Very good arguments from an Keynesian

[Hayekforever]

I was on the message boards at Amazon and I read some pretty good arguments from an Keynesian. He has pretty much debunked Austrians, gold standard and everything in between.


http://www.amazon.com/review/R2IB97C8SRVEE7/ref=cm_cd_pg_pg1?ie=UTF8&cdForum=Fx2P0D6G2M91FWQ&cdPage=1&asin=0446549177&store=books&cdThread=Tx4L2J5WTEQW8X#wasThisHelpful

Here is just a little excerpt of his comments


Alex Imas
The basic idea was that giving countries the ability to mint their own currency to pay off debts would create uncontrollable inflation, which in turn would discourage the extension of credit and, by extension, investment. The diagnosis of the problem is at least somewhat sound, but gold is NOT the solution. The argument for the gold standard is that, because gold is a tangible commodity, governments can't print it. Which is true. But if you make gold freely exchangeable for currency (which is the implication of the gold standard), the result is an international tug of war to accumulate gold reserves, which greatly distorts the market. Ahamed's book does a great job explaining that dynamic.

Ultimately, academics on the left and the right roundly rejected gold. Conservatives moved toward Milton Friedman's idea of a constant, predictably expanding supply of monetary base (money), while liberals prefer discretionary monetary policy by an independent central bank to conduct countercyclical monetary policy (expand credit during downturns, restrict it during booms). The two positions, however, aren't really all that far apart (strict monetarism failed when it was tried, and the only real difference between Friedmanites and New Keynesians over what should have been done in response to the recent downturn is one of degree-- Friedman would have prescribed aggressive, unconventional monetary policy from the Fed (QE3 and QE4), while New Keynesians would see large doses of fiscal stimulus (roughly 3-4 times the size of the one that actually passed) to combat the problem.

I think the gold bug argument comes out of irrational fears of inflation-- they see it everywhere, and think that any inflation is the worst thing ever. Where really, too much inflation is disastrous, while a low, steady rate of inflation (2-5% annually) is very much a good thing in a functioning economy (it encourages extension of credit and discourages hoarding of cash). And, as Paul Volcker's work in the early 1980's shows, an independent central bank is capable of making unpopular decisions to fight inflation, even if it means significant short-term suffering. But that's far from the problem now-- core inflation is well below target, and wage growth is actually falling, so fears of inflation are completely wrongheaded right now. But gold bugs tend not to be persuaded by models or evidence. What they do isn't economics-- it's more of a religion.

.

Just wanted to see what you guys think about his arguments. So far no one on the board can make a sensible rebuttal against him

[Steven Douglas]

Boy, I really want to say that this guy lives in a fantasy world - but then again, he's arguing the status quo, the fantasy nightmare world that is our current reality.

I didn't see an iota of "debunking" here - just revisionism at its finest, full faith in the ever-failing Keynesian religion, and nothing but Keynesian spin in a world where:

* Saving (private capital accumulation and pooling) = Hoarding.
* Perpetual debauching of the currency = without it there would somehow be no economy.
* Credit and Debt = The only means by which anything can be accomplished
* The central bank can make "unpopular" decisions (unpopular to WHO?) to "fight" the inflation it CAUSED by allowing banks to DEBAUCH the currency through fractional reserve lending of fictitious money in the first place!

Oh, thank you, masked man.

Why, what kooks those gold bugs and hoarders of cash are, with their irrational fears of having the value of their currency perpetually siphoned away and redistributed, at their short and long term expense, no less.


The argument for the gold standard is that, because gold is a tangible commodity, governments can't print it. Which is true. But if you make gold freely exchangeable for currency (which is the implication of the gold standard), the result is an international tug of war to accumulate gold reserves, which greatly distorts the market. Ahamed's book does a great job explaining that dynamic.

The most interesting part about this dynamic, I believe, is Thiers law. If you have a lot of countries playing the ever-expanding inflationary credit game with their currency, and only one country with an actual gold standard (with no fiat currency and 100% reserve banking, so that it's not in perpetual default), the good money would drive out the bad, as you would see a flood of gold shift to whichever country acted as the safe haven.

