Guest Post: Why The Full Faith And Credit Of Governments Is Inferior To Real Assets And How We Can Fix It Once And For All

Tyler Durden's picture

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DonutBoy's picture

Wow - do you actually believe the public campaign financing will take the money out of politics?

blindman's picture

take the money out of banking!
two problems solved.

jeff montanye's picture

i second your sentiment.  however the market requires good regulation to function.  see "reinventing the bazaar".  additionally it prices energy, water, air etc. too cheaply because the costs of pollution et. al. are "paid for" by others.

l1xx3r's picture

I disagree... Do not get me wrong, if politics could work, I would love Ron Paul... I also disagree with the "solutions" in this article. Competing currencies is the only way... not some governmentaly backed one (no matter what it includes). We should all start ignoring the tax man and government... we are 10,000 to one of them, 900 to 1 for cops (which most would join us in ignoring government). Lets just ignore these parasites and create our market... one that will work regardless.

i-dog's picture


Ron Paul has already given up! Listen to this interview ( with Alex Jones @ 13:30 to see that he has already capitulated emotionally to Perry ... and he couldn't change a thing in DC, even if he fought tooth and nail to the end.

Government is the problem, not the solution ... and the worst government of all is a federal government distantly removed from the affected voters facing local issues.

Secede now!!

Dick Fitz's picture

Although I support Dr Paul 100%, I agree that politics cannot be changed from the inside.

Dr P wants to repeal legal tender and introduce competing currency, but I doubt TPTB will allow that to happen without bloodshed. But it will happen, sooner than many think. The "Internet Reformation" has already changed the game, and TPTB can't put the genie back in the bottle.

Dr P has done more to educate the public about the DC one-party mafia than anyone in modern history, and deserves respect for that.

FEDbuster's picture

I support Ron Paul, but he would have to be elected Emperor in order to really change things.  Maybe he can go home to TX, be elected Governor and secede from the US?  They would have to build a fence around TX to keep people out, if that were to happen.  Just for fun enjoy this video of Ron Paul going Full Metal Jacket:

RiotActing's picture

Fuck Ron Pail, Mr. Anti government wants to outlaw abortion. How the fuck does that work Mr. Paul? There going to be a private group that enforces this? How does legislating morality square with your "libertarian" ways? He's a joke like all the rest.

Oh yeah, he also doesn't believe in evolution. He's a fucking idiot. His economic policies are not the work of genius. Get over Ron Paul, he actually IS a kook. Ron Paul, what a joke....

bigkahuna's picture

No-Ron Paul wants to let states determine if it is legal or not.

moregoldplease's picture

I think you mean he doesn't accept evolution as a fact, something you don't seem to accept either. If you have to believe in something then it takes on an aspect of faith not fact.

Ganja Jane's picture

Stop twisting Ron Paul.

He also said his PERSONAL view is that marriage is between a man and a woman. He then stated his personal view shouldn't be forced on the sovereign individual. Let the States and people decide for themselves what constitutes a marriage and get the government out of the licensing personal business.

Seriously. Stop vilifying Dr.Paul.

snowball777's picture

Cop out.

Seriously. Stop deifying Ron Paul.

FEDbuster's picture

Looks like your Mom made the wrong "choice"? 

Ron Paul wants to protect lives from the perspective of someone who has delivered thousands of them.  Like gay marriage or medical marijuana, he would make abortion a state issue.  Abortion is mainly about controlling the minority populations in urban areas, so if NYC, Chicago, Atlanta, LA want to keep killing unborn babies they could get their state legislators to give them the go ahead.  Hell, they may as well open some free spay and neuter clinics there, too.

snowball777's picture

Ah back to the "good ole days" when rich girls could fly somewhere to get an abortion and poor girls had to stay with whatever knuckledragger knocked them up. Oh the times we had.

Too bad there was no spay and neuter clinic in your mom's state.

Ganja Jane's picture

Once again the language has been corrupted.

There's a clear difference between 'pro-choice' and 'pro-abortion.'

