Repubs party platform: comittee to eval return to gold std and audit fed

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Repubs party platform: comittee to eval return to gold std and audit fed

Post by Benko » Thu Aug 23, 2012 3:52 pm

LInk from drudge report works fine, but when I copy link here, it takes you to a page the requires registration, so I pasted less than 1/2 of article below.  Hope that is OK. Article is FT.com

Republicans to embrace gold standard

By Robin Harding and Anna Fifield in Washington

The gold standard has returned to mainstream US politics for the first time in 30 years, with a “gold commission”? set to become part of official Republican party policy.

Drafts of the party platform, which it will adopt at a convention in Tampa Bay, Florida, next week, call for an audit of Federal Reserve monetary policy and a commission to look at restoring the link between the dollar and gold.

The move shows how five years of easy monetary policy – and the efforts of congressman Ron Paul – have made the once-fringe idea of returning to gold-as-money a legitimate part of Republican debate.

Marsha Blackburn, a Republican congresswoman from Tennessee and co-chair of the platform committee, said the issues were not adopted merely to placate Mr Paul and the delegates that he picked up during his campaign for the party’s nomination.

“These were adopted because they are things that Republicans agree on,”? Ms Blackburn told the Financial Times. “The House recently passed a bill on this, and this is something that we think needs to be done.”?
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by Pointedstick » Thu Aug 23, 2012 4:15 pm

Image


I used to agree with things like this... before I arrived here. These people don't seem to understand that a highly restricted money supply doesn't only prevent governments from spending recklessly (and in practice it doesn't even do that), but it also restricts the money supply from easily increasing at the rate of GDP growth. If the money supply can't grow at least as fast as the economy does, the result is gradual deflation, which is terrible for indebted people (i.e. everyone these days). The only ones who would win that game would be the holders of debt (i.e. banks and people like us).

If we're going to fix the monetary system, we can't tiptoe around the edges with half-measures. We need to penetrate the very heart of the system and eliminate debt-based money entirely! Once that's done, we can have a real discussion about what if anything should back the currency and what it should be made of. But auditing the fed is a meaningless gesture that may even make things worse (do we really want congress to have even more power?).
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by craigr » Thu Aug 23, 2012 4:26 pm

This can be solved quickly: Legalize gold to compete tax-free against the dollar. Allow businesses to price in dollars or gold or have gold contracts again. Place no restrictions on gold use in business for making payments, etc.. Let the markets work out the rest.

Doing anything more complicated is bound to fail. If gold can compete against the dollar then it will bring sanity back to the dollar and at the same time give people a competitive option to use if they want. But saying you're going to link the dollar back to gold is not going to fly. There will be too much resistance. Saying you're simply going to remove the collectibles taxes from gold (and silver) and allow minted coins to operate like money in competition has a better chance of making it.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by HB Reader » Thu Aug 23, 2012 4:50 pm

I vaguely remember a report issued fairly early in the Reagan Administration by a commission that dealt with a return to gold.  I think it was promised by candidate Reagan during the 1980 election to mollify some hard money supporters.  It didn't have any really bold recommendations.  I think it may have paved the way for the issuance of some legal tender gold coins, like the American Eagle series, with intrinsic values so high that they could never be really used as money and cause problems with the monetary system or tax code, or otherwise upset the apple cart.

A few prominent Republicans paid the report some lip service and then went on to other issues, like getting their party re-elected, building the Defense Department, making sure regulators didn't look too closely at S&Ls, etc.  It seemed like once they were in office, there were "more important" issues to deal with.

Same drill here.     
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by craigr » Thu Aug 23, 2012 5:13 pm

HB Reader wrote:A few prominent Republicans paid the report some lip service and then went on to other issues, like getting their party re-elected, building the Defense Department, making sure regulators didn't look too closely at S&Ls, etc.  It seemed like once they were in office, there were "more important" issues to deal with.

Same drill here.     
I've been to a state convention that adopted all sorts of platform planks and the elected pols do nothing with them after they get in office. So yes, just lip service and nothing serious. Party platforms are largely ignored.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by TBV » Thu Aug 23, 2012 10:16 pm

Pointedstick wrote: Image
I used to agree with things like this... before I arrived here. These people don't seem to understand that a highly restricted money supply doesn't only prevent governments from spending recklessly (and in practice it doesn't even do that), but it also restricts the money supply from easily increasing at the rate of GDP growth. If the money supply can't grow at least as fast as the economy does, the result is gradual deflation, which is terrible for indebted people (i.e. everyone these days). The only ones who would win that game would be the holders of debt (i.e. banks and people like us).
Why should there be a preference toward debtors instead of savers? If, as you say, gradual deflation would be "terrible" for debtors, then why is it not also true that gradual inflation would be terrible for savers? Or are savers less important?

