The 1870-1914 Gold Standard

[Burke]

"During the 20th century, and now into the 21st, no central bank in the world has been able to match this [gold standard] performance. They are not even in the same galaxy. No world monetary arrangement has provided even a pale shadow of that era’s incredible successes.

"We could create an updated version of the world gold standard system of the pre-1914 era. However, there isn’t really much need to change things very much. It worked fine, and would still be working today if not for World War I, and soon after, the rise of Keynesian notions that governments could manage their economies by jiggering the currency. This requires a floating currency, which is why we have floating currencies today.

"Once we finally abandon these funny-money notions – probably because of their catastrophic failure – it will be very easy to create, once again, a superlative world gold standard system."

http://www.forbes.com/sites/nathanlewis/2013/01/03/the-1870-1914-gold-standard-the-most-perfect-one-ever-created/

And what happened in 1914?

The US Federal Reserve went into operation.

There is only one reason we went off the gold standard: You can't print gold.

[philnotfil]

Panic of 1873
1882-1885 recession
1887–88 recession
1890–91 recession
Panic of 1893
Panic of 1896
1899–1900 recession
1902–04 recession
Panic of 1907
Panic of 1910–1911
Recession of 1913–1914

Those are the glory days you want to return to?

[Lawdog88]

Panic of 1873
1882-1882-1885 recession
1887–88 recession
1890–91 recession
Panic of 1893
Panic of 1896
1899–1900 recession
1902–04 recession
Panic of 1907
Panic of 1910–1911
Recession of 1913–1914

Those are the glory days you want to return to?


Will you quit trying to diminish our right to be anxious about our own glory day panics, Phil ? Geez. :laugh:

[bluelang]

Correlation or it didn't happen.

Also, even with the gold/silver standard, the value still floated. It floated much less slowly, but it did float.

[bluelang]

If you buy this stuff about the gold standard:

A) You might as well believe that Clinton's policies balanced the budget and supercharged the economy.

B) Why doesn't anyone use the gold standard today?

[adamgator96]

"During the 20th century, and now into the 21st, no central bank in the world has been able to match this [gold standard] performance. They are not even in the same galaxy. No world monetary arrangement has provided even a pale shadow of that era’s incredible successes.

"We could create an updated version of the world gold standard system of the pre-1914 era. However, there isn’t really much need to change things very much. It worked fine, and would still be working today if not for World War I, and soon after, the rise of Keynesian notions that governments could manage their economies by jiggering the currency. This requires a floating currency, which is why we have floating currencies today.

"Once we finally abandon these funny-money notions – probably because of their catastrophic failure – it will be very easy to create, once again, a superlative world gold standard system."

http://www.forbes.com/sites/nathanlewis/2013/01/03/the-1870-1914-gold-standard-the-most-perfect-one-ever-created/

And what happened in 1914?

The US Federal Reserve went into operation.

There is only one reason we went off the gold standard: You can't print gold.

Hvvj
Cgijvvij

Edit: My two year-old grabbed my phone and started typing. I'm sure she meant every word of it.

[Burke]

When money is created, someone gets the newly created money (usually pols and their pals), and everyone else gets inflation. It's just a transfer of real wealth from some to others. Those who had their wealth in money holdings really get screwed.

The fact is that the only reason most use govt money today is that they are forced to with the legal tender laws and in other ways.

Between 1985 and 2010, the dollar decreased a flat 50%.

With all the money printing going on, it's going to get a LOT worse.

[ChartsandGrafs]

Panic of 1873
1882-1885 recession
1887–88 recession
1890–91 recession
Panic of 1893
Panic of 1896
1899–1900 recession
1902–04 recession
Panic of 1907
Panic of 1910–1911
Recession of 1913–1914

Those are the glory days you want to return to?

A few questions.

What was our average economic growth rate at that time? How do those growth rates compare to the growth rates in the years following the creation of a central bank? How many of those panics and recessions were due to government interference in the economy and not necessarily the gold standard? How many of those panics and recessions were manufactured by the international bankers so that they could bludgeon the public into accepting a central bank which they would control and profit off of?

