3.06 The Gold Standard

[prayfortruejustice]

@jaguarclaw Agreed: SS has BEEN highly successful -- too bad the Boombers will drain it dry, oops wait Congress already did that -- what hey have now is IOUs.. Now that the FED is the #2 holder of Treasuries, soon to become #1, and the trade imbalance continues to go the wrong way, and the FED POMO rises to 100's of billion pumped into the DOW... By 2020 the US wll be wondering how to pay the INTEREST on the debt. Forget Soc. Sec. We are becoming a 3rd World Nation.

[prayfortruejustice]

@jaguarclaw Ans: Major parts of the the New Deal where deemed Unconstitutional by the Supreme court and the laws were struck down, Social Security is a ponzi scheme whose time is ending, When the FDR killed the Gold Standard in collusion with the Banks -- European economies almost collapsed overnight -- it was the Banks that were hording Gold and the Fiat expansion (which you embrace) became a Keynesian panacea which is failing today. People don't understand economics? Damn Keynesian.

[76Chev4x4]

@prayfortruejustice Find a college or university that embraces the Austrian model. Have fun I found THREE... this is all most people know--> Keynesian.

[prayfortruejustice]

@76Chev4x4 Yes I agree. However you can sometimes find professors at state Universities who are supporters of Von Mises or have Austrian School leanings. One could argue that the Chicago boys (Milton Freedman & Co,) were not Keynesian in their view of the economic policy making and chose a free-market approach.

[lithopoonwit]

Nearly all the gold has been stolen by the Jews, for the newly- to-build Third Jewish Temple in Jerusalem, and for the Statue of the AntiChrist. They replaced the gold by worthless paper money.

[EvenKeelMedia]

Watch: "Investor Watch" for expert advice on gold and commodity investing. You can find Investor Watch on EvenKeelMedia 's channel

[FakeryTV]

Here's a tidbit there is an estimated 158000 tons of mined gold Half of it is monetized and the rest in jewelry etc

79000tx2000lbx16ozx$1000= $2,528,000,000,000

If they held every gold bar on the planet it would cover a quarter of the debt for one year

Did you know the annual GNP for the planet is around 70 trillion People think there is enough gold to sustain the gold standard

We need to do away with wage slavery & GOVERNment

Commonwealth vs Corporate

People are addicted to the lies

[buzzz121]

Are you saying buying gold is dumb? Are you basing your #'s on 1 troy oz/ could we not adjust the price based in 1 gram and therefore have enough to use as a standard?

[FakeryTV]

No to the first question. Buying gold can still be profitable when & if hyperinflation is allowed to occur. In our current times it could increase in value five fold. I'd sell anywhere up to five K & get some other hard asset

On the weights I estimated & didn't count the added 3.1 grams of troy, still it's at most 5 trillion

The state is a violent mafia

Money & wage slavery promote the idea that there isn't enough to go around & a whole lot of people are going to have to die of starvation

[inkey2]

to fakery: just like prior to 1965....there would have to be silver backed bank notes as well. Silver would be a great addition to the prescious metals based economy

[johnsmith42424]

The amount of gold in existence is absolutely irrelevnt in regards to the efficacy of the gold standard. While there are some changes and updates that would be needed beforte the re-instutution of the former gold standard, it seems to be the only historical means available to defend honest workers and entrepreneurs from the puerile policies of government statists.

[FakeryTV]

How does it provide the ability to pay our bills if there isn't enough currency in existence to take to the bank There will still be foreclosures because of scarcity unless you plan on refinancing in perpetuity

How does it protect us from corporatism Can we go stake a claim & mine our own gold or are we still subject to wage slavery for coins to pay the rent/tax on the land to grow the food to stay alive to go to work to earn the coins

Earning the right to live has to go There's enough for all

[7Hook]

Terrible terrible analysis. the annual GDP of the planet may be 70 trillion, but there is nowhere near that amount of fiat currency circulating. Know why? Because the same money gets used over and over and over. Everytime there is a transaction. GDP counts the value of all transactions. You don't need a dollar of gold for each dollar of GDP.

there is the same amount of gold per capita today as there was a hundred years ago (actually more).

