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FORBES: Signs of the Gold Standard are Emerging from Germany

Forbes: Good money is not only a counsel of rectitude. It is critical path to restoring vibrant prosperity and social health. Erhard (as previously noted here) reprised the characterization of Pietrre and Rueff in his memoir Prosperity Through Competition .

Germany’s economic miracle “began as the clocks struck on the day of currency reform. Only an eye-witness can give an account of the sudden effect which currency reform had on the size of stocks and the wealth of goods on display. Shops filled with goods from one day to the next; the factories began to work. On the eve of currency reform the Germans were aimlessly wandering about their towns in search of a few additional items of food. A day later they thought of nothing but producing them. One day apathy was mirrored in their faces while on the next a whole nation looked hopefully into the future.”

http://www.forbes.com/sites/ralphbenko/2012/09/24/signs-of-t...

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I didn't want this gem of ad hominem attack lost

"Submitted by jgibbons on Sat, 09/29/2012 - 12:51. Permalink
So there it is, you don't have an answer because you are spouting lies. You said: The constitution forbids the government from forcing anyone to take anything but gold or silver for what is owed them...

No where does the constitution forbid the federal government from using anything but gold and silver. Plain and simple, cut and dry, you are wrong. So just suck it up, admit it, be an adult, and stop spewing out nonsensical ad hominem gibberish."

And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor.

Now I want to ask as a

Now I want to ask as a reasonable being - If you've spent a lot of time trying to educate someone who is ignorant and ungrateful, and they post something like this, is it safe to assume it isn't ignorance, but malice? And if so, why talk to such a person?

In response to the second paragraph, "Using" is not what legal tender means. "Using by government" is not what legal tender means. Legal tender means what the government can force you to accept or use in paying of debts that you are owed. That is the legal definition and easily looked up by anyone.

The federal government can issue all the tally sticks and paper it wants, but unless it has the power to force people to accept them - they aren't going to be worth anything.

The federal government was never given this power. Only States have the power, and it's restricted to silver and gold.

10th Amendment
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor.

That's right, Max.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

And the people will rise up with a form of exchange of their own - beginning with a system of barter that will lead to an exchange of scripts, or points earned for work performed. This system will have absolutely nothing to do with the elite's hoarded supplies of precious metals. It has been prophecized.

"I'm as mad as hell, and I'm not going to take this any more!"
- Howard Beale

Yes, in other words, there's

Yes, in other words, there's the emergence of the world currency. If gold isn't the world currency, a maneuver by fiat, an officiality, it would be the backing of currencies worldwide, still an officiality, a fiat maneuver. This, the backing, for all intents and purposes is currency. It would be the currency worldwide. Simple as that, folks.

Three conditions to look for:
1) control
2) issuance
3) debt based vs. debt-free money

You gold buggers are asking for your entrapment and everyone else's. Wake up.

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.

Gold Already Is The Worlds Currency,

At the worlds Central bank level.

Currently unable to get a recent update, but here are 2005 levels:

http://www.gata.org/node/104

Mainland China is now the worlds largest producer and second to India as the worlds largest consumer {Hoarder}. Chinese consumers are encouraged to buy Gold, as they can afford it.

beesting

Thanks for the information.

Thanks for the information. It supports my argument.

Why gold advocators behave as though shifting from one mass currency, a country's currency, to a different mass currency whose mass is the world population whose individuals obtainment of it today rather than tomorrow is good for them therefore bad for people who don't obtain it -- a centralizing effect -- confounds me. This shifting is the last economic move because it would be worldwide, a move from a country's currency that spans the world to a currency worldwide that no country dictates but that an international body dictates. I cannot fathom why any gold pusher doesn't see that relationship. The currency in our discussions happens to be gold. My focus isn't on gold as it is a thing worldwide used as currency. Why don't people -- and of all people, DPers -- who advocate gold see the relationship I just delineated?? What. Gives??

To that confusion of mine is, why are gold advocators blind to how this mineral, gold, would receive its value? Where would this value come from: Who applies gold's value? Of course something central spanning the world and is stationed in countries worldwide to carry out those value applications -- enforcements. That application is fiat, that is, by decree. I just don't understand why gold pushers don't listen to what they say and study. The facts are in their faces.