Also, since you seem to be so concerned about panics and recessions, what do you have to say about all the much larger and more global panics and recessions that have occurred since the imposition of the Federal Reserve? Or are those OK?

[ChartsandGrafs]

For what it's worth, I'm not a big supporter of a gold standard. Not because of any inherent flaws with gold as money, but because of the current economic system in place and how it has allowed a relatively small number of people to accrue unimaginable amounts of wealth at the expense of others. It's very likely that there are connected families in this world, like the Rothschilds for instance, who've used their control and influence over hundreds of years of central banking policy to amass stockpiles of gold and wealth that wouldn't even fit inside Fort Knox. As such, they could dominate and rule over a gold money system just as easily as they dominate and rule over a paper money system.

Even if you don't believe in any of that, there are gigantic wealth imbalances in the current, corrupt system, that have only been created due to the workings of the current, corrupt system that couldn't and wouldn't be rectified under a gold standard. In other words, a gold standard would only fix a few of the problems in the current system, but not all of, or the most important problems. A gold standard would only serve to make those problems permanent.

This isn't a viable solution.

[ChartsandGrafs]

Was the famous Panic of 1907 a natural, organic economic event, or was it entirely manufactured by the elite banking class to achieve a desired end (i.e., "never let a crisis go to waste")?

From Ellen Brown's The Web of Debt:

Congressional opposition to the plan [Aldrich plan] was led by William Jennings Bryan and Charles Lindbergh Sr., who were strongly against any bill suggesting a central bank or control by Wall Street money. It took a major bank panic to prompt Congress even to consider such a bill. The panic of 1907 was triggered by rumors that the Knickerbocker Bank and the Trust Company of America were about to become insolvent. Later evidence pointed to the House of Morgan as the source of the rumors. The public, believing the rumors, proceeded to make them come true by staging a run on the banks. Morgan then nobly helped to avert the panic by importing $100 million worth of gold from Europe to stop the bank run. The mesmerized public came to believe that the country needed a central banking system to stop future panics. Robert Owens, a co-author of the Federal Reserve Act, later testified before Congress that the banking industry had conspired to create such financial panics in order to rouse the people to demand “reforms” that served the interests of the financiers.

Congressman Charles Lindbergh in Banking and Currency and the Money Trust:

None of us will have the opportunity to do what he did at this time. Because when we really understand, we will not permit anyone to fleece us as J.P. Morgan and Co. and other bankers have fleeced us. The King Bankers put in motion in 1907 a great scheme. They had gambled and speculated on Wall St. until so many watered stocks and bonds had been manufactured on speculation that numerous speculators big and small sprang up all over the country. The largest crop ever grown upon that time was harvested in 1907. The King Bankers knew the condition, and in turn knew the condition, and informed the favored of their friends what was to come. There was to be a Panic in the Fall of 1907 that would be advertised as the result of our bad Banking and currency laws. This 1907 Panic was to be the full means by which our people would be forced to pay the full face value of our watered stocks and bonds. That guarantee would make the people pay the interest on the dividends them forever. Thus, in 1907, we were given the Panic as the initial move for the proposed steal/the Aldrich plan.

The Money Trust caused the 1907 panic. ... [T]hose not favorable to the Money Trust could be squeezed out of business and the people frightened into demanding changes in the banking and currency laws which the Money Trust would frame.

Frederick Allen in a 1949 Life magazine article titled "Morgan the Great":

The Morgan interests took advantage... to precipitate the panic [of 1907] guiding it shrewdly as it progressed.

If it's possible that the 1907 Panic could be orchestrated, what about the other panics of that time?

[Burke]

Actually, I'm not in favor of a gold standard, which is still govt dictating to people what they must use as money. I'm in favor of the govt having nothing to do with the money and banking system, except for enforcing obligations people incur. Almost certainly, people would then begin to use gold as money.

