Ron Paul on Gold vs. the Dollar




Date: 06/02/2010
Channel: Fox Business



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  1. I N V I T A T I O N

    Anyone who can disproof Mathematically Perfected Economy (MPE) is invited to publish their disproofs on Mike Montagne´s website (www.perfecteconomy.com) . Supply your URL, and/or written formal document with your real name and some form of ID.
    Contact details are on the website.
    Mike has agreed to this.

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  2. OK Fred I quit theorizing about "economy", I think there is no real exact science to be found in there. Alas. Better become a weatherman.

    Meanwhile I read that gold is all time high 1251.58.

    And Jack so far did not answer my question whether this "Mathematical supposedly "Perfect" Economy" model wants to ban "interest" all the way. Isn't that an old muslem-Koran-law?

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    • Mathematically perfected economy™ : 1. the singular (one and one only) integral solution of the categoric faults of pretended economy, in which a) inflation and deflation, b) systemic manipulation of the cost or value of money or property, and c) inherent, irreversible, and therefore terminal multiplication of artificial indebtedness in proportion to capacity to service debt are solved altogether by: a.2) promissory obligations to repay only principal, and which retire principal as it is paid at the rate of consumption or depreciation of the related property; a.3) with this obligatory schedule of payment and perpetual capacity to finance equity alone therefore perpetually maintaining an effective circulation which is always equal to the remaining value of all property; in which c.2) inherent, irreversible and therefore terminal multiplication of artificial indebtedness by interest is solved by eradication of interest; and in which, b.2) as the only powers of obfuscating currency are to corrupt the volume, proportions, and/or unnecessary cost of monetization; therefore b.3) systemic manipulation of the cost or value of money or property is solved by the inseparable combination of the first and third aspects of solution (a.2, a.3 and c.2), with the unique intrinsic result of all this e) being the only means of achieving the often claimed principle of maintaining a perpetual, immutable 1:1:1 relationship between circulation, remaining value of represented property, and commitment of every unit of the circulation to paying just so much for property as its remaining worth; and f) likewise being not only the only means of receiving fully and immediately for all consumable production, but of paying no more for our consumption than what we consume, as we consume of it; with the combination of all this therefore being g) the only fact of actual economy; 2. every prospective debtor's right to issue legitimate enforceable promises to pay, free of extrinsic manipulation, adulteration, or exploitation of those promises, or the natural opportunity to make good on them; 3. the inherent right to monetize our industry as will universally sustain trade of no more than the undiminished production of our own endeavors for whatever truly free markets deem to be the sufficiently equivalent production of others, wherein debtors are obligated to pay off promissory notes comprised of only principal, at practical rates of consumption or depreciation; 4. strict implementation of these principles through a Common Monetary Foundry, charged with certifying credit worthiness, automating payment, and enforcing obligations so as abuse imposes no cost on the rest of us.

      (We leave the secundary (subprime) market to the Austrians!

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    • UEBERNERD says: "Meanwhile I read that gold is all time high 1251.58."

      Actually, in terms of purchasing power Gold is still down 33% from it's all time high it reached in 1981.

      Yeah, the same year that Ron Paul was predicting that "there will be widespread civil unrest".

      Too bad he has more faith in a shiny rock than in Ronald Reagan and the United States - people might actually respect him today.

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      • Forest thinks he's smart for figuring in retrospect that purchasing gold at it's highest price is a bad decision. Too bad you didn't have retrospect in 1980 or else you may have turned a profit.

        Let's compare the 'highest price' scenario with a relatively 'low price' scenario of 35 dollars per ounce.
        A 35 dollar ounce of gold, adjusted for price inflation since 1971 is equivelent to about 180 of today's dollars.

        I wouldn't be too upset if I paid only 180 dollars for an ounce of gold that sells for around 1200 dollars.

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        • You mean at the $35 an ounce price that was fixed by that big'ol evil government?

          That's not a very libertarian comparison, wouldn't it be more fair to compare prices that are set by free markets?

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        • Here comes Forest's smartass retort which always follows him getting slammed.
          I'm waiting to see the bridge jump with both feet in his mouth.

          Those extreme statements are sounding alot like that 'Fled The Deflectionist' guy.

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        • fred the protectionist

          'OK Fred I quit theorizing about “economy”'

          I have the founding fathers, the constitution, and the original Republican Party on my side. You have the Confederate States of America, Karl Marx, and British economic theory which brought the British Empire down, on your side.

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  3. For the record, Citizen, your 5 million per family Keynes "boost" creating a Weimar inflation: Keynes REFUSED to sign the Versailles Treaty in 1918 because he saw Weimar -and Hitler- coming, knowing that Germany could never pay up the war "repair". His pamphlet "On the Consequences of Peace" is still readily available on the web. Keynes is always associated with creating government debt but in my previous post I explained the whole thing was meant to keep the total amount of currency constant and stabilize international exchange rates.

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  4. You can not convert Non-Euclidean geometry back to Euclidean geometry. The sum of angles in a triangle differs from 180 (flat Euclidean) on a curved surface (hyperbolic or spherical non-Euclidean). And spacetime is curved in the presence of mass.

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    • fred the protectionist

      The purpose of a non-euclidean geometry is to make calculations easier, then it is converted back to euclidean geometry, otherwise it is useless. It's just another matter of simplification, like what you earn in your first class of algebra.

