# The Evil of Fiat



## Conza88 (24 March 2009)

*Chris Leithner on 612 ABC Brisbane. 9th March.*

- "Quantitative Easing" and what it means
- Printing Money out of thin air
- Failure of Keynesian Economics
- Way to Prosperity: Through savings and production, not debt and consumption.
- Laws of Economics


*Part 2*
- Cause and effects of Inflation, Hyperinflation
- Failure of the Politicians and Government
- Effect on Australia from International Devaluation of Dollar
- Creation of UK Central Bank to Finance Wars
- Gold standard represents Peace 

*Part 3*
- Who suffers under a debasement of Currency?
- Barack Obama, Canadian Banking System
- Superannuation system
- Reserve Ratio & the Boom and Bust
- Mortgage availability ​


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## Ageo (24 March 2009)

Good find


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## GumbyLearner (25 March 2009)

Thanks for the link.

I particularly like what Mr.Leithner said in Part 2:

"One of the consequences of that policy of spend today is basically to provide a great disadvantage to punish the making things industries and to give a gargantuan leg up say to the financial sector which basically produces nothing tangible but swaps pieces of paper or entries on a computer."


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## robots (25 March 2009)

hello,

more sour grapes

thankyou
robots


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## GumbyLearner (25 March 2009)

robots said:


> hello,
> 
> more sour grapes
> 
> ...




What are you trying to say robots?

It would be great if you could enlighten the thread more with your profound 
analysis.


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## Aussiejeff (25 March 2009)

GumbyLearner said:


> What are you trying to say robots?
> 
> It would be great if you could enlighten the thread more with your profound
> analysis.




I think it's clear as mud that robi is complaining about the quality of some produce he bought at his beloved St Kilda fruit & veg market.



BTW I always knew that Fiats were evil. Those ruddy 500's & Bambinos are apt to auto-combust at the drop of hat!


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## Ageo (25 March 2009)

Aussiejeff said:


> I think it's clear as mud that robi is complaining about the quality of some produce he bought at his beloved St Kilda fruit & veg market.
> 
> 
> 
> BTW I always knew that Fiats were evil. Those ruddy 500's & Bambinos are apt to auto-combust at the drop of hat!




Dont knock those fiat 500's!!! (also known as cinquecento)


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## Dowdy (25 March 2009)

robots said:


> hello,
> 
> more sour grapes
> 
> ...





i guess your not smart enough to understand the video. We all not there's not much going around your head


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## Stormin_Norman (25 March 2009)

nothing evil with fiat.

printing money to bad for debt is evil though.

having a gold standard caused just as many (if not more) problems.

the loss of independence of the central bank is the problem.


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## Stormin_Norman (25 March 2009)

Dowdy said:


> i guess your not smart enough to understand the video. We all not there's not much going around your head




or too stupid and believe it, if u want to name call.


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## Conza88 (25 March 2009)

Stormin_Norman said:


> nothing evil with fiat.
> 
> printing money to bad for debt is evil though.
> 
> ...




There was a gold exchange standard. Proponents of the Austrian School said it would fail, and it did.

_"the loss of independence of the central bank is the problem"_... lmao

No, the fact that the 5th plank of the Communist Manifesto has been established in practically every country in the world, is the problem.


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## Stormin_Norman (25 March 2009)

Conza88 said:


> There was a gold exchange standard. Proponents of the Austrian School said it would fail, and it did.
> 
> _"the loss of independence of the central bank is the problem"_... lmao
> 
> No, the fact that the 5th plank of the Communist Manifesto has been established in practically every country in the world, is the problem.




as a shumpetarian/austrian economist i could bang on all day about the gold standard.

why do u laugh at the independence of the central bank? their job is a measured monetary growth and inflation.

when governments spend trillions more then they have and put pressure on the central bank to wind up the printing presses to pay for it - that's the problem.

even deficits are only quite evil. printing money stopping the bond market disciplining excess government spending is pure evil.

borrowing money to spend more then u have is one thing. printing money you dont have to spend it is catastrophic.