[rpmGator]

Kenysian got Europe out of depression before us. If your plan is to stop public spending while the private isn't, the depression just gets deeper.

And since we got aircraft carriers named Enterprise, Hornet and so on with that spending which saved our ass in WW2, you owe your freedom to that spending.

[T3goalie]

Nixon pulling the plug on the last foothold of the gold standard green lighted all of the spending and stimulus/printing you see today.

An inch is a standard, a foot is a standard, a mile is a standard, a lb is a standard... A $USD has no standard. It is a diminishing unconditional promise to pay nothing in particular.

[orangeblueorangeblue]

An inch is a standard, a foot is a standard, a mile is a standard, a lb is a standard... A $USD has no standard. It is a diminishing unconditional promise to pay nothing in particular.

This is the reality of all fiat, though. Even those backed by precious metals are valued arbitrarily.

[orangeblueorangeblue]

There is, in reality, no fundamental issue with the way we produce money. It's merely a fluid symbol for the value of work. Monetary manipulation is tried and true with regard to pushing or pulling the economy.

A central bank is good. A central bank that produces money is fine.

Our real problem is that our central bank is a public-private institution. This puts our government, perpetually, in the hands of private banks.

[busigator96]

I just find it funny a shiny metal has to be the standard to the world. It is all a rigged game until people fail to honor what money is supposed to be. It is sad when all of the developed world and their central banks keep injecting money to create a false economic recovery. Also, unless you are independently wealthy, are slaves to the almighty US dollar. Do you ever wonder why good and pure ideas are untimely put into place, or watered down to the point of any marginal benefit to the populace?

The bottom line is bastardized capitalism destroyed our republic.

[philnotfil]

A few questions.

What was our average economic growth rate at that time?

According to the data that Angus Madison collected (xls) (www.ggdc.net/maddison/Historical_Statistics/horizontal-file_02-2010.xls), from 1870-1914 GDP growth in the US averaged 3.8% from 1870-1914.

How do those growth rates compare to the growth rates in the years following the creation of a central bank?

Using the same dataset, from 1915-2008, GDP growth in the US averaged 3.4%.

What those averages don't show you is the huge variability. 1870-1914 had huge ups and downs, with recessions every two or three years, and huge swings from up 12% to down 8%. The creation of the central bank came along with WWI, the roaring twenties, the great depression, and WWII. Once of all those things were out of the way, since 1950 GDP hasn't been over 9%, but it also hasn't been under -2%. A very different economic environment (and I would argue better for most people) than what we had prior to the central bank. I believe that reducing the fluctuation was a stated goal of the creation of the central bank, and it has been successful at that.

How many of those panics and recessions were due to government interference in the economy and not necessarily the gold standard?

1873 was in part due to government interference. The US government stopped using silver for money and went, in practice, to the gold standard. This was in addition to problems in Europe which caused problems for American banks. That is the only one that I can identify as having government roots, although this is not an area where I feel well-educated, so if you know more, please share. I do find it a little amusing that at least one of these, the panic of 1893, was caused by a run on gold.

How many of those panics and recessions were manufactured by the international bankers so that they could bludgeon the public into accepting a central bank which they would control and profit off of?

No idea, but if they could manufacture panics and recessions at will, why would they need a central bank to do that for them?

Also, since you seem to be so concerned about panics and recessions, what do you have to say about all the much larger and more global panics and recessions that have occurred since the imposition of the Federal Reserve? Or are those OK?

The world is more interconnected now than ever before. Many of the panics and recessions I listed were influenced by international concerns.

[ChartsandGrafs]

What those averages don't show you is the huge variability. 1870-1914 had huge ups and downs, with recessions every two or three years, and huge swings from up 12% to down 8%.

Ah, so even without a central bank, the market was able to correct itself. In other words, a spike in inflation was quickly followed up by a spike in deflation. It was turbulent, and unpredictable, but there was a sort of equilibrium. The dollar maintained its value and people could generally build wealth and invest over time. The future was exceedingly bright.

