bankers and the currency chain that develops from those who sell to them is not enough to sustain a fiat legal tender system how will you get currency into the hands of individuals without letting them borrow it?
Go read a book on it.
I am listening to two idiots on CNBC debate the fiscal cliff...its all about taxing..nothing about cutting expenses...nothing....so they get another 200 billion in tax revenues...they will only last for a few years..as the producers move production and the wealth it brings away...the deficits will never go down..not wil the rate of growth of the deficits...so the USA prints prints prints and also buys its own trash.....OK..we think we have fooled everyone...NOT..the rest of the world sees this...and looks at the US dollars it is holding and using...and THEY are saying..."we have to change this"....and they will change...there are meetings going on right now about the "after the dollar" senarios.....I think its much more and much faster than we as Americans think....again I think it will be an overnight event...Will China try to corner the Precious metals markets...what if they bought all the options...and asked for delivery...all of them...could they default the metals exchanges....I think so...could they buy these options with all the worthless dolars they have..I think so..for me China is the leader of this new movement...they want the power...but they also want to strengthen their people...they think long term...10 years to them to take over the world is no big leap....we are now thinking in 4 week timeframes..the fiscal cliff is now a 4 week play...disgusting...really disgusting ...the rest of the world has to be laughing at us...while they think of what to do with their dollars...
Right the little game of hide'n'seek isnt fooling anyone, in fact its just giving free time for China and others to become stronger and pull the rug out one day. Makes me laugh when I hear people say theyre just going to 'kick the can' forever....like thats fooling anyone? No its not.
better start prepping.
When does the hunting season on committees of salaried bureaucrats open?
I think the idea of a gold standard is self-contradictory. Who creates the standard? I would much rather abolish all legal tender laws, capital gains on competing currencies, print Greenbacks (United States Notes - without interest or debt), and let gold float. People will be able to choose which currency suits them for a particular circumstance.
I don't want to fix the value of gold. And I don't think it is always the best medium of exchange. But it is a great store of value.
Too bad about that boating accident...
Savvy.
That is basically FreeGold thinking. :P
Does FOFOA believe in repealing legal tender laws completely? FOFOA doesn't seem to like Silver from what little I read on there.
I'm fine with FOFOA believing/thinking that only gold is money if they like, as long as there's no legal tender laws. No legal tender laws would mean that I could use whatever I want as money... silver, copper, nickel, platinum, a bag of rice, etc. I could be wrong, but I believe that I would find plenty of peeps out there that would make voluntary exchanges with me in silver, etc.
No, he doesn't. I think, realistically, hoping that legal tender laws are removed is a long shot.
As to silver, it's not so much a matter of dislike as it is a conclusion that it will not play a monetary role in the future, and as such will not gain from monetary levitation, excellent industrial fundamentals nonwithstanding.
David Graeber makes some interesting points about the origin and purpose of legal tender laws when discussing his latest book : http://www.youtube.com/watch?feature=player_embedded&v=CZIINXhGDcs
(The whole first hour of that video is well worth watching)
Technically you could make such exchanges now, as long as you keep it on the down-low. ;)
Thank you for the reply.
Just want to say that imo, anyone who doesn't believe in repealing legal tender laws is a statist. My belief is that spontaneous order would occur in society through human action with no need for "top down" rulers. In case you are interested...
An Introduction to Anarchy
a.k.a Voluntarism or Voluntaryism
Thank you for your link. I'm watching it now, but not sure just how long I will watch.
I am familiar with anarchy, and have quite the soft spot for it.
I will also check out your link, nontheless.
I don't think it's quite so clear cut, there are many shades of grey in this world.
FOFOA is practical, not ideallistic, that much I will agree too. :)
Edit : I suggest watching till he drinks from the cup. The tension is quite palpable. he is a very entertaining speaker, I would find it difficult to stop watching myself ( and have in fact seen it 4 or 5 times now, it's that good). ^^
I heard of his book right when it came out. It sounded like a very interesting book to me.
