Gold is not money, writes Sean Corrigan, and this is one reason we are on a path where genuine entrepreneurialism and the creation of real wealth are very much hampered. It is a path whose weary milestones are scored with the wasteful disincentives of welfarism and which is misleadingly signposted with the daubings of post-modernist voodoo, its billboards shrieking the slogans of group victimhood and emblazoned with demands for the suppression of the individual. It is a path whose crumbling paving stones are being overrun by the toxic, green shoots of that shrill new Inquisition which is today’s cult of environmentalism. FULL ARTICLE.
Source link: http://blog.mises.org/5086/what-does-the-high-price-of-gold-mean/
What Does the High Price of Gold Mean
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Andy,
As you obviously know, language is a powerful frame for the transmission of ideas. Words, and their specific choice, convey much. Whether this author, in this piece, succeeds in what he set out to accomplish, is a fine Q. I suggest he is least signalling his contempt for “AP Style”. Also, keep in mind that language structure can be useful as a shibboleth.
Your Q: “Whether this should be a “Daily Article”?”, is a good one. I’m not sure what the intended purpose of that e|mail-string is, but in light of your comment, it should definitely be reconsidered.
It could be the author was trying to bolster, with his style, as well as with his words, the following premise: “It is with horror that we now witness the maturation of the fruits of the policy that results from this abdication of the intellect.”
Sometimes technical language has to be used. However, yes, if there are two words that do the same job the less difficult (for the reader) one should be used.
Perhaps we could all gain by having a look at how Henry Hazlitt used the English language to explain economic and political matters.
Before anyone says “pot calling kettle black” – yes my own writings are often much worse than anything above.
Gold would have more application in industry if it wasn’t so expensive.
[James Turk contrasted the industrial consumption of silver to the lack
of application of gold]. Isn’t that just the paradox of commodity
money? The more use it sees as money, the fewer uses there appear to be
for it as a commodity. In truth, there are merely fewer profitable
uses for it as a commodity.
James,
“Indeed, we received 3 US patents because the digital gold currency we invented is superior to using national currencies as a medium of exchange in online commerce.”
It is not 3 US patents that could ever show that the currency you “invented” is superior to national currencies as a medium of exchange, but rather it is the market that decides this. And the US market says that the dollar is the currency and medium of exchange and unit of economic calculation.
Seriously, do you not think it is relevant that almost all US commerce is done in and reckoned in terms of the USD? Let’s make a list of things we buy. Tell me which ones you think people buy and sell in terms of gold ounces:
Groceries
Gas
Houses
Cars
Oil
Clothing
Toys
Drugs
Soap
Cosmetics
Vacations
Securities
Tools
Of that small list, I pay for them all and everything else with dollars. So does almost everybody else. How much is a gallon of gas about? $3.00. No in terms of gold? Hmmm, have to calculate that …. So what does that say: it is the dollar that is the US:
Currency
Media of exchange
Money
Unit of calculation
Gold is what people hoard to try to avoid the ravages of inflation. It would be great if it were money. It’s not.
Paul,
To modify your statement somewhat:
Gold is what people SAVE to try to avoid the ravages of an increasingly worthless fiat currency. As the money of last resort, gold will reassert itself as currency — the current form of money — when the dollar goes the way of all fiat: into oblivion.
Paul,
Even the recently departed head of the FedRes, Alan Greenspan, does not consider the U$D/FRN to be “money”. As a matter of fact, he is on record admitting that: even he cannot define the “dollar”, as we know of it today.
The “dollar” is hardly money, it is a currency and a unit of account, at best. Gold, on the other hand, has only been “de-monetized” in the sense that the link between it and the prevailing Fiat(of all stripes) has been repudiated, and, thereby, is less often used as a currency.
David,
“Gold is what people SAVE to try to avoid the ravages of an increasingly worthless fiat currency.”
