Channel: Fox Business
Blast from the past.
Free trade v. slave trade
"Top of the line Alpine car stereos, some costing up to $1,300 each, are made in China by young women who are paid 31 cents an hour and sit hunched over, staring into microscopes 9[product] hours a day, six days a week, soldering the fine pieces of the stereo," the report said. "Above the women is an electronic scoreboard which monitors their progress in meeting their production quota of 720 stereos a day."
Gee wiz, didn't you free traders say cheap foreign labor made cheaper consumer goods? Well heck if they are earning 31 cents an hour then those car stereos should cost like 10 dollars, not over a thousand dollars. Oh mah gawd, the free traders were liars, they are in reality neo-Confederates who want to bring slavery back to America.
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They make cheaper consumer goods in the perspective of the businessman. Go ahead and tell us how much the businessman charged for the same stereo while it was only manufactured inside the US.
Without something to compare the $1300 price with, your example is simply an arbitrary number that says nothing about the difference between the price charged for goods produced domestically and foreign.
Logically, if the stereo was cheaper to produce domestically they wouldn't manufacture it in China.
At the initial stages of the typical US product life cycle the newly innovated products are usually manufactured inside the US. Once the product has become less innovative, the manufacturing generally becomes outsourced to places with cheaper or more efficient factors of production.
In other words, innovation allows production of technologies that other countries can't produce yet. This is why the leader of progress must maintain it's relatively high levels of innovation and education in order to sustain it's position in the world.
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And hence, that difference in wages, along with our costs for oil create a trade deficit.
And if we have a trade deficit while we are on the gold standard, we might as well just ship our gold overseas right now and slit our economy's throat.
So what is your point again? That a gold standard is unreasonable? That is a great point!
"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 $8.3 trillion is in circulation or in deposit"
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Okay forest, the floor is yours.
Let's see your explanation on how trade deficits are caused by the difference in wages and the price of oil, even though the study of economics clearly dictates that trade deficits are the result of currency inflation.
I'm not talking about "Fred Economics". I'm talking about reality.
"So what is your point again? That a gold standard is unreasonable?"
I'm well aware that you have missed my point. I'll sum it up for you. Inflationary monetary policy is unreasonable and unsustainable. Furthermore, it has destroyed the equilibrium of balance of payments among nations acheived by the true gold standard.
Don't bother to figure out what the real-life consequences of your theories are, I know you prefer to be blissfully ignorant.
"Let’s see your explanation on how trade deficits are caused by the difference in wages"
Only a blind man needs a definition on why the sky is blue. Everyone else but neocon/Libertarians know that the massive difference in wages between the US and the 3rd world causes trade deficits.
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No explanation? Then you concede.
No less than what I was expecting.
Chinese cheap foreign labor does not result in cheaper goods to the US consumer. After the CCP skims off the top, after the People's Liberation Army skims off the top, after the Chinese Communist Government skims off the top through taxes, after the devalued juan skims off the top, after the rich Wallstreet banker who invested in the Chinese factory skims off the top, the price skyrockets from $10 to $1,300. If it were manufactured in America it would be cheaper and of better quality.
The same thing happened with King Cotton. After the millionaire plantation slave owner skimmed off the top, after the southern state skims of the top through taxes to maintain expensive slave patrols, then slave cotton was no cheaper then cotton picked by freemen.
And whenever free labor tries to make a competing product (American labor for the 21st century) there is plenty of wiggle room for slave labor to undercut the free labor by a couple of pennies. This effectively establishes a monopoly of slave labor. They didn't call it King Cotton for nothing.
You free traders are neo-Confederates, you just like slavery.
" If it were manufactured in America it would be cheaper and of better quality"
Fred do you realize how insane that sounds? Nobody is advocating slave labour. The fact is that if it were cheaper to manufacture in America, at a higher quality, WHY would anyone produce it in China?
You think it's all part of the 'big plan' to bring back slavery, and yet you call everyone else a conspiracy nut for reasonably doubting massive government as a solution to everything.
So let me get this straight. You are saying that there is a conspiracy by US businessmen and "libertarians/neo-cons" to operate at a loss by manufacturing their stereos in China long enough for the US to sdopt slave wages..... baaahahahah
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How is it that you were able to sniff out such a well hidden conspiracy (lol), yet you can't understand how creating money at interest to the federal reserve enslaves people to debt?
"The fact is that if it were cheaper to manufacture in America, at a higher quality, WHY would anyone produce it in China?"
Because the profit margin of slave labor is so great, the slavers can undercut free labor. It's called a monopoly, a slave labor monopoly. They only undercut when threatened, but raise prices most of the time to where the consumer pays more, most of the time. See, that's how monopolies work.
So that little bit by you free traders, "cheaper consumer items," is a load of crap.
"How is it that you were able to sniff out such a well hidden conspiracy..."
You mean the conspiracy of the slave interests like in the South where they were able to count slaves (who couldn't vote) as 3/5ths a person so they can maintain their presence in Congress disproportionate to the amount of southern freemen?
The Slave-Interests always conspire behind closed doors, in smoke filled rooms, like a cabal, electing their darkhorse candidates; and you Libertarian/Neocons provide them with free propaganda like the useful idiots you are.
"Really when we say “liberty” it’s code for “slavery”."
Ironically that's exactly how it went down with pro-slavery Southern propagandists. They threw around the word "liberty" allot too, but for the cabal of southern plantation owners it was code word for "slavery".
Okay, let's see if I'm reading this correctly.
So according to you Fred, the "slave labour monopoly" controlled by the "secret cabal" of "libertarians/neo-cons" and plantation owning businessmen has been designed to "undercut free labour" by producing more expensive and lesser quality stereos in China long enough to collapse American wages thereby creating a slave-based economy in America. So far their plan has gone undetected (save for two genius blog trolls) largely due to the fact that they use sophisticated trickery like substituting the word "slavery" with "liberty".
