GOLD PLUMMETS - SPOT CHART

I’ll summarize our respective positions on minor points and then go on to address the important aspect of our dialogue:

1. You think gold is an inadequate standard, I think it is better than the fiat non-standard;

2. You think Hamilton was more knowledgeable in financial matters than Jefferson. So do I. I assume we can also agree that Milken, Boesky, and Ebbers are also more financially savvy than Jefferson. Does that mean we should adopt their ideas without question?

3. You think the First Bank of the U.S. was a necessity for development. I don’t. It’s 20 year charter was not even renewed in 1811.

4. You believe Rothbard couldn't sharpen Smith, Ricardo or Mills quills. I am acquainted with all of these gentlemen, having, myself, been a product (flunkie, dupe?) of the establishment. Rothbard opened my eyes to the reality of the system.

5. You believe Smith, Mills, and Ricardo would favor the currently constituted fiat monetary system. I don’t.

6. You believe the BoE fractional reserve model was an advancement; I think it was an unholy alliance between monied interests and the crown for narrow interests and counter to the general interest.

7. You have bad words for Jefferson, Adams, Madison, Monroe, Taney, Jackson and van Buren and object to my questioning Hamilton’s motives and contribution. I feel just the opposite.

8. You think my problem is that I ignore the velocity of money. I wonder what leads you to such an absurd conclusion. Nonetheless, you go on to make the following, demonstrably incorrect statement with regard to this very area you believe me to be mis-informed about: When [velocity] is rapid the MS grows when it slows down it shrinks.

9. You observe that most wealthy nations have central banks and take that as proof that central banks are good.

Upon my return from work, I will attempt to get you to focus on the issue of what constitutes a good money. That was the one area you did not address in your response (other than to denigrate my choice of words for capturing the essence of any good money system: scarcity integrity.

A strict gold standard is a complete fantasy so its alleged superiority is irrelevent. Currency always has an element of "fiat" comprising its value.

The crooks you name have nothing to do with the astute financial program of a man of incredible genius and impeccable integrity. May have well asked if we should follow the policies of Willie Sutton (one of your heros I am sure). I never said we should accept anything without question although many gold buggers seem to do just that wrt their favorite pretty metal.

The negative financial impacts of allowing the Bank charter to lapse were so great that it was rechartered within five yrs. by Congress controlled by republicans ideologically opposed to the whole concept of a national bank. President Monroe was not only a bitter enemy of Hamilton but also a republican ideology signed the bill without protest.

I only wish the establishment would return to the concepts and understandings of those economists who believed in capitalism and turned away from the Marxist tinged ideas of the last 50 yrs.

I never said those men would support the current system merely that Smith recognized and mentioned the growth attributable to the existence of the national banks of England and Scotland.

In the English constitution the Crown does represent the general interest of the nation. Formation of the BoE came as a result of another expression of the general interest of the nation, the Glorious Revolution. Thus, in a sense it was the culmination of a political movement which changed much of British institutional life. That was also the first time a bill of rights of Englishmen was enacted.

Hamilton's motives cannot be seriously questioned by any student of the era. He was completely consumed with the idea of strengthening the Rule of Law and by such the permanent strength of the Union created by the Revolution and constitution. I have no problem with disinterested and objective questioning of his methods but none of those mentioned were either. In addition, they were economic ignoramuouses. The combination of ideological and philosophical blindness to economic matters hardly makes their criticism impressive and in fact that was why none could stand against H.'s arguments and why they were reduced to deceit, intentional spreading of falsehoods about him and his ideas. Surely you do not believe he was working for the British or to bring about a monarchy like your allies?

I don't say existance of the bank in wealthy countries is proof of anything but certainly is a point in its favor as not being destructive of the creation of wealth. Be honest with your characterization of my comments.

Once again I said that the money supply grows when business activity picks up not that the money supply grows as a result of velocity increasing. Again don't mischaracterize my comments.