Dr. Paul is an OB/GYN; He might be 'pro-choice'  but NOT 'pro-abortion.'

Pro-choice means the right of the sovereign individual to choose for themselves; Pro-abortion would imply encouraging abortion as a birth control method. Abortions are dangerous to a woman's overall all well-being -physically, mentally and emotionally-if used repeatedly to end unwanted pregnancies instead of using preventative measures. Fuck, just having to make the choice is emotionally and mentally taxing beyond what anyone who hasn't been in a position to make that choice to even begin to understand or even relate to. It's a very personal decision.

Would you like graphic details of the abortion procedure and the physical aftermath lasts weeks, perhaps maybe months? How about the emotional and mental turmoil that lasts for years?

Once again we have a failure to communicate.

I'll check back. I am willing to share my experience if you're willing to LISTEN.

Ganja Jane's picture

Ron Paul is pro-life but Not anti-choice; he wants to return it to the states to decided for themselves.

MarketTruth's picture

WAKE UP! The 'full faith and credit' is based on the slave labor of the USA's citizens via the ability of taxation.

If you starve the beast, and also begin to barter every now and then to as often as you can, there is no 'full faith' both for the country's ability to generate tax income and in the debt-based privately owned central bank's FIAT currency.


Sean7k's picture

Black market revolution.

FEDbuster's picture

Craigslist, swap meets and farmers markets are a good start. 

Kayman's picture

"the efficient market allocates wealth towards activities which create wealth. This includes manufacturing, mining and energy production. Instead, because the market was distorted by easy credit, we began a 40-year long bubble of consumption and the financial services to make it possible."

This article is a succinct summary of scarcity of free markets. The price being paid by the unemployed.

"the country's ability to generate tax income" will price the purchasing power of the USD in the long run.

If we had a choice, and we don't without blood in the streets, I would let slimy politicians run the Federal Reserve.  Private banking criminals do not have the country's interest. Period.

I think I will go outside and throw up now.


sun tzu's picture

A million laws and regulations won't help when law enforcement is corrupt and selectively prosecutes.

AldousHuxley's picture

that doesn't mean we should make bankster's legit.


to fix corruption you need regulation that forces those in power to have some skin in the game. Align the interest with those of the public.

Ganja Jane's picture

The problem with pollution is that those responsible aren't held responsible for the costs of cleaning up the mess; itrs often left to the the tax payer to pay for  out of pocket or by means of the legal fees in pursuing the case.

Dubya made sure that superfunds are the problem of the taxpayer and NOT the company doing the pollution.

Why can't we productively shift this discussion to alternative energy like geothermal, harmonics, solar, hydro and wind power?

Summary: Government statistics show that about 70 percent of all federal energy subsidies goes toward oil, natural gas, and coal. Fifteen percent goes to ethanol, the only 'renewable' source of energy that consistently gets bipartisan support in Congress (think farm lobby and Iowa, thanks Monanto!). Large hydropower companies — TVA, Bonneville Power, and others — soak up another 10 percent. That leaves the 'greenest' renewables—wind, solar, and geothermal—to subsist on the crumbs that are left. Harmonics hasn't even entered the conversation let alone Tesla technology.

We can have 'cheap' energy with little to no pollution. The problem is the real people in charge couldn't profit and control the sheeple with it.

Sean7k's picture

With free markets, profits will drive innovation and determine energy sources. Government is NEVER a part of the solution- it is ALWAYS the source of the problem.

Ganja Jane's picture

I am all for Laissez Faire but when it comes to the environment, we need to be more careful. I am as 'Green' as they come but I don't believe the populous is creating global warming, I don't believe in 'Saving the Planet.' I'd rather address the global poisoning, weather modification using Tesla Technology along with 'Chemtrailing,' GMO's and depleted uranium. The planet will still be here if we die off. We're poisoning ourselves thru the environment we need to survive as a species.

Much love to you, my brother.

Sean7k's picture

When private property is enshrined in law, people retain the ability to make polluters responsible for their actions. It is government that protects polluters through regulation.

snowball777's picture

It's difficult to bring about a tort suit when the chromium 6 in your tapwater has given you a fatal case of cancer, don't you think?


