The Gold Standard: For or Against?

[Hess]

Do you support a return to the gold standard? Why or why not?
I am interested in both Europeans' and Americans' answers.
http://scratch.mit.edu/static/icons/gallery/9821.png?t=2008-11-24+08%3A53%3A42

[SilverKnight]

It should be the standard. The dollar was created by it and that's how it should be traded for.

[Osprey]

Yes.
Its real.
Otherwise, you'll soon see 0 Dollar notes running around.

[Hess]

Yes.
Its real.
Otherwise, you'll soon see 0 Dollar notes running around.

out of curiosity, what do you make of the "there's not enough Gold in the world for a Gold Standard" argument that Bernanke recently made?

[Sultan Suleiman]

I am more for combination of curency backing by gold and the economical/scientific/resource talent/pool of the currency's nation.

Because when we get mid core mining in few more decades, gold will be like mud. :P

[Osprey]

out of curiosity, what do you make of the "there's not enough Gold in the world for a Gold Standard" argument that Bernanke recently made?

That's what i think of it

www.thesilverjournal.com/breaking-myth-of-not-enough-gold-for-gold-standard-and-falling-prices-being-natural-state-of-economy/:coffee:

[Breedingvariety]

Do you support a return to the gold standard? Why or why not?
I am interested in both Europeans' and Americans' answers.
Currency is for trading, gold and silver is for saving.

Gold/Silver standard is not an economic reality, nor is it political decision. It is political acknowledgement of monetary value of gold and silver.

So I don't care if there is "gold standard" or not. Gold is valuable anyway. And it's never ending rise in currency terms confirm that. Because currencies never go up and gold never goes down in a long run.

[Osprey]

Currency is for trading, gold and silver is for saving.

Gold/Silver standard is not an economic reality, nor is it political decision. It is political acknowledgement of monetary value of gold and silver.

So I don't care if there is "gold standard" or not. Gold is valuable anyway. And it's never ending rise in currency terms confirm that. Because currencies never go up and gold never goes down in a long run.

Gold is steady.
Mined at a consistent rate.
Paper is just scary. The banksters can wave their magic wand and lo! the money is gone.

[Breedingvariety]

out of curiosity, what do you make of the "there's not enough Gold in the world for a Gold Standard" argument that Bernanke recently made?
He indirectly acknowledged how rare and valuable gold is. But really, there is enough gold and silver in the world. It is just the matter of price in currency terms. If they were to back currency with gold, the price of gold would be many multiples higher than now.

[Breedingvariety]

Very important note:- all paper/electronic gold is currency attached to the street value of gold. As such, paper gold, just like all currencies, is doomed to crash, due to defaults to deliver physical metal.

[Wickerman]

I am not sure the standard should be gold, but it should be something concrete.

[Hess]

If they were to back currency with gold, the price of gold would be many multiples higher than now.

Indeed.

If we were to return to a Gold standard, Gold would have to be revalued with a reasonable exchange ratio between an ounce of gold and a dollar/yen/ruble/etc., which would have to be set by the market.



That's what i think of it

www.thesilverjournal.com/breaking-myth-of-not-enough-gold-for-gold-standard-and-falling-prices-being-natural-state-of-economy/:coffee:

here's a simple and effective rebuttal to Bernanke by James Rickards


the quantity of gold is never an issue; the issue is one of price. There are approximately 31,000 metric tons of gold held by central banks today and another 130,000 metric tons in private hands. It is true that if this gold were valued at the current market price of about $1,650 per ounce, a money supply of equivalent value would be far less than the current money supply. This would be highly deflationary and probably result in a contraction of world trade and gross domestic product. However, the same quantity of gold valued at, say, $10,000 per ounce would support today's paper money supply at a reasonable ratio of gold-to-paper in line with historic gold standards.

[Horseman]

The Gold Standard, or printing money under the pretext of high prices of propertys or the need for economic recovery, are the two extremes. Neither one nor the second is not good. The Gold Standard makes the banks have too little money to credit and the economy slows. The rules currently used by banks, or rather lack of any rules in danger of collapsing the entire system. What is better?

[Anarch]

The Gold Standard, or printing money under the pretext of high prices of propertys or the need for economic recovery, are the two extremes. Neither one nor the second is not good. The Gold Standard makes the banks have too little money to credit and the economy slows. The rules currently used by banks, or rather lack of any rules in danger of collapsing the entire system. What is better?
The gold standard is infinitely superior. Banks that hand out easy credit bring on malinvestments that aren't backed by real money. When those malinvestments fail, interest rates jump to compensate for the losses to creditors, driving the rest of the productive economy into the ground. Stimulus spending is just more easy credit, the root of the current economic crisis.

