Ruh oh, What does Dr Doom Predict Next?

[EdwardBaiamonte]

Yeah well what Austrians should be pushing for is Free Banking. I never understood this gold fetish. Do they not understand that you can just freeze the monetary base?

we mostly had that in the 19th Century. 1500 banks and 10,000 different bank notes. How efficient can that be? Gold is so politicians don't get to make wild guesses at how much money to print.

 

[DSGE]

Yeah well what Austrians should be pushing for is Free Banking. I never understood this gold fetish. Do they not understand that you can just freeze the monetary base?

we mostly had that in the 19th Century. 1500 banks and 10,000 different bank notes. How efficient can that be?

Exactly as efficient as one currency. Banknotes issued by a bank are generally accepted by competitors and settlements handled by a clearing house. Since banks are accepting competing banknotes it greatly increases the likelihood of having notes backed by gold. The exchange rate between banknotes will be stable and as mentioned likely pegged to gold. To avoid multiple prices for goods banks will likely peg their notes to the same exchange rate for gold. On top of which, the taxpayer isn't on the hook for the costly process of minting.

Gold is so politicians don't get to make wild guesses at how much money to print.

Freezing the monetary base does that as well, imbecile! It's better though because you don't have to worry about administering gold exchange and you don't have to rely on people redeeming banknotes for gold on fears of inflation. There'll be no long run inflation because the monetary base is frozen!

 

[samjones]

Yeah well what Austrians should be pushing for is Free Banking. I never understood this gold fetish. Do they not understand that you can just freeze the monetary base?

we mostly had that in the 19th Century. 1500 banks and 10,000 different bank notes. How efficient can that be? Gold is so politicians don't get to make wild guesses at how much money to print.

The gold standard didn't stop them from doing that.

 

[EdwardBaiamonte]

Yeah well what Austrians should be pushing for is Free Banking. I never understood this gold fetish. Do they not understand that you can just freeze the monetary base?

we mostly had that in the 19th Century. 1500 banks and 10,000 different bank notes. How efficient can that be? Gold is so politicians don't get to make wild guesses at how much money to print.

The gold standard didn't stop them from doing that.

that?????????? what is that???

 

[EdwardBaiamonte]

Freezing the monetary base does that as well, imbecile!

Except a gold standard represents a far far greater commitment to actually do it.

It seems you lack the ability to understand important distinctions.

 

[DSGE]

Freezing the monetary base does that as well, imbecile!

Except a gold standard represents a far far greater commitment to actually do it.

You keep saying that but it's not true. Freezing the monetary base and setting up a gold standard demonstrate exactly as much commitment. The difference is, you'll actually get more price stability under a frozen monetary base.

 

[EdwardBaiamonte]

Freezing the monetary base and setting up a gold standard demonstrate exactly as much commitment.

One person might be in charge of freezing the base while the whole country might own gold or gold back certificates. This is too easy!

 

[DSGE]

Freezing the monetary base and setting up a gold standard demonstrate exactly as much commitment.

One person might be in charge of freezing the base while the whole country might own gold or gold back certificates. This is too easy!

"Freezing the monetary base" doesn't mean somebody has to sit there dipping dollar bills in liquid nitrogen. It means "The Fed is not allowed to change the quantity of money". You don't need that to be administered at all. It just takes away the Fed's power to conduct open market operations or lend to banks.

A gold standard however must actually be administered. You need some people at the Fed saying "okay we've got x more grams of gold. Now we can issue y more dollars of base money".

 

[beachaar]

I think the best thing America needs to focus on is our transportation system, technology, and education. Education needs to focus more on technology ie. how computers work. This would allow us a country to compete even better in the global market. By being more advanced with technology, we can work on better improving our transporation system by building more subways, trams, etc. This would help create jobs and lower our dependence on oil.

 

[expat_panama]

I think the best thing America needs to focus on is...

Wait a second, Americans are too stupid to figure out their own priorities and they need your state control?

 

[beachaar]

I think the best thing America needs to focus on is...

Wait a second, Americans are too stupid to figure out their own priorities and they need your state control?

All I am doing is stating what I think might help our country. The government isn't doing a great job so maybe they could use more ideas from the generation that is going to have live in America for the next 80 years or so.

 

[TakeAStepBack]

Lots of broad strokes in here regarding austrian scholar thinking. The group is quite diverse in many areas of economics. Austrians Do, in fact, push for free banking and competitive currencies. Especially in the current climate of FNR that corner the market. The reason Austrian scholars turn to gold, is because the entire endeavor of economics is rooted in what Mises called praxeology. Which is basically human action. Gold was economic law for thousands of years for a reason. It evolved that way through markets, or human interaction/exchange. Governments did not "create" gold as money. They simply took the reigns.

As for the original OP, the man is pretty smart and those setting policies would be well to do in listening to what he has to say.

 

[expat_panama]

I think the best thing America needs to focus on is...

Wait a second, Americans are too stupid to figure out their own priorities and they need your state control?

All I am doing is stating what I think might help our country. The government isn't doing a great job...

--so if the gov't is making things worse it would make sense to have less government control of "transportation system, technology, and education", not more. We agree that the next 80 years matters. Over the past 80 years the nations that had the most government management of trans., tech., & ed. were the ones that made the least progress.

 

[Old_Liberal]

I make those same predictions myself and I have no official education on any of the topics.

It's not hard to predict that the world is fucked right now.

But did you accurately forecast each and every clusterfuck that got us here?

He did. He was talking about a 'perfect storm' of economic chaos when the rest of the world was 'living the dream'. He told us it would be a nightmare. He was right.

