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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
Submitted by Robert Paulson
Title: How the USA got to where it finds itself, why the full faith and credit of governments is inferior to real assets and how we can fix it once and for all
I used to think like a statist, and I used to agree with them. It's appealing to redistribute wealth, especially when it's not fairly achieved.
But what I've realized is that the solution to creating distortions in the market is not to create more distortions by attacking the symptoms. What ends up happening when you do that is that you create a hugely complex set of rules and regulations that hinder the market, make it inefficient and most importantly makes it ripe for abuse via regulation in favor of those who make the right campaign donations to the right politicians. This is the situation we find ourselves in now: A very broken market setup to benefit those who've made the right political moves.
On the other hand, you can simply end the sole cause of the problem to begin with. That sole problem is bad monetary policy. You might say that we should replace everyone in charge of the Federal Reserve with the "right" people. But even if you were able to do that, it's really a temporary fix. The issue isn't just having the wrong people in charge, but having so few people in charge of controlling the levers to begin with. Not only does it create a situation ripe for corruption and collusion, but it puts the value of money in the hands of people who are thereby expected to perform satisfactorily. They execute insane policies at the behest of a government and people who cry "DO SOMETHING!"
It is because of this monetary system that our government and the public at large have been able to amass such humongous debts. Because our system is based upon continual growth, its very lifeblood and continued existence hinges upon consistent expansion of GDP and inflationary monetary policy. The continually bad policy experienced off and on since the Nixon administration has a reason: It was masking declining economic factors.
The stagflation the US experienced in the 70s came about for two reasons: The final end to the gold standard and ensuing monetary policy attempting to stimulate the economy in lieu of actual economic activity. The badly implemented normalization of relations with China by Nixon began the trend of sending manufacturing jobs overseas.
All of this combined with the explosion of consumer credit and the financial industry. People were being squeezed by real declines in jobs and wages. With credit, they could afford to get by "until things got better." This paradigm shift from saving to spending created the consumer culture, yuppies and the decade of greed that was the 80s. As a people, we bought into this idea that we could spend our way into prosperity, and it worked for a while. Actually, up until 2007.
Stagflation was ended in the early 1980s when we finally put someone responsible in charge of the Federal Reserve: Paul Volker. He jacked interest rates up to the high teens until he tamed inflation, but an inevitable and deep recession ensued as a result. In the process, bad businesses (and some good ones) went out of business, many people lost their jobs, but in the end that creative destruction brought us back to reality and put the market in position to spring back forward, especially combined with heavy use of consumer credit as well as deep government deficits and increasing debt.
Throughout the 90s, monetary policy was relatively restrained but ever too loose near the end. It ended up assisting the dot-com bubble by allowing it to blow up far further than it ever could've by itself, ending in an unavoidable recession that was a long time coming. Further, during this time period, China began to become a bigger and bigger factor in supplying inexpensive goods to the market at the cost of American jobs and paid for partially with debt. This time, however, the debt explosion was in the private sector as government spending was restrained and the budget balanced by the end of the decade. In effect, the stagnant income and rising costs of the American people were being masked by continually growing private debt.
So what did the Fed do in the early 00s? In the wake up the dot-com bust and resultant recession, the Fed opened the monetary floodgates wide and never looked back. When the recession ended, it didn't tighten policy as it should've, and did so for two reasons. First, housing was becoming the new hot sector and they didn't want to stop the gravy train in the middle of war time. Second, the government had not only implemented hundreds of billions in war spending and failed to pay for it, but it also cut taxes and held them there. These massive deficits and and increasing debt could only be maintained with low interest rates. Basically, the Fed and the government made a bet that the deficits and debt wouldn't matter because they would be matched by a growing economy and inflation.