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  5. "700 million dollars go out of the country because of the trade deficit , so you need the FED to bring 700 million back in circulation". Fred-the-Protectionist. YES. So let us elaborate on that. What factors control the money going out of circulation: private savings S(people), taxes T(government) and trade deficit Tr(out). All right? What factors bring money back into circulation? Consumption C(people), government spending S(government) and a trade surplus (if there is one), money coming in from export, Tr(in). So the total amount of money in circulation is stable when:

    S(people)+T(gov)+Tr(out)=C(people)+S(gov)+Tr(in)

    Right? So occasionally a government can have a relatively small temporary deficit (inflate)(and obviously not giving every family a cheque of 5 million dollars) to keep the sum of the three factors in balance. If things change the government HAS to have a surplus again (deflate) to balance the sum. Not necessarily balancing all three factors at the same time. You can have some sort of a FED to steer this. And you need an international agreement to fix currency exchange rates. Well, an international agreement on exchange rates was reached in 1945 in Bretton Woods with the US dollar being the standard currency backed up by gold. And a "FED" to do the balancing. Architect of all this?

    John Maynard Keynes

    [the model BTW was inspired by physical blood circulation literally]
    Never mind Hayek, Friedman, calling Keynes a "communist", never mind LaRouche calling Keynes a "fascist". Never mind "the Austrians" or "MPE". [And that is why Reagan at some point time found himself to be a ""Keynesian" too] And it all worked like a charm in the biggest economic boom in the history of mankind from 1945 to 1971 when Nixon (KISSINGER) demolished the Bretton Woods agreement by financing the Vietnam war inflationary which lead to the downfall of the dollar up the present day. Ron Paul points to this consistently, because this man knows history.

    The key question is: why was the FED a "good boy" from 1945-1971 and did he become a "bad boy" under Nixon. Answer: Because KISSINGER (Nixon just went along) knew that the FED is NOT a true "U.S. Federal Agency" (Bernanke's words, I think he believes it himself) but an "Us-the FED" institution, meaning a PRIVATE partly offshore cartel (UK Rothschild, JP Morgan, Rockefeller Chase Manhattan, Warburg Amsterdam, a thingie in France..,..) cooked up in 1913 Jekyll Island with a history of financing both sides in at least 2 world wars. And that is why Bernanke answered on the question "where did all that money go?" "I dont know" and I think he doesnt know! Up to the total degenerate situation anno 2010 about ten years after the Glass-Steagall firewall between investment and normal business banks was demolished by Wall Street. On purpose. And that is why this "FED" has to be audited what is more this "FED" has to be ended. Ron Paul points to all this, although I doubt that his alternatives of monetarism will bring things back on track and he will need a new real US-FED and Bretton Woods in time. Glass-Steagall has to come back in the McCain-Cantwell version now, Obama opposing and fronting the entire Bush.jr-crew so we are dealing with a "coup" in fact. Maybe things have too far gone already and the world is sliding into massive war again pleasing Obama's allmighty ego. Nobel Peace prize and all, BTW Kissinger has one of those too.

    So Fred-the-P here is your answer "why is there no monetary inflation -yet-?". Because of the huge trade deficit and the printing of money out of thin air spreads all over the planet like an electrical current being grounded. Inflating Greece, Spain,..,.., the euro and there you go to a global Weimar situation.

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    • fred the protectionist

      Taxes and Savings don't take dollars out of the American economy, out of the country, Kemosabe.

      As far as savings is concerned, it creates more 'irrational' dollars via fractional reserve banking. (That's my little theory, an irrational number has to multiply itself 4 times to become 1)

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    • UEBERNERD,

      Your posit: "why was the FED a “good boy” from 1945-1971"
      Nixon continued to ran up against LBJ's huge Social deficits when the Great Society programs started spending far more than it collected taxes. ADD to that the Vietnam War, together they were unsustainable spending. The FED stepped up the currency expansion to cover the gap and inflation took hold during Carter's miserable term.

      Read the FED charter, everything it says its designed to do is just the opposite of what it does.
      END THE FED!
      Eliminate Fractional Reserve Banking which is simply an uncontrolled inflationary balloon mechanism.

      ANSWER: The FED was only waiting for another opportunity to create BOOM.

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  6. Mathematically Perfect Economy, MPE, Jack, I struggled through M.Montagne's website. Is the bottom line: "eradicate interest" or is that too simple or am I wrong?

    BTW: Non-Euclidean geometry is not useless, it is the foundation of Einstein''s General Relativity Theory and that one is spot on.

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  7. Most people can't give you a good definition of money — a definition which holds; and a definition which serves them.

    Yet if we ask the questions which develop a fully accountable answer, we readily arrive at a fact that the only definition of money which can inflict no offense whatever, is a currency which comprises immutable tokens of value.

    In fact likewise, most people do intuit that money IS a relatively immutable token of value — not understanding how the exceptions are engendered, or how the exceptions offend them. In other words, they recognize that immutability is a vital object; they likewise recognize that immutability of a promissory note is even vital to its facts of contractual obligation; but they do not recognize that one and one only monetary prescription makes good on this indispensable object of immutable tokenization of value.

    Both to tokenize value and to immutably tokenize value nonetheless are only TO REPRESENT not only however many different products, but necessarily, to likewise represent the volumes of such products, or we fail to keep the ostensible 1:1 relationship between circulatory volume and remaining value of all products, which is necessary to immutable value.

    The only way to immutably tokenize value therefore is if the units of value of the circulation are immutably linked to the remaining value of ALL represented property (not just to one or several of MANY products); and thus likewise, the remaining volume of units of circulation must at all times equal the volume of remaining value of the ALL the products which the circulation is intended to represent, or we fail to keep these principles. In fact then, the only way to maintain these equal volumes is to pay the value of the represented property out of circulation as the value of the property is perceived to be consumed, or to depreciate. The only way you can do this of course, is if we pay monetary obligations comprised only of principal, at the rate of depreciation or consumption of all represented properties.