The creation of the central bank came along with WWI, the roaring twenties, the great depression, and WWII. Once of all those things were out of the way, since 1950 GDP hasn't been over 9%, but it also hasn't been under -2%. A very different economic environment (and I would argue better for most people) than what we had prior to the central bank.

You could argue, yes, but you wouldn't be able to make a conclusive case either way. A lot of subjectivity involved.

I believe that reducing the fluctuation was a stated goal of the creation of the central bank, and it has been successful at that.

Yes, at the cost of permanent inflation (i.e., stealth tax, wealth transfer). They were successful at removing normal market corrections to imbalances and replacing them with permanent stealing.

And this is good how, exactly?

1873 was in part due to government interference. The US government stopped using silver for money and went, in practice, to the gold standard. This was in addition to problems in Europe which caused problems for American banks. That is the only one that I can identify as having government roots, although this is not an area where I feel well-educated, so if you know more, please share. I do find it a little amusing that at least one of these, the panic of 1893, was caused by a run on gold.

So you don't really know what caused those recessions and panics, but since they happened during the gold standard, the gold standard must somehow be directly responsible, right?

No idea, but if they could manufacture panics and recessions at will, why would they need a central bank to do that for them?

For the same reason all rich people utilize government: To consolidate their control over the economy, command the nation's credit and interest rates, squeeze out competition, and lord over all creation.

This is the story of history, man.

[philnotfil]

Ah, so even without a central bank, the market was able to correct itself. In other words, a spike in inflation was quickly followed up by a spike in deflation. It was turbulent, and unpredictable, but there was a sort of equilibrium. The dollar maintained its value and people could generally build wealth and invest over time. The future was exceedingly bright.

Yes. Just like under a central bank, only with the central bank, the highs aren't as high and the lows aren't as low.

You could argue, yes, but you wouldn't be able to make a conclusive case either way. A lot of subjectivity involved.

Yes, it is subjective, volatile markets make for fun times if you are a day trader or have inside information.

Yes, at the cost of permanent inflation (i.e., stealth tax, wealth transfer). They were successful at removing normal market corrections to imbalances and replacing them with permanent stealing.

And this is good how, exactly?

Yes, there is a tradeoff. No system is perfect. Long-term planning is more wothwhile with a central bank.

So you don't really know what caused those recessions and panics,

Correct.

but since they happened during the gold standard, the gold standard must somehow be directly responsible, right?

Incorrect. The conclusion I drew is that going back to the gold standard wouldn't prevent the recessions and panics.

For the same reason all rich people utilize government: To consolidate their control over the economy, command the nation's credit and interest rates, squeeze out competition, and lord over all creation.

This is the story of history, man.

Agreed, but if they were able to do that without the central bank (if they created the panic of 1907), why would they need a central bank to do those things?

[ChartsandGrafs]

Yes. Just like under a central bank, only with the central bank, the highs aren't as high and the lows aren't as low.

The Great Depression says, "hey, remember me?".

Yes, it is subjective, volatile markets make for fun times if you are a day trader or have inside information.

Nobody has more "inside information" than those who set central bank policy.

What do you think inside information about future changes to the federal funds rate is worth?

Yes, there is a tradeoff. No system is perfect. Long-term planning is more wothwhile with a central bank.

Sure, if you live in some kind of fantasy land. We live under a central bank now and most businesses have no idea what's in store for them in the future. Many have been in a veritable holding pattern since 2008 because they don't know where the economy is heading.

Incorrect. The conclusion I drew is that going back to the gold standard wouldn't prevent the recessions and panics.

That's interesting. Who said they would?

Agreed, but if they were able to do that without the central bank (if they created the panic of 1907), why would they need a central bank to do those things?

Because there's a tremendous difference between just regular corruption, fraud, and stealing and corruption, fraud, and stealing legally sanctioned and protected by force of government guns. One is considered illegitimate while the other considered perfectly legitimate.