I didn’t mean the term “hoard” in a bad way. I equate it with the term “hold”, as in keeping it on hand in one’s pocket or in one’s safe. I equate savings to investment which means buying capital goods and paying wages and rent to produce consumer and producers goods which results in higher production and more wealth.
“As the money of last resort, gold will reassert itself as currency — the current form of money — when the dollar goes the way of all fiat: into oblivion.”
The regression theorem shows us that for gold to reassert itself as money through market forces, it must do so through the painful process of emerging as the most marketable commodity in a barter economy. You cannot patent the process and you cannot advocate it into existence. I, for one am not looking forward to the chaos that is implied in having our economy sent back into the Stone Age of barter before gold can once again emerge naturally. Things will be much worse than they are now before they get better through that process.
M.E.,
“Even the recently departed head of the FedRes, Alan Greenspan, does not consider the U$D/FRN to be “money”. As a matter of fact, he is on record admitting that: even he cannot define the “dollar”, as we know of it today.”
I’m not saying that Greenspan can utter nothing but lies and incoherent babble, but the last time I saw evidence that he was capable of anything else was in an article he wrote on gold in 1966.
If I wanted to be confused about money and gold, I would pay closer attention to what the ex-chairman of one of the most prominent criminal organizations of the twentieth century has to say about it.
“The “dollar” is hardly money, it is a currency and a unit of account, at best. Gold, on the other hand, has only been “de-monetized” in the sense that the link between it and the prevailing Fiat(of all stripes) has been repudiated, and, thereby, is less often used as a currency.”
I was as disappointed as anyone to realize that gold is simply not money any longer, but we must get over it. It is an emotional thing for an Austrian, but take some slow breaths and then reflect. You don’t get paid in terms of gold, you don’t buy anything denominated in gold, you don’t say the price of the dollar is 1/700 th an ounce of gold. Every single price you have dealt in or are ever likely to deal in will be in terms of the dollar if you’re American, and some other fiat paper currency (money) of some other nation. This is not rocket science, what the prices are marked in gives you a big clue to just what is money. These days, gold is not money.
Now I agree: The only thing that can be justified as money is a market selected commodity money such as gold. All fiat paper money is unjustified and fraudulent. However, what is and what is justified are often not the same, and this is the case here for our money. I still hold that one of Rothbard’s suggested methods of getting the dollar back to gold is feasible and worth while. However, this method involves cooperation from the fed itself before it is disbanded. Unlikely, yes. But at least it is possible and doesn’t demand sending our economies to the Stone Age first.
To Paul Edwards
If our economy gets sent to the Stone Age, it won’t be as a result of market forces. It will be the result of government actions, first by debasing the currency and then continuing to force the debased currency to remain in circulation, following the model so clearly explained in Andrew Dickson White’s “Fiat Inflation in France”. A more recent example would be the peso crisis in Argentina.
When left unfettered the market will find its own solution to today’s problems of debased currency and legal tender laws. I suggest that GoldMoney is already proving to be one possible solution. Though admittedly its influence is small at this time, if we maintain our growth rate and achieve the goals that we envision, we could have a meaningful impact in five years time, perhaps less if the problems with the dollar worsen quickly.
The digital gold currency offered by GoldMoney is completely voluntary. If people find GoldMoney useful, they will use it and pay us a fee, enabling us to make a profit and remain in business. Central bankers force their fiat currency into circulation and remain in business regardless how well or poorly they do managing their currency (and their track record shows they do a poor job in maintaining the purchasing power of that currency). Central banks are not driven by market forces or bottom-line profits; they are driven by politics and their own self-interest to maintain their privileged cartel position. For this and other reasons presented in my recent monograph, “The Barbarous Relic – It Is Not What You Think” (published by the Comm. For Monetary Research & Education), I explain why central banks are the barbarous relic, not gold.