Deflation, or at a minimum, a decrease in inflationary momentum does have an effect, and it is to encourage people to get out of debt, just as they are doing now.  That's a good thing.   http://finance.yahoo.com/news/u-debt-lo ... 45522.html

In the fiscal mess which is Europe, it's Germany (a nation of savers) which is weathering the storm.

There's also the issue of the worldwide tendency to socialize the debts of large private businesses (banks, manufacturers, etc.) by transferring risk to taxpayers.  http://www.guardian.co.uk/business/2012 ... per-crisis  It seems that the biggest beneficiaries in most easy money scenarios are large financial institutions rather than ordinary citizens.  Another reason to re-examine the societal advantages of saving and the disadvantages of intemperate monetary expansion.

+++++ Having said all that, do I think that a mere mention of gold in a party platform is a significant development?  NO.  Better than nothing, but not by much.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by clacy » Thu Aug 23, 2012 10:26 pm

This is probably akin to a few kookie Dems talking about nationalizing 401k/IRA's..... Good luck with that politically. It's suicide for your job security
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by moda0306 » Thu Aug 23, 2012 10:51 pm

A non-expanding money supply isn't necessarily bad because it hurts spendthrifts, it's because if you get to the core of what monetization is supposed to accomplish to begin with (a more efficient and effective economy than any barter system could accomplish) you are basically setting it up to have huge shocks by making the money too rigid in supply.  Deflation almost always hurts debtors, but let's not act like savers are victims in an economy with moderate inflation.  First, savings is t just money you keep in the mattress or a savings account... Saving by and buying stock mutual funds will often benefit from more money flowing through the economy.  Not to mention, in a perfectly free-market monetary system, there is no way to accomplish real returns without taking some risk.  However, with the fed and treasury doing their dance, we have almost completely risk free paper (t bills) that earned positive real interest for decades.  Men of the guilded age had to take risk to achieve that with their accumulated wealth.

I don't mind Craig's idea at all, though I highly doubt it would change much.  Maybe more people would hold gold as a store of value, but to think businesses would start having stuff priced in a currency that may rise or fall 20-30% real in a year right next to their dollar price seems asinine to me.  Likely, gold will just end up doing an even better job of saving us not from inflation, but negative real rates on our risk-free debt, which is just fine with me :).
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by dragoncar » Fri Aug 24, 2012 1:12 am

craigr wrote: Allow businesses to price in dollars or gold or have gold contracts again.
Wait, what?  I must be missing something big here.  Please explain.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by TBV » Fri Aug 24, 2012 11:58 am

Gumby:

Here's a prior link where we exchanged thoughts about who benefits from sound money.

http://gyroscopicinvesting.com/forum/ht ... 1#msg33721
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by Gumby » Fri Aug 24, 2012 1:33 pm

TBV wrote: Gumby:

Here's a prior link where we exchanged thoughts about who benefits from sound money.

http://gyroscopicinvesting.com/forum/ht ... 1#msg33721
I deleted my previous post, since I was confusing creditors and debtors. It was very late when I wrote it :)

Interesting comments you posted. I think your comments mix up a few historical realities. For instance, Greenbacks weren't hatched by all Republicans. Lincoln had no choice but to issue Greenbacks to fund the war. Congressional Republicans went along with him reluctantly.

Grover Cleveland supported gold because his backers and close friends wanted him to. (Why else do politicians support things?)
See: http://projects.vassar.edu/1896/democrats.html

Anyway, there are plenty of explanations for why "sound money" is exactly what big bankers and industry leaders wanted. You just have to look for them. Ron Paul won't tell you what those reasons are. As I understand it, by moving the money supply onto gold — a very scarce and easily manipulated commodity — bankers could easily increase and contract the money supply whenever they wanted to. They were able to manipulate the money supply even in sub-regional areas. Anybody who had wealth saved as gold would gain purchasing power as gold became more scarce. When bankers contracted the money supply, many farmers couldn't pay back their debts. This caused a deflation and suddenly farms, land and businesses became very cheap in some areas of the country. This allowed industry leaders and bankers (who owned lots of wealth and gold) to buy up businesses and assets at very cheap prices. At least, that's how I understood it.