I see in the video he claims to be an anarchist. I didn't know that he's an anarchist! Well, well. I will watch it, and most likely buy his book!
Thanks again,
Cheers
I would be curious what you thought, having watched it. :P
Hi Motley Fool,
It was very interesting! I believe I learned some from it, and it had me thinking a little differently about debt. It didn't change my mind about being a Anarchocapitalist in case you were wondering about that.
About a Debt Jubilee. Not too sure about that. The wealthy cronies got one though. I tend to think that it's better if there were an orderly default(bankruptcies declared). That's what should have happened, and is still what I think would be best. If there's a debt jubilee, then I believe that people would probably start going right back into debt, with very few knowing who owes whom, and how much is owed to whom. In other words, they wouldn't have learned the lesson that they need to learn. Did the wealthy cronies learn their lesson? No. The National Debt is still going ballistic!
--> DEBT BOMB <--
I was left kind of wondering a little bit, does he know/understand how wealth is created? And he also talks kind of like no one ever barters for anything. Been a long time(years and years), but I've bartered before.
Regards, and thanks once again!
Hey again
Though of course I doubt you will check back. :P
I didn't think it would, but it does teach some interesting things.
I don't agree with the debt jubilee idea either.
Hmm, I think he made the point that barter was seen, but only where people was used to currencies, and could no longer use it like in Russia during the fall of communism. So yes, barter happens, but it's not really the natural state of things.
I am glad you learned something. I picked up more on my 2nd, and 3rd time through fwiw, with nice time lapses in between watching ofc.
Cya around.
"Just want to say that imo, anyone who doesn't believe in repealing legal tender laws is a statist."
Exactly. Personal freedom should allow people to chose their own currency/money.
It does. It's government that doesn't allow it.
We freegolders view legal tender as a non-issue. It is not important what you are forced to spend in, what is important is that you are free to choose what to save in. :)
I am going to buy Bayliner stock...lots of sinking boats here...they need to be replaced..
These Mises Institute guys are all idiots...
Well you've convinced me.
It's all just a sporting event. Gold bugs are GOOD and ANTI-gold bugs are bad.
Derp derp.
Nothing in the article demonstates that he has any idea what a gold-standard IS.
North has written extensively on the subject. Have at it:
http://www.lewrockwell.com/north/north-arch.html
Yeah, but why in heaven's name would I sink a ton of time into researching the work of an IDIOT?
He positions the Fed against the Gold Bugs, but there was a gold-standard for MOST of the period the Fed's been in existence.
I get it--if you like this sort of thing, more power to you. It's just entertainment, though, it's not educational or valuable.
"There is a principle which is a bar against all information, which is proof against all arguments and which cannot fail to keep a man in everlasting ignorance — that principle is contempt prior to investigation." -- Herbert Spencer
One of the best parts of the whole text. :)
By calling him an idiot, that makes him an idiot? That's quite the standard of proof you've got there.
Can you back it up or is that just YOUR unfounded opinion?
There is no such thing as a Gold Standard. There is only gold.
The Gold Standard was a construct of Government. They call it law, since the use of the words 'force', or 'coercion' aren't very palatable.
The Government claimed 'the right' to price fixing and called it a Gold Standard. If you believe they had such a right then there was a Gold Standard. If, like me, you believe they had no such right, then there was no Gold Standard. There is only gold.
How 'bout you enlighten us then. What IS a gold standard? Would it be good or bad, and why?
Coming in and just crapping on the comments section is bad form.
Well, I'm a bit too busy to bother tearing this specifict article to pieces today, but in case you hadn't noticed, crapping on the comments section is the primary occupation of MOST of our residents here.
The Mises Institute is just a straight-up propaganda tank. A gold standard is a fine idea, but it brings its own set of problems along with it.
