Let's Play "Who Said It?"

215
Wed, May 23, 2012 - 10:21am

As you've probably figured out, I recently received another shipment of hats, so we might as well give away another one.

So we begin today with a game of "Who Said It?" The first person to correctly identify the author of these thoughts will win a genuine, authentic and autographed Turd Ferguson hat. Of course, with google and the like, this contest may end fairly quickly but so be it. All I ask is that you read the entire passage before entering your guess.

"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which - through a complex series of steps - the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss of value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

​In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its illegal, as was done in the case of gold (in the 1930s). If everyone decided, for example, to convert all of his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payments for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. Therefore, the financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

​This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

​OK, have at it. TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  215 Comments

SaratogaPrepper
May 23, 2012 - 10:26am

greenspan

greenspan

edit: oh well, I never wear hats anyway.

survivalwstyle
May 23, 2012 - 10:27am

im going with

grEEnspan

May 23, 2012 - 10:27am

Really?

Good old Alan said that?

wow!

Hard Rain
May 23, 2012 - 10:28am

My Guess?

Alan Greenspan (and I took the time to read it all)

Rain

OrangeAlert
May 23, 2012 - 10:28am

Greenspan

Greenspan

Bongo Jim
May 23, 2012 - 10:28am

Who said it...

Weird Al Yankovitch

ivars
May 23, 2012 - 10:29am
OrangeAlert
May 23, 2012 - 10:30am

Second

Second...good enough

edit...Second turns into 7th pretty quickly around here.

babodonk
May 23, 2012 - 10:31am

Winner, winner. Chicken dinner

This is correct. Alan Greenspan wrote these words in his essay for the 1960s, "Gold and Economic Freedom".

Please email me your shipping info. Turd at tfmetals dot com.

Anonymous
May 23, 2012 - 10:32am

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