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MSNBC’s Dylan Ratigan talks about Ron Paul / Gold Standard




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did I hear that right?

Did he really say that the gold standard caused the great depression? And the other guy responded with ah huh...really?

If my need to be RIGHT is greater than my desire for TRUTH, then I will not recognize it when it arrives ~ Libertybelle

Republicae's picture

Yep....ignorance abounds!

Yep....ignorance abounds!

http://militantjeffersonian.com

"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Perhaps an analogy can help?

I think there is confusion about there being "not enough gold" to have it be used as our money. That's a misunderstanding of what it means to be money. How can there not be enough gold to be used as money if you don't have an actual "value" of gold standardized?

Imagine that the total supply of gold is a 16" diameter pizza. Now, assuming the pizza is a perfect circle, it would have an area of Area = 3.14159 * 64 (which is the radius, 8, squared). So the Area = 201 inches squared. Now, lets chop this pizza into 12 equal pieces; then we can say each piece has an area of 201/12 = 16.75 inches squared. Now, let's keep it simple and give 12 individuals exactly one piece of pizza. Then, each individual holds 16.75 inches squared worth of pizza. Great, right? But wait, pizza isn't "worth" much to people if measured in inches squared; it's food after all. While that measurement can get you an idea of what you are getting, from a nutritional point of view, calories/carbs/proteins/fat are more important! Let's say the pizza was a total of 3000 calories; then 3000/12, each individual with a piece of pizza is carrying 250 calories worth of pizza! Now, how did I do that? I manged to create a number, a "value" of pizza nearly 15 times greater (250 calories vs 16.75 inches squared) even though we are talking about the same exact 16" pizza, divided the same exact way.

The point is, even if you had just 1oz of gold on the whole planet, and you had to divide it between 7 billion people (appropriately and proportionally to their current worth), you could in THEORY do it. Of course, 1oz divided so many times is absolutely tiny, but the theory is still true... It could be done. Now, bring the reality to the forefront; the supply of gold is far far far far greater than 1oz; the truth is; the mathematics could be done to be sure that every American citizen could convert their cash and assets into Gold. It's as "simple" as calculating the total net value of every American, including businesses at a given time, for simplicity, let's say 100 trillion dollars. Then we divide the total supply of gold by 100 trillion, then appropriate the holdings so that any/every person who wishes to convert their 'cash' can do so. If we had a total gold supply of 100 million ounces (I have no idea how low this is compared to the actual supply), then when divided by 100 trillion, the result is .000001 ounces per dollar; meaning that a dollar "coin" would be .000001 ounces of gold. All these numbers are being used for simplicity and for the purpose of illustration; again, I do not know the actual net worth of every American and American business, nor do I know the American supply of gold.

This project, while lengthy and a true undertaking, would be no more "difficult" than sending men to the moon. You need smart people, and most importantly, you need honest people in the positions of power.

I hope that analogy helped.

If I may take a crack at explaining it...

First, say there is 165,000 tonnes of gold in the world. From wikipedia: At $1,600 per ounce, 165,000 tons of gold would have a value of $8.8 trillion.

So, how much gold do the ignorant people think we need? Presumably their reasoning is that we have (let's say) $88 trillion dollars worth of fiat in the world, so we need 10 times as much gold as we've got. The problem with that reasoning is that it assumes that the $/oz is fixed. According to this broken reasoning, if you took all of the dollars in the world and started buying gold, you would run out of gold and end up with lots of dollars still left over.

Anyone who knows anything about supply and demand knows that's not how it works in the real world. In the real world if we were to take all of our dollars and try to buy all of the gold, the price of gold in $ would go up -- a lot.

Of course, you can't actually do it that way if the goal is to completely get rid of the dollars and replace them with gold. That's because if you actually buy gold with dollars, then the person you just bought the gold from now has dollars and you never get rid of the things.