Think about it for a second. Most people detest the idea of private monopolies and intuitively understand that private monopolies are far more likely to produce inefficiency, bad products, stagnancy, and marketplace abuses than non-monopolies. They demand competition and a level playing field, right? It's in the public's best interests, right? Competition is considered king in the private sector.

This all changes when it comes to public monopolies, though. And that is what government is. It's essentially a legal monopoly on the initiation of aggressive force. It's the most anti-competitive monopoly that has ever existed, yet people demand its existence. If you even dare to mention the idea of doing away with a government monopoly and mention all of its inefficiencies, bad products, stagnancy, and abuses, people scream bloody murder. It's completely irrational, but that's just the way it is. In the public's mind, private monopoly = bad, while public monopoly = good. Competition is considered the devil in the public sector.

Well, it didn't take long for the robber barons and monopoly capitalists to figure this out, and they banded together in different industries and pooled their resources to worm/buy their way into government on every level. That's basically what the Federal Reserve is. It's a cartel of private banks, which prior to the existence of the Federal Reserve, were all controlled by different families/monopoly capitalists, that had grown so large and so powerful, that the public was demanding something be done about it.

Do you follow?

[philnotfil]

The Great Depression says, "hey, remember me?".

Yes. A single data point is hard to make inferences from, but there is good support for the idea that the federal reserve trying to decrease the money supply went too far and deflation turned a recession into a depression.

Nobody has more "inside information" than those who set central bank policy.

Yes, and?

What do you think inside information about future changes to the federal funds rate is worth?

Quite a lot, and?

Sure, if you live in some kind of fantasy land. We live under a central bank now and most businesses have no idea what's in store for them in the future. Many have been in a veritable holding pattern since 2008 because they don't know where the economy is heading.

Because of political considerations, not because of economic considerations. At least that is what the Republicans keep telling us.

That's interesting. Who said they would?

No one, at least not that I know of in this thread. That was my inference from the available data.

Because there's a tremendous difference between just regular corruption, fraud, and stealing and corruption, fraud, and stealing legally sanctioned and protected by force of government guns. One is considered illegitimate while the other considered perfectly legitimate.

Think about it for a second. Most people detest the idea of private monopolies and intuitively understand that private monopolies are far more likely to produce inefficiency, bad products, stagnancy, and marketplace abuses than non-monopolies. They demand competition and a level playing field, right? It's in the public's best interests, right? Competition is considered king in the private sector.

This all changes when it comes to public monopolies, though. And that is what government is. It's essentially a legal monopoly on the initiation of aggressive force. It's the most anti-competitive monopoly that has ever existed, yet people demand its existence. If you even dare to mention the idea of doing away with a government monopoly and mention all of its inefficiencies, bad products, stagnancy, and abuses, people scream bloody murder. It's completely irrational, but that's just the way it is. In the public's mind, private monopoly = bad, while public monopoly = good. Competition is considered the devil in the public sector.

Well, it didn't take long for the robber barons and monopoly capitalists to figure this out, and they banded together in different industries and pooled their resources to worm/buy their way into government on every level. That's basically what the Federal Reserve is. It's a cartel of private banks, which prior to the existence of the Federal Reserve, were all controlled by different families/monopoly capitalists, that had grown so large and so powerful, that the public was demanding something be done about it.

Do you follow?

While I think that educated and benevolent anarchy would be far superior to what we have today, government serves some important purposes. While it has its problems, the practical alternatives are less savory.

If your argument is that we should get rid of the federal reserve because we should be getting rid of government completely, I'm in agreement with the theory. The problem is the practice, it doesn't conform to the theory, and so is fairly useless.

[ChartsandGrafs]

Yes. A single data point is hard to make inferences from, but there is good support for the idea that the federal reserve trying to decrease the money supply went too far and deflation turned a recession into a depression.

Perhaps by design, maybe?

Yes, and?

