This page has been archived and commenting is disabled.

Nobel Winner Dares To Go There: "No Reason To Fear Deflation... Greece May Benefit From Gold Standard"

Tyler Durden's picture


"Historically, there is no reason to fear deflation," Nobel Laureate Thomas Sargent explains to Germany's, "we all benefit from lower prices." Crucially, he continues, "countries with declining prices, such as Greece, must improve the competitiveness they have lost in recent years," requiring falling wages and rising productivity (and falling unit labor costs) which will lead to companies cutting prices, "this is not a dangerous deflation, but part of the necessary correction so that these countries are internationally competitive again." That central banks pursue an inflation rate of around 2%, Sargent blasts, is because they consider it their job to "make bad debt good debt," adding that inflation is "a major redistribution machine - reducing the real debt burden for the benefit of creditors and devaluing the assets of the creditors." A return to a gold standard,he concludes, to prevent governments and central banks from limitless money-printing "would not be foolish."


Thomas Sargent (via dares to go there (and is likely about to be stripped of his Nobel)...

"The countries with declining prices is troubled countries like Greece. They must make their price competitiveness, they have lost in recent years, again. This requires falling wages and rising productivity. As a result, unit labor costs go back, and the company may cut prices. This is not a dangerous deflation, but part of the necessary correction so that these countries are internationally competitive again, "Sargent said in an interview.


In addition, there are, according Sargent "historically no reason to fear deflation."


On the contrary: "We all benefit when technological progress lowers the prices, such as computers," said Sargent.


That central banks pursue an inflation rate of around two percent, according to Sargent is because they consider it their job to "make bad debt good debt". Of an inflation governments benefited with high debt.


Sargent: "Inflation is a major redistribution machine, which reduces the real debt burden for the benefit of creditors and devalued the assets of the creditors."
To prevent this, according to Sargent, the reintroduction of the gold standard would be possible, "I would not necessarily say that it would be the best solution, but it would not be foolish."


Until the First World War, had the gold standard, to prevent that governments and their central banks print money limitless. During this time the prices would indeed have fluctuated, but had compensated over the years.

and specific to Europe, Thorstein Polleit adds (via,

"The ECB will continue to push the rate toward zero percent and then buy government bonds," Polleit said. Background of this development are falling consumer prices in the euro-crisis countries and the resulting fear of deflation.


At the same time Polleit warns against the consequences of the low interest rate policy. "You can defer the market-based adjustment of the credit boom of the past few years through lower interest rates and the printing of new money most, but not prevent," said Polleit. In the medium term there is no way to lead a massive correction, coupled with cuts and debt deflation.

Polleit's conclusion seems very apt givne the current melt-up:

"The longer you postpone this process, the more destructive is its effect."


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 11/16/2013 - 13:49 | 4160605 Flakmeister
Flakmeister's picture

No denying that a lot of peoples living standards will falll...

Explain to us how you can have international gold standard given the horrific imbalances in the flow of oil?

Seriously, I am all ears...

Sat, 11/16/2013 - 13:57 | 4160618 alphamentalist
alphamentalist's picture

You can't. Plus wars for oil would slow a notch to make room for wars for gold. The average Goldbug never games these things out. I care not what system of money we use as long as we adopt it with our eyes open to its inherent flaws and run the system responsibly (the opposite of what Ben shalom is doing).

Sat, 11/16/2013 - 14:01 | 4160626 Flakmeister
Flakmeister's picture

Do you think that Ben somehow changed the game or did he just inherit a system geared to run that way and had really no choice in the matter?

Sat, 11/16/2013 - 15:04 | 4160717 LetThemEatRand
LetThemEatRand's picture

Yes, the system is completely controlled by a few hundred families who own the Central Banks.  They operate on a fiat system because that is how they generate wealth.   It is very much like the average financial advisor.  They buy mutual funds for you, and for the privilege they skim a percentage of your total assets under management.  To central bankers, the entire world financial system constitutes assets under management, and they have the additional advantage that they can uniiterally decide to increase those assets by printing more money which buys them real property, goods and services, while we all fight for their paper.  They extract a percentage of the world's economic output for doing nothing other than operating the system of currencies in which it is measured.   So long as we permit these families to control the system, talk of a gold standard is utterly pointless.  It is not about economic policy.  It is about who controls the world.

Sat, 11/16/2013 - 15:04 | 4160725 Flakmeister
Flakmeister's picture

Not to side the with the current bunch of sociopaths, but you do agree that "someone will run the world" no matter what (and lets not be naive)..

I think the real point is that an interanational gold standard cannot be made to work, unless, perhaps, you had only one "country" and one current account... And we don;t want to go there do we? 

Sat, 11/16/2013 - 15:21 | 4160751 LetThemEatRand
LetThemEatRand's picture

Absolutely, someone will run the world regardless of the system.  That is where I always reach fundamental disagreement with those who advocate a pure free market.  That model forgets what history teaches about guys with big guns taking over by force whether you like it or not if the people do not form their own government with bigger guns.    Whether there is some form of gold standard that would be workable in a world of 5 billion people is beyond my pay grade.   Bitcoin is a great example of how a currency system could work without physical backing.  It all has to do with who controls the currency and under what set of rules.    What I advocate is a system that is controlled by elected representatives who are accountable to the population rather than those who fund them (taking corporate and PAC money out of politics would be a great start).  In such a system where corruption is kept to a minimum by having real rules preventing it, I'm sure smart people could figure out a currency system that would not be designed to benefit a few at the top.

Sat, 11/16/2013 - 15:26 | 4160766 Anusocracy
Anusocracy's picture

Nobody runs the world.

They just screw up the order that would occur naturally.

Like a child touching a spinning top.

Sat, 11/16/2013 - 15:35 | 4160770 LetThemEatRand
LetThemEatRand's picture

"They just screw up the order that would occur naturally."

I think you hit the nail on the head of our fundamental disagreement.  Based on all of human history, what occurs naturally is that sociopaths who don't mind killing and torturing people gain power.  Most people who don't behave this way and who just want to go about their lives expect to be led by someone else and accept this as the natural order of things.   Many of those people end up working for the tyrants because it pays well and they are not tortured and killed.  Every now and then there is a revolution and a new group takes over.  When that group is the people who ban together and form their own rule (the exception in human history), it usually -- as now is occurring in the Western nations -- ends with the sociopaths regaining power while the sheep are led by their cute little noses (again) to the natural state of oligarch rule.  People who don't see this think a pure free market without elected government would work.

Sat, 11/16/2013 - 15:49 | 4160795 Indian_Goldsmith
Indian_Goldsmith's picture

Do You people really know what you want?

Sat, 11/16/2013 - 16:35 | 4160875 Tall Tom
Tall Tom's picture

Liberty and Freedom from Tyranny? Yes many know what it is that many want. Whether or not that is a possibility is the question which they must answer..


Personally i do not believe it possible. Therefore I have no faith whatsoever and have abandoned all hope. So Patrick Henry's alternative is that which I seek.


I resent the Sheep from not resisting the psychopaths. The rage which I feel towards the oppressed as well as the oppressor is intense. Since I value not my own life then what value is there to anyone else's?


How is that for an insight? 


There is no Political Solution. I despise the socialists, all of them, the psychopathic leaders as well as the blind followers, for their enslavement and my enslavement. You haven't any clue about how much I want to wreak havoc and destruction upon both oppressor and oppressed, as they deserve the Hell which they have created. They have not seen anything yet.


Now I will not act out on my rage. If volunteerism is optimal then how can I coerce others to adopt my views? That would be contradictory and inconsistent. It would be an irrational response. I value Logic and Rational Thinking. 


But there will be many whom do not share my values. There will be many whom will act out. A bloodbath will be the result, as has happened throughout Millenia of the Human Experience. A wise man once taught me that Terrorism is just a response to oppression; and; that if it is perceived or real matters not. He is correct in his definition. He was a Libertine masquarading as a Liberal.


But I do not really want to witness that. I most certainly do not want to participate. I have had a lot of diverse experiences and have been blessed with more opportunity than many.  I have lived a full life. So I pray for Patrick Henry's alternative solution hourly.


And I will find my peace in Eternal rest.


But what I want is not necessarily your path.


What you really need to be asking yourself is that if you know what it is that YOU REALLY WANT.

Sat, 11/16/2013 - 16:56 | 4160918 LetThemEatRand
LetThemEatRand's picture

Humanity is imperfect.  Most people have little interest in politics, and even fewer have an interest in running the show.  Based upon history, the best we can do as a species is to try to keep the sociopathic wolves among us at bay while we do our best to get along.  It is ironic that many people (including you, apparently) detest humanity for keeping you down even though you did quite well personally by your account.  You blame others for your failures as well as their own, and take personal responsibility only for your successes while failing to account for any part of your detested society that helped you succeed.  Incidentally, Patrick Henry became a Federalist later in life.