Unfortunately, the housing market couldn't keep growing with just loose monetary policy. That could only do so much. So what did they do? They deregulated the mortgage market and allowed lenders to go hog wild with cheap money and low lending standards. In a free market, this wouldn't have been such a problem. However, through a combination of fraud and ineptness, the banks were able to make terrible loans, package them up into securities and falsely rate them as AAA when they were really junk. This is the key factor that allowed them to continually make horrible loans with cheap money and reap massive profits in the process. They were able to build a ticking time bomb of epic proportions because there was no one able or willing to stop them. No one wanted to be the party pooper.
The ratings agencies failed or were complicit specifically because their continued existence was not dependent upon performance but by the fact that they were deemed by the government as the agencies of choice. They had government endorsements and had zero incentive to rate much of anything properly. As you can plainly see, all 3 of the official ratings agencies are still the official ratings agencies despite their horrendous performance. Why would we expect such a system to work in our favor?
Meanwhile, the American people were high. There were two wars on they didn't want to think about. Their houses were increasingly growing in value. They bought new and bigger houses with cheap loans. The "flipping" phenomenon went into full swing. People took out huge loans against their already paid down or paid off homes to pay for consumer goods. Jobs were growing on trees. Everyone was living the high life on borrowed prosperity. It was doomed to fail and began doing so in 2007, culminating with the credit crisis in the Fall of 2008 in the midst of a terrible recession. All the way along, the government and the people became as indebted as they'd ever been (the government's exception being during WW2, though that debt was largely held by the American people). As things got worse, the debt levels only increased in the face of declining housing values. Even worse, due to bankruptcy reforms made in the mid-00s at the behest of the major banks, many people became essentially trapped in their debt with no way out.
The most important factor that so few people understand is that this approximately 40-year long process of consumerism based on expanding consumer and government debt hid a very big problem: Decline of true wealth production and rising real energy costs.
The overall loose economic policies during those 4 decades fostered the rise of consumerism and the financial industry's increasing share of the market. In a normal economic environment with sound money, 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.
For 40 years, our monetary policy enabled our ignorance of a very real and pressing problem: Other countries were catching up to us in technology and we were no longer in the front of the pack by a mile. Instead of doubling down on education and allowing the market to guide the future, we passed the buck. We decided that a continually rising standard of living without interruption was preferable to tightening our belt and delaying gratification.
Now we find ourselves saddled with ginormous debts and no economic infrastructure with which to grow our way out. We are a late-stage kidney failure patient on dialysis, and we are in terrible need of a transplant.
So how do we fix this?
Sound money, debt forgiveness and a truly free market that isn't guided by the hand of the government and is instead determined by what the aggregate investor pool thinks is the right direction. Gordon Gecko was wrong overall, but he was right that greed is good. The profit motive is the key to good decisions and long-term thinking. That doesn't mean we need to be miserly dickheads who only care about ourselves, but self-enrichment and the unfettered ability to be as successful as possible is the only route to a truly higher standard of living.
You might think gold is a barbarous relic, and I would agree that money based upon a single asset is a terrible idea. Putting all the eggs in one basket is too high a risk. However, a currency based on a multitude of assets, especially complimented by commodities that are the lifeblood of wealth creation (oil for instance, and perhaps corn in America's case), is a superior system in comparison to fiat currency backed by full faith and credit of the government. By using multiple assets, we can even out the distortions that will occur from time to time, essentially making our currency as stable as a rock. Those who produce the assets backing the currency will be induced to find the equilibrium which maximizes profit without over-extending. When we have that foundation, we can move forward with a market free of excessive and cronyism-based regulations and maintain a focus on only those regulations which are necessary to prevent harm that we find unacceptable. In other words, instead of using regulation to guide the economy in a specific direction, we can use regulation to make certain things off limits. It's the difference between steering towards something and steering away. It's far preferable to steer a ship away from an iceberg than to presume that you can steer it through the iceberg.