To answer the thread: Of course I'm in favour of the gold standard. It strips power from bankers and governments and puts that power back in the hands of productive individuals, where it belongs.

[skullnboner]

Fools Gold

http://skullnboner.wordpress.com/2011/06/21/fools-gold-why-gold-isnt-money-national-economy/

[Peyrol]

Do you support a return to the gold standard? Why or why not?
I am interested in both Europeans' and Americans' answers.
http://scratch.mit.edu/static/icons/gallery/9821.png?t=2008-11-24+08%3A53%3A42

We have the 3rd largest global gold reserve, so yes.

[skullnboner]

I think it's time some of you got a basic education on just what money is, it's only purpose and what it is/should be truly based on:

“The Money Myth Exploded” was one of the first articles of Louis Even, and remains one of the most popular to explain how money is created as a debt by private banks. It is available in the form of an 8-page leaflet (tabloid format) that you can order from the “Michael” office, in several languages: English, French, Spanish, Italian, German, Polish, Portuguese.

http://www.michaeljournal.org/myth.htm

[Hess]

Fools Gold

http://skullnboner.wordpress.com/2011/06/21/fools-gold-why-gold-isnt-money-national-economy/

This is not a discussion of absolutes. Gold clearly isn't perfect, but it seems to be better than the FIAT money we have right now.

[Quorra]

Anonymous polls are gay.:p

[skullnboner]

Mike Montagne has a perfect understanding of the purpose and proper utility of money. You must take the time to learn what it is he is imparting and how it will work for the betterment of humanity (forget about the mainstream ideas and propaganda spouted about it. Those are all mouthpieces for different angles on the scam built on the foundation of ignorance about the true function and representation of money):

http://www.perfecteconomy.com/

Mike's youtube channel--Mathematically Perfected Economy PART 01A - INTRO:
http://www.youtube.com/watch?v=FtwMkIssuUQ

Here is another channel from one of many affiliated supporters of MPE:
http://www.youtube.com/user/chotaboy66/videos

[skullnboner]

This is not a discussion of absolutes. Gold clearly isn't perfect, but it seems to be better than the FIAT money we have right now.


You really have no idea what you are talking about--just mouthing terminology someone else gave you. Read the article and other helpful material I have provided on this stream. The idea of precious commodities as a standard of monies is just another evil error compelled upon the minds of unthinking people to keep the scam going. It does not and would not ever work. Those in the bankster realm and those more educated know it for what it is.

[skullnboner]

The Austrian ‘Free Market for Currencies’ Hoax:

http://realcurrencies.wordpress.com/2012/06/11/the-austrian-free-market-for-currencies-hoax/

[skullnboner]

“Money gets its value, not from gold, but from the products which that money buys.

“Simply put, money should be a sort of accountancy, credits passing from one account to another according to purchases and sales. The sum total of money will depend upon the sum total of production".

[Quorra]

:cheer_icoon:

[Hess]

I can post long, monotonous sources too.

In fact, I can post whole books that debunk the charges in your sources

look-
http://mises.org/books/goldandgoldstandard.pdf
http://mises.org/books/caseforgold.pdf
http://mises.org/rothbard/100percent.pdf



It does not and would not ever work.

yes, how foolish of me not see the brilliance of fiat money. it's much better to stick to the current system where Bureaucrats can print an unlimited amount of money to finance their ill-conceived Keynesian misadventures while destroying (http://www.marketoracle.co.uk/Article33212.html) our savings and drowning (http://www.thefiscaltimes.com/Articles/2011/08/05/New-Debt-Ratio-Signals-Out-of-Control-Spending.aspx#page1) us in debt.

[Hess]

Anonymous polls are gay.:p

I don't think this is a very controversial issue, to be honest.

[PeacefulCaribbeanDutch]

you can use anything that is valuable and have it be a standard maybe silver or how about nuclear bars haha, Oil standard too

[skullnboner]

I can post long, monotonous sources too.

In fact, I can post whole books that debunk the charges in your sources

look-
http://mises.org/books/goldandgoldstandard.pdf
http://mises.org/books/caseforgold.pdf
http://mises.org/rothbard/100percent.pdf




yes, how foolish of me not see the brilliance of fiat money. it's much better to stick to the current system where Bureaucrats can print an unlimited amount of money to finance their ill-conceived Keynesian misadventures while destroying (http://www.marketoracle.co.uk/Article33212.html) our savings and drowning (http://www.thefiscaltimes.com/Articles/2011/08/05/New-Debt-Ratio-Signals-Out-of-Control-Spending.aspx#page1) us in debt.