"Good" money can be almost anything it all depends upon the institutional arrangements and the integrity of those controlling them. Bill Clinton in control of a gold standard would compromise it if he so desired and a decent man would control a paper money supply properly. No standard incorporates all the appropriate characteristics of "good" money. All have flaws and gold has the huge flaw of an inherent deflationary bias.

Before they started "stealing gold" neither Spain nor Britain was a powerful nation. You need to review some history of the era between 1500 and 1600 clearly you don't understand the international relations of the era.

Your claim was that during the 30 yrs before Reagan we were going downhill. That is simply false. The seventies were problematic for many reasons I don't want to get into now. Japan lost money buying overpriced American real estate lets sell them some more.

By the time the industrial revolution came around Spain was no longer removing much gold from the New World. And the fact that it missed it had nothing to do with the gold from the new world it was missed by France, Italy, Germany, Russia, Poland, and Albania too. None of them were "stealing gold."

By the time England industrialized Spain was a backwater with no gold to steal. What history are you recalling anyway. Certainly not European.

Foreigners don't own the banks (unless they are foreign banks.) Most of the stock of banks is held by Amuricuns.

More nonsense. "The Feds reserves...." Has no meaning thus cannot be adequately responded too.

What do you think the "reserve" in the Federal Reserve is? This should be good.:^)

We agree it gets hard to be a Marine.

Sure miners are proud so are bankers so what? Ask the ones with Black Lung how proud they are. Mining is one of the most difficult, dangerous and least desirable jobs around. Just ask the miners most of whom have little choice in moving to a better one.

Whose excuse? Describing history is not an excuse for what happens in it. By the 1980s farmers were facing an entirely different sort of problems some monetary some not.

I was merely giving a hypothetic example of what farmers were facing during the period of deflation from around 1875 to 1900. The price level did deflate by over a third during that period and interest rates were probably higher than 5%.
Farm prices fell even more than the overall price level making their plight even more difficult.

Obviously I never claimed that it was.

I was speaking of J.P. Morgan the individual who used his personal influence to stop the runs on banks and alleviate the Panic. The firm was not a saviour and things happening now have nothing to do with the Panic of 1907. Neither you nor anyone talking have any idea how much the firm has invested in options. But it is interesting that you believe one of the most astute financial houses is willing to bet against gold. Wonder why?

It is a concern but a country that elects scum like that deserves what it gets. Germany of 1923 will never happen here not even with a president as corrupt and evil as Clinton.

In your last post, you said that I mischaracterized things you’ve said. I will try to be more precise in the future. I respect your pov and knowledge and assume you respect mine.

A strict gold standard is a complete fantasy so its alleged superiority is irrelevent.

Do you believe that since pure capitalism has never existed,”its alleged superiority is irrelevant”? If so, we disagree. If not, how do you distinguish these two seemingly contradictory positions you hold?

Hamilton's motives cannot be seriously questioned by any student of the era.

I distrust elitists and aristocrats. I associate Hamilton with this class. You have a positive view of Hamilton. You believe his policies contributed to the growth of the economy; I believe his policies contributed to the advancement of specially privileged interests, at the expense of everyone else, I am more interested, however, in current issues and solutions than this historical debate. Many politicians of every stripe proudly describe themselves as Jeffersonians. Very few proudly describe themselves as Hamiltonians.

I don't say existence of the bank in wealthy countries is proof of anything but certainly is a point in its favor.

Okay, replace the word “proof” with “evidence.” I don’t think it is even evidence. I would accept it as evidence if you pointed to countries not faring well AFTER moving beyond central banking as I advocate. Of course, no such society is in evidence…yet.

money supply grows when business activity picks up

You seem to be putting this forth as a general principle rather than a necessary characteristic of a debt based monetary system. If so, we disagree. I favor a monetary system with a rigidly fixed money supply (I’d agree to an MS that grows at a specific rate just because people are hung up with the concept of declining prices. However, the method of distribution of the increase is crucial (the current method through the banking system is horrendous. I would accept, for example, issuance of new money in proportion to taxes paid.)