Sat, 11/16/2013 - 17:09 | 4160967 Ignatius
Ignatius's picture

Simple rule:  Anyone who seeks power should be denied it.

Sat, 11/16/2013 - 17:29 | 4161024 Flakmeister
Flakmeister's picture

By who? 

I mean seriously, you gonna wave your magic wand?

Sat, 11/16/2013 - 19:12 | 4161231 StychoKiller
StychoKiller's picture

Enact a lottery wherein the loser(s) have to serve in the Govt.

Sun, 11/17/2013 - 02:01 | 4161921 Alea Iactaest
Alea Iactaest's picture

@LTER re: oligarchs are the natural order of things

This is why Christians are taught to turn the other cheek. It is much easier, and much less messy, if people just go along with oligarch rule instead of fighting the system and getting whacked cause they're the nail that sticks up. Plus the sight of blood goes a long way in sparking those occasional revolutions. It emboldens the peasants. Hence both religion and opium are the opiate of the masses.

Sat, 11/16/2013 - 17:58 | 4161084 Miffed Microbio...
Miffed Microbiologist's picture

It does appear those that desire power do so for their own self aggrandizement, never for the good of others. I do find it strange that people, even myself, don't immediately rout out the cancer when it is in the initial stages and easier to remove. May be it's the insidious nature of these people that can fool us long enough for them to get their power base in place to entrench themselves. Their willing toadies, parasites, lackeys and sycophants who follow them in legions seem to have quite the nose for their initial stench. One would have to be hyper vigilant to keep them at bay and they flourish knowing we can't be.


Sat, 11/16/2013 - 18:08 | 4161091 akak
akak's picture

Miffed, it has also become quite evident to me over the years that the seeking of power, and the desire to exercise power over others, is an inherent sign of sociopathy, and is perhaps even the defining feature of sociopathy. 

If humanity is to progress in any manner at all, it seems to me that the relationship between power-seeking and sociopathy needs to become universally recognized, and we as a society need to learn how to recognize and treat (or otherwise deal with) sociopathy in its first manifestations in every individual infected by it.

The following book is a HIGHLY interesting, if chilling, exposition on this topic:

Sat, 11/16/2013 - 19:22 | 4161256 Miffed Microbio...
Miffed Microbiologist's picture

Thanks akak, this falls in an area of which I have much interest. Personally, I've had several encounters with sociopaths and have spent time figuring out what makes them tick so to save myself in the future. First of all, they do seem to be malignantly narcissistic. They have a self image of perfection. They are intolerant of criticism because a small degree of change is perceived to them as a self annihilation. They scapegoat others because they perceive themselves as faultless. They always disguise themselves in an aura of " goodness". They are intellectually devious, the most common reaction to them is confusion. They are always greedy. Because of their lack of empathy for others, they desire coercion and control of people.

In my experience, treatment is impossible. They "encyst" when their environment recognizes them for what they are and reemerge when conditions are more favorable. There is no cure, only protecting oneself and others from their damage. Your book recommendation sounds fascinating. Perhaps I can finally get some some scientific validation to my personal observations. Hopefully I don't piss off too many people here with my thoughts but I do have to admit, a few trolls here have a few of my aforementioned traits.


Sat, 11/16/2013 - 19:44 | 4161302 Anusocracy
Anusocracy's picture

It's all a gift from the past.

Humans and monkeys share Machiavellian Intelligence

The Social Brain is the Psychopathic Spectrum Brain.

Sat, 11/16/2013 - 18:44 | 4161170 logicalman
logicalman's picture

Government should be like jury duty.

Pick 500 people at random, off the street, and say - you're job is to run the country for 4 years, after which you wil advise the incoming, new 500, where you are up to, for the sake of continuity, for 6 more months. You will be paid the average wage and can be removed by the people if you ever mess up as badly as present politicians regularly do. You WILL BE ACCOUNTABLE TO THE LAW.

No revolving doors - no lobbying (AKA bribery) - no cronyism

Let's face it, 500 first graders would likely do a better job than the fuckers in charge at the moment.

Just a thought.

Sat, 11/16/2013 - 19:04 | 4161215 Flakmeister
Flakmeister's picture

There is some merit to this idea,  but it does rely on upholding the law (i.e. the state) unless you think mob justice is amenable to running a a complex entity such as the United States. Who appoints those that are sworn to uphold the law?

Sat, 11/16/2013 - 19:26 | 4161261 Anusocracy
Anusocracy's picture

What's with all this running stuff?

The Soviet Union was a "complex entity" "run" right into the ground.

Sure was nice of Putin to notice that the US is on the same path.

Sat, 11/16/2013 - 19:18 | 4161246 BigJim
BigJim's picture

Like most people, you make the utopian mistake of believing the problem is the people in the system... rather than the system itself. That somehow, if we can just get honest people running our lives, somehow government will be ok.

The people have asked, and allowed, governments to extend in size and scope beyond any kind of rightful role they might have in our polities (protecting the citizenry from criminality) and have become criminality incarnate.

It doesn't matter who is running the show... unless they drastically reduce the size of it.

Sun, 11/17/2013 - 01:14 | 4161859 Flakmeister
Flakmeister's picture

Running the show? There is always some one "runnning the show", or have you not noticed?

Unless of course you want to live at the level of hunter gatherer, even then there are  "Elders" and "Chiefs"...

How about subsistence level agriculture? You know, when no one has the ability amass a surplus with which to wage a "local" take over. Loyalty is cheaply bought (and sold)....

Have you read any real history?

Sun, 11/17/2013 - 13:59 | 4162689 BigJim
BigJim's picture

Hey girlfriend, read my comment again, particularly with reference to the phrase:

The people have asked, and allowed, governments to extend in size and scope beyond any kind of rightful role they might have

and then consider how your statement

Running the show? There is always some one "runnning the show", or have you not noticed?

completely misses the point.. as usual.

Tell me something - is a government that spends 10% of GDP 'running the show' as much as one that spends 50%?

Sun, 11/17/2013 - 14:05 | 4162716 Flakmeister
Flakmeister's picture

Lets see..

A snide condescending remark about my gender, followed by a classic case of moving the goal posts combined with a strawman...

Pretty clear who the troll is...

Go find another tree to bark up...

BTW, you wouldn;t last 10 minutes outside of the echo chamber...

Mon, 11/18/2013 - 19:31 | 4167396 BigJim
BigJim's picture

No movement of goalposts, no strawmen... except on your part. Repeatedly.

I imagine you think you're a pretty good debater. Has it occurred to you that the real reason you leave your real-time interlocutors flummoxed is because of your incessant non-sequitors? It's virtually impossible to argue with someone who doesn't know they're wrong.... despite them having their 'arguments' repeatedly refuted.

Tue, 11/19/2013 - 02:07 | 4168652 Flakmeister
Flakmeister's picture

Look, understand the difference betweeen theory and reality, i.e. practice. If you studied PDE's you would know it is all about the boundary conditions. 

One last time:

Show me that the trade between the great powers was greater than that with their colonies, i.e. where surplus from the colonies could not finance any short fall from inter-power trade and I will consider myself refuted... But you can't because it didn't, gold reserves tripled over that time (extraced mainly from the colonies!)

The deck was unintentionally stacked to made an international gold standard work for ~50 years back then, and the conditions are never going to be repeated again...

The stock of gold is now incapable of supporting the flow of oil.. The ratio of gold to oil has been pretty constant before and after Nixon closed the window despite dramatic increases in the price of each... Think of it this way, the wealth that is represented by an oz of gold can be created from ~15 barrels of oil.. Are you going to fix this ratio by fiat?

So if you want to see the economy collapse as all the gold slowly but surely ends up in the hands of the Petrostates, you know all those nice fellows in Russia, Saudi Arabia and Iran, go ahead, tie the world economy to a gold standard... 


If you want to argue that if no independent soveriegn nations exist, then I agree it is likely a gold standard could emerge. I suppose that surviving a nuclear war or somthing similar would create the requisite conditions. 

Or you could have a massive one world gubbmint and gold flows would be redistributed....

But then, it would not be an international gold standard...

I repeat, gold is a wonderful MOE at the local level, it fails at the international level if the world economy is unbalanced...


Don't bother replying, either you get it or you dont....

Tue, 11/19/2013 - 09:52 | 4169161 BigJim
BigJim's picture

Despite all evidence to the contrary, I am going to act like you are debating in good faith. I should also add that I am not a proponent of the gold standard per se, so this is purely academic.

So let's break this down, one step at a time.

Do you agree that if gold were 'priced' (temporarily, just for the sake of argument) at, say, something ridiculous, say $100,000 an ounce, then your 'problem' vanishes?

