On A Gold Standard And The Free Market For Goods, Services, And Money

Tyler Durden's picture

Via Keith Weiner or The New Austrian School of Economics,

A free market is composed of people who produce and trade the products of their efforts in exchange for the products of others. The free market is able to coordinate the activities of everyone, and enable everyone to optimize his results. Unfortunately, governments interfere in the free market. They do so by the use of force. The government always justifies its intrusions on the grounds of helping people. Government officials and voters are not aware of the lessons of Frederic Bastiat. The attempt of all to live at the expense of all is doomed. There ain’t no such thing as a free lunch. Rather than helping people, the government’s interference inevitably causes distortion. As destructive as government interference is in the area of production, it is that much worse in the area of money and credit. Every aspect of production and trade depends on money, so distortions in this area are magnified. Unfortunately, the government has distorted the monetary system so badly that both are accelerating towards destruction. The solution, and the only hope for civilization, is to rediscover the principles of free markets, particularly on the monetary realm, and begin returning to a gold standard.


The following thesis, while long, examines these themes in great detail; from Rand to Bastiat and the Nine 'Government-' and Seven 'Central Banking Monetary-' Interferences, the case for a 'proper' Gold Standard is clear:

"…if we are to have a dynamic economy with production, trade, invention, innovation, global markets, and growing efficiency then there must be a financial system in which gold flows"


Dissertation Final

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prains's picture

governments are run by their corporate overlords what's your point?


missed the part where you talk about a "fair and Honest" transaction

must be the old eyes

I think I need to buy a gun's picture

I didn't hear anything about gold from clinton or obama all i heard is about how great it is to go into tons of debt

Landotfree's picture

The only way you can pay debt back is for additional debt to be created, or what else are you going to pay the prior debt off with?

Dave Thomas's picture

Yeah exactly, where are you going to get all those wood toys you've spawned your cottage industry out of? This was all pre built into the system before anyone ever figured out what was going on.


Landotfree's picture

Humans continue to pick the same choice expecting different results.   The system is the same as the previous system, which was like the system before it, etc.   A ticking time bomb.

Michael's picture

We should try capitalism some time, instead of fascist feudalism. This is a free book online.

Feudalism aka American Capitalism
by David F.

Feudalism: control by an entrenched minority esp. for its own benefit : social, political, or economic oligarchy.

You are reading this online, so I won't waste your time.

The aim of the book is to provide enough shocking facts about the manipulative practices of America's power elite, that readers will be motivated (i.e., made angry enough) to take part in efforts to bring the richest 1% under control, ...before they impoverish the planet and destroy the biosphere.

The book presents overwhelming evidence that masquerading behind a democratic facade, an economic elite comprising less than 1% of the population is quietly and cunningly ruling America. Their immense wealth and power enable them to exercise so much control over the governmental process, that they effectively operate the country as a Feudal oligarchy. The book will leave little doubt that Government has been serving as a tool to subsidize and legitimize their exploitation of national and international resources, while legislative tax changes have left the nation with a Feudal wealth distribution system.

Presenting the evidence to substantiate this argument is not the main reason the book was written. Documenting the methods used by the elite to manipulate, control and exploit those with less money or power is the real purpose. At least 80% of the book is devoted to documenting their very effective methodology.

While it is evident that most people are somewhat aware that government appears to cater to corporations and influential lobby groups, the average taxpayer is practically oblivious to the extent to which the wealthiest 1% directly and purposely control and manipulate the lives and destinies of everyone else on the planet.

For those who have been brought up on a steady diet of the American Dream, but notice that today's reality and the American Dream seem to be growing further and further apart, it may be worth keeping in mind that if a frog is placed in a pan full of cold water, and the heat is turned up gradually enough, the frog will fail to sense the danger, and instead of jumping to safety, it could quite unknowingly allow itself to be cooked. In a similar fashion, the media continues to be used to desensitize and/or misinform the general public into repeatedly accepting domestic and foreign policies that are very often diametrically opposed to the best interest of the majority.

While the average American does have "a vague idea" that corporations (as well as the economic elite) use plenty of techniques for avoiding taxation; how many know that the proportion of Federal Income tax derived from Corporate income tax declined steadily from 32% in 1952; to 23% in 1960; to 17% in 1970; to a low of 9% in 1985? Without vital knowledge such as this, the public will remain in the dark as to what is really causing the decline in most Americans' standard of living. .