I can arrive at two reasons why a gold pusher wants gold: He's aware it's a scam and that its use is moving from country to the world, a transference of say-so, of control, and he has accepted he will be part of the scam ORRR he doesn't comprehend it's a scam. Either the person is duplicitious or he's confused or he believes in something besides himself, a self reduction to a parrot. Why does such an individual go away from applying his value to a thing he would transact? WHY? Very frustrating it is talking with people I consider above the fray intellectually who just don't, won't or can't pay attention to the presence and nature of the very information they gather and see what it forms. Very frustrating.

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.

Apparently, You Don't Follow Ron Paul.

Here is an old video to get you started:

https://www.youtube.com/watch?v=AMe_7-hmHHY

And This:

http://www.knology.net/~bilrum/5goldmyths.htm

And, Gold/Silver are not currencies, they are classified by most people as a "medium {s} of exchange".

beesting

You're right!

What I follow is logic whose first principle is the individual. Because I comprehend individuality, I oppose collectivism, the subjugation of the individual. So, you're right. I follow no one. I think.

More and more, beesting, I'm glad Michael Nystrom removed Ron Paul's photo on the Daily Paul. You know, at first I found that removal distasteful. But now? Now I'm on my way to agreement with Michael.

beesting, if you understand what I said, you will see I argue for you, not against you. I want you to choose your currency, a derivative of the word current, a thing in the middle which in monetary discussion is: the medium of exchange. But I do oppose your advocacy: For something you or something besides you that you contracted with to apply your value to my transactions. I do not and wouldn't think of forcing you to use my values, beesting. Why do you want me to use your values despite I want to use mine?

I will not read what article you link to and I will not watch what video you link to. I have zero -- ZERO -- interest in reading and watching what you think I ought to read and watch WHEN it isn't a small portion of your argument, a supplement, but is a large portion of your argument or, worse, is your argument. When references are a large portion of an argument or are the argument, there is no argument, the person putting them forward has NO argument. beesting, please know this: I will debate you, but I will not debate your sources, because to debate sources is to:

a) corner myself;
b) in essence admit defeat regardless the validity of your argument and my argument;
c) debate the authors of your sources INSTEAD of you; and,
d) be unfair in that you, the person who references, take the easy way out of debate, showing you aren't serious about attaining truth but are serious about wasting my time and energy. I waste no time and energy, mine and consequently yours. I respect my time and energy and, consequently, I respect yours.

So, beesting, if you want to debate, let's debate. Your move.

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.

You show a real lack of

You show a real lack of understanding of money as something that government doesn't create. Might want to read the numerous links posted below by myself and others and think through what money actually is.

And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor.

What you perceive as my lack

What you perceive as my lack of understanding government and money is my talking about it broadly because to talk about it in references especially in scattershot is to belittle this issue, an avoidance of it intellectually.

I don't spend time on life altering issues, life-and-death issues, when they're discussed superficially. Either someone wants to debate or wants to provide references. It's one thing for each person in debate to use and agree on terms to attain truth, it's another thing to send someone on a goose chase. Thanks, I prefer and will do only the former activity. Good day to you.

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.

I'm newly inspired to read the classics!

I had no idea that Goethe discussed inflation in "Faust"!

"Moderation in temper is always a virtue; but moderation in principle is always a vice." -- Thomas Paine

The world is in deep trouble - with no easy way out...

I'm no expert on finances, economics and the gold standard but here's how I see it.

Civilization blew it centuries ago when it invented money NOT based on a commodity standard.

Our founders tried to make our money based on gold and silver which traditionally (for several reasons) has been accepted as a medium of exchange between humans.

BUT NOW WE'RE TOO FAR GONE.

There are ONLY 2 possible future outcomes regarding monetary policy:

1. A CONTROLLED return to a metal standard for money. And even THAT will cause untold chaos and disruption for a period of time. Because there is too much worthless money in society right now, the cure will be very painful as we would have to figure out how to connect our currency to a supply of gold/silver.

3. An UN-CONTROLLED correction (as happened in Weimar Germany when the German Mark went worthless). In this scenario it becomes an appocalyptic event where only the strong survive. Civil obedience will break down and no amount of law-enforcement will be able to stop it.

Ron Paul has said over and over that one of these 2 scenarios MUST occur. Even though they can probably prop up the lie for a long time yet.

Either way, the end result WILL be a return to at least some semblence of a metal-backed currency or just the precious metals themselves.

THIS is why it's SO VITALLY IMPORTANT to own some gold and silver. THAT is the main lesson to take away from what is going on around us.

This may not even happen in our lifetimes, but it appears more likely that it will.

It will probably begin in Europe where they are learning the folly of the socialist idea of one currency for so many countries. And not even THAT is backed by metals.

