Posted on 07/24/2002 8:29:42 AM PDT by Fitzcarraldo
Source: www.kitco.com
I hardly ever spend a few days reading one man's opinion on any subject. Those who do are easily fooled, I've always noticed, and seem to believe everything they read without thinking for themselves. They say things like "It took a shipload of gold to pay a sailor's salary" when there's absolutely no record nor even any clues that things like this occurred. God inspired many people to write the bible for a reason, He wanted more than one witness. Don't let this Smith guy make a fool of you, think for yourself, read history, read other witnesses.
So you think there's going to be a massive gold rush soon? Where? The Chicago river? Tell me where. Like I said, I still have a vacation to take this year. If all the ice were melted off Siberia, Greenland, and Antarctica, then surely there would be a gold rush somewhere. Otherwise, I'm not holding my breath.
If you are really interested you might consult the volume about the Spanish inflation of the 16th and 17th century by McDonald.
I've never denied inflation nor deflation. If dicostu's source was accurate, then inflation did occur in Spain turning $40 into $160 over the course of 150 years! We can only wish that our fiat money inflation ran at this rate, which would be less than 1% a year, it appears. This suggests Spain's problems weren't inflation, but lack of innovation. Why innovate if your just simply stealing the treasure of a whole culture and living off it for 150 years? You can buy everything you need. Your whole economy would be service oriented, no exports. Britain eneded up with Spain's gold, not by stealing a lot of it, but by working for it, trading for it. It turned Britain into the greatest empire in the history of the world. A little island controlled the seas of the entire earth! Amazing.
But I did not say gold finds would lead to Hyper-inflation merely inflation. Hyperinflation is a rare occurence even with paper money. The current inflation rate is less than 2% and even that is likely overestimated. Even the inflation of the late 70s was not hyper-inflation.
When you consider productivity increases, it runs a little more than 2%, I think. But 2%, 3%, 4%, 20%, it doesn't matter, it certainly isn't hyperinflation, any more than Spain or California experienced hyperinflation. I consider hyperinflation as the type where you can't even buy anything because the printing presses can't keep up with inflation, or the value of the paper is best consumed as a heat source rather than as currency.
Because policy is not in the hands of bankers contrary to popular opinion in some places.
Maybe not, but they are foreign and they do nothing but drink champaign and eat cheese in their mansions while supplying our money.
Most discerning thinkers understand that mental effort is the hardest of work and that most rewarded since it can't be done by many. While Marxists discount this form of labor they are wrong to do so. Capital is the result of past work at any rate.
A mine owner in the private market has to expend mental effort, rich international bankers do not to a great degree, IMO. I'm certainly not against making a buck in the easiest, most honest way possible, being a conservative, but these guys are truly making oogles off of our fiat cash.
Most people would consider working in a mine (of any type) the greatest abuse they would ever experience.
In a free market economy they can quit. Mine workers are proud people. If seen documentaries on American gold mine workers, they didn't seen like they were in the gulag to me.
But the fact that you had to cherry-pick is an indication of the value of your point.
What I claimed “worked fine” is commodity money…and that only to counter your sweeping generalizations that say, in effect, that prior to the last few years with 100% fiat money, history was terrible.”
Nor have governments given anyone a monopoly on creating money. Every time a loan is made by a banker money is created and there is no monopoly of this power. Governments convinced no one that banks make sense, this was done by the experts who understood finance such as Hamilton and the great writers in economic theory such as Mill, Ricardo, Smith and Marshall.
The current banking system is a specially privileged cartel that is headed by the Fed which has a monopoly on the creation of currency and bank reserves, upon which the rest of the cartel creates liabilities against itself to further the Ponzi Scheme. Hamilton was the goverment front man for the moneied interests behind the 1st Bank of the US. Every other member of the cabinet, to their credit, opposed Hamilton’s ideas of credit extension (which, by the way, partially, violate some of his own previously stated positions). I doubt you could point to writings of Mill, Ricardo, Smith, or Marshall that justifies your conceptions of a fiat based banking system. It would, in fact, be a foreign concept to them. In any event, von Mises and Rothbard make the most sense to me on these matters.
By 1692 England was forced to charter the Bank of England to finance the government's wars.
You say they were "forced to charter", I say "they entered into an unholy alliance with" ---which has served, to this day, as the model for other central bank cartel systems.
A hundred yrs. later Hamilton brought the American economy into the modern world (out of the world of superstition) by creating the National Bank which worked so well its deadly enemies dropped their opposition.
In addition to the rest of Washington’s cabinet, 5 of our first 12 Presidents also opposed, and spoke out eloquently against Hamilton’s ideas. Which opposition can you point to that realized how right he was?
There is nothing "honest" about gold that is mere rhetoric with nothing to base it on.