Although the growing deficit and the near trillion dollar banking industry losses will inevitably lead to continuing cuts in the standard of living for present and future generations, most Americans feel powerless to alter their deteriorating economic conditions, and simply take consolation in the belief that everyone else is also feeling the pinch.

Nothing could be further from the truth !


Michael's picture

A gold like standard and the US Constitution strictly abided by, are fair for everyone rules of the game that should not be breached for the benefit of a few, ever!

Because it gets out of control and makes it unfair for the 99%!

It's that simple folks.

Michael's picture

Got Guns & Ammo?

I should make this my signature line.

I just made this up.  It's like that Got Popcorn? (meme)

People should make bumper stickers out of this saying.

People should make T-Shirts with "Got Guns & Ammo? on the front and "Good." on the back.

I give this to you for free.  Have at it.

economics9698's picture

Mike, has the FBI been questioning you lately?

Our government and central bank is a bunch of thieves, and???

Like we don’t know this?



proLiberty's picture

"Corporate income tax declined steadily from 32% in 1952; to 23% in 1960; to 17% in 1970; to a low of 9% in 1985? Without vital knowledge such as this, the public will remain in the dark as to what is really causing the decline in most Americans' standard of living. ."

The fallacy here is that taking money from a profitable corporation and giving it to government is somehow beneficial.  Government never spends money more efficiently than a profitable corporation will.

When corporations are taxed, profits are taxed twice.  The econoomic reality is that corporate profits shouild only be taxed when they are passed to the shareholder.   

We should be looking for ways to maximize personal liberty rather than maximizing government by optimizing the amount of tax revenue we allow it to consume.

Bicycle Repairman's picture

Government got involved in the game, because corporations had become too successful at exploiting individuals (turning them into serfs) and individuals needed a countervailing institution.  Labor unions also played a countervailing role.  Exploitation was not a sufficient reason for some.  In the great depression we learned that the endgame of corporate dominance is societal breakdown.  So government and unions entered the game.  In the years since the corporations have destroyed unions and co-opted government.  And here we are.

As for efficiency, it is not everything.

Bicycle Repairman's picture

@ I think I need: I'm not voting for Romney.

GlassSteagall's picture

The Occupy Message ... "Private Ownership of Industry is Theft"  or "Shit is Fucked Up and Bullshit" probably won't resonate with a whole lot of Americans

Bicycle Repairman's picture

The Occupy movement, like the Tea party, was immediately infiltrated and it's message was scrambled.  Part of the scrambling included replacing ideas like "End the wars" or "End corporate personhood" with "private property is theft" or "no person is free until all people wear Birkenstocks".

tocointhephrase's picture

They can evict a protest but they cant evict an idea. SILVER BITCHEZ, Bullion Bank Run BiTcHeZ

Dr. Engali's picture

So Obummer wants to channel F.D.R. Seems to me that under F.D.R. the United States was dragged into WWII by some old ships that were bombed in a harbor. This gave him all the power he needed to do what he wanted to do. I wonder if Obummer will drag us into WWIII by missile strikes on some old ships in a gulf.

prains's picture

and Romney wants to channel Reagan and give us brylcreem hair again

because looking good creates jobs

Bicycle Repairman's picture

With great hair comes great responsibility.

A Nanny Moose's picture

We gotta get rid of that old busted shit somehow. What we need is the new hotness.


Snidley Whipsnae's picture

Dr E ...

It never ceases to amaze me that many (not you) continue to declare that FDR 'saved' capitalism by the many social programs that he instituted.

FDR did not save capitalism... FDR did introduced socialist measures that saved TPTB from a general uprising of the US population that would have swept away TPTB and might have led to totalitarianism, anarchy, or who knows what.

FDR introduced a socialist safety net to save the US SYSTEM (however you would label it) while TPTB were ploting to assisinate FDR. What irony!

Point being... TPTB often do not recognize what is in their own best interests. This fact should be evident to all by now.

Dr. Engali's picture

Agreed .He was a parasite and played a big role in it's downfall by laying the ground work with his many social programs.

Nothing To See Here's picture

FDR was a fascist and had high praise for both Mussolini and Hitler before WW2. This can be verified, only erased from history classes by liberals.