Good money can be almost anything it all depends upon the institutional arrangements and the integrity of those controlling them.

We agree, here, and this is where my interests lie. If I seek good money on the basis of past models, I favor gold over the current regime. You don’t. Thinking outside the box, however, all I want is “honest” money---money that has “scarcity integrity”. Debt money that is created and distributed by an elite financial sector that requires all kinds of special privileges enforced by government to keep it from collapsing (because of its inherent unsoundness) is not my idea of good money. I have a proposal for a fiat currency along these lines that I will post here for your comments if you are willing/interested in doing so.

While complete capitalism has never been tried the gold standard has and has never proven satisfactory for any but limited amounts of time. War always throws a nation off that standard and slow economic growth accompanies its use.
There are not two contradictory issues here. The economic systems and the monetary systems are not the same thing. In fact, you might say that the USSR was on the gold standard in international trade since its money was worthless outside the country.

It is remarkable how the 200 yr. old lies of the Jeffersonians still hold sway over those who have never researched the subject. The actual aristocrat, Jefferson, condemns one born so far beneath him socially, Hamilton, and it is actually believed. Hamilton understood that the wealthy must be linked to the government in order for it to not slide into class warfare. The man who sweated in battle at Monmouth and froze at Valley Forge is slandered by one who spent much of the War hobnobbing with French aristocrats. A man who owned hundreds of fellow humans (the ultimate in aristocracy and elitism) condemns one who established the New York Society for the Manumission of slaves. Whose life was lived like an aristocrat (financed by British and Scottish banks) drinking fine french wines while sitting on expensive imported furniture and who sacrificed an opportunity to become a member of that aristocracy of wealth? Hamilton's elitism was limited to associating with truthful people with integrity which excluded most of the Republicans around Jefferson.

Jeffersonian fantasies are rampant true but how many who worship at that shrine know anything about the man? Very few. I once admired Jefferson until I began to examine what he had actually DONE not what he had said. There is a gigantic difference. On the other hand studying the life of Hamilton only increases my admiration.

No country will ever close down its central bank because to do so will collapse its economy. But it is false that the economy of the U.S. was not negatively affected by the closing of the Bank in the U.S. Both times depression resulted the second one was the worst until 1929. Only because of the chance discovery of gold in 1848 did it lift because of the increased money supply.

If the money supply does not increase when business activity increases the velocity of circulation must also increase or else the increase in shut off. Velocity cannot increase that rapidly with a gold standard. Thus, using the simple quantity theory equation P*Q=M*V one can see that output (P*Q) cannot increase unless either M, V or both increase.

It is not the absolute quantity of money which is significant but the per capita amount. (This is the reason the gold standard does not work since it cannot keep up with population increases, yearly loss through wear, clipping and removal for industrial/decorative use.) Having a MS affected by jewelry preferences is insane. Buying a gold necklace worth a grand with paper money has little or no impact on the economy as a whole using monetized gold to make it has a impact far beyond the individual since the act of making the jewelry actually decreases the MS and thus slows economic growth. Germany's inflation seems to have taught the world a needed lesson.
I don't quite understand your comment about the distribution of an increase in the MS. Sorry.

Without a Central bank private interests created money with minimal State involvement. No evidence I have seen indicates that this was an improvement and all that I have seen indicates that it was much worse. I don't believe the Central banking systems of advanced countries have ever collapsed particularly not recently. Nor do I believe it likely to happen.

I will be happy to comment on your proposal but don't pretend to be a monetary expert so its value is limited.

While complete capitalism has never been tried the gold standard has and has never proven satisfactory for any but limited amounts of time

You hold the contradictory positions that it is irrelevant to promote a pure gold standard; but not irrelevant to promote pure capitalism. You attempt to justify this clear contradiction with the above comments. Actually, neither has ever been completely tried. Each has been modified from day one. Splitting non-existent hairs does not cover up the fact that your pov on one contradicts your pov on the other.