Looks like you are really into Jewnomics.

[skullnboner]

you can use anything that is valuable and have it be a standard maybe silver or how about nuclear bars haha, Oil standard too

“Money gets its value, not from gold, but from the products which that money buys.

“Simply put, money should be a sort of accountancy, credits passing from one account to another according to purchases and sales. The sum total of money will depend upon the sum total of production".

[Xenomorph]

No, the economy should be based on something of real value, not pretty yellow metal that really can't be used for anything practical.

Here's a good blog by someone that sums up my thoughts on the gold standard:
http://www.republicanoperative.com/blog/why-i-oppose-the-gold-standard.htm

[Hess]

Looks like you are really into Jewnomics.

huh? what do Jews have to do with this?

[Svipdag]

You cannot create buying power by printing more paper money. The more scrip there is, the less it's worth. "Increasing the money supply" by printing more bills is like increasing the amount of punch at a party by adding more water to it. As Gresham's Law says, "Bad money drives out good."

Of course, WE have to accept anything that the government chooses to call money. The legal tender laws require us to. However, they are not binding on foreigners and they soon realise that the currency has been watered down and the exchange rate is adjusted accordingly.

It remains an incontestible fact that YOU CANNOT RUN OFF GOLD ON A PRINTING PRESS. Base metal coinage can be stamped out in just as vast quantities as paper money because the raw material is cheap. Currency has to be made of an expensive material so that the government cannot go hog-wild in over-producing it .

Any precious metal could be used, but platinum is too scarce. Gold and silver both meet the requirements of scarcity and expense. This is why they have been used for currency since about 750 BC.

Paper money based on gold and/or silver can be produced in excess of the amount of gold and silver available to back it up and, unless there is a run on the treasury, no one will notice the deception. The only REALLY trustworthy currency is precious metal coinage.

When I advocate the "gold standard" , inasmuch as the government cannot be trusted not to print gold-backed paper money in excess of its gold reserves, I advocate the abolition of paper money ! This would be horribly inconvenient, but NO paper currency is trustworthy. The value of a precious metal coin can NEVER be less than its bullion value.

Gold coins would be suitable only for very high denominations. For everyday transactions, silver would be more practical, and copper is so expensive now, that it could also be used for low denomination coins.

[Breedingvariety]

Fixed gold and silver ratio has many problems. I'm for floating gold and silver standard. Gold is too much concentrated in the hands of super rich. Silver is peoples money. That's why I'm not for strictly gold standard. It must be gold and silver.

[Fortis in Arduis]

What skullnboner is talking about is almost a separate issue: the problem of interest, which is fundamental. Yes, fractional reserve banking is no good, and a gold standard would ameliorate this to extent, but the problem is usury, as it always was, and until this is dealt with, we might as well have a turd standard because it will always lead to collapse.

[Quorra]

What skullnboner is talking about is almost a separate issue: the problem of interest, which is fundamental. Yes, fractional reserve banking is no good, and a gold standard would ameliorate this to extent, but the problem is usury, as it always was, and until this is dealt with, we might as well have a turd standard because it will always lead to collapse.

Are you saying we should have no loaning?

[Fortis in Arduis]

Are you saying we should have no loaning?

Interest-free loans. Got it? ;)

Americans often find this and co-operative economics really hard to understand or accept. It was the reason I left Stormfront; I was being flamed by white supremacist capitalists for my economic suggestions.

[Quorra]

Interest-free loans. Got it? ;)

Americans often find this and co-operative economics really hard to understand or accept. It was the reason I left Stormfront; I was being flamed by white supremacist capitalists for my economic suggestions.

Yep. Free Capitalism is one of those things you've got to be in a succinct lock step with over there. I don't why because it's completely contradictory to everything they want and to Hitler.

So you mean a nationalised system of loaning. I agree, that would keep it under control and people could still be able to get a head a little as well.

[Fortis in Arduis]

Yep. Free Capitalism is one of those things you've got to be in a succinct lock step with over there. I don't why because it's completely contradictory to everything they want and to Hitler.

According to the majority of Stormfront, capitalism would work if it weren't for the j00s, and the 'mud races', who spoil the party for the good white folk, who would all be like benevolent Henry Fords. Co-operative economics is RED, and doomed to failure, despite it having been the underpinning of every good fascist state. Argue the case for co-operatives and steal from the White Man! :eek:

The only thing they like about Nazism is the stuff that looks mean, like the Holocaust (which didn't actually happen, don'tcha know? lol ) and eugenics, stopping 'fags' and naming the Joooooo!