The so-called international tug of war to accumulate gold reserves was in the past, and would still be, no different than the same free market "intra-national" tug of war, even down to the individual level - which would greatly UNdistort the [currently HIGHLY distorted] market.

Furthermore, the "Constant Credit is Necessary For The Economy" mindset, with the equally mindlessly biased, but uncritically thinking assumption that only banks and credit are necessary for business, would be replaced in time by individual accumulation and pooling of capital - something that was happening in great numbers and was greatly feared by bankers prior to the founding of the Fed. You know, the old fashioned way. Rather than STEAL capital by siphoning wealth from everyone's currency in the form of a constant invisible tax in order to finance businesses that you don't own, banks and businesses would have to get back into the mode of actually risking their own assets. No bailouts required or desired either.

As of now, private accumulation of capital, that outmoded and unfashionable thing called SAVINGS, is actively, deliberately and overtly discouraged in order buy more time to keep the inverted inflationary pyramids artificially stable. And some even have the temerity to refer to "savings" (with straight faces no less) as the "hoarding of cash". The very concept of being a "hoarder" of money (read=anyone who works hard and saves, thus driving the value of all other money UP) was an epithet usually reserved for those who made runs on banks in the past; banks that truly were insolvent (inherently so), and really did defraud their depositors whilst debauching the currency via overextending fractional reserve credit.

Enough for now, gotta step out of the Keynesian Cathedral for a moment. Where's the Keynesian Holy Water fountain again? I'm thirsty.

[keh10]

He really doesn't attack gold all that aggressively. I think his main problem is that he doesn't understand the importance of capital savings. Too bad for him (and all of us) is that using artificially low interest rates to expand credit will always lead down a road to disaster.

[Mogambo Guru]

Boy, I really want to say that this guy lives in a fantasy world - but then again, he's arguing the status quo, the fantasy nightmare world that is our current reality.

I didn't see an iota of "debunking" here - just revisionism at its finest, full faith in the ever-failing Keynesian religion, and nothing but Keynesian spin in a world where:

* Saving (private capital accumulation and pooling) = Hoarding.
* Perpetual debauching of the currency = without it there would somehow be no economy.
* Credit and Debt = The only means by which anything can be accomplished
* The central bank can make "unpopular" decisions (unpopular to WHO?) to "fight" the inflation it CAUSED by allowing banks to DEBAUCH the currency through fractional reserve lending of fictitious money in the first place!

Oh, thank you, masked man.

Why, what kooks those gold bugs and hoarders of cash are, with their irrational fears of having the value of their currency perpetually siphoned away and redistributed, at their short and long term expense, no less.



The most interesting part about this dynamic, I believe, is Thiers law. If you have a lot of countries playing the ever-expanding inflationary credit game with their currency, and only one country with an actual gold standard (with no fiat currency and 100% reserve banking, so that it's not in perpetual default), the good money would drive out the bad, as you would see a flood of gold shift to whichever country acted as the safe haven.

The so-called international tug of war to accumulate gold reserves was in the past, and would still be, no different than the same free market "intra-national" tug of war, even down to the individual level - which would greatly UNdistort the [currently HIGHLY distorted] market.

Furthermore, the "Constant Credit is Necessary For The Economy" mindset, with the equally mindlessly biased, but uncritically thinking assumption that only banks and credit are necessary for business, would be replaced in time by individual accumulation and pooling of capital - something that was happening in great numbers and was greatly feared by bankers prior to the founding of the Fed. You know, the old fashioned way. Rather than STEAL capital by siphoning wealth from everyone's currency in the form of a constant invisible tax in order to finance businesses that you don't own, banks and businesses would have to get back into the mode of actually risking their own assets. No bailouts required or desired either.

As of now, private accumulation of capital, that outmoded and unfashionable thing called SAVINGS, is actively, deliberately and overtly discouraged in order buy more time to keep the inverted inflationary pyramids artificially stable. And some even have the temerity to refer to "savings" (with straight faces no less) as the "hoarding of cash". The very concept of being a "hoarder" of money (read=anyone who works hard and saves, thus driving the value of all other money UP) was an epithet usually reserved for those who made runs on banks in the past; banks that truly were insolvent (inherently so), and really did defraud their depositors whilst debauching the currency via overextending fractional reserve credit.