It is remarkable how the 200 yr. old lies of the Jeffersonians still hold sway…

Neither you nor I knew these two gentlemen. We both rely on perceptions from historical records. We are both aware that, by birth, Jefferson was the aristocrat. I am basing my opinion on their respective philosophical position when I say Hamilton was an elitist. Is it really your position that no knowledgeable person can conclude as I have despite the fact that there are authoritative historical records on both sides of the issue ? If so, why?

No country will ever close down its central bank because to do so will collapse its economy.

No country will ever voluntarily close down its central bank UNTIL the central bank causes the collapse of the financial infrastructure---and only then, if people wake up to the fact that central planning conducted on behalf of the general interest is merely sub-optimal BUT central planning on behalf of the elite is far worse.

But it is false that the economy of the U.S. was not negatively affected by the closing of the Bank in the U.S. Both times depression resulted the second one was the worst until 1929. Only because of the chance discovery of gold in 1848 did it lift because of the increased money supply.

Your facts are both sparse and inaccurate. For example, there was a severe depression in the early 1820s following the Panic of 1819, DURING the 2nd Bank’s reign. The UNPOPULAR bank closed in 1832 and was followed by 4 boom years followed by the Panic of 1837 caused by the Specie Circular in Dec of 1836. As someone who has studied this era, I have never seen your interpretation before and would be interested in a citation so that I can pursue it myself.

If the money supply does not increase when business activity increases the velocity of circulation must also increase or else the increase is shut off. Velocity cannot increase that rapidly with a gold standard. Thus, using the simple quantity theory equation P*Q=M*V one can see that output (P*Q) cannot increase unless either M, V or both increase.

Wrong. As the formula clearly allows, Q can go up while p goes down, for the same MV levels. It is how progress is reflected in an honest monetary system.

It is not the absolute quantity of money which is significant but the per capita amount.

It is neither. Any amount of money (AS LONG AS IT IS SUFFICIENTLY DIVISIBLE) can finance any size economy with any number of people, no matter how big or how small.

I don't quite understand your comment about the distribution of an increase in the MS. Sorry.

Currently, the banking system chooses who gets the increased MS by creating liabilities against itself to extend loans. I reject that process as both unjust and unsound.

I don't believe the Central banking systems of advanced countries have ever collapsed particularly not recently. Nor do I believe it likely to happen.

I believe it is DEMONSTRABLY inevitable. Furthermore, the only reason it has not yet happened is because of the huge welfare that you and I give the monetary elite. But, like a needle to a heroin addict, that welfare not only puts off the inevitable but makes it worse as well.

I will be happy to comment on your proposal but don't pretend to be a monetary expert so its value is limited.

You sell yourself short. Just as one does not have to be a weatherman to know which way the wind blows, one does not have to be a monetary expert to see the merit in a monetary system that benefits everyone rather than a small but powerful elite. I will post the article separately.

Note: The proposal below requires thinking outside the box.

What prevents us from swapping $3.5 trillion in non-interest bearing paper (i.e., money) for the $3.5 trillion in publically held National Debt (i.e., bonds), thereby saving all that interest? Actually, only one thing prevents us from doing so: the banking system could pyramid the $3.5 trillion into ten times that amount thereby creating massive inflation. If we take this capability away, however, nothing prevents us from eliminating the National Debt, in its entirety. All we have to do is simultaneously pay down the debt (by replacing it with non-interest bearing obligations) and (by degrees) remove the banking system’s ability to create and distribute money. By increasing the reserve ratio, ultimately to 100%, we will prevent undue growth of the money supply during the pay-off process. At the end of the process, a Treasury Certificate will stand behind every dollar in the system.

