It’s Time To Abolish The Fed And The SEC
On January 5, Ron Paul addressed the House Financial Services Committee’s hearing on the Madoff Ponzi scandal. He pointed out that Bernard Madoff was operating under the supervision of the SEC, that more regulation will only make the job of cunning fraudsters easier because they can claim to be approved by the government, and that two of the biggest government-run Ponzi schemes are the Social Security system and even the monetary system itself. These scams create a climate of fraud that sucks in the people and teaches them to imitate the government. This outrage must be stopped and it can be done by abolishing the Federal Reserve and the SEC, and returning to an honest monetary system based on gold and/or free competition in currencies.
Ron Paul: “For a good many years now, since the 1930s, every time a problem like this comes up, like in the Depression, we think that it is a lack of regulation, so we introduce regulatory agencies like the SEC, and, like after Enron, that was a major problem so we appropriate more money, and hire more people… that doesn’t do any good.
But this circumstance I think really makes my point, that the approach is completely wrong. [The approach] that the regulatory agencies are preempting people from doing bad things, just doesn’t work. There are millions and millions and millions of transactions. You can’t do it. All they do is give a false sense of security.
This is a perfect example of it. The SEC was involved with Madoff over the last decade. And that sort of gives the stamp of approval and says, “oh, must be okay”. So everybody’s guard is let down. This creates the moral hazard that allows people to make these mistakes and not to assume responsibility for themselves.
Does that mean we should ignore the problem? No! The problem comes because people commit fraud. And fraud laws are on the books. All the people involved with Enron were prosecuted under state laws of fraud, and the market took care of the stocks. But just adding on new regulations and spending millions and millions if not billions of dollars on regulating enterprise doesn’t do any good. It contributes to it. It is the problem.
We should look more to how the atmosphere is created by the Congress. If you look at the principle of fractional reserve banking, that in a way is a Ponzi scheme. This gets people doing things and building a mountain of debt… debt on debt, in this manner.
Also, if you really want to look at a big Ponzi scheme, and it is said too often that people end up doing what governments to, if we set examples, and believe me, everybody knows the Social Security system is a Ponzi scheme.
So yes, 50 billion dollars is horrendous, but what about an 8 trillion dollar loss in the stock market? So what do we do? We rush and pump in 8 trillion dollars. Where do we get the money? We create it out of thin air, furthering this whole idea of moral hazard and believing that we can create an unmanageable system.
It’s not the fault of the individuals at the SEC. They have an impossible job and they have to pretend they’re doing something to feel relevant the same way we do here in the Congress. We have to feel relevant we need the market to work, we need to get rid of the bad policies, the monetary system, and these mountains of debt. We say, well we’re relevant because we’re gonna hire more bureaucrats and we’re gonna appropriate more money we don’t have. And we’re gonna solve all our problems.
We’ve been doing this for 78 years, and we’ll do it again, but believe me, this will not solve our problems. We need to think about eliminating this whole regulatory process. And actually, we don’t need the SEC at all, and we could thrive even better and we would dwell on self-reliance, self-policing and the idea that people can’t commit fraud, but the government should not commit fraud either. We should not set an example.”
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Well I feel the Fed should be alive, but only when it comes to foreign policy. The income tax should either be replaced with national sales tax around 15% or a 30% tariff. Now personally I don’t favor Paul as much as I like Chuck Baldwin, because I feel his stance on immigration is better than Paul’s. Yet I never really will vote for Paul, because when it comes to foreign policy I don’t really care for him there. On economic policy I agree with him 99% of the time, but still not enough for my vote.
[...] to do so, will. I believe those with disabilities should be given assistance. I believe the IRS and Federal Reserve should be [...]
“Do we have to end fractional reserve banking at the same time?”
Absolutely, and then we have to prosecute those who started it and end the torutre, secret renditions, AIPAC/Egypt Lobbies and the rest which was caused by the Federal Reserve.
Then we can tear apart nine eleven like a fresh wound. Get rid of the Federal Fractional Reserve scam of crime and evil and give us back sound money.
If we end the Fed and print our own money, how do we make sure the new printers don’t cause the same kind of inflation?
Do we have to end fractional reserve banking at the same time?
Is there actually any gold in fort knox to back our own paper money?
americans are ASLEEP
wake up for gods sake wake up
henrymakow.com
infowars.com
goodnewsaboutgod.com
AMERICA IS GOING TO BE IN THE WORST DEPRESSION ITS EVER KNOWN
MY GOD even JIM Rogers says get rid of the federal reserve fractional banking system
and he packed his family up and MOVED TO CHINA
Nail on the head, Dixon.
RP is not talking about a gold standard, he’s referring to the Fractional Reserve Policies of the FED, and the fact that inflation is a constant as long as the US money supply is loaned to us at interest. This is clearly outlined in the book “Web of Debt” and movie “Zeitgeist: Addendum”. The FED is a non-private, non-government “entity” which propagates the deflation of the value of our currency, regardless of the inflation of productivity. Under a government-controlled money system outlined by Stephen Zerlanga’s American Monetary Act (http://www.monetary.org/American_Monetary_Act_version_10_feb_06.htm) the money (and therefore inflation) would be controlled by an ACTUAL government agency, subject to transparency under the freedom of information act. This worked before the FED, it would have worked with Lincoln’s Greenbacks, and it will at least improve, if not completely restore, our economy right now. However, another interesting theory is Jacque Fresco’s “Resource Based Global Economy”
It is my belief that with the intelligent management of all of the Earth’s resources, and the removal of money and any monetary system, is mandatory in order to succeed as a global human race, at the rate of population expansion, technological innovation, and rapid degradation of the environment in the last century. It is hard for me to imagine a world absent of money, trade, or barter, but the more I research the concept, the more logical and alluring it seems. Find out for yourself. http://www.thevenusproject.com
Matthew Stone, Sean, jacob frankerton… and i might have missed other scumbags, that are “participating” in this discussion with only one purpose…
to spam this place with loads of garbage, and to deviate from the main idea being discussed, which is to ABOLISH THE FEDERAL RESERVE SCAM and re-establish American Freedom again.
It is UNCONSTSITUTIONAL and ILLEGAL, and discussion about what we should have instead or will there be enough gold is irrelevant.
United States existed and prospered 140 years before the federal reserve leeched on and started robbing the Americans.
D. Dixon
Great article on what I am talking about in terms of gold production to worldwide availablility and production. The total amount of gold available to be mined and added to the current numbers is 19% over the course of 25 years. Key quote is: http://www.zealllc.com/2007/goldprod.htm
“Interestingly, according the USGS, global reserves in 1980 were estimated at 1.13 billion ounces. As of the end of 2005, global reserves were estimated at 1.35 billion ounces. So in 25 years global reserves have grown by about 19%.”
Interesting opinion article on the change of the dollar from gold to float point. http://2ndlook.wordpress.com/2008/01/21/gold-production-the-world-financial-system/
“In 1971 (August 15th), the world got the Nixon Chop – where even Governments could not redeem dollar holdings. The dollar was put on float. In little time, dollar value depreciated from US$35 per ounce of gold to US$225 per ounce – 80% reduction in value of dollar value.”
There are my quotes for my current opinion. If you search on Google for gold production current reserves mined, you will find numerous sites with the same exact information all from investing companies.
The ability to find, mine and put into circulation gold that is currently unknown is very, very small. As is the situation with oil, it is getting increasingly more expensive to mine gold out of the reserves.
And as I said before basing your currency on Gold means you are equating your currency to a certain volume of gold. In cases where there is no more gold supply, then you simply change the volume of the gold that can be traded, which inherently inflates your currency. That is the key of gold, you cannot arbitrarily change your currency to a new value, it is always specifically tied to a commodity, and that commodity is specifically quantifable amount.
Dave,
None of that matters. The pricing structures can change to accommodate the growth of the economy. As long as a loss of purchasing power doesn’t occur the deflationary pricing structure change wouldn’t truly be deflationary.
Do you understand? If I am wrong on this, please walk me through it.
time to organize and revolt
One more thing…
“The high office of the President has been used to foment a plot to destroy the Americans freedom and before I leave office I must inform the Citizen of his plight.”