You seem to be wedded to the view that gold is not money and that only the dollar is money. For this reason I guess you favor Rothbard’s suggestion of how to get the dollar back to gold. What I am suggesting is something that I think will prove more useful – getting people back to gold and forgetting about trying to change the dollar. That’s what GoldMoney accomplishes. It does not intend to replace the dollar and other national currencies, but to supplement them by giving market participants another currency choice. GoldMoney is a non-national currency, and we operate from Jersey, Channel Islands (which is viewed to be politically neutral around the world) for a reason. We believe that currency should be a neutral tool in commerce, not subject to political control, and Jersey enables us to achieve that objective.
It is a quixotic exercise I think to expect that the State will restore the dollar to its sound money origins. Thus, we should not be fixated on the dollar nor hope for or expect a solution. We should instead be taking steps that improve our individual situation, and less reliance on State-run currency that is being continually debased is one way to do that. So when US government action eventually puts the economy in the Stone Age by forcing its debased currency to remain in circulation, farsighted individuals who have taken steps to protect themselves can live more or less to the standard which they have become accustomed, using GoldMoney as a means for interaction with others in the marketplace.
I’d like to make one last point on the chance that you may find it helpful. It’s concerning your list of things that can be purchased with gold.
My wife and I have been discussing (for a few years actually) replacing her SUV (now 12-years old) when price of SUVs came down. I’ve been saying that we should wait and only buy when the price of the SUV she wanted to purchase fell to 2,000 goldgrams. I’ve been saying this since the price was 4,000 goldgrams. Fortunately, she has been patient, so we waited. But the week before last when gold climbed to $716 ($23.02/gg), she exchanged 2,000 goldgrams for $46,000 which she used to buy a new SUV. In dollar terms, the price of gold doubled. But when measured in gold terms, she bought her SUV at half the price from a few years ago.
Now you might say that this example makes your point, that the dollar is money. But my point is that she is operating in the gold economy, and bought her car in the dollar economy. What she did was no different than if she was traveling to Japan and exchanged her gold currency to operate in the yen economy, of if some dollar-based American travelled to Europe and exchanged their dollar currency to operate in the euro economy.
Again, admittedly, the gold economy is small, but it is growing. And people in it are increasingly using gold as currency, i.e., as means of payment. But more to the point, it proves that gold is money, even by your definition.
Paul,
Far be it for me to add anything to what Mr. Turk has said, so let me instead quote the former Fed chairman in his 1999 testimony before Congress: “Gold still represents the ultimate form of payment in the world. Fiat money, in extremis, is accepted by nobody. Gold is always accepted.”
If that doesn’t make it money, I don’t know what does, which is why I “hoard” as much of it as I can, awaiting the day when gold returns to its rightful place in human affairs.
James,
“If our economy gets sent to the Stone Age, it won’t be as a result of market forces. It will be the result of government actions, first by debasing the currency and then continuing to force the debased currency to remain in circulation, following the model so clearly explained in Andrew Dickson White’s “Fiat Inflation in France”. A more recent example would be the peso crisis in Argentina.”
I agree.
“When left unfettered the market will find its own solution to today’s problems of debased currency and legal tender laws. I suggest that GoldMoney is already proving to be one possible solution. Though admittedly its influence is small at this time, if we maintain our growth rate and achieve the goals that we envision, we could have a meaningful impact in five years time, perhaps less if the problems with the dollar worsen quickly.”
I don’t like to throw cold water on ideas of people with good intentions; it is just that the implication of the regression theorem is very plain: gold emerged as money through the barter market, gold money substitutes (redeemable gold certificates) became highly marketable, the banks and the fed then removed the gold basis of these certificates and renamed them federal reserve notes. Now people consider paper dollars money. Today, most of them have no idea that gold would make a better money than paper, some fear it wouldn’t, and many would have no idea what we are debating here. As far as the market is concerned there is no barter, there is money already: the dollar. For gold to emerge now is not a matter of a successful marketing approach. It must emerge from the chaos of barter.