During the transition process, the Publically held National Debt will be completely paid off while the money supply will remain under control. The composition of the money supply will change, by degrees, from Federal Reserve money and bank deposit money to 100% U.S. Treasury Certificates. This effect is produced by slowly increasing the bank reserve ratio (the mechanism that currently allows banks to create and distribute money). For example, in Year 1, let’s say paper money (Federal Reserve Notes plus Treasury Certificates) increases by 100%. This requires that the reserve ratio also be increased by 100% (from 10% to 20%) in order to keep the money supply stable. In Year 2, paper money goes from, let’s say, $1 trillion to $1.5 trillion, or an increase of 50%. Therefore the reserve ratio has to also increase by 50%…from 20% to 30%. At the end, the reserve ratio is 100% (i.e., the money creating ability of the banking system has been completely eliminated) and $500 billion Federal Reserve Notes have been replaced by Treasury Certificates.

Major initiatives such as the one proposed above will always produce various primary and secondary effects. Defenders of the status quo often use this fact, alone, to instill fear in order to avert change. This technique works best with people who believe they cannot possibly understand the issues well enough and, who want to believe “the experts” know exactly what to do ---and are motivated to pursue the general interest rather than special interests. Virtually all of the noted experts are, themselves, among the few beneficiaries of the current system. Gone are the days when people like John Adams, Thomas Jefferson, Andrew Jackson, Roger Taney, Martin Van Buren, James Knox Polk, Abraham Lincoln, James Garfield, Thomas Edison, William Jennings Bryan, Henry Cabot Lodge Sr., and Charles Lindbergh (to name a few) argued publicly, passionately, and persuasively for positions along the lines I espouse here. So be forewarned: powerful forces (along with their dupes and lackeys) have a vested interest in keeping you mystified.

My proposal, clearly, has four very direct and obvious effects:

1. The Publically held National Debt will be fully retired.
2. Hundreds of billion in annual interest will be available for other purposes.
3. The money supply will be government issued rather than the debt of private corporations.
4. The money creation process will have been removed from banks.

All other effects are less direct, less predictable, and therefore, less certain. I personally believe, however, that these secondary effects are largely, even overwhelmingly beneficial. In summary, I believe my proposal will lead to a more equitable, more accountable, less risky financial infrastructure. Let’s discuss, however, the undeniable effects.

My proposal pays off the entire National Debt, saves substantial interest ($150+ billion per year), and creates no inflationary pressure in the process. What could we do with this “found money”? For one thing, we could give over $500 …every single year… to every man, woman, and child, forever. Alternatively, we could reduce personal income taxes by 1/3, across the board. Another possibility is to spend it on various government programs. This is somewhat more controversial. Everyone has a different favorite program and some opposes all “big government.” Virtually all such programs, however, are preferable to the big government program of paying unnecessary interest.

Defenders of the status quo might argue that it is impossible to eliminate fractional reserve banking (FRB) because the free market will demand the services that FRB uniquely provides, and, therefore, my proposal is inflationary after all. However, simple monetary regulation that requires banks to finance assets (e.g. loans) with liabilities (i.e., deposits) of equal or greater maturity is sufficient to disallow the offending behavior of FRB banks. Such legislation essentially revokes a bank’s money creating ability. It prohibits them from entering into the essentially fraudulent contractual obligations that arise when they lend out money that they are contractually obligated to pay out on demand (or within any other time frame shorter than the maturity of the “funding” asset). The “100%” reserve banks and other institutional arrangements will be fully capable of providing all of the “good” services that FRBs now provide … but without the inherent risk, instability, and unaccountable control over our money supply that FRB entails.

Defenders of the status quo may also argue that the economy needs a lender of last resort. There is absolutely no substance to this conventional wisdom mantra. As we now know, money is created out of thin air, anyway. If there is an emergency need for liquidity, the government, which is, at least, accountable to the people, is fully capable of dealing with it. Furthermore, the Fed’s track record as lender of last resort leaves something to be desired, to say the least. It actually contracted the money supply, thereby creating/exacerbating the Great Depression. Then, when it had its biggest opportunity to deal with the opposite problem, the double digit inflation of the 1970’s, it was, again, completely ineffective.