Free trade is really just the globalist conspiracy that enables the evil plan to be put into motion, and the trade deficit is actually just their ruse to syphon the gold from America's reserves (even though real wealth comes out of a printing press at the Fed and gold is nothing more than an ancient relic that no longer has any value or utility in the world).
The only thing that can save us from the evil clutches of the libertarian/neo-con is to dismantle international trade using protectionist tariffs and by enforcing one-sided agreements. Once we isolate ourselves from the entire world and destroy all of our gains from trade, we will all have job opportunities trying desperately to inefficiently produce essential goods and services that we no longer have easy access to. If that doesn't work out, it's okay because fiat currencies can never fail and the Fed will just bail us all out.
"Free trade is really just the globalist conspiracy that..."
Yes the rich oligarchs of the world conspire to institute free trade (and open borders) worldwide so they can get richer, they could care less of the consequences like the destruction of the middle class and rise of tyranny.
You are not part of the conspiracy, you're just a useful idiot that provides them with free propaganda and free votes.
Ohhh, I get it. So Ron Paul isn't a "whack job" simply because he believes in "a conspiracy", he just doesn't support the right conspiracy for you.
The difference between your ideals and the message Dr. Paul is spreading is that your ideals are backed by nothing. You have no economic fundamentals to explain your position. In fact you seem to have made up your own economic justification for many things. An economic model is useful only if it reflects and explains reality, a goal you have come no where close to articulating.
On the other hand, Ron Paul bases his beliefs on things that are anchored in reality, such as Austrian economics.
How many crises has Fred-onomics predicted and explained to date? lol
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"The difference between your ideals and the message Dr. Paul is spreading is that your ideals are backed by nothing. "
You're ideas are backed up by Bush, Algore, Clinton, and the European scribblers of the 19th century (primarily British). This is the great service economy predicted by your free-trade confederates in the 1990's. Enjoy. It's great isn't it. High unemployment, disappearing middle class, Communist countries becoming superpowers, expensive raw materials such as oil and steel, brain drain... Wow isn't this amazing, thanks free traders.
My ideas are backed up by American First protectionists such Henry Clay, Abraham Lincoln, the founding fathers, the Constitution, the Union (vs. the Confederacy who are on your side), the original Republican Party, etc.
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"They make cheaper consumer goods in the perspective of the businessman."
Yup, the rich get richer and Americans lose their jobs and vote socialist.
"Logically, if the stereo was cheaper to produce domestically they wouldn’t manufacture it in China."
Logically, every American will lose their jobs. There are over 3 billion people on the planet earning Chinese wages, and only a quarter of a billion Americans.
"innovation allows production of technologies that other countries can’t produce yet."
Actually innovation and labor saving mechanization is lessened a great deal when you use cheap foreign slave labor.
Then the US should work to maintain competitive levels of innovation and education, as I've been saying all along.
That does not translate into "Americans should earn slave wages". Actually it;s the exact opposite since it is innovation and education that makes a worker productive. Productivity determines wage.
I don't expect you to understand, considering I have arrived at that conclusion using LOGIC (something you simply must lack).
"Then the US should work to maintain competitive levels of innovation and education,"
Translation: Americans should be earning Chinese slave wages to be competitive.
Translation of the word competitive: Whatever benefits a slave based economy.
lol I say "this is not what is meant by these words" and Fred automatically spins it as if they mean exactly what I just explained that they don't mean.
It's all a big consipracy of neo-cons and libertarians for a slave-based economy, right Fred? Really when we say "liberty" it's code for "slavery".
So if there is such a consipracy to create "a slaved based economy", why couldn't money creation through debt a part of it?
Because money creation through debt is real? And it's more fun to be a conpiracy theorist with fake theories? At least be a consistent conspiracy theorist.
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That's why Fred and Forest
are our two favorite Big Government National Socialists (NAZI)
They believe that Big Government is "entitled" to Print as much as THEY deem necessary at OUR expense.
Hey Fred and Forest....
We the People will stop buying hard commodities
After the Central Bank, the FED, ends Fractional Reserve Banking and stops creating currency out of thin air and thereby STEALING OUR WEALTH!
Hey Fred... did you get your government subsidy this week?
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Big Government National Socialists wouldn't be called NAZI, it would be called BGNS, acronym noob.
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What are you talking about Citizen?
"We the People will stop buying hard commodities"
What are you 'We the People' going to 'stop buying' and why do I care one bit? Maybe get a job and while you are at it, voluntarily reduce your social security, that would help a lot more than buying a shiny metal.
I think you wrapped yourself so tightly in that Gadsen flag it's cutting off the oxygen to your brain.
Nice rhetoric though. Chickens for Checkups!
Read yesterday that a one-ounce piece of gold can be stretched fifty miles without breaking. Talk about stretching your money (groan).
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fred the protectionist
June 3, 2010 at 10:57 am
HAH! See, the Ronulans don’t practice what they preach.
I rest my case.
Exactly what are we doing that other Ron Paul supporters aren't doing?
We are a Realist and the reality of it all is the dollar will crash and will be totally WORTHLESS. It will go the way of the Continental and Confederate currency and just be a collector's item. Whereas Gold and Silver will still have some kind of value once the new currency comes into play.
Yes, we are sure the government will let you cash in your FRNs for the new currency but at exactly what ratio will it be?
As for us wanting to purchase Silver instead of Gold that is just common economical sense. JP Morgan is shorting Silver way more than Gold and when CFTC Chairman Gensler finally stops this ILLEGAL shorting Silver will explode. They are also shorting Gold but not to the same extreme.
Plus Silver is used more than Gold in the Industries to where supply is not keeping up with demand.
Like we said, come back 3 years from now and see who has the most wealth by purchasing the precious metals to hoarding WORTHLESS FRNs.