Have you watched Bill Still's The Secret of Oz? Whether he's right or wrong, he at least explains those historical questions that you claim aren't explained. Much of it is echoed from the unmistakable symbolism found in L. Frank Baum's Wonderful Wizard of Oz.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by craigr » Fri Aug 24, 2012 1:57 pm

dragoncar wrote:
craigr wrote: Allow businesses to price in dollars or gold or have gold contracts again.
Wait, what?  I must be missing something big here.  Please explain.
Contracts under the gold standard stipulated that the payment could be demanded in gold. It was a way to ensure that devaluation threats could be mitigated.

Unfortunately, with the stroke of a pen and blessing from nine black robed federal employees it was all undone:

http://en.wikipedia.org/wiki/Gold_Reserve_Act
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by MachineGhost » Fri Aug 24, 2012 2:24 pm

Gumby wrote: Have you watched Bill Still's The Secret of Oz? Whether he's right or wrong, he at least explains those historical questions that you claim aren't explained. Much of it is echoed from the unmistakable symbolism found in L. Frank Baum's Wonderful Wizard of Oz.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by TBV » Fri Aug 24, 2012 3:10 pm

Gumby:  It would not surprise me to have "mixed up a few historical realities."  But since the President was a Republican, the House only 24% Democrat and the Senate only 30% Democrat when Greenback legislation was passed, I don't think it's a stretch to conclude that Greenbacks came about because of action by Republicans.  Unanimity is hardly a requirement, otherwise we could say that Republicans didn't favor the Iraq War simply because Ron Paul voted no.

As for the susceptibility of gold to currency manipulation, the mere existence of a gold standard without the promise of redemption in gold is, by and large, a sham.  Where redemption is available in actual practice, there is far more protection against such manipulation than in any other arrangement we have seen so far.  Is that really debatable?

I think we run the risk of overlooking the fact that great fortunes and over-sized profits (which many so often criticize) were not built on thrift or the advancement of hard currency.  They were encouraged by unequal access to debt-fueled money, often made possible through political connections.  This is how the railroads got built.  This is how multinational banks operate.  This is an arena where Joe Six Pack doesn't get to play.  When we look at debt in the US, for example, the portion owed by banks and corporations is every bit as substantial as mortgage or other personal debt.  Do we hear banks anywhere in the world demanding sound money?  No.  On the contrary, they seek expansionist policies underwritten by unwitting taxpayers. Wouldn't you if you could borrow at near 0% and lend out to credit card holders at 15-20%?  The greatest benefits from this arrangement are not harnessed by retail debtors, but by privileged financial institutions and large corporations.  The greatest risks, however, are: asset-bubble recessions, unemployment, and insolvency.  A less feverish monetary system would, I suggest, offer greater predictability, sustainability and the possibility of personal financial security through savings and the avoidance of excessive debt.  Not only that but a marked reduction in cronyism and speculation.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by Ad Orientem » Fri Aug 24, 2012 3:22 pm

I am pretty sure that so called "gold clauses" in contracts are now legal again. But I would imagine it would be a bear getting one into a modern contract.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by Gumby » Fri Aug 24, 2012 10:32 pm

TBV wrote:A less feverish monetary system would, I suggest, offer greater predictability, sustainability and the possibility of personal financial security through savings and the avoidance of excessive debt.  Not only that but a marked reduction in cronyism and speculation.
There are two sides to the story. You ought to watch The Secret of Oz (via YouTube) when you have an hour to spare. It's a very interesting look at the Crime of '73 and its implications for debt-based money. You may not agree with it, but at least you would see why many people didn't believe in the promises of "sound money".
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by notsheigetz » Sat Aug 25, 2012 10:13 am

I suspect this is just a bone being thrown to Ron Paul supporters in hopes of getting their votes.