[7Hook]

there is enough gold. And if the dollar value of gold is much smaller than the dollar value of fiat currency in circulation, the only change required is for the price of gold to rise.

The whole point of a gold standard is to stabilize the financial world and protect us non-financial people against banker fraud. You do this by paying attention to what the bankers are doing. When you find that their paper promises can't be trusted, you choose not to hold dollars and instead hold gold.

[7Hook]

that gives the bankers feed back - it tells them to stop leading a life of crime. But under a fiat system, their is no feedback mechanism (at least not officially). And then the bankers can merrily rip off the entire fucking planet - for example with a quadrillion worth of OTC derivatives - completely opaque,unintelligable and unaccountable. Hooray for global fraud!

[Elvishadabutler]

What does this have to do with stephen harper?????

[Armando7654]

unbelieveble!

[amiga2091]

Yeah the Federal Reserve is a PRIVATE company controlled by bankers. It is not Federal at all. Your paper money is backed by NOTHING. Buy gold and silver now!

[knab69]

The gold supply is limited and finite, therefore it limits what governments can do to steal from us. It makes governments directly steal instead of creatively steal through inflation and paying interest on our own currency. When a government steals directly, people get angry. That's why it does it incrementally, through petty excises, labor-income withholding, rip-off programs like Social Security and last but not least inflation and compound interest.

[DyShez]

The economic problems we face right now were created by two basic human factors:

1) Producers (banks, investors) have given in to their base desires to get something for nothing (which is impossible)

2) Politicians and Statists seek to violate natural law through unlawful force via regulation, regulation, regulation.

The Keynesian philosophy is a counterfeit because it's based upon scarcity. We live in an abundant universe. Human life value is the primary ingredient.

[DyShez]

Keynesian economics are fundamentally unreasonable; based upon a flawed premise, which is, "The state...can stimulate economic growth and improve stability in the private sector."

The state stimulates NOTHING. It produces only force which is its rightful role. It can only inhibit or allow the free practice of humankind's basic tenet to produce. Man is stimulated alone by his desire for meaning (good side) or power (dark side).

[7Hook]

If you read Ben Stein's "the Long and the Short of it at Goldman Sachs", you will learn the Goldman was shorting the very derivative instruments it was creating, and this practice of shorting while creating was continuing for over a year.

So, goldman knew their products were absolute garbage, a complete scam. But they kept on producing them, kept on feeding the housing bubble (with Fed help), making hundreds of millions, while also shorting this stuff. That is a public admission of fraud.

[7Hook]

what scum. this system was destructive, but they kept at it anyway. and now they want a bailout. And they know they can get away with it, because everybody depends on the financial system.

[7Hook]

just to make clear, the derivatives goldman was creating and selling to people, while also shorting them, are the type of crap financial instruments that the banking system is demanding congress remove from their balance sheets (by the bailout), or armagedon will take place.

[ultimatelinuxgeek]

Inflation does occur and so the value of every dollar goes down. However the goal of the Federal Reserve is to keep the inflation to a acceptable level, usually around 1 to 3 percent. Now it may seem unfair to skim value from consumers, however this must occur to accomidate the new participants in the economy. What you must remember is that while the value of each dollar may go down, things like wages and personal profit will increases as a direct result of these new products and services.

[7Hook]

With the financial bailouts happening how, "skimming" has turned into global extortion on the order of trillions of dollars.

This is fiat currency central banking in practice. Gains are privatized, insane risk is incentivized and rewarded, the downside of that risk is socialized - losses are dumped on dollar holders and taxpayers, and the perpetrators are not punished.

And, we will likely see, economies are destroyed.

Fiat currency has always been a horrible idea.