Tue, 11/19/2013 - 10:26 | 4169310 Flakmeister
Flakmeister's picture

You clearly do not get it.... I don;t care about dollars, I do not need to mention dollars at all...

So, just who is going to allow you wave your magic wand to do that? Many commodities priced in gold have pretty stable prices going back many years even to when dollars were convertible. You gonna change that by a factor of 50, just because? Is this really the level of intellectual thought by gold bugs here? I am absolutely appalled...

So if you are a not a proponent of a gold standard, why the fuck are you arguing this unless you are a troll or dumb as a post? Because you clearly have no fucking idea what you are talking about vis a vis reality when you say shit like you just did....

Tue, 11/19/2013 - 11:40 | 4169607 BigJim
BigJim's picture

Sigh. Let me repeat:

So let's break this down, one step at a time.

Do you agree that if gold were 'priced' (temporarily, just for the sake of argument) at, say, something ridiculous, say $100,000 an ounce, then your 'problem' vanishes?

Please try answering the actual question. Please also note that here, for the sake of argument, we are talking about USD at roughly its present purchasing power; ie a situation where gold is $100,000, but other commodities trade at prices similar to today's.

Tue, 11/19/2013 - 12:25 | 4169838 Flakmeister
Flakmeister's picture

And you just waved a magic wand that has no bearing to reality or history...

I suppose you could do it at gun point, is that what you are proposing?

What is the mechanism by which gold increases in value by a factor of 50 relative to commodities except by you saying it does? 

Sorry, I will not grant you that premise...


Tue, 11/19/2013 - 18:10 | 4171555 BigJim
BigJim's picture

Sigh. Let me repeat:

    So let's break this down, one step at a time.

    Do you agree that if gold were 'priced' (temporarily, just for the sake of argument) at, say, something ridiculous, say $100,000 an ounce, then your 'problem' vanishes?

Please try answering the actual question. Please also note that here, for the sake of argument, we are talking about USD at roughly its present purchasing power; ie a situation where gold is $100,000, but other commodities trade at prices similar to today's.

One step at a time, Flak. Do you agree that if gold were priced at $100,000 per ounce your 'problem' vanishes... yes or no?

Tue, 11/19/2013 - 19:12 | 4171759 Flakmeister
Flakmeister's picture

Cleave to your fantasies all you want but they ain't coming true...

Tue, 11/19/2013 - 19:35 | 4171820 akak
akak's picture

You are really quite a coward and an asshole, all rolled into one neat arrogant package.

I laugh at you Flak.

Tue, 11/19/2013 - 20:57 | 4172045 Flakmeister
Flakmeister's picture

You're so sexy when you froth at the mouth and gnash your teeth...


Wed, 11/20/2013 - 08:19 | 4172860 BigJim
BigJim's picture

One step at a time, Flak. Do you agree that if gold were priced at $100,000 per ounce your 'problem' vanishes... yes or no?

Wed, 11/20/2013 - 09:14 | 4172987 Flakmeister
Flakmeister's picture

As a rule, rhetorical questions are best left unanswered. Make your case on how that scenario arises.  I also suggest you look up the term reductio ad absudum, to see how it is used in logic and proofs.

Finally, are you suggesting that the value of Au will be redefined as such by the State? 

This thread is now too narrow to have any discussion, I suggest you drop it...


Wed, 11/20/2013 - 11:56 | 4173513 BigJim
BigJim's picture

One step at a time.

I'm not asking you here to accept that gold is 'worth', or will be revalued, at $100,000 per ounce.

I'm asking whether your problem disappears if gold was worth $100,000 an ounce.


Wed, 11/20/2013 - 12:27 | 4173648 Flakmeister
Flakmeister's picture

Just like with AGW, you are complete denial of reality...

Wed, 11/20/2013 - 12:55 | 4173729 BigJim
BigJim's picture

At the top of this thread you stated: The stock of gold is now incapable of supporting the flow of oil.

The necessary corollary to this is that if gold is priced high enough, then there would be enough stock of gold to support the flow of oil.

I'm asking you whether $100,000 an ounce is high enough.



Wed, 11/20/2013 - 18:22 | 4175277 Miffed Microbio...
Miffed Microbiologist's picture


I was waiting for a reply with bated breath. Ever teased but never satisfied.


Wed, 11/20/2013 - 18:43 | 4175341 Flakmeister
Flakmeister's picture

I have a proof of this preposition, however, the margin is too narrow to contain it...

Wed, 11/20/2013 - 19:01 | 4175386 Miffed Microbio...
Miffed Microbiologist's picture

Oh come on! Refer it to another post on the next page or just post it and people can hit the reply to read it more easily. Otherwise this is prick teasing.


Wed, 11/20/2013 - 19:50 | 4175549 BigJim
BigJim's picture

The margin is perfectly wide enough for a simple 'Yes' or 'No', Flak.

So I repeat: is $100,000 an ounce high enough to get rid of your problem vis-a-vis gold and oil?

Thu, 11/21/2013 - 00:12 | 4176368 Flakmeister
Flakmeister's picture

Why don't you run off and instead of me doing the work, you figure it out, Write a nice detailed post explaining how you think it would work. the onus is your to show your idea works...

In other words: Don't be so fucking lazy...


You still haven't addressed this:

Are you gonna point a gun at anyone who doesn't want to part with goods for your declared price in inflated gold? 

BTW, it is easy to make shit up in Pretend Land, but we don't live in Pretend Land. You seem to spend a lot time there, between this and AGW, I would say you have a hard time grasping real data and practicalities....

Thu, 11/21/2013 - 09:00 | 4176786 BigJim
BigJim's picture

The margin is perfectly wide enough for a simple 'Yes' or 'No', Flak... in fact, that would take up vastly less room than your repeated evasions.

In the past you have shown that you are either incapable or unwilling to answer refutations that involve multiple steps in one post. So we're going to do it one step at a time.

 Why don't you run off and instead of me doing the work, you figure it out,

LOL, it was YOUR assertion, not mine.

C'mon Flak, the internet is forever. And everyone can and will see (until Al Gore disinvents the intertubes) that Flakmeister is an intellectual coward... and unable to fight her corner.

So I repeat: is $100,000 an ounce high enough to get rid of your problem vis-a-vis gold and oil?

YES or NO?

Thu, 11/21/2013 - 10:41 | 4176992 Flakmeister
Flakmeister's picture

If you cannot figure it out for yourself. you don't deserve to know...

BTW, the answer is still no for more subtle reasons. However, since you like to live in Pretendland, you will never grasp why...

Try digesting this for a starter:

There are many similiar analyses that basically say the same thing...


You are truly intellectually lazy...

Thu, 11/21/2013 - 11:35 | 4177163 BigJim
BigJim's picture

Ah! Now we're getting somewhere!

So, it's 'no' at $100,000 an ounce, is it?

How about $500,000 an ounce?

YES or NO?

And no, I'm not being 'intellectually lazy' here - though I take my hat off to a typical bit of Flak sophistry - I'm trying to get you to admit that at some price level, there is enough gold vs oil. Once we establish that (and it IS a corollary to all your previous assertions) we have to establish at what price level there is enough.


How about $500,000 an ounce? Does that get rid of your problem?

YES or NO?

Thu, 11/21/2013 - 20:32 | 4179460 Miffed Microbio...
Miffed Microbiologist's picture

Oh come on Flak. Take him down! His jugular is exposed plunge th knife in. You can do it. I'm waving your pennant high up in the bleachers. YOU GO GIRL!


Fri, 11/22/2013 - 00:23 | 4179865 BigJim
BigJim's picture

+1 for giving the poor lass some encouragement :-)

edit: to be continued here:

Fri, 11/22/2013 - 13:30 | 4181329 Miffed Microbio...
Miffed Microbiologist's picture

Thanks Jim for your persistence. I am just fascinated by the whole argument and really not trying to be an asshole. Following the train of thought is quite difficult for me because of the tangential form of communication and my lack of knowledge in this area so I tend to get confused. Your focus on one point, even though hypothetical, helps immensely. Unfortunately, the other fears entrapment which may result in giving in to a point. Any good chess player knows some pieces must be sacrificed for eventual victory. A game played purely defensively is never won ( why I never was good at chess). If one is confident with ones position one does not fear engagement IMHO.


Fri, 11/22/2013 - 11:30 | 4181000 Miffed Microbio...
Miffed Microbiologist's picture

Crickets. Damn it boys. I think I got hot and bothered over nothing :-(


Edit: Flak, I hadn't noticed we're on the 2nd page now! Margin problem solved. Don't run away. 'Tis your time for glory.... Victory is at hand!