You apparently don’t get what I mean by "honest". It is not a characteristic of gold, it is a necessary characteristic of good money. Honest money must be hard to counterfeit and in predictable and limited supply. If it can be created and distributed by a specially privileged class without limit, by whim, without productive effort it lacks an important element that good money requires. A properly constituted fiat currency could be devised which maintains the “scarcity integrity” that is the essence of good money. The current fiat system, however, is substantially worse than the previous commodity money. We are moving backwards.
I have no use for a cube of copper, I can't use it for anything. Therefore I would trade that cube of copper for something I could use, whether it be gold, fiat money, a dirt bike, whatever. If I have no use for that cube of copper, does that mean it's not a commodity when I trade it for the dirt bike? That would be barter even though it was useless to me. Fiat money has the same usefulness to me as that cube of copper, it's only use to me is for trade. Therefore if trading that copper for a dirt bike was barter, I consider trading that fiat money for a dirt bike a form of barter also. Maybe not pure barter, but a form of barter.
With copper pennys. I'm not a big advocate of going to gold and slver coins, but if we did, we could still use copper pennys. Copper is a commodity also and has intrinsic value.
Even a dollar,1/300th of an ounce- 1/10 of a gram? Ludicrous. Gold was always in short supply in the less developed regions of the world and country because trade deficits drained them.
They could use copper also. Just because we went to gold doesn't mean everyone would. We can do a lot of things other countries can't do because we're still the most conservative country on earth.
Clearly if it was in desperately short supply (so short that states chartered hundreds of unsound banks to create a paper money supply) two hundred yrs. ago it would be even more rare today with a much larger population.
You guys first say there's too much gold to stay valuable, then you say it's too rare. LOL There's enough gold in the world to do business.
There is no way that the velocity of circulation could speed up enough to prevent economic collapse should we move to a gold standard.
There's no velocity problems now, are there? LOL 200-1 PEs, yeehaw! Gold would discipline those that need to be disciplined. $45 trillion worth of derivitives are going to sink us.
Removing one cause of war obviously does not remove all. There was no gold standard in practice in 1974 since we could not take our greenbacks down to the Fed and get gold (or silver for that matter.)
Yep and we've had all kinds of war since 1974, so you can't say that wars are because of gold.
No Germany could simply have allowed reparations to drain all its gold out of the country, collapse economicly and bring Hitler to power even sooner.
So the German people would not have had any exports if they traded with gold?
That may have been preferable but we have nothing to say about this. Keynes accurately analyzed what would happen to Germany should the Peace conference (of which he was a member) decide to place crippling reparations upon it. Of course, the point was that since then the value of the Mark has been kept stable and its monetary authorities have acted responsibly. But you would prefer to ignore the point and set up a straw man.
Like I told dicostu, it's foolish to read one man's opinion and take it as gospel. I see all kinds of theories saying Hitler would have done this, or Hitler would have done that if only we did this, or if only we did that. It's arrogant for any man to think he can run the history of a nation of millions of people through his head after changing a little thing here or there. History has proven that gold is unmanipulatable for a significant population, that's all I know. $40 of gold did not degenerate into $28,000,000,000,000 in Germany from 1911 to 1923, their fiat money did though.
You've read Smith, and yet you think that it took a shipload of gold to pay a sailor's salary, so he didn't do much good for you, did he?
Wealth of Nations, ever heard of it? I point you to him because he is the ultimate starting place for an understanding of how capitalism works and why it works that way.
If you're an example of one of his students, I pass. You've said irrational things, like gold has no intrinsic value, when clearly the element can be used in industry, let alone jewelry.
Ever heard "invisible hand of the marketplace", that's from Smith.
No thanks. A fool that believes a fool is a bigger fool the the original fool. LOL
Trying to discuss economics and capitalism without a basic understanding of Smith is like trying to discuss the Constitution without a basic understanding of Jefferson. You're unarmed and ill prepared.
Then why are you the one making claims you can't document?
20% in ten months looks good to me, when most of everything elase is dropping like a rock.
Decades is all it takes for a society to die after they quit innovating. Look at us between the 50s and the 70s. We were going downhill in a hurry until Reagan.
And it wasn't because of lack of innovation but the effects on property values and commodities due to a vastly increased money supply.
Not according to dicostu's source. Inflation was only a fraction of a percent. There economy became a service economy, no need to export when you steal a nation's treasure.
Britain did not end up with the Spanish gold. In fact, by 1692 it was forced to charter the Bank of England to supply a money supply. It had no significant empire until decades later.
It takes a while to significantly lurch ahead of the times, decades sounds right.
Foreigners do not control the fed. or the Bank of England or any other central bank. To maintain that they do is merely false and irrelevent.
Nope they don't control it, but they get rich off it. I don't control the company I work for, but I make money off it.
You have some silly ideas. Are you unaware that any profit from the federal reserve operations are turned over to the U.S. Treasury?
I think it's silly to have Germans give us our money.
Working in a mine is nasty, dangerous business and would be the hardest most unpleasant work 90% of the workforce ever performed.
So is joining the Marines. That's why miners are a proud people, real men doing a real man's job.
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