Ghordius's picture

btw, Churchill had also high praise for both Mussolini and Hitler before WW2. Hell, those guys were loved by nearly everybody that was not communist AND they had nice peace treaties with the SU. And the way they bashed markets, reigned in "speculation", subjugated the bankers of their age, subjected capitalistic cronycreatures to the national goals as much as the labour side, etc,

At that time, fascism was seen by many as the perfect counter to unbridled capitalism and communism. Just to remind everybody that fascism is historically a reaction to problems with crony capitalism.

AnAnonymous's picture

FDR did introduced socialist measures that saved TPTB from a general uprising of the US population that would have swept away TPTB


Really? Is there hints at this general uprising of the US American population?

The US American population was much more busy running pogroms against Chinese, latinos and negroes during that period than thinking about a general uprising that could have swept TPTB...

Welcome to another episode of the US fabled past as brought to you by 'Americans'.

SilverDoctors's picture

Ned Naylor-Leyland argued this week that rather than a fixed gold standard, the system that will replace the current fiat mess the world finds itself in will see gold freely float against a basket of goods and currencies.

While a gold standard would obviously be better than what we have now...we really need a retun to bi-metallic gold AND SILVER as free floating currencies. 

prains's picture

on the premise that china and a couple of other countries (russia) don't distort the market, good ruck

Renewable Life's picture


The gold standard was great in the pre industrial world and kept some sense of order and stability among humans for 1000's of years, however in a post industrial planet, we need a non fiat currency, that embraces the value of a basket of metals and energy resources!

cranky-old-geezer's picture



The problem with a gold standard is the word "standard".

No government in this modern world can be trusted to tie a paper currency to any standard and be honest about it. 

A paper currency system run by a government is going to be abused to the government's benefit at some point, which means more currency is going to be created than there is "backing" for, people will eventually figure it out, and the currency starts losing value from loss of confidence in it.

So NO "standard" will work for very long, meaning no paper currency system will work for very long.

Bottom line, you have to take away the government's printing press.  The only way to do that is NO sort of paper currency system AT ALL.

Constitutional framers knew that.  It's why they said gold and silver are money in America.   They DIDN'T say paper currency "backed" by gold & silver.  They didn't want ANY sort of paper currency.  They meant gold and silver coins ONLY.

Ok, so how would a gold & silver coin only monetary system work today with bank accounts, computers, etc?

Easy.  If you have XXX dollars in your bank account you can go down to the bank at any time and withdraw that much in gold & silver coins.

If you write a check to someone and they deposit the check in their bank account, the two banks must transfer that much in gold & silver coins from vault to vault.

Yes, you could still have checks, but no paper currency, just gold & silver coins.

What about a bank making a loan to someone?   No problem as long as they have the gold & silver in their vault.

What the bank CAN'T do is loan more money than they have in their vault, which means no more fractional reserve lending.

This is the ONLY monetary system that can't be abused by the government ...and banks.

And it wouldn't be run by the government.  The framers said gold & silver (coins).  They didn't say JUST gold & silver coins issued by our government.   ANY gold & silver coins would do, issued by ANY government ...and anyone else for that matter.

And it doesn't have to be JUST gold and silver necessarily.  Copper is a relatively valuable metal.  There could be copper coins for small denominations, like copper pennies we used to have.  You could have platinum coins.  Coins made from other metals.

The SECRET of an HONEST money system is the value is IN THE MONEY, not somewhere else, not held by a bank, not held by the government.  

The value is IN THE MONEY you hold in your hand. You don't have to trust anyone's word that the money is worth X.  It's right there in your hand.

If this sounds like a glorified barter system, you're exactly right.   A true monetary system is a glorified barter system.  

Or maybe I should say a streamlined barter system.   You're exchanging a known quantity of metal with generally agreed upon value for something else you want, groceries, gas, whatever.  That's barter.

The only way to have an honest monetary system of stable value is (a) the value must be in the money itself, not somewhere else, and (b) you to take control of the monetary system away from the government, because the government cannot be trusted to run an honest monetary system.

I believe I'm the first one on ZH to point out that paper currency is not money, it's a derivative.

Yes, according to the generally accepted definition of "derivative", paper currency is a derivative.  It's a paper financial gamble on some underlying value.   That's what a derivative is, that's what paper currency is.

