Posted on 02/15/2018 1:40:13 PM PST by davikkm
Politicians, economic “experts” and the talking heads in mainstream media will never tell you that monetary policy is the most important issue facing the United States. Whether you realize it or not, monetary policy has a direct and significant impact on all our lives. When the US abandoned the gold standard in the early 1970’s, it steered our economy toward a cliff that we are closer than ever to driving over.
Once the gold standard ended, the Nixon administration went to Saudi Arabia to strike up a deal that would give immense power to the US’s rent-seeking elites for many decades to come. This deal created what’s known as the Petrodollar system. In exchange for weapons and military support, the Saudis agreed to sell their oil exclusively in dollars. Eventually this deal spread to almost every other oil producing nation.
(Excerpt) Read more at investmentwatchblog.com ...
BTW barter was around (still is) for thousands of years before currency.
It works just fine.
If currency is manipulated such that its value is unstable, don't use it.
The gold standard is a specious concept.
Not sure why people insist on repeating the same old myth.
I am a businessman, investment banker.
Stock has value that is variable. Should it be backed by the gold standard?
The stock market is a barter system. Currency is only a medium of exchange.
When I trade one stock for another, the trade is only momentarily denominated in currency.
Actually the same principle applies to every other trade, whether stock or daily used commodities.
I don't invest long term in dollars. I invest in companies which use dollars for the purpose of exchange.
If dollars don't work, I can use some other means of exchange.
You have bought into the lie that any inflation is OK. All inflation is insidious and distorts capital investment. The Fed has sold us out to its benefactors - the investment banks.
I’ve been in the banking business most of my life. It works just fine without the gold standard.
Besides the non-sequiturs, it was just a smoking stinking pile of offal. The Bretton Woods system (which would be roundly condemned as part of some kind of new world order conspiracy were it to happen today) started to fall apart due to the increase in the money supply, which had led to more US dollars in circulation than there was gold in US reserves to cover possible redemptions.
What utter bullshiite.
The Fed and investment banks are completely unrelated.
I spent most of my career as an investment banker and investor.
The Fed never helped any of us.
The Fed is owned by its member banks and does not operate for a profit.
Its goal is economic stability.
Period.
The government actuaries have done a remarkable job of fixing those rates since the 1980s. Unfortunately, primarily by excluding most necessities like the price of food, transportation and utilities. I don’t have a dog in this fight, but your assertion is absurd in real dollars.
It’s the same with unemployment. It’s quite simple really, you can reach whatever outcome you wish as long as you continue to skew the baseline. Ever since Cartrer introduced his brilliant accounting methods, the government has been completely devoid of any useful metric. No person could last a month in business using government accounting principles or statistical analysis. The outcomes are baked in and they change at will.
Answer truthfully, do you trust even the Census?
Deflation is worse than inflation. And there is no way to have absolute 0 inflation/deflation.
A small amount of inflation does provide an incentive to people to store their holdings in banks where they can be reinvested.
The goals of the Federal Reserve as stated in the legislation that created them is #1 Full employment, #2 low inflation, #3 moderate interest rates.
Well put. We’ve never been on a gold standard, but the economy has been hurt by the delusion that we are.
Well said.
The financial panics in the 19th century were due in large part to the failure to understand that wealth isn’t what’s piled up in Unka Scrooge’s basement.
a precursor:
The Untold Story Behind Saudi Arabia’s 41-Year U.S. Debt Secret
How a legendary bond trader from Salomon Brothers brokered a do-or-die deal that reshaped U.S.-Saudi relations for generations.
By Andrea Wong
May 30, 2016
https://www.bloomberg.com/news/features/2016-05-30/the-untold-story-behind-saudi-arabia-s-41-year-u-s-debt-secret
Gold isn’t money. Gold isn’t wealth. Gold is a commodity. So what you’re saying doesn’t make any sense.
Wages didn’t stagnate because of coming off the gold standard. Wages stagnated because in the 1960’s we lowered our import tariffs and we saw jobs start going overseas.
We haven’t fixed that problem yet. Trump understands it. Nobody else in Congress does, or they’ve all sold out to foreign interests. Not sure which. Probably both.