[ultimatelinuxgeek]

It is always easier to say simple and provactive things than to speak the truth. Frankly what is happening in the markets was greed - banks miscalculated risk and as a result suffered the consequences. To say that banks somehow got rewarded by their stupidity is to speak of lies as we have seen countless banks (Leeman Brothers, Bear Stearns,etc.) fail due to their risky behaviour. They got the punishment they deserved by the market and then some!

[7Hook]

Twaddle.

The banks will have all of the bad debts, which they created, removed from their balance sheets.

That's just the recent relief banks have received.

Since March the Fed has been allowing banks to turn in bad CDOs and CDSs in return for treasuries.

The bailout means dollar holders and taxpayers are paying for the fraudulent lending practices of wallstreet, the massive securitization and CDS fraud.

The banks ARE NOT being punished, they are being SAVED.

[7Hook]

and the billions made by wallstreet execs from their fraud will not be given back, so all of those bankers benefited, and will not be punished by the market or anyone else.

[7Hook]

the bailout will be $700 Billion, minimum, and that is the government quoted price, so it will certainly be higher.

The banking committee itself says that this bailout saves the very people who created this crisis.

[ultimatelinuxgeek]

It has nothing to do with punishing the market. The real issue is that a modern economy cannot run without a functioning financial system, regardless of what it is based on (even gold!). If banks seized up you won't be able to deposit that cheque you got because no one is willing to take the risk of taking in the deposit. You won't be covered for insurance because there is no one willing to take the risk of insuring your goods. A collapse can harm everyone, from the United States to Japan!

[7Hook]

Yep, we depend on the banking and financial system now. The result - they can maximize risks in lending practices (or securitization), take the profits when it works, and when the inevitable happens, the banking system can extort a bailout from everyone else. In any other industry, this would be called a blatant rip off.

It is bizarre that anyone except a banker would defend such a system instead of demanding a thorough re-examination of the central bank fiat currency model.

[DyShez]

that sounds like keynesian blather to me. the fed reserve is an artificial and immoral creation of man. it keeps the power in the hands of a few who manipulate it against all moral law. but it is back firing on them now. we all will pay a heavy price

[ultimatelinuxgeek]

My view is reasonably keynesian, although there is only one country in the world that implements his ideas fully - Canada. The US is half keynesian (at least policy wise), which is why it doesn't work out so well. Also the gold standard is an immoral creation of men and nature, as it pegs an economy to one meaingless measure, and it reduces the flexibility of those who want a stable money supply.

[7Hook]

"Also the gold standard is an immoral creation of men and nature, as it pegs the economy to one meaningless measure, and it reduces the flexibility of those who want a stable money supply"

Wow, what incredible ignorance.

Tell me how a fiat currency is more stable in supply than the gold supply.

Are you under the impression that the total money supply equals the total value of all property, business, goods, services in the economy, (both in dollars)?

[ultimatelinuxgeek]

The increase in the value of the economy is created by new products, new services and increased productivity. The role of the Federal Reserve is to push out enough new money to cover these new areas of the economy, and they do this by indirectly lending money to you and me to purchase these new products and services (through loans to the chartered banks).

[7Hook]

sensible people do not buy products and services on credit (loans).

I get purchasing power to buy things from working and gaining an income, not from the fiat currency system that prints money.

[ultimatelinuxgeek]

I think you might be misunderstanding the role of chartered banks (Bank of America) and the role of the Federal Reserve. The Federal Reserve generally increases the amount of money in the economy to accomidate for new products and services. It is then the chartered banks who borrow money from the Federal Reserve to lend money to consumers. Remember that chartered banks must pay interest and the interest made by the Federal Reserve goes back to the tax payers.

[ultimatelinuxgeek]

Inflating the dollar at a sustainable rate is the essence of a healthy economic system. If the value of a currency stayed fixed over time, how can an economy grow? When there are more new products, services, businesses, how exactly do we value this? When the population of a country increases, how do we account for the added consumer base? A fixed monetary system cannot answer these questions!Also remember that the Federal Reserve can add or remove money from the economy and has done so.

[fedayeen47]

the value of the dollar increases

[7Hook]

Wrong. It is productivity that is healthy.