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## GumbyLearner (26 March 2009)

Stormin_Norman said:


> even deficits are only quite evil.




How evil?

http://www.brillig.com/debt_clock/


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## Stormin_Norman (26 March 2009)

quite evil.

so imagine how evil printing 12 trillion to just pay it back would be!


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## GumbyLearner (26 March 2009)

Stormin_Norman said:


> quite evil.
> 
> so imagine how evil printing 12 trillion to just pay it back would be!




an aircraft carrier or two and a couple of full fleets on mothballs will pay for it.. so don't worry!


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## Stormin_Norman (26 March 2009)

are u dismantling the industro-military machine?!


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## GumbyLearner (26 March 2009)

Stormin_Norman said:


> are u dismantling the industro-military machine?!




No just baiting!  LOL


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## Conza88 (26 March 2009)

Stormin_Norman said:


> as a shumpetarian/austrian economist i could bang on all day about the gold standard.




Great, so could I.  Btw, Kondratiev wave / cycles are a joke. :

More to the point, a Gold Standard would have less problems than the current Communist system. Guaranteed.



> why do u laugh at the independence of the central bank? their job is a measured monetary growth and inflation.




Their existence is a glaring contradiction to their stated goals. They destabilize the economy with their policies, it's not the other way around. They create inflation, fractional reserve banking is inherently inflationary.

Why do I laugh at it's _*"independence"*_? 

Here is why:

The standard reply of the Fed and its partisans is that any such measures, however marginal, would encroach on the Fed's _"independence from politics"_ which is invoked as a kind of self-evident absolute. The monetary system is highly important, it is claimed, and therefore the Fed must enjoy absolute independence.

_"Independent of politics"_ has a nice, neat ring to it, and has been a staple of proposals for bureaucratic intervention and power ever since the Progressive Era. Sweeping the streets; control of seaports; regulation of industry; providing social security; these and many other functions of government are held to be "too important" to be subject to the vagaries of political whims. But it is one thing to say that private, or market, activities should be free of government control, and _"independent of politics"_ in that sense. But these are government agencies and operations we are talking about, and to say that government should be _"independent of politics"_ conveys very different implications. 

For government, unlike private industry on the market, is not accountable either to stockholders or consumers. Government can only be accountable to the public and to its representatives in the legislature; and if government becomes _"independent of politics"_ it can only mean that that sphere of government becomes an absolute self-perpetuating oligarchy, accountable to no one and never subject to the public's ability to change its personnel or to _"throw the rascals out."_ If no person or group, whether stockholders or voters, can displace a ruling elite, then such an elite becomes more suitable for a dictatorship than for an allegedly democratic country.​
_The Case Against the Fed - Murray N. Rothbard_​


> when governments spend trillions more then they have and put pressure on the central bank to wind up the printing presses to pay for it - that's the problem.




LOL.. You call "Quantitative easing", putting pressure on them to wind up the printing presses? Gtfo.



> even deficits are only quite evil. printing money stopping the bond market disciplining excess government spending is pure evil.
> 
> borrowing money to spend more then u have is one thing. printing money you dont have to spend it is catastrophic.




No, theft is evil. Taxation is theft. And Inflation is a hidden tax.


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## GumbyLearner (26 March 2009)

Conza88 said:


> Great, so could I.  Btw, Kondratiev wave / cycles are a joke. :
> 
> 
> 
> ...




I like it, I like it. "control of seaports"

Who's going to buy Asciano?

Great discourse Conza88.


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## sinner (26 March 2009)

Stormin_Norman said:


> or too stupid and believe it, if u want to name call.




Wasting your time Norm.


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## Stormin_Norman (26 March 2009)

your position in this discussion is confusing Conza88.

are you talking theoretical or practical in regards to the central banks?

your post made reference to the problem i mentioned, the lack of independence of the central bank, who have become a tool of the government in many countries, including the world's biggest one.

so are u laughing at the theory of or (more seemingly) the practical independence of the central banks?

the government shouldnt be determining quantitative easing. the central bank should be to keep a constant supply of money growth into the economy. of course i realise quantitative easing isnt physically printing money, its all done on balance sheets. its a turn of phrase.