Most importantly of all, we need to take money out of politics. None of this will matter unless we prevent our politicians from being beholden to campaign contributors. Our current system engenders corruption of even our best, brightest and well-intentioned representatives. They begrudgingly accept the standard which says they must compromise their principles in order to get reelected. My solution is a constitutional amendment which requires all electoral campaigns to be paid for with public funds and prohibits any advocacy of a candidate which extends further than displays of support by private individuals, and a requirement that all such displays be transparent by way of indicating who is responsible for them.
I humbly give you these words and suggestions in the hopes that together we can build an America which is stronger, better and freer. I believe that only through freedom can we accomplish what our hearts desire. Thank you for reading this.
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You know, competition was characterized by the 1900s.
You are confusing concurrence and competition. The end goal of a competition process is to eliminate all concurrence and to achieve a monopoly.
Looking for competition without monopoly, that is gross.
Given the history, who could have imagined such a thing?
U.S. Financial Mercantilism: Bailouts, Debt, and the Socialization of Credit Risk, 1982-2007
(From Kevin Phillips' Bad Money)
Year / Rescue / Government Methodology
1982-92 / Mexico, Argentina, Brazil debt crisis / Federal Reserve and treasury relief package to avoid domino effect on U.S. banks.
1984 / Continental Illinois Bak aid / $4 billion Fed, treasury, and FDIC rescue package.
Late 1980s / Discount window bailouts / Fed provides loans to 350 weak banks that that would later fail, giving big depositors time to exit.
1987 / Post-stock market dive rescue / Massive liquidity provided by Fed, and rumors of Fed clandestine involvement in futures market.
1989-92 / S&L bailout / U.S. spends $250 billion to bail out hundreds of S&Ls mismanaged into insolvency.
1990-92 / Citibank and Bank of New England bailouts / $4 billion to help BEN, then government assistance in arranging a Saudi infusion for Citibank.
1994-95 / Mexican peso rescue / Treasury helps support the peso to backstop U.S. investors in high-yield Mexican debt.
1997 / Asian currency bailout / U.S. government pushes IMF for rescue of embattled East Asian currencies to save American and other foreign lenders.
1998 / Long-Term Capital Management bailout / Fed chairman Greenspan helps arrange bailout for shaky hedge fund with high-powered domestic and international connections.
1999 / Y2K fears / Liquidity pumped out by Fed to ease Y2K concern helps fuel final NASDAQ bubbling.
2001-5 / Post-stock market crash rate cuts / Fed cuts U.S. interest rates to 46-year lows to reflect U.S. financial and real estate assets and protect the U.S. economy's newly dominant FIRE sector.
2007 / Structured investment vehicle and subprime mortgage bailouts / Treasury Secretary Paulson proposes super-SIV fund to rescue top banks and negotiates subprime mortgage relief mechanism.
...and if you mistakenly think that all will be solved with a re-instatement of Glass-Stegal - then you clearly have no understanding of what the seperation can do, why it was removed and why it will be removed again.
PROFIT MOTIVE YOU CLOWN!
...and isn't Glass-Stegal a regulation?
Typical free marketeer - wants no regulations - except the ones you think will work!!!
"Regulate them, not US" - is the call of the free market hypocrite.
"Regulate them, not US" - is the call of the free market hypocrite.
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Yes. It is just a variation over this:
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Wrong, a free market allows the winners to manipulate it and enhance their chances of winning.
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A manipulation to determine who is to be the winner.
...and when your first 'win' comes by foul means (but not spotted and punished) - that means later 'wins' are all based on that fraud.
You think this is a good 'selection proccess'?
How many billionaires made their first million through 'dodgy means'? It might not even be illegal - just immoral.
...like selling arms to Iraq, or the Mujhadeen in Afghanistan (later becoming the Taliban) - at one point totally above board and acceptable - but in the long run this 'profit motive' turned out to be rather a big drain on the resources of both superpowers.
...and the two quotes aren't the same meaning either - the first reflects the attitude of the FMH who is all up for regulation - when it's not targetted at HIS business, the second reflects the ongoing problem of Capitalism where the winners will always win and the losers will always lose.