Then sink everything you have into Gold, otherwise you're a hypocrite.
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The more you invest in gold, the more that you're going to built wealth. Unlike Fred here who thinks you invest in money will get you far.GOOD LUCK in investing in paper money and hold on to it while you still can you FOOL! You can kiss the American Dream Goodbye.
Are you not very good at math? There are many ways to 'built (sic) wealth' - gold just happens to be the wrong way:
"Investors who paid $850 an ounce back then earned 44 percent as gold reached a record $1,226.56 on Dec. 3 in London. The Standard & Poor’s 500 stock index produced a 22-fold return with dividends reinvested, Treasuries rose 11-fold and cash in the average U.S. checking account rose at least 92 percent. On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back. "
But, it is shiny!
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I may not be good in math, but I know real wealth when I see it and it comes in Gold. & just what makes you think you know everything?
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So is this singular blind devotion a religious thing or an 'I hate anything government' thing?
Either way, might want to get that looked at... There are other forms to 'store wealth' that historically outperform gold. That is a fact.
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& You think that a piece of paper builds wealth?
No, hard work builds wealth.
Investing in ANYTHING at the wrong time, gold, property, stock market, will destroy that very same wealth.
That being said, historically, even a checking account has significantly outperformed Gold as a STORAGE OF WEALTH over the past 30 years.
It's not complicated. Families 'A' and 'B' work equally hard, family 'A' buys gold while family 'B' puts it in the stock market.
30 years later, Family 'A' has amassed a 'storage of wealth' that is 22 times what they started with, while family 'B' has a shiny rock that they need to appreciate 79% more just to BREAK EVEN.
Gold is just another version of a Fiat currency.
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I urge all Ronulans and Libertarians to invest in gold.
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Forest did you forget the discussion we had about Dr. Paul's gold investments?
You suggested your $10 000 investment into the stock market in the 1970s (when Dr. Paul bought his gold) would have become $220 000, while my $10 000 investment into gold would still "need to appreciate another 79% just to break even".
However, your math didn't add up. Simply put, my $10 000 investment into gold at a cool $35 per ounce netted me 285.7 ounces of gold. Valued in today's price, my 285.7 ounces of gold are worth over $340 000, outperforming your $220 000 investment by 120 thousand dollars without even earning a rate of return. So much for "not breaking even".
That's done simply by protecting against the effects of the inflation of the dollar. I could have out-performed you further had I switched my gold holdings back and forth into low risk investments in order to earn a rate of return in the market during times of low inflation.
Sure, you could have chosen a better investment in retrospect, but in reality we are faced with uncertainty when making decisions about the future.
One thing that has turned out to be fairly certain is that the government will continue to inflate the dollar, making gold the perfect place for hedging our bets.
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You guys keep saying "inflate the dollar". Well where is all that hyperinflation? Inflation of money would be immediately felt, well, where is the inflation?
What part of "the dollar has lost 96% of it's value" don't you understand?
How about "the dollar only buys 4 cents worth of what it bought at the time of the Fed's inception"?
Do you understand what is meant by "people must invest and earn a return in order to protect their wealth from confiscation through inflation"?
Do you care that "we are robbing the wealth of widows and grandmothers and handing it over to the politically connected"?
“the dollar has lost 96% of it’s value”
Really? Have you had 96% of your wealth stolen by central banks? Really?
So you are telling me that, since 1918 (or whatever year you anti-Fed people choose) you buried a dollar in your backyard, thinking that was a good idea, and had NO IDEA there was a nominal amount of inflation that might cause consumer prices to increase over the next 100 years? Wow, what a cute little utopia you live in.
So lets say we experience deflation, does that mean central banks are just giving you more wealth?
Your argument is invalid.
Your argument is out of touch with reality.
Nobody is saying that each individual has lost 96% of their wealth. That would obviously depend on the type of assets you hold and for how long. Everyone's situation is different, so don't act like I'm arguing otherwise. You can read the words I type, can't you?
I am saying that the purchasing power of the currency that we are being forced to hold is being depreciated by the government. In order to hold a dollar and break even you must invest it and earn at least a 3% return annually.
This is equivilent to involuntarily paying at least 3% of your return on investment to the government, for nothing.
If you don't understand that, then I feel sorry for you. I really do.
"So lets say we experience deflation, does that mean central banks are just giving you more wealth?"
Since deflation cannot happen without inflation happening first, the wealth redistribution caused by inflation has already taken place before the deflation occurs.
Deflation does return the value of the dollars to people who are still holding them, but what if you had to spend yours before the deflation occured?
This is why poor people and people on fixed incomes are effected unproportionately.
I'm getting sick of repeating myself to you. If you don't get it just say so, don't pretend to have answers that you don't even understand.
You Ronulans keep whining about "da FED printin' money by da trillions." Well where is the inflation?
"How about “the dollar only buys 4 cents worth of what it bought at the time of the Fed’s inception”?"
And New York City was bought from the indians for a couple of dollars. Oh Mah Gawd, there was massive inflation between the 1600's and 1913, the FED must have traveled back in time and created inflation.
"I am saying that the purchasing power of the currency that we are being forced to hold is being depreciated by the government."
Inflation happened long before the Federal Reserve existed, Ronulan.
Did you know there is such a thing as monetary inflation? Not to be confused with price inflation.
As I've said, learn to distinguish between things that are different.
"One of these things is not like the other. One of these things is just not the same" - Sesame Street
Then where is the double digit to hyper inflation? The treasury prints hundreds of billions of new bills every year, almost a trillion. Where is the inflation?
Again, what part of "the dollar has lost 96% of it's value", don't you understand?
America has managed to export inflation through it's system of world reserve currency. Were we to have auditing rights of the Fed's discount window we might be able to guage the real level of worldwide monetary inflation.
I see you still haven't bothered to distinguish between price inflation and monetary inflation.