Does anyone here seriously believe that the Republican party would ever follow through with this even if it somehow made it into the party platform, which I predict it won't?
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by Ad Orientem » Sat Aug 25, 2012 11:08 am

notsheigetz wrote: I suspect this is just a bone being thrown to Ron Paul supporters in hopes of getting their votes.
I agree.
Does anyone here seriously believe that the Republican party would ever follow through with this even if it somehow made it into the party platform, which I predict it won't?
I think it will make it into the platform. But no, it's not going to go anywhere after that. (Thank God)
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by TBV » Sat Aug 25, 2012 7:49 pm

Gumby wrote:
TBV wrote:A less feverish monetary system would, I suggest, offer greater predictability, sustainability and the possibility of personal financial security through savings and the avoidance of excessive debt.  Not only that but a marked reduction in cronyism and speculation.
There are two sides to the story. You ought to watch The Secret of Oz (via YouTube) when you have an hour to spare. It's a very interesting look at the Crime of '73 and its implications for debt-based money. You may not agree with it, but at least you would see why many people didn't believe in the promises of "sound money".
Well, I did learn a lot from watching the video.  Here are some of the things I learned, supplemented by some prior outside reading...
  • The monetary system of colonial America was stable and just, even though Massachusetts suffered 618% inflation from 1720-1750 and became stable only after it switched to specie and specie-convertible non-legal-tender money in 1750.
  • The Continental Congress was not responsible for ruinous inflation, even though it increased the money supply from $12 million to $225 million from 1775-1779.
  • That America after 1865, by scaling back a money supply which had grown 138% during the Civil War, was doomed.  However, somehow the America of 1860 could live in peace and prosperity with even less money in circulation. And that America after 1945, despite slashing levels of wartime spending that dwarfed those of the Civil War era, somehow was rewarded with an economic boom.
  • That the last 35 years of the 19th century were characterized by plutocratic assaults on the public welfare and sinister bank-engineered depressions, with gold specie at the heart of it all.  Yet somehow during this time, the cost of living plummeted, the standard of living shot up, and we morphed from a war-torn country into the world's premier center of manufacturing and innovation.
  • That sophisticated bankers plotted to destroy the economic security of all Americans, then amazingly published their plans in a nationwide magazine.  This is trustworthy information, despite the fact that it reads like an excerpt from the Protocols of the Elders of Zion, despite the fact that the magazine in question claims that nothing of the sort was ever published, and all references to it over the last 120 years seem to be quotes from publications, political movements and blogs who dislike bankers.  http://message.snopes.com/showthread.php?t=71945
  • That gold is a worthless relic of a bygone era and not worth a second thought.  Yet, somehow the fundamental problem with gold is that not enough of it is owned by ordinary people.
  • That the adoption of a gold standard often pauperizes the bulk of the population, allowing their assets to be bought for a pittance.  The remedy is said to be money issued directly by a sovereign government.  Yet, over the last 40 years, the best example of an entire populace being wiped out comes from Argentina.  Was this the deliberate work of its nefarious central bankers?  Yup.  Only one problem: Argentina isn't on a gold standard and the central bank of Argentina has been nationalized since 1946.
  • That the quantity of money is more important than whatever it is backed by.  Except that most people these days believe that velocity is what really matters. Oh well.
  • That it's OK to conflate support for gold with private banking and private banking with central banking, monopoly banking and fractional reserve banking.  Despite the fact that they are not the same nor joined at the hip, and despite the fact that many famous advocates for gold have often opposed central banking, legal tender laws, and the fractional reserve-engendered pyramiding of assets.
This video left me with the same impression as when viewing stuff from Russia Today, i.e. some things don't ring true, and there's quite a lot of relevant info left out.

I'm stuck with only one question:  Who/What/Where is the Benoit Film Festival?
[Update: OK, I see it's Beloit, not Benoit.]
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by Pointedstick » Sat Aug 25, 2012 10:57 pm

Having watched the movie myself, I am VERY interested to see TBV's questions/observations addressed by someone smarter than I (I'm looking at you, Gumby!  :) )
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by Gumby » Sat Aug 25, 2012 11:58 pm

Pointedstick wrote: Having watched the movie myself, I am VERY interested to see TBV's questions/observations addressed by someone smarter than I (I'm looking at you, Gumby!  :) )
Meh. I think TBV has a certain opinion that I don't share. We can agree to disagree. He seems to think that bankers had our best interest in mind when they convinced people that "sound money" was the better path. I disagree. And most farmers who supported the Greenback party disagreed. As with all things in life, those who have an agenda tend to promote their ideas for selfish reasons. Gold is no different. Those who promoted gold were doing so because they owned a lot of it and wished to use it for their own interests. It's a tradition that dates back the medieval times when goldsmiths lent gold to kings. Bankers weren't promoting gold for the good of farmers or middle-class Americans. The Greenback Party existed for a reason. The Greenback Party had legitimate concerns — as documented by L. Frank Baum's The Wonderful Wizard of Oz. To suggest that L. Frank Baum was mistaken or confused is to ignore a large chapter of American history. His timeless story clearly chronicles Coxey's Army and a legitamate perspective of the Crime of '73.