So you mean a nationalised system of loaning. I agree, that would keep it under control and people could still be able to get a head a little as well.

Yes, why not? We should own our government, and our country.

[Quorra]

According to the majority of Stormfront, capitalism would work if it weren't for the j00s, and the 'mud races', who spoil the party for the good white folk, who would all be like benevolent Henry Fords. Co-operative economics is RED, and doomed to failure, despite it having been the underpinning of every good fascist state. Argue the case for co-operatives and steal from the White Man! :eek:

The only thing they like about Nazism is the stuff that looks mean, like the Holocaust (which didn't actually happen, don'tcha know? lol ) and eugenics, stopping 'fags' and naming the Joooooo!


Yes. lol they do only like the evil side of the Nazis. It's hilarious. They don't do their cause any favours.

[Anarch]

Interest-free loans. Got it? ;)

Americans often find this and co-operative economics really hard to understand or accept. It was the reason I left Stormfront; I was being flamed by white supremacist capitalists for my economic suggestions.

Do you understand the function that interest serves? It's the subjectively determined price that present goods are exchanged for future goods. Without interest, there is no incentive for people to loan their goods (including their cash, the medium of exchange) to others, particularly in support of entrepreneurial ventures. Human knowledge being imperfect, but nevertheless consisting of working hypotheses, there must be a counter-balance to percieved risk - which is the purpose of interest.

A nationalised system of loaning is tanamount to the nationalisation of private property, which is the foundation of capital and free enterprise. Socialism is inherently doomed because it incorporates no mechanism for economic calculation.

[Breedingvariety]

Anarch, the problem with fractional reserve banking and banking in general is that all savers are lenders. Lending should be willing investment in an enterprise. Savers want to save their excess income. Savers have been duped in to believing currencies are savings, when real savings are physical gold and silver.

But there are so many problems with financial system that I couldn't put them in a short post. But the moral would be: it's a scam.

[Breedingvariety]

People will be shocked when they see the real value of Gold and Silver & the real value of their paper.

[Anarch]

Anarch, the problem with fractional reserve banking and banking in general is that all savers are lenders. Lending should be willing investment in an enterprise. Savers want to save their excess income. Savers have been duped in to believing currencies are savings, when real savings are physical gold and silver.

But there are so many problems with financial system that I couldn't put them in a short post. But the moral would be: it's a scam.

I do not advocate fractional reserve banking :p

[Breedingvariety]

I do not advocate fractional reserve banking :p
Me neither. But if there is, it better be one national bank that does what private banks do now.

A nationalised system of loaning is tanamount to the nationalisation of private property, which is the foundation of capital and free enterprise. Socialism is inherently doomed because it incorporates no mechanism for economic calculation.
Yes I agree, politicians shouldn't loan other peoples money, and bankers shouldn't loan other peoples money, like they do now.

State should provide liquidity for commercial exchanges.

Lending should be private. That is each lender should lend at their own risk. Not like it is now, each bank lends on other peoples risk and their own benefit. The situation is: heads bankers win, tails people lose.

Private property has already been nationalized, if you pay real estate tax. Some people in Lithuania pay a tax on their property, the price of which was moron estimated during the housing and real estate boom. They couldn't sell that property for even close to the estimation. But if they stop paying, they lose it. So all the people who pay taxes on their property are renters, not owners.

[Anarch]

Me neither. But if there is, it better be one national bank that does what private banks do now.

I thoroughly disagree. A national bank implies control by the government, and we already know how that story ends.


Yes I agree, politicians shouldn't loan other peoples money, and bankers shouldn't loan other peoples money, like they do now.

I disagree on the second part. I have no objection with people using money market accounts as savings accounts. Politicians should keep their hands off other people's wallets, certainly.


State should provide liquidity for commercial exchanges.

DEAR GOD NO :eek: That's how we ended up in the situation we are now. The State should be kicked into a corner and beaten til it's black and blue... assuming it should be granted the privelige of existing.


Lending should be private. That is each lender should lend at their own risk. Not like it is now, each bank lends on other peoples risk and their own benefit. The situation is: heads bankers win, tails people lose.

If your cash (the coins and notes in your wallet) are denominated deposit reciepts for gold held in a bank, which you can then go to a bank with and then redeem your gold - well, why put the gold in a bank if you don't want it loaned out to make interest? Of course, if it's simply for security purposes, then of course banks would cater for that by having the option of holding accounts for which a small security fee would apply.


