Ron Paul Calls for Audit of US Gold Reserves

[cavanami]

CS, very well put!!!

[acockasian]

"The Congress and all of us treated Greenspan as if he was some deity."

 

His older articles, before he was elevated, on the gold standard are great reading and an interesting contrast from his later positions.

[LizardKing]

Talking to the wall, I see CS...

 

You miss every point I made. Not surprising. True believers in anything are like fundy Xtians. Logic never enters the equation.

 

At least you do get that unregulated markets are bad and without regulation business will never make the right choice for anything other than the next 5 minutes. Most GOPers wouldn't even get that far. And of course, "Libertarians" are worse -- somehow they fail to see that the "Libertopia" that is Somalia (no gummint for 10+ years now!) is what would happen if they got their way.

[cavanami]

After the Civil War, in 1879, the US went back on the gold standard, which resulted in the largest economic growth in US history.

Being on the gold standard limits government spending, unlike the out of control spending that we have going on today.

Since 1913, the US dollar has been greatly devalued, and all this during the time of the Federal Reserve being in control of the money supply.

Before 1913, businesses were saving and using their profits to expand their business, not borrowing from banks and the bankers did not like this.

Thus the five men (Morgan, Rockefeller, etc) that secretly met to create the Federal Reserve, also those five had 25% of the world's wealth at that time!

The Federal Reserve was not setup to help the US people but to control the money supply and to generate huge profits for the private bankers that control the Federal Reserve.

Watch it here:

iYZM58dulPE

[Flashermac]

Yes, but now bankers are different. They are our friends!

 

 

[Steve]

That is exactly the gold standard and it is stupid. Tying a country's monetary supply to a commodity is dangerously stupid.

 

And that does it accomplish? Some dream? We *were* under the gold standard in the later 1800s and when the Great Depression started. It solves nothing, and ties the hands of government when it needs to make a currency move.

 

I'm off for dinner. Let's just end by saying that the United States abandoned its policy of stabilizing gold prices back in 1971. Since then the price of gold has increased roughly 10x, while consumer prices have increased about 250%. If we had tried to keep the price of gold from rising (because the US government historically manipulated the gold market when it was on the gold standard), this would have required a massive decline in the prices of practically everything else -- deflation on a scale not seen since the Depression. Does this sound like a particularly good idea to you? That's just one simple reality check.

 

Keynes proposed using gummint spending to correct for insufficient demand resulting in mass unemployment and a deflationary death spiral. It was a formula for saving capitalism from itself. Sound familiar? The Dem's stimulus plan? Ya, that's it.

 

Economics has evolved since Keynes. Just about everyone now agrees that monetary policy is a superior tool for dealing with recessions and preventing depressions, but in Keynes' time they where chained to the gold standard. Inflationary monetary policy to short circuit the death spiral was basically impossible, hence the Great Depression.

 

It was the Fed, despite the AIG debacle, who saved us from Great Depression 2.0 this time around because of the flexibility of monetary policy. And yes, they had a hand in creating the conditions the led to the crisis in the first place, but that doesn't change the fact that they managed to prevent the death spiral from taking hold (so far).

 

Gold Standard = Bad Policy

 

I want to touch on a few things you said. Yes, we were under the gold standard when the great depression happened. My question is so what? We have had economic problems off it as well. The gold standard isn't a cure all. Its purpose isn't to end depressions. Its purpose is to provide value for the currency and a check against the government just printing money at will.

 

You mentionedd it ties the government's hands. Is that a bad thing? We've seen what the government does when its given a free hand. What 'currency move' are you referring to specifically?

 

His suggestion of a gold standard is to end the federal reserve. Am I married to the gold standard? No. Am I married to the concept of ending the Federal Reserve? Hell yeah.

 

You mentioned going back to it would cause deflation and economic problems. You site some figures. Lets assume Paul does win and talks Congress into going back to the gold standard. I've never seen a major government change that didn't happen over time. It certainly wouldn't happen overnight. Its a massive change. I would assume it would be a gradual change. I would assume it would happen over a few if not several years. The economic and commodity markets would have ample time to trend towards this new reality.

 

There was an unprecdented economic boom when the country went back on the gold standard after suspending it during the civil war. (per the video in a previous post). Isn't there a chance it could help start an economic boom?

 

You mentioned the U.S. government manipulated the price of gold when we were on the gold standard. I'm not saying they didn't but I have never heard this. Not saying it wasn't true. This question is where I want to be educated on how they did it. (as you know I put nothing pass this government)I'm a bit of a history nut and tried googling but couldn't find out how they did it (due to my lack of search skills most likely).

 

As far as I can tell the gold stanard did not start or contribute to the crash of '29 or had a major effect on the recovery. Maybe it did. I've not heard it cited as such. People bought stock on margin (borrowed money) and couldn't pay for it when said stock dropped in price and the firms wanted their money. The country raised tarrifs to make money and stifled international trade. People stopped spending as anyone does when times are hard. Nothing to do with the gold standard. People lost faith in banks because so many failed and they lost their deposits. Again, nothing to do with the gold standard.

 

However, I would agree that a gold standard is rigid or specifically brings rigidity to any government on it but I would argue that with the U.S. government at least, that is a good thing not a bad thing. We've seen it when its given a free hand. While on the gold standard and without the Federal Reserve standard of living rose. Since no gold standard and since the Fed Reserve has taken over our money supply, future generations are now worse off than the previous. Unprecedented. The record speaks for itself.

 

You credit the fed with saving us from a depression but I contend the fed helped start it. Basically giving them credit for solving a problem they helped create.

 

If you are a for a Feeral Reserve then we will never fully agree on Ron Paul. We got side tracked on the gold standard while discussing the overall suitability of Ron Paul himself.

 

EVERY other major candidate is beholden in varying degrees (all of them to a fairly high degree) to the status quo that has us chained to a system that is eroding us as a country.

[chuckwoww]

I think there already is a gold standard in a sense. People who don't like paper money are free to buy it. It isn't very convenient or flexible but the price does give an indication of how people feel about debt.

 

LK is right about government interference. There are no guarantees that gold held by individuals will hold its value. To control the price the government would need to authorize every sale. They may even decide to make ownership illegal.

 

Still think there should be an audit.

[cavanami]

1933, the US gov forced all US citizens to turn in their gold at $28/oz (?), the price after this went to $35/oz (not sure about the numbers but the concept is for sure, the US gov fucked the US people...I know, this is a first).

 

The US gov NOW requires paperwork on gold transactions over $1000 (or something like this).

 

In the past 10 years, gold has gone up 300%...the US dollar has gone DOWN like 300%...of course, fiat money has no value, gold retains and increases in value, so why not have a gold standard? it worked for thousands of years...oh...the bankers can make their trillions, OK, let's move on...

[LizardKing]

Why gold? What about say, tulip bulbs? Sea shells worked for Hawaiians.

 

Tying currency to any commodity is simply asinine as has already been pointed out.

[acockasian]

I think there already is a gold standard in a sense. People who don't like paper money are free to buy it. It isn't very convenient or flexible but the price does give an indication of how people feel about debt.

 

LK is right about government interference. There are no guarantees that gold held by individuals will hold its value. To control the price the government would need to authorize every sale. They may even decide to make ownership illegal.

 

Still think there should be an audit.

 

 

 

 

The government is going that way for people in the US...witness the recent IRS forms for gold coin sales.