Trust Mises and Gold

[auditor0007]

I'm going to invest in Latinum. It's so much more valuable than gold. Just ask Quark.

 

[Iriemon]

A gold standard that was undermined thanks to the inflation of World War 1 and the 1920's.

Yep. Exactly right. That is the problem with gold standards. They get undermined and there is nothing the Govt or anyone can do about it except watch the economy go down the tubes.

Why is that a good thing again?

Well you seem to be inferring that the gold standard just gets undermined on its own and the government must simply sit back and watch as it happens. But it is the government that allows the gold standard to be undermined. But just because the government is able to abuse the system doesn't mean it's not the preferable system.

You've just proved against your own case.

You all argue the gold standard is superior because it takes control of the money supply from the government.

But to try to deflect the terrible consequences of being on the gold standard in the great depression, you blame it on the government.

Obviously, by your own reasoning, you are admitting that the government can still "undermine" things even with a gold standard. So why have a standard that the Govt can mess things up with but still shackles the government's hands when the economy is tanking, precisely at the time when intervention in the money supply is most greatly needed?

You get the worst of both worlds with a gold standard.

But it can be a great system for gold speculators, I'll grant you that.

 

[Kevin_Kennedy]

Yep. Exactly right. That is the problem with gold standards. They get undermined and there is nothing the Govt or anyone can do about it except watch the economy go down the tubes.

Why is that a good thing again?

Well you seem to be inferring that the gold standard just gets undermined on its own and the government must simply sit back and watch as it happens. But it is the government that allows the gold standard to be undermined. But just because the government is able to abuse the system doesn't mean it's not the preferable system.

It is not the preferable system when the "undermined" gold standard causes the economy to go down the tubes and there is nothing the government can do about it. Except abandon it once again.

But it can be a great system for gold speculators, I'll grant you that.

Then perhaps the government should not undermine the gold standard?

 

[Iriemon]

I'm going to invest in Latinum. It's so much more valuable than gold. Just ask Quark.

I'm trying to figure what remote commodity I can corner the market on, and then lobby to make that the new "money".

 

[Iriemon]

Well you seem to be inferring that the gold standard just gets undermined on its own and the government must simply sit back and watch as it happens. But it is the government that allows the gold standard to be undermined. But just because the government is able to abuse the system doesn't mean it's not the preferable system.

It is not the preferable system when the "undermined" gold standard causes the economy to go down the tubes and there is nothing the government can do about it. Except abandon it once again.

But it can be a great system for gold speculators, I'll grant you that.

Then perhaps the government should not undermine the gold standard?

It must, unless you are still proposing the "Bernie Madoff gold certificate" scheme.

 

[Kevin_Kennedy]

It is not the preferable system when the "undermined" gold standard causes the economy to go down the tubes and there is nothing the government can do about it. Except abandon it once again.

But it can be a great system for gold speculators, I'll grant you that.

Then perhaps the government should not undermine the gold standard?

It must, unless you are still proposing the "Bernie Madoff gold certificate" scheme.

I'm sorry, I can't recall what the "Bernie Madoff gold certificate scheme" is?

 

[Iriemon]

Then perhaps the government should not undermine the gold standard?

It must, unless you are still proposing the "Bernie Madoff gold certificate" scheme.

I'm sorry, I can't recall what the "Bernie Madoff gold certificate scheme" is?

That was the plan that many Ron Paulians support where the "free market" controls the currency and folks like Bernie Madoff can issue "money" thru gold certificates. But not to worry; if you find your Madoff gold certificates are worthless because Madoff made off with all the gold, you can sue him for fraud!

The free market is a great idea to put our currency in the hands of folks like Bernie!

 

[ItsFairmont]

But each of us CAN be on the gold standard.

Let's say you get your paycheck, pay the bills, buy the groceries, fill up the car, etc. and put a little cash in a drawer or envelope for a few extras.

And let's say you have 500 dollars left over at the end of each month. So you go out and buy gold coins (or coin) with your leftover cash and hide it really well in your home, under a plant, in a vault, etc.

Over time, you pile up gold coins. They will keep up with inflation, in general. Gold always has.

The only way this savings plan won't work is if we get the kind of hyperinflation that Zimbabwe had recently. They go to the point where prices doubled every 16.5 hours. That's pretty rough stuff.


You could put all your savings into gold, and then when you retire, pull out a couple gold coins each month, convert them to cash, and go buy what you need for the month.


Someone said that no currencies are exchangable for gold anymore.

That's not true. They all are. You can buy and sell gold in your town.

 

[editec]

Trust Mises and Gold, Not Keynes, Bernanke, and Fiat Money

You may find it odd that somebody like me who thinks the gold standard is a silly idea agrees with the above, but I do.

A Fiat money economic is no better than the people who control it.

