Gold Over $800 Per Ounce

Off Topic Politics and World Issues
41

I would have to respectfully disagree. My perception is that people regard paper money as a con game and they’re going to run with the rules of fiat money until the game plays out. They know that governments eventually turn paper money into paper napkins (not worth much).

Its hard to fight thousands of years of mankind’s embracing of the ‘barbaric metal’. But aren’t people who use inflation to steal pre-existing wealth more barbaric?

Government-by-theft can’t endure. Everyone wises up and there’s fewer and fewer people left to loot. Gold endures.

42

[quote]Headhunter wrote:
I would have to respectfully disagree. My perception is that people regard paper money as a con game and they’re going to run with the rules of fiat money until the game plays out. They know that governments eventually turn paper money into paper napkins (not worth much).

Its hard to fight thousands of years of mankind’s embracing of the ‘barbaric metal’. But aren’t people who use inflation to steal pre-existing wealth more barbaric?

Government-by-theft can’t endure. Everyone wises up and there’s fewer and fewer people left to loot. Gold endures.[/quote]

What pre existing wealth are the rich stealing? The middle class and poor have more than ever. It wasn’t so long ago that the rich had everything and everyone else was a serf or a slave.

Credit and fiat money have helped hundreds of millions of people live a better life.

43

[quote]LIFTICVSMAXIMVS wrote:
Mick28 wrote:
LIFTICVSMAXIMVS wrote:

Business cycles do not have to happen

Wow, what an incredibly naive statement.

Sorry that should have been stated, "Business cycles do not necessarily have to happen.

Now, do you care to explain what you mean or are you just going to pretend to have an educated opinion and reply with vague one sentence responses?

The business cycle was explained by Mises and Hayek as a result of intervention in the market. If you have anything to refute their ideas please provide and explain.

http://www.mises.org/story/1558[/quote]

Business cycles happen all the time - unless you have infinitely constant supply, and infinitely constant demand. last I checked, there are very few industries that have both. Competition also has a play in business cycles.

One could make the argument that the “new” global economy expedites cyclical changes. More Competition, different money supplies, different gov’t controls on said money supplies, and differing governmental regulations on doing business would surely throw a monkey wrench into figuring out the guessing game that is economics.

Government has wormed its way into the cycle in an effort to artificially mitigate drops in employment, and supply of money - but they are not the root cause of the cycles themselves.

I may not have all the links at hand, but sometimes real life will teach you more than someone that has a PhD in guessing at human behavior

44

[quote]rainjack wrote:
I may not have all the links at hand, but sometimes real life will teach you more than someone that has a PhD in guessing at human behavior[/quote]

But you do understand human behavior is really the only way to understand economics? Human behavior drives everything about our economic conditions. The positivist method of treating all conditions as ideal as laid down by the Keynesian School, et al does not work.

The argument I am trying to make is that no matter how much the government thinks it is trying to help they end up creating new conditions that can either be “good” or “bad” and that in all cases they do not have the ability to foresee further into the future than the direct consequence of their action. And even then they do not have perfect knowledge of the market so they can’t even be sure their action will result in any desired consequences at all.

For example, by lowering interest rates they always create a bubble in investment somewhere. The reason they lower the rates usually have nothing to do with the bubble that is created. Between 2002 and 2006 the Fed cut rates to ease malinvestment in the dot-com bubble and to help with the investment uncertainty of 9/11. This had a tremendous effect on housing. It created a huge bubble which ended popping and leaving people bankrupt once rates were raised.

And now look at what they are doing! They are lowering rates again to help bail out bad investors and to create an incentive to invest. Every action has a consequence – some foreseeable, most unforeseeable.

The biggest disaster that has happened has been the destruction of our currency. If we can’t accept that inflation is caused by interference in the money supply then really there is no hope for us. Inflation is not a natural phenomena under hard commodity money. Once the State realizes the power to coin it will spend into oblivion. Money must be returned to the free market where it came from.

45

[quote]Zap Branigan wrote:
Headhunter wrote:
I would have to respectfully disagree. My perception is that people regard paper money as a con game and they’re going to run with the rules of fiat money until the game plays out. They know that governments eventually turn paper money into paper napkins (not worth much).

Its hard to fight thousands of years of mankind’s embracing of the ‘barbaric metal’. But aren’t people who use inflation to steal pre-existing wealth more barbaric?

Government-by-theft can’t endure. Everyone wises up and there’s fewer and fewer people left to loot. Gold endures.