PRESIDENT JOHN F. KENNEDY (10 days before he was murdered)
I think the same people doing Gaza also run our central banks, so if you do tackle this, you’re a brave man!
If this world does not find a real leader, a truely brave man, we are all toast… thats humanities real problem now.
Remember you looking at the USA, but the whole world is failing.
Oil and population we can solve if we get rid of this evil proxy government (FED) first, and fast!
Now why did Bush just warn the USA against another possible 911.
I think the USA’s real enemy lives in Washington!
Good Luck Ron
I already know you the American president, the USA needed yesterday, but missed… now what?
By the way, if you know how to get rid of the crooked politicians, then I know how to fix this financial “crisis” (fraud).
Without which, this world is going to go to war, thats becoming more obvious by the day.
“The money powers prey upon the nation in times of peace and conspire
against it in times of adversity. It is more despotic than a monarchy, more
insolent than autocracy and more selfish than a bureaucracy. It denounces,
as public enemies, all who question its methods or throw light upon its
crimes. I have two great enemies, the Southern Army in front of me and the
bankers in the rear. Of the two, the one at the rear is my greatest foe.”
PRESIDENT ABRAHAM LINCOLN – 1866
He is telling you what is wrong, 200 years in advance!
Damn the Americans in congress are stupid!
… or criminals!
Ron, you warm, but you missing the problem.
FEDs (central banks) must not be private, all banks in the chain can do fractional reserves and price money, EXCEPT the central bank, because it should belong to the people, and people charging them selves to issue their own money is just stupid!
The other reason is that when a FED charges interest it causes instability if that money is not taken out of circulation.
But here is the thing you really not getting; the FED is raping the USA.
This is the scam… the FED borrows 10 billion from China.
Then it lends 9 billion to the banking inner circle to start say a casino’s and a banking HQ’s in China.
Think about that, now the USA is paying for an asset it doesn’t even have!!!
Now let me put it together for you, you are in hyperinflation already, but you are a reserve currency and thus depreciation can be traded for hyper debt.
Look at how fast your debt is rising, in the order of $100,000 per SECOND.
If they stop that, it swaps for hyperinflation!
Yes the system is broken already.
What the FED is doing is covering its tracks with BIS and the IMF and China, because if you guys wake up, you’ll see, China makes loan, FED invests in China, China now has too much money, they make another loan, and its an endless circular banking fraud.
You don’t need regulation instead you need to send the FED administrators to jail.
Ask yourself how its possible to have such a strong currency when your banks have collapsed and you have a 12 trillion dollar debt?
That’s impossible, unless there is a gearing engine at work, look at why your debt is still flying up like a rocket and you’ll see the crime against the USA. The FED is more than dirty, its evil.
You do have to stimulate the real economy, not bail bankers and you have to give the FED back to Americans. One other thing you need to understand, the same people that control your FED, also control my FED, and many other countries. There is no loyalty to the USA, it’s a world proxy government, and if China is a better investment, they have and will screw you, and still are.
Wake up America, private central banks are evil!
couldn’t pricing structures just change on a gold standard to accommodate growth of an economy? I understand that dropping prices is considered deflationary by some of you, and thus bad. But, if the purchasing power stays the same with deflationary prices, there is no difference whatesoever.
i guess it would be hard to do business 50 years down the road using decimal points? so, solution: change the notation or deal with it.
fiat money has always failed. Rome went to a floating currency and their currency eventually collapsed. What happened next? The dark ages; where fuedal systems surfaced and economic progress was a thing of the past. Bammm! Then the return to a bimetallic standard by the Bank of England preceded the industrial revolution.
Point is: You don’t want to use a value of measurement for your currency that can change drastically in supply: from excess printing or from speculation. Currencies are a value of measurement, that is all.
Here is the problem and why we will never have an ideal government and economic policy to support an empire that can last for thousands of years: It is human nature to be greedy. Simple as that. A return to gold standard will no doubt happen after all of these fiat experiments ultimately fail. I won’t be alive to see it happen, but it will.
Also, a gold standard would limit expansion of credit and thus could make economic expansion and slower. But, the expansion would be very REAL.
The big discovery in Utah? 150 million barrels? big discovery? America consumes 20 million barrels a day and thats 25% of the worlds consumption, so that big reserve would last 2 days… Gold is becoming more and more scarce. The only new reserves are only found in “fragile remote places of the world.” – National Geographic. There are 100 million people who mine for gold. Thats a 1/3 of our population and a majority of them are slaves.. Do you know how much waste comes from mining? A company had to pay 600 million dollars for proper disposal. It takes 15 tons of rocks to make one wedding ring worth of gold and there are a million people a year getting married in India.
You posted this 3 times.
i’m sure i answered 3 questions with it also.
im guessing quite a few of you posters are on amphetamines.
lmao
yo david, you think im right about the amphetamine comment?
that or they need to seriously consider decaf.
I haven’t joined this conversation in a while, but the central idea of a commodity backed currency has still not been debunked, and most of the misgivings of a fiat currancy have not been answered.
Fact: there is not enough gold in production anywhere in the world to accurately flood the market in a way that would rapidly devalue our currency.
Fact: a fixed commodity currency does not mean there cannot be inflation or changes to inflation. It does mean that your currency is not a floating point calculation which has more standard deviations from source information as to lend itself to errors and manipulation. Inflation or deflation is a function of printing or removing bills in such a way as to change the ratio of bills to owned gold assets.
Sean as you have pointed out alot of our problem in recent years has been in our trade deficit. Which under either currencies could result in the printing of more bills, however under a gold standard there is a firm, easily calculated, easily understood inflation rate. The citizen should demand that their wages be increased to keep up with the times, and the ability to keep a standard of living is much easier.
A fiat currency is backed by a moving target that changes rapidly and is subject to many different inputs, calculations, and interpretations. GDP is a result of including and exluding information to be inputted based on the interpretation of those who want to calculate it one way or another. This can obviously change as market emerge, change, mature and die. The result is a backing by something that is not easily understood, calculated, or have something concrete in which to represent its value.
The point is this, if you want to force gov’t to report exactly what its doing so that the populous can demand change, or get the means (through increase of wages) to maintain a standard of living then you need a way of holding them accountable. A fiat currency does not lend itself to that accountability, therefore it could be concluded the only reason to have a fiat currency is to rob the people of the power to hold those in power accountable for devaluing their money.
The whole point of a commodity currency is to have a hard asset that is scare and hard to devalue (ie gold production can not readily increase the total amount of gold already in existance). That results in a hard asset as which to control a ratio of bills to commodity. That ratio readily explains the fluctuation of inflation or deflation to the populous. That accountability reduces the ability to misinform the public, which then allows those in power who do not make the right decisions to be aptly removed.
Again there is nothing democratic about a fiat currency controlled by a central, private bank that in essence controls the wealth of everyone in nation. Through manipulation of the publish inflation rate which may not keep up with the actual buying power of goods by the consumer, a transfer of wealth is defintely assured.
By this I mean by charging more money for goods and services, but not paying people more to keep the net transfer of money exchanged the same, more money is paid to those who provide those goods and services and through the net of trades and sells, that passes up the economic ladder to the rich. Deflation reverses that trend which is why all of a sudden the press is rich with downselling the hit deflation that is currently going on to the US dollar.
Fiat money and the Fed is a racketeering operation that continually robs from the poor to feed the rich and is set up to keep the general population misinformed and blind to the loss of their wealth.
Dave Says:
“The whole point of a commodity currency is to have a hard asset that is scare and hard to devalue (ie gold production can not readily increase the total amount of gold already in existance).”
Really?
Other than your crappy spelling. Do you really believe you can predict that say, my friends in South Africa aren’t coiled and ready to strike if their damn mines come on line once china or the middle east funds it?
And please when you say “FACT” as in cite your source please:
‘Fact: there is not enough gold in production anywhere in the world to accurately flood the market in a way that would rapidly devalue our currency.
Fact: a fixed commodity currency does not mean there cannot be inflation or changes to inflation.’