Don't believe me? - then try and 'outplay' JPM on the silver market - go ahead, put all your savings into it and let me know when you've broken them.
They have an advantage can never hope to replicate.
Indeed.
Cheating is an inherent property of competition.
Anyone who manages to cheat successful has grown more competitive than without cheating.
Playing a chess game against oneself: the white are allowed to cheat while the black are compelled to follow the rules.
Same players: yourself, so equally between the players.
Whites are to win.
Cheating is the most looked after behaviour in competition.
I believe our representatives are controlled with both a carrot and a stick. I do not think campaign finance reform will fix the problems. I did months ago, but I have seen too much since then.
I think it will require participatory democracy to have a long lasting effect. I have seen the notion of participatory democracy so many times lately. I believe it is the solution that is coming, though it will surely take a long time to arrive. The Indignant protesters in Spain are demanding it, and I have heard of some people in Greece demanding it as well. And then, I could have been blown over with a feather when I found out that Libya had been using participatory democracy.
Anyway, it's the best way I see of combatting the carrot and the stick. Switzerland can call any law up for referendum and vote to get rid of a law that their parliament creates. That ability to veto laws seems even more important than initiatives to create new laws. It is said that usually when the people call up a law for a referendum vote, parliament usually fixes the law before the vote.
Iceland voted with a referendum to not pay back the money owed by their too big to fail banks. I know we would have too if we'd have had a referendum.
I used to think that Switzerland had the most participatory democracy because wikipedia said so, but then I found out that Libya had even more. It's a bit fuzzy though because Libya also had it's revolutionary council, and they were not officially members of the government, but appeared from the outside to do a lot of governing. Still things were pretty financially good in Libya. Libyans were not being oppressed monetarily. They had it better than us. But them wanting to us the gold dinar to sell gold, and them wanting to spread the gold dinar all across Africa was just too much for our elites to take, and I think our elites are not too fond of the idea of participatory democracy either.
Anyway, my prediction is that after very much ado, this is the way the world will be going. Time will tell.
I think it depends upon what you mean by "participatory democracy."
If you are suggesting that all laws be passed by referendum on a popular vote, I would have to strongly disagree. Laws put on the books are at least twice as hard to remove as they are to implement, and pure democracy inherently allows the implementation of the tyranny of the majority. That is the reason for the imbalance of power in the Electoral College and the structure of the House of Representatives.
If you define it as people paying attention, reading between the lines and voting for representatives who are truly cognizant of their constituency's desires, I agree. No system of government will avoid corruption if its people are apathetic and don't participate.
Far too many people define participation as voting alone. The truth is that voting is the least important factor. What's most important is a vigilant public who constantly hold their representatives to high standards and constantly discuss these matters with others in their community.
I have just one vote, but if I am able to convince 5 people to not only vote, but vote in a way I agree with, I have done far more to impact my future than I would by simply voting. This is the crux of self-government. We must not only hold our representatives accountable. We must hold ourselves accountable. Lively debates with lots of disagreements are vital, but they must be conducted with honor, dignity and respect for all participants.
The singular destructive force in modern political discourse is the lack of respect for others. It has spread beyond the political theater and into our everyday lives. When we encounter people we disagree with, do we listen to them and carefully consider their point of view and respectfully assert counterpoints? Or do we rush to judgment about their motivations and dismiss them off-hand simply because they don't agree with us, often "going for the kill" through mockery and condescension? I think it's the latter, and I think it's poisoning us.
What we need to do is value knowledge, education and above all our fellow people. We can solve anything if we're willing to be patient and consider that we may not be correct. The only certainty in an uncertain universe is that there are no certainties. Should we choose to live by that mentality, we will be better for it.
I definitely do not mean people just paying more attention with no additional power, which is what I think you are saying.
