Money Masters vs. Ron's Gold Standard

[mconder]

I just got though watching the entire 3 1/2 hour video "Money Masters" which presents the idea that going to a gold standard would be bad for America. The suggestion in Money Masters is that we re-monitize today's privately issued Federal Reserve Notes into something similar to Lincoln's green back and let Congress controll the fait rather than the international bankers. This seems somewhat at odds with the hard money people like Ron Paul. Anyone care to comment?

[goldenequity]

Money Masters
For those who have never view the film,
it can be view streaming HERE (http://ronpaulaudio.com/rpaudio/TheMoneyMasters.wvx)

[Avalon]

Sure. The problem with what is suggested in Money Masters is that without an asset backed currency, public spending is unrestrained. If government has to physically acquire the money it needs to spend instead of print it, it will be more efficient and held to task more by the people whom it is taken from (usually by force).

Don't get me wrong, public fiat money would be much better than what we currently have because a portion of every newly created dollar would not go to the banks that create it (via interest or securities). This also removes the incentive of those banks to create that money (regardless of utility) and to pressure congressmen to spend (which allows for new fractionalized creation).

I personally think that the flaws of public fiat would mostly be overcome by drastically reducing federal spending. If the federal government was restrained to only the tasks laid out in the constitution, as intended, there wouldn't be much of a problem. However, this would not stop congress from inefficiently spending what they do have control over...making our own great walls, massive missile defense systems surrounding the US, and various federal research, training, and other military facilities (not coincidentally) in every congressional district.

I suggest a system where the public money supply is increased at a set rate (like 1-2% per annum) that coincides with variables like CPI, population growth, etc and the rest of government expenditures must be paid via revenues from that year or the next. No government issued bonds with greater than 2 year terms except in the time of war (war meaning our nation is under attack by another nation).

I also wouldn't be opposed to a hard money system. That would probably be ideal in a society where population or economic activity is declining (via regulation/conservation etc).

[Bradley in DC]

I just got though watching the entire 3 1/2 hour video "Money Masters" which presents the idea that going to a gold standard would be bad for America. The suggestion in Money Masters is that we re-monitize today's privately issued Federal Reserve Notes into something similar to Lincoln's green back and let Congress controll the fait rather than the international bankers. This seems somewhat at odds with the hard money people like Ron Paul. Anyone care to comment?

Ok, let me preface this with the confession that I saw video once nearly ten years ago. Only once because I was not that impressed with it (I think I still have a copy, now that I think of it). First of all there are different types or variations on the gold standard. Dr. Paul does not want to go "back" to a previous gold standard but to incorporate all of the changes in technologies, etc.

The main point is that that video takes things out of context to imply the opposite of the reality, from memory. Jefferson opposed the first National Bank of the United States and government monopolicy of currency issue in favor of private banks issuing their own (gold-backed) curreny notes. Quotations about "the bankers" did not make a distinction between the central bankers and his ideal--not only that, but distort his stances.

No libertarian that I know of interested in this issue supports Lincoln National Banking Act and similiar policies. Lincoln justified having national currency notes to combat counterfeiting (which was a problem) but the percent of counterfeit notes jumped higher with the single national currency! The history of central banking is a history of war finance. Better for us to continue to oppose the Biddles of the world.

[xcalybur]

Well, you could do a hard money system with a 1-2% increase in Gold per year.

[LibertyEagle]

Here's something for you:

http://www.freedom-force.org/freedomcontent.cfm?fuseaction=money_as_debt&refpage=issues
http://www.freedom-force.org/freedomcontent.cfm?fuseaction=meetstill&refpage=issues

Note:
G. Edward Griffin wrote The Creature from Jekyll Island : A Second Look at the Federal Reserve. It's a very good book on the Federal Reserve.

http://tinyurl.com/yuqy3d


In this article by Ron, he suggested a number of books that he thought all Americans should read:
http://www.lewrockwell.com/paul/paul311.html

I found most in pdf on the net.