Private property has already been nationalized, if you pay real estate tax. Some people in Lithuania pay a tax on their property, the price of which was moron estimated during the housing and real estate boom. They couldn't sell that property for even close to the estimation. But if they stop paying, they lose it. So all the people who pay taxes on their property are renters, not owners.

They would indeed lose it, if the government disproportionately had the power to deprive citizens of their property. As my political views in my profile indicate, however, I am an enthusiast of reversing that equation.

[Breedingvariety]

I thoroughly disagree. A national bank implies control by the government, and we already know how that story ends.
We don't have national banks. We have private banks. Although politicians tend to fuck up everything they touch, anyway.

I have no objection with people using money market accounts as savings accounts.
Do you mean unwittingly saving money in loans? That's unwitting.

DEAR GOD NO That's how we ended up in the situation we are now.
We are not in a situation, we are in a development. Everything in finance works how it is supposed to work. Neither state, nor private sector is to blame. It is the system, that does what it is designed to do.

If your cash (the coins and notes in your wallet) are denominated deposit reciepts for gold held in a bank, which you can then go to a bank with and then redeem your gold - well, why put the gold in a bank if you don't want it loaned out to make interest?
Putting money in a bank should openly be declared to be an investment. It should be openly be declared people may lose the money they put in. Now banks present themselves as savings holders. It's not savings if it's in a bank.

But there is other problem- inflation. People who save money in currencies may not loose their savings in that currency, but they likely will lose purchasing power of that currency. That is never honestly said.

Of course, if it's simply for security purposes, then of course banks would cater for that by having the option of holding accounts for which a small security fee would apply.
All banks end up robbing the people, no matter how they masquerade themselves.

[Quorra]

It's clear that neither of you know anything about economix:p

[Svipdag]

Wrong. They know about economy, as all practical men, and especially successful business men, do. They aren't versed in and therefore are not misled by the pseudo-science of Economics.


"QVAM PARVA SAPIENTIA MVNDVS REGITVR" - Anon.

[Quorra]

Wrong. They know about economy, as all practical men, and especially successful business men, do. They aren't versed in and therefore are not misled by the pseudo-science of Economics.


"QVAM PARVA SAPIENTIA MVNDVS REGITVR" - Anon.

The economy is about buying and selling things and loaning money. You are just displaying your ignorance.

[Hess]

They aren't versed in and therefore are not misled by the pseudo-science of Economics.

I think Krugman is a good illustration of the "Economist" that never made it past his desk to see the effects of the destructive policies he so vigorously advocates.

[Quorra]

I think Krugman is a good illustration of the "Economist" that never made it past his desk to see the effects of the destructive policies he so vigorously advocates.

Krugman is a great economist.

[Hess]

Krugman is a great economist.

That's the general consensus among Statists.

This guy loves the Government so much that he actually wants the Obama Administration to prepare (http://www.huffingtonpost.com/2011/08/15/paul-krugman-fake-alien-invasion_n_926995.html) for a Mock Alien Invasion to stimulate the Economy.

[Anarch]

We don't have national banks. We have private banks. Although politicians tend to fuck up everything they touch, anyway.

Precisely why they should be kept away from as much as possible. Does Lithuania not have a Federal Reserve Bank? If so, count your blessings.


Do you mean unwittingly saving money in loans? That's unwitting.

... I'm not sure what you mean here.


We are not in a situation, we are in a development. Everything in finance works how it is supposed to work. Neither state, nor private sector is to blame. It is the system, that does what it is designed to do.

It does not work. There's tent cities across the United States and millions of unemployed, hundreds of thousands of loans have been foreclosed and Europe is slowly bankrupting itself to sustain a hemophiliac nation called Greece. The state is to blame.


Putting money in a bank should openly be declared to be an investment. It should be openly be declared people may lose the money they put in. Now banks present themselves as savings holders. It's not savings if it's in a bank.

It may be cheaper to pay a fee to have a bank store your gold than buy a suitable safe yourself. In that case, it is not an investment, but rather the use of a secure deposit box.


But there is other problem- inflation. People who save money in currencies may not loose their savings in that currency, but they likely will lose purchasing power of that currency. That is never honestly said.

This isn't a problem with a 100% gold standard. Money held in cash holdings is removed from circulation, even temporarily, raising the purchasing power of currency that is in circulation. This is barely noticable, but imagine if a government, rather than spend all of what it recieves via taxes, elected to destroy that money. It would be deflationary in its effects.


All banks end up robbing the people, no matter how they masquerade themselves.

Only if they can get away with it.

[Anarch]

The economy is about buying and selling things and loaning money. You are just displaying your ignorance.

