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Roubini: Gold Standard Fans Are ‘Lunatics and Hacks’
Moneynews ^ | 28 Nov 2011 | Forrest Jones

Posted on 12/04/2011 8:33:58 PM PST by Comparative Advantage

Those making public calls for a return to the gold standard are a bunch of lunatics and hacks who are doing nothing but calling for a repeat of the Great Depression, says New York University Nouriel Roubini.

Loose monetary policies have done little to lower unemployment rates and have many saying the U.S. should return to the gold standard, which pegs the value of the dollar to gold.

Supporters say a gold standard, abandoned in the 20th Century, would force the government to live within its means and end inflationary pressures that come with expansive monetary policy.

"That's total nonsense." Roubini tells Yahoo's The Daily Ticker, calling the gold bugs who support a return to the gold standard a "bunch of lunatics and hacks."

A gold standard prevents authorities from stimulating the economy when needed.

(Excerpt) Read more at moneynews.com ...


TOPICS: Business/Economy; Government; News/Current Events
KEYWORDS: goldbugs; iran; nohardmoney; nourielroubini
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1 posted on 12/04/2011 8:34:00 PM PST by Comparative Advantage
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...

Thanks Comparative Advantage.


2 posted on 12/04/2011 8:37:04 PM PST by SunkenCiv (It's never a bad time to FReep this link -- https://secure.freerepublic.com/donate/)
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To: Comparative Advantage

Keynesians see the world differently than the rest of us.


3 posted on 12/04/2011 8:39:02 PM PST by ClearCase_guy (Nothing will change until after the war. It's coming.)
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To: Comparative Advantage

We confine them to ivory towers for a reason.


4 posted on 12/04/2011 8:40:35 PM PST by null and void (This is day 1048 of America's ObamaVacation from reality.)
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To: Comparative Advantage

Maybe the gold standard’s the way to go or maybe it’s not. But this fiat thing sure ain’t working.


5 posted on 12/04/2011 8:42:30 PM PST by MichaelCorleone (Stop feeding the beast; if they don't say "Merry Christmas", don't buy.)
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To: Comparative Advantage

“Lunaticks and Hacks”...pretty well sums up the average Ron Paul aficionado.


6 posted on 12/04/2011 8:45:32 PM PST by Choose Ye This Day (The thing that counts is not what we could do, but what we actually do. -- Leo Spears)
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To: Comparative Advantage

Well, then, I am a lunatic and hack.


7 posted on 12/04/2011 8:46:40 PM PST by Wisconsinlady (DEFUND NPR, PBS, THE TSA AND THE U.N.)
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To: Comparative Advantage
A gold standard prevents authorities from stimulating the economy when needed

That's the general idea, yes...

8 posted on 12/04/2011 8:47:21 PM PST by Jim Noble (To live peacefully with credit-based consumption and fiat money, men would have to be angels.)
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To: Comparative Advantage

I appreciate the concept of a gold, or similar, standard.

Two problems I haven’t seen addressed:
- there isn’t enough of the stuff. Too many people would lose too much value to tolerate the switch.
- rate of gold supply increase does not match general wealth creation rate. Inflation or deflation ensues as GDP increases.


9 posted on 12/04/2011 8:56:15 PM PST by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com/)
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To: jiggyboy; PA Engineer; blam; TigerLikesRooster; Cheap_Hessian; CJinVA; Jet Jaguar; ...

GOLDBUG ping


10 posted on 12/04/2011 8:57:10 PM PST by OneLoyalAmerican (In God I trust, all others provide citations.)
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To: Wisconsinlady

C’mon, nobody ever said you were average!


11 posted on 12/04/2011 8:58:26 PM PST by SaxxonWoods (....The days are long, but the years are short.....)
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To: jiggyboy; PA Engineer; blam; TigerLikesRooster; Cheap_Hessian; CJinVA; Jet Jaguar; ...

GOLDBUG ping


12 posted on 12/04/2011 8:58:31 PM PST by OneLoyalAmerican (In God I trust, all others provide citations.)
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To: Comparative Advantage
calling the gold bugs who support a return to the gold standard a "bunch of lunatics and hacks."

Well then, just keep having Gov'ts borrow and spend on their cronies and social engineering projects. And then when it looks like they may default, have their Central Banks print money.

Because that's working out so well all around the world....