The people who controlled ours in the last thirty or fourty years didn't do it on behalf of the American economy, they did it on behalf of themselves.

As soon as one of you Miseian genuises can explain to me how to overcome the inherent problems of the gold standard you may find a convert.

Thus far your entire argument for the gold standard is the problem of fiat monetary systems run by gangsters.

THAT problem I fully understand.

Your gold standard solution, I DONT.

We "gold bugs," as you like to call us, have tried to explain the benefits to you, but you simply reject our answers. I don't think it's a lack of understanding on your part, I just think you disagree with the idea of a gold standard completely. Not everyone's going to agree, but we'll keep trying to convert you.

Well, actually Kevin, before you suggest that I am being obtuse, I have specifically agreed to the benfit of the gold standard many times, and I have asked you how we deal with the multiple problem of continuous deflation, many times.

To date you haven't addressed inevitable outcome of a gold standard...deflation

We both know the potential sortcomings with fiat money.

But you have yet to even acknowledge the inevitable shortcoming of the gold standard so who is really being obtuse here?

Damned right the GS prevents inflation...by creating continuous DEFLATION.

Addesss how the gold standard can NOT create that problem, if you can

If you cannot, just admit you don't know how to solve THAT problem of the gold standard, and we can agree to disagree agreeably.

Do not send me to a website and expect me to read a whole Misean tome to address this question.

If you cannot answer this question based on your readings of that school, then you are not qualifed enough to send me to a website because you did not understand what you read there, either.

What about DEFLATION?​

 

[Iriemon]

But each of us CAN be on the gold standard.

Let's say you get your paycheck, pay the bills, buy the groceries, fill up the car, etc. and put a little cash in a drawer or envelope for a few extras.

And let's say you have 500 dollars left over at the end of each month. So you go out and buy gold coins (or coin) with your leftover cash and hide it really well in your home, under a plant, in a vault, etc.

Over time, you pile up gold coins. They will keep up with inflation, in general. Gold always has.

Well, it hasn't over the past 30 years. But you're absolutely right anyone can own gold if they think its a great store of value.

The only way this savings plan won't work is if we get the kind of hyperinflation that Zimbabwe had recently. They go to the point where prices doubled every 16.5 hours. That's pretty rough stuff.

You could put all your savings into gold, and then when you retire, pull out a couple gold coins each month, convert them to cash, and go buy what you need for the month.

Someone said that no currencies are exchangable for gold anymore.

That's not true. They all are. You can buy and sell gold in your town.

Quite true.

 

[Kevin_Kennedy]

You may find it odd that somebody like me who thinks the gold standard is a silly idea agrees with the above, but I do.

A Fiat money economic is no better than the people who control it.

The people who controlled ours in the last thirty or fourty years didn't do it on behalf of the American economy, they did it on behalf of themselves.

As soon as one of you Miseian genuises can explain to me how to overcome the inherent problems of the gold standard you may find a convert.

Thus far your entire argument for the gold standard is the problem of fiat monetary systems run by gangsters.

THAT problem I fully understand.

Your gold standard solution, I DONT.

We "gold bugs," as you like to call us, have tried to explain the benefits to you, but you simply reject our answers. I don't think it's a lack of understanding on your part, I just think you disagree with the idea of a gold standard completely. Not everyone's going to agree, but we'll keep trying to convert you.

Well, actually Kevin, before you suggest that I am being obtuse, I have specifically agreed to the benfit of the gold standard many times, and I have asked you how we deal with the multiple problem of continuous deflation, many times.

To date you haven't addressed inevitable outcome of a gold standard...deflation

We both know the potential sortcomings with fiat money.

But you have yet to even acknowledge the inevitable shortcoming of the gold standard so who is really being obtuse here?

Damned right the GS prevents inflation...by creating continuous DEFLATION.

Addesss how the gold standard can NOT create that problem, if you can

If you cannot, just admit you don't know how to solve THAT problem of the gold standard, and we can agree to disagree agreeably.

Do not send me to a website and expect me to read a whole Misean tome to address this question.

If you cannot answer this question based on your readings of that school, then you are not qualifed enough to send me to a website because you did not understand what you read there, either.

What about DEFLATION?​

I didn't think you were being obtuse, or at least I didn't mean what I said in any negative terms.

You have a negative perception of deflation, but it's not negative. The market naturally moves towards lower prices in the first place, so deflation is not necessarily a bad thing.

 

[Iriemon]

We "gold bugs," as you like to call us, have tried to explain the benefits to you, but you simply reject our answers. I don't think it's a lack of understanding on your part, I just think you disagree with the idea of a gold standard completely. Not everyone's going to agree, but we'll keep trying to convert you.

Well, actually Kevin, before you suggest that I am being obtuse, I have specifically agreed to the benfit of the gold standard many times, and I have asked you how we deal with the multiple problem of continuous deflation, many times.

