This video shows a Ron Paul campaign rally at Michigan State University. I think you will be shocked—perhaps you won’t. I was awed. Four thousand showed up.
And then there is Mitt Romney, who gave a major speech on the economy at the Detroit Lions Ford Field:
Always a fly in the ointment. I love Ron Paul–but he is a gold nut. Poison for a modern economy.
It’s muddled thinking like this that will put another economic retard in the White House.
Maybe you could explain why the economy has been in the toilet for so many years while being controlled by people that apparently think the same way as you?
Ben, your opinion of gold is the poison. The modern economy relies on easy credit and debt, not real capital for investment. The problems with the economy would be solved handily by returning us to a gold standard, and it would be sustainable. you would have to give up your crack – debt- addiction, but in the end you’d be better for it.
Amen on that, Zacfoo. Ben is a boom-buster and probably has grand ideas on what the “modern economy” really is.
Ben: Serious question, why *do* you like Ron Paul? He would end the fed (which you’ve already spoken against in terms of an expansionary monetary system), return to a gold backed dollar, and reduce the size of government. You seem anti-all of this.
So what gives? Is he just a charming old fella? How on earth do you identify with him? Is it just his honesty? I’m curious, not baiting.
Yes, Ron Paul is charming, evidently honest, and wants limited government. He wants to shut down oversea military bases, and wipe out the USDA, Commerce, Labor and HUD—all good.
I believe Adam Smith+Market Monetarism=Prosperity.
The Bank of Japan has conducted a 20-year-long experiment with deflation, and it was and is an epic failure.
Under a gold standard, we would have chronic deflation–necessarily, if we had a growing global population and incomes. That is if we are lucky.
The price signal would be constantly distorted, and you would ever be tempted to wait before buying anything or investing in anything. Everything will be cheeper in the future if you just keep your ducats in your pocket. Of course, this leads to perma-rcessions, as we have seen in Japan, where real wages have fallen by 15 percent, industrial output by 20 percent, property value by 80 percent and the stock market down by 75 percent in the last 20 years. The yen has been strong. Whoopee. Minor deflation has been a disaster.
Under market Monetarism, yes the money supply would expand, enough to accommodate real growth and perhaps two percent inflation or a little more. Better to run a little hot. I like prosperity, I like good times, I love material wealth and income. I do not derive psychic income from zero inflation (if even such a goal can be measured in a world a rapidly evolving goods and services).
The important thing is not to regard money or gold as sacred. This is the key failing of gold nuts.
What is sacred is adopting commercial and monetary policies that help real economic growth. Theo-monetarism would be a disaster.
Forget the pompous pettifogging about money and the store of value and inflation is theft etc. Leave that for the currency cultists.
Join me in the Market Monetarist camp!
No thanks.
Currency cultists? Theo-monetarism? Pompous Pettifogging? You’re out there.
I’d rather try something that has worked, i.e. ending manipulation. Not sure you quite get the gist of Adam Smith, or AET. Last time I checked, gold worked, and we haven’t been on it since Nixon.
Inflation for the sake of solving a problem that was caused by interest rate manipulation is theft. You can’t argue that. You punish the people who made good decisions in bad times. It’s reverse evolution, you’re rescuing the mistake-makers by socializing the risk of bad decision-making.
Quote from Benjamin Cole: “The price signal would be constantly distorted, …”
LOL!
All we need are a new set of priests waving a different kind of incense. “Run a little hot …”? What does that even mean?
What is “sacred” is reality. Making things up and creating currency out of nothing is not reality. It’s an illusion to benefit some over others.
Drop the cup and step away from the Kool-aid.
Matt-
What has more virtue–borrowing to build a business, or buy a home, or to buy a T-bill or keep a wad of cash under the mattress?
People who borrow for productive purposes are more virtuous than rentiers, in my book. people who keep wads of cash around deserve to lose some of their savings to inflation every year. Keep a gold coin out of circulation, as David Hume noted….
Meanwhile, bond buyers took a risk, just like equity buyers, or guys starting up a business with borrowed money.
Gold has never really worked, and was manipulated in the Great Depression anyway. Milton Friedman gave credit to the gold standard for helping usher in the Great Depression. I will pass on gold.
Why not a silver standard? Why is gold always the cult favorite?
I am a pragmatist. I like what works. The USA economy boomed from 1982 to 2008, all the while running inflation in the 2 percent to 6 percent range. In the same time frame the Japan economy shrank, running minor deflation.