"Again, what part of “the dollar has lost 96% of it’s value”, don’t you understand?"
Again, what part of "that is normal single digit inflation that even happened before 1913", don't you understand?
No. After adjusted for inflation, at no point from the 1970's until today will GOLD OUTPERFORM THE STOCK MARKET.
Look at it from 1980 and the difference is even more stark, lets not worry about our math, let's let Bloomberg do the math:
Gold Can’t Beat Checking Accounts 30 Years After Peak
"Investors who paid $850 an ounce back then earned 44 percent as gold reached a record $1,226.56 on Dec. 3 in London. The Standard & Poor’s 500 stock index produced a 22-fold return with dividends reinvested, Treasuries rose 11-fold and cash in the average U.S. checking account rose at least 92 percent. On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back."
EndTheFed says: "but in reality we are faced with uncertainty when making decisions about the future."
Or you could be a Ronulan and blatantly fearing/predicting the end of the world. If Ron Paul was doing as he was saying, he is still looking at ginormous losses on his gold purchases back in 1980/1981 when he was calling for a collapsing economy and violence in the streets.
Read your link again. They are referring to the rate of return on investment.
It's hard to compare rates of return when gold doesn't earn one. Apples to oranges.
Gold protects against inflation. You can't dispute that.
How exactly is it that you think gold investors haven't broken even if they "earned 44 percent"?
You contradict yourself in your own examples and you expect people to take you seriously. Come on.
You have no clue what you are posting, and can't see that it doesn't make your argument.
But thanks for the laugh, forest
Over the last 20 years the average investor earned 3.9% a year, before taxes!
Inflation grew 3.0% a year.
When the SHTF you can wipe your face with FRNs, but you will need gold, silver, tobacco, gunpowder, or liquor if you want food.
EndtheFed says “It’s hard to compare rates of return when gold doesn’t earn one.”
Well, isn’t that a fairly essential component of determining how well something serves as a ’storage of wealth’?
EndtheFed also can’t figure out: “How exactly is it that you think gold investors haven’t broken even if they “earned 44 percent”?”
Read the article, and let me quote FROM THE ARTICLE: “On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back.”
Oh wait, I forgot, Ronulans don’t like numbers. So let me explain WHAT THE ARTICLE CLEARLY STATES, in nominal value, Gold could appreciate 44% over a 30 year timeframe, but on an inflation-adjusted basis you would have paid roughly $2000 an ounce back in 1980.
For someone who talks about inflation all the time, you really aren’t good at math, are you?
Forest said: "Well, isn’t that a fairly essential component of determining how well something serves as a ’storage of wealth’?"
Learn to distinguish between things that are different. A storage of wealth maintains the value of the wealth it is storing.
Not to be confused with a return-earning investment.
You are arguing that a store of wealth doesn't earn a return like an investment does, which is what I stated at the very beginning of this argument. lol
You do realize that mediums that "store wealth" undergo far more inflation then the dollar since the FED.
Hasn't every gold standard in the history of mankind failed?
Can anyone name one single country that is currently on a gold standard?
Mr. Forest Fred's friend another dependent on government to solve all of your problems. Like I said to Fred! Continue to be blissfully ignorant.
What on earth are you talking about?
There is nothing 'blissfully ignorant' about viewing a US Dollar as a medium of exchange - nor am I 'depending on the government to solve all of my problems'.
I mean, you could listen to Ron Paul, or you could listen to Warren Buffett (who I would argue is not someone who just sits around depending on the government):
"Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
" [gold] has no utility"
Since gold has many utilities, I'll assume that you are referring to monetary gold. In which case you are still wrong. This is why I've told you to read about how money originates. Gold that is being used as money and not in production is useful (has utility) because it is a medium of exchange.
As money originated it's usefulness was derived from the fact that it is more marketable than the products of the labourer. For instance, if a man who produced wagons wished to trade for a carton of eggs, how could he break apart his wagon in order to pay for the carton of eggs of lesser value? This is assuming he could even find a seller of eggs willing to trade for wagon parts. Suppose the seller of eggs desired to trade for butter. These are the problems of "direct trade" (barter).
The problem is solved when indirect trade comes into the equation. The producer of the wagon can trade first for a barrel of butter, not because he wishes to consume the butter directly, but because it allows him to trade for the eggs he desired. Butter is more widely accepted than a wagon, so the wagon producer can now access products through this method of indirect trade that he could not purchase by trading directly.
The wagon producer bought the butter because it was easily divisible, widely accepted, it had real value, and most of all because it allowed him to purchase the goods he desired through indirect trade. Therefore the butter was useful as a medium of exchange.
Gold has emerged on the free market as the most useful medium of exchange in the world.
Ohhhhkay. So how many indirect transactions do you make with gold today? How many merchants in the United States are equipped to exchange their goods for gold? If it isn't necessary for indirect exchange, what value does it have then?
Gold is NOT USED AT ALL as a medium of exchange in today's economy. You going to carry a little scale around and scrape flakes off when you want to buy some groceries? Pay your electrical bill?
Come on, enough with this romanticizing Chickens for Checkups garbage.
This time the answer to your problem is found in the origin of fiat money.
Fiat money was originally a warehouse receipt that entitled it's holder to the property it represented. Banking institutions had to store large amounts of precious metals that were expensive to transport. Therefore it was much more convenient to simply exchange the ownership papers as opposed to physically transporting the gold everytime a transaction occured.
Paying with gold could be as easy as swiping your debit card.
You're right, gold is not necessary for indirect exchange, we could use bottle caps. The difference is that bottle caps would be arbitrarily chosen, where as gold has been chosen continuously on the free market. If you understand what makes a medium of exchange valuable at it's origin, then you understand why gold is one of the best possible ones.
"where as gold has been chosen continuously on the free market"
What are you talking about? Is this more Chickens for Checkups reminiscing?
