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#51
10-19-2007, 10:34 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] Here are some videos with Ron Paul debating a member of the Federal Reserve Board of Governors on the gold standard in 1983: Part 1 Part 2 Part 3 Part 4 Part 5 Part 6 Part 7 The video quality is poor, but all you really need is to be able to hear the audio. I’m fairly sure Ron Paul hasn’t changed his views since then. If you're still not convinced that the gold standard is the way to go, how about reading this essay titled “Gold and Economic Freedom” by Alan Greenspan. He also supports the gold standard. -Caeddyn [/ QUOTE ] Youre only 40 years too late. Greenspan does not support the gold standard any longer. [/ QUOTE ] In his new book he says he is "nostalgic" for the fiscal restraint gold forces, but that he now realizes it is inconsistent with a welfare state that most Americans want. He doesn't say whether HE wants that or not. 
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#52
10-19-2007, 10:38 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
[ QUOTE ] [ QUOTE ] Here are some videos with Ron Paul debating a member of the Federal Reserve Board of Governors on the gold standard in 1983: Part 1 Part 2 Part 3 Part 4 Part 5 Part 6 Part 7 The video quality is poor, but all you really need is to be able to hear the audio. I’m fairly sure Ron Paul hasn’t changed his views since then. If you're still not convinced that the gold standard is the way to go, how about reading this essay titled “Gold and Economic Freedom” by Alan Greenspan. He also supports the gold standard. -Caeddyn [/ QUOTE ] Youre only 40 years too late. Greenspan does not support the gold standard any longer. [/ QUOTE ] Oh yeah? “There are numbers of us, myself included, who strongly believe that we did very well in the 1870 to 1914 period with an international gold standard.” -Alan Greenspan October 2007 [/ QUOTE ] I don't know enough about the position to comment, but for those that do: Greenspan says "...with an international gold standard". Is he saying that a US gold standard wouldn't do any (or much) good without the international community's agreement? Cody
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#53
10-20-2007, 12:48 AM
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Re: If the Gold standard came back ...
I misspoke when I said he supports the gold standard. What I should have said was he’s probably not against it now (like the other posters in this thread), and at one time was for it.
According to these 2005 transcripts Greenspan says to Ron Paul there would be no advantage changing to the gold standard. His reason is that we have pseudo-goldstandard with our current fiat system. That we learned the mistakes from the past and we won’t make them again. I think this is a fallacy. It is common sense that humans make mistakes. Nobody is perfect. And we were lucky that we had someone like Greenspan with his knowledge in world economics and his moral values in charge of the economy; someone who would not make many mistakes. However, history shows that eventually someone will make a big mistake or someone power hungry will get in control of the system and they will screw it up. We should not let the minority have control of the majority, especially when they conduct business in private. With regards to Greenspan’s statement on the international committee, he was just stating history. I agree with Ron Paul in the videos I posted that we don’t need the help of the international community in order to adopt the gold standard. We don’t need another Brenton Woods agreement. If we switch to a real “modern” gold standard and it works well for us, the international community will want to imitate us. As Ron Paul said, “We led them away from the gold standard, we can lead them back to it.” However the comment that a fiat money system better supports a welfare state… The reason that it does is because it hides the fact that a welfare state is expensive. A fiat money system basically deceives people that social programs like “Universal Heathcare” are free. They are not. And a fiat money system hides the cost because when there’s a deficit (and we haven’t had a balanced budget in decades), they just print more money causing an “inflation tax”. That’s why the dollar is weakening. If we had a gold standard, the average American would wake up that these social programs are not cheap, and in fact are worse than a free market. The FED would no longer be able to print the money when there is a deficit. The government would have to result to raising taxes or borrowing money. And they can only borrow so much before people stop letting them do it. We would then move away from Socialism and move back toward a Republic with a free market. -Caeddyn
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#56
10-20-2007, 03:32 AM
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Re: If the Gold standard came back ...
[ QUOTE ]
And we were lucky that we had someone like Greenspan with his knowledge in world economics and his moral values in charge of the economy; someone who would not make many mistakes. [/ QUOTE ] Moral values? This is the same guy telling people to get ARM's for their home loans and helped create the biggest housing bubble in the history of mankind. Hes a scumbag in my opinion.
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#57
10-20-2007, 10:12 AM
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Re: If the Gold standard came back ...
From Luxoris' link:
[ QUOTE ] Deflation is the result when the economy grows faster than the money supply, and deflation is effectively a step towards a barter economy. Here's a thought experiment: Let's assume the Fed has (miraculously) discovered a way to control the quantity of base money such that the demand for fiat money remained constant -- and they proceeded to do just that for decade after decade. Which economy would be the more likely result: (a) a thriving, high-employment economy in which abundant goods and services cost fractions of dollars, and wages are pennies per hour; or (b) a stagnant, depressed, high-unemployment economy, with all the misery that accompanies a lengthy depression? [Frankly, I think the economy would start moving towards (b) for a few years... and then we'd experience an overthrow of the government.] A good exercise for me, for the past decade, has been to think through Milton Friedman's equation (an identity), which he had made into his license plate: MV=PQ (Money supply times Velocity equals Price level times Quantity of transactions). One key implication: when M, V, and P are held constant, Q cannot grow. Throw in the fact of life that deflation stifles entrepreneurs' desire to borrow (and therefore to innovate), and we arrive at the conclusion that unfettered real growth requires an accompanying growth in the money supply. ... The Fed cannot control the money supply, it can only influence the demand for money. If we were better able to measure inflation and predict inflation, the Fed would be better at choosing the target rate for nudging the demand in the desired direction. [/ QUOTE ] The blatant lack of reasonable logic astounds me.
