>> ^ponceleon:
...but frankly anyone who thinks they "know how to solve the economic crisis" is just full of shit. The economy has become so over-blown and indecipherable, there's just no one easy answer.

I disagree. We know the fiat currency system has lead us to this problem. The answer isn't to continue creating money out of thin air and creating hyperinflation. That only prolongs the depression.

You have to cut the government off from an endless supply of money by transitioning to a currency system that has something backing the money and thus limiting the supply. I really do think it's that simple. We'd still have unemployment and hardship as history proves depressions come and go no matter what kind of economy you have, but we'd pull out of it quickly.

The United Kingdom is a trading company, listed and registered on Dunn & Bradstreet (check it for yourself)

The British Government are no more than the board of directors of UK PLC.

The UK has been bankrupt now for about 4 years. We have a fiat currency that has absolutely nothing of value behind it.

The only thing of value in the UK is the labour of the people who live in it.

Outstanding post, deserves to be sifted.

>> ^jwray:
^ Government manipulation of interest rates is the only viable way to prevent inflation and deflation in the context of a free-floating fiat currency. Market fundamentalism is dead.


(upvoted your comment because I think what you say will come true eventually)


I don't think market fundamentalism is dead (yet), I think it has been covered up by many of the economic "tricks" we've been doing for over 30 years to prevent deep recessions. It has gotten more complex, and we have learned many new things, but the fundamentals of economics are still there. Countries can still debase their own currency with unmitigated deficit spending, for instance.



Anyway, like I said above, unemployment is going to become a huge issue in the not-too-distant future (assuming we don't run out of resources or kill ourselves first). I like Austrian Economics, but I don't think it is designed to work in a world where 30%+ of the populations of developed countries do not have the option of working.

Something like Socialism will have to be adopted in the future (I feel dirty saying that). I do not know what specific form it will take, but it cannot be based on the idea of freely-available work. In a way, capitalism is hitting the fan... I just hope our current and future leadership can adapt to the impending situation instead of sticking to "what has worked in the past".


Edit: if you're wondering where technology is going, try this out: http://en.wikipedia.org/wiki/Technological_singularity

No one really knows where that will lead, but it sure as hell won't be "business as usual".

^ Government manipulation of interest rates is the only viable way to prevent inflation and deflation in the context of a free-floating fiat currency. Market fundamentalism is dead.

^In a fiat currency system, anything is possible.

We live in a republic, not a democracy. The constitution sets up a system of sound money not fiat currency, and for good reason. I think it was funny how he dodged the question of how his hero would of totally hated the idea of a central bank. Though, it isn't the idea of the central bank and fractional reserve that would of been most disturbing, it would off been the complete control of the money system being in the hands of the government. Historically speaking, this almost always results in either hyper-inflation or stagflation.

Greenspan himself was a former Austrian economist until he moved on up the chain of command. The same happened with Nixon and other various political figureheads. Power corrupts I guess

>> ^DrPawn:
Very nice. Why can we not have a CEO like that ?


They don't get a lot of attention, but we do. We'd have a lot more, unfortunately our socialist government feels it necessary to subsidize overpaid and corrupt companies with money appropriated from underpaid ones. The beauty of free market capitalism is that when a company leader abuses precious capital by using it to simply overpay themselves for no additional production, a competitor will invariably take that opportunity to invest or lower prices rather than give it to themselves, thereby forcing the other company to do the same or fail.

This would happen a lot more often if we didn't have what has become known as "corporate welfare." Since people continue to enable the appropriation and redistribution of taxes/inflation on vast levels by voting for socialist republicrats every election cycle, we see a tremendous amount of subsidization that begets self-perpetuating fraud and excess. This is the act in which a socialist government engages: a tax is forcibly appropriated money, and it is levied on all, but distributed to select entities. Those entities tend to be the ones who are the most overpaid and corrupt, because those are the types of entities that bribe politicians into doing so. Without income taxes or a fiat reserve currency, this would all be impossible.

Unfortunately, only 3% of America understands libertarian concepts fully, so we're essentially doomed to another lengthy depression. Europe is somewhat spared from this because

(a) their fiat currency is not the reserve currency. They did not have the capacity to export their inflation abroad and distort the direction of their economies into a service sector, non-manufacturing house of cards dependent on foreign credit to consume foreign production. If they're smart, they will only suffer to extent that they loaned us money that we are trying to pay back with a printing press instead of a manufactured product.
(b) they don't have a gargantuan military empire.

All else is practically equal, they suffer from the same tax-and-inflate socialist policies that plague us today. It's just that we've taken it a step further. It's a complete U-turn from our original principles that got us from nothing to world power. And socialism will lead us back down to third-world status when the dollar finally collapses and the trillions sitting in foreign vaults comes home to roost.

^ Im not sure what you are actually getting at there. Some jobs just don't have a place in the market. They are providing a good or service that people don't want (or want enough to justify the cost). What we have now is companies that people voted with their dollar should die being bailed out by tax dollars. More over, the tax revenue isn't coming from taxes itself, but being printed. It no longer represents the value of total goods and services in the market place like a fiat currency should. The result isn't something new, it's hyper-inflation. It has happened many times around the world and either results in massive reform or economic collapse.