Yes, Mob rule is the much talked about potential problem of pure democracy. Puppet government ruled by the few is the not enough talked about problem of representative republics. Which problem are we most suffering from right now? Are we suffering from the politicians too much listening to the people, or not enough listening to the people? Did the people want the banks bailed out? Did the people want a new super-congress? I wonder if the people would vote for the patriot act if it were up for a vote. I wonder if the people would vote to bring all the troops home?
What this system of government needs is another check and balance against the carrot and stick that leads to a puppet government. That is what is lacking. That is the long missing check and balance that has led us to where we are now.
I am not exactly sure how much participatory democracy we should have, but I know to the depths of my soul that at the very least we need the ability to strike down laws. We need to be able to say no to oppressive laws.
All those against some participatory democracy because of a fear of mob rule need to open their minds and notice the carrot and stick puppet government problem which has gone on so long. Is it worse to have the many oppress the few as is the worry with pure democracy, or to have the few oppress the many which is happening right now?
Open your minds and see that we direly need this power to stop the few from oppressing the many.
I think everything you say is mostly correct, but I think you may fail to understand the power of the author's suggestion for removing money from politics.
No, it wouldn't account for under-the-table outright purchase of votes, but that is a minimal occurrence. The overall issue is voting based upon a fear of not getting the donations needed to be reelected.
Oops, that's Libyans wanted to use the gold dinar to sell oil, not the gold dinar to sell gold.
Hey, who gave Silver a shot Novocaine? All other Pm's heading up.
Lots of nice ideas - taking money out of politics, multi-asset currency, transparency in politics - ideas that have been posted to death at one time or another in these forums and unashamedly plagiarized here - why not? They're great ideas.. BUT "Greed is Good"? That's what got you in this position in the first place. You never learn do you? Ambition or self improvment being good, I can understand, but greed? WTF. That's why this article is STUPID.
I think that depends upon what you define as greed. Is it not greedy to want more than the average Joe has?
Am I not greedy if I work harder than the rest based on my desire to have a Ferrari, a car which very few can afford?
Am I not greedy if I want to make enough money to travel around the world as often as I can despite the world not having the resources for most, let alone all, of the population to do so?
If I build a business that is profitable and provides a valuable service to the world in pursuit of these goals, has my greed not benefitted the world?
I would describe Richard Branson as greedy, but I have never heard one person utter a mean or spiteful word about him, and I wouldn't either.
But, but, but... the mere existence of a greedy person is a favour done to the others, no?
Funny US citizens.
This is the lunacy of having to deal with Americans. You have to define "Greed" for them, and explain why it is not a good thing. Just as you have to define, "Torture" for them and explain why it is not a good thing. There is something horribly polluted with the pool of their collective moral psyche for these simple concepts, which believe me, almost everyone else in the world takes for granted, to be issues of contention.
Don't confuse greed and ambition. To want more than you have is a goal worth pursuing - part & parcel of self-improvement, - particularly if your ambitions includes your children. To want more than you NEED without any reason is greed, pure and simple. Take a good hard look at the level of obesity and related diseases and you don't have to be a genius to conclude that greed is not a good thing at all. There's nothing wrong with desire, ambition, & drive. But it might be worthwhile asking yourself whether it is really worth it, and whether your desires are realistic. Is it for your happiness or does it stem from your jealousy, envy, and inferiority complex? The world is full of sad, mad, angry psychos stuck in the dangerous eternal loop of having unrealistic expectations of life. You will never be happy with greed, because it is the way of the MSM consumer and it is a never ending propaganda of inciting you to desire things you do not need.
If you described Richard Branson as greedy, I'm pretty certain he would have issues. It ain't a compliment, bud.
To put it in the context of this website, let me leave you with a quote from Fight Club:
"You have a class of young strong men and women, and they want to give their lives to something. Advertising has these people chasing cars and clothes they don't need. Generations have been working in jobs they hate, just so they can buy what they don't really need"
Based on your definition of greed, I would agree that greed is bad.