I will take 1982 to 2008 any time. What a great period.
I like profits, I like wealth, I like boom times I like to let the good times roll.
Hewing to an artificial subjective federal nominal index of the purchasing power of a dollar—at the cost of real output? Not so much. Screw inflation, I really don’t care if we get boom times.
How can you borrow something that isn’t there? Until somebody saves something, there is nothing to borrow. It’s all fiction.
It’s nice you have the wherewithal to decide that all savers should be punished for their conservative spending, because somehow saving is not “virtuous”.
You keep barking up the same tree – manipulating the money supply to spawn boom times. That’s crap. It leads to bust times.
Why not silver? Why not, I think we’ve had silver backed currency, too. There’s just more of it. Not understanding why gold backed dollars makes sense is not a good enough reason to criticize it.
Here’s what I know about gold:
1. it’s been used for thousands of years as both currency and commodity
2. it has real market value, gains value when currencies devalue, and it has a far more stable value in trading than paper money
3. there’s a limited supply of it (both in use, and in the ground)
4. less and less of it becomes newly available each year
5. people want it
What I know about our printed money:
1. it’s easily manipulable
2. if we’re not backing it with anything, just print three $1 Trillion dollar notes and pay off the debt (so what? nobody will loan anything to us for a while? pfff…)
3. How much value does a piece of 75% cotton 25% paper actually have, other than what a given government says it’s worth?
4. People don’t want it
Wow, just wow. How hard is it to see that Gold would stabilize the economy and the magic fiat dollar has us who know’w where. Good Points Matt
What Paul actually wishes to do, as he has said many times, is simply to make gold and silver legal tender as called for in the Constitution, as well as to remove the taxes on these metals. He has called this “going forward to a new gold standard” to make it clear that this is not the same thing as going “back to the gold standard.” The reason he wants gold and silver to be made legal tender is because he likes the idea of competing currencies and opposes monopoly money. He wants us in the marketplace to be able to decide what money we use, rather than government imposing its choice on us. And, he is confident that if allowed the choice, it is natural that the market will choose money backed by “hard assets” such as gold and silver. As it stands now, fiat currency issued by the Federal Reserve has the special privilege of being “legal tender.” This, and the tax penalty on buying and selling gold, enforces a near monopoly on money in the U.S. to the effect that nearly all transactions are conducted with fiat Federal Reserve notes. If gold and silver were given legal tender status, and the taxes on them removed, currencies backed by these metals, as well as the metals themselves, would have a much greater chance at successfully competing with fiat Federal Reserve notes. The Federal Reserve might be an issuer of gold-backed paper (prior to the creation of the Fed, currency was commissioned to be printed by other banks), but that it is not even necessary. As Paul points out, these could be issued by the private sector. In fact, they already are being issued, but as pointed out above, it is difficult for them to get a foothold due to special legal privilege for fiat currency. Examples of privately-issued gold-backed money in limited use today include E-gold (http://www.e-gold.com) and the Liberty Dollar. Paul has said that he does not want to abolish the Federal Reserve overnight because it would cause massive economic disruption. Presumably, the Fed would be abolished only after the the masses converted to sound money. If that occurs, then the Fed would have already become irrelevant anyway, so doing away with it would be a non-event.
So, contrary to what you may have heard, Paul does not want to “go back on the gold standard.” He simply supports abiding by the Constitution and making gold and silver legal tender so that sound money can compete on a level playing field. Paul’s advocacy of gold-backed currency, “sound money,” or “hard money” is not the same thing as supporting a “return to the gold standard.” He does not want to return to the price fixing arrangement of the nineteenth and early twentieth centuries – as much as his detractors would like to claim. Moreover, Paul does not seek an immediate end to fiat currency, but a gradual conversion. For the near and intermediate term the Fed would continue printing money, and if anyone wanted to continue using fiat Federal Reserve notes they would have that choice. Others may choose gold-backed money. Who would have a problem with people having this choice? Spend-happy politicians, political entrepreneurs, and power-hungry bureaucrats, that’s who. If the masses eventually chose sound money over fiat money, government would no longer be able to rely on the Federal Reserve to monetize the debt and “print money” in order to accommodate wasteful spending and grow the Federal government like a cancer. Ronald Reagan said, “As government expands, liberty contracts.” Paul strongly believes that making gold and silver legal tender is crucial to limit the ability of government to grow and therefore to allow liberty to prevail.