There's an incoherent inchoate animus directed at the Fed around here. It can never be explained by those who have it, because it isn't based on anything. Regarding gold, I'm surprised no one has trotted out the fiction about how FDR sent jackbooted stormtroopers into all the banks, pried open all the safe deposit boxes, and seized all the privately held gold currency. I wish my grandfather hadn't been so law-abiding and just buried his gold coins, or hid them in an old tool box up in the rafters. But, I'm sure he needed the money right then anyway.
Deflation is a Bitch.
The Fed’s QE was designed to stop this from happening and, for the most part, they succeeded. They aren’t stupid.
We are now coming off a base line of “near zero” Fed funds rates that has been in place for an extended period of time.
IMHO, if the Corporate tax cuts are only used to increase wages and NOT used to lower prices of their goods, we will see an accelerated rate on inflation in both Wages and CPI.
Deregulation may help but most of our CPI (Consumer Price Index) reflects the cost of goods that are provided by very large and major corporations that aren’t subject to any real competitive threat.
My fear is that they see that everybody has received a raise and now they can increase their prices.
The deflationary cycle is thankfully over.
The inflationary cycle begins.
The Fed will raise their overnight Fed Funds rate in an effort to slow growth but this will only fuel the availability of funds since it improves the risk margins for lenders and they will lend more.
All of this is fine if our CPI doesn’t go up along the way.
Getting an extra 2 or 300 dollars in your paycheck is irrelevant if it will cost you that much more to conduct your life.
>
If you want to barter in gold, I am sure some retailers will accept it. Have at it.
>
Article I, Section 10, “No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts”.
Maybe I missed the ability to pay any govt fine/tax using GOLD or SILVER...but them FRN funny monies are taken w/o a whimper of protest.
I cannot fathom how, on a supposedly (R)N(C) forum, those in favor of Congress, w/o ANY approval by We the People, passing ANY “authority’ to a non-elected, non-accountable foreign private entity...especially one blatantly inscribed w/in the Constitution.
The Founders sure didn’t give Congress to ability over weights & measures and write in gold/silver to just allow a fiat system to spring-up (they would have done that from the START).
Quite incorrect. Currency is easily divisible. Barter is not. Gold adds value to currency. Deflation is healthy. Inflation is fraud.
The rich vs middle class split has its origin beggining at 1971. Clear as day.
No gold standard is criminal, benefitting the wealthy asset class.
FU Richard Nixon. Damn you to hell.
Just a plain old silver quarter will still get me a gallon of gas. That’s all I know.
Don't take this the wrong way and I am not necessarily disagreeing with you, but I am curious how old you are?
Really? By what mechanism?
Massive money creation eventually leads to inflation, which eats away at the value of your dollars. The rent-seeking elites are much more equipped to handle this because they receive the newly created money first.
How do they get it "first" and how does inflation help them?
Before the gold standard was ended, US national debt was well under $1 trillion. After almost five decades without a gold standard, the national debt is now over $20 trillion and is set to go a lot higher in the coming years.
The debt has nothing to do with the Gold Standard and everything to do with out-of-control spending by politicians, mainly not spent on productive endeavors, but stupid spending to get reelected. Free cell phones for deadbeats...how does that help anyone other than the politicians? Transfer payments (i.e., payments for no good or service in return) in the US increase by 32% during the past 8 years. That's simply politicians buying votes with your tax dollars with nothing in return.
As I mentioned before, when new money is created, it goes directly into the banking system. After that, it goes to the most well-connected individuals and institutions.
Proof? Pure BS.
After the fat cats have had their fill, wealth trickles down to the rest of us. The gold standard is essential in keeping money creation restrained.
Please explain this mechanism. More crap.
The graph that shows productivity relative to real median family income has nothing to do with the gold standard or inflation. His statement: When the creation of money becomes unrestrained, inflation becomes rampant. breaks down when you consider the rate of inflation during the years of the largest gap in his graph is from 2008 to 2015 when inflation was around 1%. Median incomes fell because businesses could dodge the Obamacare bullet by using parttime workers (i.e., under 30 hours/week). Median incomes fell because of reduced work hours, not the Gold Standard.
“His statement: When the creation of money becomes unrestrained, inflation becomes rampant. breaks down when you consider the rate of inflation during the years of the largest gap in his graph is from 2008 to 2015 when inflation was around 1%.”
Gee, that just happens to be the years of the Obama administration, when he was rigging the numbers so that his media lackeys could trumpet how awesome the economy was, when all of us know it was in the toilet and real inflation was much higher.
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