> No, theft is evil. Taxation is theft. And Inflation is a hidden tax.




which was exactly what i was saying. its tax by proxy of inflation which is very difficult to remove from an economy.

please explain why gold standard is superior to fiat money. or why the theory of fiat money is flawed if the central bank is allowed its proper independence.

kondratiev waves are an interesting theory. one could argue we're in one atm.


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## Ageo (26 March 2009)

Stormin_Norman said:


> please explain why gold standard is superior to fiat money. or why the theory of fiat money is flawed if the central bank is allowed its proper independence.




Stormin i thought the gold standard was in place so people couldnt print as much as they wanted??? (i.e if you wanted a trillion dollars in paper you needed to accumulate that much in gold before you could print it off???)

You see heres the problem without the gold standard, there is no control and how could you control a country in terms of printing money?????

If there was a gold standard in place then the U.S would be stuffed and wouldnt be invading countries (because they wouldnt be able to afford it). So im curious to know why you think it was worse off ?? do you believe when nixon abolished it that was a good thing???

1 thing is forsure is that paper can be manipulated so much easier than hard commodity can. (which means fiat can be more evil than gold if manipulated).


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## sinner (26 March 2009)

Ageo said:


> Stormin i thought the gold standard was in place so people couldnt print as much as they wanted??? (i.e if you wanted a trillion dollars in paper you needed to accumulate that much in gold before you could print it off???)
> 
> You see heres the problem without the gold standard, there is no control and how could you control a country in terms of printing money?????
> 
> ...




Errrrr I suggest you go and check what it was like when there was a gold standard.

Big countries will just add gold back to the list of things they kill people in small countries for, and make sure they and their buddies have more of than everyone else in such a situation.

This is the way it has been for millenia and was this way as recently as 1974. The only reason the US managed their con was to convince the Arabs to accept USD for oil instead of gold. Suddenly everyone has to buy USD instead of gold. But that is a whole other story. Do you really think if a gold standard was reinstated things wouldn't go back to what I have described above.

Anyway, there just isn't enough gold for a gold standard. Maybe gold+silver+copper or something. Why bother. Gold will re-exert its influence as money whenever it is required to (and you better wish it doesn't end up like this) and fiat works *just fine* every other time.

PS: Gold has a natural inflation rate of whatever non-recyclable consumption subtracted from production equals and this will vary year to year.


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## Stormin_Norman (26 March 2009)

gold was a primary reason why the great depression spread. the contraction in united states caused gold to flow from europe to america.

that contracted europe's money supply artificially, cause currency had to be based on gold.

britian went off the gold standard in 1931, the rest of europe followed as this fundamental flaw in the system was realised.


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## Jikx (26 March 2009)

I think you've hit the spot right on - Gold standard is not the solution. It would actually exacerbate the problem as there is insufficient Gold to go around. Unless you absolutely LOVE having prices dropping like a stone (along with your pay) then go ahead. Imagine having your pay cut in half or more, because that's what it would have been if we were on the Gold standard in the past decade. 

Sorry Gold is certainly no longer a solution.

A possible solution to Fiat would be to have Gold/Other precious metals as a cash equivalent. That means no capital gains tax, and legislation designating Gold banks as being unable to lend out or derive it in anyway. You can spend your "Gold" using the standard ATM systems, and it would be converted to market cash equivalent at the point of transaction. It creates competition to Fiat money, thus decreasing the temptation from printing it.


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## Ageo (26 March 2009)

The reason there might not be enough precious metals (gold/silver etc..) to cover money is because prices have been artificially rising because of fiat and its practices. 

Whatever the solution the current system we are in now is not the answer.

How can you justify $8 for milk and bread now? it was only 3 decades ago when this figure was cents. With this rate of inflatin what happens in 50yrs? $50 for bread and milk?? whats the average wage going to be???

At the end of the day the fiat system has to be backed by something otherwise all the paper they print represents no value.


