Well, matter cannot be created or destroyed, so it's all still around somewhere.
Going Back on the Gold Standard?
- Thread starter What Would Jesus Do?
- Start date
Well, matter cannot be created or destroyed, so it's all still around somewhere.
Funny how conservatives don't see this as an issue in regards to income and wealth inequality.
Nixon a 'con'??? You're kidding right? Mr. "We're all Keynesians now." Nixon? This is the guy who gave the EPA, affirmative action and price controls. The financial 'experts' were the bankers who control the FedRes. The same ones who ripped of America with the 'too big to fails'.
You're really confused. Inflation is when the Fed 'inflates' the money supply through manipulation. Think printing paper out of thin air. When they shrink the money supply, it causes a bust.
Alan Greenspan, explained years ago: Any attempt to use gold as money gets in the way of funding the welfare state. As he wrote in July, 1966, in “Gold and Economic Freedom”, long before he became chairman:
"This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
"This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the “hidden” confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
You don't even have to do the math. It's already been presented. We do not have enough gold to back all the dollars in circulation. Any attempt to put us back on the gold standard would require government action that would make Roosevelt blush.
In his day, Nixon was conservative. But you have to remember that 4 years before Nixon, Goldwater, who was a real conservative (not a Reagan or Cruz type) got his ass handed to him by ol' Landslide by "we the people." Make no mistake about it....Nixon was a conservative GOPer who understood politics was not a "my way or the highway" type of thing.
I'm reading All the Presidents' Bankers by Nomi Prins. She mentions the problems encountered in the 1950s when the dollar was pegged at $35 an ounce and foreign banks and such were cashing in dollars for our gold.
I love these posts. They validate my decision to go into the field of finance. Regardless of my position, I figured out a couple years ago that people were too ignorant to know what was really going on. Nothing will ever change, so IMO it's better to be on the right hand of the devil, than in his path. I just wish I would have realized this ignorance sooner. I'd probably have three houses and a yacht by now.
I believe in today's world, "sound money" just is not functional. We have moved way far away from the idea. Cannot be recovered.
Sound money scares no one. We have that now. The stupidity that would be going back to the gold standard does.
Tying currency to a gold price that is "fixed" by the government is sound how? Sure, gold will always be worth something, but if the actual value of gold goes way up or way below the "fixed" price, you don't see the problem that causes?
In Tuesday’s Republican presidential debate, Senator Ted Cruz reintroduced an idea that had many viewers scratching their heads and nearly all economists pulling out their hair. Mr. Cruz advocated a return to the gold standard — that is, tying the value of a dollar to a set amount of gold — because, he said, it produced prosperity under the Bretton Woods system and it helped “workingmen and -women.”
Mr. Cruz is confused about history and economics. The framers of Bretton Woods specifically designed their new international monetary system not to be a gold standard because they believed gold-based currency was largely responsible for the Great Depression. Their system, named for the New Hampshire town hosting the 1944 international conference that created it, was not a gold standard but “the exact opposite,” according to John Maynard Keynes, one of the system’s principal designers. Under Bretton Woods, nations were not obliged to set monetary policy according to how much gold they had, but rather according to their economic needs.
Leaving his historical errors aside, Mr. Cruz is not the only Republican presidential candidate to express admiration for the gold standard: Senator Rand Paul and Ben Carson have, too. The gold standard has long been a pet cause among some conservatives (it was hinted at in the 2012 Republican platform) and has gained credence among mainstream Republicans as a tool to limit government influence over the economy.
But a return to the gold standard would be catastrophic, especially as we continue the climb out of our Great Recession. That is because, as the framers of Bretton Woods knew, the course of an economy depends not only on what happens, but on what people expect will happen.
Under a gold standard, the amount of gold a nation holds in bank vaults determines how much of its money circulates. If a nation’s gold stock increases through trade, for example, the country issues more currency. Likewise, if its gold stock decreases, it issues less.
Gold as currency has obvious problems. First, there is relatively little of it while there are more people and goods all the time. So in the long term, the gold standard exerts a downward pressure on prices as money becomes relatively tighter and its value increases. If prices continue to decline, people are less likely to spend their money. After all, if you believe that the price of, say, shirts will continue to drop, you’ll delay splurging on haberdashery.