Perhaps that's not what the author meant. He isn't perfect, you know. ;)
:)
Based on your definition of greed,
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Nihilism is pretty high among US citizens... Based on his definition of greed?
Why not play that game to the utmost:
based on your definition of "based", based on your definition of "on", based on your definition of "your", based on your definition of "definition", based on your definition of "of", based on your definition of "greed", well, draw your own conclusion but define every word you are using because US citizens are nihilistic at heart and will reject common conventions that do not go their way.
Considering the frustration I've suffered here of sharing a common language, I won't disagree you. ;)
Why would anyone think that the full faith and credit of governments was superior to real assets ?
"WASHINGTON (AP) — The dismal U.S. job market, which has intensified fears of another recession, may be even worse than the unemployment numbers suggest.
The shockwaves from the Labor Department report on Friday that employers stopped hiring in August have rippled around the world, sparking a steep retreat in Asian stock markets. The lack of hiring in the U.S. last month surprised investors — economists were expecting 93,000 jobs to be added. Previously reported hiring figures for June and July were revised lower.
The jobs picture may even be worse than the 9.1 percent unemployment rate suggests, because America's 14 million unemployed must also compete with 8.8 million other people not counted as unemployed — part-timers who want full-time work."
http://news.yahoo.com/dismal-jobs-data-shakes-world-markets-095629181.html
But other then no jobs, weak dollar, sinking house prices, increased food prices....other then that MSM says everything is fine and Wall Street should hand themselves record Bonuses again this year.
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If the problems started when we got off the Gold Standard than why is this article suggesting we recreate the wheel? We need to be back on the Gold standard and that in and of itself contains the discipline needed to rid this country of the corrupt banking cartel and incompetent politicians
Right. Admitting you were wrong was a good first step.
The next best step would be to stop trying to think up new 'solutions' and get the fuck out of the way of people who know how to fix this.
Telling people to get out of your way is not going to get them to help you achieve your goals.
If you're right, explain your rationale. The presumption that if only we listened to you everything would be fine indicates you're as convinced of your correctness as smug bastards like Krugman. Same arrogance, different flavor.
"Same arrogance, different flavor."
You are completely correct.
I had the same thought just before posting. However. Correcting practically everyone is tiring work. So excuse and ignore the comment if you will. :)
No problem at all. I don't expect perfection.
I am curious though as to your rationale. What of the author's suggestions do you disagree with, why, and what would you do differently?
Really?
Lmao, bugger.
Ok I'll do a short and sweet. :P
The biggest problem I have with this article as a whole is that it mixes truth with falsehood. That is the most dangerous kind of lie.
"You might think gold is a barbarous relic, and I would agree that money based upon a single asset is a terrible idea. Putting all the eggs in one basket is too high a risk. However, a currency based on a multitude of assets, especially complimented by commodities that are the lifeblood of wealth creation (oil for instance, and perhaps corn in America's case), is a superior system in comparison to fiat currency backed by full faith and credit of the government. "
Pure bullshit. For so many reasons it's funny.
I'll go with, multiple markets for manipulation( "By using multiple assets, we can even out the distortions that will occur from time to time" - more management? the arrogant pricks) , these items have different functions ( for example, if corn was backing money what would happen to corn production [ research tobacco money in Virginia in early USA days ]), marginal utility theory ( they would vie for utility in this function, gold would win hands down, which would mandate more government interference to keep 'natural levels', etc. I could go on, but these are enough reasons.
" and maintain a focus on only those regulations which are necessary to prevent harm that we find unacceptable"
Who are we? Who would make these decisions. As demonstrated by the stupid legalities in the USA, pillows could be outlawed as they could be harmful to your health. Honestly? If you, for example, burn from putting your hand on a stove you deserve the pain. You don't bloody well sue the stove manufacturer for not warning you.