Who, TODAY, is 'continuously choosing gold on the free market as a form of monetary exchange'? Ronulans? Sorry, the 1-2% of Ronulans that have been hoarding gold, have been doing so since the 1970's in preparation for the **coming economic rapture**, no change there.
Really, given that the USD is the world's reserve currency, could your statement really be further from the truth in today's environment?
What percent of the US population owns gold as a store of wealth? How many are mortified and go about spouting how they WANT to abandon US Dollars and move to gold?
None. Crackpot Austrian Economists ONLY.
Noone in this day and age is actively demanding to move to a gold standard EXCEPT Ronulans so please stop with the 'free market is choosing gold' - no, YOU are choosing gold. That is it.
Of course hard work builds wealth you moron. & you still haven't answered the question.
"Hasn’t every gold standard in the history of mankind failed?"
Not before heavily inflated currencies began causing trade deficits that forced governments to refuse to redeem dollars for gold. Had they not repudiated, they would have lost all gold reserves due to the outflow in the balance of payments.
All fiat currencies seek to immitate the advantages of gold as a medium of exchange without it's limitations.
The government doesn't like gold's limitations because those same limitations restrict them from creating unlimited quantities of it overnight.
So economies that run trade deficits can't be on a gold standard?
That depends on your definition of a gold standard.
A true gold standard is a world wide gold standard. Under a worldwide gold standard, countries won't run trade deficits.
The key to understanding this is understanding what causes a trade deficit. When a country inflates their currency, their exports become cheaper abroad. Conversely, whatever they import will be more expensive than before they inflated. Therefore they experience increased exports, but they don't want to import as much as they used to. This creates a deficit in the balance of payments, and the country that inflated will then experience an outflow of their reserve money.
If the reserve money happens to be gold, the country will experience a gold outflow as everyone attempts to redeem their gold. This is unable to happen when every currency exchanges at the same rate (like inside the US).
Fred is right that trade plays a part because without trade there would be no deficits, but do we really want to give up trade when we can simply take advantage of the natural equilibrium achieved by the true gold standard?
Afterall, exchange is what allows civilization to expand and progress, because (to borrow from my previous example with the wagon producer) how can we expect the wagon producer to develop his wagon into a motor-car if nobody will trade with him? He would have to waste his talent and spend his time raising his own chickens and eggs.
So all countries move to a gold standard? Unbelievable. What Libertarian utopia is this? So lets assume a realistic happening - asymmetric adoption of the Gold standard by the United States. What happens - BAM gold sucked out of the country by trade deficits.
So, just eliminate trade deficits by... Tariffs? Or should US citizens move their wages back to slave wages which are ALSO set by the government of the competitor?
Now that's not very Libertarian of you...
And so, once again, the Libertarian Pandora's Box of Idiocy is opened when Libertarian beliefs are applied to the *real* world.
"What Libertarian utopia is this?"
Did you know it was once like that?
"What happens – BAM gold sucked out of the country by trade deficits."
I see you missed the entire point. A wold wide gold standard means trade deficits won't happen because everyone has the same currency, like inside the U
"What happens – BAM gold sucked out of the country by trade deficits."
Ahh, I see you've missed the entire point of everything I just explained to you -- more particularly the part about how trade deficits won't happen when everyone has the same currency (i.e. world wide gold standard).
I guess the logic of "look at the states inside the US, they have the same currency and no trade deficits among one another" doesn't mean anything to you? Hmm... You are a case study.
Oh well, ya can't say I never tried.
"Unbelievable. What Libertarian utopia is this?"
Did you know that it used to be that way?
Oops. duplicate comment, i thought the first one didn't post. My bad.
"should US citizens move their wages back to slave wages"
No they should work to maintain competitive levels of education and innovation. That's what it means to be the leader of progress.
So, basically you are saying gold as a vehicle of indirect transaction is useless unless there is worldwide adoption, which there is not. Because noone, NOONE, uses, or plans to use, gold as a tradeable currency.
Chickens for checkups again? You are a barbarous relic that is keeping this country from moving forwards.
No, I'm clearly saying that inflation destroys the international equilibrium of balance of payments created by a world wide gold standard.
I'm saying inflationary monetary policy has destroyed what many economists call "the most stable economic system the world has ever known" (the world wide gold standard).
Even just having the option to switch between fiat dollars and gold protects against confiscation of wealth through inflation.
If anything is "keeping this country from moving forwards", it's the inflationary policy that requires everyone to earn at least a 3% minimum rate of return just to break even.
"Under a worldwide gold standard, countries won’t run trade deficits."
That's because whenever a country started bleeding gold they'd rapidly throw up a Tariff to prevent themselves from bleeding all their gold reserves. Read history, free trader.
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"A wold wide gold standard means"
A) That would require an international "trade agreement," Oh mah gawd, a trade agreement like NAFTA. Oh mah gawd, that is soooo unconstitutional.
B) Would never happen.
C) In reality you Libertarians, if given the chance, would unilaterally put the US on a gold standard and the trade deficit would suck Fort Knox dry of gold in less then 6 months. Then we'd be back on paper money, but this time with an empty Fort Knox.
"how trade deficits won’t happen when everyone has the same currency"
If the US and China had the same currency, US wages would lower to that of China and China would be able to exercise political influence in America.
Having the same currency is also political consolidation like the European Union, and gee wiz, I thought you Libertarians didn't like the idea of international political consolidation.
"No they should work to maintain competitive levels of education and innovation."
Translation: Americans should be earning 50 cents an hour, Chinese wages, to be competitive in this new "global economy". See, Libertarians are more globalist then the neocons. The neocons think they can only go halfway.
Fred said: "They'd rapidly throw up a tariff"
So they create the environment for an outflow of gold, then throw up a tariff to counteract it.
Then you end up with a managed economy bound to fail economically like the soviet union.