It comes down to an argument for debt-based money vs. debt-free money. I prefer the idea of debt-free money, in certain situations, since debt-based money tends to lead to an ever-increasing money supply (in order to keep things solvent). Thomas Edison and Henry Ford were supporters of debt-free money and were very outspoken against debt-based money. From what I can tell (unless I am misunderstanding his comments) TBV sides with the bankers who wanted money to be debt-based. That's his prerogative. That's really what it comes down to... debt-based money or debt-free money. Pick one.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by MachineGhost » Sun Aug 26, 2012 6:44 am

Gumby wrote: It comes down to an argument for debt-based money vs. debt-free money. I prefer the idea of debt-free money, in certain situations, since debt-based money tends to lead to an ever-increasing money supply (in order to keep things solvent). Thomas Edison and Henry Ford were supporters of debt-free money and were very outspoken against debt-based money. From what I can tell (unless I am misunderstanding his comments) TBV sides with the bankers who wanted money to be debt-based. That's his prerogative. That's really what it comes down to... debt-based money or debt-free money. Pick one.
I don't think debt-based money endears Progressive social engineering or a social safety net.  I just don't see how we can put the genie back in the bottle or even that we want to.  There are clear benefits to society.

It really doesn't matter what you use for money or a medium of exchange anyway, but to have the economy be constrained by a lack of a money supply ala The Great Depression is just bloody stupid.  There were over 400 scrips invented and used by communities during The Great Depression.  Necessity is the mother of all invention.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by stone » Sun Aug 26, 2012 10:48 am

I'm wondering whether our monetary sytsem is slowly and incremetally morphing into being something like a debt free gold standard system despite all efforts to prevent that. QE and near zero short term treasury rates might render government spending effectively debt free if the current tragectory gets extrapolated. If gold prices climb for decade after decade, then at some point won't they catch up with an austerity era fiat currency?
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by TBV » Sun Aug 26, 2012 2:48 pm

Gumby wrote:
Pointedstick wrote: Having watched the movie myself, I am VERY interested to see TBV's questions/observations addressed by someone smarter than I (I'm looking at you, Gumby!  :) )
Meh. I think TBV has a certain opinion that I don't share. We can agree to disagree. He seems to think that bankers had our best interest in mind when they convinced people that "sound money" was the better path. I disagree. And most farmers who supported the Greenback party disagreed. As with all things in life, those who have an agenda tend to promote their ideas for selfish reasons. Gold is no different. Those who promoted gold were doing so because they owned a lot of it and wished to use it for their own interests. It's a tradition that dates back the medieval times when goldsmiths lent gold to kings. Bankers weren't promoting gold for the good of farmers or middle-class Americans. The Greenback Party existed for a reason. The Greenback Party had legitimate concerns — as documented by L. Frank Baum's The Wonderful Wizard of Oz. To suggest that L. Frank Baum was mistaken or confused is to ignore a large chapter of American history. His timeless story clearly chronicles Coxey's Army and a legitamate perspective of the Crime of '73.

It comes down to an argument for debt-based money vs. debt-free money. I prefer the idea of debt-free money, in certain situations, since debt-based money tends to lead to an ever-increasing money supply (in order to keep things solvent). Thomas Edison and Henry Ford were supporters of debt-free money and were very outspoken against debt-based money. From what I can tell (unless I am misunderstanding his comments) TBV sides with the bankers who wanted money to be debt-based. That's his prerogative. That's really what it comes down to... debt-based money or debt-free money. Pick one.
Fellow HBPP'er Gumby:

No offense taken, but the above sounds like an ad-hominem argument.  I must be wrong because I'm in bed with the devil, eh?  Sort of a shame that I put together all those bullet points and you didn't try to address any of them.