Really? Fact? Sooo rad, please cite?
i guess my post is fault-proof. no one can debunk my line of reasoning. hilarious.
humans trip me out.
http://www.questionsquestions.net/docs04/peakoil1.html
Actually you can have a fiat currency,if you have written with your constitution that only more currency is allowed to be produced to equal that of your GDP.This means that loans by the Fed Res to both the Govt and the retail banks is determined by a precise mathematical formula which limits their excesses.It can be done.
does anyone care to try to respond to my prior message and tell me how I am wrong?
if gold supply was constant? why would that even matter? don’t you want your value of measurement(currency value) to be as constant as the 1 centimeter or 1 inch markings on a ruler?
come on guys, respond to my post. show me where my line of reasoning is faulty.
gold supply is not constant. it is becomming more and more scarce. That is why most countries got away from the gold standard. gold mines are becomming harder and harder to find. U should check out this months issue of national geographic. They explain everything in there.
Hey Dave,
Cite your article
Please. If you are going to say gold is going up. Say when, and why? As a republican hippie from humboldt i’d like to see.
Hey Sean,
Cite your source, please?
- Matt
check out this months issue of national geographic..
Gold is becoming more and more scarce. The only new reserves are only found in “fragile remote places of the world.” – National Geographic. There are 100 million people who mine for gold. Thats a 1/3 of our population and a majority of them are slaves.. Guess how much waste comes from mining? A company had to pay 600 million dollars for proper disposal. It takes 15 tons of rocks to make one wedding ring worth of gold and there are a million people a year getting married in India.
Dear Sean,
The idea of Peak Oil (i.e., that the world’s in situ oil supplies are running out quickly) fosters fear in politicians, the public and so-called (but non-technical) experts who don’t know any better. Some do know better but may have economic/political motives to foster the fear. What is true is that the easily extracted oil is decreasing. What this means is that this easily extractable oil is being depleted faster than the same type (i.e., easily extractable) is being found. This is not the same as saying that we are running out of oil. It has been estimated (American Petroleum Institute) that only about 30% of the oil in a reservoir can be economically extracted by pumping. See above weblink. Where is the 50-70% that can’t be extracted by pumping? Yep, it is still in the ground, waiting for some bright engineer to figure out a way to recover it. If that estimate is correct, then we still have as much oil as has ever been used, apart from reserves and new discoveries, if we can extract it. Other energy producing technologies may become cost effective before we can develop methods to better optimize oil recovery. The problem is there has been little economic incentive to optimize oil recovery during times of low oil prices.
Peak Oil theory doesn’t take into consideration the discovery of oil in places that were not expected to have significant oil potential in the past. New oil discoveries are being made frequently (e.g., a 150 million barrel resource discovered in central Utah a few years ago – new discoveries occurring frequently), but they are harder to find, deeper, and are less newsworthy than the spectacular deposits of the past and the scare-news of climate change and other political issues which take center stage. These deposits will not be explored for, or discovered, as long as petroleum prices are down.
The same is true of any commodity, including gold. The easily discovered gold deposits (at the earth’s surface) have been found and are being mined. This doesn’t mean we are running out of gold, but it is harder to locate new deposits (which are deeper) and the extraction process is capital intensive. The South African mines are deep and the gold is expensive to mine. Does that mean that gold is “running out”? Not at all. In addition, much gold is produced as a byproduct to the mining of oither mineral commodities (like copper), and when production at those mines are scaled back because of lower copper prices (for example) gold production is also scaled back as a result.
If the price of gold rises, more companies will find it economically feasible to extract the gold and you will surprisingly discover that there is plenty of gold to be mined (in many countries for that matter – even in the good old USA). For example, several gold deposits have been discovered in Montana, but the ban on cyanide processing means that it can’t be economically recovered with present technology, while the ban in place. What this means is that because the demand for gold remains high, the gold comes from elsewhere, often at the human cost (and greater environmental cost) you referred to in another post. Thus, the hypocrisy of the “not-in-my-backyard” attitude is manifested.
Mining companies frequently reprocess mine tailings (i.e., waste) from the past operations to recover gold (any process, even present technology, is/was never 100% efficient). I could go on about this, but hopefully you get the point. If there is a demand for gold (or copper, or any other natural resource) as soon as the price satisfies the economics of extraction, new mines will come into production and more gold deposits will be discovered (even where you don’t expect them – not all the gold in the earth is in South Africa). What economic incentive does a company have to explore if they can’t profit from it (i.e., present situation with commodities)? You’d be surprised at how well endowed in mineral wealth the earth is. However, there should be an ethical stewardship about its extraction and use.
It may appear that gold/oil is running out, but that is only considering resources we know about. However, no one knows where all the resources are and they definitely haven’t all been identified, and even those which are reported to be exhausted still contain gold (yes, even in the USA). Many mines are put on standby during price drops, and start up again when gold rises (even after 100 years!).
None of the above is intended to minimize the social/political/environmental costs of oil consumption by the USA. It is intended simply to indicate that “we aren’t running out of oil”. Because of these other considerations it would be much better for the USA to become energy independent.
150 million barrels? big discovery? America consumes 20 million barrels a day and thats 25% of the worlds consumption, so that big reserve would last 2 days… Gold is becoming more and more scarce. The only new reserves are only found in “fragile remote places of the world.” There are 100 million people who mine for gold. Thats a 1/3 of our population and a majority of them are slaves.. Do you know how much waste comes from mining? A company had to pay 600 million dollars for proper disposal. It takes 15 tons of rocks to make one wedding ring worth of gold and there are a million people a year getting married in India.
why do you repeat your posts so much?
Its funny how some worship gold like it has mythological powers. I would rather have a car and house than a small brick of gold. I’m pretty sure they make better investments also.
I mean.. food, a home and car has value. gold and money’s only value, which is the same (spending power), is used to obtain these things..
Actually, gold mines are becoming more and more scarce. Now it takes 250 tons of rock to move just to find one wedding rings worth.. We are running out of gold!
Do you really believe so Sean?
Before we jump to any monetary conclusions, lets keep a global eye on the the most valuable, most minerable, most treasurable, regions on this planet. Do we close our eyes to the third-world regions which have been extorted of their minerals and precious metals and now are forced to labor in toil of worthless paper money? (To this date, and time, Zimbabwe 50 billion dollars = 2 loaves of bread, that is also the same as Zimbabwe 50 billion dollars = 5 American Dollars. Refer to exchange rate).
By applying the basic economical fact that a dollar (legal tender) is supposed to represent x amount of oz of gold, not “all debts, public and private.” So when we can compare those numbers, with what we already know, then we know that we have a more gold “backed” by our dollars (insufficient knowledge as to presenting gold as payment was outlawed in 1933, House Joint Resoultion # 192).
Now why is there not an adequate account amount of valuable resource, nevertheless commodity, to make up for the surplus of paper notes that they supposedly represent? Only because they are being held, to take control of supply and demand(of anything because paper backs virtually nothing, yet believed to be the opposite), and therefore controlling the market.
People cash there gold in for dollars, but cannot spend their gold, which has theoretically true value, in stores of commerce. There is a inverse reaction to this system and the way people behave in such.
Charity, goodwill, and humanistic wealth is the way to go. Pride is the root of all evils.
Anon,
In response to Sean
you can’t have an interchanging variable if your going to base money off it.. There has to be a fixed rate to gold. That means that we would have to mine more gold to print more money. Thats the whole point to it. Thats the way it was and has to be.. You should check out this months issue of national geographic to get the whole concept of mining gold because i’m not sure if your resources are very valuable.
You should go to the store and buy this months issue of national geographic and read about the slavery and death cost for your shiny metal
Sean
I read the first 4 lines of your 2nd post above and then I noticed many post thereafter. Sean you would do well to go to the library and learn something about the “nature of the issue of money”.
why don’t you watch this movie to understand a little something about money.
http://www.youtube.com/watch?v=vVkFb26u9g8
Read ‘Black Gold Stranglehold’
That book got horrible reviews and is seen as a joke! You should read the 1 star reviews instead of the 5 star next time you buy a book or anything else in that matter…
http://www.amazon.com/review/product/1581824890/ref=cm_cr_pr_hist_1?%5Fencoding=UTF8&showViewpoints=0&filterBy=addOneStar
or just go to this website… peakoil.net
OK Sean, so you only read that which follows your own belief system.
You have zero argument against what I posted, so you tell me ‘the reviews were horrible’. Even if that were true, is that your complete counterpoint? It does seem to be your MO.