With enough time, the gold standard can create a deflationary spiral that brings an economy completely to a halt — which is what happened in the Great Depression. It was for this reason that Franklin D. Roosevelt abandoned the gold standard in the first days of his presidency, declaring that he would make the dollar into a “managed currency” the value of which policy makers might increase or decrease in response to economic need. In giving policy makers the power to regulate the money supply as they saw fit, Roosevelt created the expectation of a turn toward inflation, giving people reason to spend more money in the short term. (As Keynes observed, inflation causes problems, too, but at least it encourages spending, while the expectation of deflation can “inhibit the productive process altogether.”)
Recovery began as soon as Roosevelt took office in March 1933, and his use of the dollar to spark recovery created the basis for the adoption of managed currencies around the world. Eleven years later, Bretton Woods gave multiple currencies fixed but adjustable rates. Nations now had precisely the freedom the gold standard denied them, to use monetary policy to regulate their economies. (The United States dollar had a nominal value in gold of $35 an ounce but the country was not obliged to set monetary policy according to how much gold it had.)
Mr. Cruz correctly notes that the world economy enjoyed decades of prosperity under Bretton Woods, but that happened without a gold standard, not because of one. Why is a discredited policy now attractive to Republicans? The gold standard suits a political moment. Tying the dollar to an arbitrary quantity of shiny metal binds policy makers’ hands, robbing them of their discretion to act: The central bank can’t adjust the money supply to counteract crises or prevent them. These limits, for many Republicans, are good things. The gold standard is essentially the monetary equivalent of a government shutdown.
A new Bretton Woods might be a good idea, to encourage greater international cooperation on monetary issues, but a gold standard is not, as nearly all economists agree. Even the mainstreaming of gold-standard talk can have bad consequences, should its proponents gain the ability to pressure central bankers to tighten the money supply, as a gold standard would oblige them to do. A return to the good old days of gold could leave us vulnerable to precisely the outcome Bretton Woods was intended to prevent: another Great Depression.
http://www.nytimes.com/2015/11/13/o...still-love-the-gold-standard.html?ref=opinion
Mr. Cruz is confused about history and economics. The framers of Bretton Woods specifically designed their new international monetary system not to be a gold standard because they believed gold-based currency was largely responsible for the Great Depression. Their system, named for the New Hampshire town hosting the 1944 international conference that created it, was not a gold standard but “the exact opposite,” according to John Maynard Keynes, one of the system’s principal designers. Under Bretton Woods, nations were not obliged to set monetary policy according to how much gold they had, but rather according to their economic needs.
Leaving his historical errors aside, Mr. Cruz is not the only Republican presidential candidate to express admiration for the gold standard: Senator Rand Paul and Ben Carson have, too. The gold standard has long been a pet cause among some conservatives (it was hinted at in the 2012 Republican platform) and has gained credence among mainstream Republicans as a tool to limit government influence over the economy.
But a return to the gold standard would be catastrophic, especially as we continue the climb out of our Great Recession. That is because, as the framers of Bretton Woods knew, the course of an economy depends not only on what happens, but on what people expect will happen.
Under a gold standard, the amount of gold a nation holds in bank vaults determines how much of its money circulates. If a nation’s gold stock increases through trade, for example, the country issues more currency. Likewise, if its gold stock decreases, it issues less.
Gold as currency has obvious problems. First, there is relatively little of it while there are more people and goods all the time. So in the long term, the gold standard exerts a downward pressure on prices as money becomes relatively tighter and its value increases. If prices continue to decline, people are less likely to spend their money. After all, if you believe that the price of, say, shirts will continue to drop, you’ll delay splurging on haberdashery.
With enough time, the gold standard can create a deflationary spiral that brings an economy completely to a halt — which is what happened in the Great Depression. It was for this reason that Franklin D. Roosevelt abandoned the gold standard in the first days of his presidency, declaring that he would make the dollar into a “managed currency” the value of which policy makers might increase or decrease in response to economic need. In giving policy makers the power to regulate the money supply as they saw fit, Roosevelt created the expectation of a turn toward inflation, giving people reason to spend more money in the short term. (As Keynes observed, inflation causes problems, too, but at least it encourages spending, while the expectation of deflation can “inhibit the productive process altogether.”)
Recovery began as soon as Roosevelt took office in March 1933, and his use of the dollar to spark recovery created the basis for the adoption of managed currencies around the world. Eleven years later, Bretton Woods gave multiple currencies fixed but adjustable rates. Nations now had precisely the freedom the gold standard denied them, to use monetary policy to regulate their economies. (The United States dollar had a nominal value in gold of $35 an ounce but the country was not obliged to set monetary policy according to how much gold it had.)