If truth be told, I harbor no love for the "heads I win, tails you lose" arrangement that big-league bankers have had for so long.  It smacks of privilege, monopoly and a refusal to accept responsibility: all anti-capitalist characteristics.  Nor do I long to see generations of innocent citizens fall into debt simply to possess tokens allowing them to engage in trade.  However, I don't need to have any point of view at all in order to highlight the illogic and factual errors contained in that video.  Let's see...
  • Were the British really ready to pounce on the US during the Civil War in order to cement their alliance with northern bankers?  l'm afraid not.  The South was Britain's natural partner in trade and commerce, while the North did everything it could to inhibit the British from competing with their own fledgling industries.  That's what all those tariff debates were about.  Hell, that's what the Civil War was about!  The British wanted to intervene on behalf of the South, but changed their mind after the Battle of Antietam.
  • The "robber baron era" (1865-1900) was one in which, despite the moniker, non-farm average annual income (after inflation) grew by 75%. Between 1865 and 1898, the output of wheat increased by 256%, corn by 222%, coal by 800% and miles of railway track by 567%.
  • The adoption of the gold standard did not strangle the American economy.  It's adoption coincided with of the growth of the public school system, the absorption and employment of millions of immigrants, the construction of modern cities and urban mass transit, the expansion of the nation's rail system and the creation of truly national markets.  Ten times more patents were issued in 1860-90 than in the previous 70 years. Many economists regard the 1880's as the greatest period of US economic growth ever. Nobodies with nothing, like Andrew Carnegie, Alexander Graham Bell and John D. Rockefeller, were able to get financing, grow their businesses, transform the world economy and lower prices to boot.  Whether this was accomplished due to extreme avarice, skillful business practices or the hand of God doesn't matter. What does matter is that none of this is explainable by the theory expounded in "Oz."
  • What's more, economists like Murray Rothbard have long questioned whether the Panic of 1873 was as severe or long lasting as usually claimed.  At arms length, one may even favorably compare the economy's performance in the ten years after gold's adoption in 1873 with the ten years following its abolition in 1933.  But I digress.


The circulation of money is a contentious issue, no matter how it's organized.  The full value of our life's efforts to date are denominated in currency, currency whose value can be manipulated.  That's a problem.  Even colonial Maryland, which handed out free money on a per capita basis, could not protect the citizenry from a decline in its value.  Money that can be inflated to serve private or political goals works at odds with the universal human desire to preserve the value of our labor, which (to me) is the meaning of property.  On the other side of the coin, (ooh, did I really say that?) severe and abrupt contractions in the supply of money are often the result of prior inflationary episodes, i.e. the result, not the cause of the problem.  Such events frequently involve war, and always involve prior government action.  Therefore, to put one's full faith (and money) in the hands of a wise and benevolent government presents risks that should not be overlooked.  One of the enduring appeals of specie is that, once issued, it cannot be retroactively devalued.  One of the main attractions of market-based money (or non legal-tender competing currencies) is that it preserves ordinary folks' freedom of choice and offers protection against currency manipulation.  Being at the mercy of a banking cartel is unsettling.  Being at the mercy of an even bigger monopoly (you know who) is even more unsettling. We should expect better choices than these, choices which restrain the tendency of money issuers to weaken the necessary correlation between money and the present and not-too-distant supply of stuff for which it can be exchanged.  Thankfully, I believe the range of options is greater than you suggest.
Last edited by TBV on Sun Aug 26, 2012 6:16 pm, edited 1 time in total.
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Re: Repubs party platform: comittee to eval return to gold std and audit fed

Post by stone » Sun Aug 26, 2012 3:57 pm

TBV, did the big discoveries of gold in California and the Yukon make gold less of a "hard currency" during that period and was that instrumental for gold functioning well as money? I'm just struck by how successful monetary metal systems seem to coincide with massive discoveries of new metal. Perhaps the best example of sucessful monetary metal was the pieces of eight silver coin system that provided a global currency from the 1500s to the early 1800s. The massive amounts of silver mined in Bolivia and Mexico were crucial for that system IMO. China ran a trade surplus for centuries and ship loads of silver coins went in one direction to China. IMO if thousands of tonnes of silver had not been available to mine; silver would have needed to have been abandoned for that system. Afterall, silver only took off as a global currency once the New World mines were discovered. Gold only took off as money in North America once big gold discoveries were made. Before that didn't people in North America use silver and paper money?
"Good judgment comes from experience. Experience comes from bad judgment." - Mulla Nasrudin
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