13 posted on 12/04/2011 8:58:51 PM PST by PGR88
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To: ctdonath2

Correct.


14 posted on 12/04/2011 9:01:12 PM PST by SaxxonWoods (....The days are long, but the years are short.....)
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To: Comparative Advantage
A return to the gold standard would be the death knell of the dismal science of economics. We could read von Mises' Human Action and get back to our businesses.

Therefore, Keynesian "economists", the demand stimulators, fear the gold standard.

First they ignore you ... we're making progress.

15 posted on 12/04/2011 9:01:26 PM PST by Kennard
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To: null and void

The confinement is imperfect, unfortunately.


16 posted on 12/04/2011 9:10:59 PM PST by coloradan (The US has become a banana republic, except without the bananas - or the republic.)
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To: ClearCase_guy
Keynesians see the world differently than the rest of us.


17 posted on 12/04/2011 9:13:57 PM PST by Lancey Howard
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To: ctdonath2
there isn’t enough of the stuff.

Prices are relative determinations. When something is elevated to the role of money in the marketplace its value is determined by the participants on an individual case by case basis. There are 'enough' yen to price everything in the world, just as there are enough Federal Reserve notes. A currency denominated in gold weight would just as readily by priced by the market against all goods available.

Too many people would lose too much value to tolerate the switch.

Who? Those who get the loans of 'new money' first? Surely not those seeing the value of the dollar driven down by Bernanke's deliberate inflation of the money supply. Why do you care more about Goldman Sachs than the people who live on your block? They're losing too much now to continue with this system of institutionalized robbery in lieu of taxation.

- rate of gold supply increase does not match general wealth creation rate. Inflation or deflation ensues as GDP increases.

Changes in value (price) consequent to relative levels of production are how free market economies prioritize production. If the rate of production of two goods are different, then an increase of the money supply can't match them now anyway. This point you raise is actually irrelevant. In the event that production in general outpaced the production of gold specifically this would actually confer additional benefit upon savers, and automatically encourage even greater levels of capital formation to support even greater capital investment and increased productivity.

18 posted on 12/04/2011 9:25:03 PM PST by Gunslingr3
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To: Comparative Advantage

You mean like all the central banks and major investment companies buying gold as fast as they can?


19 posted on 12/04/2011 9:25:50 PM PST by Secret Agent Man (I'd like to tell you, but then I'd have to kill you.)
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To: ctdonath2
G. Edward Griffin addresses this point in his book THE CREATURE FROM JEKYLL ISLAND on page 141 under the subheading: The Misleading Theory of Quantity, where he states that “The amount of gold in the world does not affect its ability to serve as money, it only affects the quantity that will be used to measure any given transaction.” This book is an excellent expose of the Federal Reserve Banking System.
20 posted on 12/04/2011 9:36:48 PM PST by Nevada Outback (Nevada Outback)
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To: OneLoyalAmerican
Well, if we flash a gold bullion, would it cause spontaneous human combustion of Roubini? It seems that may be behind his virulent hatred of gold.:-)
21 posted on 12/04/2011 9:41:21 PM PST by TigerLikesRooster (The way to crush the bourgeois is to grind them between the millstones of taxation and inflation)
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To: Gunslingr3
In the event that production in general outpaced the production of gold specifically this would actually confer additional benefit upon savers, and automatically encourage even greater levels of capital formation to support even greater capital investment and increased productivity.

What good is capital formation in a deflationary environment when no one wants to borrow or invest in new production?

22 posted on 12/04/2011 9:50:08 PM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Nevada Outback
This book is an excellent expose of the Federal Reserve Banking System.

This book is an excellent expose of the ignorance and confusion of Griffin.

23 posted on 12/04/2011 9:51:42 PM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: ctdonath2

“Two problems I haven’t seen addressed:
- there isn’t enough of the stuff. Too many people would lose too much value to tolerate the switch.
- rate of gold supply increase does not match general wealth creation rate. Inflation or deflation ensues as GDP increases.”

Ten pounds is enough. All that matters is that a “dollar” equals “X” amount of gold. This fixed standard means that they do not steal your money by steadily devaluing the dollar. In this world, prices do not continually skyrocket, and a dollar has a value. The government cannot flood the market with fiat dollars to fund wars and welfare unless they want to be open about it and tax us.