Sun, 11/24/2013 - 13:28 | 4185711 Flakmeister
Flakmeister's picture

Update: Big Jim got his ass handed to him...

There is more to winning a debate that being an abusive blowhard with only a passing understanding of the concepts....

Sat, 11/16/2013 - 17:39 | 4161039 Tall Tom
Tall Tom's picture

I am not blaming anyone for my failure. What I detest is my enslavement. I detest myself. I absolutely hate being Human. I take full responsibility for that.


Or trust me that I have looked into the mirror and what I see disgusts me. If I am disgusted by my own then what do you expect that I will see in the rest?


I am a misanthrope. I see no hope in the Human Condition.


As far as Patrick Henry? He was human also.

Sat, 11/16/2013 - 17:55 | 4161076 shovelhead
shovelhead's picture

Someone needs a hug...

Sat, 11/16/2013 - 18:20 | 4161117 Miffed Microbio...
Miffed Microbiologist's picture

I understand misanthropy and personal hated having experienced this myself but I am surprised at hatred of being Human. Is this as opposed to being another life form or do you dislike sentience, being self aware? Being Human enables one to have a full spectrum of experiences mental and physical that other animals cannot have. Desiring freedom seems particularly Humanistic. Of course Nihilism is as well. May be I have misunderstood and you meant you don't wish to be alive.


Sun, 11/17/2013 - 00:25 | 4161796 TheReplacement
TheReplacement's picture

All life is a struggle.  From the lowest to the highest forms, nature always tries and eventually does kill you.  Get over it already.

Sat, 11/16/2013 - 17:43 | 4161046 RockyRacoon
RockyRacoon's picture
What you really need to be asking yourself is that if you know what it is that YOU REALLY WANT.


I'd settle for others to stop telling me what I want, and what they think is the "answer".  That's why we are where we are.   How about leaving me the hell alone...

Sat, 11/16/2013 - 19:49 | 4161308 Marco
Marco's picture

I can't, we share natural resources and are stuck with eachother.

Sat, 11/16/2013 - 20:19 | 4161375 Anusocracy
Anusocracy's picture

My thoughts also.

Leave other people alone, they're not your property.

Sat, 11/16/2013 - 16:01 | 4160820 Anusocracy
Anusocracy's picture

So why in the fuck do you want to offer them unlimited power only restricted by their whims and fancies?

Because the ant colonists think WE need it?

I'm for panarchism, that way you colonists can live under whatever type of tyranny you want.

Sat, 11/16/2013 - 16:21 | 4160845 Flakmeister
Flakmeister's picture

Nothing is offered, they take it...

Sat, 11/16/2013 - 16:49 | 4160907 Anusocracy
Anusocracy's picture

"Nothing is offered, they take it..." from those who consent.

Sat, 11/16/2013 - 17:01 | 4160939 Flakmeister
Flakmeister's picture

Platitudes and empty rhetoric doesn't amount the shit in the real world, despite what you think.

Sat, 11/16/2013 - 17:38 | 4160981 akak
akak's picture

Flakmeister, after watching you 'debate' (i.e., pontificate and bloviate) in this forum for several years now, I have come to the conclusion that you are little more than a humorless, bitter, rigidly dogmatic contrarian who picks fights and pointlessly argues with others of good faith merely for the sake of argument. I am very close to simply writing you off as a poster worthy of dignified response or consideration, as I have Chindit13 after his repeated specious and dishonest attacks on gold and the owners and advocates of gold.

One thing that the subject of gold is eminently good for is to pick out the trolls and the dissembling defenders of the corrupt and unsustainable financial and monetary status-quo --- the topic simply sends them into babbling irrationality, hysteria and apoplexy.  And despite your predictable protests to the contrary, I have rarely if ever seen you here as anything other than a stalwart supporter of that same status-quo.

Sat, 11/16/2013 - 17:43 | 4161048 Flakmeister
Flakmeister's picture


        pretty clear that if you are reduced to ad hominems to address my points that the debate is over...

As for the status quo, given my age and position, I would just as soon not deal with an economic collapse the likes of which have not been seen since the Black Death.... The system is fucked and doomed but don't blame me if I don't want to roll the dice on the "Brave New World" in the next 10 years... (Though I might not have a choice)...

Just talking my book...

BTW, It is quite possible that I own more physical gold and silver than you do....

Finally, who was it that said, the unexamined life is not worth living?

The quote applies in spades to this place...

Sat, 11/16/2013 - 17:49 | 4161058 akak
akak's picture

No, you arrogant and lying SOB, the debate was over when you refused to have an honest debate.

You evidently only come here to preach, harangue, nitpick and pick fights --- your mind is clearly as closed as any I have ever encountered.

R24, is that you?

Sat, 11/16/2013 - 18:19 | 4161113 Flakmeister
Flakmeister's picture

Show me where I lied...

Please cut the shit, Akak...

Sat, 11/16/2013 - 18:23 | 4161120 akak
akak's picture

It is impossible to show anything to somebody whose eyes (and mind) are closed.  I refuse to step in for Sisyphus.

Sat, 11/16/2013 - 19:06 | 4161220 Flakmeister
Flakmeister's picture

That was a very elegant way of throwing in your towel...


Sat, 11/16/2013 - 19:24 | 4161258 akak
akak's picture

You are correct, I have thrown in the towel, but not in the sense that you imply.

Sat, 11/16/2013 - 19:44 | 4161301 Squid-puppets a...
Squid-puppets a-go-go's picture

it is you who has thrown in the towel - in the eternal fight for justice, fairness, and repreive from predation, your views effectively give up the fight and throw your lot in with the wolves


Sat, 11/16/2013 - 20:46 | 4161439 Flakmeister
Flakmeister's picture


Sat, 11/16/2013 - 18:53 | 4161180 Sean7k
Sean7k's picture

I like your honesy here Flak and agree, that your vision is not only possible, but frightning as well. We all need to examine our biases and you do us all a service in this. 

Here is another scary thought: if people are so divorced from the concept of value and what money is, they can no longer value gold and silver, could it not also result in the kind of starvation and debt slavery that would mirror your conclusions? What would you keep in reserve, if the people didn't realize until it was too late, what has value and how it is created? 

Sat, 11/16/2013 - 19:18 | 4161247 Flakmeister
Flakmeister's picture

Much appreciated and thanks for your measured reply...

I don't claim to have the solutions, but I have lot of questions, especially of those that zealously parade their surety. I spent last night arguing with an old friend of mine who is well connected to the financial industry about how the US economy is a Potemkin village and he vehemetly disagreed with me (and he did make some good points).

There are so many ifs that speculating about the nature of the future in any but the broadest terms is almsot fruitless. Whatever is unsustainable will be revealed and that is occuring now. Whether it be fossil fuels, food or fiat.

It is clear to me that if we are truly to prosper, a new value paradigm must emerge. My biggest fear is that it is beyond our grasp as a society.


Sat, 11/16/2013 - 19:59 | 4161332 Sean7k
Sean7k's picture

I understand completely. Have a great weekend!

Sun, 11/17/2013 - 10:09 | 4162193 trader1
Sun, 11/17/2013 - 12:39 | 4162450 Flakmeister
Flakmeister's picture

He has clearly given some thought to the problem, needless to say the denizens of the Hedge would not be impressed...

Sun, 11/17/2013 - 14:03 | 4162713 trader1
trader1's picture

yea, it's sad how much pent-up aggression comes out here when you drop the "M" word...

Sun, 11/17/2013 - 12:54 | 4162485 chindit13
chindit13's picture

Merriam Webster, meet akak.  Here’s his definition of “debate”:

A system of thought where there is a requirement to parrot and agree with every utterance of akak.  Synonym:  echo chamber.  Antonym:  free thinking.

I see you also labelled Flakmeister “bitter”.  Well, I’ll bet if we were to open the akak Dictionary, your photo would be on the page next to bitter.  It sure seems so.  Lighten up.  Somewhere along the way you’ve appointed yourself Guardian of the Golden Idol.  At best, you’re merely on the Steering Committee of the Eleanor Rigby Support Group.  For some reason you seem to take every opinion that differs from your comfort zone as a fingernail tip dragged across a schoolroom blackboard.

Perhaps you haven’t noticed, but this is a website.  It’s not a leadership body.  People come to read Tyler’s articles, and a few come to have a bit of fun writing comments.  Only the delusional get upset and think they can change the world from the comment’s section of a blog.  Accept your impotence and lack of power.  Anything else just causes the bile to flow, and that is all so unnecessary.  Try to have some fun, rather than take every contrary opinion as a personal attack.  You’re always bird dogging folks whose views you’re incapable of entertaining, always “being done” with people who dare to have open minds.  You end up looking desperate.  I wonder if your sole remaining reason to be is to collect green arrows.  They're cheap here, you know, all you have to do is embrace the groupthink.

