Saturday, December 20, 2014

Defense of the Gold Standard & the Discovery of Freedom, pt 4 of 7


Muhammad Rasheed - But I'm cool. I'll still respond to the posts you made that I haven't gotten to.

Muhammad Rasheed - Abdur Rasheed wrote: "Muhammad : There were zero recessions, depressions, and economic down turns during the gold standard. For real though!"

They weren't caused by being on the gold standard, the way the weaken dollar and debt culture causes them under the fiat system. So you vilifying the gold standard anyway is dumb. The banks are always going to do what the banks do... which was my point in the post before James'. But historically... demonstrated in all of those Panics you found... the banks' mischief is far more controlled under the gold standard and they, the 1%, pay the most for it.

You pulling a Neil P and nitpicking the fact that I said zero recessions doesn't change the fact that we were better off when the banks didn't have total control to manipulate economic policy at will over American lives.

Muhammad Rasheed - Abdur Rasheed wrote: "Just like they do today. What's changed? What's the case FOR the gold standard if we went through the same shit that we go through today?"

Okay, now we're getting somewhere. On that note I'll go back to where I left off. In the future I'll refrain from using absolute terms in my general argument since you're going to use them as a weapon against me like Neil P, Jr.

Abdur Rasheed wrote: "Muhammad: "Those four recession/depressions didn't have anything to do with the GOLD STANDARD!"
Rah: "That had NOTHING to do with what you said..."

But if I explain to you that that is what I MEANT then what is the point in nitpicking me and trying to punish me about it??? It means... like that damn Neil P... that you aren't INTERESTED in understanding my side and have a discussion. It means YOU already made up YOUR mind that YOU have all of the answers and you're just trying to get me to stop talking about it. Otherwise why not just say, "Okay, I thought XYZ based on that. Alright go on. Finish so I can see exactly what you are trying to say so I'll definitively know what your point is to see if it makes sense and holds up based on what you mean to express."

The point of a normal civil discussion is to understand each other, right? If you don't WANT to understand exactly why I'm sold on this stuff, then walk away. You're just here to insult me and dismiss me and I don't want to talk to you. That's the only point of nitpicking me and trying to hold me to the letter of something I said that didn't fit the spirit of what I'm expressing. I didn't want to damn fight with you, I just wanted to discuss it.

Muhammad Rasheed - Jackals Home wrote: "Tradition doesn't equal truth, correlation doesn't equal causation, and if gold never existed, our worldwide economy would look exactly the same. Humans looking to abandon the barter system will use literally (literally literally, not figuratively literally) anything for currency..."

Sure they would, and have. But my point is that where ever gold was known and available, it was always considered as wealth because of its beauty, ease of usage, and resistance to corrosion, making it a perfect substance for money exchange because of its "rarity, durability, divisibility, fungibility and ease of identification" (Wiki). They can use other substances with less of those qualities than gold possesses, but why? You want to use a substance that people will continue to have faith in and can trust... a trait that gold always had. If you are searching for something to use to back your currency with, that won't deplete, and will always be around because it is basically indestructible (you have to use the equivalent to "Dip" from the Who Framed Roger Rabbit movie to remove it from the planet) then why not use gold?

Muhammad Rasheed - Abdur Rasheed wrote: "What's the case FOR the gold standard if we went through the same shit that we go through today?"

I wish that was the question you would've started your whole argument with.

Now let me back up a bit...

Jackals Home - Isn't that exactly what Abdur said? That gold was considered valuable because it was pretty?

Beauty-Yup. So are pooka shells.

Rarity-So is any number of rare earth metals. So what.

Ease of usage-Beating a metal into a shape is pretty nice. But it's not the only metal capable of being made into cellphone guts or jewelry. As far as "usefulness" in history, I hazard that iron has proven to be the go-to "useful metal" since 1200BC, give or take. Again, "considered valuable" and "Inherently valuable" are not synonymous.

Durability-Not uniquely durable. Again, Iron has it beat.

Divisibility-literally means "can be divided." All physical matter fulfills this quality.

Fungibility-Cart before horse. It's fungible because people consider it valuable. It's not valuable because it's fungible. The wiki on "fungibility" refers to pistachios as another example of an item with fungibility.

Ease of identification-Virtually any element can be identified just as easily, thanks to good old Archimedes.

"You want to use a substance that people will continue to have faith in and can trust... a trait that gold always had." Yeah, that's a terrible argument. Tradition is the worst reason ever, to do anything. "This is the way it's always been done!" is the rallying cry of the worst, most despicable, most regressive, hateful stances in history.

Having faith in a substance is stupid. "Trusting" an object is stupid. (

Gold. Is. Fiat. Currency.

Muhammad Rasheed - Pooka shells aren't prettier than gold, c'mon.

Jackals Home - Repeating the "You can have faith in gold! You can trust gold!" arguments are pretty much exactly why I feel like this argument is with some shiny suit-wearing guy on TV after the last episode of Law&Order:SVU on TNT. It really feels like you're reading this stuff out of a pamphlet that says something like "Gold! Your path to security, wealth, and happiness!" that you got from a seminar you paid way too much to attend.

Listen, I'm not gonna shit on how anyone spends their money, I haven't got a leg to stand on. But If I was trying to convince you that all my D&D miniatures and comic books were some kind of secret investment that "THEY don't want you to know about!" you would be well within your rights to give me shit about it.

Jackals Home - Beauty is subjective.

