We've found a new piece to add to the Hall of Shame. Emerging Money must have been paying close attention to Bridget, stating that Ron Paul's call for a return to a gold standard is wrong because it is only the banking of governments that gives gold any value.
Congressman and presidential candiate Dr. Ron Paul has spent most of his career advocating a return to the gold standard. He feels that replacing the yellow metal with paper is the source of many economic woes that returning to gold could fix. There's just one problem with his plan: he's wrong.
He's wrong because gold has almost no value except as an investment. While about half of the world's silver is used in industry, well over 90% of gold is only for investment purposes. In that regard, it is no better than paper money.
A currency is whatever is accepted as a medium of exchange. It can be paper money or gold. For it to be accepted, the recipient has to be assured that it has the desired value for the good being exchanged. For paper money, that comes from the imprimatur of the issuing government.
That is just as true for gold. It is only the backing of governments that gives gold any value. And as University of Chicago economist Richard Thaler, remarked in a recent New York Times article , "Why tie to gold? Why not 1982 Bordeaux?"
Gold also has more storage and transportation costs than our present currency, which mostly exists as numbers in computers. To defend his call for the gold standard, Dr. Paul says gold does not have to be transferred in exchanges in its physical form: it can be done electronically or in paper certificates.
We already have a way of performing that kind of exchange. It's called money.
Insane drivel found here
Perhaps we need to start voting for the most insanely idiotic hit pieces on gold published by the MSM.
13 comments:
These morons also seem to forget that gold is a very rare metal which is also why it holds value unlike paper. Plus the process o mine and refine the metal and it's limited supply I mean cmon really. Lets use some common sense here..
SilverSpiff
All these arguments against the value of gold are fine as long as the present system still works and the elites goals can be achieved using our worthless paper money. It won't be long before we reach system reset time. Something tells me that gold will be part of that program.
"It is only the backing of governments that gives gold any value."
Doo-doo of the Sun? Tears of the Moon? No Value?
Wait til the Annunaki get back here. If you bring them a golden offering, no harm will come to your household. That's enough value for most people.
Gold and silver are money in the same way that corn is food and wood is heating fuel. Gold and silver have the physical properties of money, therefore they are money. Much of gold's value is that it is one of the few things on earth that is naturally and almost uniquely well suited to be a medium of indirect exchange. Saying that without government backing gold is the same as paper money is ludicrous... paper is not durable, divisible, valuable, or rare. Gold is all of these things irrespective of a government or any other human institution.
It was a RED HERRING for purposes of distraction. Give it the attention it merits.NONE.
Gold succeeds as the ultimate money because the majority of humans agree on it's worth, not because governments grant it legitimacy.
It's amazing (or not) how prevelant these FUD hit pieces are becoming. I think it's a good thing keeping them corralled in the Hall.
"which mostly exists as numbers in computers."
Here everyone grab these numbers on this web-server: $1,000,000,000,000,000,000,000,000,000...
You're all RICH now! :-)
Numbers in computer systems can go POOF! Gone! Bye Bye.
Like in EMP, bugs, virus attacks, natural and man-made disasters. Yes financial institutions have backup systems, but these are not infallible. While gold on the other hand...
I guess that's why every country on earth is scrambling to accumulate as much gold as they can get their hands on.
And I just use it to line the bottom of a bird cage.
And the winner of the hall of shame award is.......Emerging money!
Keep stackin!
Crazy Canuck
This is a quote from John Maynard "The Man" Keynes' book "On the Consequences of the Peace":
“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”
“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
So, since ALL of TPTB are "Keynesians", it should be obvious that they are doing nothing but following their "Dad's" directions. To the letter.
How ridiculous a statement is this?
It looks like quite a few people here have spent their hard earned Dollars on Gold. LOL. You guys. I'm not going to accept Gold as payment unless I can exchange it for a currency. Otherwise, I would rather trade for something that actually commands value instead of price. Sure, I think Gold is a good financial play if everything goes good, but the Gold bugs have it backwards with their apocalypto thinking.
Here is an example. I live in the desert lets say. A person with a pound of Gold arrives at my living quarters and is dieing of thirst. This person knows how to get Gold but little else. Ironically, I don't care. I know how to get water, food, and shelter. I tell this person that I will give them some water, but that pound of metal they have is nearly useless to me since I cant do any actual work with it, and not only that, I could prospect plenty of it myself if I wanted to assuming other people do not have third parties like governments to protect their property rights. Anyways, this person will keep their Gold and work for me since after all their Gold has no actual value out side of a trace component of advanced technology and as a frivolous decoration.
I am a precious metals bug btw, but I'm betting that people will continue to be mostly moronic since they have a long history of it. My desire to put effort into Gold acquisition is solely dependent in the short run on people's idiocy. Otherwise, the price of Gold would be very low since we have several hundred years worth in stock pile for the whole world population. Gold only has truely high value during scarcity transition stages. At this point, the only valid transition point for giving Gold real value is for the entire world population to be living like a middle class American while there is literally thousands and thousands of people working to colonize and study space. This value would only exist for a maybe 1-3 decades until space resource acquisition is realized upon which the value of Gold will be very low.
Real value comes from necessity, price does not. Otherwise you are drinking someone's KoolAide. If Gold really had any long term substantial value, than why won't you pay me $100k an ounce. You won't because the price of Gold is solely dependent on 98% of buyers expecting to resell at a higher price.
Inflation, btw, is solely a psychological phenomenon that arises from jockeying in the social hierarchy. If people really want to end inflation, than the whole group will stop trying to 1up everyone else. They will stop trying to dominate others. They will stop bitching about how others do not deserve wealth.
From "Monetary Madhouse" at Silver Investor, April 2005---
“The Constitution of the United States, in forbidding the States to make anything but gold and silver coin a legal tender for the payment of debts, seems to define money, and to express the will of the people to make a distinction between money and the promise of it. Paper money cannot be as good as coin as a legal tender for deferred payments, unless it can be made absolutely certain that it can be converted into as much coin at the maturity of the debt as it passed for at the inception. And it is equally true that on no other condition can it as well perform the function of coin as a storehouse of purchasing power. The proper material for money is determined by the nature of things, a law higher than any government.”---“The Relations of Debt and Money,” North American Review, May 1877, pages 421-422, 431, article by Elizur Wright (1804-1885) who developed actuarial tables and is known as the “father of life insurance.”
“The ancient and hideous spectre of fiat money” (North American Review, June 1892, page 669).
“The immense chasm between real money and this fictitious paper representative.” (The Century Magazine, letter, February 1884, page 630).
“Spain and Italy, now wallowing in the mire of depreciated paper” (North American Review, October 1897, page 552).
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