The economy consists of production and trade. This statement subsumes the rest of what's commonly considered economics :p

[Breedingvariety]

Precisely why they should be kept away from as much as possible. Does Lithuania not have a Federal Reserve Bank? If so, count your blessings.
Lithuania has a central bank. But central banks are privately owned.

... I'm not sure what you mean here.
I mean, what people think as their money savings in a bank, actually are loans to the bank. And as banks loan money, by extension "savers" are lenders to borrowers. "Savers" hold debt, not money. That is never explained explicitly.

It does not work. There's tent cities across the United States and millions of unemployed, hundreds of thousands of loans have been foreclosed and Europe is slowly bankrupting itself to sustain a hemophiliac nation called Greece. The state is to blame.
I don't mean it is good the way it is. I mean there are no economic or financial crisises. Crisis happens when external and unforeseen factors negatively impact well working system. If everything that happens is inevitable within a system, then the system didn't experience crisis. So it works the way it is supposed to work.

It may be cheaper to pay a fee to have a bank store your gold than buy a suitable safe yourself. In that case, it is not an investment, but rather the use of a secure deposit box.
Physical gold and silver in your hands, or you don't have it. Otherwise you have a piece of paper. You say to a banker: "I trust you more than myself". Even deposit boxes have high possibility to be raided when system ends it's cycle in hyperinflation or during deflationary collapse.

Storing Your Silver Explained:
http://www.youtube.com/watch?v=en5wD7Gw3nU

This isn't a problem with a 100% gold standard.
Like I said, gold standard is just an official acknowledgement of monetary value of gold. Even under gold standard, if you hold paper, you are not holding gold, you are holding a promise to pay a certain amount of gold. USA had gold standard with one ounce of gold being valued at $20. Then, during thirties depression gold was revalued to $35. Now gold is valued at $1581.

If you look at British pound notes, it is written on them: ""I promise to pay the bearer on demand the sum of...". It used to be a certain weight of silver, now it means a certain sum of pounds.

This is barely noticable, but imagine if a government, rather than spend all of what it recieves via taxes, elected to destroy that money. It would be deflationary in its effects.

Yes, theoretically deflation is possible by various means. Practically it is extremely rare even in a short term. And it has never happened in a long run.

Only if they can get away with it.
Yes they can.

Bankers can always run away to other countries with the loot.

[Incal]

Must be difficult to carry those in the wallet.

[Anarch]

Lithuania has a central bank. But central banks are privately owned.

And yet are still bound so tightly to the State they may as well be part of it.


I mean, what people think as their money savings in a bank, actually are loans to the bank. And as banks loan money, by extension "savers" are lenders to borrowers. "Savers" hold debt, not money. That is never explained explicitly.

This need not necessarily be the case. As I said, there is no reason banks couldn't offer to store people's gold for a fee. I think most people would recognise the reality of what you're saying if they started wondering where the interest on their savings comes from.


I don't mean it is good the way it is. I mean there are no economic or financial crisises. Crisis happens when external and unforeseen factors negatively impact well working system. If everything that happens is inevitable within a system, then the system didn't experience crisis. So it works the way it is supposed to work.

It certainly is not working the way it's supposed to work. The way it's supposed to work is that we don't have financial crises because everything is working perfectly, and low inflation will raise wages, cheap credit will expand the economy and everyone will be prosperous and happy. It's not working because that plan is based on a faulty understanding of economics.


Physical gold and silver in your hands, or you don't have it. Otherwise you have a piece of paper. You say to a banker: "I trust you more than myself". Even deposit boxes have high possibility to be raided when system ends it's cycle in hyperinflation or during deflationary collapse.

When currency is backed by gold (I'm not in favour of a bimetallic currency) hyperinflation is not possible.


Like I said, gold standard is just an official acknowledgement of monetary value of gold. Even under gold standard, if you hold paper, you are not holding gold, you are holding a promise to pay a certain amount of gold. USA had gold standard with one ounce of gold being valued at $20. Then, during thirties depression gold was revalued to $35. Now gold is valued at $1581.

US currency changed to fractional reserve banking with the rise of the US Federal Reserve. US currency was formally severed from the gold standard in 1971. Gold standard currency is not just recogising the monetary value of gold, it is making currency - cash and coins - receipts against actual gold. Once instituted, the threat of bank runs would be sufficient to prevent hyperinflation.


If you look at British pound notes, it is written on them: ""I promise to pay the bearer on demand the sum of...". It used to be a certain weight of silver, now it means a certain sum of pounds.

Pounds of what?