    Volume of circulation must likewise equal remaining volume of all represented property. Franklin observed in his "Modest Inquiry into the Nature and Necessity of a Paper Currency," that the colonists prospered substantially more when they supplemented their circulation of precious metal with paper currency (certain implementations of which were debatably subject to interest). He postulated that some prospective extent of such supplementation might be excessive; and that it might have negative consequences. But nonetheless he noted (evidently then because they never reached such a limit) that the additional circulation of paper currency sustained substantially greater prosperity.

    Why?

    They must therefore have suffered previously from an effectively deflated circulation. But simple questions thus resolve Franklin's curiosity:

    If the circulation is to represent (tokenize) value, then if the circulation were ever to exceed the volume of the remaining value of all property, then someone would have received circulation for nothing. Such an excessive, "inflated" circulation however would be impossible, if in fact all promissory notes (of principal only) are legitimately collateralized.

    Likewise however, if the effective volume of circulation is ever less than the volume of represented property, then it is impossible to trade all property all at once; and someone will not have received and persisted in just reward for their production.

    So, an "effective," just circulation must at all times equal the remaining value of ALL production ("productS").

    A further malady exists in the present disposition of currencies subject to interest. That is, ever more of a circulation is perpetually dedicated to sustaining ever greater sums of artificial debt, leaving ever less of the same circulation to represent/tokenize the value of property. Thus interest makes abiding by our necessary principles of immutable tokenization impossible.

    1. The only circulation which sustains all these necessary objects therefore is a volume of circulation which is at all times equal to the remaining value of all property.

    2. The only way to maintain such a circulation is to pay principal out of circulation at the rate of consumption or depreciation of related property.

    3. Thus as a circulation comprised of promissory notes only represents FINANCED property (subject to promissory obligations), the only way to sustain a circulation which necessarily represents the remaining value of all property is to further accommodate immediate conversion of equity into currency.

    These in fact then are the principles of mathematically perfected economy™; and this is a vital path of the logic of overall solution.

    But our question asks if money is a product? Essentially, this is to ask if it MUST be a product in order to serve these vital purposes of a just currency, which of course must eradicate all potential for systemic offense.

    We can see however, even on an abstract level, that the concept of tokenization can only go awry if the need for tokenization must account for all products, and the concept of tokenization requires A product or a few productS to do so. Yet even according to the concept of tokenization itself, the token is distinct from the product itself — unless to be an immutable token of value, "money" must actually exist in the physical form or instances of some such "product." In other words, if just/"honest" money IS a product; how then and why would argue this restrictive concept of A product or productS? How can either case serve the objects of volume equaling the volume of ALL products, if money "must" be A product or productS; and if the volume of THE product or productS must yet equate to the volume of ALL products?

    In fact, given the aforesaid observations, we readily recognize that nothing but ALL products CAN so represent all products; and the only reason folks like the Austrian "economists" are trying to insist on A product (or productS) for their obfuscated claim to tokenization, is they refuse to acknowledge the very principles they pretend their ONE or few productS somehow uphold — and yet are proven not to uphold.

    As Franklin likewise observes, never did their precious metal monetary standards result in actual consistent values of money; and the reasons are evident in these principles: There is no perpetual 1:1:1 relationship between remaining circulation: remaining value of represented property: and obligation, because the Austrians refuse to recognize that the only mathematic course to this perpetual relationship is to pay off promissory notes comprising obligations of principal only, at the rate of consumption or depreciation of the related property — with the payments thus retiring the circulation as the value of the property itself is consumed. In fact, only promissory notes of principal, paid at this obligatory schedule of payment CAN accomplish these purposes; and do so even without regulation.

    Thus we readily understand the problems of gold, which itself in fact perpetually violates our necessarily perpetual 1:1:1 relationship; and which further violates these principles when it coexists with interest, which perpetually disposes ever more of the circulation to servicing a perpetually multiplying sum of artificial debt — leaving ever less of the same circulation to sustain commerce.

    Thus the answer to the original question is that money CANNOT BE A product, if it is to be an immutable token of value, because A product, in which the resultant circulation would ostensibly be redeemable, ITSELF cannot represent All products! Thus it cannot provide a perpetual 1:1 relationship between volume of circulation and redeemability which purportedly eliminates subversion of value. Effectively, the Austrians (and others) claim virtues of gold which do not exist, while the principles they exalt instead would endorse only mathematically perfected economy™, because the only currency which CAN accomplish this purpose of making the circulation effectively not A product, but in fact at all times ACTUALLY REDEEMABLE in ALL products, is mathematically perfected economy™ — which alone therefore, immutably tokenizes all products represented by the circulation, and in such a way that the circulation is always redeemable in the very scope and volume of products it was from the beginning, intended to represent.

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  8. Mathematically Perfected Economy is offering real solution.

    Mathematically perfected economy is a currency not subject to interest, comprising a debt financing all permissible enterprise, paid by each and every debtor exactly as they consume of the associated production.
    There is no inflation or deflation, as the currency in circulation is always equal to the current value of existent production across however much of the economy is supported by a circulation.
    Neither the value of money or assets are altered by changing proportions of circulation to indebted assets or services. The value of the money is always consistent in quantity — both in earnability and spendability — with the remaining value of the indebted assets which exist, for which it was issued, and which constitute its immutable value.
    The remaining circulation is always sufficient to pay off debt. Further production therefore is not impeded by a deficient circulation, deplenished by paying more than what circulation was introduced to finance the production.
    Debt is not multiplied beyond the circulation or remaining value of indebted assets. To pay debt obligations exceeding the remaining value of indebted assets sets off a perpetual cycle of re-borrowing and multiplication of debt. Merely to maintain a circulation, we must borrow again so much as we have paid beyond the original circulation which was equal only to the unmultiplied debt.
    Neither production or consumption are impeded by imposition of extrinsic cost. In every transaction, production is traded for equal production.
    So long as we make such a circulation available to production, no impediment, limitation, or inequity whatever are imposed upon production or commerce. Production and commerce are fully expedited only by a completely liquid and effectual currency.
    Mathematically perfected economy is no more than a singular prescription, dissolving unjust intervention.

    http://endtheecb.ning.com/video/mathematically-perfected

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  9. As this is the very set of principles -- and the only set of principles which ensure the immutable value of money across its lifespan -- a perpetual 1:1:1 relationship between remaining value, remaining *obligation*, and currency in circulation -- what the f is an "Austrian economist" doing complaining about the preservation of value of money, that they can take unearned and unjustified profit? Well... obviously, that's the point of being an "Austrian economist" -- and it's just why they argue so ignorantly, and reject all accountable argument -- because it comes back to their lack of principle.

