Gold Standard Nirvana
Nove 8,2010
NEW YORK (TheStreet) -- With World Bank president Robert Zoellick openly advocating a return to some kind of "gold standard," we got the expected flurry of knee-jerk opposition from the banker community. Among these tired, old refrains was the common myth that there is "not enough" gold (and/or silver) to back-stop an effective monetary system -- in our modern global economy.
In fact, the only thing for which we lack enough gold/silver is as fuel for the endless Ponzi-schemes created by bankers, and which are only possible in a world where reckless money-printing generates a permanent inflation-spiral. If that is the world one wants to live in, then by all means, reject the gold standard -- and have fun trying to outmaneuver the bankers, as they dilute your "money" while robbing you blind.
For those who would like to visualize a different kind of global economy, let's see what a gold (or silver) standard would bring us. To start with, we must first separate fantasy from reality. The modern capitalist model, as Ben Bernanke tells us, is built upon permanent inflation (or, rather, infinite currency dilution). Such a world is 100% guaranteed to degenerate into a collection of debt-bloated Ponzi-schemes (like the U.S. is today) unless you believe the implicit premise behind this economic "order" which the bankers have foisted upon us: that we can have infinite growth in a finite system.
Much like you can't grow a towering tree out of a small flower pot of soil, so too it is mathematically impossible for global economic growth to continue indefinitely. One by one, mature economies will see their growth naturally dwindle, approaching zero over the long term. This obvious concept should not frighten anyone except bankers (and the politicians who serve them).
Keep in mind that if the $10's of trillions in ill-gotten gains which ultra-rich, global misers are hoarding was distributed around the world, we could already eliminate poverty. Thus, a zero-growth world (in the distant future) can be a world full of content, middle-class citizens -- with a gold standard being absolutely essential for such a stable, global society.
Instead, we live in a world where economic growth has already started its inevitable slowdown, but in contrast, the bankers have goaded the weak-minded dolts who govern us into allowing even more money-printing, while we generate less and less real wealth (which is what gives fiat paper any value, at all).
This is a world which, instead of providing stability must result in steadily rising inflation and ever wilder boom/bust cycles -- for everyone except the government-subsidized bankers. In other words, it's a world with more than 6 billion losers, and only a relative handful of "winners." There is no possible argument against this simple arithmetic: modern capitalism is a lemming-economic system -- where all the world's economies deliberately race to see which one can drive their currencies to zero first.
More Related Stories
And what of the whining by bankers that in a gold standard, the world would not have "enough money." The question, of course, is "enough" for what? "Enough" to fuel $trillions in banker-fraud, so that those same bankers could pay themselves billions of dollars per year as "commissions" for their crimes? No, there would not be enough money for that.
What there would be enough money for is to run our economies according to the economic principle which the world's central banks promised us, when these monetary abominations were created: "price stability." This is the official legislative mandate of every central bank, and yet their policies have always been geared toward preventing price stability.
Let's start with definition of terms here, something shunned by the central bankers, themselves. Obviously "stable prices" mean prices which do not change. There are only a handful of people (in Western economies) still alive today who have ever seen "price stability" in their lifetimes. For all the rest of us, we have lived our lives in a world of perpetual inflation -- i.e. perpetual price instability.
To illustrate the intellectual bankruptcy and inherent dishonesty of central bankers, we need only look at their "inflation targets" (the speed with which they destroy our currencies). The 2% target of these thieves-in-suits, is more than enough to take any currency to near-zero in less than a century.
For those who don't trust their own ability to work out the math on that, relax, we have empirical examples to guide us. None are better than the Federal Reserve, who (in less than one century since they hijacked the U.S. monetary system) has caused the U.S. dollar to lose roughly 97% of its value.
If someone was born "very wealthy" 97 years ago (i.e. they had $100,000 tucked under their mattress), would that person believe the Fed had kept its promise of "price stability" when the "fortune" that this person was born with was now barely enough to sustain them in their old age?
What would have happened if the Federal Reserve had not been able to distort, debauch, and eventually destroy our gold standard (with the help of a succession of U.S. war-monger governments)? Banker apologists assure us that we would have all suffered -- in a world without "enough" money. Specifically, they argue that a gold standard would prevent the expansion of global trade.
More Related Stories
Here is where we get to the intriguing, empirical phenomenon of the world's gold supply. Roughly speaking, this has been rising at a relatively stable rate of 2% per year. By amazing coincidence, this is almost exactly the level of the current, sustainable growth of which our global economy is capable.
Growth above the 2% level (on a global scale) must (as a matter of simple arithmetic) be based upon unsustainable leverage and credit expansion. In the extreme, that is represented by the Wall Street Ponzi-schemes. Growth below 2% indicates (at our current level of economic maturity) that the global economy is under-performing.