THAT is going to end and Germany will be the catalyst.

When the Germans get tired of funding the lazy countries (which I don't even have to name), they will bow out of the Euro and that will be the END of it (most-likely resulting in some kind of war).

As for us, the politicians and central bankers will kick the can down the road as long as possible past the Euro collapse.

Until that time, although it would be foolish to put all your assets not precious metals, we should aquire as much as practical and personally affordable.

Anyway, that's my 2 cents worth which probably isn't worth even that.

"We have allowed our nation to be over-taxed, over-regulated, and overrun by bureaucrats. The founders would be ashamed of us for what we are putting up with."
-Ron Paul

Debt-Based Currency vs. Deft-Free Currency

As we all are aware of, currently we are under a system, where through fractional reserve lending and the Federal Reserve, any new money is created out of debt. A $100 into the system, will require say $110 with interest in return, but that $10 was never created so it can never actually be paid back. So the national debt is always growing.

Now if we went to a gold-standard, abolished the Fed, and ended fractional reserve lending, there would be an improvement in that money is not created out of debt. Gold is scare and there is a constant given amount. But if the economy grows, gold becomes relatively more scarce, because the economy demands more. The gold to wealth ratio has essentially decreased, and this is essentially deflation. Deflation is good for the lender(the institutions with significant banking power). So in this sense, a gold standard even if it's implemented in a debt-free system, has the potential of being very undemocratic toward the common man. And also, this means that gold, though having a constant supply, will not have a constant value. Again you could have the bears and bulls speculating on market trends, and gold potentially could be very unstable with any economic changes.

But if you went to a debt-free paper currency, you could match the money supply to wealth. This is favorable to the common man, and does not give any deflationary (gold standard) or inflationary (debt-based paper)advantages for the banking powers or national debt. So we need to distinguish in our arguments when we refer to a paper currency, as either being debt-free or debt-based, because they are very different. A debt-based paper currency will always fail, but this does not have to be the case for a debt-free paper currency. Giving the people through their government the power to issue their own money is the same principle as giving the people through their government the power to provide for their own common defense. The market will take care of the money once its in circulation, but the economy and the market is still ours, and we have the sovereign right to set the amount of money.

Continental Currency is a prime example of why that

won't work.

The result? The Framers wrote the Constitution and implemented specie currency with Gold and SIlver Coin.

Paper currency is too easy to produce.

You can't run an economy on something that represents value. You have to actually trade value.

Paper has effectively no value in comparison to what it is traded for. Thus it fails every time.

You're obviously no dummy

on the subject and I won't resort to insults. But the idea of debt free paper money is a utopian impossibility. No government controlled currency would be able to continue indefinately as the natural progression of human corruption would eventually lead to having a lender of last resort and then back to a currency that is debt based and manipulated simply because you cannot trust the management of your currency to a centralized group of fallible human beings. The integrity of the money would be under constant assault by politicians looking to convert it to something that they could manipulate. This unfortunate patern of human conduct is so overwhelming that no rule could be written that an inevitable legislative majority or panic in an economic catastrophe would not eventually overturn. This sounds cynical, but the prospect of a monetary dictatorship will always be too tempting for ambitious aristocrats.

As far as the idea that demand for gold would deflate to the point of hurting the common man is a little bit flawed. We need to remember that when we are dealing with a free market currency such as gold that is what it is, a currency, and not a commodity. People do not hoard currency, at least not enough to truly make a significant difference in the market, so the extremely violent swings would not be nearly as much of a factor as what you described. Whatever currency gets stored will eventually make its way back into the market and periods of deflation would do little more that increase the wealth of those who were frugal until inflation picked up. The normal range of money in circulation would be determined by the market very quickly after a free currency was installed and would deviate throughout the business cycle. There is no historical evidence to support the idea that the currency would deflate to the point that it would no longer be viable to continue to use gold as money.

Nice comment, bb. I agree the

Nice comment, bb. I agree the gold standard can be very, very unfavorable to the common man. And I'm a common man if ever there has been one. It's very sad to me 95% of DPers, a freedom professing people, favor the gold standard. They're missing the obvious, something I used to explain to people here and which I won't do nowadays. I used to explain and prompt people to grasp concepts and use generalities of history regarding money, but I was unsuccessful and scorned, so no more of my comments trying to induce people to understand gold differently, correctly. I won't spend time discussing this issue other than to chime in on someone's commentary I agree with because to speak contrary to gold standard on the DP is to be a courageous (which I was) and, eventually, exhausted (which I am). I hope you continue talking about your view on gold and, more important than gold, currencies treated as gold: debt vs. debt free and, as I think you mentioned but what I think is paramount, control and issuance.