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## Stormin_Norman (26 March 2009)

inflation isnt a problem of fiat money. its a problem of over supply of money.

that's not fiat's fault. that's the printing press and supply and demand's fault.

deflation caused by a gold standard is far far a bigger problem then the inflation problem.


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## Conza88 (26 March 2009)

Stormin_Norman said:


> your position in this discussion is confusing Conza88.
> 
> are you talking theoretical or practical in regards to the central banks?




If you "theory" doesn't work in reality, then it's bull**** and wrong. You can't have "good in theory" and wrong in reality. 

I'm saying it's wrong in both the theoretical and practical sense. Just like Communism is wrong in theory, it's wrong in reality too.



> your post made reference to the problem i mentioned, the lack of independence of the central bank, who have become a tool of the government in many countries, including the world's biggest one.
> 
> so are u laughing at the theory of or (more seemingly) the practical independence of the central banks?




I'm laughing at you because you think a Central Bank would ever be, or remain "independent", and Murray Rothbard completely and utterly destroyed the notion in that excerpt, go read it again, and again - until you come to grips with what was said.



> the government shouldnt be determining quantitative easing. the central bank should be to keep a constant supply of money growth into the economy. of course i realise quantitative easing isnt physically printing money, its all done on balance sheets. its a turn of phrase.




They "should" do a lot of things. Like resign for starters.

Let us put it this way: give any man or group power, and it will tend to use that power. If the power is inherently abusive, then that power will be abused. Our present system gives to the federal government and its Federal Reserve System the unlimited power to counterfeit. The problem is that if the Fed has the power to counterfeit, it will inevitably use that power. Why? Because the power to counterfeit is too tempting. The power to create money means that it is far more tempting to print it than to work for it. It means that the counterfeiter can pay his debts, spend more money, give more money to his friends and associates. In the case of government, the power to counterfeit means that government's debts can be paid without levying taxes, that government spending can increase, and that political allies can be purchased and maintained.

The power to counterfeit is the power to abuse. It is not enough to urge the government to use it more moderately. The power must be taken away. Counterfeiting is fraud, and no one should have the right to counterfeit, least of all government, whose record of counterfeiting throughout history is black indeed. Money and banking must be separated from the State, just as Church and State are separated in the American tradition, just as the economy and the State should be separated.​
Gold, Peace and Prosperity - Dr. Ron Paul



> which was exactly what i was saying. its tax by proxy of inflation which is very difficult to remove from an economy.




All fiat is backed by nothing but force / faith.



> please explain why gold standard is superior to fiat money. or why the theory of fiat money is flawed if the central bank is allowed its proper independence.




Get over your "proper independence" bs. It, ain't ever, nor will ever happen. What is your problem? How can you not understand, an institution which has been granted a monopoly by the government, won't ever stay or remain politically independent.



> kondratiev waves are an interesting theory. one could argue we're in one atm.




You could try. But you'd be wrong. *The Kondratieff Cycle: Real or Fabricated?*


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## prawn_86 (26 March 2009)

Conza,

While all types of opinions are allowed at ASF, please try not to deliberatly provoke or be condescending to other members.

Thanks

Prawn


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## Jikx (26 March 2009)

Ageo said:


> How can you justify $8 for milk and bread now? it was only 3 decades ago when this figure was cents. With this rate of inflatin what happens in 50yrs? $50 for bread and milk?? whats the average wage going to be???




Well that's taking a pot shot. Look on the other side of the coin. A computer with the computing power of your wrist watch would have cost millions just a few decades ago! The average car is more sophisticated than the vehicles that sent people to the moon. It's almost insane the pace of technological advance which counter balances the cost of basic goods.

Can you really argue the share of basic goods / services from the average wage has gone up? All I can see is more and more descretionary spending. 

No the problem is most assuredly the over borrowing / lending that always occurs before the busts. Keep the standards watertight, and ignore the cries for financial deregulation. Finance is the one industry that produces nothing but fluff anyway.


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## kotim (26 March 2009)

The whole system is based on credit and its expansion.  That is why fractional reserve banking and all its progeny is the only way to go for a civilisation that wants to "expand"

See if you can get a hold of a book that used to be printed in America called Money mechanics and you will realise that there is not enough printed money in the world to cover all the "Money" that is being used.  The whoe system is based on faith and credit of those buyign and selling.  