Even more interesting is the effect of a gold standard on economies which deviate from that growth rate. For economies growing below 2%, the 2% per year growth in the supply of gold is actually mildly "stimulative." For economies growing above 2% (i.e. faster than the increase in the money supply), this means (by definition) that we have a growth in goods and services which exceeds the growth in the money supply -- resulting in prices decreasing, or in the peoples' money being worth more.
That's right, the "penalty" paid by countries which (temporarily) exceed that natural rate of growth is that people will be able to go to stores and businesses and get more for their money. The other consequence of this money-scarcity is that the cost of money (i.e. the cost of borrowing) increases and interest rates rise. Note however that consumers who have money which is increasing in value have much less need for credit (i.e. borrowing from bankers).
This dampens the demand for credit (and new debt) in "overheating" economies naturally. Conversely, in our banker-driven world of fiat-paper, we must rely upon the "good judgment" of our central bankers to pull back on their reckless money-printing as economies overheat. In fact, in the West we have never seen central bankers exercise such good judgment.
Instead, these "guardians" of our economies inevitably claim to be "totally surprised" any and every time their reckless money-printing spins out of control (and manifests itself in asset-bubbles). Given the 0% success-rate of these monetary charlatans, it has been made conclusively obvious (by their own actions) that a gold standard is the only way to curb the serial-recklessness of these myopic bankers.
This brings us back to our definition of "price stability." Naturally, in the real world, we could never have all prices staying "flat" all of the time. However, what "stability" means is that sometimes those prices would go up, a bit (mild inflation) and sometimes they would go down a bit (i.e. mild deflation). Obviously, for people mild deflation is preferable ("more bang for your buck"), it is only bankers who are absolutely phobic about deflation -- since deflation is the Destroyer of Ponzi-Schemes.
Again, this is a natural process. In any/every Ponzi-scheme, some "asset" becomes wildly inflated in price. This "overheating" automatically leads to higher interest rates, and those higher interest rates cause the banker Ponzi-schemes to "detonate" -- and to do so with much less economic damage, because it is impossible for these banker Ponzi-schemes to ever get as large as the obscene "bubbles" recently inflicted upon us by Wall Street greed.
Ultimately, the gold standard "equation" is a very simple one: for 99.99% of the world's people, a gold standard brings a safer, more sustainable, monetary Nirvana for us to live in, while for 0.01% of the world's population (i.e. the bankers) it makes it much more difficult to lie, cheat and steal.
Nove 8,2010
NEW YORK (TheStreet) -- With World Bank president Robert Zoellick openly advocating a return to some kind of "gold standard," we got the expected flurry of knee-jerk opposition from the banker community. Among these tired, old refrains was the common myth that there is "not enough" gold (and/or silver) to back-stop an effective monetary system -- in our modern global economy.
In fact, the only thing for which we lack enough gold/silver is as fuel for the endless Ponzi-schemes created by bankers, and which are only possible in a world where reckless money-printing generates a permanent inflation-spiral. If that is the world one wants to live in, then by all means, reject the gold standard -- and have fun trying to outmaneuver the bankers, as they dilute your "money" while robbing you blind.
For those who would like to visualize a different kind of global economy, let's see what a gold (or silver) standard would bring us. To start with, we must first separate fantasy from reality. The modern capitalist model, as Ben Bernanke tells us, is built upon permanent inflation (or, rather, infinite currency dilution). Such a world is 100% guaranteed to degenerate into a collection of debt-bloated Ponzi-schemes (like the U.S. is today) unless you believe the implicit premise behind this economic "order" which the bankers have foisted upon us: that we can have infinite growth in a finite system.
Much like you can't grow a towering tree out of a small flower pot of soil, so too it is mathematically impossible for global economic growth to continue indefinitely. One by one, mature economies will see their growth naturally dwindle, approaching zero over the long term. This obvious concept should not frighten anyone except bankers (and the politicians who serve them).
Keep in mind that if the $10's of trillions in ill-gotten gains which ultra-rich, global misers are hoarding was distributed around the world, we could already eliminate poverty. Thus, a zero-growth world (in the distant future) can be a world full of content, middle-class citizens -- with a gold standard being absolutely essential for such a stable, global society.
Instead, we live in a world where economic growth has already started its inevitable slowdown, but in contrast, the bankers have goaded the weak-minded dolts who govern us into allowing even more money-printing, while we generate less and less real wealth (which is what gives fiat paper any value, at all).
This is a world which, instead of providing stability must result in steadily rising inflation and ever wilder boom/bust cycles -- for everyone except the government-subsidized bankers. In other words, it's a world with more than 6 billion losers, and only a relative handful of "winners." There is no possible argument against this simple arithmetic: modern capitalism is a lemming-economic system -- where all the world's economies deliberately race to see which one can drive their currencies to zero first.