Enough for now, gotta step out of the Keynesian Cathedral for a moment. Where's the Keynesian Holy Water fountain again? I'm thirsty.

^ Someone who gets it! Glad you found this message board, Steven.

[Guitarzan]

Debunked Austrians and the gold standard?

Not only do I not see that, but I don't see where he made a good case for the Keynesians either.

[FreeTraveler]

Once again, let me recommend the videos Fear the Boom and Bust (http://econstories.tv/2010/06/22/fear-the-boom-and-bust/) and Fight of the Century (http://econstories.tv/2011/04/28/fight-of-the-century-music-video/) over at econstories.TV. A thorough economics education in 17 minutes flat, and it's fun besides.

I've even taken to quoting verses from the songs as rebuttal to various Keynesian arguments.

Both links include all the words. Read them. Read them again. There's no better short explanation of the difference between Keynesian and Austrian that I've found anywhere. If someone has one, I'd love to know about it. If you want more detail, the rest of the videos there expand on the lessons in those two.

[Travlyr]

I was on the message boards at Amazon and I read some pretty good arguments from an Keynesian. He has pretty much debunked Austrians, gold standard and everything in between.


http://www.amazon.com/review/R2IB97C8SRVEE7/ref=cm_cd_pg_pg1?ie=UTF8&cdForum=Fx2P0D6G2M91FWQ&cdPage=1&asin=0446549177&store=books&cdThread=Tx4L2J5WTEQW8X#wasThisHelpful

Here is just a little excerpt of his comments


Just wanted to see what you guys think about his arguments. So far no one on the board can make a sensible rebuttal against him

More of the same old tired message, "Let a bunch of privileged elite oligarchs take care of you guys and everything will be alright. Trust us. BTW: We're working on a "New & Improved" global currency for your spending pleasure. You're going to love, love, love it. Introducing ... "The Bancor!"

All austerity aside ... go back to sleep... Everything is OKAY!"

[fisharmor]

If by "very good arguments" you mean "the same arguments that come up every time this is discussed", then sure.


The basic idea was that giving countries the ability to mint their own currency to pay off debts would create uncontrollable inflation, which in turn would discourage the extension of credit and, by extension, investment.
Note what he did here.
Investment is an extension of credit.
The idea that investors might actually save actual physical actual wealth and use that actual physical money to actually give actual money to someone is an alien concept to Keyesians at this point.
Investment isn't possible unless you wave a magic wand and create money out of thin air.
They've been saying this for over two years now, and it has been wrong every time.
But as an infamous man once said, a lie repeated often enough becomes the truth.


The diagnosis of the problem is at least somewhat sound, but gold is NOT the solution. The argument for the gold standard is that, because gold is a tangible commodity, governments can't print it. Which is true. But if you make gold freely exchangeable for currency (which is the implication of the gold standard), the result is an international tug of war to accumulate gold reserves, which greatly distorts the market. Ahamed's book does a great job explaining that dynamic.
And it's important to put out there in these cases that we are not gold bugs. Some of us are, sure. But if you're not, put that on the table as soon as possible.
If you introduce the idea that anything can be money, it destroys further parts of his argument.
Note that he said "make gold freely exchangeable for currency". Again, underhanded. Why is it that gold is not free for us to use as currency?
What is it about gold that makes it impossible for us to transact in it?
The only thing that makes this impossible is the fact that Keynesians have repeated that lie often enough.
That, and the fact that if we were to do that, government couldn't shave our money, meaning they wouldn't have enough money, meaning they would have to stop "services", like shaving our money.


Ultimately, academics on the left and the right roundly rejected gold.
I think he really means to say "academics on the left and the right whom we allow to grace the pages of expensive economics texts roundly reject gold".