OR they could have simply not inflated their currencies, and continued to enjoy the most stable economic system the world has ever known. See what happens when guys like Fred are allowed to take the reigns? Forget the world's most stable system, Fred wants to be able to inflate to benefit himself at the expense of grandmothers and widows.
"A) That would require an international “trade agreement,” "
Actually it's a lot less complex than having every nation with it's own freely fluctuating currency. I thought that was one of your arguments against the ending the Fed; you said the result would be chaos as everyone inside the US begins making their own currencies and regulating the value against one another? That doesn't apply when it supports my argument, huh? How convenient it must be to have no use for reason or consistency.
"B) Would never happen."
It already has happened.
"put the US on a gold standard and the trade deficit would suck Fort Knox dry of gold in less then 6 months"
Yes the trade deficit, which is caused by inflation.
That's why you would have to deflate the dollar or revalue the gold before you could put the heavily inflation-damaged US back on a gold standard. 'Fred Economics' dictates that we 'protect' all American industries, essentially isolating us from the entire world and creating a country that is completely reliant on itself to produce EVERYTHING it needs. You would do away with the gains from trade that allow civilization to expand sustainably.
We'd be back on trade in no time, once the people began to starve.
"I thought you Libertarians didn’t like the idea of international political consolidation"
There is a difference between international monetary consolidation for the purposes of unlimited inflation, and for the purposes of limited inflation. Learn to distinguish between things that are different.
"Did you know it was once like that?"
Yes, it was, and it FAILED.
Did you also know that when all countries were on the gold standard, life expectancy was 30-45 years? It is now 67. So stop romanticizing the past - you don't live there.
The supply of gold doesn't even grow with the United States population, but hey, who cares about facts?
"Yes, it was, and it FAILED."
Go ahead and name one example of a gold standard that failed in the absense of inflation.
It is quite clearly inflationary monetary policy that has failed.
"The supply of gold doesn’t even grow with the United States population, but hey, who cares about facts?"
The supply of money doesn't need to grow with the population. That's why I've told you time after time to read about the concept of purchasing power. But hey, who cares about the economics of reality?
You fruitloop wanted to know what happened when there was a trade deficit, while the US was on a gold reserve, and I told you: we threw up a massive tariff. You should look at the history of Tariffs in the US before the FED, Tariffs rapidly went up and down and up and down, much like inflation and deflation massively went up and down and up and down. It was economic chaos you cannot fathom.
"There is a difference between international monetary consolidation for the purposes of unlimited inflation, and for the purposes of limited inflation. "
Wrong. You lunatics want the world to consolidate into one single currency, and then in your next breath you act shocked when someone suggest the Amero. You are a walking-talking contradiction.
I see you still have a hard time distinguishing between things that are different.
Maybe you should do some of those puzzles for kids that have a bunch of identical pictures except for one that has a minor difference. Try picking out the different picture a few times and you might get the hang of it.
"One of these things is not like the others...." lol
Daaaaang, a world-wide single currency is worse then the Amero, conspiratorilly speaking. Contradiction man.
Again, learn to distinguish between things that are different.
Let's go through it sloowwwllly so you can understand.
A world wide GOLD standard is real money, with a natural limitation to inflation.
A world wide fiat currency is fake money, with no limit to inflation.
One is created with debt, one is no man's liability.
The fact that you can't understand this distinction showcases the fact that fiat currency inflation is a HIDDEN tax, emphasis on the "hidden". Most people don't understand, and it's up to the people who can comprehend to protect the sheep from the wolf.
Oh so you think it's OK the world (is forced to) consolidate into one currency (gold), but you recoil in conspiratorial horror when someone suggests North America consolidates their currency into the Amero.
So for the first 4000 years worth of economies that this magical rock was based upon, they are ALL NONEXISTENT and EVERY SINGLE ONE failed because of... Trade deficits?
Come on. Gross oversimplification.
Not a single country in the WORLD is on the gold standard... Is it a conspiracy? BOOGEDY NWO BOOGEDY or is it just not feasible?
Funny, Ronulans are all about free markets - except gold, lets manipulate the price and supply of GOLD by tying it to the largest economy on earth.
Where has a gold standard ever failed?
Keep the rhetoric for your mommy and give us the hard evidence.
"Where has a gold standard ever failed?"
Name me ONE COUNTRY IN THE WHOLE WORLD that is on a gold standard today.
The fact that NOT ONE COUNTRY IN THE WHOLE WORLD is on a gold standard is not enough evidence for you? Or is it all some global conspiracy?
Read the facts and you will find that inflation is the cause of the downfall of the gold standard.
Inflation of a currency causes a deficit in the balance of payments for that country. The trade deficit causes a reserve outflow. In order for a country who is on the gold standard to continue inflating the currency, they must repudiate on their obligations to redeem the currency for gold, or else their gold reserves are depleted. THUS inflation ruins gold standards.
It doesn't get any more clear than that. If you can't present economics to prove that inflation doesn't destroy gold standards then you concede.
Free Trade in combination with dirt cheap transportation costs brought about by the internal combustion engine is the cause of the downfall of the Gold Standard.
I'd rather not get rid of the internal combustion engine, so Free Trade has to go instead.
I like gold. It's nobody's damn business how much I make or what I invest in.
I hate this social justice crap, getting something for nothing. The free market requires a trade. I'm sick of this progressive crap ripping me off for all these years, the waste is sickening.
Creating money through debt versus the government buying gold to make money, which to you think is more reliable? If debt is not repaid, the system falls apart, which is right where we are.
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Why do you want to drain the US of all gold reserves in record time? That's what would happen with your free trade + gold standard, then we'd be back to square one with paper money except this time with an empty Fort Knox. That would be bad.
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The Broken Record strikes again.
Trade deficits are caused by inflating currencies. Look it up.
Therefore inflation would drain the gold, not free trade or the gold standard.