Defenders of the status quo will also tell you that under my proposal you will have to pay fees for your checking account. In this, they are correct. You must measure the cost of paying for your checking privileges against the huge offsetting benefits we have discussed. Rest assured that defenders of the status quo will come up with other, relatively unformed and vague allegations: capital market inefficiencies; financial turmoil; intolerable interest rate levels; mom; apple pie; the flag. Some or all of these will be put forth as reasons to reject this proposal.

Before they started "stealing gold" neither Spain nor Britain was a powerful nation.

Exactly. Spain stole the gold, Britain mostly worked for the gold. Britain sparked the Industrial Reavolution. Spain paid for her sins of laziness and theft.

You need to review some history of the era between 1500 and 1600 clearly you don't understand the international relations of the era.

What don't I understand?

Your claim was that during the 30 yrs before Reagan we were going downhill.

No I said look at our decline between the 50s and the 70s. The 50s were great, the 70s were terrible. Something happened between the 50s and 70s. Extreme liberalism and the 60s happened.

That is simply false. The seventies were problematic for many reasons I don't want to get into now.

Union liberalism. High taxes. Government micromanagement of the economy. It's not difficult to understand.

Japan lost money buying overpriced American real estate lets sell them some more.

Because of Reagan releasing the great American businessmen and entreprenuers from the bonds of high taxation rates. Japan could have held their real estate they bought if liberals would have won the presidency and kept tax rates high. This country wasn't going anywhere with those high tax rates.

By the time the industrial revolution came around Spain was no longer removing much gold from the New World.

Exactly. Thet stole all the gold. Britain worked for that gold and became great.

And the fact that it missed it had nothing to do with the gold from the new world it was missed by France, Italy, Germany, Russia, Poland, and Albania too.

That's funny, I seem to remember France having a lot of success around 1800 with a guy named Napoleon. Maybe I'm mistaken. :^)

None of them were "stealing gold."

France and Britain were neighbors of Spain. They got the gold and fought it out amongst themselves for dominance of the seas. Spain declined into obscurity. It's because they stole the gold. Germany didn't do too bad either. As a matter of fact all the western countries besides Spain did well. Russia and Poland...that's Esau, he's been screwed up for 4000 years.

By the time England industrialized Spain was a backwater with no gold to steal.

Exactly. All that gold put them so far behind they couldn't catch up.

What history are you recalling anyway. Certainly not European.

I seem to recall Britain, France, the Dutch, and Germany ruling the world after Spain stole the gold. Are you saying that Germany, France, and the Dutch were insignificant after the 1600s?

Foreigners don't own the banks (unless they are foreign banks.) Most of the stock of banks is held by Amuricuns.

So you're saying that the federal Reserve doesn't work with any foreign banks?

More nonsense. "The Feds reserves...." Has no meaning thus cannot be adequately responded too.

Then why do they call it a "reserve"?

What do you think the "reserve" in the Federal Reserve is? This should be good.:^)

A speech In Congress in 1934. McFadden died two years later of the "flu".

We agree it gets hard to be a Marine. Sure miners are proud so are bankers so what? Ask the ones with Black Lung how proud they are.

Those are coal miners.

Mining is one of the most difficult, dangerous and least desirable jobs around. Just ask the miners most of whom have little choice in moving to a better one.

There's a lot of jobs that are undesirable. Should the government ensure that these jobs are eliminated?

Whose excuse?

Whose excuse what? Italicize my comments so I know what you're talking about. I'm too lazy to reconstruct every post you make.

Describing history is not an excuse for what happens in it. By the 1980s farmers were facing an entirely different sort of problems some monetary some not.

Exactly. People have problems in fiat money systems, so blaming all problems on gold is short-sighted.

I was merely giving a hypothetic example of what farmers were facing during the period of deflation from around 1875 to 1900.