Conservatives moved toward Milton Friedman's idea of a constant, predictably expanding supply of monetary base (money), while liberals prefer discretionary monetary policy by an independent central bank to conduct countercyclical monetary policy (expand credit during downturns, restrict it during booms). The two positions, however, aren't really all that far apart (strict monetarism failed when it was tried, and the only real difference between Friedmanites and New Keynesians over what should have been done in response to the recent downturn is one of degree-- Friedman would have prescribed aggressive, unconventional monetary policy from the Fed (QE3 and QE4), while New Keynesians would see large doses of fiscal stimulus (roughly 3-4 times the size of the one that actually passed) to combat the problem.

Little known fact: Milton Friedman's son David Friedman is a past economics professor and a great proponent of anarchocapitalism. He's also a polymath the likes of which his father never was (I was reading articles by David Friedman on medieval Turkish recipes before I even knew anarchocapitalism existed). So given that the apple has fallen pretty far from that tree, I don't see why Milton's arguments ought to carry so much weight.
Of course, I understand precisely why they do: it's because he can be propped up as a "conservative" who supports the things Keynesians push for.


I think the gold bug argument comes out of irrational fears of inflation-- they see it everywhere, and think that any inflation is the worst thing ever.
Yeah, when someone grabs your junk on a crowded train, it's not the same thing as when a rapist gives you AIDS, sure.


Where really, too much inflation is disastrous, while a low, steady rate of inflation (2-5% annually) is very much a good thing in a functioning economy (it encourages extension of credit and discourages hoarding of cash). And, as Paul Volcker's work in the early 1980's shows, an independent central bank is capable of making unpopular decisions to fight inflation, even if it means significant short-term suffering. But that's far from the problem now-- core inflation is well below target, and wage growth is actually falling, so fears of inflation are completely wrongheaded right now. But gold bugs tend not to be persuaded by models or evidence. What they do isn't economics-- it's more of a religion.

Wow, that's so much smoke blown up our asses that it's coming out of our ears.
This guy hasn't had to buy milk recently, I guess.
Or butter.
Or gasoline.
Or copper plumbing.
Or tires.

Look, I'm just not that old, and if I realize that certain things are twice or three times more expensive than they were ten years ago, and if I can draw a direct link between these things and some commodity, this just isn't that hard to follow.
Some things go up in price because the commodity they rely on went up, and other things don't go up in price so quickly because they're either farther down the manufacturing line, or because natural market forces - which tend to push prices down - are counteracting the inflation of the money supply.
I don't see how this is so hard to grasp.

ETA: Had to put this in here....
In 1996, I was earning $7 an hour, and in order to fill up my mom's 1994 Saturn SL1 gas tank, I had to work for about two hours.
Today, my total compensation is about $50 an hour, and in order to fill up my 1991 Saturn SL1 gas tank, I have to work for about two hours.

[hugolp]

The post is really bad, but this catched my eye specially:


while a low, steady rate of inflation (2-5% annually)

2% used to be very high price inflation. Then central banks decided that it had to be the norm, so 2% was the top for "optimal" price inflation.

Now this guy is saying 5% price inflation is low... Let the politicians and bankers rob from everyone that earns a wage as quickly as they can.

[dannno]

I was on the message boards at Amazon and I read some pretty good arguments from an Keynesian. He has pretty much debunked Austrians, gold standard and everything in between.


http://www.amazon.com/review/R2IB97C8SRVEE7/ref=cm_cd_pg_pg1?ie=UTF8&cdForum=Fx2P0D6G2M91FWQ&cdPage=1&asin=0446549177&store=books&cdThread=Tx4L2J5WTEQW8X#wasThisHelpful

Here is just a little excerpt of his comments


Just wanted to see what you guys think about his arguments. So far no one on the board can make a sensible rebuttal against him

Why would you make a name like "Hayekforever" when you don't even understand Austrian economics enough to see through this deranged posting? Anybody who has a basic understanding of Austrian economics can see through these tired arguments.

I'm going to put money on you not actually being a fan of Hayek at all. What a sneakster.