How about this. I am no economist. Common sense told me that the banking deregs that changed a proven sound banking system would eventually crash the economy. Afterall, those deregs were put into place from lessons learned in the late 19th century and early 20th.

And, when Perot told us what free trade would do to jobs here, I knew that we would end up with high jobless rates and high underemployment rates, with middle class shrinkage and more poor. I am a fucking genius! But anyone with one living brain cell could have figured that out. This really isn't complex, it is basic common sense.

But we have a great problem with spending. We have our ass in a crack. The new economic model that so many on both the left and the right worship is a middle class destroying model. For very obvious reasons. But here's the bad part. As this new model displaced more and more workers, the social safety nets exploded, and it does not look like we can afford them. So, you cut off the nets, while jobs continue bleeding to cheap labor and what do you get? How about a fucking violent revolution perpetrated by the new have nots? With a real chance of real socialism coming into existence. Not what the cons call it, but the real deal.

So we send american jobs over seas, and we call em lazy bums when there is no work for em. This is eventually piss off millions, and you may see cons hanging from local oak trees. They, the two parties have no idea what they are setting this nation up for. And all just because a few special interests wanted to max out their wealth by cheap commie labor. Greed is a sin because it destroys, or can destroy nations. DUH.

 

[EdwardBaiamonte]

So we send american jobs over seas,.

Lets be clear it is the liberals that send jobs overseas:

1) Make unions illegal ( 10 million new jobs) Democrats oppose

2) make minimum wage illegal ( 5 million new jobs) Democrats oppose

3) end business taxation; especially tax incentives to off-shore jobs ( 5 million new jobs) Democrats oppose

4) make inflation illegal ( 2 million new jobs) Democrats oppose


5) make Federal debt illegal( 2 million new jobs) Democrats oppose

6) send illegal workers home(8 million new jobs) Democrats oppose

7) Pass Balanced Budget Amendment to Constitution( 3 million new jobs) Democrats oppose

8) cut pay of government workers in half( 4 million new jobs) Democrats oppose

9) Make health insurance competition legal( 6 million new jobs) Democrats oppose

10) end needless business regulations ( 2 million new jobs) Democrats oppose

11) restrict Federal spending to 15% of GNP( 2 million new jobs) Democrats oppose

12) support unlimited free trade( 2 million new jobs) Democrats oppose

13) reduced unemployment compensation, welfare, food stamps, medicaid.( 2 million new jobs) Democrats oppose

14) privatize education, social security ( 4 million new jobs) Democrats oppose

15) end payroll taxes ( 1 million new jobs) Democrats oppose

Since Democrats always oppose wisdom and common sense the only serious option is to make them illegal as the Constitution intended.

 

[EdwardBaiamonte]

Freezing the monetary base and setting up a gold standard demonstrate exactly as much commitment.

One person might be in charge of freezing the base while the whole country might own gold or gold back certificates. This is too easy!

"Freezing the monetary base" doesn't mean somebody has to sit there dipping dollar bills in liquid nitrogen. It means "The Fed is not allowed to change the quantity of money". You don't need that to be administered at all. It just takes away the Fed's power to conduct open market operations or lend to banks.

A gold standard however must actually be administered. You need some people at the Fed saying "okay we've got x more grams of gold. Now we can issue y more dollars of base money".

1) of course quantity needs to change with seasonal demand etc and as economy grows so you have one liberal in charge of the black box.

2) with a gold standard everyone is involved so there is a far greater commitment, and one that most can understand too

 

[expat_panama]

...we send american jobs over seas...

So what?

Remember those 'american jobs' are jobs created by individual Americans. If I make a chair it's mine and I can sell it anywhere I want. Same thing when I make a job, I can store it, use it, or sell wherever I want. Anyone who's not happy about what I do with the jobs I make is free to make their own jobs and keep 'em in the US if they want. Of course if they do that then they end up loosing money on taxes and court fights but it's their choice.

It's a free country isn't it?

 

[Dr Grump]

Oh... I'll make a prediction of my own.... no one will want to discuss this... and those who do reply will 'blame' Bush, the Republicans, the right, the wealthy, yadda, yadda, yadda.

I'll also make a prediction (having only read the first two posts) that people will also blame the left, statists, 'progressives' and Obama...

 

[Dr Grump]

We've got a poster right here on this board who is case in point for that: Toro. He's not an Austrian by any definition, but can recognize when Federal Reserve inflationary policy leads to bubble creation.

Well in that case it's my prerogative to call him on it and present my case for why that's not true.

Paulie is partly correct. I was an Austrian during undergrad. I grew up on a diet of Bastiat, von Mises et al but abandoned it when I entered the capital markets and realized that most economists generally have little practical understanding of markets. Austrians are too dogmatic but I generally agree that inflation is not a general rise in prices but instead inflation is the creation of too much money while a general rise in prices is symptomatic of this increase.

And FTR I'm very skeptical of a gold standard.

Aren't economies just one big Ponzi scheme?

 

[Toro]

Well in that case it's my prerogative to call him on it and present my case for why that's not true.

Paulie is partly correct. I was an Austrian during undergrad. I grew up on a diet of Bastiat, von Mises et al but abandoned it when I entered the capital markets and realized that most economists generally have little practical understanding of markets. Austrians are too dogmatic but I generally agree that inflation is not a general rise in prices but instead inflation is the creation of too much money while a general rise in prices is symptomatic of this increase.

And FTR I'm very skeptical of a gold standard.

Aren't economies just one big Ponzi scheme?

No. Economies are very real. They are, however, very reliant on confidence and driven by psychological and intangible benefits. Much of the economy resides within the mind since it is highly reliant upon preferences but it is still very real.