Wealth creation rate? A gold standard economy simply does not need steady increases in the amount of gold. This aregument essentially pretends that a gold standard must ape the behavior of keynsian fiat money. There is simply no need for huge increases in “money supply”. If money is tied to a fixed standard and you never find another ounce, all that means is that a dollar will have buying power and deep intrinsic value. Maybe a house would still be 1500 dollars, instead of 100 times that price with dollars with 98% of their value stripped.

This is why the story of Abe lincoln running 15 miles or whatever to return 9 cents to someone meant. There was a time that a penny, dime or quarter had value. If we found no more gold forever, then maybe a dime would have the buying power of 10 dollars. But there is no need for “more gold” unless of course, you want to finance a welfare state, or a warfare state without raising appropriate taxes.

And it would be impossible to do things like provide europe with 7 trillion in “liquidity” if they had to find 7 trillion in gold, or raise it in taxes.

Accepting YOUR beliefs, why can’t the government print me up 50,000 so i can pay off my truck? They just printed two times the GNP of China to give to Europe. The real question is why is counterfeiting a crime anymore?


24 posted on 12/04/2011 9:52:10 PM PST by DesertRhino (I was standing with a rifle, waiting for soviet paratroopers, but communists just ran for office)
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To: DesertRhino
They just printed two times the GNP of China to give to Europe.

Give?

25 posted on 12/04/2011 9:56:10 PM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: Comparative Advantage

Roubini - that sly dog! He must be a silver bug!


26 posted on 12/04/2011 9:58:15 PM PST by The Duke
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To: Comparative Advantage

It’s hard to peg anything to gold with all the hype. A warehouse full of food,soap,salt, scotch and vodka will be as valuable as gold. Hard goods. What does someone have to have, need or want? They have the gold and you have the goods. Gold then becomes as valuable as what your willing to pay to feed your family or get drunk. It’s all relative to the desires of individuals and there situation.


27 posted on 12/04/2011 9:59:26 PM PST by liberty or death
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To: Comparative Advantage
A gold standard prevents authorities from stimulating the economy when needed.

When needed, when not needed, when it is counterproductive, when elections are near, when friends in the banks just need a boost, when they just put all their money in gold and need to make a profit, when the day ends in "Y",

28 posted on 12/04/2011 10:01:56 PM PST by KarlInOhio (Herman Cain: possibly the escapee most dangerous to the Democrats since Frederick Douglass.)
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To: ctdonath2

“Two problems I haven’t seen addressed:
- there isn’t enough of the stuff. Too many people would lose too much value to tolerate the switch.
- rate of gold supply increase does not match general wealth creation rate. Inflation or deflation ensues as GDP increases.”

Ten pounds is enough. All that matters is that a “dollar” equals “X” amount of gold. This fixed standard means that they do not steal your money by steadily devaluing the dollar. In this world, prices do not continually skyrocket, and a dollar has a value. The government cannot flood the market with fiat dollars to fund wars and welfare unless they want to be open about it and tax us.

Wealth creation rate? A gold standard economy simply does not need steady increases in the amount of gold. This aregument essentially pretends that a gold standard must ape the behavior of keynsian fiat money. There is simply no need for huge increases in “money supply”. If money is tied to a fixed standard and you never find another ounce, all that means is that a dollar will have buying power and deep intrinsic value. Maybe a house would still be 1500 dollars, instead of 100 times that price with dollars with 98% of their value stripped.

This is why the story of Abe lincoln running 15 miles or whatever to return 9 cents to someone meant. There was a time that a penny, dime or quarter had value. If we found no more gold forever, then maybe a dime would have the buying power of 10 dollars. But there is no need for “more gold” unless of course, you want to finance a welfare state, or a warfare state without raising appropriate taxes.

And it would be impossible to do things like provide europe with 7 trillion in “liquidity” if they had to find 7 trillion in gold, or raise it in taxes.

Accepting YOUR beliefs, why can’t the government print me up 50,000 so i can pay off my truck? They just printed two times the GNP of China to give to Europe. The real question is why is counterfeiting a crime anymore?


29 posted on 12/04/2011 10:03:53 PM PST by DesertRhino (I was standing with a rifle, waiting for soviet paratroopers, but communists just ran for office)
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To: Comparative Advantage
"One of the major causes of the Great Depression was the existence of the gold standard," Roubini says.

