gold versus paper and the keynes experiment

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Thu, Jan 3, 2013 - 9:21am
Ottawa, ON
Joined: Sep 13, 2011

bbacq from the main board....

Wow, I haven't been here in six months and VtC and Sroche and lots of silly ideas are still circling! First, a link to my article on money and currency, which I stuffed in the bbacq room for now. It doesn't explain specifically why "freegold" is silly obfuscation, but you ought to get the drift. Enjoy.

@TJeffson: thanks for the props, I do my best. Inflation may be "theft" or not, depending on how it arises. In a fractional/fiat/central banking system, I tend to agree, and add that the theft is both direct and indirect. It distorts value-perception and pricing, which leads to "unnatural" winners and losers. The winners (thieves?) are banks, bureaucrats, financial industries etc, and large-cap organizations, and just about everyone else loses (though long term, big picture, we all lose, even the "winners").

@MotleyFool: please read my article linked above. I'd rather you used the term "currency system", instead of "money system" as money is only an idea, but currency is something real. We transact using the real thing, not the idea. These systems are not inherently inflationary nor deflationary, it is policy and action within the system that inflates or deflates the supply. "Gold standard" is an overloaded term, and you should be specific. During the period you mention ("1800s"), the US used many currencies, including Lincoln's non-gold-backed greenbacks. There was not a single, "deflationary" gold standard during the period. I also have to note that any gold-as-money currency system is inherently inflationary, as gold has always been mined faster than it is lost or consumed, ie the total gold supply has been on a monotonic increase since time immemorial.

@Nick Elway: You nail the truth (as close as we might know it) about this quite succinctly. The bankers have been killing leaders who get in their way for thousands of years. Read Matthew 21:12. Jesus was on a cross within four days of publicly humiliating the bankers who were enforcing a currency-system through coercion (the shekel that was required for the purchase of the church's favours). Yes, Jackson, Lincoln, and Kennedy were all permanently removed from power by the bankers. I believe Kennedy's last executive order permitted the Treasury to directly issue currency (taking such power back from the private, non-federal Federal Reserve). I believe Johnson's first act was to repeal Kennedy's last. Can anyone confirm these two assertions with decent references?

But Nick, you should not think that gold standards are deflationary. Inflation and deflation describe growth and shrinkage of the supply of currency. Under a true (ie non-coercive, thanks, Xty) gold standard the money supply is increasing slowly. But in any advancing economy under a relatively stable currency regime prices will fall, because the market figures out better, less costly, more efficient ways to get things done. In a real free market under stable currency, not just outdated VCRs get cheaper. Everything does. But that is not deflation.

They will not stop trying. It will take courage and perseverance to again defeat the bankers and buy some decades of economic truth. The bankers thrive on fear. It is their only weapon, and, for some reason, many people seem to grant them this weapon of their own free will.

The bad bankers (and all the evil that flows from them) will be defeated again when enough people realize that what they ought to fear are the bankers themselves, not the silly lies they and their minions tell.