Mr. Cruz correctly notes that the world economy enjoyed decades of prosperity under Bretton Woods, but that happened without a gold standard, not because of one. Why is a discredited policy now attractive to Republicans? The gold standard suits a political moment. Tying the dollar to an arbitrary quantity of shiny metal binds policy makers’ hands, robbing them of their discretion to act: The central bank can’t adjust the money supply to counteract crises or prevent them. These limits, for many Republicans, are good things. The gold standard is essentially the monetary equivalent of a government shutdown.
A new Bretton Woods might be a good idea, to encourage greater international cooperation on monetary issues, but a gold standard is not, as nearly all economists agree. Even the mainstreaming of gold-standard talk can have bad consequences, should its proponents gain the ability to pressure central bankers to tighten the money supply, as a gold standard would oblige them to do. A return to the good old days of gold could leave us vulnerable to precisely the outcome Bretton Woods was intended to prevent: another Great Depression.
http://www.nytimes.com/2015/11/13/o...still-love-the-gold-standard.html?ref=opinion
We don't want money to be hoarded like gold, which a gold standard would create. We want it to be invested, borrowed and lended so it can spur economic development.
The necessary ROI in a gold standard monetary system would kill capital investment.
AND THAT IS A BAD THING
It’s not too hard to understand why everyone seeking the Republican presidential nomination is proposing huge tax cuts for the rich. Just follow the money: Candidates in the G.O.P. primary draw the bulk of their financial support from a few dozen extremely wealthy families. Furthermore, decades of indoctrination have made an essentially religious faith in the virtues of high-end tax cuts — a faith impervious to evidence — a central part of Republican identity.
But what we saw in Tuesday’s presidential debate was something relatively new on the policy front: an increasingly unified Republican demand for hard-money policies, even in a depressed economy. Ted Cruz demands a return to the gold standard. Jeb Bush says he isn’t sure about that, but is open to the idea. Marco Rubio wants the Fed to focus solely on price stability, and stop worrying about unemployment. Donald Trump and Ben Carson see a pro-Obama conspiracy behind the Federal Reserve’s low-interest rate policy.
And let’s not forget that Paul Ryan, the new speaker of the House, has spent years berating the Fed for policies that, he insisted, would “debase” the dollar and lead to high inflation. Oh, and he has flirted with Carson/Trump-style conspiracy theories, too, suggesting that the Fed’s efforts since the financial crisis were not about trying to boost the economy but instead aimed at “bailing out fiscal policy,” that is, letting President Obama get away with deficit spending.
As I said, this hard-money orthodoxy is relatively new. Republicans used to base their monetary recommendations on the ideas of Milton Friedman, who opposed Keynesian policies to fight depressions, but only because he thought easy money could do the job better, and who called on Japan to adopt the same strategy of “quantitative easing” that today’s Republicans denounce.
George W. Bush’s economists praised the “aggressive monetary policy” that, they declared, had helped the economy recover from the 2001 recession. And Mr. Bush appointed Ben Bernanke, who used to consider himself a Republican, to lead the Fed.
But now it’s hard money all the way. Republicans have turned their back on Friedman, whether they know it or not, and draw their monetary doctrine from “Austrian” economists like Friedrich Hayek — whose ideas Friedman described as an “atrophied and rigid caricature” — when they aren’t turning directly to Ayn Rand.
This turn wasn’t driven by experience. The new Republican monetary orthodoxy has already failed the reality test with flying colors: that “debased” dollar has risen 30 percent against other major currencies since 2011, while inflation has stayed low. In fact, the failure of conservative monetary predictions has been so abject that news reports, always looking for “balance,” tend to whitewash the record by pretending that Republican Fed critics didn’t say what they said. But years of predictive failure haven’t stopped the orthodoxy from tightening its grip on the party. What’s going on?
My main answer would be that the Friedman compromise — trash-talking government activism in general, but asserting that monetary policy is different — has proved politically unsustainable. You can’t, in the long run, keep telling your base that government bureaucrats are invariably incompetent, evil or both, then say that the Fed, which is, when all is said and done, basically a government agency run by bureaucrats, should be left free to print money as it sees fit.
Politicians who lump it all together, who warn darkly that the Fed is inflating away your hard-earned wealth and enabling giveaways to Those People, are always going to have the advantage in intraparty struggles.
You might think that the overwhelming empirical evidence against the hard-money view would count for something. But you’d only think that if you were paying no attention to any other policy debate.