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  10. It's interesting how this topic has generated so many responses, nearly 5 times the average for this site.
    A Gold Standard is not the solution; rather ending Fractional Reserve banking where Banks, the FED in particular, create money out of thin air is the direct corollary to the dilemma of inflation. Keynes postulates that we can simply artificially increase the supply of money and it will create demand (out of thin air) by an artificial boost… Stimulus Spending.
    If this were true, then Ben should simply recommend sending every American family a five million dollar check and all would be solved, no more pain and suffering! WRONG!!!
    It has not worked nor will it ever work. M. Keynes General Theory ignores the problem of Scarce Resource, printing more money doesn’t create more material goods or service, it simply raises Demand and forces prices up on the Limited Scarce Supply side. Assuming every family gets $5M dollars, bread would soon be selling for $200 a loaf or more! Like the 1925 Weimar Republic.

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    • fred the protectionist

      Fractional Reserve banking is banking. You get rid of that, you might as well just shut down all the banks.

      I'm all for it. Banks are not a necessary evil, they produce nothing of value.

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      • The people criticise the fact that governments pay interest for the use of their own money which the central bank creates "out of nothing" (to use William Paterson's famous phrase). This leaves the state of a nation's economy susceptible to the interests of private bankers who create the money solely for the purpose of creating ongoing profits for their employees and shareholders, without any other binding social or legal obligations to the broader community (or future generations) that are normally expected from government entities.

        We don´t need banks under MPE. They in fact are the biggest problem in today´s society. Let´s kick´m out together with the Austrians...

        http://www.perfecteconomy.com/

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  11. You presume this is my first experience with Austrians, and that I might not be sufficiently aware of their ideas that my observations of their lack of manners hold. Their ideas are bankrupt. They routinely dismiss all logic. They have no arguments; they merely cite one another as if they’re a coalition which has agreed not to step on each others’ toes so they can all pretend expertise.

    Even conventional “economics,” which is itself a facade, rejects Austrian School dogma; and so routinely do they abort logic, that over my 20 years experience with them, logic, courtesy, discipline, true critical thinking, and an interest in the truth… if any of these fly out the window… it’s a strong sign there may be Austrians around.

    See all the Austrian works on interest, if you don’t believe me, which are cited by my invalidations of Austrian dogma. There isn’t word of principle in the whole of their treatises on interest. By “free market” they mean “arena of predation” as much as any other enemy of the people.

    Maybe I didn’t drop the debate in time for you, but if you have a principle in mind which would have pleased you more than stirring their potty back for fun, lay it on me. That’s a pretty damn wicked place for a purported economic institute. I have no faith in their works, and have yet to behold any even worth knowing of.

    What’s more, I see no reason to take the quality of the posts as examples of the quality of the school of thought, for no one there asked for the standards to be raised.

    What they’re up to is obvious.

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  12. HEY ALL
    This Friday June 4th, 2010 the market took a 3.5% nose dive
    Gold went UP 2%!

    Hey Fred and Forest, please don't buy gold,
    leave that to US Free Market Libertarians

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    • fred the protectionist

      I urge all Libertarians to sink everything they have into Gold.

      C'mon do it, do it do it.

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      • You must be our Sunday morning extremist.

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        • fred the protectionist

          It is extreme to ask the Libertarians to put their fiat dollars where their mouths are?

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        • Fred,

          Your posts are like a spinning top of misdirected rage.
          Is that what you were going for?

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        • The thing that is extreme is the extent to which you exaggerate the position of libertarians.

          For example, when a libertarian recommends gold as an investment, it doesn't mean they are telling you to invest everything you have into gold -- that assumption would be considered 'taking it to the extreme'.

          People who can comprehend the intended message understand that the libertarian is simply recognizing that by holding something that is negatively correlated with the dollar, you can effectively reduce risk. Gold happens to be negatively correlated with the dollar.

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        • fred the protectionist

          "For example, when a libertarian recommends gold as an investment, it doesn’t mean they are telling you to invest everything you have into gold — that assumption would be considered ‘taking it to the extreme’. "

          It is not extreme to call out a hypocrite.

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        • Sorry guys, Fled does not recognize his own extremist statements. At least not publicly.

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        • fred the protectionist

          Go ahead, sink every fiat dollar you got into Gold. C'mon do it, do it do it do it.

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        • You obviously don't understand what diversification of risk means.

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        • fred the protectionist

          "You obviously don’t understand what diversification of risk means."

          If the whole world is on the magical 'gold standard' then there is no 'diversification'. You don't 'diversify' money, oh me oh my.

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        • We're not on a "magical" gold standard.

          We're referring to reality.

          Again, it is obvious you don't understand the point of diversifying risk, or else you would recognize gold as a hedge against the dollar.

          Look up "negative correlation" in your encyclopedia (google).

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        • He still cannot recognize that each of his statements are extremism.

          The concept eludes him.