No, paper currency is NOT money.  It's a derivative.  Federal reserve notes (FRNs) are not money, they are derivatives.  They are paper financial gambles on some underlying value. 

Trouble is, there is NO underlying value.  FRNs aren't tied to ANYTHING, like a normal derivative is.

FRNs are naked derivatives.  Derivatives that aren't tied to any underlying value.

So no, we haven't had money in America since gold and silver certificates were taken out of circulation.  We've had naked derivatives since then.  Derivatives that aren't tied to ANYTHING of underlying value. 

Under common law giving someone a derivative does NOT pay a debt, because the derivative HAS NO GENERALLY ACCEPTED VALUE.

And guess what.  FRNs don't pay a debt either.   The law says so.  They're legal tender yes.  The law says so.  But they don't pay the debt.  The debt is still there technically speaking.

See, FRNs are derivatives, not money. 

Money pays a debt.  Derivatives don't.

marathonman's picture

Well played Geezer.  Well played.

Obama's got a drone for you too, with a kiss from Dimon and Blankfein.

cranky-old-geezer's picture



I wouldn't be concerned about it, nothing I say here about the true nature of FRNs is gonna matter to 99.9999% of the sheeple out there.  They look like money.  They spend like money.  That's all sheeple care about.

msmith9962's picture

I drive a fiat.  It's a proxy for a real car and also depreciates rapidly.

Gavrikon's picture

Step 1, eliminate all taxes (sales and capital gains) on gold and silver bullion and coins.

Step 2, make gold and silver legal moneys for the payment of taxes.

The rest should follow, with goods and services eventually being priced in FRNs and/or grams of PM.

That ought to put an end to the debate on which "money" is better.

Temporalist's picture

I'm sure the people will be lining up with their PMs to give them to the gov. for taxes.

Landotfree's picture

1.) there is no such thing as a free market, never has been, never will be

2.) going back to a gold standard does nothing, you can go back to a gold standard anytime you want... nothing stopping you

All the other standards were gold and silver, in the south pacific they used sea shells... so what?  They all collapsed.

Humans took their gold and silver and lent them, attaching a rate of interest... after X amount of years... the need for exponential growth can't be met, collapse... people die, rinse and repeat.  I mean all you unfunded liabilities are crying now, you haven't even collapsed yet.  Nothing you can do now to avoid the coming flood.  As long as you continue to attach interest to your medium of exchange the cycle will repeat, sorry, no easy way and no easy choice.

"The Architect: The matrix is older than you know. I prefer counting from the emergence of one integral anomaly to the emergence of the next, in which case this is the sixth version.

Neo: There are only two possible explanations: either no one told me, or no one knows."  - the matrix reloaded


Snidley Whipsnae's picture


"you can go back to a gold standard anytime you want... nothing stopping you"

This comment is disingenious on so many levels that anyone reading it probably stopped reading as soon as they came to it.

Perhaps you should do some research and find out how many obstacles exist to prevent US Citizens from "returning to a gold standard any time they wish"...

If force by the US Gov that requires all to use fiat were removed, fiat would quickly become a transaction only currency  and PMs would quickly become the store of value currency. In fact, this is in the process of happening now although it is against the wishes of TPTB.

GlassSteagall's picture

What are the logical steps to a Gold Standard? Anyone want to suggest?



moonstears's picture

Fellow Americans you have a gold standard, gold's traded at $1950 ish, silver at $49 ish, in the 1780s-1933 you went to a bank to trade for gold, you rarely "carried" it. You want the banks to have all the fuckin' gold for your "standard"??? THINK! You might go get a double eagle and hide it under the sofa, if you desired, in the 1920s or whatever. Go buy a gold eagle and hide it under the sofa , if you wish.

see: www.usmint.gov. Metal's even cheaper on the free market/ local coin shop.

Think you'll see these prices once they start monkeying with attaching fed notes in some meaningful way?? Careful! Too much debt on these current currency notes IMO.

