No anarchy here. Just good conservative principle and common sense.
Posted on 04/29/2002 5:14:43 PM PDT by shrinkermd
Under certain circumstances, it can be done. For instance, the HKSB managed Hong Kong's money for decades without scandal or inflation. Of course, the HKSB was a public/private sort of thing.
I think you're flirting with the 'ad hominem' argument when you mock monetary sceptics as believers in madcap conspiracies, or shameless snake-oil salesman of PM collectibles.
Read Franz Pick. The destruction of national curencies he writes about is all too real. The monetization of debt is the inevitable outcome of allowing socialistic deficit financing to dominate our financial markets, which has already happened. That's why government bonds are 'certificates of guaranteed confiscation'.
I don't know when the music(Greenspan's money pump) will stop. I am not a believer in predictive technical analysis, nor have I any inside knowledge as to the course of world political events.
Nevertheless, I do know this: Someday the music will stop; there will be insufficient chairs to sit in, and most of the people will be left with dud tickets.
That's the lesson of history. That, and the fact that governments will lie, and twist and spin until the very end. That's another lesson of history.
I expect NO improvement in the ethics of government; that's why I'm a conservative.
Peace. ;^)
Agreed. That's why, despite the anti-Fed misinformation that crosses the line into kook territory doesn't make any sense. Despite the hype to the contrary, banks are privately owned by normal everyday stockholders just like GM or Microsoft. The Fed is owned by these privately owned banks. The banks appoint the Fed's board of governors, the president appoints the chairman. Any scenario that involves dismantling the Fed also involves turning the money supply over to the elected legislative politicians in Washington. The cure to deficit spending in such a system becomes simply running the printing presses overtime. Back to square one.
You premise that someday "the music must stop" is based on the false assumption that inflation is a big bad bubble that has no choice but to burst. Inflation is a necessary negative feedback in the economic loop that keeps the amount of money slightly higher than the amount of goods. It's the reason that the gold standard won't work anymore... the gold supply is finite and mostly controlled from Moscow and Cape Town. The American economy isn't, and can never be. It's that simple.
I'm a conservative because I believe in personal responsibility and economic freedom. Tying my future to the spot gold market in Moscow would seem counterproductive to that end.
You keep stating that gold is a medieval concept. Article I Section 10 of the Constitution declared it illegal to use anything but gold and silveras legal tender. There is ample evidence that the founders never intended the use of anything but gold and silver for money. They learned that hard lesson during the Revolutionary war (Continentals were worth nothing by the end of the war).
The reason we went off the gold standard was to satisfy the interests of the Fed (which are privately owned banks by the way). They wanted to be able to water down the value of the dollar (it's worth 5% of what was worth in 1913) and to create a system where the government would use borrowed money to create more and more debt every year (now at 6 Trillion and climbing). From there it was a simple step towards creating a larger and larger central government that would be funded by an Income tax and inflation. This would have been impossible to do without detaching the dollar from any meaningful peg.
Lastly, no fiat currency has ever in history succeeded...not ever! It has been tried over and over again in history never works. It never works because the people in control of the government (whether its a monarchy, representative democracy or a "socialist nirvana") will always strive to print more and more of it until it becomes worthless. Our experiment is about 30 years old, how much longer will it last?
I guess I'm done...and please don't throw personal insults at me like youy did with a couple other posters here...
Franz Pick
Peter Beter
The term "certificate of guaranteed confiscation" is rooted in the philosophy that it's somehow illegal or immoral for governments to use debt instruments for raising revenue - the reasoning goes "they take your money via taxation, then they sell you bonds to so you can get part of your own money back" or somesuch nonsense. The reasoning seems to be that all debt is evil, and it must be eliminated. So what's the alternative? More onerous taxation? "No, taxation is bad too." OK. Now what? Nothing left to do but dismantle the whole thing. The deeper you read into all this gold bug anti-fed stuff, the clearer that message becomes - it's about anarchy.