Quite a lot, and?

The point is pretty clear. The Federal Reserve represents the absolute pinnacle of "inside information". And it's not just standard inside information, it's potentially the most valuable economic inside information the world has ever known. It's one thing to be able to set interest rates, but it's another to actually know in advance what these changes will be. Over a period of time, and done incrementally, connected insiders could amass trillions and systematically buy up chunks of the economy with such inside information. The best part is, nobody will ever know, as the Federal Reserve isn't open to external, outside audits of many of its operations, specifically its open market operations.

The Federal Reserve is an untouchable, inscrutable engine of fraud, inflation, theft, inside information, and corruption, yet we're supposed to believe it is somehow necessary to the economy? That it makes everything somehow better?

Because of political considerations, not because of economic considerations. At least that is what the Republicans keep telling us.

Come on, man. What does this even mean? What does the Republican Party have to do with this?

If you honestly believe this, then this answer would also apply within an economic system that doesn't feature a central bank. One could argue that uncertainty in the economy is always due to politics, and not the free market.

No one, at least not that I know of in this thread. That was my inference from the available data.

Very well, that's what I figured.

While I think that educated and benevolent anarchy would be far superior to what we have today, government serves some important purposes.

I used to believe this, too. Then I started thinking critically, and now I can't go back.

While it has its problems, the practical alternatives are less savory.

Obviously debatable, that's a different discussion though.

If your argument is that we should get rid of the federal reserve because we should be getting rid of government completely, I'm in agreement with the theory. The problem is the practice, it doesn't conform to the theory, and so is fairly useless.

And how's government working in practice today? Does the government in practice conform to any of your theories?

[mastoidbone]

gold as MAIN currency is a recipe for slow growth. When and if an economy grows---gold supply does not. So deflation is result. And deflation causes businesses to NOT produce. And then recession and depression.

If money supply cant grow as economy grows you will have a disaster---this has happened MANY times with gold.

That said---if you dont have 5-10% of your assets in metals....you are taking a real risk.

[ChartsandGrafs]

gold as MAIN currency is a recipe for slow growth. When and if an economy grows---gold supply does not. So deflation is result. And deflation causes businesses to NOT produce. And then recession and depression.

If money supply cant grow as economy grows you will have a disaster---this has happened MANY times with gold.

That said---if you dont have 5-10% of your assets in metals....you are taking a real risk.

Sorry, but I don't believe this be a valid argument. Growth in the U.S. economy under the gold standard was brisk, to say the least. We basically went from an economic backwater to the world's most powerful economy in a relatively short time. America's most productive, and most sustainable economic period occurred during the gold standard, not the unlimited paper standard we have today.

Also, gold is always being produced. We're talking thousands of years of history here. If there's a shortage of available gold on the market and the supply goes down, the price naturally goes up, and production increases. When production increases, the supply goes up and then the market price falls again, making production less profitable. Either way, gold is being produced and the amount of available, above-ground gold is never really static for very long, if at all.

[orangeblueorangeblue]

There is functionally no difference between fiat backed by metal and fiat backed by pure faith. We have some serious monetary policy issues, and our central bank is a poorly designed entity, but this switching to a gold standard fixes nothing, really. It's a notion that has a lot of appeal to people who don't really understand how money works.

This was sort of eye opening in master's econ, where we had a lot of young kids who thought the whole concept of fiat was inherently flawed. It's a simplistic view, to say the least. Money is a symbolic exchange of work; it does not necessarily need value, nor does actual scarcity have an advantage over artificial scarcity.

[philnotfil]

Perhaps by design, maybe?

I would have a hard time accepting that the great depression was something purposely inflicted on the world. If it was, who benefited from it? Why didn't they, or someone else, do it again?

