You can say that again.
Posted on 12/04/2011 8:33:58 PM PST by Comparative Advantage
Those making public calls for a return to the gold standard are a bunch of lunatics and hacks who are doing nothing but calling for a repeat of the Great Depression, says New York University Nouriel Roubini.
Loose monetary policies have done little to lower unemployment rates and have many saying the U.S. should return to the gold standard, which pegs the value of the dollar to gold.
Supporters say a gold standard, abandoned in the 20th Century, would force the government to live within its means and end inflationary pressures that come with expansive monetary policy.
"That's total nonsense." Roubini tells Yahoo's The Daily Ticker, calling the gold bugs who support a return to the gold standard a "bunch of lunatics and hacks."
A gold standard prevents authorities from stimulating the economy when needed.
(Excerpt) Read more at moneynews.com ...
What good is capital formation in a deflationary environment when no one wants to borrow or invest in new production?
This book is an excellent expose of the ignorance and confusion of Griffin.
“Two problems I haven’t seen addressed:
- there isn’t enough of the stuff. Too many people would lose too much value to tolerate the switch.
- rate of gold supply increase does not match general wealth creation rate. Inflation or deflation ensues as GDP increases.”
Ten pounds is enough. All that matters is that a “dollar” equals “X” amount of gold. This fixed standard means that they do not steal your money by steadily devaluing the dollar. In this world, prices do not continually skyrocket, and a dollar has a value. The government cannot flood the market with fiat dollars to fund wars and welfare unless they want to be open about it and tax us.
Wealth creation rate? A gold standard economy simply does not need steady increases in the amount of gold. This aregument essentially pretends that a gold standard must ape the behavior of keynsian fiat money. There is simply no need for huge increases in “money supply”. If money is tied to a fixed standard and you never find another ounce, all that means is that a dollar will have buying power and deep intrinsic value. Maybe a house would still be 1500 dollars, instead of 100 times that price with dollars with 98% of their value stripped.
This is why the story of Abe lincoln running 15 miles or whatever to return 9 cents to someone meant. There was a time that a penny, dime or quarter had value. If we found no more gold forever, then maybe a dime would have the buying power of 10 dollars. But there is no need for “more gold” unless of course, you want to finance a welfare state, or a warfare state without raising appropriate taxes.
And it would be impossible to do things like provide europe with 7 trillion in “liquidity” if they had to find 7 trillion in gold, or raise it in taxes.
Accepting YOUR beliefs, why can’t the government print me up 50,000 so i can pay off my truck? They just printed two times the GNP of China to give to Europe. The real question is why is counterfeiting a crime anymore?
Give?
Roubini - that sly dog! He must be a silver bug!
It’s hard to peg anything to gold with all the hype. A warehouse full of food,soap,salt, scotch and vodka will be as valuable as gold. Hard goods. What does someone have to have, need or want? They have the gold and you have the goods. Gold then becomes as valuable as what your willing to pay to feed your family or get drunk. It’s all relative to the desires of individuals and there situation.
When needed, when not needed, when it is counterproductive, when elections are near, when friends in the banks just need a boost, when they just put all their money in gold and need to make a profit, when the day ends in "Y",
“Two problems I haven’t seen addressed:
- there isn’t enough of the stuff. Too many people would lose too much value to tolerate the switch.
- rate of gold supply increase does not match general wealth creation rate. Inflation or deflation ensues as GDP increases.”
Ten pounds is enough. All that matters is that a “dollar” equals “X” amount of gold. This fixed standard means that they do not steal your money by steadily devaluing the dollar. In this world, prices do not continually skyrocket, and a dollar has a value. The government cannot flood the market with fiat dollars to fund wars and welfare unless they want to be open about it and tax us.
Wealth creation rate? A gold standard economy simply does not need steady increases in the amount of gold. This aregument essentially pretends that a gold standard must ape the behavior of keynsian fiat money. There is simply no need for huge increases in “money supply”. If money is tied to a fixed standard and you never find another ounce, all that means is that a dollar will have buying power and deep intrinsic value. Maybe a house would still be 1500 dollars, instead of 100 times that price with dollars with 98% of their value stripped.