Here’s some opinion:  Money is not fiat.  Money is not gold.  Money is faith practiced by the majority.  In fact, only one side of a transaction needs to have the faith, as Peter Minuit showed better than anyone ever.  I know fiat is worthless.  I also know gold is essentially worthless, except for having a few replaceable industrial uses.  Any other “value” attributed to it is faith.  Its history is meaningless unless you believe in a gold gene, or think dead people’s opinions still count.  You are asking that one faith be replaced for another faith.  To what end?  So a government you don’t believe now will issue a supposedly set amount of paper based on an essentially worthless asset they claim to have in abundance?  Perhaps what you are looking for is monetary discipline, but that hardly requires a shiny metal to make it happen. 

The world is a collection of asset whose relative values change over time.  Gold is no exception.  Gold’s value relative to other assets is near an historical low.  Anywhere from six weeks to seven months of the average person’s labor (using the government-dictated gold price or the free market price) was necessary to earn the equivalent of one ounce of gold a hundred fifty years ago.  Today, the average worker earns the equivalent value in a mere nine days.  Labor’s value has shot up relative to gold over a century and a half.  Most people simply could not afford to “stack” in the mid-19th Century.  Today they can.  That seems to upset you.  Perhaps if you thought of it like getting into Walmart first on Black Friday, you’d be less riled? 

Those who view gold as just another asset loaded up on it in 1999.  They legged out when it got frothy.  Somehow you feel that makes them “statists” or “supporters of the status quo”.  That’s pretty bizarre “logic”.  Gold was the longest trade I ever held, 1999-2011.  No, I did not get top tick, but I got $500 above current market.  Lucky or not, I get to enjoy the wealth not frittered away by hanging on to false paradigms and inventing excuses.

Last week you tossed out the tired line of “picking up nickels in front of a steamroller”.  Nelson Bunker Hunt also used that line, to his eternal embarrassment.  So you won’t get run over by a steamroller, but unless you plan on living forever, you may well end up next to the late Mr. Hunt.  Those who weren’t wedded to a bygone era have pretty full bags of nickels, which they may well use to re-acquire gold when its decline has run its course.  I’ll do that, too, but first I’ll let it breathe.

Too bad for you not everyone shares your view.  Maybe you could pack up and move to India, where gold is valued more than modern sanitation.  You could start a cult, maybe have a temple built to commemorate your own perceived sense of greatness.  Over time, you could even earn a Bharat Ratna, joining the likes of politicians, cricket players, and Albanian nuns.  That might be a noble, albeit not Nobel, pursuit.

Like I said, most people come here to read Tyler’s articles, and for entertainment.  I see people like you, pissing into the wind, getting in a lather because somebody like Flakmeister or I hold opinions at odds with yours.  Pretty silly to let that bother you.  You “refuse to be Sisyphus”, yet you came at Flakmeister twenty times in this article alone.  That’s kind of obsessive.  Have you forgotten this is just the comment’s section of a blog?  Your characteristic venom and ad hominem, which you invariably initiate, has the feel of Shakespeare’s famous passage from Macbeth:  a tale told by an idiot, full of sound and fury, signifying nothing.

Why not just post your opinions, let others post theirs, and relax.  Have fun.  You’re never going to change anything, not even an opinion, so why get your blood on the boil?



Sun, 11/17/2013 - 15:54 | 4163014 akak
akak's picture


Have you forgotten this is just the comment’s section of a blog?

You end up looking desperate.  I wonder if your sole remaining reason to be is to collect green arrows

Try to have some fun, rather than take every contrary opinion as a personal attack

Why not just post your opinions, let others post theirs, and relax.


Look at the pot calling the kettle black.

Yes, Chindit, my blood DOES get boiling, and rightfully so, when I am confronted by egregious and deceptive LIES wrapped in the smug, condescending arrogance of a willfully disingenuous bastard like you.  It is one thing to argue from a differing position in good faith and honesty, but quite another to vehemently try to argue that up is down and black is white --- while insulting those who 'dare' to step up and call the liar out.

The many half-truths, misleading statements and outright lies you attempted to repeatedly propagate in the recent thread regarding gold, and your consistent unwillingness and/or inability to address my rebuttals to some of your more egregiously dishonest claims, speak for themselves.

Perhaps all those red arrows which you received as a result sting a bit more than you are willing to admit.  I would submit that they probably did not sting nearly as hard as was deserved.

Sun, 11/17/2013 - 20:15 | 4163638 Miffed Microbio...
Miffed Microbiologist's picture

Chindit, I do think you are being somewhat unfair. Though I acknowledge akak is passionate about his beliefs and does get a bit riled up at times I have never experienced him demanding cult -like slavish devotion to his views. We differ on several accords but still remain on speaking terms.

I have witnessed Flak and LTER viciously attack and deliberately, personally taunt numerous people here. They are certainly not above reproach. You yourself made a comment to Hedgeless Horseman where you implied his children may have been sired by the pool boy. To debate HH on the veracity of his bigotry is one thing; claiming him a cuckhold is another and in my view is an uncalled for personal attack.

Perhaps it would be best either simply admit there can be no meeting of the minds on any part of the matter or come to some simple points of unity and shake hands at that. The only other choice seems to be a stale mate of epic noisy proportions; two male bighorned rams crashing together echoing in the mountain tops. Full of sound and fury signifying nothing.


P.S. I did make a last comment to you on the other thread.

Mon, 11/18/2013 - 00:11 | 4164161 Flakmeister
Flakmeister's picture

Yeah, but I go after the bigots....

Mon, 11/18/2013 - 15:32 | 4166235 Miffed Microbio...
Miffed Microbiologist's picture

If that's fulfilling to you, have at it. I find is somewhat useless. Bigotry forms from personal experience and is based in fear and mistrust.No one is born a bigot. Attacking one only solidifies their views. Providing an environment where there is no reason to fear, hate or be intolerant may allow them to personally decide to climb out of a bigoted state. It is solely up to them to do this. Fighting with them will have no resolution but will provide many hours of non stop argument to no conclusion. Of course, some just like to argue so this maybe fulfilling in itself.


Mon, 11/18/2013 - 18:27 | 4167072 Flakmeister
Flakmeister's picture

I have been able to get afew banned by merely providing a oppurtunity for them to reveal their full colors... Worth the effort, YMMV though...

The only person I really ripped was an insensitive bitch who kept going on about how Sandy was a nothingburger (even after the death toll was clearly rising)...

No, over the years here, it is very safe to say I have received far more abuse than I could possibly ever deal out...

Tue, 11/19/2013 - 03:09 | 4168713 Miffed Microbio...
Miffed Microbiologist's picture

Well you certainly do stick to your convictions no matter what the prevailing consensus is which is a demonstration of strong character or an inherent pigheadedness. Take whichever you most feel is complementary to yourself. Though there are a few here I find abhorrent, I'm not sure if they are worth the sparring effort to excise. I've done enough physical butchering to know the level of gore and stench I would face. I guess I am not willing to sully myself in a mental battle with someone I feel is beneath me. It is not arrogance,it's just that I have so much energy for such an endeavor it would have to be incredibly worth it. If ZH became populated with too many people I couldn't find any commonality I think I would banish myself.


Tue, 11/19/2013 - 03:55 | 4168750 Flakmeister
Flakmeister's picture

Strong character, if you please...

Hanging out in an echo-chamber is boring, really...

Sure, I  follow discussions between experts at various speciality sites, but unless you are very active in a given field, you are not going to add much to the discussion... And believe it or not,  real knowledge moves very slowly compared to the 24 hr news cycle...

As far as ZH goes, take Energy for example, after 4 years of blood, it is safe to say that the most civil discourse is to be found in the energy articles. Facts not opinions set the debate and the whackadoos know that they will be called out by a whole slew of different people.  Admittedly, some more polite than others. You have to back up what you claim. It is equivalent to an "Educated electorate" and do you not agree that is the key to a properly functioning society...

The way I see it, you got to start somewhere....

Sat, 11/16/2013 - 15:22 | 4160761 Anusocracy
Anusocracy's picture

Of course it can work and it will create winners and losers, just like now.

The difference is that the winners and losers won't be chosen by the elite.

Sat, 11/16/2013 - 15:42 | 4160783 Flakmeister
Flakmeister's picture

You are not really that naive, are you?

Sat, 11/16/2013 - 15:50 | 4160800 Indian_Goldsmith
Indian_Goldsmith's picture

"chosen" "elite"....lololololo

Sat, 11/16/2013 - 16:21 | 4160844 Anusocracy
Anusocracy's picture

I'm not naive, moron.

I don't have your hunter-gatherer/townsfolk authoritarian collectivist morality.