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        • Nor does this statement carry any weight at all, which you cannot seem to realize:

          EndtheFed clings to a flasehood: "or else you would recognize gold as a hedge against the dollar."

          www.inflationdata.com/inflation/images/charts/Gold/Gold_inflation_chart.htm

          Hmm... "And, it should be pointed out, gold has lost ground to inflation from its 1980 peak of $850 to now. Adjusted for inflation, $850 in 1980 would be $2,221. Those who bought gold during the last inflation scare are still waiting for the big payoff."

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        • fred the protectionist

          "it is obvious you don’t understand the point of diversifying risk"

          Well according to you there's no risk in gold, gold is perfect, gold is god; make a calf out of it; so no need to "diversify".

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        • fred the protectionist

          "extremism."

          It's not extreme to wonder if you put your fiat dollars where your mouth is.

          *eyes left*
          *eyes right*

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        • Marching out that tired example again huh?

          You do realize that $850 was one of the highest gold prices ever until it's recent surge. In fact, gold closed at around $600 per ounce in 1980.

          Adjusted for inflation, $35 dollars spent in 1971 is like spending $180 in today's terms.

          1200-180=1020

          A one thousand dollar increase on a $180 investment is not too bad. Especially when the point of buying gold is to hedge your dollar-denominated investments -- MEANING that you invest dollars, and you reduce potential losses by holding negatively correlated gold.

          I.E:
          If we both made the same investment in 1980 into the stock market but I made some additional investment into gold, I would have a higher net return than you. This is because the gold price in dollars increases as the dollar depreciates.

          "Diversification of risk", and "negative correlation". Look them up.

          Or, stay blissfully unaware. It makes no difference to me.

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      • You've really missed the entire point,
        Gold isn't going up in price, its the FRNs going down in purchasing value.
        Two economic principals at work here
        FRNs are becoming worth-less as the FED churns them out by the box car train load

        Supply (FRNs) exceeds the Demand (people willing to hold them), FRNs value diminishes (inflation) Soon they can be used to start your barbecue, like so many world fiat paper currencies in the past.

        Demand for (Gold / Silver) a hard commodity that is increasing for its Store of Value, Supply is diminishing therefore buyers are willing to pay more FRNs for the SCARCE and desirable commodity for its FUTURE purchasing value.

        The laws of Economics are akin to the laws of nature, they are immutable. When the FRNs are blowing down the street like autumn leaves, no one will bother to bend over to pick them up. You just hold on to your FRNs and good luck!

        Unrestrained currency expansion ultimately results in worthless currency.
        The FED is simply the conduit to that final end. WORTHLESS DOLLARS

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        • And, it's not an accident.

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        • fred the protectionist

          "You’ve really missed the entire point,
          Gold isn’t going up in price, its the FRNs going down in purchasing value.
          Two economic principals at work here
          FRNs are becoming worth-less as the FED churns them out by the box car train load"

          Really? Then where's the inflation?

          And if there's no inflation, then where's the harm?

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    • The "Austrian school" seems to attract the brain dead -- like non-Euclidean geometry. It has no use, because it doesn't even have a fundamental principle which equates to economy -- much less proof of one. Take the baseball bat to "Austrian economists." We should decorate the neighborhood with them -- swinging from every tree.

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      • So the Keynesians drive the train off of the track and some idiot wants to go after the Austrians?
        Yepper, it must be those damn Austrians, that were never in authority, that screwed the pooch.

        wow, INGSOC Rules!!

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        • The Austrians routinely reject mathematics; and they in fact exalt interest — the very cause of failure (not debt)!
          The reason nonetheless that Austrians and Hayek in particular exalt interest (with no mathematic or rational defense whatever), Hayek himself tells us: It makes “banking” (obfuscating the promissory notes of the people) “an extremely profitable business.” (See Mises page, reproducing Hayek’s article: “A Free-market Monetary System.”)
          “Freedom” is Hayek’s first lie, for there is no freedom even from terminal exploitation, when the purported “Free Market Monetary System” is imposed upon the people despite political promises to the contrary, and when it can only multiply artificial indebtedness in proportion to capacity to pay, as the unassenting subjects are forced to maintain a vital circulation by perpetually re-borrowing principal and interest as ever greater sums of artificial debt, perpetually increased so much as periodic interest on an ever greater sum of debt, until of course the sum of artificial indebtedness exceeds their (finite) capacity to pay, destroys their credit-worthiness to maintain a vital circulation — and you have what you have right now, everywhere around you.
          That’s freedom, Mr. Austrian “economists?”
          In fact the lie of your pretended economy can only multiply artificial cost!
          Now, to say you predicted the present failure, even as it is the one possible fundamental consequence of the interest you advocate — that is one of the greatest lies in history.
          But it won’t fly.

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        • Why Austrians advocate higher interest without even indulging in the math which would be indispensable to proving we benefit from some ostensibly legitimate rate of interest, imposed ostensibly because the only legitimate process is to borrow our own promissory notes into circulation from “banks”? Well, the Austrian “economist’s” God, Hayek tells us: “I am more convinced than ever that if we ever again are going to have a decent money, it will not come from government: it will be issued by private enterprise, because providing the public with good money which it can trust and use can not only be an extremely profitable business; it imposes on the issuer a discipline to which the government has never been and cannot be subject. It is a business which competing enterprise can maintain only if it gives the public as good a money as anybody else.”

          In other words, “competing banks” are merely a continuation in the same fatal processes, to our purported benefit under even higher costs and rates of escalation of artificial indebtednes.

