Posted on 03/18/2020 9:01:22 AM PDT by A_perfect_lady
I know very little of these things. I'm an English teacher, and a mathematical cripple. But it seems to me our economy could shrink to a point where tying our money back to gold might be possible. I'm asking Freepers because most of you know more about this than I do. So... what do folks here think?
“Gold is kept... does that make sense?”
Yes, there would be fluctuations. The problem with gold is that there is only so much of it. That limits the supply of capital. Without new capital you end up with the situation where the economy is closed to new innovations. Somebody invents antigravity, but in order to develop it you have to stop doing something else. With fiat currency we simply print new money. I see something like a daily market price for money based on the supply, demand and other factors. (No. I don’t have a clear thought as to how it would work. The Obama administration tried to free the world from using the dollar by helping China (Our enemy, or certainly not a friend) create a basket of currencies. They also tried a gold backed Chinese currency. Haven’t heard anything about that recently.)
Incidentally, due to world wide demographics we are entering a period of low available capital. The older people have money, but as we retire we stop investing in growth because we can’t take the volatility. This will make investment capital increasingly expensive. Which, is why we need to solve the money problem now as opposed to later.
There is no reason to expand the money supply when the ecooomy grows. Thinking so is closely akin to the Keynesian zero sum view of Economy, that the only growth is Inflation and Inflatoin is the decrease in the value of the money which enables one country to steal resources from another country. A true gold standard would take the manipulation of the money supply out of the hands of a committee of men who are much too small a sample of consumers to be able to know how the economy is working. A stable stock of money means that prices decline as more goods are produced. That does NOT mean that profits decline, only that the actual value of a dollar amount of profit rises as prices decline. A stable money supply lends now long missing stability into the system and predictability. Calculation becomes easier. Liberals think that wealth IS the stock of money and the more you grow that stock the richer the nation is. A bit of enthusiasm in that sort of wealth creation gives us Weimar or Zimbabwe or Venezuela.
The Clinton network, involved in the Gaddafi gold (140 tons), but there were 2000 tons of Iranian gold frozen (from Bush military ops that fell in lap of Obama) held in UAE but moved as part of Iran deal but most not back to Iran. I don’t know where remainder went.
Prince Alwaleed Bin Talal worth 27 Trillion half in gold, this was ten years ago. UBS has gold repository in Zurich eleven stories, all underground.
It’s not so dangerous as it was in years past with the deep state so entrenched. It’s better now. We are better off now. But things coming to a head now.
In 2018 I lost count of how many assassination attempts on Trump and his family. The last count I had was 18. Trump was very smart or rather people in his real inner circle. They brought in their own security detail with decades of service to Trump and family, wouldn’t let Secret Service manage, Service had to report and take orders from Trump security detail until Service members were screened, vetted, tested.
Here is how the power was aligned before ‘Trump happened’.
Ruling families (New York, London, Zurich, others e.g. SA but SA royals are mostly in Europe)
Central Bankers “CBs” (managers to ruling class)
Intel groups “enforcers” (CIA, MI6, others enforcers for central bankers)
Fronts (Funded/setup by CBs and managed by enforcers)
Pols (funded by Fronts)
News outlets (funded by Fronts)
For example, Soros is a Front, a conduit to CBs, Bezos is a Front - father was CIA, he’s a CIA kid
Yes, gold std is anathema to CB control, it restricts/curtails their power because currency difficult create off book ‘dark money’. Of course they will contract killers to take out any threats.
Other forms of currency used in money laundering operations:
uranium, arms, illicit and legal drugs (sometimes mixed), art, children, slaves.
How do I know this? Actual Intel and Front contacts but I’ve been out of the loop for about 5 years now. I don’t want to reconnect. I’m raising a young teen alone. If I make a difference it will be through banking technology, e.g. decentralization.
The ‘deep state’ are mostly CB placed assets inside the US government to control it.
Trump is making progress in razing the deep state but his people also want to leave part of it in place as long as the DS assets think they are not exposed. Unwitting double agents can be worth more than gold.
The current China Virus is a deep state op. I know it sounds whacky but it was launched to hurt Trump and throw his reelection into chaos. But as VDH wrote today, it has boomeranged back on the schemers.
We are in a war, not a hot one but a very active one. The forces aligned against Trump know they cannot win a hot war. They tried to fuel one via NK and then Iran, didn’t work. China, historically will not attack a superior power. They will sneak though.
There is one unknown group I subscribe to that sounds wildly conspiratorial, long history of military family connections give me insight to it. It was setup by Eisenhower. It is secret even to alphabet agencies. When the alphabets see me say/write anything about it they will dismiss that I am nutso. That is good for me. If I were to create a following, which I won’t, I would be targeted. The group is a special military group that has a mission to preserve the United States no matter what, no matter politics, no matter what period. They have all tools, more than any other group anywhere. They have the upper hand on all others. They see everything others are doing. That group I am convinced is behind Donald Trump. So I am not worried at all about what plays out. It’s also I believe why POTUS appears so calm.