Peter is just pointing out what is already historically the case, printing money you don't have causes massive inflation. Printing what will soon be 1/5 the GDP (about 4-5 trillion in bail outs and climbing) will cause hyper inflation, about 20-30% if the trend continues. The people this will hurt the most are the poor and elderly; basically those who's wages are fixed or slowly adjusted with the inflation rate.

wiki: The terms fiat currency and fiat money relate to types of currency or money whose usefulness results not from any intrinsic value or guarantee that it can be converted into gold or another currency, but instead from a government's order (fiat) that it must be accepted as a means of payment.


ALSO:

As of June 13, 2008, the US nickel has $0.06013 in metal content; all circulating US nickels carry a 20.3% premium over face value in metal content metal at market prices. The intrinsic value of pre-1982 US cents, weighing 3.11 grams, are worth $0.02414, 141.4% above face value in metal content at market prices. However, post-1982 US cents, which weigh 2.5 grams, are 97.5% zinc and 2.5% copper (coated over the zinc) by weight. These have an intrinsic value of $0.00508 as of June 13, 2008, or 49.2% less than face value.


source wikipedia

take your pompous name and shove it up your ass. Then answer the following question:

Name one country that has ever had PPP median wages as high as OECD simultaneously with absolute laissez-faire economic policy (no taxes, no fiat currency, etc).

Name one country that has ever had PPP median wages as high as OECD simultaneously with absolute laissez-faire economic policy (no taxes, no fiat currency, etc).

Tags for this video have been changed from 'ron paul, money, monetary, inflation, economy' to 'ron paul, money, monetary, inflation, economy, federal reserve, fiat currency' - edited by my15minutes

>> ^imstellar28:
^I have never once argued for or supported anarcho-capitalism. It drives me nuts when people associate capitalism with anarchy. I am as strongly against anarchy as I am socialism.
Mainstream economists disagree with me like the mainstream disagrees with me that the earth was created more than 10,000 years ago. Keynesian economics holds about the same weight as intelligent design in my book. It is a completely unsupported "theory", and is facing an intense amount of contradictory evidence, yet it still persists.
Fraud is illegal in this country right? I am charging him with 300,000,000 counts of fraud. Isn't that enough to put someone away for life? I am also charging him with treason. Isn't that enough to warrant the death penalty? I was giving the rest of the "mainstream" the benefit of the doubt. If you can prove they are familiar with Austrian theory, then its going to be a long day at the noose. I am positive this is not true in most economic programs in the country. There are less than a dozen Austrian programs in the country and 25 years ago there were less than a dozen prominent Austrian economists in the world.
Advocating Keynesian ideas when you are versed with the Austrians is like trying to save a dying man with leeches and voodoo when you are versed in germ theory and have antibiotics in your back pocket. Greenspan is the moral equivalent of an atheist who is the pope of a church leading an inquisition.


Quit pretending that pure capitalism has been proven better by the Austrian school, without actually supplying any of that so-called evidence.

Quit pretending you know Greenspan's inner thoughts. The most likely explanation is that he changed his mind about Objectivism and Austrian economics because the evidence against them outweighs the evidence in their favor.

Give ONE example of a country that has brought its GDP (PPP) per capita to current U.S. or European levels without depending on central bank fiat currency for liquidity. All the gold and all the Oil in existence is not enough to provide an adequate amount of currency. The total value of all gold ever mined ($4.3 trillion) is less than 1/15 of the world's GDP.

^ You used a lot of words to put forward no logical argument, just a lot of "nyah nyah, I think you're wrong".

You say: Europe is choking to death from socialism.

I say: Check your facts again, Europe is excelling, and we're declining, and between the two, we're vastly closer to libertarian philosophy.

You say: Monopolies don't/can't exist.

I say: Google Enron and California. When's the last time you saw a small, independent grocery store?

You say: I'm arrogant and ignorant for denying that inflation is unconstitutional.

I say: "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;" from Article I, Section 8.

(and frankly, it was a straw man argument on your part -- I'm not opposed to the gold standard, I just don't think it's unconstitutional, nor that fiat currency is the Root of All Evil)

You say: [Democrats] don't [like the free market], you don't even know what it is.

I say: One of 'em just won the Nobel prize in economics. Someone notify the Nobel Foundation!

You say: Regulation of banks with pesky laws is impossible, so let's get rid of them so that people are forced to police the banks themselves.

I say: Why stop there? Why not get rid of property laws too, and let people engineer their own way of defending their property from thieves?

Let's tone down the level of demagoguery. I'm just as capable of calling you a an arrogant, ignorant fool, but somehow I doubt that will make you more receptive to an opposing view.

Maybe a few beers would help, but given the size of the rant, I'm not sure there are enough beers out there to do the job.

This has got to be a hard time for Libertarians -- even the Republicans have abandoned conservative economic principles, and the country seems to be swinging the way of the (moderate) Democrats.

Let's hear one example of a nation that's currently doing well with absolute laissez-faire economic policy (which implies not relying on any U.S. or European central-bank-issued fiat currency for liquidity)