This is why the story of Abe lincoln running 15 miles or whatever to return 9 cents to someone meant. There was a time that a penny, dime or quarter had value. If we found no more gold forever, then maybe a dime would have the buying power of 10 dollars. But there is no need for “more gold” unless of course, you want to finance a welfare state, or a warfare state without raising appropriate taxes.
And it would be impossible to do things like provide europe with 7 trillion in “liquidity” if they had to find 7 trillion in gold, or raise it in taxes.
Accepting YOUR beliefs, why can’t the government print me up 50,000 so i can pay off my truck? They just printed two times the GNP of China to give to Europe. The real question is why is counterfeiting a crime anymore?
By limiting the amount of money authorities can put into circulation, authorities render themselves powerless to act as a lender of last resort when needed.
Yet another Keynesian moron.
Stepping on the currency is not what you do to promote prosperity. Stepping on
is what crooked drug dealers do.
Yeah,, give. The Fed created it out of thin air and is “loaning” it at negative real rates. And they will tell us soon it was all paid back. It’s a joke.
Let me lay down a beat and see if you can follow it. If the Euro is in trouble, and fiat money can be created without cansequences by US. Then why are we not seeing the EU central bankers just print up all they need for all the “liquidity” they need?
For bonus points, explain why counterfeiting is still a crime. North Korea supposedly printed 45 Million (with a capitol M!) in “supernotes”. This is about .005% of the money the Fed created out of thin air for the “stimulus”.
If the liquidity of the banks is an issue, and the currency will not be debased as a consequence of freely creating dollars out of thin air,,, then why not just create Euros out of thin air in THEIR central banks?
And if American banks face exposure and need bailing out, why, they could just “loan” them to US banks holding risky EU paper and derivatives,, and everything would just be fine, huh?
Don't be so sure of that, His views mirror that of George Soros, and Soros, while saying pretty much the same thing about "gold bugs" owns quite a great deal of gold, even going so far, to actually trade certificates for the actual real stuff, and buying interests in mines.....
Gold, paper (fiat), seashells, doesn’t matter what is being used as they are doomed to failure as governments always eventually end up debasing their medium of exchange. Usually due to greed leading to corruption and wars.
Wouldn’t need a gold standard if governments could control their spending which would inspire confidence instead of a lack of trust.
This banking system was doomed to fail anyway using compounding interest it mathematically couldn’t work from the beginning but they knew that at the time and only projected out about a 100 years.
The other main flaw was thinking they could smooth out or prevent business cycles from occurring.
You can say that again.
(A gold standard prevents authorities from stimulating the economy when needed.)
Somehow they always want to stimulate government spending, not private saving and investment.
The Great Depression came into being because Roosevelt increased government spending, turning a big recession into a depression.
The fiat thing is working fine. The dollar is more stable on a year to year basis than it was on the gold standard. The only difference is that while gold had wild swings of inflation AND deflation, fiat money always errs on the side of slight inflation, because that's the side that's good for business. Deflation is associated with depressions.
On the gold standard America had depressions every 20 years. Not so with fiat money. Once we got past the learning curve with the great depression, we've been able to avoid depressions.
The thing that is not working is congressional overspending. But if you think congress can't borrow and spend by promising that your children will pay in gold, you're wrong.
And there are a lot of powerful people such as Soros and China that would love to see the Federal Reserve dissapear and replaced with something they could manipulate like the gold standard.
You really think congress can't borrow and spend on a gold standard? They'll just promise that your children will pay in gold.
Folks the big propaganda move is on today, attempting to justify high oil prices (above 100) due to Iran (instead of the real monetisation going on). Don’t buy into the propaganda today.
Big Euro-U.S. spending monetisation is underway driving oil up over 100, DESPITE high unemployment. Friday faked-rigged unemployment numbers were a set-up for this propaganda.
Again, oil, the real “gold” commodity, is being driven up by monetisation...QE.
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