“The digital gold currency offered by GoldMoney is completely voluntary. If people find GoldMoney useful, they will use it and pay us a fee, enabling us to make a profit and remain in business. Central bankers force their fiat currency into circulation and remain in business regardless how well or poorly they do managing their currency (and their track record shows they do a poor job in maintaining the purchasing power of that currency). Central banks are not driven by market forces or bottom-line profits; they are driven by politics and their own self-interest to maintain their privileged cartel position. For this and other reasons presented in my recent monograph, “The Barbarous Relic – It Is Not What You Think” (published by the Comm. For Monetary Research & Education), I explain why central banks are the barbarous relic, not gold.”
I agree with the general thrust of your position. However the small, but very important point on which our assumptions differ is this: that given the current popularity and familiarity with FRNs, that there is a possibility for wide-spread adoption of GoldMoney. This is not because GoldMoney is not a great idea. It is because for it to succeed, the gold commodity would already have to be money. People would have to say something like this: “Hey, I’m using gold as money anyways, why not use GoldMoney as a money substitute! It’s even better because it’s more convenient!”
“You seem to be wedded to the view that gold is not money and that only the dollar is money. For this reason I guess you favor Rothbard’s suggestion of how to get the dollar back to gold. What I am suggesting is something that I think will prove more useful – getting people back to gold and forgetting about trying to change the dollar. That’s what GoldMoney accomplishes…”
LOL. Well, I’m not really at all advocating the paper dollar as money, as much as just making what I would call the obvious observation that it in fact is money. The corollary to that is, of course that gold is not money. I favor Rothbard’s position because I agree with him that after 100 years of using FRN’s and 70 years with them not even being redeemable in gold that people are not going to switch to some other form of money when this one is so utterly in widespread use and marketable. The masses have absolutely no idea of how or why your GoldMoney could be better than the dollar, and they are not about to invest the time and effort in learning why it is the case. The market operates with or without the participants’ formal understanding of the foundational principles of money. It does not depend on this understanding; a switch to GoldMoney would require just such an understanding as a minimum; I have no faith that this could ever happen.
“…It does not intend to replace the dollar and other national currencies, but to supplement them by giving market participants another currency choice. GoldMoney is a non-national currency, and we operate from Jersey, Channel Islands (which is viewed to be politically neutral around the world) for a reason. We believe that currency should be a neutral tool in commerce, not subject to political control, and Jersey enables us to achieve that objective.”
And this is a fatal misunderstanding of the nature of money in a free market. Only in the very early stages of the development of money on the fringes of barter, can another commodity have a hope of challenging the first for the purpose of indirect exchange. Once a commodity (or its substitute turned fiat) achieves mass acceptance as money, the market has decided. The dollar holds this position. GoldMoney cannot offer another choice. Money is naturally the exclusive single most marketable commodity. Two moneys won’t exist side by side.
“It is a quixotic exercise I think to expect that the State will restore the dollar to its sound money origins. Thus, we should not be fixated on the dollar nor hope for or expect a solution. We should instead be taking steps that improve our individual situation, and less reliance on State-run currency that is being continually debased is one way to do that. So when US government action eventually puts the economy in the Stone Age by forcing its debased currency to remain in circulation, farsighted individuals who have taken steps to protect themselves can live more or less to the standard which they have become accustomed, using GoldMoney as a means for interaction with others in the marketplace.”
Yes, perhaps you are right about the state. But I still think I’m right about money.
“I’d like to make one last point on the chance that you may find it helpful. It’s concerning your list of things that can be purchased with gold.
“My wife and I have been discussing (for a few years actually) replacing her SUV (now 12-years old) when price of SUVs came down. I’ve been saying that we should wait and only buy when the price of the SUV she wanted to purchase fell to 2,000 goldgrams. I’ve been saying this since the price was 4,000 goldgrams. Fortunately, she has been patient, so we waited. But the week before last when gold climbed to $716 ($23.02/gg), she exchanged 2,000 goldgrams for $46,000 which she used to buy a new SUV. In dollar terms, the price of gold doubled. But when measured in gold terms, she bought her SUV at half the price from a few years ago.