Leading political figures insist that climate change is a gigantic hoax perpetrated by a vast international scientific conspiracy. Do you really think that their party will be persuaded to change its economic views by inconvenient macroeconomic data?
The interesting question is what will happen to monetary policy if a Republican wins next year’s election. As best as I can tell, most economists believe that it’s all talk, that once in the White House someone like Mr. Rubio or even Mr. Cruz would return to Bush-style monetary pragmatism. Financial markets seem to believe the same. At any rate, there’s no sign in current asset prices that investors see a significant chance of the catastrophe that would follow a return to gold.
But I wouldn’t be so sure. True, a new president who looked at the evidence and listened to the experts wouldn’t go down that path. But evidence and expertise have a well-known liberal bias.
http://www.nytimes.com/2015/11/13/opinion/republicans-lust-for-gold.html?ref=opinion
But what we saw in Tuesday’s presidential debate was something relatively new on the policy front: an increasingly unified Republican demand for hard-money policies, even in a depressed economy. Ted Cruz demands a return to the gold standard. Jeb Bush says he isn’t sure about that, but is open to the idea. Marco Rubio wants the Fed to focus solely on price stability, and stop worrying about unemployment. Donald Trump and Ben Carson see a pro-Obama conspiracy behind the Federal Reserve’s low-interest rate policy.
And let’s not forget that Paul Ryan, the new speaker of the House, has spent years berating the Fed for policies that, he insisted, would “debase” the dollar and lead to high inflation. Oh, and he has flirted with Carson/Trump-style conspiracy theories, too, suggesting that the Fed’s efforts since the financial crisis were not about trying to boost the economy but instead aimed at “bailing out fiscal policy,” that is, letting President Obama get away with deficit spending.
As I said, this hard-money orthodoxy is relatively new. Republicans used to base their monetary recommendations on the ideas of Milton Friedman, who opposed Keynesian policies to fight depressions, but only because he thought easy money could do the job better, and who called on Japan to adopt the same strategy of “quantitative easing” that today’s Republicans denounce.
George W. Bush’s economists praised the “aggressive monetary policy” that, they declared, had helped the economy recover from the 2001 recession. And Mr. Bush appointed Ben Bernanke, who used to consider himself a Republican, to lead the Fed.
But now it’s hard money all the way. Republicans have turned their back on Friedman, whether they know it or not, and draw their monetary doctrine from “Austrian” economists like Friedrich Hayek — whose ideas Friedman described as an “atrophied and rigid caricature” — when they aren’t turning directly to Ayn Rand.
This turn wasn’t driven by experience. The new Republican monetary orthodoxy has already failed the reality test with flying colors: that “debased” dollar has risen 30 percent against other major currencies since 2011, while inflation has stayed low. In fact, the failure of conservative monetary predictions has been so abject that news reports, always looking for “balance,” tend to whitewash the record by pretending that Republican Fed critics didn’t say what they said. But years of predictive failure haven’t stopped the orthodoxy from tightening its grip on the party. What’s going on?
My main answer would be that the Friedman compromise — trash-talking government activism in general, but asserting that monetary policy is different — has proved politically unsustainable. You can’t, in the long run, keep telling your base that government bureaucrats are invariably incompetent, evil or both, then say that the Fed, which is, when all is said and done, basically a government agency run by bureaucrats, should be left free to print money as it sees fit.
Politicians who lump it all together, who warn darkly that the Fed is inflating away your hard-earned wealth and enabling giveaways to Those People, are always going to have the advantage in intraparty struggles.
You might think that the overwhelming empirical evidence against the hard-money view would count for something. But you’d only think that if you were paying no attention to any other policy debate.
Leading political figures insist that climate change is a gigantic hoax perpetrated by a vast international scientific conspiracy. Do you really think that their party will be persuaded to change its economic views by inconvenient macroeconomic data?
The interesting question is what will happen to monetary policy if a Republican wins next year’s election. As best as I can tell, most economists believe that it’s all talk, that once in the White House someone like Mr. Rubio or even Mr. Cruz would return to Bush-style monetary pragmatism. Financial markets seem to believe the same. At any rate, there’s no sign in current asset prices that investors see a significant chance of the catastrophe that would follow a return to gold.
But I wouldn’t be so sure. True, a new president who looked at the evidence and listened to the experts wouldn’t go down that path. But evidence and expertise have a well-known liberal bias.
http://www.nytimes.com/2015/11/13/opinion/republicans-lust-for-gold.html?ref=opinion
Would you rather have a bar of gold or a long and proven cash flow creating business?