Without a credit based system we would not be anywhere near as technologically advanced as we are today, it's as simple as that.  The system is a tool and it just comes down to how the tool is used.  If the person using the tool is"evil" then evil will result, if person is good then "good" will result.

Any system that would not allow for credit expansion would be a very bad system, becasue it would require the constant "brotherly love" potion so that those who have look after those who do not.  It is hard enough now poreventing fights and wars, but if youwent away from a credit system as such then there would be far more turmoil inthe world, which is not something that aprogressive society wants.

The Gold standard is like saying people wish for the good old days, and in some cases it is true, but look to the downside of what things used to be like and many people would not be so quick to ask for the good old days.


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## Ageo (26 March 2009)

Stormin_Norman said:


> inflation isnt a problem of fiat money. its a problem of over supply of money.
> 
> that's not fiat's fault. that's the printing press and supply and demand's fault.
> 
> deflation caused by a gold standard is far far a bigger problem then the inflation problem.




Hehe but its much easier to say collect another $1trillion with fiat then it is if you had a gold standard no???

And please explain how deflation (supposedly caused by gold) is a much bigger problem???



Jikx said:


> Can you really argue the share of basic goods / services from the average wage has gone up? All I can see is more and more descretionary spending.




You think so? so a loaf of bread today (from a local baker) is the same compared to wages then it was yrs ago?

care to explain?


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## Stormin_Norman (26 March 2009)

gold and the depression. fiat money and inflation.

milton friedman:

http://www.youtube.com/watch?v=O7pnjzCuSv8


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## Dowdy (26 March 2009)

Stormin_Norman said:


> gold and the depression. fiat money and inflation.
> 
> milton friedman:
> 
> http://www.youtube.com/watch?v=O7pnjzCuSv8




that was a good clip UNTIL he started talking about John Maynard Keynes as one of the greatest economist!

It's his principles that the credit crisis is based on and the current stimulus ideas to try and go back to it.


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## Stormin_Norman (26 March 2009)

keynsianism, invented by his followers gave keynes a bad name.


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## Conza88 (26 March 2009)

Stormin_Norman said:


> gold and the depression. fiat money and inflation.
> 
> milton friedman:
> 
> http://www.youtube.com/watch?v=O7pnjzCuSv8




Please don't lie and say you're an Austrian Economist.

No Austrian agrees with Ben Bernanke and the Monetarist / Chicago school... which had no idea this crisis was coming, or any other for that matter.

He's attacking a Gold EXCHANGE standard. Which the Austrian said would fail as well. 

*Milton Friedman: "John Maynard Keynes as unquestionably one of the greatest economists of all time."*

Hahahahaha !



Stormin_Norman said:


> keynsianism, invented by his followers gave keynes a bad name.




No, he achieved that himself with his incoherent general treatise, a 'General Theory'. Which requires his followers to try understand, just exactly, wtf he was trying to say. lol 

Treasure trove of truth:

http://www.youtube.com/profile?user=misesmedia&view=videos&query=gold


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## Stormin_Norman (26 March 2009)

i'm still trying to figure out what youre trying to say.


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## Ageo (26 March 2009)

Stormin_Norman said:


> gold and the depression. fiat money and inflation.
> 
> milton friedman:
> 
> http://www.youtube.com/watch?v=O7pnjzCuSv8




Mate are u serious??? and you say you base your economic theory on austrian principles?

*Milton Friedman: "John Maynard Keynes as unquestionably one of the greatest economists of all time."
*

That has to be the post of the month. Anyone have any real evidence that the gold standard is much worse off than the current fiat system????