Two of them are available from the Foundation for Economic Education (FEE). I really like this organization. All kinds of good stuff on this site.
http://www.fee.org/library/


Economics in One Lesson

http://www.fee.org/pdf/books/Economics_in_one_lesson.pdf


The Law

http://www.fee.org/pdf/books/The_Law.pdf


I haven't found the entire book, The Road to Serfdom, on-line, but I have found this cartoon, summarizing it.
http://www.mises.org/TRTS.htm


What has Government Done to our Money

http://www.mises.org/rothbard/rothmoney.pdf
or
http://www.mises.org/money.asp


Economics for Real People

http://www.mises.org/books/econforrealpeople.pdf

[foofighter20x]

Fiat currency has got to go. A fiat currency just gives government an excuse to print it's own fake money and tax you in a manner that you hardly realize or notice until it's too late.

We need to go back to a single-commidity-based money, such as gold or silver--I prefer silver in all honesty.

Government must be left the power to criminalize and prosecute counterfeiters, but their power to coin and print money must be repealed and the money supply returned to the free market. Also, our banking laws need to be restructured to get rid of all the bad laws they now exploit for profit.

Rothbard's What Has Government Done to Our Money? (http://www.mises.org/media.aspx?action=category&ID=92)

[Mattsa]

Fiat currency has got to go. A fiat currency just gives government an excuse to print it's own fake money and tax you in a manner that you hardly realize or notice until it's too late.

We need to go back to a single-commidity-based money, such as gold or silver--I prefer silver in all honesty.

Government must be left the power to criminalize and prosecute counterfeiters, but their power to coin and print money must be repealed and the money supply returned to the free market. Also, our banking laws need to be restructured to get rid of all the bad laws they now exploit for profit.

Rothbard's What Has Government Done to Our Money? (http://www.mises.org/media.aspx?action=category&ID=92)

Whatever system is adopted, it will be vunerable to fraud

There's no reason why a fiat currency cannot work other than overcoming the temptation of banks to print more of the stuff than they should

All previous gold standards have failed for the same reason..........GREED

Bretton Woods failed because the US government and the banking system broke the rules. When creditors demanded payment of debt in gold, the system broke down

You can't beat human nature I'm afraid!

Two interesting fiat currencies worth reading about are:

Talley sticks.

This form of currency, basically wooden sticks lasted for hundreds of years in England

The Banking system in Panama is another very interesting fiat currency system which actually uses the American Fed Reserve notes as currency. The difference is, there is a real free market banking system with a 100% reserve. If too many FRNs come into the economy from abroad, they are immediately shipped offshore to prevent inflation. The result is that Panama has achieved an average inflation rate of around 1% for over 30 years.......with the US Dollar!!! Interesting stuff huh!!!!

Another example are the Channel Islands in the UK. The Bank of Jersey uses publically created debt free money for all public expenditure. There is no Capital gains tax, no inheritance tax, lower income taxes, lower duties on cigarettes alcohol and petrol and much lower local taxation levied against the people

So a gold or silver backed currency isn't necessary if the banking system is properly regulated and public expenditure is funded with debt free money according to what the economy can afford, ie, publically created money can only be created relative to the expected increace in economic activity. If the economy doesn't grow according to expectations, some money must be removed from circulation to control inflation. The Channel Islands are among the most prosperous in the world despite having virtually no manufacturing base.

The thing to remember is the system is only as good as the people charged with administering it.

[Original_Intent]

I am against a gold standard for primarily one reason: The bankers have used their 90 years of controlling the markets to buy up most of the gold. Going to a gold standard would in essence just make them richer as they conrol so much of the commodity.

A silver or other commodity based currency would be great. I also think that a fiat currency could work, but would be a lot more open to corruption.

[LibertyEagle]

Two interesting fiat currencies worth reading about are:

Talley sticks.

This form of currency, basically wooden sticks lasted for hundreds of years in England




"The solution to fiat money is not MORE fiat money. It is REAL money based on tangible assets, and none has yet been discovered that serves as well as gold or silver. The assertion in the videos that wooden sticks were successfully used in England as money is grossly misleading. Tally sticks were occasionally used like government-issued script that could be applied to the payment of taxes, but at no time in history were they ever used as a medium of exchange for substantial economic transactions. To propose that we now can live with fiat money based on that myth is a non-solution of the highest order."

http://www.freedom-force.org/freedomcontent.cfm?fuseaction=meetstill&refpage=issues

[foofighter20x]

Whatever system is adopted, it will be vunerable to fraud

There's no reason why a fiat currency cannot work other than overcoming the temptation of banks to print more of the stuff than they should

All previous gold standards have failed for the same reason..........GREED
...
The thing to remember is the system is only as good as the people charged with administering it.