Muhammad Rasheed - lol You can give me shit about it. All I ask is for you to hear out my argument.

Jackals Home - I've read the whole thread. I explained earlier that your impression that I hadn't heard your argument was mistaken. If your argument hasn't been adequately explained thus far, another 500 words aren't going to be sufficient.

Jackals Home - And really, if you're still coming up with new facets of this argument after writing so much about it, I suspect I'm not the one you're really trying to convince.

Muhammad Rasheed - Yes, beauty is subjective. Abdur was saying that beauty is ALL that gold had going for it and that it couldn't be trusted.

Jackals Home - You can't trust it, because it's an object.

Jackals Home - Why would you "trust" an object?

Jackals Home - Abdur was right. Currency has value because people treat it as if it had value. Gold has value for exactly the same reason. Aside from it's use in circuit printing (which is actively hurt by it's inflated "value" fueled by speculators), it's actual useful functions can be supplanted by any number of other substances. And guess what, if you're actually using a substance for a purpose (rather than speculation and/or "bling") you'll go for the cheaper option.

Muhammad Rasheed - Jackals Home wrote: "'This is the way it's always been done!' is the rallying cry of the worst, most despicable, most regressive, hateful stances in history."

Ah! That's not the point at all (related though).

Jackals Home wrote: "'Having faith in a substance is stupid. "Trusting" an object is stupid. (

The point is that it is the human population themselves whose confidence in a currency gives it it's strength. If the people decided to stop trusting in the dollar as a currency, the dollar would then be worthless. That's the inherent danger in any currency. But the peoples' confidence in gold as an object of wealth... even when NOT used as money... has been consistent.

Jackals Home wrote: "Society gives gold value, not the other way around. It's value is predicated on everyone agreeing that it has value, like every other form of currency."

That's 100% my point. Society HAS given gold its value, and has always done so. Done so with such consistency that you can trust that it will continue. Where in history have people every lost confidence in gold as an object of wealth and abandoned it as such? Never. That means it is not fiat, it is actual wealth. Just like the sun consistently rises every day, gold has consistently been regarded as actual wealth. Is it possible people will just stop? Sure. It's possible a cosmic event will knock the sun loose, too, but for the moment based on past record we can trust that it will continue to behave the way it's always behaved, at least long enough to enjoy a financially stable society. The paper currency of fiat has been abandoned and tossed aside before, it not being wealth but only a promise of wealth backed by the central bank's word. Now on the gold standard we would use paper to represent the gold in stores. It is possible, and has happened, that people would lose faith in the banks' integrity in redeeming it for their gold, and they make a bank run to snatch their gold out.

Jackals Home wrote: "Ask Tom Hanks on that island if he'd rather have had $1000 worth of gold, or $1000 worth of pistachios, and I'm dead cert what he would have preferred."

Currency is only necessary in a society in which goods/services are exchanged between other humans. The value of gold as wealth is only possible if it can be exchanged for more pistachios from another human that owns them.

Muhammad Rasheed - Jackals Home wrote: "Abdur was right. Currency has value because people treat it as if it had value. Gold has value for exactly the same reason. Aside from it's use in circuit printing (which is actively hurt by it's inflated "value" fueled by speculators), it's actual useful functions can be supplanted by any number of other substances. And guess what, if you're actually using a substance for a purpose (rather than speculation and/or "bling") you'll go for the cheaper option."

My pointing out that gold had actual practical applications was only to counter Abdur's insistence that it was "worthless" and completely without value.

I think it's primary strength is a a backing for currency on the gold standard.

Muhammad Rasheed - Jackals Home wrote: "And really, if you're still coming up with new facets of this argument after writing so much about it, I suspect I'm not the one you're really trying to convince."

I'm convinced. But I need to be able to talk about it and answer the dedicated cynic's questions. I need to be able to see it clear in my mind from an economist's perspective, and I can't do that if I don't talk about it with other people.

Plus we've covered other topics in this thread, too.

Jackals Home - "If the people decided to stop trusting in the dollar as a currency, the dollar would then be worthless. That's the inherent danger in any currency. But the peoples' confidence in gold as an object of wealth... even when NOT used as money... has been consistent."

Wealth=Money. There is no definition of "wealth" that doesn't involve trading something for something you want. So the idea of people sitting around, eating fruit off the trees and fish from the lakes going "Tibor has more wealth than us, because of his shiny rock" is ludicrous on its face.

Currency is currency, and if you think that gold is some kind of eternal value unit, I hate to tell you, it's not even the best, most fungible trade good now, let alone in the uncertain future where rampaging illuminati protomutants and bilderberg biothropes have rendered the dollar obsolete.

Narcotics will be valuable in a greater variety of possible futures than gold, because unlike gold, cocaine actually has a function--even if you have nothing but cocaine. Unlike gold, you don't need societal instrumentalities like "industry" and "civilization" to do something with it, it can be used right off the plant.

Really you should be arguing to put the country on the cocaine standard.

Muhammad Rasheed - You can get hooked on cocaine just from being around it and breathing in the particles, and touching it too much. That's like trying to use uranium as currency.

Muhammad Rasheed - Using gold won't kill you.

Jackals Home - And your answer is still "this is the way it's always been done." You don't need to handle gold to back our scrip, do you?

Jackals Home - If your answer is "Gold is best used to back currency" and you don't need to handle it then, then why would the average citizen need to handle the coke?