Hunter-gatherer culture -> townsfolk culture -> freedom culture.

I'm of the freedom culture, which is emerging from the townsfolk culture, you are not. You, most likely, want to live in some blissful, bygone days, days of your beloved governments killing hundred of millions. For what? So you and your fellow ant colonists can have your precious government?

Sat, 11/16/2013 - 16:23 | 4160848 Flakmeister
Flakmeister's picture

You appear to be reduced to babbling.

I asked very simple questions and you seem to be befuddled.

Sat, 11/16/2013 - 16:34 | 4160874 Anusocracy
Anusocracy's picture

"I think the real point is that an interanational gold standard cannot be made to work,"

That's your belief. I'm not going to argue about your beliefs. They're yours, do what you want with them.

How about this: Where do rights come from?

Sat, 11/16/2013 - 17:05 | 4160959 Flakmeister
Flakmeister's picture

Don;t change the subject.

I demonstrated below that it would take ~20 years for all the gold to amass to Petrostates, And you have done nothing to refute that..

Sat, 11/16/2013 - 17:09 | 4160971 akak
akak's picture

You have proven nothing except your own shallow understanding (and even that gives you undue credit) of the subject of the gold standard, or of monetary theory and history more generally.


Sun, 11/17/2013 - 05:54 | 4162033 Squid-puppets a...
Squid-puppets a-go-go's picture

er, flak, the gold standard was around for 1000's of years - when bronze was the oil of the day, when iron was the oil of the day, and for a good part of the period where oil has been in ascendance.

what on earth makes you think its unworkable. And also, the oil producers already have been accumulating plenty of gold in prep for the day the US petrodollar fails

you are a strange creature

Sun, 11/17/2013 - 11:11 | 4162287 Flakmeister
Flakmeister's picture

International trade was very limited before the latter part of the 19th century: follow the flows...

Sat, 11/16/2013 - 19:58 | 4161327 Marco
Marco's picture

Ehh, the IMF (and the EU) gave them money AND turned their economy around into surplus ... do you expect their government to have the discipline to maintain that surplus without the IMF, with all the easy money to be had on the open market at the moment? I certainly don't.

I think in a couple of years they (and all of us) will be right back to where they were in 2008.

Sat, 11/16/2013 - 20:25 | 4161386 Al Gorerhythm
Al Gorerhythm's picture


Let's get something straight. Those families don't generate any wealth; they strip it through their monetary deceit through its legal protection. Government, through its spending of the producer's savings, have spent so much of our collective wealth that they have obligated us to producing more wealth than we have produced to date (national debt) or could ever produce to pay those obligations off. It is government with its spendthrift nature that is the problem. It is government with its gatekeeping role in legalizing debt money, money that indebts us. This is unabated profligacy by spendthrifts who are unaccountable to the workers (other than the charade of voting them out of office, yet the beast remains; feeding).

This system needs change but it isn't going to happen by voting in a different arm of government. The red team has its hand in your left pocket and the blue team its hand in your right. Voting one or the other in only closes one pocket and removes one hand.

Its a skimming process alright and it is the banks with their interest bearing debt money and the government with its taxation powers who are destroying the value of our labour and strip the wealth of our efforts. One head of the hydra has to be removed to end this wealth transfer. Rise up, slaves.

Sat, 11/16/2013 - 21:04 | 4161482 29.5 hours
29.5 hours's picture



"It is not about economic policy.  It is about who controls the world."

Succinct summary of the task before us. We need to re-take the political battlefield we were driven out of. We keep sleepwalking while our rights are stolen by the handful.

Who controls the world is the question central to our self-defense and even survival.




Sun, 11/17/2013 - 13:30 | 4162600 123dobryden
123dobryden's picture

well nothing to fear from deflation? tell me then who suffers in the corrupt country under deflation, only average folk, as heshe is most likely to lose job as shehe is  not well  connected to keep not only government job /that constitutes cca half of the jobs/, but any job at all, and is left with no income...when the country is not that corrupt, then deflation benefits the average folk, as heshe is most likely to keep job, maybe for less money, but with declinig prices in worst scenario nothing changes...just look at 30's USA, long ques for shit jobs, and in the 30's US was a paradise on earth compare to now


so, in order for country a deflation to be a positive thing, entire public sector has to collapse in the first place, well or shrink at least, as it sucks all benefits that deflation brings for itself....go to greece now and ask people how they benefit from declining prices


Sat, 11/16/2013 - 15:12 | 4160744 B2u
B2u's picture

No choice?  He could have stopped at QE1.

Sat, 11/16/2013 - 15:19 | 4160756 Flakmeister
Flakmeister's picture

And? Do you really think the US "can balance the budget?" Please, do not be facetious in your response...

Sat, 11/16/2013 - 15:50 | 4160798 Anusocracy
Anusocracy's picture

Why not? For a start, cut defense to $100 billion and also end the police state. Then end every federal department or program that's covered at the state or local level. Sell all federal lands over a period of several years and buy out as many Social Security recipients as possible. At the same time, start winding down the payroll tax and start getting people out of SS.

Admit it, you are just too much of a government loving ant colonist to accept a smaller government.

Sat, 11/16/2013 - 16:14 | 4160832 Flakmeister
Flakmeister's picture

And you think the people are going to vote for those proposals? Seriously?

Hey, regarding military, you are definately on to something, I have read that you could save ~250 billion a year by reinstituting the draft instead of overpaying mercenaries (actually their overlords)....

You want to run with that? Good luck....


Well, I suppose if there was a dictatorship, you could put your proposals into effect (but that isn;t really the direction we want to go, is it?)

PS The floor is yours, I have no defended or advocated any form of government program, I want you to make your case, realisticly mind you... 

Sat, 11/16/2013 - 16:27 | 4160857 Anusocracy
Anusocracy's picture

There isn't a right to form a government. There isn't a right to vote.

Have you ever stated a desire for no government whatsoever? Do you vote?

Sat, 11/16/2013 - 16:32 | 4160869 Flakmeister
Flakmeister's picture

Not sure where you are going with this, but please do go on. I'll ignore the rhetorical questions.

What exactly are you advocating? 

Sat, 11/16/2013 - 16:44 | 4160899 Anusocracy
Anusocracy's picture

Panarchism, where I can be free from you and you can be free from me. I have no wish to be part of a humonkey troop.

It appears to me that the great desire of you and your ilk is to control others.

Sat, 11/16/2013 - 17:07 | 4160963 Flakmeister
Flakmeister's picture

Sounds nice, how do you make it happen in real life?

Why has it not happened on any meaningful scale?

Unless you think you can mandate human behaviour or values.

(Oh, the bittersweet irony!)

Sat, 11/16/2013 - 17:41 | 4161043 akak
akak's picture

Chattel slavery was a "given" and an inherent part of human existence for thousands and thousands of years, until suddenly, within the space of around a century, it was abolished around the globe.

Your kneejerk contrarianism, and deeply bitter cynicism, is again on display.

Sat, 11/16/2013 - 17:46 | 4161055 Flakmeister
Flakmeister's picture

What has that to do with anything? Though, I do agree the repudiation of slavery was one of Western civilaztions finest moments...

Too bad it took such a horrific war to achieve it in the US....

Sun, 11/17/2013 - 06:19 | 4162047 Squid-puppets a...
Squid-puppets a-go-go's picture

it took a horrific war because assholes with your mentality preferred to shed the blood of others than to facilitate evolution towards more humane standards


Sun, 11/17/2013 - 11:14 | 4162290 Flakmeister
Flakmeister's picture

Would you like me to quote the articles of secession as put forth by Mississipi? How about the "Cornerstone Speech"?

Don't make a fool of yourself...

Sun, 11/24/2013 - 16:06 | 4186019 FeralSerf
FeralSerf's picture

That horrific war did NOT achieve the repudiation of slavery in the US. It would be more accurate to state that the mechanics of slavery merely changed and that slavery was extended to a greater population, i.e. most of the white population as well.

Lincoln instituted the draft, most definitely a form of involuntary servitude.

Most Americans are debt based slaves now, either debt they have taken on themselves or debt their owners, i.e. government and the elites have saddled them with.

Sun, 11/17/2013 - 10:20 | 4162208 trader1
trader1's picture

no one is free of anything.

we are all interconnected.

Sat, 11/16/2013 - 15:51 | 4160802 JamesBond
JamesBond's picture

do not confuse the words "can't" and "won't"




Sat, 11/16/2013 - 21:35 | 4161542 malek
malek's picture

 I care not what system of money we use as long as we [...] run the system responsibly

Under that premise pretty much anything will work.
Actually under that premise taken a little broader, we need no justice system anymore. Or government.

Next fantasy please!