To date you haven't addressed inevitable outcome of a gold standard...deflation

We both know the potential sortcomings with fiat money.

But you have yet to even acknowledge the inevitable shortcoming of the gold standard so who is really being obtuse here?

Damned right the GS prevents inflation...by creating continuous DEFLATION.

Addesss how the gold standard can NOT create that problem, if you can

If you cannot, just admit you don't know how to solve THAT problem of the gold standard, and we can agree to disagree agreeably.

Do not send me to a website and expect me to read a whole Misean tome to address this question.

If you cannot answer this question based on your readings of that school, then you are not qualifed enough to send me to a website because you did not understand what you read there, either.

What about DEFLATION?​

I didn't think you were being obtuse, or at least I didn't mean what I said in any negative terms.

You have a negative perception of deflation, but it's not negative. The market naturally moves towards lower prices in the first place, so deflation is not necessarily a bad thing.

Other than inducing people not to invest or borrow or spend, deflation great for the economy. Especially when you get that annual cut in pay.

 

[Kevin_Kennedy]

Well, actually Kevin, before you suggest that I am being obtuse, I have specifically agreed to the benfit of the gold standard many times, and I have asked you how we deal with the multiple problem of continuous deflation, many times.

To date you haven't addressed inevitable outcome of a gold standard...deflation

We both know the potential sortcomings with fiat money.

But you have yet to even acknowledge the inevitable shortcoming of the gold standard so who is really being obtuse here?

Damned right the GS prevents inflation...by creating continuous DEFLATION.

Addesss how the gold standard can NOT create that problem, if you can

If you cannot, just admit you don't know how to solve THAT problem of the gold standard, and we can agree to disagree agreeably.

Do not send me to a website and expect me to read a whole Misean tome to address this question.

If you cannot answer this question based on your readings of that school, then you are not qualifed enough to send me to a website because you did not understand what you read there, either.

What about DEFLATION?​

I didn't think you were being obtuse, or at least I didn't mean what I said in any negative terms.

You have a negative perception of deflation, but it's not negative. The market naturally moves towards lower prices in the first place, so deflation is not necessarily a bad thing.

Other than inducing people not to invest or borrow or spend, deflation great for the economy. Especially when you get that annual cut in pay.

It means your money is worth more.

 

[Iriemon]

I didn't think you were being obtuse, or at least I didn't mean what I said in any negative terms.

You have a negative perception of deflation, but it's not negative. The market naturally moves towards lower prices in the first place, so deflation is not necessarily a bad thing.

Other than inducing people not to invest or borrow or spend, deflation great for the economy. Especially when you get that annual cut in pay.

It means your money is worth more.

Of course you are getting paid less too. But that is the problem. Why invest if you can just sit on your money and its becomes worth more? Why buy a car now when it will be cheaper in 6 months? When you borrow money it costs more because you are paying the loan back in more expensive money.

None of which is indusive to economic growth.

 

[Kevin_Kennedy]

People are not going to choose not to buy simply because in 6 months something might cost less. Prices go down all the time, it's the natural progression of the market as I said before, and people still buy things.

 

[Iriemon]

People are not going to choose not to buy simply because in 6 months something might cost less. Prices go down all the time, it's the natural progression of the market as I said before, and people still buy things.

You're arguing against economic interest. People will still buy things but they will be incentivized to put off the purchase. And I disagree with your conclusion. I know people right now how are planning to buy a house but waiting to see if prices will go down furhter.

 

[Kevin_Kennedy]

People are not going to choose not to buy simply because in 6 months something might cost less. Prices go down all the time, it's the natural progression of the market as I said before, and people still buy things.

You're arguing against economic interest. People will still buy things but they will be incentivized to put off the purchase. And I disagree with your conclusion. I know people right now how are planning to buy a house but waiting to see if prices will go down furhter.

A friend of mine actually just bought a house, despite my telling him that prices will probably fall further. You're always going to have some people that are waiting for just the right deal to come along, but it won't cause a "deflationary spiral" under a gold standard anymore than it does now.

 

[LOki]

Of course you are getting paid less too.

Can only be true if you're bering paid in fiat money.

But that is the problem.

It sure is--if youre being paid in fiat money.

Why invest if you can just sit on your money and its becomes worth more?

Can't happen with money founded upon an objective standard rather than than one founded upon some retard's capacity to print money, or force an interest rate.

Why buy a car now when it will be cheaper in 6 months?

This is a problem worthy of consideration only when the notion that money IS value, has replaced the notion than money represents value--you know, like when you're spending fiat money.

When you borrow money it costs more because you are paying the loan back in more expensive money.

This is only true when the notion that money IS value, has replaced the notion than money represents value--you know, like when you're spending fiat money.