What pre existing wealth are the rich stealing? The middle class and poor have more than ever. It wasn’t so long ago that the rich had everything and everyone else was a serf or a slave.

Credit and fiat money have helped hundreds of millions of people live a better life.[/quote]

Credit, yes.

Fiat money, no.

Your understanding of what money actually is, is deeply, deeply flawed.

It is a way of keeping score. You do not create more touchdowns by inflating the numbers on the score board. It is just that if one team allways gets the inflated points first it is more likely to games.

That pseudo Keynesean BS failed to jump start the Japanese economy for a decade now and is basically very passe since the 80 stagflation.

The argument that inflation is not stealing because the GNP still grew despite inflation is beyond insane, Ron Paul is your friend.

Not the candidate, the economic author.

46

[quote]rainjack wrote:
LIFTICVSMAXIMVS wrote:
Mick28 wrote:
LIFTICVSMAXIMVS wrote:

Business cycles do not have to happen

Wow, what an incredibly naive statement.

Sorry that should have been stated, "Business cycles do not necessarily have to happen.

Now, do you care to explain what you mean or are you just going to pretend to have an educated opinion and reply with vague one sentence responses?

The business cycle was explained by Mises and Hayek as a result of intervention in the market. If you have anything to refute their ideas please provide and explain.

http://www.mises.org/story/1558

Business cycles happen all the time - unless you have infinitely constant supply, and infinitely constant demand. last I checked, there are very few industries that have both. Competition also has a play in business cycles.

One could make the argument that the “new” global economy expedites cyclical changes. More Competition, different money supplies, different gov’t controls on said money supplies, and differing governmental regulations on doing business would surely throw a monkey wrench into figuring out the guessing game that is economics.

Government has wormed its way into the cycle in an effort to artificially mitigate drops in employment, and supply of money - but they are not the root cause of the cycles themselves.

I may not have all the links at hand, but sometimes real life will teach you more than someone that has a PhD in guessing at human behavior[/quote]

Absolutely.

It is just that John Maynard Keynes thought that governments could smoothen the business cycle by borrowing and spending money during recessions and saving and paying back during booms aka deficit spending.

Guess what happened?

47

[quote]orion wrote:
rainjack wrote:
LIFTICVSMAXIMVS wrote:
Mick28 wrote:
LIFTICVSMAXIMVS wrote:

Business cycles do not have to happen

Wow, what an incredibly naive statement.

Sorry that should have been stated, "Business cycles do not necessarily have to happen.

Now, do you care to explain what you mean or are you just going to pretend to have an educated opinion and reply with vague one sentence responses?

The business cycle was explained by Mises and Hayek as a result of intervention in the market. If you have anything to refute their ideas please provide and explain.

http://www.mises.org/story/1558

Business cycles happen all the time - unless you have infinitely constant supply, and infinitely constant demand. last I checked, there are very few industries that have both. Competition also has a play in business cycles.

One could make the argument that the “new” global economy expedites cyclical changes. More Competition, different money supplies, different gov’t controls on said money supplies, and differing governmental regulations on doing business would surely throw a monkey wrench into figuring out the guessing game that is economics.

Government has wormed its way into the cycle in an effort to artificially mitigate drops in employment, and supply of money - but they are not the root cause of the cycles themselves.

I may not have all the links at hand, but sometimes real life will teach you more than someone that has a PhD in guessing at human behavior

Absolutely.

It is just that John Maynard Keynes thought that governments could smoothen the business cycle by borrowing and spending money during recessions and saving and paying back during booms aka deficit spending.

Guess what happened?

[/quote]

Nothing really. Just narrower cycles and more geniuses thinking they know how to predict human behavior. Things are not nearly as bad as they could be, or as they have been.

Tulips anyone?

Or maybe a visit back to 1929?

Hell - was anyone alive in the late 70’s early 80’s besides me?

This is nothing.

The impatience of spoiled americans, and the vitriolic hatred of the US by Europe magnifies the bad and minimizes the good of the global economy.

Maybe vitriolic hatred is a bad choice of words. Perhaps “vested interest in removing the dollar and replacing it with the Euro”?

Nonetheless - you cannot remove gov’t from the economy. They are too big a part of it now with all the entitlements they hand out.

48

For my friends who desire to learn about economic analysis from an Austrian Perspective,

This is a 10 lecture, 16 hour series in audio format from the Mises Institute – FOR FREE.

http://www.mises.org/media.aspx?action=category&ID=99

Up until I found this obscure school I could not accept economic theory as laid out by traditional teaching. My reasons for rejecting them (though not explainable at the time) was precisely the reason the Austrians rejected the same economic theories: They are all based on perfect measurable conditions that are not acceptable under real world circumstance.