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## Stormin_Norman (26 March 2009)

u asked how gold caused the deflation (and depression) to spread.

you talked about inflation.

that video touched on both of them.

keynes is one of the greatest economists of all time. there is far more to keynes then government deficits.

other great economist are friedman, smith, marx, ricardo, schumacher, walrus, marshall,  pareto, fisher.

many of them profoundly disagree. all of them offered insightful views which shouldnt be discounted.

do those arguing for a gold standard realise that gold standard would mean there is no such thing as monetary policy???

i am yet to hear a good reason for abandoning monetary policy as a tool to aid recovery from economic downturns.

monetary policy would be limited to the production of gold. there is about $6 trillion dollars worth of gold in the world at current prices.

how do you move towards that?

sensible monetary growth is needed. money is the oil of an economy's engine. too much oil is messy, too little oil and the thing grinds to a halt.

chaining money supply to a physical good is silly. why not make it backed by cheese, or whales, or common garden rocks?


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## Glen48 (26 March 2009)

Think they will be a new World currency created once this is all over?


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## refined silver (26 March 2009)

Stormin_Norman said:


> i'm still trying to figure out what youre trying to say.




Conza follows Austrian economics. This is often confused with classical/neo-classical or monetarist theory. While there are many similarities there are very important points of difference also.

Your take on gold and the Great Depression is a Monetarist view as espoused by Freidman (and Anna Schwartz). The Austrians would strongly disagree with Friedman's analysis and conclusions here.


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## Ageo (26 March 2009)

Stormin_Norman said:


> chaining money supply to a physical good is silly. why not make it backed by cheese, or whales, or common garden rocks?




I agree better than not backed by nothing eh? perhaps it should represent the resources that country has which in turn determines how much paper they can print?

P.S Isnt all this printing and money pumping part of keyens theory?


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## Stormin_Norman (27 March 2009)

refined silver said:


> Conza follows Austrian economics. This is often confused with classical/neo-classical or monetarist theory. While there are many similarities there are very important points of difference also.
> 
> Your take on gold and the Great Depression is a Monetarist view as espoused by Freidman (and Anna Schwartz). The Austrians would strongly disagree with Friedman's analysis and conclusions here.




id challenge the notion that all austrian school economists back a return to gold.

sensible money supply yes, but need that be forced by a gold standard?


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## refined silver (27 March 2009)

Stormin_Norman said:


> id challenge the notion that all austrian school economists back a return to gold.
> 
> sensible money supply yes, but need that be forced by a gold standard?




Basically they do. They assume that human nature and politicians being what they are, a sensible money supply is impossible in the long run, unless backed by something that can't be increased at will.

There are many arguments about HOW to have an effective gold standard especially in the light of modern commerce, there are many ways to do this and still have a flexible system.


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## Stormin_Norman (27 March 2009)

so what about the effects of contagion bought about by having a base currency?


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## Jikx (27 March 2009)

refined silver said:


> Basically they do. They assume that human nature and politicians being what they are, a sensible money supply is impossible in the long run, unless backed by something that can't be increased at will.
> 
> There are many arguments about HOW to have an effective gold standard especially in the light of modern commerce, there are many ways to do this and still have a flexible system.




If you could give some links, I would be interested to read.

A small country like Australia could be backed by Gold, but imagine a large developed country (US, Germany, Japan)? Within a single year of average growth (2%) and a single country would eclipse the increase in Gold supply but a large factor. How would the Gold standard work in this case?


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## Jikx (27 March 2009)

Ageo said:


> You think so? so a loaf of bread today (from a local baker) is the same compared to wages then it was yrs ago?
> 
> care to explain?




I'm not talking about just bread. I'm talking about how much our income has far outpaced that of basic goods. For example, we all liked to complain about the price of petrol but as the percentage of our pay it was quite normal. It's all about relative.

As I mentioned above, how do you reconcile the huge magnitude of global growth and the tiny increase in Gold supply?

Here's an odd thought - Gold standard would merely shift people from one unproductive industry (finance) into another (Gold exploration and mining).


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## refined silver (27 March 2009)

Jikx said:


> If you could give some links, I would be interested to read.
> 
> A small country like Australia could be backed by Gold, but imagine a large developed country (US, Germany, Japan)? Within a single year of average growth (2%) and a single country would eclipse the increase in Gold supply but a large factor. How would the Gold standard work in this case?