Since you love to post, post some links for the horrible reviews. Please, make the links from those who do not have a dog in the hunt.
Other than that, keep your responses directed to any others left here that would waste their time dancing with you …. not me.
Someone asked me (a student) “if the government doesn’t bail out mortgage companies, does that mean all the people who had their mortgages would be homeless?”
I wasn’t sure how to answer that. I told them that I did not know what would happen, but for example, if you purchased a computer at a major chain on a payment plan and then that chain went out of business, the business would either sell the debt to someone else and now they would own your payment, or that you would by default not owe anything on your computer if they did not sell your loan.
Though I had no idea to answer, the question made me wonder if people had been misinformed to the point that they thought they would become homeless.
I can do chemistry forwards and back, but I don’t know how to answer questions like that… go figure.
It is a demonstration of how useless our elected officials have become when one man can speak in simple terms about such subjects as foreign policy and the economy and sound so refreshingly original and eloquent. The real crisis in this county today is the lack of real statesmanship. Instead, career bureaucrats that must uphold the ponzi schemes of government to insure reelection serve us. These pyramid schemes need to add new suckers in escalating numbers to keep up the pretense of success. In this way, our elected officials are passing on the fallout of the current pyramid onto future generations.
I recently heard an economic analyst say that Nostradamus could not have foreseen the implosion of the housing market. I am just a dumb carpenter from the south side of Chicago, and I have no education in economics, but I saw the collapse and the resulting domino effect coming years in advance. This whole economy, and all of its major players, is participating in a huge hoax that must be perpetuated or else face total collapse.
Three relevant articles for improving economic policy. Please feel free to share.
The recognition of facts, even when in plain sight, is challenging. Res ipsa loquitur, the facts do speak for themselves, but getting people to notice may not be easy. The first article makes the point: Joshua Bell, one of the world’s elite violinists whose CDs Romance of the Violin sold over 5 million copies, played for 45 minutes at an entrance to a Washington, D.C. subway during rush hour. Hardly anyone stopped. The reporting of this phenomenon by Washington Post writer Gene Weingarten won a Pulitzer. People didn’t recognize the brilliance of Bell’s music due to competing facts, relevant to our work with monetary reform:
1. They’re busy; it’s difficult to compete with peoples’ immediate concerns even with brilliance.
2. People pay attention to “platforms,” an office title, stage, or previous history.
3. People would have to see through a kind of lie; with monetary reform this acknowledgment has consequences of asking and answering questions that evoke cognitive dissonance such as why they were lied to, what else are lies, and what the total damage might be.
Feel free to use the quotes at the end of my paper to demonstrate that well-known people (with platforms) have supported monetary reform (quotes and background on monetary reform: Heart of Economics: http://classlink.lcusd.net/classlink/viewfiles.php?pid=4096 ). Washington Post article with video: http://www.washingtonpost.com/wp-dyn/content/article/2007/04/04/AR2007040401721.html .
Peter Dale Scott helped expose the lies of the Vietnam War with his book The War Conspiracy. He calls the phenomenon of peoples’ rejection of painful facts that will raise further painful questions “deep politics.” His following article quickly summarizes the reprehensible facts of the so-called “bailout:” no independent expert testimony through hearings, a rush to vote under threat of martial law (not widely reported and documented in the article), and having no accountability how the money is being used. Scott then points to the possibility that this is an engineered collapse of our economy that includes the use of martial law. While dangerous, this also obviously opens the door to public motivation to embrace monetary reform. http://911truth.org/article.php?story=20090108233407311 .
The last article is from Paul Craig Roberts, former editor of the Wall Street Journal and Assistant Secretary to the Treasury under President Reagan. Roberts’ title: Will there be a recovery? Again, serious in its description of a possible future, but important to be prepared to respond with policy of monetary reform: http://www.counterpunch.org/roberts01052009.html .
Carl Herman
Carl_Herman@post.harvard.edu
There is plenty of energy on the planet.Every time someone comes up with an alternate technology,the oil corporates buy them out.
They don’t like solar energy since it cannot be monopolised and Govts are less able to tax it.All that needs be done is to put far more R&D into to solar energy.Solar can also produce hydrogen energy which is clean and efficient.Many are pushing for nuclear energy since this can be monopolised.They are trying stifle solar development since this moves the balance of power back to the consumer.
The US has vast quantities of shale oil.There is no shortage of energy.Oil is monopolised by the likes of OPEC who are currently reducing supply.
All good points.
I was told by a professor that the electric car had existed for about twenty years (back in the late 90’s), but we didn’t see them because Exxon held the patent, and that we would start seeing them soon because patent was due to soon expire. Sure enough, electric hybrids were just around the corner from then.
There is not enough energy on the planet.. When we run out of oil, we will need 20,000 new nuclear plants or solar panals covering half of california to replace the energy. We only have 1.6 Km of solar panals in the world to date…
You should look up peak oil bc even the optimists say that we have about 40 or 50 years till we run out of oil.
The IEA or International Energy Agency predict we will peak oil 2020 or sooner.
It is a known fact that peak oil has occured in over 30 countries.. I guess god must have blessed the middle east to have infinate oil. You should check out the ASPO website at peakoil.net
couldn’t pricing structures just change on a gold standard to accommodate growth of an economy? I understand that dropping prices is considered deflationary by some of you, and thus bad. But, if the purchasing power stays the same with deflationary prices, there is no difference whatesoever.
i guess it would be hard to do business 50 years down the road using decimal points? so, solution: change the notation or deal with it.
fiat money has always failed. Rome went to a floating currency and their currency eventually collapsed. What happened next? The dark ages; where fuedal systems surfaced and economic progress was a thing of the past. Bammm! Then the return to a bimetallic standard by the Bank of England preceded the industrial revolution.
Point is: You don’t want to use a value of measurement for your currency that can change drastically in supply: from excess printing or from speculation. Currencies are a value of measurement, that is all.
Here is the problem and why we will never have an ideal government and economic policy to support an empire that can last for thousands of years: It is human nature to be greedy. Simple as that. A return to gold standard will no doubt happen after all of these fiat experiments ultimately fail. I won’t be alive to see it happen, but it will.
Also, a gold standard would limit expansion of credit and thus could make economic expansion and slower. But, the expansion would be very REAL.
But, oh i forgot, The current plan is to overpopulate the world and use up natural resources. This of course all occurring before humans have figured out how to create self-renewing energy and self-renewing tissues. Basically, before humans figure out how to efficiently use matter. In other words, mass in = mass out. Humans will not have enough time to figure out how to slowly capture the mass out side of the equation and reinput it into another system and so on and so forth.
actually, oil production decreased the mid 70’s causing the problem and we did not peak until 1995 but now we are running out.
Since we were running out of oil, we tapped into alaska in the mid late 1970’s but could not refine the crude before the recession hit. As soon as 1988 oil production in Alaska peaked and now they are running out as well.
Actually, it is the country that has oil which has the power and the harsh reality is that the world will run out of oil.. For a hundred years we were the largest oil producers. We were the Saudi Arabia of the past. Thats how we grew such a large millitary and had the wealth to build massive sky scrappers just like Venezuela’s growth in the past. We peaked oil in the 50’s and ran out around 1980 causing a major recession. Saudi Arabia is expected to peak at any time. Thats why we took control of Iraq just as Germany took over Buku and North Dafur removed the people from the south. We are working on a world market now and there is an extreem demand for oil because of the growth that is associated with it. Thats why gas became so expensive this past summer until September when 30 countries tapped into Iraq. The reason the Federal Reserve raises intterest rates is to try to prolong growth and oil consumption because we are going to run out in as little as 20 years. The world consumes 220 million barrels of oil a day and that number is climbing at a dangerous accelerated rate.. Without oil a society like ours cannot survive. Everything is made using oil, especially food. There is not a biomass that can replace oil either. Electric plants will fail and there is not a technology in grap reach that can add up to the equivalence of power. This poses the greastest threat of all time. The ones who survive will learn what its like to be amish.
Having a privately owned Federal Reserve Bank is legalised theft.Looking beyond their inflationary influence which has destroyed the US economy,they the Res,are stealing the increase in GDP that the US people produce annually.When you have a real increase in GDP of say 3.5%,there needs to be more money put into the system to equal that GDP.The Res by virtue of owning the US currency owns this new GDP.