Sat, 11/16/2013 - 14:12 | 4160645 Flakmeister
Flakmeister's picture

Umm... junks but no volunteers to explain a way out of the problem...

Sat, 11/16/2013 - 14:18 | 4160651 Buckaroo Banzai
Buckaroo Banzai's picture

Let me help you. Find Professor Antal Fekete on the interwebs. Read what he has to say about how Real Bills make a gold coin standard work. It is an especially effective system in facilitating world trade. Did you know that the volume of world trade just before 1914 was staggeringly high? That's when the Real Bills clearing houses were dismantled.

Sat, 11/16/2013 - 14:38 | 4160658 Flakmeister
Flakmeister's picture

I have read Mr. Fekete extensively...

World trade at the time was primarily on the  between colonies and the home country with the colonies getting pillaged. Very different than now. Nothing like the oil market existed then...

Could you remind us of the manufacturing tariffs in place at the time?

Do you think that a tripling of World gold reserves between ~1875 and ~1910 had anything to do with viability of the gold standard?Where did that gold come from?

Edit: From

More important for adherents of Listian developmentalism were tariffs on manufactured goods. In developing countries such as the United States, Argentina, Brazil, Mexico, and Russia these averaged two, three, or more times those in Europe. Nor did tariffs decline in the years before World War I. In France, where protection became synonymous with that “apostle of protectionism” Jules Méline and the Méline Tariff of 1892, tariff rates did not reach their peak until 1910. In most countries they increased until the war. As of 1913 average tariffs on manufactured goods were 13% in Germany, 18% in Austria-Hungary, 18% in Italy, 20% in France, 26% in Canada, 28% in Argentina, 30% in Japan, 41% in Spain, 44% in the United States, 40%–50% in Mexico, 40%–60% in Colombia, 50%–70% in Brazil, and 84% in Russia.

Sat, 11/16/2013 - 16:15 | 4160839 Buckaroo Banzai
Buckaroo Banzai's picture

Before central banks and the income tax, tariffs is where governments got their money.

Tariffs have been demonized because they are incompatible with the One World/Central Banker system.

Sat, 11/16/2013 - 16:34 | 4160867 Flakmeister
Flakmeister's picture

Fine, but you do agree that tariffs are very statist?

I would argue that the tariffs were also there to discourage the net flow of gold out of the vaults into your neighbors vault. In other words to protect your slice of the trade. Given the historical record, there is  a clear pattern neighbors  periodically coming to blows. It was a prudent practice to have as much gold as possible to finance the next inevitable set to...

History is replete with examples of countries trying to beggar their neighbors...

Sat, 11/16/2013 - 14:30 | 4160662 DoChenRollingBearing
DoChenRollingBearing's picture

Right, Mr. Banzai, + 1


Fekete also shows how capital is destroyed in an environment of ever-lower interest rates.  It might seem that lower rates would stimulate investment (intuitively), but what it does in reality is to make older debt harder to pay back.  And those would borrow would then fear a lower NEW rate in the future, making their borrowing more risky...

There is always more older debt than brand-new debt.

Sat, 11/16/2013 - 14:57 | 4160711 FreedomGuy
FreedomGuy's picture

The very real flip side of low rates is that my mother on fixed income has no income because of essentially zero interest rates. You eat your principle-capital and get no return on money. When interest rates are zero there is little incentive to save or loan. To make the same income even as a bank you naturally want to increase leverage in the sense of lowering resere requirements to get a higher volume of loans out to make a basic amount of income. You still need to pay the tellers and property taxes on your banks and it is far harder on 2% loans than 10% loans.

Economies are infinitely complex and I stress "infinite". That is why central planners with finite knowledge cannot intervene any more successfully than you can manage a rain forest. The laws of unintended consequences run rampant.

Sun, 11/24/2013 - 16:14 | 4186042 FeralSerf
FeralSerf's picture

I doubt your mother is really on a "fixed income". Thanks to the REAL inflation rate, it is more likely her income is declining every month instead.

This is not an "unintended consequence". There are other groups, e.g. FIRE, that your mother probably isn't a member of that are the beneficiaries of this inflationary policy.

Sat, 11/16/2013 - 16:07 | 4160828 Urban Redneck
Urban Redneck's picture

As long you're taking about the real bills model, you might as well include the 21st century version....

1914 is a bit stale (and theoretical as to applicability to current circumstances) at this point

Sat, 11/16/2013 - 14:45 | 4160686 jcaz
jcaz's picture

I just know junk when I see it.....

Sat, 11/16/2013 - 14:51 | 4160700 Flakmeister
Flakmeister's picture

Seriously? Is that the most cogent explanation you can muster? Pretty lame, if I do say so...

Sat, 11/16/2013 - 15:21 | 4160758 Landrew
Landrew's picture

Sadly the answer to your question, is Pain. Pain will be felt by all of us at the bottom  regardless the solution of deflation or inflation. The 1% will prosper with continued  acquisition of assets for a dime on the dollar. Pain is the only commonality in all solutions to credit bubbles.

Sat, 11/16/2013 - 17:56 | 4161080 Sean7k
Sean7k's picture

Hey Flak,

Are you bored this afternoon? The only answer I can think of is simple: end legal tender laws. Then people can complete contracts and exchanges in their choice of currency. Value for value and guess what? People will realize what money actually is once again.

The problem with gold is simple: it becomes a standard and thus, subject to manipulation, for all standards must be defended.

Sat, 11/16/2013 - 18:21 | 4161118 Flakmeister
Flakmeister's picture

You thinking micro, I am referring to the macro. And in in a self contained local economy you are correct. 

Very different kettle of fish once you go cross border shopping...

Sat, 11/16/2013 - 18:40 | 4161159 Sean7k
Sean7k's picture

No, I'm thinking macro. Europe conducted trade in multiple gold and silver backed currencies. The US colonists used tabacco. This is merely a conversion problem, which the Suiss were quite ingenius at demonstrating. Currency choices amongst countries are a contract discussion and there is an entire school of law (amiralty) that covers this.

Further, you are also assuming economies would retain leverage as comparable levels to today. Whereas, a stable currency system elimnates this possibility. You are also forgeting about social credit and that nations only exchanged gold after all trade was balanced out. Finally, we woud no longer have large war economies, as we could no longer afford them. 

You choose to ignore that people are creative and capable of working out problems. Then you define the problem in terms that are not relevant to stable currency systems. Trade was conducted for thousands of years without paper money, therefore the onus is on you to show why it could no longer work.


Sat, 11/16/2013 - 18:44 | 4161168 akak
akak's picture


Trade was conducted for thousands of years without paper money, therefore the onus is on you to show why it could no longer work.

Nicely stated.

But, but, but, I suppose that "this time it's different", right Flak?


PS: For statists, and apologists for status-quo authority, this time it's ALWAYS 'different'.

Sat, 11/16/2013 - 19:33 | 4161272 Flakmeister
Flakmeister's picture

I really don't want to repost the discussion and data links for the 19th century international gold standard scattered throughout. Interanational trade prior to the 20th century was of a very different flavor than now. Flows were driven by exploitation of colonies. For example, Britain did not get rich off of France, but by exploiting Jamaica, India etc... 

The 30 Years war and 100 Years war would suggest that laying waste to countryside such that 20% of the locals died was emminently possible under a gold standard. 

I do not dispute that different mediums of exchange can arise, but there has never been a economic asset that played the role of oil.  I know that you are not suggesting tabacco for oil, but you do get my drift.


Sat, 11/16/2013 - 20:11 | 4161358 Sean7k
Sean7k's picture

You don't need to, I really don't see the connection. Europeans developed and exploited colonies, but that began in the 17th century. Central banking had already reared its' head by the 19th century (eighteenth in England and the twelfth in China), so blaming gold is pretty selective.Flows were driven by agricultural products and mechanization as well (King Cotton, Wool, etc).  Yes, war was possible, but no where near the scale we experience today. The costs were limited by gold.

Actually, both gold and silver have played the same role, that is why they were standards, much like oil today. Further, the opportunities for manipulation were just as legion.That is why legal tender laws are so problematic- they are the foundation for manipulation to exist.

Sat, 11/16/2013 - 20:52 | 4161461 Flakmeister
Flakmeister's picture

No one is blaming gold...

I only point out that the international gold standard only flourished in a very special set of circumstances...

The 30 years war was as bad as WWII on the locals: In fact it was not until WWII that more civilians died compared to combatants, which is the legacy of the 30 years war...

Sat, 11/16/2013 - 21:20 | 4161503 akak
akak's picture


No one is blaming gold...

That is PRECISELY what you have been doing all throughout this thread, you lying sack of shit.

I only point out that the international gold standard only flourished in a very special set of circumstances...

