Inflation Is Theft

Have you ever taken a college-leve economics course?

Even when our money in this country was based on gold and silver, there most certainly was inflation. You can deny it all you want, but there always has been. Even when gold, silver, etc. was used directly, there was inflation. An economy with no inflation is devastating.

BTW, one of the key causes of the Great Depression was a return to the gold standard by the British.

Our paper money today is based on something just as sound as basing it on precious metals. If our GDP drops, our money drops, just as if gold drops.

 

Yes, I have. University of MD (very liberal) and George Mason (very conservative).

If you had taken a college-level economics course (and many high school economics courses), you would know that zero inflation or negative inflation are devastating to the entire economy, not just the banks. (Also, zero national debt is also bad for the economy, but that's a long and detailed study that I'm not going to spend the time typing out.)

Yes, from 1873 until 1934 or 1935. The Great Depression started in 1929. In 1934, Roosevelt made it illegal for private individuals or the reserve to own gold. That's part of the way we got out of the depression. (Also, there are many valid arguments that the silver standard and later, the gold standard, was part of the events that led to the Great Depression.)

Yes, along with the rest of the industrialized world, including Japan, the US, Britain, Germany, France, Canada, and others.

Well, you have based this opinion on the fact that gold and silver are mentioned (although, you don't take into account sheckels, etc.), and say that God disapproves of anything else. There is nothing in the Bible to indicate what you believe.

It obviously makes common sense, since history supports it.

That's where you're wrong. It is just as volatile, if not more so. Using silver and gold as money is part of what led to the Great Depression.

 

Sorry, but that statement is just so incorrect. Most of the depth of the Great Depression was the result of the Smoot-Hawley tariff and its kindred in other countries. The rest was the result of the Federal Reserve manipulating the money supply.

Honest money has something substantive to back it up, not just the full faith and credit of an organization. Honest money has always been that way and always will be that way.

Many more people will understand this on down the line when the economic dislocations caused by using fiat currency come home to roost - big time.

 

Speaking of George Mason University, the following was written by my favorite substitute host for the "Rush Limbaugh Show":

"So what about the president's nomination of Ben S. Bernanke as Alan Greenspan's replacement? I know little or nothing about the man. What I do know is that it's not wise for one person, or group of persons, to have so much power over our economy. Here's my recommendation for reducing that power: Repeal legal tender laws and eliminate all taxes on gold, silver and platinum transactions."

- Dr. Walter E. Willams, George Mason University
www.townhall.com/opinion/columns/walterwilliams/2005/11/16/175724.html
www.gmu.edu/departments/economics/wew/

 

Funny, I've never been taught that, but I've heard a bunch of YEer types tell me that they will teach that.

That's not what I said. In fact, that's pretty much the opposite of what I said. I just deny that basing on the GDP is not "steady".

Dr. Williams can explain it much better than I can, and he does in some of his books. In my economics text books, this takes many pages. I will not type that many pages, but I can point you to where you can buy some text books. Or, you can Google it. (Although some people seem to think that's too much work, I doubt you do, so happy hunting!)

I have never said that. I have just denied that our present currency is unbacked. In fact, I said that artificial manipulation is bad.

 

When England returned to the gold standard, it led to great deflation, which was a direct precursor to the Great Depression. It's immediate effects, however, were almost euphoric to the economy.

In the initial downturn in 1929, most historians point to the stock market crash, but most economists point to the gold standard at pre WWI parities. (The stock market actually recovered very nicely if you were able to ride it out.) Because of the vast cost of WWI, Europe was not able to respond to crises, and the cost of war reparations were fundamental to the economic history of the US, Germany, France, and England.

In the '20s, home mortgage and credit purchases of automobiles and furniture boosted spending but created a lot of consumer debt. Even if they kept their jobs, anyone who was deeply in debt when a price deflation occurred were in serious trouble. Prices and incomes fell 20-50%, but the debts remained at the same dollar amount. Debtors tightened their belts, consumer spending fell, and the entire economy weakened. Capital investment slowed or stopped, because profits looked poor. (Would you invest if you thought you were going to lose money?) Because of bad loans and future prospects for profit becoming worse, banks became more conservative. They built up their reserves, which intensified the deflationary pressures. The downward spiral sped up. This sort of process, which was entirely based on a gold standard, turned a relatively minor recession into a great depression. Keep in mind that all of this took place while on the gold standard!

Now, the Smoot-Hawley Tariff act, certainly contributed to worsening the Depression, but it by no means created it. It was not created until the downward spiral had already started, but did accelerate it beyond the point of no return (if it were not already to that point).

Maintaining gold convertibility tightly restrains credit creation. Credit creation by banking entities under a gold standard threatens the convertibility of the notes they have issued, and consequently leads to undesirable gold outflows from that bank. The result of a failure of confidence produces a run on the specie basis, which is generally responded to by the bankers suspending specie payments. Hence, notes circulating in any “partial” gold standard will either be redeemed for their face value of gold (which would be higher than its actual value) — this constitutes a “bank run;” or the market value of such notes will be viewed as less than a gold coin representing the same amount. (The preceding paragraph was copied from a document which I don't have the person's name to credit.)

 

I have done no such thing. I have said that it happened in spite of the fact that we were on the gold standard. You keep throwing the gold standard out there as the cure-all for everything, and "it just ain't so"!

Now, I would go further to say that since we are on a currency that can expand as our economy expands, if we were to suddenly convert to the gold standard that it would cause disaster to our economy for several different reasons. (Much like the artificial minimum wage: It's a terrible idea, but now that we have it, we're stuck with it.)

 

The problem during the depression was that people wanted to do business buit there was insufficient money in circulation. When Roosevelt took over he confiscited private gold, raised the price of gold, and put more money in circulation.

If there is a gold standard then the money supply can't increase unless the govt buys more gold. If the govt bids up the gold market then there is inflation of the money supply because each dollar will buy less gold.

When we were on a gold standard most of the people neever had any gold. Half the people lived on the farm and got by bartering. Now less than 5% live on a farm.

No one ever says what the price would be if we reverted to a gold standard. I suspect $5,000 minimum per ounce. Why? because 90% of the money in circulation is electronic.

 

>No, gold is not a cure all. But without honest money, we cannot have an honest economy.

We don't neeed any money. We need honest book keeping.

"Money" has become nothing but a convenient conversion factor for comparing the value of one's time vs the value of goods and services.

I propose that we use Standard Work Hours as the conversion factor.

A SWH is the amount of work an average adult can do with a shovel in an hour. Other types of labor and services would use multiples or fractions of SWH. A doctor, for example, might bill at 5 SWH or 10 SWH. A new car might have an asking price of 5,000 SWH.

 

It was because of the threat of the man Sadam Hosein, their leader, who in the perception of the present administration was a "terrorist".

The evidence given was abundant, poison gassed men, women, children, rape rooms, mass graves, invasion of neighboring nation, etc...

Some not so abundant : WMD's.

But even at that, the real "enemy" is the terrorist who in the name of God will slaughter innocents and even him/herself in the process. Neither does it matter if the victims are Moslem.


HankD

 

>Actually, farmers used money like everyone else.

Yes, and the result of the gold standard and insufficient money in circulation was that the farmers lost their farms to the banks and now we have largo agro companies and few small farms.

 

10-page warning: This thread will be closed no sooner than 10:30 p.m. ET by one of the moderators.

Lady Eagle
Moderator

 

Closed per previous warning. LE

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