To answer the posting you put up, yes, countries would try and get bigger gold reserves, or at least expand the VALUE of their gold reserves. But the argument is made in a way that insinuates there is not enough gold because the market would then be 'distorted' by these countries trying to accumulate gold. This is complete bologna. What would happen is that as productive countries attempt to expand the value of their gold reserves, the demand and thus the price of gold would go up in all currencies. That means that gold would simply become more valuable, and each country would require less pounds of gold to support their economic output.

[dannno]

And yes, as others have mentioned, a slow steady rate of inflation is NOT optimal!!

A steady rate of deflation, as production increases, actually makes things LESS expensive. Most people's wages will remain steady while their buying power would actually increase as prices fell.

[Bossobass]

Thomas Jefferson said in 1802:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive
the people of all property – until their children wake-up homeless on the continent their fathers conquered.”

This is what's missing from the guy's rant. When a private concern is allowed to control the inflation/recession cycle, they slowly (and more recently, quickly) transfer all real assets from the true investors, manufacturers, inventors, innovators and competition to themselves.

Just look at the past 100 years or so. Walt Disney, Andrew Carnegie (US Steel), Henry Ford, Amadeus Giannini's Bank of Italy (BofA), Sam Walton (Walmart), Nikola Tesla (alternating current), George Westinghouse (Westinghouse Air Brake, Westinghouse Electric, etc), etc., etc. All of these men eventually either lost control of their businesses and/or patents to bankers in contrived "panics" and or "depressions/recessions", just eventually sold out to monopolies controlled by bankers or had their ideas and innovations stolen through illegal activities by the bankers trusts.

All the bankers have is creation of money and control of monetary policy. They invent nothing, they produce nothing, they innovate nothing, yet in their vaults is contained the title deeds to every asset in the country, now including millions of houses (which everyone always said is the last thing banks want), just as Thomas Jefferson predicted.

I've never advocated a strict gold standard. I prefer the term RP uses regularly; sound money. What I definitely have always been against is a fiat currency controlled by a few in total darkness. Anyone who advocates that is daft.

Bosso

[FreeTraveler]

And yes, as others have mentioned, a slow steady rate of inflation is NOT optimal!!

A steady rate of deflation, as production increases, actually makes things LESS expensive. Most people's wages will remain steady while their buying power would actually increase as prices fell.
And when you get the inevitable "deflation will kill us all" argument, simply point to the technology they're communicating on the internet with. The whole industry has been in a "deflationary spiral" since the Apple II. Why didn't Apple go bankrupt decades ago? Why are companies constantly introducing new products when they know the price will fall within days of the introduction and they're going to have to work continually to keep bringing the price down or get eaten by their competition?

[eric_cartman]

one way to debate this is simply to argue in favour of freedom and liberty. explain that people should be able to choose to save and transact in whatever they want. and generally, when people have been given the freedom to choose their own money, they choose gold and silver. if you want to use a fiat money created by central banks and/or governments... the government has to force people to use this currency somehow. so it requires the use of force... which also generally involves the threat of violence from police. so i actually don't advocate a gold standard... i advocate for people's freedom to choose their own money... even though i suspect people would choose gold if they were given the freedom to do so.

but this guy's only real argument is that countries would try to hoard gold because it would be the reserves for their currency... and by extension, would make their currenty stronger. though this is a possibility, countries these days are trying to weaken their currency because they falsely believe that a weak currency is the key to a strong economy.

but i wouldn't want a fiat currency that was backed by gold. i would want to use gold as the currency itself. to the extent that there was paper money... these would simply be paper receipts for a fixed amount of gold. i wouldn't really want governments to hoard gold at all... and there would be no central bank. governments would get gold by collecting taxes from their citizens, and then spend that money on military, courts, jails, etc. if the government collected more in taxes than it spent, then the government would accumulate gold. this would be maybe an "emergency" store of gold in the case of a big disaster. otherwise, it would be the people trying to hoard gold... but the only way that they can do this is to work hard and save money.... and the money they save doesn't just sit under their mattress, it gets loaned out as capital for the economy to grow.