My background is science gave me the insight to know such measurement is not capable under scenarios as complex as the market place. For example, in the physical sciences there are no subjective measurements. Everything is a combination of measures of some spacial element: time; distance; mass. We have ways of dealing with uncertainty related to shortcomings in technology in the laboratory. For example, we know a measuring stick might only allows us to measure down to about 0.5mm accuracy so we can account for that error. That is to say we have precision of +/- .5 mm. This is not so in the market place.

When dealing in economics the only objective measurements than can be made are what we can count – supply. Value is subjective because it is an act of preferring one good over another. There is no way to objectively measure how much one good is preferred over another – that is to say, there is no unit of measurement that allows us to do that. When choosing we always rank according to time preference. For example, I prefer a new pair of shoes now, over a pair of pants. After I fulfill my demand for shoes I can then choose pants or whatever happens to be next in my list of demands. These are the foundations for economics based on human action.

How does man make choices in a world fraught with scarcity?

Anyway…I hope I turn on a few more people to this fascinating subject.

49

[quote]rainjack wrote:
orion wrote:
rainjack wrote:
LIFTICVSMAXIMVS wrote:
Mick28 wrote:
LIFTICVSMAXIMVS wrote:

Business cycles do not have to happen

Wow, what an incredibly naive statement.

Sorry that should have been stated, "Business cycles do not necessarily have to happen.

Now, do you care to explain what you mean or are you just going to pretend to have an educated opinion and reply with vague one sentence responses?

The business cycle was explained by Mises and Hayek as a result of intervention in the market. If you have anything to refute their ideas please provide and explain.

http://www.mises.org/story/1558

Business cycles happen all the time - unless you have infinitely constant supply, and infinitely constant demand. last I checked, there are very few industries that have both. Competition also has a play in business cycles.

One could make the argument that the “new” global economy expedites cyclical changes. More Competition, different money supplies, different gov’t controls on said money supplies, and differing governmental regulations on doing business would surely throw a monkey wrench into figuring out the guessing game that is economics.

Government has wormed its way into the cycle in an effort to artificially mitigate drops in employment, and supply of money - but they are not the root cause of the cycles themselves.

I may not have all the links at hand, but sometimes real life will teach you more than someone that has a PhD in guessing at human behavior

Absolutely.

It is just that John Maynard Keynes thought that governments could smoothen the business cycle by borrowing and spending money during recessions and saving and paying back during booms aka deficit spending.

Guess what happened?

Nothing really. Just narrower cycles and more geniuses thinking they know how to predict human behavior. Things are not nearly as bad as they could be, or as they have been.

Tulips anyone?

Or maybe a visit back to 1929?

Hell - was anyone alive in the late 70’s early 80’s besides me?

This is nothing.

The impatience of spoiled americans, and the vitriolic hatred of the US by Europe magnifies the bad and minimizes the good of the global economy.

Maybe vitriolic hatred is a bad choice of words. Perhaps “vested interest in removing the dollar and replacing it with the Euro”?

Nonetheless - you cannot remove gov’t from the economy. They are too big a part of it now with all the entitlements they hand out.

[/quote]

My point was something different:

A perfctly normal business cycle where overinvesting in some area can be corrected can be avoided short term by pumping new mony into the system.

Suddenly a system that has overinvested in some areas anyhow swims in cheap money (which is stolen through dilution from fixed income earners) and invests even more in areas it would never invest in, were it not for that cheap money.

That delays the market correction for the prize of building a bubble.

This bubble will burst sooner or later and the government will bail out the TBTF companies again, also with money stolen from fixed income earners.

It is immoral, disruptive and stupid.

So business cycles are normal, inflated (in the truest sense of the word) boom bust cycles are man made and only possible with a fiat currency.

Gold is not magic, which is exactly why it cannot be magically multiplied to bail out banks, i.e it forces governments to let the markets work OR to raise taxes.

A commodity money keeps the system more honest.

50

Paul Questioning Bernanke Nov 8 2007

51

[quote]Zap Branigan wrote:
Headhunter wrote:
I would have to respectfully disagree. My perception is that people regard paper money as a con game and they’re going to run with the rules of fiat money until the game plays out. They know that governments eventually turn paper money into paper napkins (not worth much).

Its hard to fight thousands of years of mankind’s embracing of the ‘barbaric metal’. But aren’t people who use inflation to steal pre-existing wealth more barbaric?