If the economy grew, and there were more goods and services, and the money supply was constant, your money would increase in value, something most people would like.

Besides which, the supply of gold can be increased, so it is not a "fixed" monetary system.

The Fed COULD remove money, in practice it doesn't

The problem of fiat currency is it causes inflation, ie theft from dollar holders, and harm to the economy.

[ultimatelinuxgeek]

As you have suggested the supply of gold can be increased, if that is true than how does the gold standard change anything?  We would still inevitably have some inflation as new gold is put into the system. What you are suggesting is that we base all of our value on one commodity (gold) which everyone values differently, rather than having it based on an entire economy (the fiat system) which everyone is confident about and places high value and regard about. Which is the more logical argument?

[7Hook]

You are leaving out an extremely important difference between a gold system and a fiat system - fiat can be printed without limit, making currency debasement much easier, and so much more likely to occur (as is happening now).

Hyperinflation is much more likely under a fiat system.

Everyone is certainly not confident about a fiat system.

The value of gold is determined in a market. Currencies have their own markets as well, where their values can change.

[ultimatelinuxgeek]

Are you suggesting that under a gold system money cannot printed without limit? In a gold system every dollar in circulation is indexed to a quantity of gold. What is to stop corrupt entities like the government or people from reindexing the value of gold to create new money? Infact under gold the situation is worse, you have to house and protect this gold, which is something you have to do much less of under fiat.

[7Hook]

The need to house a protect gold is not a strong reason to reject a gold standard. Banks have always had a problem of protecting valuables - such as safe deposit boxes, or the paper currency in the bank. Theft is a problem for all people who own property.

Yes, under a gold standard, money can be printed excessively, and that was the problem that lead into the depression.

But, when excessive printing happens, dollar holders are free to convert the paper promise (dollars) to the physical gold.

[7Hook]

(cont.), so when more people reject the paper promise of gold (dollars) and take the gold itself, banks have less money on which to base their lending, and they must curtail lending. This fact puts a real constraint on the ability of banks to print money, or lend wrecklessly, and imposes real discipline on banks.

In a fiat system, what is a person to do when banks print excessively? there is no competing currency people may switch to and reject the fake promises of the bank.

[ultimatelinuxgeek]

Hyperinflation occurs if the people who run your central bank know nothing about economics and free markets (e.g. Argentina under military rule) and has nothing to do with the type of monetary system.

The value of a fiat currency is also determined in a market, don't tell me that somehow market forces don't act upon a fiat money system but yet they do for gold! As you have pointed out currencies (which are fiat based) have their own markets as well, and are driven by supply & demand economics!

[7Hook]

I did not want to say that market forces don't act on fiat currency. My point about gold's price in dollars being determined in the market is a response to your point that everyone values gold differently. I wanted to be clear that each person may value gold differently in relation to other products, but the price of gold itself is not different for each person, it is determined in a free market. It sounded like you were saying gold is bad as money because everyone puts a different price on it.

[ultimatelinuxgeek]

With regards to everyone is certainly not confident about a fiat system, it's important to note that if you talk gold standard, fiat standard, or any other standard, what the monetary standard is *supposed* to represent is the economy. What you are arguing is that people feel more confident about the gold standard. If this was true then the great depression would not have occured, however the excessive tightness of the gold standard and regulators strangled the global economy.

[7Hook]

I really disagree with this point, that the monetary standard is supposed to represent the economy, though maybe I'm not clear what you mean.

Do you mean that the currency represents the value of the economy in just the same way as the shares of a corporation represent the value of the corporation?

[ultimatelinuxgeek]

The monetary system is supposed to represent people's perceived value in an economy, is more or less what I am trying to say. If it doesn't represent the real value of the economy than what does it represent, the clouds in the sky?

[7Hook]

I think the monetary system is supposed to allow people to exchange value between each other much more easily by means of a common unit of exchange, as opposed to a barter system.