          Effectively, what the Austrians want is to remove the embossed letters which now say “Federal Reserve Bank,” and replace them with Austrian ‘COMPETING’ Bank(s)” — a principle which they refuse to debate, further define, or justify. Of course, any ostensible “competition” would ostensibly, on the contrary, drive interest rates down. But the Austrians tell us that we wouldn’t have borrowed ourselves into this debt mess if higher rates of interest had discouraged excessive/reckless borrowing.

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      • learn how to use an em dash. its painful to read your ravings.

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    • They are the mother of all hypocrits...to hell with those ego centric bastards...

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  13. Not sure where you Government Employees, forest and fred the protectionist, get your info from but here are some FACTS.

    In 1971 Gold had an average worth of $40.81 and in 2007 the average price was $695.39 which was an average return of 1703.9696% and an average profit of 1603.9696%

    When you take inflation into consideration, by using the site below, you see that an item that cost $40.81 in 1971 costs $208.93 in 2007 which means you still made a $486.46 profit which equates to a 1192.0117% return.

    Not sure what the figures were on stock market returns from 1971 to 2007 but after taking inflation into consideration they will be a lot less then what you posted we are sure of that. You just put a total but did not take inflation into consideration yourselves.

    Site we got Gold history from - http://www.pensions.gold.org/assets/file/pensions/media/gold_price_chronologyfinal.pdf

    Site we used to calculate inflation - http://www.coinnews.net/tools/cpi-inflation-calculator/

    Would love to read your comments on this so let's go.

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  14. While the gold standard can neither save us from further multiplication of debt or rectify the other issues before us, simply re-invoking the gold standard would pave the way for immediate loss of "our" monetary gold, for already twenty years ago, the perpetual process of multiplying debt had plunged us from the greatest creditor nation in the world to its lowliest debtor nation. For the very purposes of the lie, "our" currency is now held in immense quantities across the world; and thus even if "we" held gold for money instead of paper, our inevitable collapse under perpetually multiplying indebtedness therefore will mean giving up the last of our former gold, rather than the last of a mere paper, as we tolerate the imposition of a Second Great Depression. I am now even more worried about our financial future, unless we advocate Mathematically Perfected Economy (MPE) in which we mathematically have proven the above, but are also offering a real immediate solution to the current terminal system.
    For more information you can visit the following links:

    www.perfecteconomy.com

    http://endtheecb.ning.com/video/mathematically-perfected

    Kind regards,
    Jack

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    • fred the protectionist

      The FED is already advocating the um, "Mathematically Perfected Economy (MPE)". When 700 billion dollars leaves the country every year (from the trade deficit) that means American citizens are short 700 billion in cash, so the FED has no choice but to print 700 billion a year lest America suffers massive deflation of dollars.

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      • u wouldn´t say that if you understood MPE. Give it a try, looking at your posts it´s made for you!!!

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        • fred the protectionist

          "There is no inflation or deflation, as the currency in circulation is always equal to the current value of existent production across however much of the economy is supported by a circulation.
          Neither the value of money or assets are altered by changing proportions of circulation to indebted assets or services. The value of the money is always consistent in quantity — both in earnability and spendability — with the remaining value of the indebted assets which exist, for which it was issued, and which constitute its immutable value."

          I think I understand, and the mission of the Federal Reserve is to keep the supply of dollars for US Citizens static.

          How you determine the total value of assets of a country is arbitrary, especially since you are trying to determine them in fiat which is also (initially set as) arbitrary, so are the zeros in a fiat dollar arbitrary.

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  15. fred the protectionist

    http://american_almanac.tripod.com/fwhfree2.htm

    Free Trade, The Confederacy, and the Political Economy of Slavery

    by Frederic W. Henderson

    "As the debate on the question of the North American Free Trade Agreement (NAFTA), and the doctrine of free trade as the panacea for American economic problems, has raged in the past month, the American electorate have not been told that this nation has once in its history experienced the "magnificent benefits" of truly free market, free trade economics. While President George Bush, and his associates in the fight to ram through "fasttrack" authorization for NAFTA, regale the innumerable advantages of such an agreement, based on such policies, the American people should know, not only that free-trade has historically been an alien and subversive economic principle for this nation, but that the only time that it has actually prevailed on American soil, it produced the living hell known as the Confederate States of America.

    Much as history has been written otherwise, slavery, secession and the great war fought to insure the survival of this nation between 1861-65, was a battle against the destructive policies of what was then known as "British" free trade. The southern Confederacy, along with its doctrines of human slavery, states rights and secession, was the institutionalized manifestation of British free trade policies in America. It was free trade that created slavery, as part of a system that oppressed the majority of the southern population, and turned that section into a despotic, oligarchical nightmare in total opposition to the principles of republicanism upon which this nation was founded.
    .
    .
    .
    "

    It's dejavu all over again.

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  16. "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Thomas Jefferson

    EMPHASIS ADDED
    "deprive the people of all property until their children wake up homeless on the continent their Fathers conquered"

    The battle is END THE FED, the single greatest threat to Americas survival!
    Gold is only a Store of Value of Last Resort, its a shame that Americans have to move to gold only because the Government has engaged in a grand scheme of Monetary Theft of our wealth though CURRENCY DILUTION...
    Printing FRNs to pay for massive spend thrift crony bail outs.

    Even the Chinese realize, what Fred and Forest deny, that they are holding massive amounts of rapidly declining (Pulp Fiction) American dollars. Soon they will DUMP their FRN's for hard assets in mass.

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    • fred the protectionist

      “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…I believe that banking institutions are more dangerous to our liberties than standing armies… The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” Thomas Jefferson

      Absolutely, that's right. Private banking institutions are service industries which aren't even a necessary evil. That's why the FED is not a private bank, but a quasi-government entity, and any Libertarian worth their salt knows that any quasi-government entity is a full government entity cause 'dem gubments are tyrants.