Muhammad Rasheed - Jackals Home wrote: "Wealth=Money. There is no definition of "wealth" that doesn't involve trading something for something you want. So the idea of people sitting around, eating fruit off the trees and fish from the lakes going "Tibor has more wealth than us, because of his shiny rock" is ludicrous on its face."

Naturally it would only be relevant in a society that's sophisticated enough to need an exchange currency where the barter system is no longer practical on that scale.

The point is that it functions as wealth. If the currency is backed by an object of value then it isn't fiat currency.

Muhammad Rasheed - Jackals Home wrote: "If your answer is "Gold is best used to back fiat currency" and you don't need to handle it then, then why would the average citizen need to handle the coke?"

Because you ALWAYS have the option to redeem your currency certificate for the actual wealth it represents. They don't have the right t keep it from you if you want to get it back. In the banks' case, they make their money by charging interest on your gold, so if you take our gold out, they get annoyed. And when they over-reach in the speculative bank witch craft market and cause a bubble, and the citizens find out, then they would all do a 'bank run' and snatch their gold out causing the banking industry to suffer massive losses. The current fiat system is designed so that they can't do bank runs anymore. Now if they miscalculate and wreck the system it won't matter if you get your money out or not. The dollar will be worthless.

Jackals Home - Gold is a pretty, moderately valuable rock that exists in a very limited amount unsuitable for backing a currency for a country or world in which growth is exponential. Currency's value is in it's ability to buy goods or services, Uncle Scrooge explained that to us in grade school, man.



Currency has value if it buys things.

It buys things if society uses currency.

If currency doesn't buy things, it has no value.

Even if there's a shiny rock backing it up. If you think that some kind of worldwide economic disaster will happen, in the future, and people's Poundnotes, Euros, Yen, Dollars and Stone discs will become useless, and SOMEHOW gold will still buy food and iPods and medicine, then you are severely misguided.

Jackals Home - I'm more interested now in who the new guru is, the guy who got you so suddenly involved in Gold! Gold! Gold! Is it this guy? Norm Franz

Muhammad Rasheed - Jackals Home wrote: "Gold is a pretty, moderately valuable rock that exists in a very limited amount unsuitable for backing a currency for a country or world in which growth is exponential."

But James gold WAS suitable for backing our currency in our country that was experiencing exponential growth. The banks weren't making much in interest in that kind of climate, even though everything was great for everyone else, and they cranked up the interest rates so they could enjoy some gravy too and it caused a crisis. They did something goofy in '07 that caused another crisis based purely on them manipulating the system. J.P. Morgan himself was involved in that one, one of the original Money Trust dudes,and when HE had to come out of pocket to bailout his banks, he was pissed and thought, "Never again!"

The Money Trust got together and figured out a long term system so that they could make their interest money, and when they miscalculated and it blew up in their face, they could make someone else bail them out legally. A few years later... here we are. The US owes its deficit to the corporate descendants of the original Money Trust, so when they get themselves (and now by extension all of us) in trouble, the don't HAVE to bail themselves out anymore. If I owe you $500, and you come up on a hard time and need $300, you're not going to break open your own piggy bank you're going to make me give it to you.

But in this case, every time the US draws out money they contractually have to pay the Fed itself interest on it, adding to our deficit. The Money Trust deliberately got us off of the gold standard in order to have this relationship. They don't want the average person to know how they do business. The last time the average person was informed about how the banks operate, people routinely would make bank runs and watched the Money Trust's moves carefully.

Muhammad Rasheed - Jackals Home wrote: "I'm more interested now in who the new guru is, the guy who got you so suddenly involved in Gold! Gold! Gold! Is it this guy?"

NO! I don't even know who that is! I'm not even going to click on it in case your sarcasm has overstepped its bounds.

Jackals Home - "They don't want the average person to know how they do business."

They, again. "Financial secrets THEY don't want you to know!" C'mon, who's the new guru? Just tell me so I can read up about his theories directly.

Find me an example of one of these bank runs where the little guy didn't get completely destroyed, while you're at it. Everything I can find seems to say that the crises caused by bank runs are incredibly toxic and destructive to economies, bottom-to-top. I haven't found an example yet where it said "All the small investors successfully got their money out, and the bankers all lost their shirts." I can't find that example. Is that one of the things "THEY" don't want me to know about?

Jackals Home - All the recent writings about returning to the gold standard are from the Romney campaign. I guess if a small business owner like Romney was looking to entertain returning to the gold standard, it really would be a win for the small investor. Fuck's sake.

Jackals Home - Hang on, I've gotta get my eyes, they just rolled the fuck out of my head, out the front door and took a train to somewhere they don't have to look at Mitt fucking Romney's opinions on how to improve the economy for the little guy. Oh, and he has Michelle Bachmann's support, too, super. That little-"L" is getting bigger all the time.

Muhammad Rasheed - Jackals Home wrote: "If you think that some kind of worldwide economic disaster will happen, in the future, and people's Poundnotes, Euros, Yen, Dollars and Stone discs will become useless, and SOMEHOW gold will still buy food and iPods and medicine, then you are severely misguided."

Putting the country back on a precious metals standard is the only way in which citizen confidence can be restored. It's tried and true.

Jackals Home - Tradition, again. This is why I keep saying I've heard your arguments.

"Gold standard is stable! It's tried and true!"

There was plenty of economic instability while the US was on the gold standard. Frequent and lengthy economic downturns.

"That wasn't because of the gold standard!"