Wonderful. You can go ahead and exclude yourself from any further discussion on monetary policy. "Work Brings Freedom" fits you perfectly.
ETA: You'd better hope, if your Climate Change fear is justified, that your fellow human beings don't cop the same weak plea as you just did- "In today's world, making our planet inhabitable is just not functional." Good luck.
Hey! You can speak without copying and pasting novels! Too bad that when you do, you get it wrong. It's clear that we live in a world of the relative, however. Sound money is absolutely NOT what we have now!
I'm not a republican, if that's what you mean.
And to answer your question, where do you think all that newly created money goes to? Do you think it goes to the poor or the politically connected? The overspending is one big reason for the increasing income gap.
You know where I stand on this and yes we have "sound money" today but the way our monetary policy is being run puts that status unnecessarily in harms way. That doesn't mean we should use the gold standard (shoot me bc that would be truly awful) but we could do things better than we could manage things better than we are today.
For the record, I'm not rigid on there MUST be a "gold standard" to correct this. But, there is no sound money at all. The monetary policy is hardly sound. The money, the currency, the medium of exchange and the store of value are all over the place. Have competing currencies, discuss and devise remedies. But, to say, or imply that MONETIZED DEBT is "sound money" is just insane to me. The financial system is just that- monetized debt. And it's rigged to favor the wealthy at the expense of the poor. There's nothing "sound" about our monetary policy, except that it soundly makes wealthy people perpetually wealthy, and remain in the ultimate places of power.
Let me answer your question with a question. In 1920, a 1 oz. gold coin valued at $35 could buy you a finely tailored suit. In 2015, with that same coin now valued at just under $1,100, you can still buy a finely tailored suit. My question is this....could your $35 in paper money buy in 2015 what it could it 1920? I'll answer for you. because I always get crickets when I posit this. Answer: ABSOLUTELY NOT. 98% of the people's purchasing power has been robbed from them by a private banking cartel.
I don't even bother to read anything from The Old Grey Whore. Do they have any credibility left? They deliberately LIE about every war to whip up support for the 1%ers. I'm guessing this crap opposed gold. What a shock! A paper controlled by The Billionaire Club wants to keep the 3 card Monty shell game going to their benefit. I'm aghast.
You do realize that i was saying that cash flow (not just $1 or $35) is a more valuable resource than gold.
It appears that cash flow valuations have out performed gold.
My God, Man! Is their no limit to your stupidity. You have cornered the market on this commodity. What we have today is counterfeit money. The money on your Monopoly game board is worth more. As you have noted, it is backed by nothing, nada, zilch. Just faith and credit. Our government is at war with countries right now over dollar hegemony. Saddam Hussein chose to flip the bird at Western bankers and decided to sell oil for Euros because he was getting cheated by receiving a devaluing dollar in return. Iran built an Oil Bourse to sell their oil for other currencies in 2006. They were targeted for extinction.
I guess that explains why the bankers are hoarding all of the gold. The U.S. wouldn't even repatriate Germany's gold when they asked for it a couple of years ago.You do realize that i was saying that cash flow (not just $1 or $35) is a more valuable resource than gold.
It appears that cash flow valuations have out performed gold.
Its backed by the reliable and predictable cash-flow that has been produced for decades upon decades. I've already have shown you how cash-flow valuations have out produced and performed gold over the last 100 years and the you throw that crap up.
As stated before i am not all happy with how lose we have been w growing the money supply but saying that a dollar is backed by nothing and worth nada, zilch is plain stupid.
110 years on that chart bro. Your argument is dumb and simple minded. In your world a business couldn't get a loan unless they had some gold backing. Your approach stifles growth and innovation bc it hampers risk taking and capital investment.
You're throwing up a straw man's argument. Countries are running from the dollar like a scolded dog. Our economy is built on a house of cards. When the people realize their wealth is being stolen right from under their nose, there will be a revolution. Henry Ford knew this. You're comparing decades to the 5,000 years in which gold has been a store of value. Here is what Keynes said about people like you:
Keynes was also aware of the dangers of inflation.[50] In The Economic Consequences of the Peace, Keynes had written:
"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
https://en.wikipedia.org/wiki/John_Maynard_Keynes
5,000 years of gold to 110 years? Let me check my inflation calculator. Nope. Your argument still doesn't hold up.
Your argument for a gold standard is dumb and reckless...you've been hoodwinked!
http://www.theatlantic.com/business...orlds-worst-economic-idea-in-2-charts/261552/