“Now you might say that this example makes your point, that the dollar is money. But my point is that she is operating in the gold economy, and bought her car in the dollar economy. What she did was no different than if she was traveling to Japan and exchanged her gold currency to operate in the yen economy, of if some dollar-based American travelled to Europe and exchanged their dollar currency to operate in the euro economy.”
I think that is very cool and very smart. I really hate to even dispute you on this issue when I’m this impressed with what you are trying to achieve. Unfortunately, you are correct that your example does make my point. However, it just seems like a really smart way to go for the individual savvy enough to see the angle. So my hat is off to you.
“Again, admittedly, the gold economy is small, but it is growing. And people in it are increasingly using gold as currency, i.e., as means of payment. But more to the point, it proves that gold is money, even by your definition.”
By my definition? James, gold will by money by my definition when cabbage prices are marked in Safeway in terms of gold weight. I have to say though, if you are right and i am wrong, i will not be disappointed.
David,
Everybody (I exaggerate for the sake of humor) is quoting Greenspan to make the point that gold is money. I don’t mean to be disrespectful to those quoting him when I say that I think this is funny and ironic. There is always the chance that what Greenspan says is actually correct and true. I just don’t think it is necessarily very likely.
In any event, let us recognize what the entire purpose of the fed has been: to give weight to the argument that gold is a bad money, that the use of a gold standard leads to an instable economy, fraught with recessions and depressions due to the investing man’s psychological instability. The pretext of the fed is that central management of the economy keeps it on an even keel, that without the fiat money of the fed, that gold would have us jumping from the frying pan to the fire on a regular basis.
I do not dispute that gold is the ultimate commodity most suited for monetary purposes. I agree that in free barter markets, it has in the past and would again emerge as the natural commodity money. I agree that some people hold it because of this fact even today. All I’m saying is, we all buy our groceries with dollars, not gold ounces, and that furthermore this is highly unlikely to change without cooperation from the fed itself. The basis on which I conclude this is the regression theorem. Once a money is established, even if it has been completely converted to fiat, the people are comfortable with it and will stick with it, come hell or high water. And if, as in Germany of the 1920′s, they destroy their mark, they will adopt the currency of another nation, or they will create a new mark based on the old one. They will not and cannot jump to gold by instinct or by formal reasoning, as this is not how commodity money emerges.
Paul,
I buy my groceries with dollars for the same reason that I pay my taxes with them: the state gives me no choice. And come hell or high water (both of which ARE coming), the people, being utterly clueless, will do as they’re told, until their overlords see that it’s time to pack their bags (with gold) and bid the people a disdainful adieu.
As for the dollar, as the world’s reserve currency, it cannot implode without all other fiat currencies imploding. And since it is inevitable that the dollar WILL implode, what can one conclude other than that gold must reassert itself?
And forget barter, as digital currencies like GoldMoney are already here and are simply waiting in the wings to put gold back in its rightful place, only much more securely and robustly.
That said (and with all due respect), I think it’s you who needs to take a deep breath and accept the fact that we stand on the threshold of a new era, one in which the state as we know it will pass into history and humankind will embark on a long-delayed journey of discovery.
Yes, the transition will be chaotic, but better that than the continuing chaos of the state. I mean, can you honestly look at the world today and not see that this insantiy cannot continue? Do you not see that the Internet is changing everything — http://www.lewrockwell.com/orig/garris3.html — and that as our money is returned to us, so will our freedoms be?
Cheer up, buckle down, and buy gold.
Paul,
With this: “There is always the chance that what Greenspan says is actually correct and true.” I suggest that read his statements, as FedRes head, from the following point of view: he works for the Federal Reserve, a private corporation, not the USGov, or the people of the u. S. of A..
I found, from that POV, much of what was chalked up to “Greenspeak”, became emanately clearer.
As far as your belief that two “moneys” cannot concurrently circulate, I’d suggest you’d find many instances over time, including today, where that was exactly, at least, the case.
