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Created and paid for by Michael A. Nystrom, a concerned citizen. Not paid for by, nor officially affiliated in any way with Ron Paul's Campaign for Liberty. ALL RIGHTS RESERVED
In a Free-Society Gold is always increasing in value
Not wild fluctuations like now -- but steady increase.
If you loan out $1000 (let's say 1 oz of gold) and expect it to be paid back $100 (1/10th oz of gold) for 10 months -- by the time you've collected all the gold the value has gone up.
When a value-commodity (gold) is used to increase value-production and/or value-services the "value" of that commodity is increased.
When a debt-currency (FRN) is used to increase value-production and/or value-service the "value" of that FRN goes down -- it's an inverse relationship -- "you can't get something from nothing."
So, loaning gold out (without interest - debt) to create valuable products/services increases the value of the gold as it comes back to the lender -- Midas Touch :-)
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Mises on Profit/Loss
I'm not sure that's strictly true...
For example, under a relatively free (at least central bank as we know them free) system, the discovery and taking of gold by the Spanish Armada massively increased the gold supply in Europe, causing actual inflation. But not nearly as massively as what our central bankers have done in the past year to the dollar. Anyway, what you say is certainly GENERALLY true for gold, and more importantly, the loaning of gold by central bankers at unrealistically low rates to their politically-connected (and already rich) bankster buddies
http://www.goldsilverbullion.com/CrisisExecSum.htm and
http://www.gata.org/node/4608 and the whole media-ignored GATA site have more.
True there can be inflation
True there can be inflation with gold, but it can only happen regionally, since eventhough increased gold supply in Europe caused inflation, deflation occurred in areas where gold became scarce.
As for banking buddies they are going to be buying the gold being sold by the IMF, why, because they have dollars and want to get rid of them.
In fact the IMF is racking in dollars off the world market, and will hold them. This will effectively as Ron Paul speaks of cause Inflationary and depression. Inflation of dollars on the world market and deflation within our country. The Fed is being replaced by the IMF and the FRN is being replaced by SDRs, which has the trading symbol XDR.
grant
sarcasmo: I should have said ceteris peribis
and writ out all assumptions.
#1 Imagining a "Truly" Free-Market
#2 Truly Competitive Currency Market
#3 Sound Money
#4 No Fed Bank
Given the above I think what I said would stand.
I don't know (if in a truly free-market) an increase in gold in competitive currency market would result in inflation -- Gold has value and FRNs do not -- so an increase in supply does not have the same effect.
The cost would come down and the number of uses would go up.
Loans would be more plentiful and products and services would go up.
Artificial increase in FRNs results in a depreciation of products and services.
A Natural increase in Gold results in an appreciation of products and services -- Gold appreaciates in a free-market (naturally) and so do the products (whose input parts were bought with it) and services.
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Mises on Profit/Loss
No figuring
"Natural rates" are figured the same way "natural prices" of everything else are figured in a free market - they are not! People make bids and offers. If a bid matches an offer, a trade takes place. Competition among lenders and borrowers would establish a fluctuating market price (interest rate), just as competition among sellers and buyers establishes a price in the stock market, the energy and metal markets, and even the retail grocery and clothing markets.
free market easy
SUPPLY & DEMAND, no overhead regulation IT regulates itself.
you-no
see to your liberty
Keep money working and increased production produces profit.
Interest is not really necessary to profit by lending money.
For example, if I live in a city and apples cost $1 each, and I like apples. Then I may want to invest in apple production. An apple producer needs money to buy equipment. I lend him my money, he is able to produce 3 times as many apples for the community, increased supply of apples, price of apples fall to 75 cents each. I get the return of my money and buy my apples for 25% less. My money is returned to me and now I can invest in bringing down the price of oranges.
grant
Increased production
Increased production produces profit as long as you do not over produce ,which is why we are in this crisis ...Demand is down products are everywhere.....Now we have too many workers ...We can satisfy supply easily because we are TOO productive....This is why they will want to get rid of people for the NWO
you-no
see to your liberty
How much extra are you willing to pay next year for ...
100 units of currency today?
And ...
How little are you willing to get extra next year for lending out 100 units of currency today?
It is as simple as that.
WAHOR!!
http://www.dailypaul.com/node/48994
WAHOR!!
http://www.dailypaul.com/node/48994
I suggest this avenue.
Well some of us would use the bible as a guide and charge no interest. If gold has real value, why charge interest? A good man grants loans without interest, stays away from injustice, is honest and fair when judging others, and faithfully obeys decrees and regulations of our Creator.
Ezekiel 18 5-9
grant
In a free market, no one would be barred
from loaning at no interest, just as no one should be barred from loaning at interest if the borrower finds that is the best deal he/she can get.
good verse thxs
Where is the love?
Where is the love?
By supply and demand for money
In the sense that it means anything in this context, "natural" here means that it arises simply as a relationship between the supply demand for money. These elements are determined by any number of factors, as you can imagine, but Austrian economists conceive of the interest rate as a function of "time preferences": how much people prefer present consumption (high time preference) to future consumption (low time preference). In a society with high time preference, the rate of interest will be high, because higher consumption means lower savings, and so a diminished supply of capital available for investment. Conversely, of course, lower time preference means a lower natural interest rate, as people's willingness to delay consumption results in a greater pool of available funds.
I'm sure if you search for "natural interest" at Mises.org, you'll come up with a bunch of good stuff.
Thanks, I am reading
Thanks, I am reading America's Great Depression by Rothbard, and am coming up with a lot of questions. It's good to have a place like this to get a quick answer.
“Liberty means responsibility. That is why most men dread it.” -George Bernard Shaw
Unregulated supply and demand.
No one knows what it would be. And it wouldn't be uniform. It would just be an average.
It's like asking what that natural price of tobacco would be, if the government set the prices today.