Why do you think that?

"Gold standard is stable! It's tried and true!"

I've read this already, man. You argument is that the gold standard is good, and it was so good that those problems during the gold standard couldn't have been it's fault, because the gold standard is so good.


Jackals Home - Not exactly germane, but sums up the structure (if not the specific content) of your argument.

Muhammad Rasheed - Jackals Home wrote: "'They don't want the average person to know how they do business.' They, again. "Financial secrets THEY don't want you to know!" C'mon, who's the new guru? Just tell me so I can read up about his theories directly."

lol I don't have a guru, I'm kinda skipping around. The info is out there. It's historical. I'll send you some site references.

Jackals Home wrote: "'Find me an example of one of these bank runs where the little guy didn't get completely destroyed, while you're at it. Everything I can find seems to say that the crises caused by bank runs are incredibly toxic and destructive to economies, bottom-to-top. I haven't found an example yet where it said "All the small investors successfully got their money out, and the bankers all lost their shirts." I can't find that example. Is that one of the things "THEY" don't want me to know about?"

Oh no, all the little guy investors were completely smashed. Did you see the movie Maverick by Richard Donner? When certain poker player would lose and get up from the table and start crying when they went into the other room? "If you can't afford to play then you shouldn't play." It's the folk who didn't invest who ran to the bank to snatch out their savings, and redeem their currency notes who were alright. That was the little guy that was alright and got through it unscathed. The currency was still backed by the gold standard so he was okay because the currency itself didn't loose its purchasing power.

But the greedy bastards who decided to pool their life savings and play with the big boys? Smashed. The bank owners at the top made money and danced out of the way and everybody below that had to eat it. But when the went too far and had to save their money-lending business by bailing themselves out from their own profits, then they got pissed. "Money Trust ASSEMBLE!!!"

Muhammad Rasheed - Jackals Home wrote: "There was plenty of economic instability while the US was on the gold standard. Frequent and lengthy economic downturns."

That's why the banks were always burdened with all those regulations made by policy makers who are in the know. It is their completely deliberate manipulations that caused the crisis. Before my brother decides to nitpick me again for absolutes, some economic downturns are normal parts of a free market economy, and they can cause temporary issues, but they always self correct just from the normal flow of business. Sometimes even an unexpected boom and expansion in an economy can make certain sectors experience temporary problems until they are able to catch up. But the banks cause our actual finance problems, conspicuous especially when they come during economic prosperity. They make WAY more money manipulating interest rates than they do charging regular bank service fees.

Jackals Home - Okay, here's my final word on the subject. I know very little about the delicate and inscrutable world of worldwide economics. And I suspect your knowledge of it is within a very small degree of variance from my own. I do know a little about how to sniff out bullshit. And if everyone who is calling, seriously calling or considering a return to the Gold standard is a multi-multimillionaire like Mitt Romney or Ron Paul (who is and was a despicable racist who actively and repeatedly called for race war source fucking cited: Game Over: Scans of Over 50 Ron Paul Newsletters), then I already feel confident in my knee-jerk reaction to the idea that those unbelievable shitheads do not have my best interests at heart. SORRY

If you wanna give me the name of whatever Holiday Inn seminar mogul (The guy from the Leo DiCaprio movie, maybe?) put the bee in your ear about this bullshit, then I'll address that shit directly.

Now, if I'm not going to take their word on it (And I'm not), and I look for someone who is informed on these matters, someone who has done the legwork, someone who is a professor of economics at Princeton, someone with a Nobel prize (for example), and I find Paul Krugman.

Paul Krugman thinks that is "an almost comically (and cosmically) bad idea."

The Nobel Prize-winning Princeton economics professor and New York Times columnist wrote in a Sunday blog post that a return to the gold standard would lay waste to an already struggling U.S. economy.

"Under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933," Krugman wrote. "Oh, wait."

Argument over.

Muhammad Rasheed - Did Mitt Romney really say he wanted a return to the gold standard? If he did I would strongly suspect him to be lying to to coddle the tea partiers to get their votes. Did he really?

Jackals Home - Yeah, it looks like it was more him going "mmmmmaaaaaybbbbeeee" and Ryan was the one who was pushing for it. Couple of local boys with big ideas about how to help the struggling people in their neighborhoods. Where the houses are each worth more than a summer blockbuster.

Little guys, only making 15-30 million a year.

Jackals Home - Here's that whole Krugman interview, incidentally. It's extensively hyperlinked to the evidence as to why this is a terrible idea.


Muhammad Rasheed - Romney was only telling his base what they wanted to hear. Ryan may have been serious but if he would've made it as VP, the Fed would've immediately snapped him to heel to shut that shit up.

Jackals Home - I already said that. Are you really on Mars? Read that Krugman article, look at all the charts, and stop this nonsense. Is nonsense.

Muhammad Rasheed - James...

...why would the Fed want to return to the gold standard when they wouldn't make as much money? Would ANYBODY be allowed to win a nobel prize for talking against the fed policies and publicly poking holes in their bs? You finding a book written by the pigs at the end of Animal Farm in which it insists that 'four legs are bad and two legs are good' isn't going to move me. Finding an article by someone who is a celebrated slave of our mutual enemy was a waste of your time.

Muhammad Rasheed - The American citizens have already been indoctrinated with the idea that gold standard is bad - fiat system is good. I reject that message.

What else do you have that's NOT crazy and evil?