By limiting the amount of money authorities can put into circulation, authorities render themselves powerless to act as a lender of last resort when needed.

Yet another Keynesian moron.

Stepping on the currency is not what you do to promote prosperity. Stepping on is what crooked drug dealers do.

30 posted on 12/04/2011 10:10:05 PM PST by cynwoody
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To: Toddsterpatriot

Yeah,, give. The Fed created it out of thin air and is “loaning” it at negative real rates. And they will tell us soon it was all paid back. It’s a joke.

Let me lay down a beat and see if you can follow it. If the Euro is in trouble, and fiat money can be created without cansequences by US. Then why are we not seeing the EU central bankers just print up all they need for all the “liquidity” they need?

For bonus points, explain why counterfeiting is still a crime. North Korea supposedly printed 45 Million (with a capitol M!) in “supernotes”. This is about .005% of the money the Fed created out of thin air for the “stimulus”.


31 posted on 12/04/2011 10:19:53 PM PST by DesertRhino (I was standing with a rifle, waiting for soviet paratroopers, but communists just ran for office)
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To: Toddsterpatriot

If the liquidity of the banks is an issue, and the currency will not be debased as a consequence of freely creating dollars out of thin air,,, then why not just create Euros out of thin air in THEIR central banks?

And if American banks face exposure and need bailing out, why, they could just “loan” them to US banks holding risky EU paper and derivatives,, and everything would just be fine, huh?


32 posted on 12/04/2011 10:25:56 PM PST by DesertRhino (I was standing with a rifle, waiting for soviet paratroopers, but communists just ran for office)
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To: DesertRhino
One thing you can be sure of, Roubini does not own any Gold or Silver.
33 posted on 12/04/2011 10:38:35 PM PST by BooBoo1000 ("Think for yourself")
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To: BooBoo1000
One thing you can be sure of, Roubini does not own any Gold or Silver.

Don't be so sure of that, His views mirror that of George Soros, and Soros, while saying pretty much the same thing about "gold bugs" owns quite a great deal of gold, even going so far, to actually trade certificates for the actual real stuff, and buying interests in mines.....

34 posted on 12/04/2011 10:54:53 PM PST by Sonny M ("oderint dum metuant")
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To: Comparative Advantage

Gold, paper (fiat), seashells, doesn’t matter what is being used as they are doomed to failure as governments always eventually end up debasing their medium of exchange. Usually due to greed leading to corruption and wars.

Wouldn’t need a gold standard if governments could control their spending which would inspire confidence instead of a lack of trust.

This banking system was doomed to fail anyway using compounding interest it mathematically couldn’t work from the beginning but they knew that at the time and only projected out about a 100 years.

The other main flaw was thinking they could smooth out or prevent business cycles from occurring.


35 posted on 12/04/2011 11:19:06 PM PST by Razzz42
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To: ClearCase_guy
Keynesians see the world differently than the rest of us.

You can say that again.


36 posted on 12/04/2011 11:25:24 PM PST by Talisker (History will show the Illuminati won the ultimate Darwin Award.)
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To: Jim Noble

(A gold standard prevents authorities from stimulating the economy when needed.)

Somehow they always want to stimulate government spending, not private saving and investment.

The Great Depression came into being because Roosevelt increased government spending, turning a big recession into a depression.


37 posted on 12/05/2011 12:07:58 AM PST by winner3000 (ss)
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To: MichaelCorleone
"Maybe the gold standard’s the way to go or maybe it’s not. But this fiat thing sure ain’t working."

The fiat thing is working fine. The dollar is more stable on a year to year basis than it was on the gold standard. The only difference is that while gold had wild swings of inflation AND deflation, fiat money always errs on the side of slight inflation, because that's the side that's good for business. Deflation is associated with depressions.

On the gold standard America had depressions every 20 years. Not so with fiat money. Once we got past the learning curve with the great depression, we've been able to avoid depressions.

The thing that is not working is congressional overspending. But if you think congress can't borrow and spend by promising that your children will pay in gold, you're wrong.

And there are a lot of powerful people such as Soros and China that would love to see the Federal Reserve dissapear and replaced with something they could manipulate like the gold standard.

38 posted on 12/05/2011 1:11:38 AM PST by DannyTN
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To: PGR88
"Well then, just keep having Gov'ts borrow and spend on their cronies and social engineering projects."