To add insult to injury,they then loan this money to the US Govt and thus the US people are taxed and charged interest on their own productivity.
The only difference between slavery of the past and debt slavery,is that the modern slaves of debt,house and feed themselves under the delusion of democracy,whilst being entertained by the idiot box believing that they are free.
It is the Corporates who have that real power and our Govts pander to their every need.
haha, i just looked at the back of my ten dollar bill and it says in print, “who is ron paul?”
in fact, before the bailouts, we would have needed an extra 1.2 trillion dollar national deficit in order to have an even balance of money. Thats 1.2 trillion dollars in loans that needed to be passed out. We would have needed that much more growth in homes/cars/businesses to have be well off. This was impossible bc of high interest rates due to rising fuel and steel costs.
you know we kept worrying about the national debt rising 4 trillion dollars over the past 10 years before the bailouts, but we have had a trade deficit of 3.5 trillion dollars in that same length of time.. We need a large national defcit and more money because we have such an unfair balance of trade. With a 3% GDP, that .5 trillion dollar gain we’ve had in the past 10 years doesn’t nearly add up to the total amount of money we should be at.. If you look at the debt to gdp%, we are at the same amount of debt as we were in 1990 but we pretty much had a trade surplus so we had an abundance of money. With NAFTA and all these free trade agreements, we are giving all our money away. We have to print more and more money just to keep from being bankrupt. The problem is that other countries are getting richer by extracting our money supply.
If you cannot back your currency by gold then think of the next most precious commodity that is real.Land and infrastructure owned by your Govt.I’m Australian and our future in very intricately entwined with the US economy.We don’t have nuclear weapons and rely on the US for defence.We also have free trade agreement with you.
Why not have a currency that is redeemable in shares of the Govt owned land mass and infrastructure of your nation.Then it is backed by something more subatantial than gold.ie it can actually produce something.
Sack the Fed Res and let Congress print money backed by shares in your nation.
interesting, have you crunched any numbers on this?
not a bad plan, but the gov would still be in charge of the distribution of who gets what land.
Thanks Ron for these continuing blog posts on a variety of topics. I watched your YouTube videos for a while trying to understand your philosophy, and read some libertarian books with the same intent.
I can’t say I agree entirely with libertarian philosophy, specifically because I think it’s important to subsidize education (though I concede that private schools are often better). Nonetheless, these philosophical points you’re making are very valid, so I think they should influence progressive policy in the future, as you’ve made clear the many significant dangers of using statism to enact progressive change. The problem being that statism is like cocaine, because power is addictive, so it can easily get out of control.
Everyone else that’s challenged the Fed ends up dead. I hope Ron is taking serious precautions…
Unfortunately we’ve already crossed the even horizon of this disaster. The majority of the American sheeple are blind, soft, pink, and ignorant to the reality of this collapse.
Stick together in your own communities as this unfolds. Learn basic skills that you’ll need to survive. Once this entire current system has burned to the ground the survivors will finally have a real chance to rebuild a truly productive America in the image the founders intended. Wait patiently for that chance and seize the opportunity. It won’t be free or easy, real freedom never is.
Cite your source Mr. Freeman (last name might be a fake
)? Otherwise that was just a terrible comment that you have to support
John F. Kennedy attempted to bring back the power to issue and create currency back to the United States government (i.e. Only, and still is, three branches = executive ( now “all-powerful” due to Patriot Act), legislative, and judicial) and away from our government’s national bank, as we know by issuing those silver backed dollar certificates, and within those six months he brought back as much prosperity he could until he was ripped from this earth.
In affiant to Mr. Freeman,
In response to Matthew Stone,
Anon, R.I.P. JFK, Abe Lincoln, Malcolm X, Mahatma Gandhi, Jesus, all of our fallen who fought for our universal freedom.
I couldn’t agree more.
you know we kept worrying about the national debt rising 4 trillion dollars over the past 10 years before the bailouts, but we have had a trade deficit of 3.5 trillion dollars in that same length of time.. We need a large national defcit and more money because we have such an unfair balance of trade. With a 3% GDP, that .5 trillion dollar gain we’ve had in the past 10 years doesn’t nearly add up to the total amount of money we should be at.. If you look at the debt to gdp%, we are at the same amount of debt as we were in 1990 but we pretty much had a trade surplus so we had an abundance of money. With NAFTA and all these free trade agreements, we are giving all our money away. We have to print more and more money just to keep from being bankrupt. The problem is that other countries are getting richer by extracting our money supply. So go ahead and buy your gold. I don’t care what you do. We aren’t going to be able to go back to the gold standard and we are going to have to print 1 trillion a year to match our 1 trillion a year trade deficit so stop worrying about it. No skin off my b ack
What do you do sean? We need you working for us! Whatcha doing and how can we all help you and ron paul? And if we help you do you have a private enterprise plan? You are making money how?
That is a very broadstroke observation to say that a country like China that is going through double digit grow is growing because it is producing it’s own raw materials, and therefore we should produce our own raw materials.
You could take Japan for instance that has almost no raw materials to speak of and experienced double digit growth at one time. When you go from 3rd world to industrialized there is amazing growth in you economy. China has the world’s largest population and is currently experiencing growth based on increases in education, infrastructure, market, etc.
The US is currently not growing at a large rate because we are not reinvesting in our own infrastructure at a massive rate because there are no initiatives to do so and because our old crap still works. Expect that you will see growth over the next few years with Obama’s plans for roadway and electral grid infrastructure investments.
Economic growth is determined by new markets, and developments in old markets. Unfortunately growth is not infinite, and is fully dependant on major innovations. Until you see the next great thing explode, our markets will continue to slow in growth.
That said, the US has been a leader in intellectual property markets for a long time. That could change with all of our education problems and other countries catching up, but in general software and inginuity have always been expanding markets that we continue to dominate.
japan grew so much because they had a giant trade surplus which caused them so many problems. the point is, the steel and gas industry is the reason the federal reserve raised interest rates in the first place, to prevent hyper inflation.. we all know that and we all know that interest rates robbed money from the economy and caused this recession.. We already know that the steel industry is collapsing and is asking for a trillion dollar bailout. All i’m saying is that the federal reserve did what they did to prevent inflation which would have occured even if our money was backed by gold, our economy would have been set up to fail in the same manner. “Inefficiency + drying up money + new regulation = dead company.”
Also, like I mentioned earlier. We have such a high trade deficit because our society has changed away from production to trade. If we change to the gold standard, than we would be giving all our money away, 800 billion a year that the fed could not replace.
I believe everyone should know, but not everyone will understand. Not even his fellow congressmen seem to care or understand. I think we need fix the system instead of attacking it if we want to change anything.
Sean, Whether it is a show or not is not the point. The problem is not enough people know who ron paul is and what he stands for and they do not understand the problems facing this country hence they have no idea how to solve the problems. It is called exposure…the more you get the more people understand! Ron Paul is not seen enough to even know who he is outside his district in texas…That is a fact. I live on the east coast and i talk to people everyday who say. Ron Paul..Who is that?
Sorry man. I live on the east coast and ask to talk to ron paul supporters? nada.
ronpaul supporters email me at forestnomad@hotmail.com
Funny how they gave him 2 minutes and then let him talk for 4.
Perhaps something was sinking in? Probably not.
Go Ron.
Yeah I noticed that too, for once they didn’t cut him off!
As a result to Bush destroying the steel industry with high tarrifs, the price of oil skyrocketed. Many people blamed Katrina which actually had virtually little effect on the price of gas. It was the cost for oil pipelines and the rapid growth of the car industry that raised the price for crude oil.. Alan Greenspand raised interest rates 5 times or more in 2004 and continued raising rates through 2005 before Katrina ever hit due to rising costs of fuel. So the problem with the oil industry happened before Katrina.. Ben Benarke took over after Alan Greenspand and was going to reverse the interest rates but did not because the housing industry seemed to be improving, unfortunetly it was due to subprime mortgaging and not a strengthening economy. Actuality, the economy was losing money at a rapid pace because of interests. This is the major problem that led to unemploymet. We still have this probelem because of the steel industry. They tried telling us this when asking for a trillion dollar bailout in the summer of last year and again just a couple days ago. Bush destroyed about six major steel companies. Now only two remain and cannot produce as much as we demand. That is even what they have mentioned in their plea for help. I believe we should look into this problem and not overlook its importance. We really need to fix this problem if we want limited government. There are two ways of taking over control, by force and by stealth. We can’t achieve limited government by attacking the system, instead we must fix and build the system where it does not need government intervention. With more steel production we can increase supply and lower the cost for investments. We can build an economy that works on its own without the malpractice of the Federal Reserve whom raises interest rates because of our uncontrolable growth.. We need to control growth to eliminate it’s needs and the needs for other government intervention.