Jackals Home - Right, this is where you say that the guy who went to school is saying shit because he's only out for himself, but your guy, your guru is out for everybody.

Muhammad Rasheed - hahaha I don't HAVE a guru.

Jackals Home - I wasn't aware the Nobel Commission worked for "Them." Don't attack the man, attack the numbers. He's linked all over that article.

Jackals Home - Nobel Foundation

Muhammad Rasheed - A gold standard would benefit the 98%, while the fiat system leans towards the 1%.

Jackals Home - Look at the charts, man. How would deflation help people buying bread?

Jackals Home - How?

Muhammad Rasheed - Financial Panics: 1873, 1884, 1890, 1893, 1907

These were the ones specifically I was talking about. It was caused by bank manipulations and the people who didn't invest and got their saving out... the little guys... were safe. The 1907 panic was notable because one of the Money Trust members was actually named in the Wiki article as someone who had to bail his own banks out from something he caused. The Money Trust began planning their federal reserve act plans in 1910, got it passed in 1913. They got us into WWI in 1914 creating the massive super debt base needed for their fiat-interest machine to function properly at their advantage.

Financial Panics: 1930, 1931, 1932, and 1933

"The Great Depression began in August of 1929, when the United States economy first went into an economic recession." (Wiki) The Federal Reserve Act enabled the Money Trust to partner with the US gov so they could continue to do the stuff they do without repercussion from authorities. The people DIDN'T want a central bank for America, so I'm not surprised they kept making bank runs while the Money Trust was still setting up their system. They had permission to increase currency over what we had in stores now, but the gold standard was still dragging them down, limiting their new fund power.

Muhammad Rasheed - What do you mean "how?" I've been telling you how.

But I don't have a finance degree and a nobel prize so you've only been skimming my posts?

Jackals Home - If your argument is "I know more than you" and I go this guy knows a lot about the economy, he has a Nobel prize, he's taught economics at Princeton for umpty-up years, and your argument is "That guy's bonafides are tainted" then you've created another loop where your argument can't be addressed through logic or citing facts, or anything.

"Gold Standard would help the economy!"

This economic genius says it would fucking destroy the economy due to gold's inherent instability creating periods where currency was subject to inflation or deflation without recourse, because tying currency to a single commodity means you have no options for maintaining when the value of that commodity fluctuates.

"Haha that's bullshit! That guy works for 'Them.'"

Why do you think that?

"Because he doesn't like the gold standard! Gold standard would help the economy!""

All of your arguments are circular. If your objective is to stalwartly face hordes of people you respect telling you in sincerity that your ideas are crazy and stem from an isolated perspective provided from a single guru who you will not name, and repeat the same talking points over and over without examining anything that disagrees with your contention, then good job yo.

Muhammad Rasheed - Jackals Home wrote: "Jackals Home Look at the charts, man. How would deflation help people buying bread?"

Under deflation you have a drop in the price of goods. This can happen while the economy is booming and expansive. Deflation "increases the real value of money" increasing its purchasing power. "Deflation occurred in the U.S. during most of the 19th century (the most important exception was during the Civil War). This deflation was caused by technological progress that created significant economic growth."

But ALL modern economists, repeating their Fed slave mantra, proclaim that deflation is ALWAYS bad and something to be avoided at all costs. Banks don't make their super-interest money in those conditions and have to swallow normal prosperity levels like everybody else.

Muhammad Rasheed - Jackals Home wrote: "...provided from a single guru who you will not name..."

I'll accept your offer to walk away now. I'll continue to work this out by myself. Thank you for your time.

Jackals Home - Also: Why do you think Paul Krugman works at the Fed? He doesn't. Your mindset has made enemies of both academia and the Nobel commission. Antintellectualism on a worldwide basis.

"While an increase in the purchasing power of one's money benefits some, it amplifies the sting of debt for others: after a period of deflation, the payments to service a debt represent a larger amount of purchasing power than they did when the debt was first incurred. Consequently, deflation can be thought of as an effective increase in a loan's interest rate. If, as during the Great Depression in the United States, deflation averages 10% per year, even an interest-free loan is unattractive as it must be repaid with money worth 10% more each year."

Yay! Deflation sounds great!

Jackals Home - "A deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price."

Hooray!

Jackals Home - "Since deflationary periods disfavor debtors (including most farmers), they are often periods of rising populist backlash. For example, in the late 19th century, populists in the US wanted debt relief or to move off the new gold standard, and onto: a silver standard (the supply of silver was increasing relatively faster than the supply of gold making silver less deflationary than gold), bimetal standard, or paper money like the recently ended Greenbacks."

Yeah! Screw those farmers! And people with mortgages!

Jackals Home - "I'll accept your offer to walk away now. I'll continue to work this out by myself. Thank you for your time."

One last question. Why do you think Paul Krugman works for the Fed?

Muhammad Rasheed - Jackals Home wrote: "If, as during the Great Depression in the United States, deflation averages 10% per year, even an interest-free loan is unattractive as it must be repaid with money worth 10% more each year."

You can't use the Great Depression as an example of deflation when we just came out of WWI and we were experiencing the effects of that massive debt and over printing of currency over our gold stores. Deflation can happen in both poor economic condoitions, and during great economic conditions.  But how does your scenario equal to the deflation we experienced during a time of economic prosperity as in the 19th century?

That's where my conspiracy theory card comes into play... they lie so that the average person won't recognize the benefits experienced from a system that they aren't in total control of.