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#58
10-20-2007, 10:32 AM
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Re: If the Gold standard came back ...
[ QUOTE ]
From Luxoris' link: [ QUOTE ] Deflation is the result when the economy grows faster than the money supply, and deflation is effectively a step towards a barter economy. Here's a thought experiment: Let's assume the Fed has (miraculously) discovered a way to control the quantity of base money such that the demand for fiat money remained constant -- and they proceeded to do just that for decade after decade. Which economy would be the more likely result: (a) a thriving, high-employment economy in which abundant goods and services cost fractions of dollars, and wages are pennies per hour; or (b) a stagnant, depressed, high-unemployment economy, with all the misery that accompanies a lengthy depression? [Frankly, I think the economy would start moving towards (b) for a few years... and then we'd experience an overthrow of the government.] A good exercise for me, for the past decade, has been to think through Milton Friedman's equation (an identity), which he had made into his license plate: MV=PQ (Money supply times Velocity equals Price level times Quantity of transactions). One key implication: when M, V, and P are held constant, Q cannot grow. Throw in the fact of life that deflation stifles entrepreneurs' desire to borrow (and therefore to innovate), and we arrive at the conclusion that unfettered real growth requires an accompanying growth in the money supply. ... The Fed cannot control the money supply, it can only influence the demand for money. If we were better able to measure inflation and predict inflation, the Fed would be better at choosing the target rate for nudging the demand in the desired direction. [/ QUOTE ] The blatant lack of reasonable logic astounds me. [/ QUOTE ] Wow. That's great. That's fantastic. [ QUOTE ] One key implication: when M, V, and P are held constant, Q cannot grow. Throw in the fact of life that deflation stifles entrepreneurs' desire to borrow (and therefore to innovate), and we arrive at the conclusion that unfettered real growth requires an accompanying growth in the money supply. [/ QUOTE ] He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q!
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#59
10-20-2007, 12:20 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
He has all the necessary knowledge to get it right, lays it out for you, puts it in the correct order even... and then just misses it. If M, V and P are held constant then Q cannot grow, but deflation is a decrease in P, which is on the same side as Q so a decrease in P leads to an increase in Q! [/ QUOTE ] lol, wow!
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#60
10-20-2007, 02:16 PM
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Re: If the Gold standard came back ...
[ QUOTE ]
I misspoke when I said he supports the gold standard. What I should have said was he’s probably not against it now (like the other posters in this thread), and at one time was for it. According to these 2005 transcripts Greenspan says to Ron Paul there would be no advantage changing to the gold standard. His reason is that we have pseudo-goldstandard with our current fiat system. That we learned the mistakes from the past and we won’t make them again. I think this is a fallacy. It is common sense that humans make mistakes. Nobody is perfect. And we were lucky that we had someone like Greenspan with his knowledge in world economics and his moral values in charge of the economy; someone who would not make many mistakes. However, history shows that eventually someone will make a big mistake or someone power hungry will get in control of the system and they will screw it up. We should not let the minority have control of the majority, especially when they conduct business in private. With regards to Greenspan’s statement on the international committee, he was just stating history. I agree with Ron Paul in the videos I posted that we don’t need the help of the international community in order to adopt the gold standard. We don’t need another Brenton Woods agreement. If we switch to a real “modern” gold standard and it works well for us, the international community will want to imitate us. As Ron Paul said, “We led them away from the gold standard, we can lead them back to it.” However the comment that a fiat money system better supports a welfare state… The reason that it does is because it hides the fact that a welfare state is expensive. A fiat money system basically deceives people that social programs like “Universal Heathcare” are free. They are not. And a fiat money system hides the cost because when there’s a deficit (and we haven’t had a balanced budget in decades), they just print more money causing an “inflation tax”. That’s why the dollar is weakening. If we had a gold standard, the average American would wake up that these social programs are not cheap, and in fact are worse than a free market. The FED would no longer be able to print the money when there is a deficit. The government would have to result to raising taxes or borrowing money. And they can only borrow so much before people stop letting them do it. We would then move away from Socialism and move back toward a Republic with a free market. -Caeddyn [/ QUOTE ] WTF are you talking about? The vast majority of people don't have a clue re gold vs fiat money. A dollar is a dollar, and a dollar for welfare is a dollar for welfare. There is no deception. You praise Greenspan immediately after calling what he said a fallacy. People can be counted on to make mistakes in policy, much more rarely mistakes in execution. The Fed has learned by trial and error, the only thing that actually has any meaning in economics, everything else is just thought experiments. For there to be future errors in policy there would have to be an unrecognized sea change in the economic enivronment, extremel unlikely given the volume of data available.
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