None of which is indusive to economic growth.

Which is the underlying weakness of fiat money. The only reason that successful the fiat money systems enjoy success is that those who run them, responsibly treat them like they're founded upon an objective standard rather than than one founded upon some retard's capacity to print money, or force an interest rate. All the others just simply go tit's up.

 

[editec]

We "gold bugs," as you like to call us, have tried to explain the benefits to you, but you simply reject our answers. I don't think it's a lack of understanding on your part, I just think you disagree with the idea of a gold standard completely. Not everyone's going to agree, but we'll keep trying to convert you.

Well, actually Kevin, before you suggest that I am being obtuse, I have specifically agreed to the benfit of the gold standard many times, and I have asked you how we deal with the multiple problem of continuous deflation, many times.

To date you haven't addressed inevitable outcome of a gold standard...deflation

We both know the potential sortcomings with fiat money.

But you have yet to even acknowledge the inevitable shortcoming of the gold standard so who is really being obtuse here?

Damned right the GS prevents inflation...by creating continuous DEFLATION.

Addesss how the gold standard can NOT create that problem, if you can

If you cannot, just admit you don't know how to solve THAT problem of the gold standard, and we can agree to disagree agreeably.

Do not send me to a website and expect me to read a whole Misean tome to address this question.

If you cannot answer this question based on your readings of that school, then you are not qualifed enough to send me to a website because you did not understand what you read there, either.

What about DEFLATION?​

I didn't think you were being obtuse, or at least I didn't mean what I said in any negative terms.

You have a negative perception of deflation, but it's not negative. The market naturally moves towards lower prices in the first place, so deflation is not necessarily a bad thing.

In other words you do not have an answer.

No the market does not naturally move to lower prices anyway.

You are evading the inherent problem of imposing a gold standard on a vibrant and growing economy, Kevin.

The gold standard works perfectly in a STATIC economy, I will grant you that.

The gold stadard creates continuous DEFLATION in a growing economy, thus through that pressure the GOLD standard serves to depress economic activity.

HOW do you solve that problem or how do you structure society such that it can live with continuous deflation?

I'm prepared to accept the gold standard the moment you can explain to me why I would EVER buy anything I didn't abbsolutely positively need if I KNEW that the price of it would be lower next week, next year and so forth.

Additionally, who but an insane business person would borrow to become a producer if they knew that what they produced would continuously be decreasing in price while the GOLD they had to pay back would be continuously INCREASING in realtive value at the same damned time?

How does BORROWING work in that gold standard world?

Why do you keep avoiding answering my questions?

Because the MISES doesn't have an answer, perhaps?

We all KNOW how fiat money CAN be (doesn't have to, but certainly can be) bad.

Of course, fiat money could ALSO (if the regulators choose ) ALSO cause DEFLATION, couldn't it? they can just as easily decrease the money supply as increase it you know.

Ideally, amount of money in circulation should be some fairly consistent relationship to the amount of good and services in the market.

GOLD STANDARD cannot DO that.

How do you devise an economic system to overcome that problem?

 

[Iriemon]

Of course you are getting paid less too.

Can only be true if you're bering paid in fiat money.

But that is the problem.

It sure is--if youre being paid in fiat money.

In a deflating currency economy, salaries eventually go down.

Can't happen with money founded upon an objective standard rather than than one founded upon some retard's capacity to print money, or force an interest rate.

Less dollars with more people and goods = salaries go down.

This is a problem worthy of consideration only when the notion that money IS value, has replaced the notion than money represents value--you know, like when you're spending fiat money.

Money, whether fiat or gold, only has value for its relative purchasing power. Gold does have some instric value as jewelry.

When you borrow money it costs more because you are paying the loan back in more expensive money.

This is only true when the notion that money IS value, has replaced the notion than money represents value--you know, like when you're spending fiat money.

If the purchasing power of the currency has increased, it costs you more in purchasing power to repay a loan in a deflationary environment.

EG You borrow $1m for 20 years. Over 20 years deflation causes prices to fall by 1/2. You are making 1/2 the income. When you pay back the $1m, it is costing you $2m in equivalent purchasing power. Plus whatever interest.

Loans are more expensive for people and businesses. They borrow less and therefor can buy/produce less.

None of which is indusive to economic growth.

Which is the underlying weakness of fiat money. The only reason that successful the fiat money systems enjoy success is that those who run them, responsibly treat them like they're founded upon an objective standard rather than than one founded upon some retard's capacity to print money, or force an interest rate. All the others just simply go tit's up.

Unlike a deflationary scenario, If you just hold you're assets long term in cash, in an inflationary currency situion, I agree that would be retarded. So what do you do? You put your money in investments that keep up with inflation. That money is available for businesses and loans to buy things and increase production.