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.

That's what silver and copper are for.

A monometallic system will not work.

A bi-metallic system with one hard pegged to the other, will not work.

You have to allow free floating, laissez faire, currency, issued by private individuals to enter the market.

if you try to control issuance, it will fail.

There is a book called "Good

There is a book called "Good Money" which describes the private coinage of money in England in the 1800s. When the government refused to coin copper and there was a scarcity of larger denomination coins. The larger coins also were problematic because they were too large for the average person to use on a daily basis. So, once again the private sector came through to solve the problem. Of course later the government decided that only the government could coin money regardless of denomination. If you want a true education on austrian economics, history, and an arch capitalist theory, go to www.mises.org.

Been there many times.

.

Educate Me More

Okay, I am fine with using silver and copper, so long as there is a plentiful supply, and I understand your reasoning.

But issuance by private individuals seems impractical. How are you constantly going to make sure that these metals are their supposed value? It easy to alloy metals, and pass it off as something it is not. Plus if someone decided to suddenly issue copper notes out of their supposes vaults of copper, does this mean that audits will have to take place to actually see if that copper does exist? I don't know, just a few questions that came to mind right away. I guess could you explain more how this bi-metallic private issuance would work?

I don't think we see a limit to bi-metalism.

We'd see six metals in circulation, though not necessarily all at the same time, or not necessarily all in similar denominations/sizes.

Left free, the market will eventually settle on this:

Coins, Bars & Bricks based on either the Troy Ounce or the Gram.

Items issued in the following ratio: 1:2:5:10 etc.

This means you would have say 1g, 2g, 5g, 10g, 20g, 50g, 100g et cetera coins/bars/bricks.

(or 1/10 toz., 1/5 toz., 1/2 toz. 1 toz., 2 toz., 5 toz., 10 toz. et cetera if using the Troy system)

Perhaps maybe some would try to stick with old named denominations, but I don't see them lasting. (dollars, reals, marks, pounds et cetera) The math is too complicated and the items are not easily interchangeable.

A system based on either Troy ounces which is widely know, or grams, which is the international standard for measuring any quantity of anything, is more likely to be used on a wide spread basis.

Now, there are six metals which lend themselves to use as money, due to their atomic properties:

Copper
Nickel
Silver
Gold
Palladium
Platinum

Each will be likely minted and circulated to some extent.

Copper and Nickel will fill the role of every day coinage. Which sees more use depends on market forces and the current state of industry for that metal at the time. Having both, allows for flexibility without monetary deflation problems. Inflation will not occur, because Gresham's Law will pull the off value metal out of circulation.

Silver will be more of a mainstay for every day purchases, and will essentially be the main currency.

Gold and Palladium will serve long term savings needs, and be used for very large purchases.

Most likely, governments and business will use gold for capital purchases rather than the lesser three metals.

The same rules for Copper and Nickel apply here for Gold and Palladium.

Platinum and Palladium may also trade places from time to time until mining is more stable between the two.

Because of this, Gold may fill a larger role, but when those two stabilize in production and usage, I expect to see all three hold a spot at the top for such purchases and long term savings.

-----------

Certainly, people will try to issue notes "backed" by various metals. These will fail, and people will stop trusting them.

More likely, people will trust and use a system of electronic payment, where the quantity in circulation is constantly audited and cannot be increased without mining production and fabrication. e-Gold is such a system right now. I see banks quickly getting up to speed on how to deal with this issue. The kinks are essentially already worked out.

The only issue will come from the banks themselves and their desire to use your deposits for their own gain.

If they stick to transaction fees, they'll likely not cause problems.

If they try to get into lending schemes - we'll need some sort of solution.

I foresee a need to require a barrier between three types of institutions:

A - clearinghouses/payment processors - what we commonly refer to as "banks"

These should not be allowed to loan out anything at all. They take deposits, and process payment transactions. They make their money on transaction fees.

B - savings and loans - likely just as they are now, but a limit on the level of risk that can be incurred by making the loans. Loans come out of savings and must be voted on by the savers. No payment processing is conducted at all.

The institution makes a profit on loan fees - no interest. They share some of this with depositors. If any "interest" is to be charged, it must be only to a business and only in the form of a return on what is produced by the business.

C - Speculation Houses - what most banks are today.