So you instead have to use some trickier solution. One way to do it (not recommended, but easy to understand) would be as follows:
1. The US government (or the world's governments if everyone is switching) starts printing money and buying gold.
2. While doing the above, some key values are monitored: How much gold does the US government have, what is the price ($/oz) for gold, how many dollars are out there.
3. The government stops when gold * price = dollars
Note that due to the government's printing/buying action, the gold held by the government, the price of gold, and the dollars in circulation all increase. You might think it possible that the equation never balances (because dollars just keeps getting bigger so you never have enough gold), but it actually has to eventually balance. The reason for that is that price increases faster than dollars does (because price increases not only in direct and proportional response to more dollars due to dollar debasement, but also due to dwindling supply of gold for purchase). While that alone would be enough to make the equation eventually balance, the fact that the amount of gold held is increasing makes it balance even quicker.
4. Congratulations. You now have "enough" gold. Just lock the fiat at the final price (i.e., switch the fiat to a 100% reserve gold standard, with fiat convertible at the gold-exchange window at the final price). The government(s) now have exactly enough gold that if every last person holding dollars converted them to gold, they would have just enough gold.

Of course, Ron Paul's preferred method, which accomplishes a similar thing, is not the above method, but rather a competing currencies system. In such a system you would see the same dynamic -- the price of gold would rise and the value of fiat would drop until an equilibrium is reached.

Either way, people already holding gold benefit and people currently holding fiat don't make out so well. (I guess that's what they get for being ignorant and holding fiat though. They were going to lose it all through inflation and/or total-dollar-collapse anyways. At least what they have left should be a bit more stable.) And either way the gold mining sector would see a lot of growth (as the new higher price of gold would not just be higher in nominal terms but also in real value terms, so more expensive mines would be justified -- that's a bit of not-so-productive "pay back" for having gone so long off of the gold standard).

are you suggesting Dear Sir, that it is all relative?

and that we can in fact use "lesser" metals to make up the difference?
like mebbe Silver, copper and nickle?
and that the reason for this is to stop people from making it out of thin air?

methinks you might be on to something....

Every time

Every time I hear or read the phrase "Are you suggesting," I think of Chris Wallace and his ridiculous questions to Dr. Paul, like "Are you suggesting that we should take our marching orders from Al-Quada," and "Are you suggestion that heroin use and prostitution are exercises of freedom?" Haha. :)

Anyway, no, my suggestion is simply that the idea of there not being enough gold to use it as the backing of a currency is silly, because there isn't any standard in place. Simply put, I realize the idea of being sure to guarantee conversion of everyone's cash and assets to gold IN THIS AGE, given all of the inflation since the Fed's inception, is somewhat distorted and might seem "pointless," as we'd have to fix the "worth" of gold, as I outlined in my example, at .000001 oz/$. But, the conversion WOULD provide, for the future, a stable currency. The problem is with convincing people that a slow but steady growth in productivity is better than large booms and large busts in continuous cycles.

It seems to me that the $ was based on the Spanish Milled Dollar, which had a specific amount of silver designated to it, I believe 290 grains? If we were to go back to that designation, undoubtedly, a % of CURRENT wealth/value would be lost from people of all classes. I'm not 100% against that or anything, but it would be a hard sell to convince people to accept the medicine now to experience the relief later.

Also, the good Dr's stance on competing currencies, IMO, is the best overall approach to putting pressure on the fed. There is no reason why people shouldn't be able to do business using ANYTHING as currency; minus the obvious, like non-consenting human beings.

Heh. Quite simply, the reason

Heh. Quite simply, the reason there is not enough gold to fund these behemoth governments is the EXACT reason they did away with the gold standard! It reined them in and kept their size small and they could NOT have that..

You are correct in what

You are correct in what you're saying, but you're assuming that lots of people will have lots of long term loans. Have you ever heard of the concept of Capital Formation? ..it's the concept of people and businesses ACTUALLY saving money for future expenditures and planned expansions. It's what responsible individuals do to be able to afford things, and it should be rewarded with the purchasing power of those savings retaining value, or going up in value. Inflation and Fractional Reserve Banking discourage and penalize savers. As a matter of fact, you could say this was one of the prime motivations for the direction those traitorous bastards took us when they pushed for, and enacted the 16th ammendment. They wanted people to come borrow from them.