How much was this deflation? A whopping 1%?

The price level did deflate by over a third during that period...

That's known as an increase in productivity.

...and interest rates were probably higher than 5%. Farm prices fell even more than the overall price level making their plight even more difficult.

Yep, the same thing happened in the 80s. Productivity increases favored those who were better at the business of farming. Small farms are cute and quaint, but people love lower prices. A businessperson is a businessperson. Stay on top of your business, or you're out of business.

Obviously I never claimed that it was.

What? I've slept since yesterday.

I was speaking of J.P. Morgan the individual who used his personal influence to stop the runs on banks and alleviate the Panic.

Did I disagree with you? He used this saviour episode to help establish the Federal Reserve. FDR shipped tons of gold to Europe after the Federal Reserve was created. Those guys that came over from Germany in 1913 and met with Morgan among others knew they'd end up with the real money after passing out pieces of paper to the American people.

The firm was not a saviour and things happening now have nothing to do with the Panic of 1907.

Then why'd you mention it?

Neither you nor anyone talking have any idea how much the firm has invested in options.

$23.4 trillion! It's in the public record from the government. Read the recent threads on Citibank and Morgan!

But it is interesting that you believe one of the most astute financial houses is willing to bet against gold. Wonder why?

They don't necessarily bet against it. They pay 1% unterest on the gold they owe to other banks. They sell gold derivatives and use the money to buy treasuries thereby making the diffence between the 1% and whatever the treasuries are. It was relatively under control until Rubin came along and exponentiated this activity for free money. The company went out on a limb because they knew Rubin would protect them in case gold went up. Now the situation is too for out of control for anyone to save them. So they had an emergency meeting, surprise, surprise, gold goes down $11.00 the next day even in the face of a bad day on Wall Street, breaking an opposite relationship since the middle of June and Morgan is saved...for now...

It is a concern but a country that elects scum like that deserves what it gets. Germany of 1923 will never happen here not even with a president as corrupt and evil as Clinton.

You have a lot of faith in man.

I will have to take some time to properly reflect and respond. Thanks.

The Hunt brothers were amateurs to the Dukes, who tried to corner the orange juice futures market back in the 1980's. Mortimer and Randolph Duke tried to use inside information purchased illegally by one of their henchman. Fortunately, the plot was foiled because one of their disgruntled former employees, Louis Winthorpe III, was clued in on the scheme by Billy Ray, a street bum-turned-trader working for the Dukes in an experimental intern-type program. Ray and Winthorpe got together and masterminded an elaborate way to thwart the Dukes, leaving them penniless.

My position is that a true gold standard is impossible not that its pursuit is irrelevant. The decision to produce one would be a governmental decision but capitalism arises without governmental initiation. Left to it self capitalism works and thrives left to itself the gold standard runs aground and is immediately changed. Thus, I see no contradiction in my position.

An elitist is different from an aristocrat in my view but even with that term Jefferson spoke often of the desirability of the government and society being run by an "aristocracy of virtue" Hamilton on the other hand often took cases of poor men even escaped slaves without fee. He never looked down on the working man and counted many among his followers in NYC. His political opponent in the state, George Clinton, represented the land owning interests. Being concerned with non-agricultural development does not make one an elitist. What is your evidence from his deeds that he viewed the world like an aristocrat? Almost all evidence about Jefferson shows precisely that he was an aristocrat and he lived like one until his death. He put on an act for his democratic followers which seems to have had a lasting impact but it was a show.

Hamilton was a realist not an aristocrat and never lived like one rather like a middle class lawyer. My belief that any significant study of the two men confirms exactly what I have said. Hamilton never believed in currying favor with the lower class by acting the Super-democrat and feared the rule of the lowest class that is true but this does not make him an aristocrat.

I can't tell you offhand which writings I relied upon for that era but will determine them and get back to you.