"None of this will matter unless we prevent our politicians from being beholden to campaign contributors."
Whatever. Never mind under the table bribes. This doesn't address the underlying problem that large swathes of the population contribute zero and will always vote for whoever will give them the most for free.
In short, all his 'solutions' are pure bullshit.
Peace
As much as I like Ron Paul, the basic problem is that he is 75 years old. He's just too old. We don't need any Boomer presidents, either. It's time to move on from all those Keynesian failures.
good post, the only link lacking is on how too easy credit creates increasing wealth disparity, and how under our political system, since too easy credit benefits a select few in the economy (creating wealth disparity) they then use that wealth to take over the political process, make sure the status quo is maintained, and that leads to worse policies. By itself sound mney policies will hyelp the political process, the same way that too easy credit caused the financialization of the economy, and those easy credits were used to buy the politicL PROCESS.
This is the most important statement in the entire article.
As for money, I would like to see a definition that entirely removes it from human control. I like the idea of using the mass of the Sun as a store of wealth.
"Instead of doubling down on education and allowing the market to guide the future, we passed the buck"
Wrong- our education system is a corrupt instituion in itself. It costs over $1 million to graduate a single student who is competent at their grade level in math and science in some urban districts. We must get government out of the business of education when we also get government out of the business of running our money.
They have lost my full faith, I have become a government atheist. Other people call us anarquists.
The basket currency idea is plainly an unworkable system that has been given very little thought by its proponents.
The above quote assumes that someone will be in charge of assigning the various weights in the basket of commodities. The government would be obviously in charge, since a market-basket currency does not arise from the free market itself (there has never been a market-basket currency that has spontaneously emerged from the free market).
The government could and would, then, alter the ratios of weights, adjust the various fixed terms, and so forth. The hankering for a fixed market basket is an outgrowth of a strong desire for the government to regulate the economy so as to keep the "price level" constant. This will only create a boom-and-bust business cycle by manipulating the basket artificially in absence of any free market drivers.
A final and vital flaw in a market-basket dollar is that Gresham's law would result in perpetual shortages and surpluses of different commodities within the market basket. This was demonstrated when the U.S. had a bimetallic standard.
The quantity of gold, on the other hand, can not be readily increased, making it of steady value. All things should be priced in grams or milligrams of gold and the gold dollar based on a fixed weight in gold. The government's role in money is only to ensure that gold coins are of certified weight and purity; the government gives up its monopoly on money. There would also be no optimal quantity of money in stock. Prices would tend to decline as the economy grows. Deflation of prices - contrary to the banking oligarchy's propaganda - is not a bad thing. It's what balances out the previous excesses.
http://mises.org/resources.aspx?Id=8a1b9cc7-6569-4876-a608-91f70d8c0e58
While it is challenging to read such a blunderbuss of emo decon as this Kodak moment pining wistfully for:"... a truly free market that isn't guided by the hand of the government and is instead determined by what the aggregate investor pool thinks is the right direction." It is even more of a bother to scan comments under such scatterbrained nonsense here on my beloved ZH and NOT find this coconut oil and Hamptons sand in the head thinking go unquestioned in any meaningful way.
A majority of the readers of this missive have been raised, some to a greater degree than others, within the firelight of an imperfect society made possible by these invisibly handless governments so readily maligned here. While it is amusing to speculate that a world without government might mean to parentless children running up and down candy store aisles at your 7/11, it serves no purpose in contributing to any mature analysis of this unraveling, this unfolding, nor does it serve to contribute to the foment of turning this readership to a direction of thinking based on wisdom, an invaluable tool when time serves to reconcile this moment in the discourse of Civilization. The purpose of Government is to protect the weak from the strong. When Government fails in this measure society dissolves, the contract is broken, long live the King.
This Tyler moment is brought to you by someone who will also leap to the idea that central planning is useless, outmoded or without merit in some value derivative way. He obviously has no experience sitting at the table of any corporate body strategically shaping an assault on a competitors market, a military corps planning campaign or a religious conclave shaping belief. We do not shape ourselves in the small desires of the individual, but in service to the large of the group.