There is no problem with the amount of gold in the world. Just the price. When Nixon ended gold convertability in the 70s, gold went from $35 to $880. 

The price of gold rose so that the reported gold reserves in the US balanced external liabilities of the US. A google search will reveal those two amounts today. Jim Sinclair, who speaks of a revitalised gold certificate ratio in one of the links below, predicted this final price of gold in the early 70s and got out on the day it peaked.

http://www.gold-speculator.com/jim-sinclair/2673-more-federal-reserve-gold-certificate-ratio.html

This is Part 1 of a long dialogue on gold and the money supply, by a modern Austrian advocate

http://www.lewrockwell.com/north/north687.html

Academia's war Against Free Mkt Money
http://www.lewrockwell.com/north/north666.html

The rest of the Lew Rockwell site or Mises.org will give you Rothbard or Von Mises full works as two leaders of the Austrian school.


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## pilbara (27 March 2009)

Jikx said:


> For example, we all liked to complain about the price of petrol but as the percentage of our pay it was quite normal.



complaining about high petrol prices is justified, because the oil price bubble is the bubble of last resort, it has a corrosive inflationary effect and can truly shock the world economy, affecting the profit of every productive industry, causing a slowdown in demand for everything.  When the world's economy stops then gold becomes relevant as the ultimate measure of wealth, but during normal times oil is more important. Gold is the ultimate measure of wealth because of its rarity -- all of the gold in the world would fit on a tennis court -- but oil is priced like it is an infinite resource. With true scarcity the price of oil will break free of supply/demand elasticity, and become more like gold.


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## Conza88 (28 March 2009)

Stormin_Norman said:


> keynes is one of the greatest economists of all time. there is far more to keynes then government deficits.
> 
> other great economist are friedman, smith, marx, ricardo, schumacher, walrus, marshall,  pareto, fisher.
> 
> many of them profoundly disagree. all of them offered insightful views which shouldnt be discounted.




Haha, I have no idea how you could possibly ever call yourself an Austrian Economist, besides you think it's cool?

Look, this really ain't worth my time. So I'm not going to both highlighting the fallacies and hundreds of years all those clowns set back real economics.

Since you're focusing on depressions some what. Play close attention:

*The Great Depression: Mises vs. Fisher*_by: Mark Thornton_

"Ludwig von Mises established the foundations of modern Austrian economics while Irving Fisher established the foundations of modern mainstream macroeconomics and central bank policy. Fisher helped create and was a proponent of mathematical economics, statistics and index numbers, and a monetary policy that “stabilized” the value of the dollar. Fisher claimed that his scientific approach established a new era of prosperity during the 1920s. 

Mises published a book in 1928 that critiqued Fisher’s approach and predicted that it would lead to an economic crisis and collapse. Before the stock market crash in 1929 Fisher proclaimed a perpetual prosperity for the economy and continued to recommend investing in stocks long after the market had collapsed. In this important case study, *Mises passed the “market test” while Fisher lost his personal fortune during an economic crisis that his economics help create."*​


> do those arguing for a gold standard realise that gold standard would mean there is no such thing as monetary policy???
> 
> i am yet to hear a good reason for abandoning monetary policy as a tool to aid recovery from economic downturns.




I'm not actually for a Gold Standard, if by that you mean - Government maintains control over monetary policy in any regard.

I would allow competing currencies, get rid of legal tender laws, basically a free market monetary system. 

You know - allow Capitalism to create it's own money, for the first time, like ever. (Central Banking rocked up in England in 1800's) To finance wars, with FIAT! above all else... lol So if you are for peace, you're for the Gold Standard / Free market monetary system.



> monetary policy would be limited to the production of gold. there is about $6 trillion dollars worth of gold in the world at current prices.
> 
> how do you move towards that?
> 
> ...




*What has Government Done to Our Money? by Murray N. Rothbard*

Can't paste it all, but here is an excerpt:

*II. Money in a Free Society
8. The "Proper" Supply of Money*

Now we may ask: what is the supply of money in society and how is that supply used? In particular, we may raise the perennial question, how much money "do we need"? Must the money supply be regulated by some sort of "criterion," or can it be left alone to the free market?