Government-by-theft can’t endure. Everyone wises up and there’s fewer and fewer people left to loot. Gold endures.

What pre existing wealth are the rich stealing? The middle class and poor have more than ever. It wasn’t so long ago that the rich had everything and everyone else was a serf or a slave.

Credit and fiat money have helped hundreds of millions of people live a better life.[/quote]

Wow! Might want to read all this over again, Zap.

Anyway, governments print money (actually write a check) and spend it before the effect of increasing the money supply causes the value of the money ALREADY IN CIRCULATION to lose value. What they spent is theft from the holders of the currency who trusted that the money would have a constant value.

Eventually of course, the victims wake up to this and take action to prevent this from happening. The government has to increase its power to keep up the theft and the race is on. Fiat money must eventually lead to totalitarianism, where people cannot react to prevent the theft. They’ve lost total control of their lives. A mixed economy/liberalism must logically descend into despotism. Its happening now.

52

[quote]Headhunter wrote:
Zap Branigan wrote:
Headhunter wrote:
I would have to respectfully disagree. My perception is that people regard paper money as a con game and they’re going to run with the rules of fiat money until the game plays out. They know that governments eventually turn paper money into paper napkins (not worth much).

Its hard to fight thousands of years of mankind’s embracing of the ‘barbaric metal’. But aren’t people who use inflation to steal pre-existing wealth more barbaric?

Government-by-theft can’t endure. Everyone wises up and there’s fewer and fewer people left to loot. Gold endures.

What pre existing wealth are the rich stealing? The middle class and poor have more than ever. It wasn’t so long ago that the rich had everything and everyone else was a serf or a slave.

Credit and fiat money have helped hundreds of millions of people live a better life.

Wow! Might want to read all this over again, Zap.

Anyway, governments print money (actually write a check) and spend it before the effect of increasing the money supply causes the value of the money ALREADY IN CIRCULATION to lose value. What they spent is theft from the holders of the currency who trusted that the money would have a constant value.

Eventually of course, the victims wake up to this and take action to prevent this from happening. The government has to increase its power to keep up the theft and the race is on. Fiat money must eventually lead to totalitarianism, where people cannot react to prevent the theft. They’ve lost total control of their lives. A mixed economy/liberalism must logically descend into despotism. Its happening now.

[/quote]

You are claiming fiat money and inflation are being used by a cabal of rich people to defraud poor people from their wealth.

I am not sure you understand that poor people traditionally have no wealth and have to work every day for what they have.

Under our current system poor people have more than they have ever had at any time in the history of man. One big reason is because capital has been made available.

It seems our system has actually enriched the very people you claim it was meant to defraud.

Something does not compute with your logic.

53

[quote]Zap Branigan wrote:
Headhunter wrote:
Zap Branigan wrote:
Headhunter wrote:
I would have to respectfully disagree. My perception is that people regard paper money as a con game and they’re going to run with the rules of fiat money until the game plays out. They know that governments eventually turn paper money into paper napkins (not worth much).

Its hard to fight thousands of years of mankind’s embracing of the ‘barbaric metal’. But aren’t people who use inflation to steal pre-existing wealth more barbaric?

Government-by-theft can’t endure. Everyone wises up and there’s fewer and fewer people left to loot. Gold endures.

What pre existing wealth are the rich stealing? The middle class and poor have more than ever. It wasn’t so long ago that the rich had everything and everyone else was a serf or a slave.

Credit and fiat money have helped hundreds of millions of people live a better life.

Wow! Might want to read all this over again, Zap.

Anyway, governments print money (actually write a check) and spend it before the effect of increasing the money supply causes the value of the money ALREADY IN CIRCULATION to lose value. What they spent is theft from the holders of the currency who trusted that the money would have a constant value.

Eventually of course, the victims wake up to this and take action to prevent this from happening. The government has to increase its power to keep up the theft and the race is on. Fiat money must eventually lead to totalitarianism, where people cannot react to prevent the theft. They’ve lost total control of their lives. A mixed economy/liberalism must logically descend into despotism. Its happening now.

You are claiming fiat money and inflation are being used by a cabal of rich people to defraud poor people from their wealth.

I am not sure you understand that poor people traditionally have no wealth and have to work every day for what they have.

Under our current system poor people have more than they have ever had at any time in the history of man. One big reason is because capital has been made available.

It seems our system has actually enriched the very people you claim it was meant to defraud.

Something does not compute with your logic.[/quote]

Capital are machines, land and buildings.

THAT is what is meant with capital and the expansion of capital when it comes to the success of capitalism, rise in productivity, etc.