Yes, theoretically deflation is possible by various means. Practically it is extremely rare even in a short term. And it has never happened in a long run.

Of course. Due to government's being biased towards inflation, because it arrogates wealth without being as obvious as taxation.


Yes they can.

Bankers can always run away to other countries with the loot.

The primary means banks have of looting people is via the issuance of cheap credit. With a gold standard currency, this isn't possible. And if they actually start loading the gold into shipping containers without legally owning that gold, well, the government is actually capable of arresting people. It's pretty much the purpose of government - to protect life, liberty and property.

[Breedingvariety]

The way it's supposed to work is that we don't have financial crises because everything is working perfectly, and low inflation will raise wages, cheap credit will expand the economy and everyone will be prosperous and happy.
Credit should not be cheap. The price of credit should be determined by the free market.

US currency changed to fractional reserve banking with the rise of the US Federal Reserve.
If you bring gold to a bank, bank then issues more and more paper based on that gold. Then gold represents just a fraction of the paper issued. That's fractional reserve banking. Even today all paper gold and silver are receipts for a fraction of physical gold and silver in banks vaults. That's what they call gold and silver suppression.

US currency was formally severed from the gold standard in 1971.
If it was done once, it can be done again.

Gold standard currency is not just recogising the monetary value of gold, it is making currency - cash and coins - receipts against actual gold. Once instituted, the threat of bank runs would be sufficient to prevent hyperinflation.
Even without gold standard you can buy gold with your money. Gold isn't even taxed unlike silver. The powers that be view gold as the ultimate money. They just don't want the sheaple to know that. Gold standard or no gold standard, gold is money either way.

Pounds of what?
The paper currency called British pound.

The primary means banks have of looting people is via the issuance of cheap credit. With a gold standard currency, this isn't possible. And if they actually start loading the gold into shipping containers without legally owning that gold, well, the government is actually capable of arresting people. It's pretty much the purpose of government - to protect life, liberty and property.
Assuming bankers are not above the law or law is not catered to the bankers. Most robbers need to break in to get the loot. If a banker wants to rob, he gets the loot handed to him. Only the second part of robbery- "getting away" is still applicable to a banker.

[Quorra]

The economy consists of production and trade. This statement subsumes the rest of what's commonly considered economics :p

You are clearly ignorant on these matters:p

[Anarch]

Credit should not be cheap. The price of credit should be determined by the free market.

I certainly agree.


If you bring gold to a bank, bank then issues more and more paper based on that gold. Then gold represents just a fraction of the paper issued. That's fractional reserve banking. Even today all paper gold and silver are receipts for a fraction of physical gold and silver in banks vaults. That's what they call gold and silver suppression.

Hypothetically, if I bring gold to a bank for the purposes of storage, I am given a receipt for that gold, which I may then use as currency in exchange for goods on the market. Whomever recieves my reciept may then go to the bank and withdraw the gold in exchange for handing over the reciept.

If I deposit my gold into a money market account, that is, supposing I permit my gold to be loaned out by the bank in exchange for accruing interest, I would recieve a reciept of ownership inclusive of interest agreed in the term of the account. The third person who then applies for the loan would be granted a reciept exclusive of interest on the principle. He would then use his cash to buy goods he deems to be of value and by either using them as factors of production for the purpose of making consumers goods, on which he would then hope to earn a profit higher than the principle and interest owed. His income would (presumably) be in the form of currency, or gold reciepts (or actual gold). Part of the money he earns is then given to the bank to the total of the principle and interest. The bank pockets a service fee, the principle and accrued interest are returned to the original depositor, and the profit of the entrepreneur may then be reinvested into capital goods or expended on consumers' goods however the entrepreneur sees fit.

The above is not fractional reserve banking.


If it was done once, it can be done again.

It should never have been done. The US Federal Reserve should never have been brought into existence.


Even without gold standard you can buy gold with your money. Gold isn't even taxed unlike silver. The powers that be view gold as the ultimate money. They just don't want the sheaple to know that. Gold standard or no gold standard, gold is money either way.

Try writing up a contract for the provision of goods and/or services to be paid exclusively in gold.


The paper currency called British pound.

One British pound is worth the physical weight of a bundle of paper with ink on it? The British Pound was originally declared to be worth one pound of silver.


Assuming bankers are not above the law or law is not catered to the bankers. Most robbers need to break in to get the loot. If a banker wants to rob, he gets the loot handed to him. Only the second part of robbery- "getting away" is still applicable to a banker.