You do know the steel industry actually died because of Cold War contracts right? The company’s were publicly traded but primarily received revenue from the government. The contracts were profit margin over cost. In such a contract, the only way you make more profit is by increasing cost (instead of innovating to lower cost). As a result the end of the Cold War and reduction of the military industrial complex lowered the demand for steel. Additionally, these companies had large amounts of their profits based on public markets instead of government funds. Unable to compete the industry died by not being able to compete with newer, cost efficient worldwide competitors.
What?? I’m in the construction business. I build schools for a living. I know that Bush and the EPA set policies back in 2001 to make steel companies pay a tax on how much carbon they produce.. About six companies failed because they couldn’t afford to upgrade their production methods.. Steel is the base for all buildings. A school uses roughly around 10 million+ dollars worth to be built.
I think you saw the tail end of what was a long road of set up to fail, which is what I described. Inefficiency + drying up money + new regulation = dead company.
The system that we have is so badly broken it is repulsive. Frustrating would be a huge understatement. I could type for hours here but what really needs to happen is a primetime show with ron and peter schiff explaining how our freedoms our being destroyed by this repulsive system which has dwarfed into moral hazard gone wild…now if we could sell as many videos as girls gone wild in this sick society…we might be on to something! Thank you so much for being our voice of reason!
We don’t need a show to explain to people what are country should be. Do you think thats going to feed the poor and cure the sick??? as long as there is a majority of people in need, there is going to be a large government to help. Thats the will of the people.. We need to help the people in need in order to restore faith in limited government. We should produce more domestic steel and oil if we want to cure our inflation problem. Then we wouldn’t need a federal reserve to enforce unemployment to reduce demand.. If we had the supply, we wouldn’t have to worry about the demand (inflation). Capitalism would take hold and the economy would start functioning without government intervention.
While you are correct that production of resources located in the US would reduce imports and increase exports (of course implying that our costs are competitive in the market, which is not the case of crude, and needs a vast infrastruction improvement for Steel), again it doesn’t address the underlying issue being brought up by RP. The current issue is that the fiat system allows the government to devalue the currency and yet does not accurately reflect those numbers in its reporting. The correction for inflation to wages, taxes, etc. that are “supposedly” working off of those numbers are vastly undercorrected and the everyday citizen suffers.
Key example is the legislation RP got put in that allowed for minting of gold and silver coins to ease the ability for the everyday citizen to invest. If you take a $20 dollar denomination at the time of minting and compared its value in current US dollars it would be of $800 dollars in value. In the past 20 years the US has rarely posted inflation over 5%. How then do we come to that value?
I doubt gold has vaporized, or demand has increased dramatically. Our currency has erroded. At the sametime if wages have adjusted to match inflation, assume 5%, but true inflation is in the 15-20% range, then how does the every day person keep up?
That is the falicy of having a fiat monetary system as something that is truely capitalistic and should exist in a free market.
The federal reserve didn’t lower interest rates bc the housing market was stabilzing due to subprime mortgaging. It got an 11-0 vote to keep interest rates high after Alan Greenspan got replaced. This is the fault of poor lending methods that hid true growth. The federal reserve board was just as in the dark as we were about the future to come.. We don’t need to produce gas and steel to export. We need it here badly, and yes it would make both so much cheaper because we are competing on a world market with countries that are growing 3 times the pace as us. This is what inflation comes from, this is why the interest rates started going up in 2004. That is the whole problem. Not some system that is scientificly proven to work.
Producing here locally does nothing if it can be purchased overseas cheaper. That’s what killed Pennsylvania steel which was one of the largest producers in the US. They died after they lost the contract for the reconstruction of the World Trade Towers to smaller foreign competitors.
The same is true of oil. Oil in Texas is only profitable to drill if crude is over $60-$72 a barrel. That’s why previous to the gas hike, you rarely saw many of the fields pumping oil. The sale price would have been too high.
Your point of contributing 8T to rework the steel industry does not look at the government as a business. You inject that money into the system, and how do we get it out? What the return on investment? Whats the ROI period?
All of those have to account for the global market competition. Other than the claim of jobs, or buying US vs foreign, I haven’t seen those type of numbers on injecting money into that market, let alone a proposed plan of reducing the money in circulation to preinjection levels.
What you seem to not factor in on the “cheaper calculation” is the net effect of inflation to just make $8T to inject in the industry, as well as the time till the desired effect takes place (ie build, hire, train time). The instant effect is a devaluing of our currency while we wait for a long term effect of getting locally produced steel and because of a diminshed will make us cheap to buy by foriegners (maybe if our wages and cost are still not higher than the market will bear). Of course thats all speculation at this point because there is no study. Just the “independence” and “buy America” rhetoric.
The countries that are growing the fastest are producing their own steel. ex. china, south korea, etc… When we grew the most, we were producing 40% of the worlds steel. Now that we dont produce as much steel, we don’t build as much..
Sorry, not to drop in, but as soon as whatever commodity you pick you do that, and if i we a proponent of secondary effects and capitalism, i would plow my strong dollars (OIL)to cheap companies. Find gold, smuggle it in, then convert and take dollars out.
Is that what you want? How can you keep a gold standard when everyone wants to take you down?
China might have a crapload of gold. I would state that a gold standard would mean we abandon the free market (aka fiat currency) adhere to a communist security (we totally know better than the world) and watch china support countries like south africa just for the gold to take us down.
- Matt
Wow. I would like to comment, but numbers are so normally specific, not widespread like your chatter. You have a defensible point? One.
I ask for one cause the next point had like 10 years of scheming and anger. Make one point, make it defensible, and make it good.
These arguments about there not being enough gold to back a currency get repeated on here on all the time. Well, the statement always gets made, there’s just never any logical argument made to back it up.
It’s simply a matter of tying x units of currency to 1 ounce of gold. And under a true gold standard, someone could walk into a bank with x units of said currency and walk out with 1 ounce of gold. Just because today’s dollar (or other fiat currency) is worthless doesn’t mean it always was. All a gold standard would do would be to tie the value of the currency to a fixed amount of gold. And prevent the government from its relentless campaign of theft through inflation.
When there was 1.5 billion people at the start of the 20th Century there was a true gold standard. And how much gold had ever been mined up to that point? Central bank and treasury holdings at the time were 3,200 metric tons. Today, with a world population of 6 billion, central banks and global institutions are holding over 30,000 metric tons. So CBs are actually holding more gold per capita today yet supposedly a gold standard couldn’t exist?
http://www.mises.org/books/caseforgold.pdf
Who knows where your getting your numbers…
“In 2005 the World Gold Council estimated total global gold supply to be 3,859 tonnes and demand to be 3,754 tonnes, giving a surplus of 105 tonnes.”
link please
http://en.wikipedia.org/wiki/Gold#Production
In fact, it says that the United States only has
United States – 8,133.5 tonnes
World – 29,783.9 tonnes
World official gold holding (September 2008)
Ok, the united states holds 241 billion worth of gold or 8,133.5 tonnes. How is that going to compare to the trillions of dollars thats in our economy today?? are we going to devalue gold around the world to fit our currency??
It’s simply a matter of tying x units of currency to 1 ounce of gold …. as a commodity, it will find its correct price in a free market, sound money economy
you seem to want a seamless, painless, perfect plan
do you have one now?
ok ok, so we could just own a portion in gold.. That doesn’t solve any problem though as I explain through this whole mess of arguments.
The problems that would be solved have been pointed out over and over on this site.
Are you just here to dance?