More Related Stories
And what of the whining by bankers that in a gold standard, the world would not have "enough money." The question, of course, is "enough" for what? "Enough" to fuel $trillions in banker-fraud, so that those same bankers could pay themselves billions of dollars per year as "commissions" for their crimes? No, there would not be enough money for that.
What there would be enough money for is to run our economies according to the economic principle which the world's central banks promised us, when these monetary abominations were created: "price stability." This is the official legislative mandate of every central bank, and yet their policies have always been geared toward preventing price stability.
Let's start with definition of terms here, something shunned by the central bankers, themselves. Obviously "stable prices" mean prices which do not change. There are only a handful of people (in Western economies) still alive today who have ever seen "price stability" in their lifetimes. For all the rest of us, we have lived our lives in a world of perpetual inflation -- i.e. perpetual price instability.
To illustrate the intellectual bankruptcy and inherent dishonesty of central bankers, we need only look at their "inflation targets" (the speed with which they destroy our currencies). The 2% target of these thieves-in-suits, is more than enough to take any currency to near-zero in less than a century.
For those who don't trust their own ability to work out the math on that, relax, we have empirical examples to guide us. None are better than the Federal Reserve, who (in less than one century since they hijacked the U.S. monetary system) has caused the U.S. dollar to lose roughly 97% of its value.
If someone was born "very wealthy" 97 years ago (i.e. they had $100,000 tucked under their mattress), would that person believe the Fed had kept its promise of "price stability" when the "fortune" that this person was born with was now barely enough to sustain them in their old age?
What would have happened if the Federal Reserve had not been able to distort, debauch, and eventually destroy our gold standard (with the help of a succession of U.S. war-monger governments)? Banker apologists assure us that we would have all suffered -- in a world without "enough" money. Specifically, they argue that a gold standard would prevent the expansion of global trade.
More Related Stories
Here is where we get to the intriguing, empirical phenomenon of the world's gold supply. Roughly speaking, this has been rising at a relatively stable rate of 2% per year. By amazing coincidence, this is almost exactly the level of the current, sustainable growth of which our global economy is capable.
Growth above the 2% level (on a global scale) must (as a matter of simple arithmetic) be based upon unsustainable leverage and credit expansion. In the extreme, that is represented by the Wall Street Ponzi-schemes. Growth below 2% indicates (at our current level of economic maturity) that the global economy is under-performing.
Even more interesting is the effect of a gold standard on economies which deviate from that growth rate. For economies growing below 2%, the 2% per year growth in the supply of gold is actually mildly "stimulative." For economies growing above 2% (i.e. faster than the increase in the money supply), this means (by definition) that we have a growth in goods and services which exceeds the growth in the money supply -- resulting in prices decreasing, or in the peoples' money being worth more.
That's right, the "penalty" paid by countries which (temporarily) exceed that natural rate of growth is that people will be able to go to stores and businesses and get more for their money. The other consequence of this money-scarcity is that the cost of money (i.e. the cost of borrowing) increases and interest rates rise. Note however that consumers who have money which is increasing in value have much less need for credit (i.e. borrowing from bankers).
This dampens the demand for credit (and new debt) in "overheating" economies naturally. Conversely, in our banker-driven world of fiat-paper, we must rely upon the "good judgment" of our central bankers to pull back on their reckless money-printing as economies overheat. In fact, in the West we have never seen central bankers exercise such good judgment.
Instead, these "guardians" of our economies inevitably claim to be "totally surprised" any and every time their reckless money-printing spins out of control (and manifests itself in asset-bubbles). Given the 0% success-rate of these monetary charlatans, it has been made conclusively obvious (by their own actions) that a gold standard is the only way to curb the serial-recklessness of these myopic bankers.
This brings us back to our definition of "price stability." Naturally, in the real world, we could never have all prices staying "flat" all of the time. However, what "stability" means is that sometimes those prices would go up, a bit (mild inflation) and sometimes they would go down a bit (i.e. mild deflation). Obviously, for people mild deflation is preferable ("more bang for your buck"), it is only bankers who are absolutely phobic about deflation -- since deflation is the Destroyer of Ponzi-Schemes.
Again, this is a natural process. In any/every Ponzi-scheme, some "asset" becomes wildly inflated in price. This "overheating" automatically leads to higher interest rates, and those higher interest rates cause the banker Ponzi-schemes to "detonate" -- and to do so with much less economic damage, because it is impossible for these banker Ponzi-schemes to ever get as large as the obscene "bubbles" recently inflicted upon us by Wall Street greed.
Ultimately, the gold standard "equation" is a very simple one: for 99.99% of the world's people, a gold standard brings a safer, more sustainable, monetary Nirvana for us to live in, while for 0.01% of the world's population (i.e. the bankers) it makes it much more difficult to lie, cheat and steal.