There may be some contours in a future from which one can discern the parent of this time, but as the Xerox simulacrum turns evidence into the distant dust of myth, we must abide with care of our imagining in systems and values we willfully think to endure beyond the near of our gaze. Old wine-skins, new wine, our thinking must be alive and agile, couched in some ethic which serves the greater good. If not cumbersome fascistas of brutish small mindedness will prevail, opportunities you bend toward will be lost.
And all of this parochial hugging of an America cloth at a time of world significance. …? We can do better. Remember ~ the angels we wrestle with now will shape the world we wake to in the morning once dream yields to the light of day.
Please , let us aspire to much much more.
a currency "based on" gold is redeemable in gold. ditto silver. what is a commodity-based currency, "based on" a "basket of commodities" redeemable in?
really, i want to know!
gas? crude? benzene? high fructose corn syrup? genetically-modified grains? pure, fluoridated water? guns? pussy from women who sell theirs to anybody who wanders in? a "basket" of eggs available once per year at religious holidays based on the spring equinox? tattoos? lab-produced "diamonds"? ms. lagarde's turds? benzelbub's whiskers? prez0's lies? Super Congress's decrees? the 'future' of the Council on For. Relations?
just b/c someone is "famous for something-or-other" doesn't mean he or she knows wtf they are talkin bout
the problem w/ crap like paulson's is that others might think it's a "good idea" and instead of letting the "systems" make the (yes, i know) extremely painful adjustments from "what we pretend we are worth" to what we are really worth, to prefer to SAVE everybody (again) by printing something "new" and telling us it is "worth a basket of commodities" so trust me
the problem w/ the "currencies" we have is that the fuking goobermints can't control treir damned spending, so:
print, print, print,
bail, bail, bail...
we have an "invention"
so nothing hasta fail
and when this mountain of stinking shit becomes recognized for the con game which it is, some "famous" people want to give us a new "invention"?
fuk them and the horses they're trying to ride "in" on, too!
.."One final word, do what you can to better your personal circumstances and contribute to the betterment
of society. We need more truly altruistic people. We have enough of those with narcissistic personality disorder." sage
.
06/13/2011
Delusional Economics
The New Normal in America: It's Not a Pretty Picture
http://www.ethicssage.com/2011/06/delusional-economics.html
.
greed is only good if you base your
culture, estimate its quality and success,
on the metric of consumption, say if you are an
infant at the breast or maybe a parasite on a vein
.
less is more is good for the human
spirit, balance.
.
greed is a symptom of a mental illness
so if you think it's good you might want
to think about the possibility that you have
a problem and your actions might be causing
scarcity and forms of degradation of quality
of life for others, near and far. the individual illness
being a part and having impact on the collective disease.
.
the money folks, political types, have no
real education with respect to environments,
ecology, psychology, history etc.. they study
law and funny money cons. everything is a commodity!
they are imbeciles who have occupied the mindset of
the culture/s. their infinite ignorance kills millions
and destroys the earth, piece by piece, day by day, to
satisfy the demands of debt based fiat money in debt
saturation. delusional dimwits in the spotlight!
cornering the systemic fiat money market. no concept
of the real impacts outside their small circle of opulence.
.
greed is good? and overweight people are just working their
way to the total accomplishment of morbid obesity.
the author probably meant to differentiate quality
from quantity, something economics rejects, is incapable of
by design. not that they don't know about this but they
refuse to acknowledge it because it would be revealing concerning
their design and con. greed is not good, and it is the wrong word
for what is good. striving for integrated quality is good but that
is not greed.
.
less is more is good for the human
spirit, balance.
.
delusional economics
The Global Economic Crash of Year 2011
http://verbewarp.blogspot.com/2011/08/delusional-economics.html