The growing number of investment goods.

The printing and distributing of pieces of paper has nothing to do with it. THIS kind of capital actual slows the growth of real capital down, up to the point of consuming it via taxation when inflation gets big enough.

There is this congressman from Texas you might have heard about. He has some ideas regarding that issues you might want to look into.

54

[quote]Zap Branigan wrote:
You are claiming fiat money and inflation are being used by a cabal of rich people to defraud poor people from their wealth.

I am not sure you understand that poor people traditionally have no wealth and have to work every day for what they have.

Under our current system poor people have more than they have ever had at any time in the history of man. One big reason is because capital has been made available.

It seems our system has actually enriched the very people you claim it was meant to defraud.

Something does not compute with your logic.[/quote]

Are we reading the same stuff? Where do I say rich people are plundering the poor? I haven’t written anything of the sort.

I’ve been saying that since government gets the FIRST USE of printed money, it gets to use that money before the inflationary effects move through the economy. The created money has value; it is the value placed on the money by the current holders of already extant money. The value of the freshly printed money is value stolen from holders of the older money.

How much simpler can I make it?

Now, the holders of money see that they are being fleeced. They raise the rent, increase prices at their store, or find a higher paying job. They seek to STOP being fleeced.

So, governments must enact ever more harsh measures to continue fleecing their citizens. Fiat money leads a mixed economy/welfare state, into despotism.

Please read several times, Zap.

55

[quote]Headhunter wrote:
Zap Branigan wrote:
You are claiming fiat money and inflation are being used by a cabal of rich people to defraud poor people from their wealth.

I am not sure you understand that poor people traditionally have no wealth and have to work every day for what they have.

Under our current system poor people have more than they have ever had at any time in the history of man. One big reason is because capital has been made available.

It seems our system has actually enriched the very people you claim it was meant to defraud.

Something does not compute with your logic.

Are we reading the same stuff? Where do I say rich people are plundering the poor? I haven’t written anything of the sort.

I’ve been saying that since government gets the FIRST USE of printed money, it gets to use that money before the inflationary effects move through the economy. The created money has value; it is the value placed on the money by the current holders of already extant money. The value of the freshly printed money is value stolen from holders of the older money.

How much simpler can I make it?

Now, the holders of money see that they are being fleeced. They raise the rent, increase prices at their store, or find a higher paying job. They seek to STOP being fleeced.

So, governments must enact ever more harsh measures to continue fleecing their citizens. Fiat money leads a mixed economy/welfare state, into despotism.

Please read several times, Zap.

[/quote]

A fiat currency is at least a prerequisite for a welfare state or wars.

Both kinds of socialist endeavours can only be financed via debt and inflation.

56

[quote]Headhunter wrote:
…

Are we reading the same stuff? Where do I say rich people are plundering the poor? I haven’t written anything of the sort…
[/quote]

You have said it dozens of times in the past few weeks in dozens of ways.

57

[quote]orion wrote:
…
A fiat currency is at least a prerequisite for a welfare state or wars.

Both kinds of socialist endeavours can only be financed via debt and inflation. [/quote]

Oh please. War has been around as long as man has.

58

Is the Euro pegged to gold? If not - why not? Seems to me that, from all the ballyhooing over the demise of the dollar on this thread, the Euro should be pegged to something other than the dollar.

Or is it the fact that the dollar the baseline currency and is not pegged to gold that is causing all the gnashing of teeth?

Why does a currency need to be backed by a natural resource? Seems to me that makes a pie with finite pieces.

Economics is just a guessing game anyhow.

59

[quote]Zap Branigan wrote:
orion wrote:
…
A fiat currency is at least a prerequisite for a welfare state or wars.

Both kinds of socialist endeavours can only be financed via debt and inflation.

Oh please. War has been around as long as man has.[/quote]

So…?

Parasites have been around even longer. Should we just accept them as unavoidable?

60

[quote]Zap Branigan wrote:
orion wrote:
…
A fiat currency is at least a prerequisite for a welfare state or wars.

Both kinds of socialist endeavours can only be financed via debt and inflation.

Oh please. War has been around as long as man has.[/quote]

Fiat money allowed for wars to expand and become total. It made it easier for governments to confiscate the wealth of its citizens; simply print up what you need. An example is Lincoln and his Greenbacks, or the ‘Continental’ from our revolution.

The real culprit is central banking, if you want the real instrument of total war. Nations inflate using its central bank.

And it does allow some people to pursue wars for profit. There Zap, happy now?