You really think congress can't borrow and spend on a gold standard? They'll just promise that your children will pay in gold.

39 posted on 12/05/2011 1:15:36 AM PST by DannyTN
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To: SunkenCiv

Folks the big propaganda move is on today, attempting to justify high oil prices (above 100) due to Iran (instead of the real monetisation going on). Don’t buy into the propaganda today.

Big Euro-U.S. spending monetisation is underway driving oil up over 100, DESPITE high unemployment. Friday faked-rigged unemployment numbers were a set-up for this propaganda.

Again, oil, the real “gold” commodity, is being driven up by monetisation...QE.


40 posted on 12/05/2011 1:43:31 AM PST by Varsity Flight (Phony-Care is the Government Work-Camp)
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To: Comparative Advantage

I have found this website to be a very useful source of information on the economy, gold, and silver.

http://goldismoney.info/forums/


41 posted on 12/05/2011 2:35:43 AM PST by Silver Sabre
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To: cynwoody

Roubini is a Marxist hack and yet the NBC-Wallstreet-cramer crooked millennials & leftist all think he’s some type of genius. I’d almost like to see Ron Paul in office just so these pricks heads explode and buffoon Bernake/Paulson/Geitner get their just rewards.


42 posted on 12/05/2011 3:03:38 AM PST by iopscusa (El Vaquero. (SC Lowcountry Cowboy))
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To: Comparative Advantage

bttt


43 posted on 12/05/2011 4:00:08 AM PST by Travis McGee (www.EnemiesForeignAndDomestic.com)
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To: Comparative Advantage

Last week I was wondering what is going to happen? I drug up the Kittco chart above and with my dividers, drew some new Y axis lines to the right extending the X axis in to 2012. I wanted to predict when gold will reach $2,000.

It looks like the 5 year trend line extended into next year will cross the mark about July 2012. The trend line can be easily drawn with a straight edge and ignores the recent hump that is apparent anomaly.

So, there you have it Gold $2,000 per ounce the end of July

Further if you make a rough calculation of the trend line curve, the slope is increasing at roughly the rate of about 22% per year. Some one can check me out. that seems high

44 posted on 12/05/2011 5:06:26 AM PST by bert (K.E. N.P. +12 ..... Crucifixion is coming)
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To: ctdonath2

.....there isn’t enough of the stuff......

You look at the valuation backward. There is always enough. Gold is not valued in $$’s, $$’s are valued in gold.


45 posted on 12/05/2011 5:09:00 AM PST by bert (K.E. N.P. +12 ..... Crucifixion is coming)
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To: DesertRhino
Yeah,, give.

A swap means give?

The Fed created it out of thin air

Yes.

and is “loaning” it at negative real rates.

A swap means no interest at all.

And they will tell us soon it was all paid back. It’s a joke.

Why is it a joke? The swaps during the crisis were all paid back.

If the Euro is in trouble, and fiat money can be created without cansequences by US. Then why are we not seeing the EU central bankers just print up all they need for all the “liquidity” they need?

I don't think anyone said no consequences. And the EU central bankers can't print all they need, because they need dollar liquidity.

For bonus points, explain why counterfeiting is still a crime.

For bonus points, explain why you think the Fed counterfeits.

46 posted on 12/05/2011 7:00:35 AM PST by Toddsterpatriot (Math is hard. Harder if you're stupid.)
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To: DannyTN

The massive, long term deficits we have now would be impossible on a gold standard and with no Federal Reserve. There would be real interest rates and immediate discipline on the Government when it’s spending became too large..


47 posted on 12/05/2011 7:09:49 AM PST by PGR88
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To: Varsity Flight

The price of oil is due to cartel control, and the price of oil drives the price of everything, except for goldmania.


48 posted on 12/05/2011 7:51:46 AM PST by SunkenCiv (It's never a bad time to FReep this link -- https://secure.freerepublic.com/donate/)
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To: Comparative Advantage

Yeah...because fiat money has worked out so well.


49 posted on 12/05/2011 7:55:03 AM PST by B Knotts (Just another Tenther)
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To: Choose Ye This Day

:’)


50 posted on 12/05/2011 8:02:02 AM PST by SunkenCiv (It's never a bad time to FReep this link -- https://secure.freerepublic.com/donate/)
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