Jackals Home - We can't use that as an example because it contradicts your beliefs, I understand. Can you tell me what other examples I'm not permitted to cite as direct evidence that explicitly refutes your central contention?

Right, coming out of a major war always destroys the economy, like those pesky 50's.

Why do you think Paul Krugman works for the Fed? Like, what evidence do you have of that? Why would you think that the Nobel Committee (A private organization based in Sweden) reports to the American Fed? Why would you make such a bizarre contention?

Is everyone who disagrees with your contention a member of some sort of secret organization? One that schemes and plots in the shadows? Am I a member? If so, how can I get my decoder ring?

Muhammad Rasheed - Jackals Home wrote: "Why do you think Paul Krugman works for the Fed?"

I didn't say he worked for them, I said he was their slave. All mainstream economists spew that pro-fiat-interest-incurring Federal Reserve stuff because that's what is taught to protect that system. "Keynesian economics."

It's the Austrian school of economics that are their foil.

Jackals Home - And the Nobel family? They're complicit in what way?

Muhammad Rasheed - Jackals Home wrote: "And the Nobel family? They're complicit in what way?"

Only in the sense that they are a mainstream institution and they accept his accomplishments at face value. I'm sure the German gov gave pro-Hitler a$$holes all kinds of awards and shit too...

Jackals Home - "Gold Standard would help the economy!"

This economic genius says it would fucking destroy the economy due to gold's inherent instability creating periods where currency was subject to inflation or deflation without recourse, because tying currency to a single commodity means you have no options for maintaining when the value of that commodity fluctuates.

"Haha that's bullshit! That guy works for 'Them.'"

Why do you think that?

"Because he doesn't like the gold standard! Gold standard would help the economy!""

You still didn't address the argument, regarding how tying currency to a single commodity causes unavoidable instability when that commodity's value fluctuates. Why not?

Nor did you address how deflation most negatively affects borrowers (like farmers with mortgages) while benefiting people most heavily invested in liquid assets (IE those people who you keep saying are gonna lose out from a return to the Gold Standard, your pals Ron Paul et al).

You just completely Godwinned your own post, while directly comparing the Nobel Family (Who have spent decades using the legacy of a remorseful war profiteer to reward peacemakers and academics for enriching humanity) to Hitler. Does that seem like a reasonable response to these questions? Is it possible you're angry at something other than the gold standard?

Muhammad Rasheed - Jackals Home wrote: The Gold Standard is great!""He's part of the problem!" Why is that?"

Why is your guy part of the problem? Because he's contributing to the American brainwashing to force them to think that something they used to know was bad for them into believing it's now for their own good.

Remember that scene in Michael Moore's Capitalism where he showed that the brightest students in the country... who used to go into science/math... were being recruited into the finance industry, creating over-complex formulas designed to make that bullshit work for the new master, while simultaneously being too complex for the mainstream to see the bullshit?

Jackals Home - If you see something that looks like a sentence fragment, refresh the page and wait. I hate Facebook's shitty interface.

Muhammad Rasheed - Jackals Home wrote: "You still didn't address the argument, regarding how tying currency to a single commodity causes unavoidable instability when that commodity's value fluctuates. Why not?"

"unavoidable instability" under a free market economy corrects itself just from the regular flow of day-to-day business. The problem comes from the banks wanting to be able to manipulate the interest rates at will to their advantage. You can't take their nonsense seriously.

Muhammad Rasheed - Jackals Home wrote: "If you see something that looks like a sentence fragment, refresh the page and wait. I hate Facebook's shitty interface."

I'm glad you decided not to walk away. I don't have a guru.

Muhammad Rasheed - Jackals Home wrote: "Nor did you address how deflation most negatively affects borrowers (like farmers with mortgages)..."

I read where they said that the other day, and I've been trying to find how that works. Deflation increases the real value of money, so you should be able to pay off your debts faster. Naturally the LAST thing the bank wants you to do is pay your loan off faster because that's drawn out interest payments that HE isn't getting. Again I have to play my conspiracy theorist card and say that they are lying. They don't want you to know there is an alternate system that you would benefit from better.

Jackals Home wrote: "...while benefiting people most heavily invested in liquid assets (IE those people who you keep saying are gonna lose out from a return to the Gold Standard, your pals Ron Paul et al)."

Ron Paul's not my pal (anymore) and he's not a bank owner. Although successful, in that gold standard system he would just represent a successful doctor guy that lives down the street. It's the banks specifically that will lose out and the professional investors who count on changes in interest to play with.

Jackals Home - "The free market corrects all faults!" The Tea Party Mantra. They shout that shit to the heavens whenever they poison the groundwater for a third of a million people, or blow up an old folks home with an impromptu fertilizer bomb. You got an example of the free market solving these problems? A source?

And look, you didn't wake up one day and invent this desire to return to the Gold standard. You didn't. You read or heard this shit somewhere. Since you're so willing to use relentless ad hominem attacks against the people who disagree with your stance (Paul Krugman is a "slave of our mutual enemy" which I guess means "education" or perhaps "journalism") while the Nobel Commission is as 'bad as Hitler.'

So if you're going to respond with the same, canned, rote responses no matter what I write, it's bad faith to not reveal a source on where these new ideas came from. If you can attack my sources as being worse than Nazi's you can at least let me Google search whoever you picked up this thread from. With some quotes, some charts, some specific historical examples as to when these concepts worked out for the little guy

Muhammad Rasheed - Jackals Home wrote: "'The free market corrects all faults!' The Tea Party Mantra."