but this fear of "hoarding" gold is really nothing to be afraid of. let's pretend that someone worked really hard to produce lots of goods and services... he started up lots of companies, employed lots of people, and earned lots of money.... and instead of saving his gold in a bank or investing the gold, he hoarded the gold in a big vault. and let's pretend that he never spends his gold, and when he dies, he leaves his gold to his son who just keeps it locked away in the vault. for all intents and purposes, he might as well have sunk all his gold in a ship at the bottom of the ocean. and even if this one guy managed to accumulate half of all the world's gold... the global economy would still function perfectly fine with half the amount of gold. the gold would just be twice as valuable. because it doesn't matter how much gold there is... because the value is just based off of how much is in circulation, in competition to pay for goods and services.

sometimes i hear the ridicilous argument of "there's not enough gold to go back on a gold standard". so i always respond by saying: about 161,000 tons of gold have been mined since the beginning of time... so let's say that this is roughly the total supply of above ground gold... how much gold would you need to go back on a gold standard? 200,000 tons? 900,000 tons? and then you have to explain how the total number of tons of gold available doesn't make a difference, because it's reflected in its value.

[Steven Douglas]

This is what's missing from the guy's rant. When a private concern is allowed to control the inflation/recession cycle, they slowly (and more recently, quickly) transfer all real assets from the true investors, manufacturers, inventors, innovators and competition to themselves.

Yes. Under what other system is collateral required, with title to assets of 'real value' given over, in exchange, not for nothing, as many say, and not "out of thin air", as commonly supposed, but rather in exchange for real value that was siphoned directly from the currency pool itself?

The currency pool is the source of the loan, not the bank. And who owns that currency pool? Effectively, anybody who draws from that well and slops from that trough, of course, and that's a pretty exclusive club. That isn't you, me, or most others who have been locked into it exclusively "by fiat". You don't even "own" your own currency - the so-called "debt notes" that you possess. This goes to a core facet of why private property ownership is even at issue in the first place. If you "own" your currency, then technically you are entitled to a partial title on anything your currency was risked for "on your behalf". But it was not on your behalf. Part of the value of your money was lent out to others, and yet you are not considered a party of interest. It was not "your" money that was being risked.

So the bank can make a private loan, the value of which comes invisibly but directly from all other currency, in exchange for title to real assets, just as surely as if the money for that loan was risked from the bank's own asset column.

Of course, the situation becomes much more absurd, more bizaree, when the government (read=you, ostensibly) does this, because that is when you very much do become a party of interest. In fact, you and your children are the collateral for the loan - the value of which CAME FROM YOU. The value of that loan is first siphoned, as an invisible tax, from you-the-currency-user, and then loaned to you-the-government. This must later be repaid, with interest, via visible taxes...to an entity other than you-the-lender OR you-the-government. And the entity that acted as the middle-man beneficiary was permitted to do this for free, and all because of a monopoly license that it was granted by all those fine people in Congress on the left and the right (each for their own reasons, and their own agendas).

The so-called "lender of last resort" is, and always was, you. Not the Federal Reserve, not the banks. Those are only the names that took yours in vain. You. And everyone else who is perpetually locked into the fiat currency monopoly.

I find it noteworthy that Keynesians who object to a gold standard, or "sound money" standard, are not only objecting to a nationwide replacement standard for fiat currency. Most object even from a standpoint of currency competition - knowing full well that their preferred system will necessarily crash without full mandatory participation - and for good reason.

[wannaberocker]

Why would you make a name like "Hayekforever" when you don't even understand Austrian economics enough to see through this deranged posting? Anybody who has a basic understanding of Austrian economics can see through these tired arguments.

I'm going to put money on you not actually being a fan of Hayek at all. What a sneakster.

To answer the posting you put up, yes, countries would try and get bigger gold reserves, or at least expand the VALUE of their gold reserves. But the argument is made in a way that insinuates there is not enough gold because the market would then be 'distorted' by these countries trying to accumulate gold. This is complete bologna. What would happen is that as productive countries attempt to expand the value of their gold reserves, the demand and thus the price of gold would go up in all currencies. That means that gold would simply become more valuable, and each country would require less pounds of gold to support their economic output.

Haha i was thinking the same thing.