I think there is a relationship between the amount of money and the amount of goods and services in the economy, but if you look at it that way then it seems sensible that the banks print currency to accommodate growth in the economy. With that view, fiat currency seems sensible.

(cont.)

[7Hook]

(cont.)

what I am saying is that the increase in the value of the economy is created by all the people in the economy. But the money meant to represent that value is printed and spent by bankers first.

When bankers print, the total money supply increases, and the value of each dollar decreases. In effect, they skimmed value from the rest of the economy, but it was everyone else in the economy that created that value.

[ultimatelinuxgeek]

The only thing that gives fiat currency value is general consumer confidence.... wait a second, isn't general consumer confidence far stronger than ones perceived value in Gold? If we look at the price (value) of gold historically, we see that Gold is a highly volitile currency. How would you like your system of money to be based on something that varies wildly? Compare that to general consumer confidence which on the whole is far more stable than Gold currency!

[7Hook]

fiat currencies are far more volatile that gold, and they always end up being worthless, causing much harm in the process. This is not the case with gold, which has been valuable for thousands of years, and is still valuable.

[ultimatelinuxgeek]

What makes gold valuable? Why not use silver, aluminum, computer software, cellular phones, bread? Aren't they all worth some value? Does gold have an absolute value? Most people place different value on gold. The entire economy is far more valuable than gold, most people would agree and the fiat money system represents the entire economy not people's conifdence in one thing (which can fluctuate up and down).

[7Hook]

Gold's value - divisible, durable, convenient, consistent, valuable in itself, hard to counterfeit.

Contrast:

Silver - almost as good as gold, more abundant

Aluminum - not convenient

Computer software - easy to counterfeit, or duplicate

Cell phones - not divisible

Bread - not durable

Yes, they are all worth some value, but gold serves the role of money the best.

Can you restate the last part?

[ultimatelinuxgeek]

All the gold in the world is less valuable than the world economy. The fiat money system is a way of making the global economy a currency. Basically what I am arguing is that people have a certain belief of the value gold and that value fluctuates over time (if you don't believe me look at the price of gold through history). Everyone however is highly confident in the value of the global economy. Why base money on gold when there are more powerful things to back it like an entire economy?

[7Hook]

in a gold backed system, a bill issued by the bank is a promise from the bank that a holder of the bill is entitled to return that bill to the bank and receive an amount of gold - from the bank - in return for that bill.

Under a fiat system, a bank prints bills as it choses, and relies on legal tender laws passed by government, to force other people to accept the bills as valuable.

The bank itself promises you nothing for that bill. So, the bank is issuing claims to other people's property.

[Leobardo]

A dollar backed by gold isn't worth the amount of gold printed on the face of the currency. It is worth the government's promise that it said money will be redeemable in gold.

[ericclaptonismygod31]

Gold standard is the answer! The government has created this economic bust and is trying to reflate the economy by lowering interest rates.

[7Hook]

Great idea, but when are you going to start posting information at the website? It hasn't been updated since november 2007, and there are only about 5 total entries.

[YKoz3]

you hate niggers

[Fallof85]

GOLD VALUE = Traded in USD

USD = Traded in Euros/Pounds/Francs/Pesos/etc.

EUR = Traded in USD

GOLD VALUE = based on currency value

Gold is worth whatever the world is willing to pay for it. Free trade and free floating currencies allow the public to decide what an economy is worth.

[Rickdeckard2020]

The only thing preventing a Hobo begging in the street from loaning you a million dollars he doesnt have and getting interest on it, is a piece of paper giving him the fraudulent rights banks have conned us into giving them.

[Rickdeckard2020]

I think that its not the absence of Gold that causes the problem, its who gets to control the money supply and what is done with it.

Right now private corporations (Banks) effectively create the money out of thin air(money as debt) that the government could print without paying interest. But this racket through fractional reserve also applies to individual loans.

[KillerInstinct2006]

The absence of gold plays a big part in the inflation of the dollar bill though. I mean since when did American's get the idea that a paper is so damn valuable? It literally grows on trees, for crying out loud.