Republican Primaries (3 Viewers)

[funkshen]

Yes but they have some sort of chance to regain their former glory if they reign in their spending and fix up their debt and blah blah blah. Wouldn't a gold standard weaken them to a point that they can't control?

not necessarily. it's entirely a thought experiment. and it depends what kind of gold standard anyone means (is it a system with notes 100% backed by a fixed amount of gold, or less?). its more likely to be a mixed metal standard anyways considering gold and silver prices behave differently to economic conditions, or a basket of goods (far more likely since any gold standard will involve an internationally negotiated regime and the IMF loves commodity baskets). also it wouldn't result in regained glory. the glory of the united states was built on the back of non-gold standard (bretton woods wasn't a gold standard)

it could be beneficial in that it would contribute to price stability, restore confidence in both domestic and foreign investors, discourage fiscal profligacy (and ipso facto waging war around the world)

it could be harmful in that politicians have never been able to manage a gold standard system adequately, it is a terrible idea during debt deflation, many of profound opinion think it might result in worse outcomes. it can also be argued that the behaviour of commodity prices in the last 20-30 years indicate that a gold standard would have made this period a lot worse (compared to the 19th century when it made a fair bit of sense).

its pretty likely to have massive negative repercussions in the short and medium term for politicians and average joes, so yeah, its unlikely. if you think a gold standard is imminent, buy all the gold you can considering, in light of this, it is currently grotesquely undervalue. this is a disadvantage in itself as there would be massive price level shocks - it might be like a meteor hitting earth. after a while the dust would settle, but the dinosaurs would be extinct. the idea of a gold standard is pretty dumb, there are better ideas out there like robert hall's 'ANCAP Standard' (ammonium nitrate, aluminium and plywood). an indication of the unlikely implementation of the gold standard is that ron paul's position is to legalise competing currencies, not institute a gold standard.

 

[SylviaB]

It's hard to say something radical when the motivation behind it is an attempt to adhere to the constitution

Yeah those founding fathers were a bunch of hacks

It's dumb because it wouldn't actually doing anything purposeful.

hahahahah (hint: bretton-woods was ended in 1971)

(not to imply I necessarily support a gold standard though)

 

[Garygaz]

gingrichs ex-wife is doing an interview friday night american time on their time together. also talking about how he asked her for an open relationship and shit like that

 

[SylviaB]

Gringrich is surging in the polls because in the South Carolina debate, he said poor black kids should learn the value of work by being janitors... He got a standing ovation. lol. Moments like this makes me realise how ignorant people can be.

Yeah we need to give them scholarships to study "Black Studies" at a community college instead, that is what will *really* help them.

 

[Aquawhite]

Perry dropped out, giving support to Gingrich

I'm not sure what to make of it; if it topples Romney then I might be pleased since I don't agree with a few things Romney stands for. Why do Americans not support Paul? It saddens me to not see more support for him.

 

[funkshen]

Yeah those founding fathers were a bunch of hacks





hahahahah (hint: bretton-woods was ended in 1971)

(not to imply I necessarily support a gold standard though)

 

[Lolsmith]

not necessarily. it's entirely a thought experiment. and it depends what kind of gold standard anyone means (is it a system with notes 100% backed by a fixed amount of gold, or less?). its more likely to be a mixed metal standard anyways considering gold and silver prices behave differently to economic conditions, or a basket of goods (far more likely since any gold standard will involve an internationally negotiated regime and the IMF loves commodity baskets). also it wouldn't result in regained glory. the glory of the united states was built on the back of non-gold standard (bretton woods wasn't a gold standard)

it could be beneficial in that it would contribute to price stability, restore confidence in both domestic and foreign investors, discourage fiscal profligacy (and ipso facto waging war around the world)

it could be harmful in that politicians have never been able to manage a gold standard system adequately, it is a terrible idea during debt deflation, many of profound opinion think it might result in worse outcomes. it can also be argued that the behaviour of commodity prices in the last 20-30 years indicate that a gold standard would have made this period a lot worse (compared to the 19th century when it made a fair bit of sense).

its pretty likely to have massive negative repercussions in the short and medium term for politicians and average joes, so yeah, its unlikely. if you think a gold standard is imminent, buy all the gold you can considering, in light of this, it is currently grotesquely undervalue. this is a disadvantage in itself as there would be massive price level shocks - it might be like a meteor hitting earth. after a while the dust would settle, but the dinosaurs would be extinct. the idea of a gold standard is pretty dumb, there are better ideas out there like robert hall's 'ANCAP Standard' (ammonium nitrate, aluminium and plywood). an indication of the unlikely implementation of the gold standard is that ron paul's position is to legalise competing currencies, not institute a gold standard.

What I was trying to say was why would a politician want to revert from fiat currency to a gold standard when they can have more control over fiat currency and when arguably the regression (I guess) to a gold standard wouldn't help anyone.

However now after reading your response my question wasn't correct in its premise

 

[funkshen]

politicians have more control over a gold standard bro

 

[Lolsmith]

educate me

 

[Garygaz]

the banks can print as much money as they want, it won't cause inflation as long as it never ends up in the middle/lower classes hands. all the money is circulating amongst institutions and the upper class.

