In a precious metal standard countries balance international payments with gold. The problem is that it's accompanied by price instability. A high cost country like the U.S. with heavy imports from China, would finance trade deficits by exporting bullion to China. This decreases the money supply in US and increases it in China, effectively exporting US inflation to China. Hence, contagion.
Notice no talk about how the Central Bank (The Fed) is creating money out of thin air. Not only is the US dollar worthless, ALL paper money is worth less.
The Fed faces a monetary dilemma: expand the money supply and cut short term interest rates to keep the US out of recession; or contract the money supply and raise interest rates to choke off inflation. Broadly speaking, the first favors those who have lost or are in danger of losing their jobs; the second those who haven't and aren't. It is a policy tightrope.
If there is no "control" over money supply, like a gold standard, the government can keep the ponzi scheme going as long as people accept the paper. As soon as no one wants the the paper, it become worthless. Gold and silver only, the founding fathers put it in the constitution for a reason. They got burned with the continetial dollar. All "fiat" money ends, no exceptions.
Pete, thanks for the encouraging and supportive words.
In the interview I meant what I said about having an employment perspective. There's a big divergence between what economists say is happening and what exactly is, if you've lost your job.
As far as more telly appearances are concerned, the acid test is whether I get invited back.
Vince, you look great and are very likeable, your commentry is measured and authoratative. I hope you secure more telly work as you are obviously a natural. Peter
In a precious metal standard countries balance international payments with gold. The problem is that it's accompanied by price instability. A high cost country like the U.S. with heavy imports from China, would finance trade deficits by exporting bullion to China. This decreases the money supply in US and increases it in China, effectively exporting US inflation to China. Hence, contagion.
vxwoodward 3 years ago
Notice no talk about how the Central Bank (The Fed) is creating money out of thin air. Not only is the US dollar worthless, ALL paper money is worth less.
boots920 3 years ago
The Fed faces a monetary dilemma: expand the money supply and cut short term interest rates to keep the US out of recession; or contract the money supply and raise interest rates to choke off inflation. Broadly speaking, the first favors those who have lost or are in danger of losing their jobs; the second those who haven't and aren't. It is a policy tightrope.
vxwoodward 3 years ago
If there is no "control" over money supply, like a gold standard, the government can keep the ponzi scheme going as long as people accept the paper. As soon as no one wants the the paper, it become worthless. Gold and silver only, the founding fathers put it in the constitution for a reason. They got burned with the continetial dollar. All "fiat" money ends, no exceptions.
boots920 3 years ago
Pete, thanks for the encouraging and supportive words.
In the interview I meant what I said about having an employment perspective. There's a big divergence between what economists say is happening and what exactly is, if you've lost your job.
As far as more telly appearances are concerned, the acid test is whether I get invited back.
Thanks again,
Vince
vxwoodward 3 years ago
Vince, you look great and are very likeable, your commentry is measured and authoratative. I hope you secure more telly work as you are obviously a natural. Peter
cofflarge 3 years ago