David,
This is one of my favorite topics, so I just can’t shut up on it…
“I buy my groceries with dollars for the same reason that I pay my taxes with them: the state gives me no choice. And come hell or high water (both of which ARE coming), the people, being utterly clueless, will do as they’re told, until their overlords see that it’s time to pack their bags (with gold) and bid the people a disdainful adieu.”
Not really. Most people have no idea they are under compulsion to use the dollar. They just do and would freak out at the suggestion they accept payment in any other form than what they presently take it in, which is dollars in the US.
“As for the dollar, as the world’s reserve currency, it cannot implode without all other fiat currencies imploding. And since it is inevitable that the dollar WILL implode, what can one conclude other than that gold must reassert itself?”
But when a currency implodes, what has happened historically? The German mark imploded. A new mark was created at some fixed ratio to it. Gold did not reassert itself. When you state that gold will reassert itself, keep in mind the regression theorem and how it connects to this. Gold must either be explicitly re-tied to the dollar by those who broke it away from the dollar in the first place, or gold must emerge from barter all over again. The latter is not beyond the realm of possibility, but we have to go through a 1920s German mark debacle with the US dollar to contemplate such a sequence occurring also without a new fiat currency introduced to take its place. That scenario is just nasty and perhaps unlikely.
“And forget barter, as digital currencies like GoldMoney are already here and are simply waiting in the wings to put gold back in its rightful place, only much more securely and robustly.”
I’ll forget about barter when I forget about the money regression. I’ll do that when someone successfully refutes it.
“That said (and with all due respect), I think it’s you who needs to take a deep breath and accept the fact that we stand on the threshold of a new era, one in which the state as we know it will pass into history and humankind will embark on a long-delayed journey of discovery.”
LOL. You won’t see me complaining if we can loose the paper dollar, get back to a gold standard, and do it all without the fed’s cooperation or the pain of being reduced to barter first to get there. I’ll take that deep breath we have advised each other to take. But I won’t hold my breath for this new era.
“Yes, the transition will be chaotic, but better that than the continuing chaos of the state. I mean, can you honestly look at the world today and not see that this insantiy cannot continue? Do you not see that the Internet is changing everything — http://www.lewrockwell.com/orig/garris3.html — and that as our money is returned to us, so will our freedoms be?”
It sounds to me that if you are right, then my opinion is of little consequence as we are staring at a new inevitable era of sound money. But do I come across as being against such a thing? I’m just suggesting you give the money regression as laid out by Mises another thought just to double check that your vision of the future is consistent with it. My argument is that it is not.
“Cheer up, buckle down, and buy gold.”
I’m happy dude, and I already have gold.
M.E,
“With this: “There is always the chance that what Greenspan says is actually correct and true.” I suggest that read his statements, as FedRes head, from the following point of view: he works for the Federal Reserve, a private corporation, not the USGov, or the people of the u. S. of A..
“I found, from that POV, much of what was chalked up to “Greenspeak”, became emanately clearer.”
When you characterize Greenspan’s comments as immanently clearer, do you mean immanently honest, truthful and forthright? As in, he is not practicing the fine art of obfuscation simply because he is knowingly defrauding the American people in collusion with the criminal banking community and the federal government?
It is true that his BS could be interpreted pretty accurately. It is also pretty clear that it was not ever meant to be interpreted accurately. But I suppose I digress.
“As far as your belief that two “moneys” cannot concurrently circulate, I’d suggest you’d find many instances over time, including today, where that was exactly, at least, the case.”
You have my attention and curiosity: where; when.
Paul,
The acceptance of the U$D, today, occurs in virtually all parts of the globe. In Iraq, at the very minimum, there are U$D and NID (New Iraqi Dinar) in concurrent circulation.
In years past, the British Pound was accorded similiar.
Singapore, still, today has 1:1 convertibility/usage with Brunei’s currency, and they are freely used in one another’s geographic territories.
Many merchants, especially in economies that are geared toward tourism, frequently accept the currencies held by the traveler from the visiting country, often accepting the “foreign” currency at a premium.