Confusion reigns.

This discussion on Ratigan amongst the "experts" demonstrates how successful the bankers have been in destroying knowledge of the principles of political economy and monetary science.

They know that something is going on but they cannot even ask the questions that might elucidate some answers. They sense that there is a BIG GAP in their knowledge but they are afraid to admit it to anyone including themselves.

They are stuck on empty and they cannot find the tap to turn the water on. The English author was promoting a book published by the Economist which is the commercial propaganda arm of Chatham House so it is unlikely to throw any light on the subject.

The question that MUST be answered first is What is Money? Once that fundamental question is answered truthfully and clearly then the light will go on and the rest of the discussion will simply fall into place. It is then impossible to be fooled by any macroeconomics mumbo jumbo that tries to tell you that ANYONE whether government or private can actually create money simply by making an entry in a ledger and calling it a deposit.

Fractional reserve banking is linked to that fallacy and should be stopped just as soon as the door is open to the Oval Office and our President takes his seat behind the desk.

"Jesus answered them: 'Truly, truly, I say to you, everyone who commits sin is a slave to sin. The slave does not remain in the house forever; the son remains forever. So if the Son sets you free, you will be free indeed.'" (John 8:34-36)

The Great Depression was not

The Great Depression was not caused by a gold standard it was caused by the Federal Reserve which was subsidizing Great Britain's government and by fractional reserve banking which is actually a lack of a gold standard. This is the crap we're up against. It is so hard for us to win when news channels are reporting false history and passing it off as facts.

The Long Depression of 1873-1896,

which was called "the Great Depression" until the 1930s when the other great depression happened, does seem to have been caused by the demonetization of silver and beginning of the GOLD-ONLY standard. Remember, the VERY FIRST fractional-reserve lenders were goldsmiths who lent out paper notes (gold IOUs) in greater amounts than the gold they actually had. Get rid of fractional-reserve lending first, THEN talk to me about a gold standard.

The Long Depression is a keynesian lie

that was used among other things to justify the creation of the Federal Reserve. There was no such depression, in fact it was a prosperous period.

http://www.youtube.com/watch?v=JeIljifA8Ls&list=FL4wfMRdpM-O...

That lecture, "Why Was the Fed Created" by George Selgin, is the first of the congressional lectures on monetary policy sponsored by Dr. Paul. Selgin clarifies what happened in that so called "Long Depression".

"If ye love wealth better than liberty, the tranquility of servitude than the animated contest of freedom — go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, an

There was no "Long Depression" of 1873-1896

...it never happened.

It is a myth created by ignorant modern economists who assumed that falling prices = depression.

See "The Myth of the Great Depression 1873-1896" by S.B. Saul.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Did i miss the mention

of Ron Paul?

First 10 seconds

First 10 seconds

Isn't the objective competing currency

Ron Paul is about stopping runaway inflation which is what the Fed does best. Inflation is a tax on the middle class that doesn't ever catch up. Inflation is destructive and who doesn't understand this now especially on DP?
Why is gold now $1600+ an ounce, because of inflation and devaluation and destruction of the dollar. Gold was once $35/oz. a century ago.
Gold and Silver and even now Platinum are precious metals and have the word precious attached to it because it is universally accepted around the World.
Very soon with the onset of more and more economics of BRICS and IRAN's oil bourse etc. The US dollar hegemony is now in jeopardy. The Fed is destructive to all middle class.

Our Immoral Monetary System

Has anyone even considered that our current monetary system is immoral? True money is a medium of exchange. It is probably the single most important development in the history of economics.

Consider the barter system. No valid transaction can take place unless two people have something tangible to exchange. Ignore for the moment the problem of coincident wants - that is, each person must have something to exchange that the other person wants. Of course, money came into existence to solve that problem.