'Sticky' wages and other prices can simply be gradually eroded by inflating. So long as the PTB are disciplined, most economic players will simply make adjustments and move on.
If inflation could merely fluctuate around 3-5% per year, then overpaid civil servants would slowly be cut back to a reasonable income; malinvestments in housing, etc. could gradually be made good by depreciating the currency; and society's more productive members will keep their focus on the carrot of 'more money' instead of upon the stick of 'high taxes'.
Once folks in general cotton on to this fraudulent scheme, however, the 'jig is up'.
We, as a society, continue to live off the moral and political capital of our ancestors. Just like gold, that capital is replacable only by hard, persistent work. The substitution of 'politically correct' rhetoric for the hard truths of history is a perfect analogue of the replacement of gold by government-decreed currency. Just because lies are often more comforting than the truth is no reason to abandon truth; just because gold is more difficult to accumulate than paper and ink does not render it a 'relic' of antiquarian interest only, as we all surely discover sometime in the not-too-distant future.
P.S. Moscow has little influence on world gold prices; the great state of Nevada produces as much gold as Russia.(or near enough!) Besides which, nearly half of all the gold ever mined is in the possession of the U.S. Gov't.
The monetization of debt is just about the worst thing that can happen to an economy short of nuclear war, IMO.
That's a rather disingenuous assumption to make, given the many principled conservatives who've been arguing for its restoration ever since it was abolished. I suppose it would be one thing if the matter had been put to a vote of the people, or at least subjected to anything approaching a public debate; but we know that didn't happen. So I think we have a right to be a bit concerned about the "vested interests" of those who imposed this monetary order on society without its consent (using an emergency as a pretext for permanent change, no less).
If you take offense to the word PIMP...
Hardly. You're only degrading yourself by using it.
No anarchy here. Just good conservative principle and common sense.
Mind you, that's a pretty terrible accusation in some circles! ;^)
Apparently some of the problems with the gold standard in the 19th century were due to Britain ignoring silver as money thereby driving down its price vis a vis gold. This gave them a trading advantage against the poorer, but resource-rich countries.
No shuck, Sherlock. I'll bet you'd be among the first to say that you're against having a global one-size-fits-all economic policy. And yet here you are advocating for one.
You'll deny that, of course, and tell us that fixed exchange rates have nothing to do with economic policy, or the performance of economies (which you already said) but that's just because you don't understand this stuff well enough to understand the implications of your own proposals.
What you are essentially telling us is that we should abandon a free market in currencies, and instead fix the prices by fiat. And we can do that just this one time because we're using gold, which is special and magic and makes our price-by-edict system better than a market.
No it doesn't. It would just turn long-term control of the world's economies over to the gentle ministrations of the Russian and South African governments, who have enough gold in the ground to jack the price around all they want. You want Vladimir Putin setting the rate at which our economy can expand? (I know you don't believe you're doing that by pegging currencies to gold, but again, that's only because you don't understand how any of this really works).
You're so bent on removing "the current fiat providers" that you'd replace them with a worse bunch of fiat providers without even knowing you're doing it. You pretend that gold just "is," and there isn't anybody mucking around with its supply. Sure there is. It's not like The Lord releases so much every year from His secret stash in Heaven. Miners decide this, and some of them are governments that need not make economic sense in their production decisions. If there are military or other strategic objectives to be gained, they'll go ahead anyway. Meet your new "Fed" who decides your money supply: the Russian government. And you thought you were doing this to protect the Constitution.
Plus you'd take the currency-trading market out of the system, which is what keeps the current system honest.
That is not true. I saw a clip of Franklin Delano Roosevelt on the History channel a few months ago. He said we were going off the Gold Standard so an American dollar would continue to be worth a dollar.
:-)
Yes...much sound and fury...signifying Nothing!
If you are so clueless as to not be aware of the inflation of U.S. currency since 1913, then I do not think there is any empirical data that would persuade you. Seriously.
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