Why have just one entity administer it when the free market would be so much more efficient and will mitigate fraud as much as possible?

All previous standards failed only because governments intentionally and fraudulently interfered with its proper functioning. Intervention was the problem, not the standard. Were it left alone, it would have functioned via supply and demand to this very day.

Rothbard makes this perfectly clear if you listen to the audiobook I linked.

[foofighter20x]

Two interesting fiat currencies worth reading about are:

Talley sticks.

This form of currency, basically wooden sticks lasted for hundreds of years in England.

Also, tally sticks were not fiat currency. It was a receipt for deposited gold and thus a gold-backed currency. Read up on this stuff, really. :rolleyes:

[Mattsa]

"The solution to fiat money is not MORE fiat money. It is REAL money based on tangible assets, and none has yet been discovered that serves as well as gold or silver. The assertion in the videos that wooden sticks were successfully used in England as money is grossly misleading. Tally sticks were occasionally used like government-issued script that could be applied to the payment of taxes, but at no time in history were they ever used as a medium of exchange for substantial economic transactions. To propose that we now can live with fiat money based on that myth is a non-solution of the highest order."

http://www.freedom-force.org/freedomcontent.cfm?fuseaction=meetstill&refpage=issues

I wasn't suggesting we readopt talley sticks as a currency

I'm just making an arguement that whatever monetary system is adopted is only as good as the people who control it

A Gold standard would be great if it was run by honest people............

But hey!!!! Honest people are in short supply!

Power corrupts and absolute power corrupts absolutely.........remember?????

We all thought Blair was a great person in 1997!

The Americans thought Bush was a worthy president too

It's very very easy to con uneducated people and I'm afraid we.... the people who understand economics and money....are rare.

It's very very easy to screw people when they are DUMB

How fortunate for rulers people do not THINK - ADOLF HITLER

Remember that!

[Mattsa]

Why have just one entity administer it when the free market would be so much more efficient and will mitigate fraud as much as possible?

All previous standards failed only because governments intentionally and fraudulently interfered with its proper functioning. Intervention was the problem, not the standard. Were it left alone, it would have functioned via supply and demand to this very day.

Rothbard makes this perfectly clear if you listen to the audiobook I linked.

I totally agree with you on the principle of free market banking, be it gold backed or fiat

Central banking is the fiscal equivalent of the antichrist! LOL!

[LibertyEagle]

I totally agree with you on the principle of free market banking, be it gold backed or fiat

Central banking is the fiscal equivalent of the antichrist! LOL!

I don't know about you, Mattsa, but I would prefer my money have some tangible value.

[Mattsa]

I don't know about you, Mattsa, but I would prefer my money have some tangible value.

I agree but I'm not sure such a system is possible

Maybe it could work in the USA but here in the UK we are screwed. Our government sold 1/3 of our gold reserves back in 1997 for $250 oz!!!!!

If there was a return to a gold standard here, it would bankrupt the whole economy. I think we have about 200 tons of gold in reserve in the UK

Whatever, my girlfriend is American, from Oregon and I want to be with her. I'm seriously considering a move to the USA.

The UK is screwed. The totalitarians have already destroyed the freedom and liberty of the British people. We've been asleep at the wheel for decades. The UK will be a third world country in 10 years time

[Man from La Mancha]

I fear Fort Knox is empty it has not been audited since 1953.

[Swmorgan77]

I just got though watching the entire 3 1/2 hour video "Money Masters" which presents the idea that going to a gold standard would be bad for America. The suggestion in Money Masters is that we re-monitize today's privately issued Federal Reserve Notes into something similar to Lincoln's green back and let Congress controll the fait rather than the international bankers. This seems somewhat at odds with the hard money people like Ron Paul. Anyone care to comment?

The money masters is a good historical documentary, but I don't agree entirely with its conclusions.

Certainly a Congress-issued, fiat (unbacked) currency would be BETTER than what we have with the Fed, since it would not be created at interest and it would be being done by the Constituitonally designated channel, but ultimately precious metals backing is better in the long run for preserving buying power.