I know, I know, I know, and believe me...

I know.

That's why I'm usually studying this stuff all by myself, because the company it attracts tends to be less than pleasant. Does that give you at least a little insight why I would prefer my friends to... if not jump in with me... at LEAST be the dedicated cynic I can talk to about it? If you and Abdur can see my side fully and continue to poke holes, either way it will help me. Treating me like I'm crazy and not worth listening to will not help me. Just being willing to be a listening here and provide some feedback will.

Muhammad Rasheed - Jackals Home wrote: "And look, you didn't wake up one day and invent this desire to return to the Gold standard. You didn't. You read or heard this shit somewhere."

Of course I did. But there is no one person, like Thomas Sowell on his concept of education and work ethic being the key to climbing the socioeconomic ladder, that I got the gold stuff from. It actually started from hearing some one mention it back in 2005, questioning them a little and then just looking up gold related topics. It took me a lot of places. My Favorites folder was full of sites on my old computer that got destroyed. It'll tale me a while to remember which ones really got me started, but I can find other stuff from people with more solid arguments than my own, sure.

Jackals Home - This is the problem with any method of thinking that instills distrust of the informed, man. You become your own source, for everything, because "The experts" are all "Them." Anyone educated in the field you're frustrated with becomes a moral enemy, rather than someone whose experience and education makes them well-informed.

I'm not sure what kind of double-secret secret code Paul Krugman could have where he writes a public column available virtually for free on the internet, wherein the information contained is designed to be heard and understood correctly by the rich, but misunderstood by the poor, who will then be caught in a wasteful web of poverty. I'm not even sure how a person could manage that. I'm also not sure why he would describe and relate the causes of the current recession as being due to the misguided fiscal policy of austerity (The Depressed Economy Is All About Austerity(which is again, a libertarian mantra, "tighten your belts!" "Small government!")), if he was somehow in the pockets of the people who determined that misguided policy. I don't know what kind of complicated web of conspiracies leads to such a baffling result. You have to see that a mindset that asks you to believe that is flawed.

Jackals Home - And look, if you owe 25 bucks, and you pay back a dollar a week, your debt is going to be paid in 25 weeks, no more, no less, regardless of how valuable that dollar is. If your dollar is worth more, that debt is also worth more. Meanwhile the owner of that debt can spend that money when it's value is high, and sit on it when it's value is low. See how deflation screws the little dude?

Muhammad Rasheed - There are other schools of economic thought that support the gold standard. They are regularly scorned by Keynesian economists. A popular expert isn't necessarily the correct exert, especially on this topic.

Jackals Home - If he's wrong, it's because his interpretation of the facts is wrong. The nice thing is that you can examine his past contentions and see if what he says is reliable. You can check those charts that show how wackadoo the price of gold has been in the last four decades, compared to how stable spending has been. You can check facts, and numbers, and information. Once you start going "That guy is wrong because he's "Them!" you're no longer connected to the facts of the matter.

Muhammad Rasheed - Jackals Home wrote: "And look, if you owe 25 bucks, and you pay back a dollar a week, your debt is going to be paid in 25 weeks, no more, no less, regardless of how valuable that dollar is. If your dollar is worth more, that debt is also worth more. Meanwhile the owner of that debt can spend that money when it's value is high, and sit on it when it's value is low. See how deflation screws the little dude?"

So you are saying there is no "yin yang" principle when it comes to deflation/inflation? Under inflation you end up paying more on your loan over time, and under deflation you end up...

...that's it.

Muhammad Rasheed - Under inflation you pay more for the initial purchase because of the interest payments. If interest rises over the course of the loan's life you pay more.

Muhammad Rasheed - But under deflation you aren't paying interest, are you? The loan itself increases in value, but you aren't paying interest... you're ONLY paying down the premium itself, and now you are free earlier. OF COURSE they want to hide shit like that. You will be free from debt earlier.

Jackals Home - Under inflation, you pay more for things, bread, meat, staples. Under deflation you pay more on debt. This is separate from interest payments, this is just the variance in currency.

The debt holder is consistently on the losing end, because paying double for butter doesn't mean shit to Ron Paul, and his house is owned outright.

Jackals Home - Why would you not pay interest during deflation? What bank is gonna give you a loan that cancels interest if the currency becomes more valuable?

Muhammad Rasheed - lol why do you keep putting ron paul in that role? lol

Muhammad Rasheed - Jackals Home wrote: "Why would you not pay interest during deflation? What bank is gonna give you a loan that cancels interest if the currency becomes more valuable?"

They would not. Thus their whole gravy train comes to an end.

Jackals Home - Because he's the biggest cheerleader for returning to the Gold Standard, and his credibility is fucking lower than Denis Rodmans. He called MLK a communist sympathizer, and said he molested children of both genders (Source cited, page 10:Game Over: Scans of Over 50 Ron Paul Newsletters).

Muhammad Rasheed - That's why when THEY talk about it there is no scenario in which deflation is good, because they never want you think it ever CAN be good. They would not profit from it. Or would profit very little from it. The 19th century was the last time conditions were like that.

Muhammad Rasheed - Jackals Home wrote: "Because he's the biggest cheerleader..."

I KNOWWWWW why Ron Paul is out of favor, James, and rightfully so. It's just funny when you prop him up as your preferred face/puppet when you are making fun of this stuff. Good show.