None of the problems related to the maintenance of a gold-standard is ever addressed by the devout zealots, and it's OBVIOUSLY not a perfect system or you'd find it in use in some of the more enlightened states today. Instead, you find the gold standard has been abandoned EVERYWHERE.
Gold standards are not inherently incompatible with central-banking, and central-banking is the primary cause of our current set of national economic issues.
"Well, I'm a bit too busy to bother tearing this specifict article to pieces today..."
Your first post today was just after nine this morning...then you really got cranked up around 1:00 PM.
Busy day!...busy busy busy...lol.
I know dude, I was here. I thought you'd have some insightful comments about the content of this article, or maybe even my posts.
Oh, wait...no I didn't--you're a moron!
Yeah, I'm moronic enough to go look at your comment log...but only the time frame...busy busy busy ;-)
Nothing to discuss about the content of the article, eh? You just want to snipe at me personally?
I'm flattered by the attention, but I'm really not interested.
Yeah, at least he could rise to the level of analysis presented by you:
1) All these Mises guys are idiots.
2) It's all a conspiracy.
3) There's no point in reading anything to the contrary.
Sometimes you just have throw the dog a bone so he'll quit barking.
////////////////
It allowed me to have a pleasant conversation below ;-)
Are you two cousins or something? You from the smart side of the family and nmewn's the inbred spawn of the dumb uncle?
(I'm out of work now, so can comment a bit more in-depth.)
The Mises Institutes pieces are all of a kind--lewrockwell.com is the same--they're Randian "libertarian" types who know that most of their audience doesn't have a CLUE what the underlying issues involved are, so they make a lot of oblique references to their "enemies" and how horrible this specific thing or that specific thing is without ever explaining how we got where we are in the first place.
In this case, Gary North is intentionally conflating the problem of a "centrally-managed" MONEY SUPPLY (fiat-currency created by a central bank) with the problem of a non-resource backed currency unit. These problems are fundamentally different, but because many of the less-informed fans will just see "GOLD is GOOD" in this article, they can pat themselves on the back for having read it and having a stash of the metal buried with a bunch of canned-hams and lacquered ammo.
Now, as should be obvious: there's nothing particularly special about GOLD--it's an element, same as any other chemical in the periodic table. The fact that it doesn't have much industrial application keeps the supply fairly stable over time. So if the only thing you care about in designing a currency system is INFLATION, it seems to hold a lot of appeal as a commodity-backing for a currency.
But the problems that can occur in an economy are FAR more complex than just "inflation." The downside to an inelastic money supply (which would obtain in the case of any non-fractional reserve commodity-backed currency) is that investment potential is strictly limited by access to a physical resource which is held by a tiny number of people--so if you want to do infrastructure investment in Alabama, but all the gold is in the hands of the financiers in NYC and London, you are at their mercy when it comes to receiving credit. The result is "weighted" credit system--all the areas in which wealth has long been concentrated can continue to maximize the rent received for finance AT THE EXPENSE of the rest of the planet. (This is best understood by observing global economic history between about 1400 through 1800.)
[NB: Inflation itself may be a necessary element of any human economy, too, simply because the human population is growing. Unless it is taken for granted that people born earlier in history SHOULD have access to more money (and credit), it is difficult to envision a system in which "purchasing power" can remains stable with an inelastic money supply--the grandchildren will ALWAYS have less potential wealth than the grandparents, because the number of dollars cannot expand beyond whatever the commodity-extraction rate permits.]
Now, here on ZH the word "fiat" is generally used to refer to currencies which lack commodity backing, but technically what "fiat" means is that certain types of money are "government approved" and a legal structure is in place to maintain that government defintion of "what makes something" into money. In the US, it was previously the familiar gold/silver standard, but it could just as well have been water or salt or sulfur.