The point is pretty clear. The Federal Reserve represents the absolute pinnacle of "inside information". And it's not just standard inside information, it's potentially the most valuable economic inside information the world has ever known. It's one thing to be able to set interest rates, but it's another to actually know in advance what these changes will be. Over a period of time, and done incrementally, connected insiders could amass trillions and systematically buy up chunks of the economy with such inside information. The best part is, nobody will ever know, as the Federal Reserve isn't open to external, outside audits of many of its operations, specifically its open market operations.

The Federal Reserve is an untouchable, inscrutable engine of fraud, inflation, theft, inside information, and corruption, yet we're supposed to believe it is somehow necessary to the economy? That it makes everything somehow better?

Having regular audits of the federal reserve is an important thing that isn't currently happening.

Come on, man. What does this even mean? What does the Republican Party have to do with this?

If you honestly believe this, then this answer would also apply within an economic system that doesn't feature a central bank. One could argue that uncertainty in the economy is always due to politics, and not the free market.

The Republican claim has been that businesses are in a holding pattern because they don't know how much the government is going to raise their taxes. Surveys of business owners indicate that the problem is a lack of demand, not uncertainty over government intervention or inflationary risks. I'm inclined to believe the business owners that they are in a holding pattern because of lack of demand.

I used to believe this, too. Then I started thinking critically, and now I can't go back.

What have you learned that we can apply to the world that we live in?

Obviously debatable, that's a different discussion though.

Agreed and agreed.

And how's government working in practice today? Does the government in practice conform to any of your theories?

It pretty terrible, but not as bad as the alternatives.

[philnotfil]

gold as MAIN currency is a recipe for slow growth. When and if an economy grows---gold supply does not. So deflation is result. And deflation causes businesses to NOT produce. And then recession and depression.

If money supply cant grow as economy grows you will have a disaster---this has happened MANY times with gold.

This is the important argument against gold as the basis for currency. It's a pretty good one.

[philnotfil]

Sorry, but I don't believe this be a valid argument. Growth in the U.S. economy under the gold standard was brisk, to say the least. We basically went from an economic backwater to the world's most powerful economy in a relatively short time. America's most productive, and most sustainable economic period occurred during the gold standard, not the unlimited paper standard we have today.

Also, gold is always being produced. We're talking thousands of years of history here. If there's a shortage of available gold on the market and the supply goes down, the price naturally goes up, and production increases. When production increases, the supply goes up and then the market price falls again, making production less profitable. Either way, gold is being produced and the amount of available, above-ground gold is never really static for very long, if at all.

Growth in the US economy hasn't been any different under gold or under fiat currency. The numbers are available, go and look at them.

A bigger problem is our lack of urgency in paying down debt when the economy is doing well.

[ChartsandGrafs]

I would have a hard time accepting that the great depression was something purposely inflicted on the world.

I wouldn't. It paved the way forward for the government to grow by leaps and bounds in a very short period of time and forcefully altered the way in which the American people viewed their government, as well. Millions of Americans came to depend on their government virtually overnight.

Think of the power transfer that took place politically during the Great Depression.

If it was, who benefited from it?

I really don't know who benefited from the Great Depression with any certainty, other than the power-lusting politicians in Washington, but there can be no doubt that somebody somewhere benefited, and who better than those in charge of setting monetary policy and those who owned the controlling interest of the Federal Reserve's member banks?

The mainstream, government-approved story on the Great Depression is that it was all just some big, unfortunate "accident" and "miscalculation" of government and monetary policy. Of course, right? Everything that happens is an accident of incompetence. Nothing ever happens by design. Absolutely not. We're not supposed to believe that. Beliefs of that nature can only lead us towards the idea that there's a "man behind the curtain", or a "throne behind the throne", and that's simply verboten.

For what it's worth, Franklin D. Roosevelt's son-in-law, Curtis Dall, said this about the Great Depression in his book My Exploited Father-in-law:

The depression was the calculated 'shearing' of the public by the World Money powers, triggered by the planned sudden shortage of supply of call money in the New York money market....The One World Government leaders and their ever close bankers have now acquired full control of the money and credit machinery of the U.S. via the creation of the privately owned Federal Reserve Bank.