But notice that money is only a facilitator of exchange. True money must represent some tangible "thing". In other words true money is a certificate of contribution to the economy, whether that contribution is goods or services. It says that I have actually caught two fish that I want to exchange for your bag of wheat. Of course, the bag of wheat did not come into existence without the effort of the person offering it for sale.

When your neighborhood counterfeiter or the Federal Reserve prints money, that money does not represent a tangible contribution to the economy. As Ron Paul said in one of his speeches, when the local crime syndicate prints money that is called counterfeiting, but when the Federal Reserve prints money that is called good monetary policy.

Gold and silver have become the money of choice and according to the Constitution no state may "make any Thing but gold and silver Coin a Tender in Payment of Debts."

As I write this I am observing an image of Zimbabwe's One Hundred Trillion Dollar note with Ron Paul's signature. Is this the future of our monetary system?

Good commentary

I like what you say. The FED is a counterfeiter. The more money it pumps into the economy the less it has in real value. The economic competing nations will eventually be the downfall of the FED even if the corrupts won't bring in the reigns. The FED is doomed to now fail because "the Emperor has no clothes"

Yeah that's right, its ending legal tender law....

Its competing currency, which leads to the Courts back in our hands. Inflation back in our hands.

Choice among the masses and the end of legal tender law....
http://www.shtfplan.com/precious-metals/federal-reserve-admi...

double post

...

"If ye love wealth better than liberty, the tranquility of servitude than the animated contest of freedom — go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains sit lightly upon you, an

All the madness started with the goldsmiths

Yes, the goldsmiths. They had all of the gold so they controlled the economy. In time, since carrying around loads of gold became impractical, they began handing out receipts for it and they held the peoples gold as well as the ability to borrow (first banks and first fiat). They also realized that no large amounts of people would demand their literal gold back at any one time, so they can lend out receipts for gold they didn't even have and then charge interest (beginning of fractional reserve lending)!!!

The colonies saw prosperity because they created their OWN fiat that was not under power by the private groups. They flourished. When the Bank of England (first major bankers/elitists) found out about this, they outlawed it and forced the colonies to return to only paying their taxes in gold. The colonies' went through a severe depression and this was the (many times unsaid) start of the revolutionary war!

Gold is a

SCARCE commodity in proportion the the people. Think about that for a second. Therefore, it is able to be bought up and used as leverage by the banker class. It has happened throughout history.

I'm a huge Paul supporter and a delegate to my state for Ron Paul. I'm not hating. I'm just starting a convo we should all have and realize. Its the only thing I don't like is when he mentions the gold standard and the gold standard only. Wish he would explain more about the ideas of competing commodities (not just one scarce one -- economic suicide that is slightly better than what we have now) and/or fiat money that is printed by the US Congress as allowed for in the constitution, NOT private groups (FED).

"ideas of competing commodities"

The thing is, gold always wins that competition, because it is the best money.

And what's your beef with gold being scarce? If money is not scarce, then money is worthless. Gold is ideal for use as money precisely because it is reliably scarce: i.e. its supply-demand picture is very stable.

As for the Congress issuing fiat money, I assume that's a joke. You're familiar with the concept of inflation? And you're aware that the government is corrupt? I'm so sick of this greenbacker nonsense I could spit. How anyone intelligent enough to support Ron Paul could be stupid enough to be a greenbacker is beyond me.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

http://www.lewrockwell.com/north/north213.html

read this, I think it will be helpful in understanding the "myth of insufficient gold"

Rothbard also debunked this as thoroughly and as eloquently as anyone ever has, which can be read here: http://lewrockwell.com/rothbard/rothbard202.html#chap02.

Concentrate on #2, "What is the optimum supply of money?"

I intended this to be directed at Evan's comment directly above, not you nowornever.

Liberty or Death

Don't be a punk about it

Just asking some questions we should as before everyone just jumps behind the gold standard idea without knowing a thing.