With free trade and a world gold standard (and NO INFLATION), there is no loss of gold amongst nations because there is no trade deficits.
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Wrong, trade deficits are caused by cheap foreign labor.
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Okay then, go ahead and explain how a trade deficit could develop between two nations using the same currency.
Can't wait to see the rationale behind this. Fred Economics at it's best.
"Okay then, go ahead and explain how a trade deficit could develop between two nations using the same currency."
If 95% of Americans were earning 50 cents an hour there would be no trade deficit,. Of course if China and America had a political and economic union say like between Nebraska and Colorado were in a political and economic union, then there would be no trade deficit.
You Libertarians are the true Globalists, neocons are just tinkerers.
Are you going to provide reasons or examples?
Or has 'Fred Economics' transcended logic and reason?
So all of the gold in the WORLD doesn't even equal money in circulation.
Wait, what is our trade deficit again? And how would we buy the gold to move onto a gold standard?
"So all of the gold in the WORLD doesn’t even equal money in circulation."
That's because the dollar has been depreciated in terms of gold. That's what inflation IS; creating more paper money than there is gold that it represents.
Once again, if you had read about (and understood) purchasing power and inflation like I told you many times, you wouldn't make such foolish comments.
Gold is worthless and useless. Who cares if there's none of it in Fort Knox?
Actually, even though the US is not officially on a gold standard, our gold reserves do strengthen the dollar.
Foreign governments like China hope and pray the US people will get stupid one day like elect a politician who would return the US to the gold standard, then they could suck us dry of gold and have a big gold reserve themselves.
If we had absolutely no gold in the vault the dollar would actually be weaker, so the gold in the Reserve Banks act as a sort of quasi gold standard, strengthening the dollar a bit. It is important.
"Creating money through debt versus the government buying gold to make money, which to you think is more reliable?"
Ummm, but in order to buy gold... wouldn't the government still have to 'create money'?
You don't really make any sense at all, but that makes less sense than the rest of your ramblings.
Fred is wrong as usual, just know that he's the consummate
Big Government National Socialist (NAZI) he's always been.
He doesn't like Libertarians because WE refuse to drink the Cool-aid!
Go Dr Paul, keep up the message, its having the intended affect
Actually, foreigner, Henry Clay protectionism is what built America. You guys are tearing everything down.
I came across this
Executive Order 6102 – Wikipedia, the free encyclopedia
Executive Order 6102 is an Executive Order signed on April 5, 1933 by U.S. President Franklin D. Roosevelt ”forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates.” It required all persons to deliver on or before May 1, 1933 all gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve….
Despite the dire threat of ten years in prison there was only one prosecution under the order and the order was ruled invalid by federal judge John Wolsey in this case on the technical grounds that the order was signed by the President, not the Secretary of the Treasury as required. The circumstances of the case were that a New York attorney, Frederick Barber Campbell had on deposit at Chase National over 5000 ounces of gold. When Campbell attempted to withdraw the gold Chase refused and Campbell sued Chase. A federal prosecutor then indicted Campbell on the following day (September 27, 1933) for failing to register his gold. Ultimately the prosecution of Campbell failed but the authority of federal government to seize gold was upheld. The case forced the Roosevelt administration to issue a new order under the signature of the Secretary of the Treasury, Henry Morgenthau, which was in force for a few months until the passage of Gold Reserve Act on January 30th, 1934….
The limitation on gold ownership in the U.S. was repealed after President Gerald Ford signed a bill legalizing private ownership of gold
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@Bishop153 Just watch it change again if he decides to run for prez...
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two years ago they said Ron Paul was a lunatic. Now they treat him like an ambassador... kind of funny
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Not sure who you mean by 'they', but Ron Paul is for sure still treated by a lunatic in many, many circles.
They treat him like that in the economically illiterate circles (and others).
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And they are still running in circles.
@TheGoalSetter You are wrong, gold has enormous industrial value. It is the best conductor that exists, suffers absolutely no chemical erosion, etc.. If gold were plentiful, we would not be using copper for electrical wiring, we would not be using lead for radiation shielding, etc., as gold is better. Your computer would simply not work if it was not for the gold used in it's circuits. These are just some examples. Gold would be valuable even if people did not value it for aesthetic reasons.
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People do not value gold for aesthetic reasons anymore, unless your a gang banger or a shallow hollywood actress. There are better things in life that are pleasing to the eye then a piss colored rock that has the hardness of lead. A fast car, a plane, a fast computer, a well tended garden is more valuable then the piss colored rock.
Gold's high price now is just as artificial as the "fiat dollar" you guys keep whining about. It's price is artificially kept up by fear, and fear alone, not because of it's aesthetic properties.
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Fred your just wrong again, you missed Ron Paul's message by a mile. But that's typical of a Big Government National Socialists (NAZI) dude like you!
Its not "aesthetics" and its not "just as artificial as the “fiat dollar""
The Federal Reserve Notes (FRNs) are fast becoming "Not worth the paper they're printed on"
Us "Ronulans" (your typical dis) prefer to hold a tangible hard commodity, GOLD, that our current National Socialists regime isn't able to INFLATE with more diluted FRNs
Fred, go ahead, stuff your mattress with FRNs and sleep well!
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"a tangible hard commodity"
OH I get it, a "tangible hard commodity" opposed to a "tangible soft commodity."
The Federal Reserve Notes (FRNs) are fast becoming “Not worth the paper they’re printed on”
"Measured against a basket of currencies from the Group of 10 nations proportioned by how they trade against each other, the greenback is up about 3 percent since 1975, according to Bloomberg Correlation-Weighted Currency Indexes. "
Not true... Gold can be a pretty crappy 'store of value' as well, I mean its has been trounced as a 'store of value' over the past 30 years:
"Investors who paid $850 an ounce back then earned 44 percent as gold reached a record $1,226.56 on Dec. 3 in London. The Standard & Poor’s 500 stock index produced a 22-fold return with dividends reinvested, Treasuries rose 11-fold and cash in the average U.S. checking account rose at least 92 percent. On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back."
