JDV, return to the gold standard has increasingly been popping up in discussions and I was wondering what your thoughts are on the topic weighing the pro’s and con’s as well as the viability of a modern gold based US currency.
A 100% reserve, all US currency is backed by gold bars is just not workable. The goal of all this talk is to somehow force the gov’t to not take on lots of debt and then monetize it thus using inflation as a tax on savers. We really need to figure that out but the way to do it is probably not to manipulate gov’t by using competing currencies, making gold legal tender, some sort-of partial reserve gold standard or any of these other power-limiting ideas. If you’re overweight, learn how to exercise and eat right don’t get liposuction and padlock the refrigerator.
we’ll need mother teresas in power to have that level of discipline when in power.power corrupts everyone.thats why a Constitution exists to keep the govt in check .people’s representatives can usually get into power by pandering to special interests/populism and the constitution is often dismissed as a piece of paper. one will need people of extraordinary character not corrupted by power in the govt for JDV’s proposal to work. that is what history teaches
addendum: Greenspan, when he was much younger and not sullied by power as the Fed Chief wrote this revealing piece http://www.constitution.org/mon/greenspan_gold.htm Greenspan always avoided answering why his actions didnt hold up to his belief (ron paul tried to get him to answer this in congress - g’span the master of convoluted speech masterfully avoided a straight answer) One paragraph I especially like from that article: “With a logic reminiscent of a generation earlier, statists argued that the gold standard was largely to blame for the credit debacle which led to the Great Depression. If the gold standard had not existed, they argued, Britain’s abandonment of gold payments in 1931 would not have caused the failure of banks all over the world. (The irony was that since 1913, we had been, not on a gold standard, but on what may be termed “a mixed gold standard”; yet it is gold that took the blame.) But the opposition to the gold standard in any form — from a growing number of welfare-state advocates — was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.”
I don’t think I did put forward a proposal because the proposal is monstrously big. The proposal limits gov’ts and limits gov’t spending. I don’t think that deficit spending = welfare state, unless we put an awful lot of people on the list of welfare recipients including equity holders of investment banks, do-nothing bureaucrats, arms manufacturers who ought to be making something more productive, etc. BTW - An interesting aspect of this is that we can only directly tax our own citizens. However, as a debtor nation, we can tax other countries by debasing our currency. It’s a nasty tool to have to use, but a tool we might want to keep in our box.
“BTW - An interesting aspect of this is that we can only directly tax our own citizens. However, as a debtor nation, we can tax other countries by debasing our currency. It’s a nasty tool to have to use, but a tool we might want to keep in our box” some would call that colonialism redux :-).also, the fact that oil is traded in dollars worldwide is a very very important factor that helps the dollar stay strong. isnt it weird, an intra-europe transaction is done in USD? eg: russia produces oil and exports it to western europe and the payment is made in US dollars!!.-but how long will that continue one could sa that the dollar today is backed by oil.
JoeyDVivre Wrote: ------------------------------------------------------- > BTW - An interesting aspect of this is that we can > only directly tax our own citizens. However, as a > debtor nation, we can tax other countries by > debasing our currency. It’s a nasty tool to have > to use, but a tool we might want to keep in our > box. A bit like a threatened woman smothering poo all over themselves?
That was very disgusting, Chris.
hahaha, thanks joey, that’s essentially what I’ve been responding with, minus the overweight thing, but it just keeps on popping up in conversation, so I was unsure if I was missing anything.
"some would call that colonialism redux :-).also, the fact that oil is traded in dollars worldwide is a very very important factor that helps the dollar stay strong. " I have heard that this claim is exaggerated since the actual cash outlay in the trading of oil is much smaller than the value of what is being traded. Of course there is still a massive amount being purchased which does contribute to the dollar.