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      • Dear Fred,
        Glad you noticed that point. The FED is a "private" bank given a public charter to serve ONLY THE GOVERNMENT at the expense of We The People!

        The FED is the private piggly wiggly bank of a spend thrift Political Elite. Pork Barrel on wheels with NO RESTRAINTS and it only serves their Crony Political Friends, Big Banks, Big Business i.e. the Military Industrial Complex at the expense of you and me.

        Timmy and Benny have No Audit, No Restraints, and No Accountability.
        Absolute Power, Corrupts Absolutely and that COST US dearly
        An Easy Evil that has effectively dissipated the common citizens wealth.

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    • Ending the FED is NOT or only part of solution. What is your solution?? What are you going to do when you have ended the FED???

      www.perfecteconomy.com

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  17. Article 1, Section 10 of the US Constitution says: "No State shall ... make any thing but gold and silver Coin a Tender in Payment of Debts" which means states can create their own gold and silver currency. So my question is, if it's such a great idea to use gold and silver coins for currency, why doesn't Ron Paul advocate the state of Texas create their own gold and silver currency? If it works well for Texas, then other states can follow suit. If it doesn't work. then no one else will make that mistake. Better one state should try and fail than the entire US. I mean, does Paul believe his own rhetoric or doesn't he? If he can't sell it at home, why should the rest of us buy into it?

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    • fred the protectionist

      Hehe, yeah Ron Paul keeps forgetting the sentence starts with, "No state shall ...." not "The Government of the United States shall not...."

      Libertarians don't understand the Constitution, like the Liberals who they revile. They misread, misinterpret, and sometimes make stuff up like the socialists. They are just as radical and unConstitutional as the Socialists.

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    • Are Fred and Dfens two dingleberries on the same rump?

      It must be a non-English speaking rump because they cannot even comprehend the meaning of that simple sentence. Must've learn to read with the Look/See method.

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  18. 'The system of banking we have both equally and ever re probated . I contemplate it as a blot left in all our constitutions, which, if not covered, will end in their destruction, which is already hit by the gamblers in corruption, and is sweeping away in its progress the fortunes and morals of our citizens. [54] – Thomas Jefferson, 1816

    We need to question the "morals" of our two favorite National Socialists Fred and Forest. They sure don't want you and I to buy and hold any gold, we might gain wealth INDEPENDENT of Big Government control! Why that's just down right anti-Nazi thinking.
    I suspect they only have their own immoral "special interests" in mind.

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    • fred the protectionist

      Well at least you got the National (nationalist) part right. I guess that makes you Libertarians inter-Nationalists, like the Comintern.

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  19. fred the protectionist

    All the free traders have to do is delay and wait it out, until everyone grows old and dies, then younger generation forgets how well off their parents and grandparents were before subsistence wages. It'll be like in that scene from 1984 where Winston goes to a prole section of town, and asks an old man what life was like before The Party.

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    • Fred...
      Free trade is not the problem, its only a small part of the broader solution.

      Hitler also preached "protectionism" from competition and targeted the jews and fomented other such fear based and race based paranoid hate speech, eventually he made laws that justified Mass Murder. How far are YOU willing to push your "Protectionist" rant?

      Ron Paul and Ronald Regan have one common message, Government is not the Solution, Government is the Problem.

      RUN AWAY SPENDING and NO RESTRAINT
      MAD MONEY >>>> PULP FICTION!

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      • fred the protectionist

        Are you comparing the founding fathers, and every Republican up till the 1920's, to Hitler?

        Well they were nationalists, as opposed to you Libertarian inter-nationalists who have no loyalty to family, country, state or nation; you'd sell their own children for a buck.

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        • Libertarian777

          Fred I hope you're writing all your comments on a computer designed, built and manufactured in the USA.

          Heaven forbid you purchased a computer made in China/Singapore/Malaysia. We need tariffs on computer imports. Computers should only be made in the USA.

          I'm willing to pay $70/hr (incl. benefits) to workers on the production line to make my $12,000 desktop. NOT

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        • fred the protectionist

          A processor either comes from Germany or Silicone valley; the power supply, case, plastic keyboard most likely comes from China; the ASUS motherboard comes from either China, Mexico, or Taiwan; the video card is probably from Hong Kong, and the monitor from Japan.

          Ironically the most difficult part to manufacture is the processor, which was also the cheapest component out of everything else I bought. The processor which requires a clean room, massive infrastructure, massive amount of architecture research.

          So far my motherboard's onboard sound produces a high pitched squeal 20% of the time I turn it on, which requires me to reboot to get rid of. And my video card needed replaced.

          The processor, which was the cheapest component, still runs fine.

          Cheap foreign slave labor produces more expensive that are substandard products, and you nutcase Libertarians think it's A-OKAY. (Germany is not cheap foreign labor). You Libertarians are the enemy of the consumer and the worker.

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        • Yepper, all of them damn libertarians holding elected office messed it all up!!!

          Wait, where are all of these libertarians in public office?

          Frederich, you are a dog barking at your own tail.

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        • "Cheap foreign slave labor produces more expensive (products) that are substandard products" -Fred

          Economics proves your claim to be false.

          When a firm that is faced with competition charges a higher price than it's market equilibrium dictates it opens up an opportunity for new firms to enter the industry. The profits provide an incentive to enter the industry to fill the deficit in supply.

          So if the slave-laborers produce more expensive products than the American laborers as you say, there is nothing stopping Americans from undercutting the slave-laborers and restoring the jobs you are so concerned about. Especially if they are better quality as well.

          It really undermines your credibility when your explanations contradict your argument.