They loan at high risk, make money on interest, and share them with depositors. Only deposited money may be loaned. But the loans do not need to be voted on by depositors. They are controlled by the bank. No payment processing at this level either.

-----------

We could try to implement these reforms, but leaving the market to decide the best course how to get there would be the better option.

What we need to do is remove all government barriers to this happening on its own, and then letting people loose to find their own solutions.

I surmise, something like what you read above is what will be left when the dust settles.

Interestingly

There's technology that lets you instantly check the value of coinage metal to make sure it's not an alloy. It gets cheaper all the time.

Honestly though, I think people would just use cards and electronic forms of gold and silver. Much more convenient.

Eric Hoffer

FYI Ron Paul has changed his

FYI Ron Paul has changed his stance on sound money, he now supports a free market solution. Last year he submitted a bill called the Open Competition of Currencies Act, I will try to find a link. Hey I was once just like you all for debt free state money before reading about open competition of currencies. It is genius and most likely our only hope.

Actually my very first post on the DP was in support of debt free state money.
http://www.dailypaul.com/120254/constitutional-money-system-...

AOCSmint.com /

AOCSmint.com / opencurrency.com

I love these guys. I think they should be the standard for this country, or at least their system.

End The Fed!
BTC: 1A3JAJwLVG2pz8GLfdgWhcePMtc3ozgWtz

Get rid of government minting

And that I would agree is a minor flaw with the constitution.

The federal government should not have been given the power to have a mint, any more then to have a post office.

It's true that it wasn't given a monopoly power for either of those things, and private businesses have done both, but it's been used by some naives and fools in the past to imply that money is somehow magically made by government, and government needs to do it.

Money has always sprung into existence by nature. It solves the problem of coincidences of wants among people voluntarily trading, and groups of people trading usually choose a commodity to solve that problem like gold because of its natural characteristics *1.

"Money" didn't use to be minted., it used to be weighed as seen in the early Bible- it was just a traded commodity. It started getting its current mystical, something only government can do flavor and name under the Romans, who minted government coins in the temple of Moneta - where we get the current name money from.

It's pagan worship. There is no mystical thing about money that requires governments to mint it. If it's silver or gold, it was made by God - just dig it up and use it. Or use whatever the market wants to trade.

*1 6 Characteristics Of Money
http://money.blurtit.com/q5102689.html

Coincidence of wants
http://en.wikipedia.org/wiki/Coincidence_of_wants

Money - origin of the name as pagan worship, like government worship!
http://en.wikipedia.org/wiki/Temple_of_Juno_Moneta

And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor.

Adjusting For Gold Demand in a Gold Standard Debt-Free System

As the economy grows, I said that the gold to wealth ratio is decreased. The economy demands more circulation, but there is still a fixed amount of gold.

But this can be remedied.

Say 10 dollars of gold were in circulation, but the economy required more. Well you could divided the gold up into quarter pieces, so there would be 40 gold quarters in circulation. But if the economy grew more, you would have to divided this up further, and if you get my trend, eventually we will be trading in a currency that is still backed by gold, but each unit will be represent an amount of gold that will begin to approach 0. So essentially if there is not enough gold available for the upper limit of economic activity and population growth, then a truly free market will try to correct itself out of a gold standard into one that is simply backed by the wealth of the country.

Money should not be controlled by government, period!

Money should not be controlled by the government, period! It emerged from the market and should stay there. Politicians came in after its creation and took control. Read Menger, Rothbard, or Paul. Anyone who visits this site who has not yet visited: www.mises.org should make it a top priority. You will find more free info on Austrian Theory and history than you could get through in years. Dr. Paul helped to found it with Lew Rockwell 30 years ago.

Lew Rockwell is that old?

wow

Exactly. Take away the FRN's

Exactly.

Take away the FRN's privilege of legal tender and remove taxes on PMs and let's see what the market decides.

Bernanke would be looking for a new job in a matter of months.

Never trouble trouble til trouble troubles you. Fortune Cookie

I Have A Question ?

If the bankers, who supported FDR {Roosevelt} had or stored most of the Gold, why did FDR have to sign an executive order to confiscate the physical Gold { Which was being used as money} in 1933?

Answer: The bankers DIDN"T have as much Gold as they claimed to have, because the Gold was spread far and wide in the possession of American merchants, business people, farmers, beekeepers, and the general public, like the U.S. Constitution mandated.
Don't be fooled by false history, the USA became the wealthiest nation on planet earth, under the GOLD standard.

beesting