First, the total stock, or supply, of money in society at any one time, is the total weight of the existing money-stuff. Let us assume, for the time being, that only one commodity is established on the free market as money. Let us further assume that gold is that commodity (although we could have taken silver, or even iron; it is up to the market, and not to us, to decide the best commodity to use as money). Since money is gold, the total supply of money is the total weight of gold existing in society. The shape of gold does not matter?except if the cost of changing shapes in certain ways is greater than in others (e.g., minting coins costing more than melting them). In that case, one of the shapes will be chosen by the market as the money-of-account, and the other shapes will have a premium or discount in accordance with their relative costs on the market.

Changes in the total gold stock will be governed by the same causes as changes in other goods. Increases will stem from greater production from mines; decreases from being used up in wear and tear, in industry, etc. Because the market will choose a durable commodity as money, and because money is not used up at the rate of other commodities--but is employed as a medium of exchange--the proportion of new annual production to its total stock will tend to be quite small. Changes in total gold stock, then, generally take place very slowly."​


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## Conza88 (28 March 2009)

Glen48 said:


> Think they will be a new World currency created once this is all over?




 They are trying hard... Nothing really wrong with it, if there's no world central back, world government and it isn't a Fiat dollar.

i.e Gold or silver etc... as the global currency is fine. Basically automatically means free trade with all countries, international division of labour.

Shame they're following the Keynesian dream though. 



refined silver said:


> Conza follows Austrian economics. This is often confused with classical/neo-classical or monetarist theory. While there are many similarities there are very important points of difference also.
> 
> Your take on gold and the Great Depression is a Monetarist view as espoused by Freidman (and Anna Schwartz). The Austrians would strongly disagree with Friedman's analysis and conclusions here.




Thanks  Here's a goody:

*Milton Friedman Unraveled by Murray N. Rothbard*



refined silver said:


> There is no problem with the amount of gold in the world. Just the price. When Nixon ended gold convertability in the 70s, gold went from $35 to $880.




Yep, another thing for people to note is that was another "market test". Every school of thought had a take on which way Gold would go when Nixon cut ties with the Gold Standard.

Keynesian, Chicago, every other school vs the Austrian Economists.

The clowns said it would go down to about $6 an oz. The Austrians said it would rise, to about 75 oz. Which was unheard of. It went up. The Austrians won.

And over time it's gone higher and higher, and will continue to do so. Hyper inflation here we come, quantitative easing! Yeahh!!


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## Dowdy (30 March 2009)

Stormin_Norman said:


> id challenge the notion that all austrian school economists back a return to gold.
> 
> sensible money supply yes, but need that be forced by a gold standard?




Having your currency pegged to a hard asset that can't be manipulated will create discipline to the money printers (the fed) in the world and will stabilise prices

They will still have the printing press but it will be like having the gold as their ink as you only have so much.

You can't have a 'sensible money supply' if there is nothing stopping their temptation to print more. Gold create the discipline. It's not basic economics, it's basic psychology


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## Conza88 (6 April 2009)

Glen48 said:


> Think they will be a new World currency created once this is all over?




*The G20 Moves the World a Step Closer to a Global Currency by Ambrose Evans-Pritchard*



> A single clause in Point 19 of the communiquÃ© issued by the G20 leaders amounts to revolution in the global financial order.
> 
> "We have agreed to support a general SDR allocation which will inject $250bn (£170bn) into the world economy and increase global liquidity," it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.
> 
> ...


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## Ageo (6 April 2009)

Thats funny and scary at the same time.

IMF has its own currency? wow


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## numbercruncher (7 April 2009)

Ageo said:


> Thats funny and scary at the same time.
> 
> IMF has its own currency? wow





Yup it doesnt matter who makes the rules and laws if you control the money supply ..... this is all part of an ongoing evil plan surely ....


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## Conza88 (8 April 2009)

numbercruncher said:


> Yup it doesnt matter who makes the rules and laws if you control the money supply ..... this is all part of an ongoing evil plan surely ....








 lol​


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