Where does it talk about the helping the steel industry on this page? I’m sorry im new here, but I am a diehard fan for limited government. I’ve been watching ron paul for over a year back when the elections first started and i traveled across the country to attend the rally for the republic.. I’m sorry i didn’t look into your gold arguments, but I see problems past that which really should be addressed and will eliminate the need for government intervention. Unlike everyone here, i believe we can achieve this by stealth instead of force.
If every dollar must be backed by a certain amount of gold, then you cannot create money out of thin air. The gold standard says you must have the gold first. Governments find it harder to wage war, dole out entitlements and build public works with a gold standard tying them down. Banks can’t lend as much money; hence they can’t make as much money. This is why the banking interests of this country backed the creation of the Federal Reserve. They appreciated the value of a good cartel.
Actually WW1 started bc the unfair advantage of trade with the gold standard.. If banks can’t lend, than how are people going to start businesses??
Because they love credit and just want to take advantage of low interest rates!
How about saving their money??? I did it.
If the gold standard was desired so much, why would there not be one country in the world that has a hard currency. It is not there because the population of the world has exceeded the amount of gold for the use of money.. The population doubles every 50 years, do you think they are going to start producing double the amount of gold every half century. That is a complete insurmountable reality.
Very simply there are 3 good reasons why no country goes to the gold standard.
1) The ability to include and exclude figures to produce inaccurate inflation and exchange rates is not able to be done in a gold standard. However many number of dollars you have ties to a number of gold. Your exchange rate is always known. While you can create inflation to compensate for population growth (there is nothing saying you can’t), you can’t hide that your inflation is increasing and by how much.
This means you have an informed general population which is not the case within a fiat monetary system.
2) The general population is in control of the monetary system instead of private organizations and the rich elite which control them. In a fiat system the control is in a central bank, that central bank decides the money supply and the way the value is determined, who gets the money, and where it is distributed.
The gold standard limits inflation by allowing citizens to opt out of the currency and hold gold instead. A person could get all of their money in gold, wait for inflation to create 20% increase in the number of dollars it takes to buy his gold, and just increased 20% of his wealth.
This is unlike the current system where people are forced to stay within the current monetary system, and then they have no way controlling its inflation or trading price. Additionally they do not have enough wealth to trade their depreciating asset in a way which allows them to increase their wealth. The game is angled to those who control it, and it is not the everyday citizen.
3) The gold standard is not subject to speculation, and therefore is less subceptible to market swings. The hard currency does not change based on confidence in the market, it trades at whatever any other currency buys gold at and then the ratio of dollars to gold.
This therefore does not fair well for those whom have the ability to a) always monitor market forces and therefore can benefit most from a currency which trades like stock, b) can control market forces based on their ability to control supply, and/or c) have enough money to invest and ride through the waves of market forces to benefit from fluctuation in currency trades.
Again the currency is of the people, by the people, for the people, yet the current system benefits 8% of the population (or less) and robs the rest.
That’s why no government goes to a commodity backed standard. The control of the monetary system returns to the people and not to the elite which control the markets and banking industries.
What are you talking about? Your gonna be making minumum wage if your paid in paper or gold shavings so 8% will still benifit bc they will still be making big bucks.. First of all, changing to the gold standard doesn’t mean people have to come out with their figures.. 2nd, the central bank just takes money out of the bank to control the demand for goods. Thats the whole reason the gold standard would be as effective. 3rd, inflation doesnt just jump 20%, that is a horrible insignificant argument. And anybody can buy gold right now and then sell it after inflation, so that doesn’t make any sense. 4th, gold is subceptible to market swings. More production cost more money makes that money less valuable.. That was alot of typing for not one single good point.
Ok I’m game.
1) The government every year posts its inflationary rates, GDP, etc. Could the US government decide to be different than everyone else in the world and not post it? Sure, but it wouldn’t happen. That inflation rate would then reflect the change in ratio of dollars to gold.
2) Let’s say that is 100% correct, how is it beneficial to devalue a currency as a means to change demand for goods and services? Demand should be fully in control within the market not via a central bank. That is the central ideal within capitalism. Control of the demand or supply by anything other than private industry is a direct violation of that principle. It’s even worse when you consider that central bank is a government entity but run by private individuals. Seems fairly clear that this is not something designed for the greater good instead of private intrest and is not within the ideals of a free market.
3) My inflation number was an example. I didn’t do a year to year calculation to find out what an increase over 20 years from $20 to $800+ would be. I guarentee it doesn’t = 5% year over year.
While you are correct that anyone can buy gold today, you cannot trade gold for common goods since that would be a competing currency. As such, you have to have the means to survive using current money, be liquid enough to tap your savings in case you need it, and invest in gold. There was a case you can look up on MSNBC about a lawyer office that paid his employees in gold denominations to avoid taxes. While they paid no penalties to the IRS, they adamantly stated you cannot pay people in competing US currencies.
This is the central theme behind allowing for a gold standard currency. You open up gold as a currency to be traded easily and as liquid as cash. Instead of leaving it as a market commodity which must go through several processes before becoming accessible cash or transfered back into gold investment.
4) You are correct, and I never denied gold is subject to market swings. However, fiat money introduces more swings due to there being no standard of what it is based on and therefore a market standard of what it should be traded as. Gold’s value (by itself) is based on cost to extract, availabilty, and demand. Under the fiat system you add the speculative cost the currency to determine the cost of gold. This again makes fiat money much more subceptible to market swings instead of gold.
Gold has inherent value based on 3 factors. Fiat money is speculative and based on what other view its value relative to other currencies and commodities’ value. Additionally it has the same factors as any other commodity. The ability to truely relate its value is so subjective that it is obvious why it is hard to see some issues emerging.
If you don’t see that adding the subjective value that Fiat money has is inherently flawed when compared to every asset it attempts to purchase than the concept of a sound monetary system is lost…where was your point?
The market can’t keep up with the demand, thats where inflation comes from. Demand is a natural part of a growing economy. Inflation is going to happen wheather the gold limits the supply of money of the federal reserve does. My point is that we need to solve inflation if we want a sound economy. We have to amp up domestic production to reduce demand in a global market.
“3) The gold standard is not subject to speculation,” Really?
What if I took my easy fed dollars today and invested them into south african gold mine, brought the gold back then invested in illegal swiss currency accounts, sold the gold, then bought the united states.
The gold standard has to be dead, it’s the equivalent of the oil standard is now.
- Matt
Really? ‘The gold standard is not subject to speculation,’
I don’t care what you said before or after, that is a terrible, terrible, statement.
Totally incorrect.
Dave. As soon as you do that, and if i we a proponent of secondary effects and capitalism, i would plow my strong dollars to cheap compaines. Find gold, smuggle it in, then convert and take dollars out.
Strangle man, strangle.
“The total amount of gold that has ever been mined has been estimated at around 142,000 tonnes.[12] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. This is less than the value of circulating money in the U.S. alone, where more than $7.6 trillion is in circulation or in deposit (although international banking currently practices fractional reserves).[13] Therefore, a return to the gold standard would result in a significant increase in the current value of gold, which may limit its use in current applications.[14] For example, instead of using the ratio of $1,000 per ounce, the ratio can be defined as $2,000 per ounce (or $1,000 per 1/2 ounce) effectively raising the value of gold to $8 trillion. However, this is specifically a perceived disadvantage of return to the Gold standard and not the efficacy of the Gold Standard itself.” – wiki
Though your argument that there is not enough gold is invalid, it really does not matter because what is really desired is specie money not controlled by the government.
Money is just a means of exchange. Wheather if it’s blue, black, yellow, wooden, iron, copper or gold.. What gives value to the means of exchange is the effert and work gone into recieving that specific amount. If I worked so hard for a set amount in gold, I would still have the same amount of buying power as would I working for any other means of exchange.. The federal reserve intervines whenever production can’t keep up with demand. So the whole purpose is to limit the supply of money, adjusting it’s value or spending power. Creating money backed by gold would be used in the same manner as the federal reserve. The whole point of the gold standard is to limit the supply of money to keep the demand down which adjusts it’s value or spending power. We are going to have to create gold standard money just as fast as fiat money if we want to grow with the population, or else the dollar to individual ratio will become smaller and we would have to worry about serious deflation. There just isn’t enough gold around, so we will constantly be raising the value of gold and devaluing the dollar until it becomes unstable. We already know that we don’t have near enough gold to match the population we have now. There is not enough gold ever mined in the world that can match half of our deficit.. Gold standard makes unfair trade. It is what caused discrimination that led to world war 1.. Without deficit spending our economy would collapse because we gave away all our manufactoring jobs over seas and we have such a large trade deficit, that we would give all our money away! We developed a lifestyle of trade, not production, so half of our businesses would collapse because trade would become less and less when our total supply of money becomes gets shipped over seas. The fiat system is a way to control and balance the supply of money to the 21st century economy. It is flexible and has value. Inflation would come from money backed by gold or fiat. That is our main problem. We need to get ahead of production instead of trying to become low on demand if we want a healthy economy. Thats true for whatever form of money of means of exchange..