Gohn Galt's picture

Exactly.  The corruption of our government is in every stage.  If anyone is licensed or certified, like a doctor, corporate food producer, teacher or city services.  I can guarantee that not one thing that they can produce or deliver is in your best interest.  Whatever happens to the world or the government, the days of blindly trusting others for food or medical solutions are gone and it might have only been an illusion at best.

I have take of all of my own needs, filter all air, distill all water, grow in environmentally controlled conditions.  I track the air quality inside and out.  Including alpha, beta, gamma radiation.

If a man is a beggar, he can not approach life on his terms.  So I say, empower and educate the beggars so they may become men.


Sean7k's picture

Regulation kills free markets. It is an intervention for the benefit of the few that create it. Markets need nothing except an atmosphere of sound money through the elimination of legal tender laws. As John Adams said, "you don't have to force a man to accept good money".

Captain Benny's picture

His name is Robert Paulson.

I think he's advocating the right thing regarding election reform, but success cannot be achieved in reforming this beast of a western world without some serious pain and that means a depression that will be far worse than the "Great Depression" ...

buzzsaw99's picture

No-one can be trusted to administer the money. Everyone steals. It is a fatal flaw in any proposed system. This is just more of the same. Some bankers get rich while the people who actually produce are exploited.


Here is my suggestion:


1) massive dieoff.

2) self sufficiency.

3) barter.


It's the only way forward.



flacon's picture



1) massive dieoff.

2) self sufficiency.

3) barter.


That's why humans invented MONEY and TRADE because those three things are too unappealing for an extended period of time... but I hear you man! I hear you! 


buzzsaw99's picture

yeah, unappealing, unappealing to those who wish to exploit the labor of others.

RockyRacoon's picture

Yep.   And this part lacked sufficient explanation: based upon a single asset is a terrible idea.

The argument given, about all the eggs in one basket, is a bit limp.   Having too many baskets allows for gaming of the system.   A gold standard is a focused and direct asset that has historical significance.   Of course, the Federal Reserve will have to be dissolved to accomplish that.   Therein may lie the fly in this ointment.

And, please, don't anyone post about economies with gold standards have failed or had other problems.   They were not true gold standards in the classic sense.   Yes, a gold standard can be gamed as well, but it will have to be twisted into something only called a gold standard -- not the real thing.   Does anyone really think that the U. S. has a "Democracy" or "Free Markets"?   Same concept.

(Yeah, I know it's a Constitutional Republic.   A person's gotta cover his ass in all ways possible around here to keep from getting slammed.)

blunderdog's picture

I love ya, Rocky, but the idea that *any* fixed resouce commodity is going to somehow solve the problem of human corruption is just WRONG.

Let's say, just for sake of discussion, we had a PERFECT gold standard in place tomorrow.

What is supposed to happen to all the people who own no gold?  They trade in their "savings" or "wealth" for some amount of gold, right?  So the amount of gold available defines the current gold "conversion rate" according to whatever everyone considers their "wealth" today.

Now tomorrow, when I lent my friend a few bucks and told him to give me an extra buck back, is the "conversion rate" of gold supposed to change?  Because of the PRIVATE CONTRACT that existed between me and my friend?

Problem: any fixed exchange-rate for a physical commodity is incompatible with EITHER: a free market of floating exchange rate, OR a functional credit market.

Which of those common assumptions do you want to sacrifice?  Floating exchange, or a credit market?

Alpha Monkey's picture

I love ya, Rocky, but the idea that *any* fixed resouce commodity is going to somehow solve the problem of human corruption is just WRONG.

The solution is to let it be free floating, not fixed, with price discovery by the free market.  Once the price reaches the true value, it will be incredibly difficult to manipulate.  If you're wondering how valuable gold might get, imagine if everyone realized there dollar denominated "wealth" assets were just paper and poured into gold.  What might that price be, and when would it go down if everyone that was holding it as a wealth asset saved it to pass it onto their children.