If you accept the necessity of existence of government (which the Mises Institute schmoes claim to do), it's not difficult to understand why government *REQUIRES* control over currency and legal tender status. Management of a set of competing forms of "money" would be impossible by the relatively slow to adapt government. If government could possess a legitimate claim to levy taxes, they'd never be able enforce fair compliance when one citizen pays in water and another pays in salt and a third pays in sulfur--at any given moment, the discrepancy in values between the competing monetary units would result in one taxpayer being treated "unfairly" by whatever determination the tax-collector makes.
[NB: This is why the anarchists are correct, incidentally, and why government isn't worth preserving. However, without government, most of the necessary elements of "capitalism" have to be reconstructed in a voluntarist legal system, and as you probably realize, no one's come up with any great approaches to do that while also PREVENTING the development of a new organized crime-family (AKA government) from reclaiming power.]
If I do my square-best to summarize North's piece above I come up with this: "gold bugs favor a gold-standard, which is inherently oppositional to the existence of central banking."
That claim is false. The article is thus *wrong* at the very outset--it's so off-base that it's a little embarrassing to see YOU here defending it. I never thought for a moment you were fuzzy on this stuff, although we've certainly had our disagreements on many other issues.
He starts with a FALSE PREMISE as an advertisement for his book, which he somewhat hypocritically sells in exchange for the same form of currency he claims exists solely as a moral wrong in the first place.
Fuck him.
One fallacy at a time, please.
Rand was famously at odds with libertarians and vice versa. Here's LVMI founder Lew Rockwell presenting Rothbard on Rand:
Here's Rand on libertarians and anarcho-capitalists:
I might be interested in hearing your take on Gary North and this article, but I understand if you have nothing to say on-topic.
So you object to discussion of a direct quote from your post?
Nah, we all know you've got a lot of links, but say something on-topic or go home, kthxbai.
Flawed thesis.
Money has a few properties that the realm of fiat can never emulate. Fiat requires govt decree...and "force" of acceptance. Money is derived from 2 participants that agree to the terms of the deal and exchange (buyer/seller).
People have agreed on the medium of exchange, long before govts figured it was good business to "manage" all trade and "clip" their tribute from the serfs. To hold a surplus in the medium of exchange is to recognize that something can be also a store of value, to be later put to work on new projects. Fiat only drives people to find the path that's both unproductive and requiring minimal effort. Sustaining society with fiat is something that history has proved to be unfounded to date.
That is the illusion. That humans can be good stewards of the planet with artificially induced "competition" in the business cycle. Sooner or later, the productive catch on to the scam being run on them...and start to look for a more beneficial trade unit than the paper iou's currently being used
If you really believed in what you write...
Then you would remove your kneepads, and demand your FED and US Treasury overlords update their ledgers and admit their lies
http://fms.treas.gov/gold/index.html
I guess since it's just tradition....only the paper exchanges need to concern themselves with keeping the exchange rates updated
Money is derived from 2 participants that agree to the terms of the deal and exchange (buyer/seller).
Yes, of course, now follow the implications: this means that "money" exists only as a virtual concept. There is no such thing as "money" as an exchangable "physical object," and the call for a "gold standard" (or ANY commodity-standard) seeks to override this fact.
If you really believed in what you write... Then you would remove your kneepads, and demand your FED and US Treasury overlords update their ledgers and admit their lies
See, this is the bit that's so funny. You read my post and think I've "sided" with the FED and the US Treasury overlords because North's piece is dishonest and stupid. The world is not made up of binary oppositions--just because North hates the Fed and I hate the Fed doesn't mean I have to like his bullshit.
He's just another shill trying to hawk gewgaws he gets for free to the rabble. Another guy trying to collect rent on his preferred set of lies.
My post was inteded to describe what's wrong with North's article. I'm really not that concerned with government or money. I have enough to eat and a roof and my preferred diversions and a way to sustain it all. For now. That's a fine deal as far as I'm concerned.
It just doesn't piss me off that the current crime-syndicate running things doesn't do everything that I think would be best. Life's too short.