There is no doubt that the FedRes is the Fraud you purport. Can an individual running such a scheme ever be deemed: “Honest”, no. But, surely, everthing he has ever uttered is not False. I meant what I said, when viewed “more properly”, his statements became easier to understand. Diogenes, his ownself, couldn’t find an “Honest Man” at the FedRes.
M.E.,
There are situations where the people of country A will accept currency of country B. But i don’t think it relates to the situation of gold which we are discussing. Let’s enumerate these situations:
1. Country A’s currency is so devastated, that any relatively stable foreign currency will seem more attractive. This happened in Germany in the 1920′s where gold did not replace the mark. I would suspect that Iraq’s new Dinar has a similar lack of reliability and appeal in the minds of the Iraqis today.
2. Where the people of country A have daily exposure to foreign currency of country B because they deal with country B’s people as tourists daily. Merchants will accept the currency for their customer’s convenience, but they will redeem it for local currency if they wish to buy from others in their nation who do not deal daily with foreign nationals.
As an example close to home, i know that Bellis Fair (Bellingham WA) merchants used to, or maybe still do take Canadian money. I also know they don’t try to use their Canadian money at shops much further south. They certainly don’t shop in Seattle with Canadian dollars. The very same is true north of the border.
3. Where the government of country A tell their people that the currency of country B is to be accepted at the prescribed exchange rate and that they can’t not accept it. This is not a market behavior, but legislation.
People will prefer to deal either in their currency which they are familiar with, or if their currency is complete trash, they will want relatively reliable foreign exchange. People will be reduced to commodity barter only if neither of these other options is available, and only after that will gold again eventually emerge as currency. The bottom line is, a commodity money can’t emerge spontaneously from the mere devastation of a fiat currency. It must emerge either from barter, or else the process that took the currency away from gold in the first place must be reversed.
M.E.,
“…surely, everthing he [Greenspan] has ever uttered is not False.”
I am sure you must be right in this point. It’s just not a very reassuring vote of confidence for the poor fellow. On the other hand, I’m sure it really is the best that can be said of him. My meager little point was simply that I don’t consider him a great or reliable reference on the question of money. But others may differ and that’s fair enough.
If our economy gets sent to the Stone Age, it won’t be as a result of market forces. It will be the result of government actions, first by debasing the currency and then continuing to force the debased currency to remain in circulation …
That did not occur only in France and Argentina. That is exactly how the Roman empire fell.
When a money economy collapses, the violence starts. Security is economic activity, after all, and as such, it will become impossible to produce efficiently, just as it will become impossible to efficiently produce anything else, once the wheels come off the wagon.
As a student of medieval and early modern history, I can tell you that the so-called middle ages were not nearly as backwards as the moderns believed, nor was ancient Rome as wonderful. But the 5th-10th centuries were pretty rough.
Paul,
“Most people have no idea they are under compulsion to use the dollar.”
Nor do they know that the dollar isn’t a dollar (as in a constitutionally-mandated amount of government-minted silver) but a dollar BILL issued by a private and wholly unconstitutional bank. But like I said, the American people are clueless, which is why they are deaf to what gold is going out of its way to tell them and why they will freak out when the dollar finally implodes, not knowing where to turn other than to the very same criminals who got them into this mess.
“But when a currency implodes, what has happened historically? The German mark imploded. A new mark was created at some fixed ratio to it. Gold did not reassert itself.”
The Reichmark wasn’t the world’s reserve currency, and in any case, gold didn’t reassert itself then for the same reason that it hasn’t done so today: the powers that be are doing all in their power to suppress it — http://news.goldseek.com/GATA
But that was then and this is now. And now is entirely different — http://www.oftwominds.com/blogmay06/housing-global-recession.html
Glad you’re happy, dude, and glad you’re buying gold.
But he blows it in the very first sentence: “As consumer spending goes, so goes the economy.”
I think Independent Investment Advice Wakefield more effective for all people.
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