I am not sure I am on board with this. Don’t misunderstand. I fully understand the problems of fiat money. But what you describe is deflation. Take a $100,000 mortgage on a house that, through deflation, is only worth $80,000. Soon banks stop lending money, and economic activity decreases. Gold is not the answer. At least in my opinion.
What you say makes sense to me. I have no doubt that the media’s handling of the virus was meant to destroy the economy and hurt Trump, and the fact that he’s basically grabbed the ball from their hands and is running with it tells me he knows exactly what’s going on. They expected him to pull back, not lean into it.
There is nothing wrong with price deflation so long as it is not inflation of the stock of money. Declining prices are not declining alue. Mortgages would take into account the real world and a rapidly expanding economy might just produce a f0 interest mortgage rate. The value of the payments would rise with the rise in the value of the dollar and the lender is fully repaid his interest because the dollars he has received have increased in value. Even a “negative” interest rate, if in a real world situation of an expanding economy with an unchanging stock of money would be profitable. The “conservative” alternative would be to increase the number of dollars at exactly the rate of the increase in productivity but that is not something that a committee can do accurately at all because the economy is composed of the entire population’s activities in the market. Perhaps the advent of AI will make such calculation efficient but that level of tech will have its own problems for humanity that will dwarf puny Economics.
In the eyes of policy makers, a little inflation is better than any deflation. I am inclined to agree. In a perfect world, their would be neither inflation or deflation. Unfortunately, ours is not a perfect world.
fhayek, You need to read your Hayek again. Yes, deflation as a result of financial panic is bad. And Hayek was critical of the Federal Reserve for not making the system more liquid in the 1929 panic.
However, Hayek would argue that deflation as a natural result of productivity gains is a GOOD thing. For example, who could afford a computer today if not for price deflation?
Productivity gains don't mean companies are losing money by selling their products for less money; it means companies can sell their products for less money and still remain profitable. Investment opportunities increase in that environment, not decrease.
And, no, you wouldn't have to put your money in a mattress under deflation. Your dollar's purchasing power increases over time.
Money-in-the-mattress time is when we have negative real interest rates, as it is now in the EU (with negative NOMINAL interest rates) and, I'm afraid, as it may be soon here too. In fact, depending on what the inflation rate is right now, we may have negative real interest rates already.
No, Deflation is the decrease in the stock of money. Everything else is price change. Prices naturally decline with improving technology. Most folks, including conservatives, cannot really understand money not being controlled by a few experts at the top, if only to ameliorate the “excesses” of the market.
Precisely. Your mattress is your best investment. Your money is gaining in value. If you spend it, you lose out on tomorrows increase. People are incentivized NOT to spend. All of which has a negative economic impact.
Contrast that with inflation, where you are incentivized to spend your money today, because tomorrow it is worth less. While this helps the shopkeeper today, this has terrible implications for the saver. His money is losing value by the day.
And there is a big difference between computers getting cheaper and deflation. Inflation/Deflation is a monetary phenomenon. Computers getting cheaper is not.
Productivity gains do cause deflation — when prices fall AND the monetary base is not expanded. And that is a good thing. See the Great Deflation of 1870-1890.
The problem comes when the monetary authority (a central bank or our Federal Reserve) steps in and says ALL deflation is bad, and therefore “a little inflation is good!” See the value of the US dollar since 1913 to see how that works out.
With all due respect, prices can rise and fall without there being inflation/deflation. The price of oil has dropped dramatically because of a demand/supply dynamic. No deflation. Inflation and deflation are monetary phenomenon. Don’t let anyone tell you differently.
I didn't say deflation was not a monetary phenomenon. I said only that deflation in and of itself is not necessarily a bad thing.
If deflation is a result of financial panic, then yes it is bad. And Hayek argued as much, when he criticized the Fed for not adding more liquidity in the 1929 panic.
However if, as during the period 1870-90, technological productivity gains lead to a reduction in the general level of prices in the economy -- AND there is no expansion in the monetary base -- that is indeed deflation and is a good thing.
Unfortunately, our monetary overlords believe deflation is ALWAYS bad. Hence the trend of the Dollar since the Fed's inception in 1913.
Additionally, the "a little inflation is a good thing" could just be a BS cover for the fact that Fedzilla's spending outpaces its ability to tax the population, so inflating the currency is a convenient, surreptitious way to fleece the sheeple.
Isn’t 1933 in the ‘early 1900’s’?
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