Jackals Home - Uh, how? How does the bank's "gravy train come to an end?" If the bank sits on the money when value is low (inflation), and invests it when it's high (deflation), charging interest the whole time, at what point do they lose out?

A bank isn't like a household, they don't need to invest in staples like beans and bread when money's tight. Why do you think the lender is getting off worse than the borrower?

Isn't that what we want, the borrower (the poor farmer) to be on the winning side of these economic fluctuations? Isn't that what the gold standard is going to "fix?"

Jackals Home - You just did a little "Ta DA!" without actually doing the trick.

Muhammad Rasheed - But it IS bad for them, deflation, that's why they are vilifying it. I just have to figure it out. THEY aren't going to tell me...

Muhammad Rasheed - They sing the praises of inflation all day.

Jackals Home - STAND BACK EVERYBODY MUHAMMAD'S GONNA FIGURE IT OUT

STAND BACK ECONOMIC COMMUNITY

STAND BACK

Muhammad Rasheed - I GOT THIS!!!

Muhammad Rasheed - lol shut up, james.

Jackals Home -



Muhammad Rasheed - Jackals Home wrote: "Uh, how? How does the bank's 'gravy train come to an end?' If the bank sits on the money when value is low (inflation), and invests it when it's high (deflation), charging interest the whole time, at what point do they lose out? Why do you think the lender is getting off worse than the borrower? Isn't that what we want, the borrower (the poor farmer) to be on the winning side of these economic fluctuations? Isn't that what the gold standard is going to 'fix?'"

Mind you, because deflation is really only a bad thing under already adverse conditions like the Great Depression in which it just becomes yet another symptom of other shit going wrong, I'm talking about under a gold standard when a currency is stable and their reach is significantly restrained using the 19th century as the model.

1.) It would discourage borrowing, because people wouldn't have to. It would be easy to save. If I did have to get a short term long I could pay it off faster.

2.) The gold standard prevents the printing of currency above what is represented in stores so inflation is very low when it occurs from something like more gold flowing in, and is controlled by the free market and doesn't destabilize the economy. The benefits the banks receive from that kind of inflation are minimal compared to their preferred kind of inflation that genuinely weakens the currency.

Jackals Home - So deflation caused by gold standard wouldn't unduly penalize the borrower, because fewer people would borrow. Because they'll be livin' it up on that big deflation dollar. Uh huh.

What if they took out a loan when gold's value (and thus the value of the dollar) was low, leading to inflation, because they needed that loan to pay for necessities like feed and fuel whose costs shot up? And then got stuck paying their bigass deflation dollars back to the bank, who got rich on both ends of the transaction?


Can you show me at what part of the upper chart's (Gold Standard) CPI index looks "more stable" than the (recent) lower chart? This is historical data, cited sources. You still haven't pointed to the evidence of success, at any time in history, anywhere in the world, for the Gold standard. When I show you experts that call the idea cosmically bad, you attack them (rather than their numbers or arguments) while giving me exactly zero of your competing experts who view the matter as you do.

Since you wouldn't cite any of those mystery experts who agree that the gold standard would be good for America's economy, I went looking for them.

Here they are:


Oh, actually, every respondent agreed that the idea was crap. Their responses varied from "It's crap" to "It's SUPER crap." Not one actual economist thought it would help the economy.

What's really great is they put their faces and names at the bottom of the article, so you can individually look at each one and accuse them of being in Skull & Bones, or whatever claptrap you invent in your head to discredit huge chunks of the educated so you don't have to examine your view. That you got from some guy. At some point. Who wasn't Ron Paul.

INB4

"But they're slaves to the Fed! That crooked Fed!"

Why do you say that?

"Because the Gold Standard is great! Only the crooked-ass Fed doesn't want the gold standard!"

AND AROUND AND AROUND AND AROUND

Muhammad Rasheed - Jackals Home wrote: "'The free market corrects all faults!' The Tea Party Mantra. They shout that shit to the heavens whenever they poison the groundwater for a third of a million people, or blow up an old folks home with an impromptu fertilizer bomb. You got an example of the free market solving these problems? A source? "

Thomas Sowell's Basic Economics book shows exactly how the principles in the free market function. You can read the pdf of it here:


The housing price fix concept I described earlier in this thread is an example of things going wrong when the gov interferes with a free market, which is the regular flow of supply and demand with prices rising falling normally. It isn't related to people overstepping the bound and interfering with other peoples' right to have a safe and healthy environment.

Jackals Home - Graduated from Harvard, huh? Why, if he's educated at an Ivy-league school like that, he must be on the side of the Fed. I can't take anything an elitist like that says seriously. How dare you even show me that guy.

Muhammad Rasheed - ...that article is making me so angry... lol

Muhammad Rasheed - Here:

Jackals Home - Did you look at the poll? I have 6 Harvard professors to your Harvard graduate. If you live according to an antiintellectual agenda, you have to die by it, too.

Jackals Home - I'm pretty sure this guy is your guru, too. He shares your talking points, and inability to cite a source: Politics Versus Gold by Thomas Sowell

Jackals Home - Just some shit a guy said. Not a single chart of a single year, to shore up any of his claims.

And his column is called "Fact-free liberals," too. Motherfucker, I'm the one citing sources! You're just some tea-party dipshit writing down whatever your Alpha-bits spell out.


Muhammad Rasheed - Here's a classic argument:

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