Check out the free audio book "What has government done to our Money" by Rothbard, where he makes the case for a 100% gold dollar. The book is suprisingly clear and easy to follow:

http://www.mises.org/media.aspx?action=category&ID=92

[Bradley in DC]

I agree but I'm not sure such a system is possible

Maybe it could work in the USA but here in the UK we are screwed. Our government sold 1/3 of our gold reserves back in 1997 for $250 oz!!!!!

If there was a return to a gold standard here, it would bankrupt the whole economy. I think we have about 200 tons of gold in reserve in the UK

I'm beginning to understand Mattsa better now. The UK was part of the group of central banks selling gold before and as part of the Washington Agreement to suppress the price and confuse price signals for the fiat currencies.

Under some variations of the free banking approach, their would be no government ownership of gold reserves. See Kevin Dowd's work on the Scottish free banking history for a better example closer to home.

Also, your government screwed up its re-introduction of the gold standard after WWI by going to the pre-war price level but not allowing domestic (labor) prices to adjust downward (even if unchanged in real terms). Of course, the needed to go off gold again for war finance with WWII anyway.

[Highmesa]

I think the next evolution of money is already here if we can get someone like Ron in office. You can put your money in Digital Currencies like e-gold or Pecunix and it is backed with gold, silver, platinum. In fact, I've seriously considered ditching my bank checking account in favor of one of these backed alternatives.

A couple things need to happen to make it really viable and competitive. One, get rid of the personal income tax so there are no tax implications of holding metals as fiat notes are inflated. Two, stop the federal gov't from going after these alternatives under the guise of "crooks use them anonomously so we're going to shut them down" as is happening now with e-gold. Crooks use all kinds of accounts, credit cards, paypal, real banks.

If those 2 things were to happen, there would be free market alternative to gov't issued currency. I think the demand for tangible paper currency is going to drop drastically over the next decade or so. Heck, my paycheck is direct deposited, I pay all my bills online, and probably only go through maybe $40 worth of actual cash a week - and I could probably cut that significantly. If I could move to one of these digital currencies, I wouldn't even need to hold any FRNs.

I think Dr. Paul has mentioned (don't remember where) that we couldn't go directly to a gold standard right away. The potential for disruption of the money supply would be too great. It was either Friedman or Rothbard tht had a pretty simple way to ditch the fed in favor of gov't issued currency that would erase the federal debt - I'll have to look that up again.

[TruthLiberates]

I agree but I'm not sure such a system is possible

Maybe it could work in the USA but here in the UK we are screwed. Our government sold 1/3 of our gold reserves back in 1997 for $250 oz!!!!!

If there was a return to a gold standard here, it would bankrupt the whole economy. I think we have about 200 tons of gold in reserve in the UK

Whatever, my girlfriend is American, from Oregon and I want to be with her. I'm seriously considering a move to the USA.

The UK is screwed. The totalitarians have already destroyed the freedom and liberty of the British people. We've been asleep at the wheel for decades. The UK will be a third world country in 10 years time

Is it because UK joined the EU?

[GreyBlood]

I myself am a fan of bimetallism. and little gov't intervention. if business put out 10 dollar silver certificates and don't have the silver to back it up, they will go to prison. if they lie about the purity and weight (hence, value) then they will go to prison. other than that, private business can put out their own currency. maybe they could use them for advertising. like "Watch NBC" or Walmart could put out their own money and say, "use our money at our store and get 10% off".

[EvoPro]

This is one thing that confuses me: Does the government finance most it's spending through Fiat printing or borrowing from china? Does printing add to the US debt?

[LibertyEagle]

Yes
Yes
Yes

But printing money does more than that. Every additional dollar that goes into circulation, makes each one already in existence worth less. Hence, inflation.

[Shmuel Spade]

I advocate a complete separation of money and state. Society (and by extension the world) doesn't need the state to provide money any more than it needs it to provide sandwiches, shoes, toothbrushes, buckets, medicine, or anything else.

The solution is to stop listening to the money cranks like the Money Masters folks, and start reading Mises, Rothbard, Hazlitt, Reisman, de Soto, and even dare I say it… Ron Paul.

What Has Government Done to Our Money? (http://www.mises.org/money.asp) is the quintessential book to demonstrate this. Approaching that work is the sine qua non for having any kind of monetary understanding when it comes to making economic sense, and understanding Ron Paul.

[Bradley in DC]

And Hayek, and Dowd, and Shuler, and White, and Selgin, and many others!