Again, bullshit --- gold and silver served as money, or (later) at least as the backing for money, for millenia, in virtually EVERY society which had a money economy.  You can attempt to deny that fact only at the risk of further demonstrating your dishonesty and ignorance.

The 30 years war was as bad as WWII on the locals: In fact it was not until WWII that more civilians died compared to combatants, which is the legacy of the 30 years war...

And that had what exactly to do with the use of gold and silver as money?  One might just as well blame the Salem Witch Trials on the existence of blueberries in New England.

Sun, 11/17/2013 - 13:33 | 4161963 Flakmeister
Flakmeister's picture

I have been told numerous times in this thread that "Total War" as practiced in Central Europe in the 17th was not possible under gold standard. In essence you could not have long protracted wars because you would run out of money before things got "too heavy"... 

Sort it by estimated percentage of world population killed...

Edit: For shits and giggles, I'll throw this out as well

All the more impressive given it started 7 years after 30 Years War...

Sun, 11/24/2013 - 17:09 | 4186161 FeralSerf
FeralSerf's picture

You shouldn't believe everything you're told. The idea that "Total War" as practiced in Central Europe in the 17th was not possible under gold standard is nonsense.

There is some truth to the idea that a combatant is limited by his resources and a significant portion of those resources in the 17th century may have been gold. War for one's absolute survival is not limited as such. Financial and recreational wars (like the 100 Years War/Cousins War) were more limited by one's gold, particularly for the need to finance the build up of one's army for an intended war.

There was also the ability of the combatants to convince their soldiers that there was gold on the other side to be taken. Often the soldiers were paid by the spoils of war, i.e. not from the treasury of his superiors but rather from the treasuries of the defeated.

The possession of gold can often be a liability. It can and has gotten its owners killed.

Sat, 11/16/2013 - 20:18 | 4161360 akak
akak's picture

I grow more and more disgusted with your liberal biases and your LIES, Flakmeister.

Interanational trade prior to the 20th century was of a very different flavor than now. Flows were driven by exploitation of colonies.

Of course, with your Marxist background, you must parrot that egregious lie, but there is simply NO data to support that absurd claim, nor have you ever tried to provide any --- because you cannot.  It is simply impossible for somebody like you to acknowledge that free trade was, or could be, a crucial component of the world (or of any) economy.

The 30 Years war and 100 Years war would suggest that laying waste to countryside such that 20% of the locals died was eminently possible under a gold standard.

Actually, Germany (and most of Europe) was under a silver standard at the time, but your point, narrowly stated and considered, still stands.  But I do not believe that anyone has ever tried to claim that a hard money standard would lead to Utopia on earth, or that it ever could.  "Better" is still not "perfect".

I do not dispute that different mediums of exchange can arise, but there has never been a economic asset that played the role of oil.

Here you simply reveal your gross historical ignorance, Flakmeister --- but in that ignorance you are simply representative of most Americans today.

In fact, there have been MANY assets and commodities that have been as important as, or even MORE important than, petroleum in world history. 

Even in the 2nd millennium BC, tin played such a role, being critical to the making of bronze, which was societally crucial not just for durable weapons of war (even better than the later iron in many applications), but for tools of all kinds as well, such as for plowshares, knives, etc.  Wars were fought over tin resources, and the demand for tin stimulated a widespread trade that was astonishingly large and diverse for its time.  The need and demand for tin drove the Phoenicians into the unknown Atlantic to mine and trade for the metal in Britain, which in antiquity was known as "The Cassiterides": "The Tin Islands".

Later, salt was a critical component and driver of world trade, worth in many places almost its own weight in gold.  Salt was not only important for allowing humans to exist in and travel through the hot and arid regions of North Africa and the Middle East, through which caravans carried many other important commodities as well, but it was also of vital importance in the preservation of food.  Salt was of equal importance in the stockfish (dried cod) and dried herring industry and trade of medieval Europe, in which the need and desire for the excellent long-lasting storage qualities, and flavor, of stockfish in particular impelled medieval fishermen in their primitive cogs to sail from Germany and England to Iceland and Greenlandic waters to fish for cod, mostly in the cold months of the year, and in small open-decked ships under unimaginably harsh conditions.

Later yet, in the 18th and first half of the 19th centuries, the whale oil trade drove hundreds of ships around the world, even into northern and largely unexplored Arctic waters, in the quest for the (then) only practical and widely-available oil for nighttime illumination, which allowed both individuals and industry to function largely free of the restraints of daylight (the mass production and mass use of tallow candles for the same being impractical in most such applications).  The ability to illuminate the factories of the day, a simple matter profoundly underappreciated today, greatly spurred and facilitated production and the Industrial Revolution itself.

No, Flakmeister, despite your narrow focus on the here-and-now, this time is NOT different.

Sat, 11/16/2013 - 20:55 | 4161464 Flakmeister
Flakmeister's picture


Quit with labels and name calling...

Show me the numbers that back your claims... 

Sat, 11/16/2013 - 21:10 | 4161495 akak
akak's picture


The typical ignorant, uneducated, know-nothing modern response to history or historical fact.

When a person, or a society, refuses to acknowledge its own history, or history in general, it is doomed to repeat the mistakes and errors of the past.

Thank you for demonstating your true colors here.

Sun, 11/17/2013 - 14:52 | 4161966 Flakmeister
Flakmeister's picture

More ad homs and slurs... I detect a sad sad pattern, Akak...

Where's the Beef? I ask you to show that trade between the powers was greater than with their colonies. You balked...

Sat, 11/16/2013 - 21:19 | 4161512 buyingsterling
buyingsterling's picture

You're thinking of the modern gold standard, where a currency is valued in oz of gold. In the new gold standard advocated by Fekete, the gold and silver are the money. They're not pegged to anything.

Sun, 11/17/2013 - 03:09 | 4161969 Flakmeister
Flakmeister's picture

No, not at all, I am simply refering to the fact the gold stocks are dwarfed by oil flows and that the Petrostates all have huge current account surpluses....

Pegged no, but their value relative to oil is pretty stable, this is a demonstrable fact...

So, do you fix the ratio between gold and silver or does it float? Does one keep two account? One in gold and the other in silver?


Sat, 11/16/2013 - 20:13 | 4161343 Kirk2NCC1701
Kirk2NCC1701's picture

The way out would be to use currency that meets "sound money" requirements, as I posted on 11/8  4137185

The fully expanded list of Attributes of Ideal Money is...


MONEY             FIAT                              GOLD                         BTC

1. Finite Supply              N                             Y                         Y

   (store of value)

2. Portable                    Y                             Y+N                     Y

3. Fungible                    Y                              Y                        Y

4. Non-forgeable            N                             Y                         Y

5. Divisible                    Y                              Y+N                     Y

6. Private                      N                               ?                        Y

7. Acceptance               Y                              Y+N                   Limited but growing fast

8. Conf/Theft-resistant    N                             N                         Y

9. Durable                     N                              Y                        Y+N

Given this Table of Attributes, plus the endless violation of #1 in the case of fiat money, the days of fiat money "are numbered".

Sat, 11/16/2013 - 14:48 | 4160692 WSMassiv
WSMassiv's picture

You simply do not understand the pricing of oil.  It is elevated by forced monopolies and by government tax. Never mind lies on inventory and supply.  (We do not know the true price of oil.)

So your premise for argument is invalid.

A gold standard would help on many levels:

1. Hamstring government spending on wars (Try and run a war on a cash basis.)

2. Force infrastructure and general building techniques that would require LONG TERM THOUGHT - which is perhaps the most vicious problem, short term profit in exchange for long term planning.

3. Allow most simplistic people to understand the value of time/money

4. Because of number 3 above, taxes will be reduced to bare minimums and/or eliminated  (I assume this because inflation is a tax that is hidden from all, again lies.)


These are just a few reasons why it would be a good thing.  I am not a bug, but there is a change coming and we tend to repeat our mistakes as a species.  We can use anything to exchange value, and I am still learning.  I tend to sway more towards using a currency that is interest free.  A major thing that people here tend to forget is that even though CREDIT has increased, the amount of currency in the system is still only 3%. 

Check out BILL STILL on alternative currency.  If you want a HONEST future this is probably where we all need to have a real discussion. Again many on zerohedge ignore this.  They all want to be kings rather then equals.  I laugh when I read many comments here because most still have a lottery ticket mentality rather then understanding.

Sat, 11/16/2013 - 14:58 | 4160712 Flakmeister
Flakmeister's picture

The gold-to-oil price ratio has been pretty stable for nigh on 40 years, so vis a vis gold, we have a very good idea of the price of oil...

40 million barrels of oil a day are physically traded between countries, with Russia and Saudi Arabia reponsible for about 35%...

Do the math....

Do NOT follow this link or you will be banned from the site!