 

[funkshen]

educate me

some argue that the gold standard is a 'policy straight jacket'. this is demonstrably false. politicians have always reserved the right to suspend convertibility, alter the rates of convertibility, confiscate gold, and accumulate huge debts. well, the gold standard didn't stop queen anne pissing away the fortune of scotland (arguably due to the advice and consultation of self interested financiers like william paterson) or the arguably similar situation of latin america, asia and russia and their respective currency crises (the result of pegging their currencies to an extraneous object e.g. the US)

when nixon suspended convertibility in 1971 and ended the bretton woods system it wasn't because he had a penchant for fiat money, it's because the solution to the situation, if maintaining the bretton woods system, was for the US to cut spending and massively raise interest rates and fucking over The Average Joe. systems of fiat or gold money remain the confluence of government and banking/financial interests. the elimination of such is the linchpin of a 'competing currencies' system.

the banks can print as much money as they want, it won't cause inflation as long as it never ends up in the middle/lower classes hands. all the money is circulating amongst institutions and the upper class.

what no they can't, the banks don't 'print' any money at all
and no it isn't, the money isn't circulating at all
but HYPERINFLATION IS JUST AROUND THE CORNER ZIMWEIMARWE BUY GOLD NOW NOW NOW

 

[Garygaz]

you know i meant central banks, right?

yes the money is circulating, it goes through the bond markets, through institutions and governments accounts without actually effectively moving into the broader economy

 

[funkshen]

you know i meant central banks, right?

yes the money is circulating, it goes through the bond markets, through institutions and governments accounts without actually effectively moving into the broader economy

oh i see what you mean. i thought you meant the upper class as in rich people holding on to cash
but i would argue that the money isn't circulating that much either. so much of it is just sitting as excess reserves accruing the same interest as required reserves. the demand for cash is huge due to debt deflation

that money (QE money) is NOT circulating

but your point still remains that there won't be inflation if too much money isn't chasing not enough goods. the velocity of money is fucked and no republican primary candidate is gonna fix that

 

[Lolsmith]

some argue that the gold standard is a 'policy straight jacket'. this is demonstrably false. politicians have always reserved the right to suspend convertibility, alter the rates of convertibility, confiscate gold, and accumulate huge debts. well, the gold standard didn't stop queen anne pissing away the fortune of scotland (arguably due to the advice and consultation of self interested financiers like william paterson) or the arguably similar situation of latin america, asia and russia and their respective currency crises (the result of pegging their currencies to an extraneous object e.g. the US)

when nixon suspended convertibility in 1971 and ended the bretton woods system it wasn't because he had a penchant for fiat money, it's because the solution to the situation, if maintaining the bretton woods system, was for the US to cut spending and massively raise interest rates and fucking over The Average Joe. systems of fiat or gold money remain the confluence of government and banking/financial interests. the elimination of such is the linchpin of a 'competing currencies' system.

cheers

 

[Garygaz]

oh i see what you mean. i thought you meant the upper class as in rich people holding on to cash
but i would argue that the money isn't circulating that much either. so much of it is just sitting as excess reserves accruing the same interest as required reserves. the demand for cash is huge due to debt deflation

that money (QE money) is NOT circulating

but your point still remains that there won't be inflation if too much money isn't chasing not enough goods. the velocity of money is fucked and no republican primary candidate is gonna fix that

well that was the theory that everyone had and rushed into the gold market, money printing = gold price increases

but even though the US has been printing manically and the EU too (discreetly) you haven't seen the inflation that your standard textbook model would predict. it'd almost be interesting to see the US/EU/Japan just print a fuck tonne of money, buy each others toxic bonds and unilaterally take hair cuts of between 30-50% on them. the toxic bonds go from the market, the banks recover some of their capital investment (enough to prevent bankruptcy), bonds are now held by central banks, and they can do whatever they want. the money never reaches the general population and inflation never occurs. haha i'm trying to get my head around this. it's like that debt exercise you do in economics where a black smith pays a butcher 5 dollars, he pays the 5 dollars he owes to the baker, the baker pays the library and the library pays the blacksmith and all the debt disappears

 

[funkshen]

well that was the theory that everyone had and rushed into the gold market, money printing = gold price increases

but even though the US has been printing manically and the EU too (discreetly) you haven't seen the inflation that your standard textbook model would predict. it'd almost be interesting to see the US/EU/Japan just print a fuck tonne of money, buy each others toxic bonds and unilaterally take hair cuts of between 30-50% on them. the toxic bonds go from the market, the banks recover some of their capital investment (enough to prevent bankruptcy), bonds are now held by central banks, and they can do whatever they want. the money never reaches the general population and inflation never occurs. haha i'm trying to get my head around this. it's like that debt exercise you do in economics where a black smith pays a butcher 5 dollars, he pays the 5 dollars he owes to the baker, the baker pays the library and the library pays the blacksmith and all the debt disappears

what bonds are you talking about? EU sovereign debt, toxic MBSs (and others?), and japanese sovereign debt?

the ECB has just started QE too if you didn't notice (they're not being upfront about it)

in this situation it is quite clear the transmission mechanism to inflation is broken (velocity of money has plummeted)

 

[Garygaz]

starting with eu sovereign debt, i think. mass movement off debt ownership from commercial/inv banks to central banks

 

[funkshen]

starting with eu sovereign debt, i think. mass movement off debt ownership from commercial/inv banks to central banks

but at what point do they start lending again

everyone is deleveraging.

 

[inJust]

So Perry is endorsing Newt, and I would speculate that Herman Cain and Sarah Palin's going to do so as well... so who said that Newt is "fizzling" again? Trust me, the establishment is behind Newt, so it's gonna be a fight between Ron Paul, Mitt Romney and Newt Gringrich. You guys ruled Newt out too early. The Republican primaries are a rollercoaster ride. But if one candidate has the support of the establishment that can't fizzle out. If anything, Santorum will.

 

[Lentern]

Yeah those founding fathers were a bunch of hacks





hahahahah (hint: bretton-woods was ended in 1971)

(not to imply I necessarily support a gold standard though)

Mate come back when your ready to explain why you don't agree with repealing "Don't ask, Don't Tell"