The part you are missing however is that tying money to a fixed commodity that is scarce forces you to actually show true inflation. Example: for every boullon of gold you have 1 dollar. The Fed decides we need more dollars and then the ratio changes to 1:2. Now you have inflation of 50%.
Why did we move away from a system like this, because then you can’t do math magic and make inflation, GDP and whatever else look the way you want to. You have a fixed number of money which ties to a fixed commodity. That fixed commodity has exact value world wide, which then fixes your exact trade value to other currencies. In this fiat system its all speculative, which means money trades like stocks. In general this is why the excessively rich enjoy fiat money systems and inflation (especially inflation which can be doctored up in a fiat money system), because the more wealth you have the easier it is to trade currencies like stock and win out overall.
Fixed commodity currencies means it is easier to understand for the everyday person on what is happening to the value of their money. It is easier for them to request more money from their employer, to argue against policy of printing more money and decreasing the money in their accounts, etc. This inheriently gives the power back to the people instead of the elite who can influence the game and have enough assets to win.
I believe that people should be able to become rich and am very much opposed to the redistribution of wealth. I am also against a system which does not allow individuals to move up under their own sweat and hard work. The field has been drastically narrowed due to the ability of a few to control the game, the field, the teams, the rules.
You are correct that inflation can occur in either system, however the visibility of that inflation and the impact it has on its middle and lower class citizens is vastly different than in a fiat system. This cannot endure.
That is a huge misunderstanding in the value of money.. When there is more money, there is more demand.. The amount of money printed doesn’t affect anyone until it reaches consumers hands.. You can’t have a “fixed number of money to a fixed price of commodity”…. It cost money to produce commodities, thats why the steel industry is asking for a trillion dollars to update production methods to keep up with our needs. It is the basics of economics, supply and demand.. When the price of gas goes up, it is because other countries need gas too. Other countries are growing 10% a year and buying 50% more cars every year, so it cost money for new steel pipelines for crude oil production. That is why the price of gas goes up. Just today the price of gas went up 20 cents because Russia cut off Europe from it’s reserves. Now europe is getting its oil from the middle east. Gas prices are going to get higher and higher to pay for the production of these different countries abroad and new drivers here in America.. Our economy has to grow so much every year wheather the money is fiat or gold, so the growing demand “inflation” will be the exact same.. fuel prices do effect food production costs, and does contribute to minor inflation, but steel is an ivestment commoditie, so the effect on its prices will effect all economic growth… Anybody can become wealthy if they tried. It’s not impossible to live a happy life with plenty of money if it is that you desire. People become wealthy somehow; It is the ones that try the hardest that succeed the quickest.. Also, all taxes are a redistribution of wealth. Fox news will warp your mind.
We are so much more global now? Isn’t it possible that people could actually make a run on a country if you were tied to a commodity? Or inflate it by ‘free market’ purposes?
We are tenuous enough with oil, do you really want to tie your future to something other countries could swamp us with?
E.G. if we went to a gold standard, why couldn’t middle east nations take their money from oil, as it inflates now, buy huge tracts of south africa, mine the crap out of it, and then say ‘ok peeps we got what you want, now sell us your currency at this non-freemarket rate’.
Or just smuggle gold in and buy currency at the gold rate?
When you said this… I just ignored it…
“The whole point of the gold standard is to limit the supply of money to keep the demand down which adjusts it’s value or spending power”
but then you restated it….
“When there is more money, there is more demand”
This is illogical. Just because there is more of something doesn’t mean there is more demand. ONLY when the VALUE of that item increases(inversely proportional to the price), will the demand go up.
Look two steps ahead dummy. If your dollars are backed. Why couldn’t someone (foreign country awash with oil or our treasuries) mine gold at slave wages then smuggle it in, convert, then run? BRILLIANT. Is that the dollar run you want?
We (and me) totally failed at foreseeing the oil spike as a country we shit our pants before it crashed. But I saw how the RP peeps latch on ;(
Where ron paul fails for me is that he doesn’t learn from failing back in the 80’s (Peace, Gold, and Prosperity) not sure he has a clue about reaganites.
‘Matt Stone,’ you are either an idiot, a troll or both. Don’t opine on economic or monetary subjects until you do a lot more study. Yes, theoretically some foreign country could “mine gold at slave wages” and then generate significant inflation in a gold-standard monetary system, but there’s no way they could ever generate the sort of inflation that is possible — indeed, inevitable — with paper currencies. Having a currency backed by anything (gold, silver, grain, cotton, buckskins, beaver pelts, wood, etc.) of real value (i.e. – something that takes real work to obtain), limits the amount of inflation that is possible. Look at what is going on in Zimbabwe to get an idea of what is going to happen to the U.S. dollar. The dollar is dead — smart money is selling dollar holdings and buying assets overseas. You should do the same, while there are still people fool enough to take paper dollars.
-Some Dude
P.S. — Even if one accepts your premise that paper currency is best, how do you decide who gets to control the printing of the currency? Who gets to spend and/or lend it first? (And, thus, obtain the greatest benefit from it.) What of the fact that, if it is lent out at interest (>0%), then, mathematically, there is always more money owed to the lenders than actually exists? Or do you fail to even grasp that fundamental aspect of debt-based paper currency?
Why the quotes? matt stone is my real name
I think you need to learn how natural
The peeps you abandon watched redwoods get sunk years ago, deep in the sea, old growth redwood!
resources are managed AND harvested. Complete ignorance.
And yeah, I am a california republican. So im basically a democrat in georgia, so i fight that too.
- Matt
And, really “Having a currency backed by anything (gold, silver, grain, cotton, buckskins, beaver pelts, wood, etc.) of real value (i.e. – something that takes real work to obtain), limits the amount of inflation that is possible.”
Really? You are limiting inflation? And saying there are limits to inflation? Rad.
- Matt
Ron Paul continues to shine like a beacon of light in the darkness and stupidity of the current American financial system. Go tell ‘em, Ron!!!
You need to set short terms for regulatory officials… That would eliminate most crooks in Washington.
SAME CIRCUS, DIFFERENT CLOWNS. POLITICIANS COME AND GO, WE NEED TO REFORM THE SYSTEM IN ORDER TO MAKE LASTING IMPROVEMENTS!!!!!!!!!!!!!!!!!!!!!!!!
-TYPICAL CAREER POLITICIANS VOTE IN FAVOR OF THEIR OWN CAREER AT THE EXPENSE OF THE PEOPLE THEREFORE WE MUST REQUIRE TERM LIMITS FOR ALL ELECTED OFFICES. THE U.S. CONGRESS BY ITS VERY NATURE IS A CLASS OF PEOPLE WITH PRIVILEGE AND POWER. THAT, I AM CONVINCED, IS AT THE HEART OF OUR PROBLEM. IF ALLOWED, CONGRESSMEN AND SENATORS WILL ALWAYS VOTE TO PERPETUATE THEIR OWN CAREER OF PRIVILEGE. THEY DO IT BY BRIBING THEIR COUNTRYMAN USING OUR TAX DOLLARS TO DO IT( i.e., EAR MARKS, SPECIAL INTEREST PORK BARREL SPENDING, CHARITY ENTITLEMENTS). MANDATORY CONGRESSIONAL TERM LIMITS WILL ALSO HELP TO STYMIE THE LOBBYISTS.
Ron Paul has an inspiring appetite for harmony and freedom. I would have never thought a politician could be so eloquent and thoughtful in exposing the wrong truths of the financial system.
Anyone know what, if there were a speculative attack, how much money china would make?