It is way too scarce. That is the problem. Like I said, the rate of gold per person in the world is ridiculous. Someone gets left out. Its like musical chairs. If money is only one scarce commodity, then it does not serve the interest of you and me in the end. It cant. Its gets bought up and used for wealth and leverage of the elite. It will be used against us, not for us.

It ISN'T the Gold Standard....

Its silver/gold for all, competition between all parties.

And this is the PROOF of why the Media won't talk about it or really discuss gold/silver.
http://www.shtfplan.com/precious-metals/federal-reserve-admi...

Again someone's been lying for decades. Fiat created a fictitious world ruled by papers.
Gold/silver put Justice back in our hands.
That way the Judicial system is back with us in charge too.

A punk? LOL....

"Just asking some questions we should as before everyone just jumps behind the gold standard idea without knowing a thing."

Seems to me you weren't asking many questions, you were making blatantly false and (pardon my lack of tact) stupid claims about a subject about which you obviously know nothing. Now, ordinarily, I don't attack people for being ignorant, I try to persuade them. But, the greenbackers really get under my skin, because I find that they are impervious to reason. Their views on the gold standard are like religious dogma. Anyway...

"It is way too scarce. That is the problem. Like I said, the rate of gold per person in the world is ridiculous. Someone gets left out. Its like musical chairs."

The amount of gold is irrelevant. If there is more gold, then each unit is worth less. If there is less gold, then each unit is worth more. It does not matter. No one "gets left out." The dollars of the rich man are each worth the same weight of gold as the dollars of the poor man.

"If money is only one scarce commodity, then it does not serve the interest of you and me in the end. It cant. Its gets bought up and used for wealth and leverage of the elite. It will be used against us, not for us."

...this is what pisses me off so much about you greenbackers. I can't even refute a statement like this. There is NO SENSE AT ALL to this claim. You say it is scarce, therefore it will help the rich and hurt the poor: can you say non sequitur? It will be used as "leverage" by the elite. WTF does that even mean?

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Look into whether

our nation even has the gold reserved for a gold standard, and that will answer all of it. Hint: Fort Knox and the non existent gold because of one of the largest wealth-transfers in history. Another Hint: Reagan administration looked into the gold standard and found out that there was not enough gold.

I used the word punk because you bring me right down to the term stupid. And greenbacker? Check my other post just below yours where non private issued money is the second solution that I see, less preferable to the first which is the Austrian School of Economics approach. What I'm doing is exercising my love for discussing thoughts and ideas.

I love when the people in a movement that is about finally discussing ideas just shoot down and ridicule people who want to discuss ideas.

If you want to understand the gold standard and money in general

...here are some books you could read:

http://library.mises.org/books/Ron%20Paul/Case%20for%20Gold.pdf

http://library.mises.org/books/Edwin%20Walter%20Kemmerer/Gol...

http://library.mises.org/books/Joseph%20T%20Salerno/Money,%2...

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

What I'm saying is that there

What I'm saying is that there seems to be only 2 solutions:

a) truly competing correncies/commodities. If they starve the people of gold (which they have done!), then they can run to silver. If there's a problem with silver, than they can run to copper. If a problem with copper, they can run to seashells or cow dung! The point is, no private control on money!

b) Yes, currency issued by our elected congress, as stated in article 1, section 8 of the Constitution. Our forefathers were not against government. They were against govt that was not for and by the people. Right now, money is not issued/controlled by the govt, it is controlled by the FED which is a smokescreen for the Banks. You take their power away from them and they will flip. If you think that Greenbacks were so terrible, why do you think Lincoln was assassinated. Look it up. I'm not completely advocating for this solution necessarily, but seriously, its the one that the elitists hate the most. You eliminate the ability for a nation to borrow and fractional reserve lending (and print US notes instead of Fed Res. notes), it takes care of their power on our government. Look into it. Once again, the point: no private control on money.