Now tomorrow, when I lent my friend a few bucks and told him to give me an extra buck back, is the "conversion rate" of gold supposed to change?  Because of the PRIVATE CONTRACT that existed between me and my friend?

Small amounts of debt and interest would never destroy an economy, why do you think they should influence the price of the worlds prefered wealth asset.  Now, when governments endorse programs of over-spending on debt, (which would be much more significant amounts of money) then the world would be aware of this, and the value of gold in that country's currency would increase.  In this scenario, it is the savers who benefit when their governments decide to turn on the printing presses.  Savers who have their wealth in gold that is, not in local currency denominated assets.

Problem: any fixed exchange-rate for a physical commodity is incompatible with EITHER: a free market of floating exchange rate, OR a functional credit market.

There is no problem, we will eventually see gold take it's rightful place as the premier wealth asset, AND have functioning credit markets that are kept in check by gold.

blunderdog's picture


I think you misunderstand the point of the criticism.  It's not that my friend's and my private contract for a few grams of gold is going to ruin the system--it's that ANY private debt-contract requires quantities of gold to be "promised" which may not ever come into existence.

Something "breaks" in a fixed-commodity resource currency.  The problem is structural, logical, and foundational.  There are reasons why countries went off the gold standard, and they're not just that politicians wanted to steal more.

THIS SAID: A gold standard right now would be a good idea, as it would be somewhat corrective to the current over-creation of debt-based money.  It just won't be any kind of permanent solution, and even the simplest gaming-through of the options demonstrates why.  The economy is NOT a steady-state system.

eaglefalcon's picture

You might as well agree with your friend on how any ounces of gold he needs to pay you back instead of how many bucks, that way you don't get into a dispute later and lose the friendship.  


Why bother with a "gold standard" i.e. a paper currency backed by gold?  Why not just one world currency -- gold so that nobody would ever bother with  "exchange rates" again.  If anyone is complaining about the weight of gold, they can make payments with gold denominated check or debit card.  


In fact that is my dream world, gold as sole currency (maybe silver as spare changes), non-fractional reserve banking, no consumer credit, no mortgage, everything needs to be bought by cash gold.  If anyone wants to make risky investment, thats their choice, but no bail out from government, so they need to either eat their loss or pay big insurance money, that'll wipe out 95% of the credit, drive down the price of everything, and make a huge segment of the society responsible, productive and prudent citizens.


In fact, if gold becomes the only currency, we dont need central banks any more.  I'd rather subject myself to the force of the market than to the tyranny of bernanke

Koffieshop's picture

If the world would ever settle into a steady-state economy with no population or economic growth and have sustainable production it would be in the way you described. Also, products would cost a fortune and last a life-time. None of that cheap throw-away crap. Houses would be build to last a couple of hundred years.

It sounds wonderful, but I think we will never have this. People are ambitious assholes and need strife, discord and illusions of grandeur because that is how evolution is pushing us forward.
Lessons of the past are forgotten and if there is no problem you can be sure someone will create one.

RockyRacoon's picture

I love ya, Rocky, but the idea that *any* fixed resouce commodity is going to somehow solve the problem of human corruption is just WRONG.

Absolutely nowhere did I say that.  Human corruption is a constant, not a variable.   As for people needing gold to make transactions in a gold standard economy... how's that?   The folks with cash in their banks don't need gold, but the bank does.  It is the holder of gold in proxy for the depositor.   Farmers don't need anything but hard assets, land, and seed.

SloSquez's picture

The cure has become the disease...odd that.

Kayman's picture

Or more precisely - The Federal Reserve; the disease purporting to be the cure.

mendolover's picture

IMAO I believe we are headed for all three.

disabledvet's picture

My solution is far simpler: appoint me to all that important stuff and everything will be just fine.

Besides look at my floppy ears. How could you go wrong with floppy ears like that?

buzzsaw99's picture

polly purebred needs a new pair of shoes? ;)

delacroix's picture

wasn't underdog a drug addict?

WmMcK's picture

I thought that was Shoeshine Boy ...