Ooooohhhhh shiiiinnnyyyyy!!! Me likey!
Keep your shiny rock, the adults have better things to do with their money.
Forest, you ignorant biatch ....
Read the damn paragraph again, in English:
“Measured against a basket of currencies from the Group of 10 nations proportioned by how they trade against each other, the greenback is up about 3 percent since 1975, according to Bloomberg Correlation-Weighted Currency Indexes. ”
Measured against a basket of toilet swirling currencies, the dollar is up about 3% over a 35 year period. Bragging about this is equivalent to you bragging about your three inch pecker because your boyfriend only has two and a half inches.
Fred said: "[gold]’s price is artificially kept up"
Milton Friedman said that too. He said that's the reason that if we removed gold's connection to the dollar we would see it's price drop to about six dollars per ounce.
He was wrong. Immediately after the dollar and gold were no longer connected, gold prices increased by over 800 dollars.
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"On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back.”
Your link is talking about RETURN ON INVESTMENT.
Gold doesn't earn a rate of return.
It protects against inflation. That's the point we're making.
Sure if we could all invest in retrospect we would all want to make a 22 fold increase, but how would we know THEN that we weren't going to lose all of our money to risk, or to inflation?
Nobody is saying gold is a better investment for rate of return, but just about everybody understands that gold is a protection from inflation (except you and Fred, apparently).
The Forest Is Thick
Here's a perfect example of how illogical Forest and Fred are.
I post a comment that states nothing aside from FACTS; I referred to a quote by Milton Friedman, and explained how his prediction that gold would drop in value was proven to be wrong by a whopping $800 increase per ounce. There is no opinion in this post, and the information I used is verifiable and true. Yet, I still receive 2 thumbs down.
Sorry that you don't like the truth guys. I'd be pissed off too if someone kept ruining my bubble of blissful ignorance.
Wow a flaming free trader made a bad prediction, how unusual.
I think what people forget is that Fox is a business, just like the others. And they do whatevers profitable. Ron Paul wasn't profitable back in 2007/2008, but McCain was. Now that more people are leaning towards the opinion of Ron Paul, I wouldn't be surprised if Fox backs him. I could be wrong, but I hope I'm not.
They will back him. It's either him or Mitt Romney for the Republican nomination, and Mitt Romney is too "establishment" to endorse, not to mention they never really loved him over at Fox.
What we really need to worry about is independents - Paul has tremendous support among independent voters. We should try to convince every single independent we know to register republican so they can be involved with the republican primary and really represent the candidate they've been shown to support. Whether you're actually a republican or not is irrelevant, if you don't play a part you won't see him on the general election's ballot.
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I'm an Independent voter and Dr. Paul done a great job convincing me to vote for him.
Gold has no real (barter) value. It has the same value as paper currency...that which the buyer is willing to pay for it. Things with real valure are seeds, water, guns, etc. Gold, other than aesthetic value, simply has no value. And it is precisely that aesthetic value that makes it useful ONLY IN TIMES OF LUXURY! That's why rulers of great empires have always sought it out. But if the global economy is destroyed, there are no great empires...thus, gold is a bad doom's day investment.
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Gold has been valued as a means of storing wealth for thousands of years and will continue to be so.
A box full of FRN's could end up being virtually worthless, but not a box of gold.
Good you Libertarians sink everything you have into Gold, go ahead. Practice what you preach.
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Not sure where others are but we are putting everything we have in Silver and not Gold. Plus Copper-Clad Lead, Long Shelf Life Foods, a Garden and also land.
You keep getting those WORTHLESS FRNs and let's see who has the most wealth in a few years.
Dr. Ron Paul/Dr. Rand Paul 2012
"ONLY Doctors WILL HEAL America"
There is Hope for America in 2012
HAH! See, the Ronulans don't practice what they preach.
"You keep getting those WORTHLESS FRNs and let’s see who has the most wealth in a few years."
Right, so using your insane methodology, if you had bought gold 30 years ago and I had invested in the stock market, I would have TWENTY TWO times the amount of wealth, whereas you would still be 79% away from even GETTING YOUR MONEY BACK.
That, my friend, is the difference between you and your family owning your house and putting in a pool, instead of renting a single-wide and staring at a shiny rock.
Hyperbole will get you nowhere.
Then why do gold and silver emerge as the chosen medium of exchange on the free market whenever/wherever they are available? There are very good reasons for this. I trust you'll find them in due time.
Gold and silver are not the chosen medium of exchange on the free market whenever/wherever they are available? They only pop up during economic downtime.
Who did the US Mint sell all the gold eagles to in May? I haven't seen them offered online through their site.
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I still have my Ron Paul 2008 sign - my daughter told me to keep it so "if he doesn't win, we can use it next time."
She's only seven but my wife and I brought her to the caucus with us in 2008 to help her understand the process, and we'll do so again in 2012.
She wants to put the 2008 sign in the yard now but out of respect for Ron I'll wait until he announces he's decided to run.
could make a "HOW TO" vid on gold investing
i don't trust fox.
im voteing smart next time, im going with my gutt, i want RP to win so bad.
I AM VOTING RON PAUL FOR PRESIDENT IN 2012!!! I DID IN 2008 AND I AM GOING TO DO IT AGAIN!
RON PAUL for President 2012!!!
So now Dr. Paul is Fox's favorite guest. Will it trash him again in 2012 on Presidential election?
Ask Dr Nostradamus, i'm sure he'll know.
Fred and Forest like to think they know everything which they don't.
They expect to tell Ron Paul that he is wrong, but they don't understand monetary inflation or the basic laws of supply and demand.
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