[couvi]

a steady rate of inflation (2-5% annually) is very much a good thing in a functioning economy (it encourages extension of credit and discourages hoarding of cash)

This statement shows a preference for capital from credit (debt) over capital from hoards of cash (savings). If you had capital from hoards of cash, why would you need capital through credit?

Remember that debt is the always-present counterpart to credit. Substitute the word debt for the word credit and there is no difference. So as credit is encouraged, so is debt. The inflationary environment, as it promotes credit, favors the creditors--the banking class.

The banks inflate the currency (they get first use of the money) so it is the banks which benefit from inflationary policy (they are kind enough to sell us the money--the cost is the interest). A great deal of our scarce resources go into the payment of debt. Savings is a great alternative to debt. The resources that were put towards the payment of debt in the inflationary environment can, instead, go towards production in an economy devoted to savings. It is only when savings is greater than debt that we can have the sustainable production which will improve the economy.

[Wesker1982]

I was on the message boards at Amazon and I read some pretty good arguments from an Keynesian. He has pretty much debunked Austrians, gold standard and everything in between.


http://www.amazon.com/review/R2IB97C8SRVEE7/ref=cm_cd_pg_pg1?ie=UTF8&cdForum=Fx2P0D6G2M91FWQ&cdPage=1&asin=0446549177&store=books&cdThread=Tx4L2J5WTEQW8X#wasThisHelpful

Here is just a little excerpt of his comments


Just wanted to see what you guys think about his arguments. So far no one on the board can make a sensible rebuttal against him

Bob Murphy destroys this guy


http://www.youtube.com/watch?v=lPxzE2XM1TY

Who is a respectable and knowledgeable Keynesian. Highly recommended video.

[archangel689]

He's talking about a central bank with a official currency backed by gold, obviously. People like this are always fixated on centralization. The solution is to let the market find the solution.

Fiat money isn't inherently evil...but I will argue that it will ALWAYS become so. People cannot be trusted to manage a fiat dollar, because their self interests will always get in the way (read:corruption). The temptation to print will always be there and it will be used improperly. It has to be handled by a free market solution, that solution might not be gold specifically: The real solution is the legalization of alternative currencies.

I would not be anywhere near as excited about going back to the gold standard as I would a complete legalization of alternative currencies.

We had a gold standard and they still printed more dollars than there was gold at the “standard” fixed rate.



I was on the message boards at Amazon and I read some pretty good arguments from an Keynesian. He has pretty much debunked Austrians, gold standard and everything in between.


http://www.amazon.com/review/R2IB97C8SRVEE7/ref=cm_cd_pg_pg1?ie=UTF8&cdForum=Fx2P0D6G2M91FWQ&cdPage=1&asin=0446549177&store=books&cdThread=Tx4L2J5WTEQW8X#wasThisHelpful

Here is just a little excerpt of his comments


Just wanted to see what you guys think about his arguments. So far no one on the board can make a sensible rebuttal against him

[Gaddafi Duck]

Yeah, the guy is right about the gold standard and people exchanging paper for gold. That's not a flaw of the free market or gold, but a flaw of Keynesian policies! The government undervalued the value of gold, which is why you saw people and nations convert overvalued paper for gold.

The old gold standard had its fair share of flaws. What the nimrod doesn't understand is competing currencies or a gold coin standard, which would come about in a total free market in the money supply which would be completely sustainable. A gold bullion standard, as the one we had with the government, wouldn't work, and certainly not one the government instituted.

It's amazing how people kick and scream pointing out the flaws of the gold standard, but don't realize it was the GOVERNMENT managing the fuckin' thing. Amazing how they say the government is incompetent then turn around and suggest them to do something competent, like having a central bank which we know doesn't work. But then again, they don't understand their arguments are logically inconsistent because they can't think.

[AlexMerced]

Well, there are some comment worth exploring in the OP mainly the one about the gold tug of war, which again which is why I and many austrians are for competition in currencies and private issuance and free banking, because competition allows no particular system to have that much influence over the entirety of economic health.

Although for those who want gold and 100% such a system may arrise or coexist in a system of competing systems.