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        • fred the protectionist

          "So if the slave-laborers produce more expensive products than the American laborers as you say, there is nothing stopping Americans from undercutting the slave-laborers"

          Wrong. The profit margin for free labor is slimmer then slave-labor. The monopoly of slave-labor continues because their profit margin is so great and its so easy to undercut the competition. Then when the competition (American labor) goes out of business they raise the prices back up above and beyond what an American product would have cost.

          You are the enemy of both the consumer and labor.

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        • "Then when the competition (American labor) goes out of business they raise the prices back up above and beyond what an American product would have cost." -Fred

          Fred you ignore economics. How can you assert that your theory is correct if you can't show how accepted economic theory doesn't apply? You are claiming that Americans would allow the Chinese to charge a higher price than it would cost to produce on their own. That's economic irrationality.

          Let's take a look at the economics you are ignoring (or unaware of).

          Pay particular attention to the part of your quote that says "they raise the prices back up above and beyond what an American product would cost", which in the laws of economics results in an opportunity for American Laborers to produce the products on their own. The rational consumer will substitute the less expensive product of the same quality. Therefore, the competition acts as a mechanism that protects consumers from being exploited by producers both foreign and domestic. That's if the products are the same quality.

          If the foreign product is of lesser quality as you said, then the slave-labor has no market share in the market for a similar but higher quality product. The result is two seperate markets, the low quality market (supplied by foreign producers) and the high quality market (supplied by American producers). Consumers who value quality over inexpensive price will purchase the American-made version, and vice versa.

          Please explain how Fred-onomics accounts for this.

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        • fred the protectionist

          "Pay particular attention to the part of your quote that says 'they raise the prices back up above and beyond what an American product would cost', which in the laws of economics results in an opportunity for American Laborers to produce the products on their own. "

          Wrong. It takes allot of initial money to make a factory go, and nobody is going to invest in American labor with the threat of Chinese slave labor undercutting them, so the slave-labor monopoly stands. You don't understand how monopolies operate because Libertarians and neocons love monopolies. You think monopolies are A-OK. You think monopolies provide cheaper consumer items when they do not.

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        • Fred said: "nobody is going to invest in American labor with the threat of Chinese slave labor undercutting them"

          If that's the case, what is stopping it from working the other way around? What makes investing in chinese slave-labor any more attractive when they are intentionally opening an opportunity for American labor to under-cut them? That's what selling a more expensive, lesser quality product accompliches. Explain how Fred-onomics accounts for that.

          And,
          Are you aware that a monopoly means a LACK of competition?
          So how can I "love monopolies" but support competition as protection for consumers?

          Make sense when you post.

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  20. Anybody interested in the facts about gold should read the short but sweet book entitled "The Case For a 100% Gold Standard" by Murry N. Rothbard. I think it's available for free online.

    Don't get your information from blog trolls who don't understand the words that they type.

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    • fred the protectionist

      "Don’t get your information from blog trolls..."

      Yeah the book might provide a valid argument, which you blog trolls have not provided.

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    • Don't forget to buy some gold from Goldline.com too!

      I mean, don't let the facts that gold has not been a good store of wealth, isn't used by anyone for transaction purposes, isn't used to back a single economy in the world any longer, and isn't even a very good hedge against inflation.

      It's really that simple, Gold is the solution for everything! Trust me!

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      • Did you figure all that out about gold during your two examples that turned out to disprove your own argument?

        hahah.

        The evidence is in the posts. You guys are a mess.

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        • "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. "

          Hmmm, an inflation-adjusted return of "22-fold" that NOT GOLD RETURNED or "down 33% in value" that GOLD RETURNED. Hmmmm, that is a tough one...

          You really are supporting the stereotype that Ronulans are horrific at math.

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        • Libertarian777

          That's NOTHING Forest.

          Zimbabwe's stock market returned 300,000% in 2007!

          http://www.chinapost.com.tw/business/africa/2008/01/02/137413/Zimbabwe-stock.htm

          http://mises.org/daily/2532

          Gold only returned 24% in that year!

          I'd have been much better off if I put all my money in the Zimbabwe stock market in 2007.

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        • Dude. Zimbabwe suffered horrific inflation... You have to adjust for inflation. It's not complicated.

          Maybe you are missing this part: "On an inflation-adjusted basis, gold investors are still 79 percent away from getting their money back. ”"

          AFTER adjusting for a decrease in relative purchasing power of USD, the value of Gold DECREASED EVEN MORE. Thus, it would have been better to hold on to one USD over the past 30 years than gold.

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    • Effectively, what the Austrians want is to remove the embossed letters which now say “Federal Reserve Bank,” and replace them with Austrian ‘COMPETING’ Bank(s)” — a principle which they refuse to debate, further define, or justify. Of course, any ostensible “competition” would ostensibly, on the contrary, drive interest rates down. But the Austrians tell us that we wouldn’t have borrowed ourselves into this debt mess if higher rates of interest had discouraged excessive/reckless borrowing.

      They are the f problem

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      • You speak as if the Austrian School claims that higher interest rates are always the answer, however that is only true when the rates have been first arbitrarily set below the equilibrium rate that supply and demand for money would dictate.

        There is a reason that the Americans often have negative savings rates.

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        • Yep. I don't even joust with them any more. They simply won't let you use any prevailing mathematic argument; they don't have a clue what can save us; they even deny the problem; and worst of all, their God Hayek tells us why the Austrians in fact advocate banking at elevated interest rates:

          http://www.perfecteconomy.com/pg-relevant-historic-quotes.html#FriedrichAHayek

          Because providing the public with good money which it can trust and use can not only be an extremely profitable business;"
          http://mises.org/story/3204

          They are more of the same and do NOT offer solution. They are part of the problem...

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        • This site should be familair for you. More discussions here:

          http://endthefedusa.ning.com/forum/topics/austrian-economics-is-not-the

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