Perhaps Curtis Dall had an axe to grind. Perhaps Curtis Dall had an active imagination. Perhaps Curtis Dall was a "conspiracy theorist". Then again, as a Wall Street banker himself, and a member of the Roosevelt family, perhaps Curtis Dall knew something the regular American people weren't told and weren't supposed to know.

Why didn't they, or someone else, do it again?

Who says they haven't? Is it not possible that the World Financial Crisis of 2008 was meant to be the spark that would send the global economy into another Great Depression? Rich people like getting rich and they also like consolidating power through the governments they control and influence.

What better way is there to do this than manufacturing crises through their control of central bank monetary policy?

Having regular audits of the federal reserve is an important thing that isn't currently happening.

Of course not. Can you imagine what a truly independent audit of the Federal Reserve's open market operations might reveal over the past 50 years? Why do you think it doesn't ever happen?

The politicians' bread is buttered by the banks and corporations. Nobody in this country can get elected to high office without two things:

1. Gigantic quantities of money to finance campaigns.
2. Favorable media coverage and marketing.

The entire election process is controlled by these two factors, and any politician who wants a seat at the big table in Washington is dependent on both in tandem. Not one or the other, but both.

And who controls the purse strings and media? Rich people do. Corporation do. Banks do. That's how the system works. The politicians serve the rich. Not because they are corrupt scumbags, even though most of them are, but because they have to. They have no choice.

That's why there isn't a real Federal Reserve audit and why there will never be a real Federal Reserve audit. It's as rigged as rigged can get.

The Republican claim has been that businesses are in a holding pattern because they don't know how much the government is going to raise their taxes. Surveys of business owners indicate that the problem is a lack of demand, not uncertainty over government intervention or inflationary risks. I'm inclined to believe the business owners that they are in a holding pattern because of lack of demand.

And why is there a lack of demand? Might it have anything at all to do with ruinous monetary policy set by the scoundrels at the Federal Reserve?

What have you learned that we can apply to the world that we live in?

Honestly? That we are screwed. There is a system in place that is so total and so complete that the mind that is aware of it is rendered almost incapable of finding a weakness or edge from which it can start to dig around or underneath it. Nothing short of a mass spiritual and cognitive awakening will suffice.

In the meantime, we can discuss the theoretical limitations of various political and economic systems as if they existed in a more rational world.

It pretty terrible, but not as bad as the alternatives.

If you're capable of recognizing and admitting how terrible it is, we can talk and exchange ideas. From there, we can discuss alternatives and maybe even learn a thing or two.

[mastoidbone]

gold supply is finite---each year a SMALL amount is produced. If gold supply increases 3% and economy increases 5% you will have MASSIVE deflation as you will have goods fighting for currency....which is a disaster.

Gold is DIFFICULT and expensive to mine---meaning your economic growth is CAPPED.
If you recall---when we had gold std in 1800s we also discovered the largest gold mines EVER found....which allowed growth.

Days of easy gold are over....gold as currency=deflation.
Deflation=NO INVESTMENT for fear of reduced return.

[ChartsandGrafs]

Growth in the US economy hasn't been any different under gold or under fiat currency. The numbers are available, go and look at them.

A bigger problem is our lack of urgency in paying down debt when the economy is doing well.

Disagree. The United States grew to become the world's largest and most powerful economy under the gold standard. This includes all of the period up to the collapse of Bretton Woods 1 in 1971.

Since that time, under a paper standard, we've been in slow decline. There's no way to sugarcoat it either. The U.S. economy of today is a shell of its former self. The only thing that's kept us afloat is massive public and private debt, inflation, and our petrodollar empire. We used to have an economy that produced enough domestic wealth to support our standard of living. Now we have an economy where we can't support our standard of living without amassing a mountain of IOUs, threatening others with our military, and exporting our inflation abroad.

Seriously. No rational person could compare the U.S. economy pre-71 with what we have today. It's a joke.