You are correct that is a theoretic possiblity and seems to have been the case in the last quarter of the 1800s but it is rare and not typical. During that period there was great hardship and political organizing to alleviate those hardships. Great strikes and massive increases in labor organization accompanied the reductions of wages necessary to adjust to the decline in the money supply. Deflation produces falling nominal wages and even if real wages are increasing the "money illusion" of the working class generates strife. It was feared that communist or anarchist revolution was upon us during those years because of the labor unrest. This had its political results and pressure for an increased money supply to raise prices and wages.

Lack of divisibility is the achilles heel of the gold standard and its unweildly nature.

Think I read about that one in the Wall St. Journal. Wasn't there some kind of kinky beastiality involved?

As I recall, Mortimer and Randolph staged something of a comeback after a Prince Hakeem from Mabunda re-financed their careers by proffering seed money in a brown paper bag.

Deflation produces falling nominal wages and even if real wages are increasing the "money illusion" of the working class generates strife.

Re-education would not be that difficult, but as I said, we can have honest money with a growing MS as long as the distribution of the new money is equitable. For example, why not create a nickel, annually, for each dollar of money supply and give it to the owner, thereof; or give $200 to everyone ($60 billion) to grow the 1.2 trillion money supply by 5%; just take control over the distribution of money from the unproductive, banking sector that, despite all the special privileges heaped upon it, always gets in trouble and has to be bailed out by you and me.

Lack of divisibility is the achilles heel of the gold standard and its unweildly nature.

I am unaware of any limitation due to divisibility. Nor is it unweildy since a redeemable paper money and redeemable coins operate EXACTLY as unredeemable fiat money.

It is interesting that your solution is the same as that in a book I just finished called Triumph of the Bankers though the author (can't recall his name) seems to come from the opposite political spectrum as most FRs. And is totally against the gold standard.

Perhaps divisibility is not the proper word but trying to pay for small purchases would be very difficult and using gold dust would be totally impractical. In days when gold coins were used Mrs. James Polk mentioned in her letters the difficulty of carrying coins. She wanted paper money just for that reason lol. While ancedotal I believe it not an insignificant aspect of the gold standard.

Money all boils down to trust whatever the standard. It was this feature which Hamilton understood above all and his program essentially capitalized the word of the American people when its gov. stood by the debt issued. Trusting the word of the government induced large investments from Europe and made people from across the world invest here. Jefferson suggested the difficulties be solved by deflauting on the debt as had been done by several southern states with their debt taken on during the Revolutionary War.

Without this trust and that investment the U.S. would have had almost no money supply. Specie was drained to Europe by persistent trade deficits for at least only by continuous investment by England was the balance of payments kept from having disastrous impacts.

You equate gold standard with the use of gold coins in commerce. However, all that a gold standard requires is that paper money, coins, etc. be redeemable in gold at a standard weight per unit of currency by the issuer. I would, personally, add the requirement that the issuer of the paper and coins maintain 100% of the gold needed to redeem all outstanding paper and coins. Either way, however, the system is better than the current fiat system wherein the government grants the Fed and the rest of the banking cartel a monopoly on the right to issue and distribute money while the rest of us are required to honor it through legal (a.k.a. forced) tender laws. This system does not comport with democracy or free enterprise. It imposes an elite structure by force and because the money-creating privilege is always and has always been abused, the government grants still further special privilege to the monetary elite.

Because you are so adverse to gold, I went on to say that fiat systems are also possible that do not establish an elitist structure. I go on to describe one that benefits virtually all but a tiny monetary elite. Your only comment, so far, is that it is interesting that some guy who is on the other side of the political spectrum from most FRs suggested the same concept in a book. I am not surprised. People of all political stripes should, theoretically, favor honest money over the current system. Are you saying that since people you don't like agree with me nothing further has to be said about the merits of my suggested reform?

Ping

I don't follow this stuff, and I couldn't care less, but...
$2 out of $307 is a plummet?

Is hyperbole an essential part of gold trading?