To implement standard: I'd just add a re-value to a $50,000 bi-metal 1ozt "electrum" coin (not yet in the Constitution, amend it in at 45% Au/55% Ag), redeemable at your request at any federal reserve bank or US Mint. Voila'(It'd cost about $780 usd today to coin one, or $78 for a 10th at $5000 fv). Please notice too that there are USD denominations on bullion at above site. C'mon think outside the box, are you getting it? What if Dr. Paul is really only trying to get the FED to come off their gold, the stuff in Knox that FDR gave 'em before we all were born???? Dr PAUL LIKELY HAS MORE GOLD THAN ALL POSTING HERE. I do think he's quite a patriot, but what's his angle? Think folks! Oh, and how many have fuckin' $50K, for this coin? See how they'd do it??? By the way, the Fed says gold's still $44 or so, per ozt but the US Mint says its $50 right on a 1 oz coin. THINK about it. Too many smart minds on ZH too, think! Half these elitists believe gold is value-less, fuck 'em, hope they keep on thinking that. The other half know what you do, evidenced when you ask these very questions. Think about it !!! p.s. Shout out to President Ford in the great beyond, for  righting the wrong against his fellow Americans and allowing gold ownership, in any qty, again, in the 1970s!!!

Lucius Cornelius Sulla's picture

Step 1) Get some Libertarians voted into Congress

Step 2) Repeal the legal tender laws

That's all you will have to do.  People will choose currencies backed by gold over fiat.  You just have to remove the legal barriers to do so.

Landotfree's picture

Repeal the US legal tender laws and you have instant collapse, I figure million will go the first year, eventually probably 1-3 billion.

cranky-old-geezer's picture



Well, maybe if you took away America's military USD "support" around the world too.

America's military is the real thing maintaining USD value these days.  Take that away and yea, USD would pretty much collapse overnight and we'd have anarchy in America by morning.

AnAnonymous's picture

And 'Americans' are suicidal... This is why 'Americans' residing in the US worship the military... They know where their 'american' welfare comes from...

Gavrikon's picture

"Repeal the legal tender laws."

Thanks, that was the phrase I was looking for (see my comment above).

marathonman's picture

You can always exchange bullion for goods if you find someone to trade with.  Legal tender laws aren't that big a hurdle.  Where they get you is in the taxation on 'capital gains' on converting bullion to FRN's (all because they have destroyed the value of the FRN).  Don't convert to FRN's and just trade the bullion and you haven't incurred a gain.  Easy peasey, right?

Dr. Engali's picture

While a gold standard is certainly better than we have now it would not be well recieved as most of the gold is concentrated in the hands of a few. A bi-metal currency would certainly be better in that instance .
A fiat currency that isn't supported by debt would work as long as there were restraints on its printing. Plus you wouldn't get caught up in the debt trap of the current debt backed currency.
Lincoln's greenbacks worked quite well. And to paraphrase Lincoln when he was fighting the bankers... It's preposterous to think the government can issue 30 million dollars in debt and not be able to issue 30 million dollars in currency.

Lucius Cornelius Sulla's picture

If you get rid of legal tender laws and allow States or private banks to issue their own currencies then the best currency will survive, whether its backed by gold, silver or clam shells.

Pseudo Anonym's picture

wtf, is this another one of those mickey mouse PhD degrees?

The New Austrian School of Economics, Keith Weiner, A Thesis Submitted to the Graduate Faculty of the New Austrian School of Economics in Partial Fulfillment of  the Requirements for the degree of DOCTOR OF PHILOSOPHY

btw, can anyone point me to any original idea of keith's in his 'PhD' thesis?  it looks to me that it is mostly a rehash and compilation of other thinkers' work

IridiumRebel's picture

but he acknowledged his wife...........

AurorusBorealus's picture

Have you read many PhD theses?  They are nearly all like that.  Thousands are produced each year... nearly none of them contain anything original.  All of those in the social sciences (economics included) and in the humanities do nothing but ape the arguments of some "school" or some "grand theory of everything" in pursuit of a political end that corresponds with some present-day ideology.  Facts are nothing but statistical or anecdotal illustrations, chosen only for the purpose of adding credibility to the author's preconceived political agenda.

Shell Game's picture

Oversimiplified thinking from our future dark age.  There are damned fine dissertations and there are damned poor ones.  The good ones are created by free thinking individuals (there still are some out there..).  With guidance from a good mentor, under the harsh watch of a peer group committee, synthesis is born. 

The problem with the sciences in Amerikka, over the last 25 years, is the hyper-aversion to risk.  The little money that is portioned to science is given to fewer and fewer principal investigators on projects with predictable outcomes.  American science has all but eliminated the unquatifiable, yet crucial, quality of serendipity