If a banker empties his safe and runs, he reveals himself to be an unscruplous liar and a thief. He will have lost any and all good-will in the eyes of customers. Reputations take years to build and can be destroyed in moments. Quite asides from the repercussions of customers being rather angry (and private security companies and/or insurance agencies hunting them down and recovering stolen goods) such people are quite likely never to be able to do business again.

Then again, such bankers could be hunted down and shot.

[Anarch]

You are clearly ignorant on these matters:p

http://i1.kym-cdn.com/entries/icons/original/000/000/015/orly.jpg

:p

I'm a great fan of the Austrian school of economics :D

[Anarch]

Krugman is a great economist.

Krugman is a worthless piece of sh#t. :cool:

[Quorra]

Krugman is a worthless piece of sh#t. :cool:

It's clear you have become drunk on your own deranged ideas.:p

[Breedingvariety]

Chinese Paper Futures ‘Gold’ Scam Fleeces Investors of $60 Billion

Over 5,000 investors were bilked out of 380 billion yuan, or $59.62 billion in a scheme involving Loco London gold since 2008, according to a report in the China Daily.

“Chinese gold demand is on track to expand by seven percent to 870 tonnes this year. On its current path, China will likely surpass India as the single largest market for gold in 2012,” said Marcus Grubb, managing director at the World Gold Council.

More recently, individual investors around the globe have lived through a number of financial crises. The U.S. technology dot.com bubble bust in the equity market, the U.S. real estate collapse, the collapse of Lehman Brothers and the global financial crisis in 2008, and the European sovereign debt crisis, which is still unfolding.

Unfortunately, scams, frauds, bubbles are unlikely to go away. Many investors feel that physical ownership of gold is one way to protect and preserve assets. Something to consider.

http://www.forbes.com/sites/kitconews/2012/07/20/focus-china-gold-scam-could-translate-into-higher-demand/2/

[kabeiros]

Krugman is a great economist.

Not as great as Bernanke. LOL :D

[Hess]

Krugman is a worthless piece of sh#t. :cool:

I think he's wrong on almost everything, but even I would concede that he is an astute economist.

People can be wrong while still being smart, as is the case with him.

[Quorra]

I think he's wrong on almost everything, but even I would concede that he is an astute economist.

People can be wrong while still being smart, as is the case with him.

That's the silliest thing you've ever said.

[Hess]

That's the silliest thing you've ever said.

Truth be told, I find the lack of any substance in your posts to be quite charming.


Facts and Logic are overrated :thumb001:

[Anarch]

That's the silliest thing you've ever said.

Quoted for truth.

If he's intelligent as people suspect he is (and I'm fairly confident he doesn't have Downs Syndrome) then he should be hung, drawn and quartered because either he should know better, or he does know better and doesn't care.

[Quorra]

Quoted for truth.

If he's intelligent as people suspect he is (and I'm fairly confident he doesn't have Downs Syndrome) then he should be hung, drawn and quartered because either he should know better, or he does know better and doesn't care.

What a load of rot. I don't know where you are getting your info from.:loco:

[Hess]

If he's intelligent as people suspect he is (and I'm fairly confident he doesn't have Downs Syndrome) then he should be hung, drawn and quartered because either he should know better, or he does know better and doesn't care.

So people who disagree with you are either stupid or lying? What a constructive atitude, mate.


I go to a very Liberal College; most of my professors are Government Lovers, and I debate them all the time.

Are their positions wrong and their beliefs naive? absolutely. Are they misguided? I sure think so.

But "stupid" or "idiotic" are words I would reserve for the likes of Paris Hilton or Kesha, not people who disagree with my political views.

[Quorra]

So people who disagree with you are either stupid or lying? What a constructive atitude, mate.


I go to a very Liberal College; most of my professors are Government Lovers, and I debate them all the time.

Are their positions wrong and their beliefs naive? absolutely. Are they misguided? I sure think so.

But "stupid" or "idiotic" are words I would reserve for the likes of Paris Hilton or Kesha, not people who disagree with my political views.

Nah they are are stupid.

Kesha and Paris Hilton aren't stupid. Or at least , we have no way of really knowing.

[Anarch]

So people who disagree with you are either stupid or lying? What a constructive atitude, mate.

Not at all. But Krugman is a special case.

Of Krugman and Diocletian (http://mises.org/daily/6076/Of-Krugman-and-Diocletian)
Krugman and British Austerity (http://mises.org/daily/5939/)
Krugman attacks Ron Paul, Austrian Economics (http://archive.mises.org/19954/krugman-attacks-ron-paul-austrian-economics/)
Krugman's Intellectual Waterloo (http://mises.org/daily/3530)

Soooo... Krugman is a nutcase.