[Why does this give me a real bad feeling?]

"The point is, the closer the reserve is to 100%, the less you have booms, busts and bank runs." This is not proven. Remember the gold inflation that the New World gold caused during the 1500's.

Very few things are absolutely proven, especially in economics, but that's hardly a good case to make. That gold had been accumulated over many years, then was discovered and stolen by Europeans. I can't see how anthing like that can happen again, unless there is some undiscovered civilization somewhere that has unearthed a vast horde of gold. That scenario was incredibly unique. Any further addition, or inflation, of gold will have to be done by mining, which is true wealth creation instead of debasement and is kept in check by free market forces. Overproduction quickly becomes unprofitable and corrects itself in the absence of intervention and distortion by government.

 

Aren't the people who audit the annual reports supposed to be INDEPENT CPS's? We have shares and bonds in a number of banks, both large and small, and I have yet to understand one report. Usually the footnotes comprise the greater part of the statement. The greater the extension, the less the comprehension - and that is the intension of the report. I defy anyone to certify to the health of any corporation traded on any American exchange - with his money. I refer you back to affairs at Citigroup. The management of banks (and other corps) have absolutely no interest in the welfare of depositors and other shareholders. The money is not theirs. They may steal all they want under different guises. The SEC is more useless than mammaries on a snake.

Things get much simpler when depositor assets are held at 100% reserve. You are adding a lot of other financial activity into the scenario that will always require a skilled accountant to understand, regardless of monetary policy.

 

Insofar as debasement of coinage is concerned, it was not only the monarchs who practiced the theft. There are ridges and notations on the rims of coins because people would cut slivers off of the rim. There was also a practice called 'sweating' where a person would put a number of gold coins in a leather pouch and then pump them up and down so as to get little chips to flake off and then pass the coin on with the flakes now his profit.

The recurring problem with money is that it becomes disassociated from the basic value-holding commodity. Instead of denominating in weights of a specific fineness, the true measure of the monetary value, money is denominated nationalistically in dollars, francs, etc. Once there is trust in the national denomination it can be gradually debased. If the cost of something was a specific scientific denomination of money, this would be controlled. However, in our day and age any return to a gold standard would only be practical in primarily digital form, given that economic stability has been established.

 

About free trade, we haven't had truly free trade in a long time, if ever. I consider most problems to be unintended consequences of well-intended market intervention.

[Why does this give me a real bad feeling?]

Explain gyro banking, I can't find any information on the term. The point is, the closer the reserve is to 100%, the less you have booms, busts and bank runs.

 

I don't fully accept your reasoning with the annual reports. There are other factors, and competition for clients would force independent audits and such. If you have the choice between an audited bank with an understandable report and a bank with a confusing report which is more trustworthy? This is already the case with digital gold currencies.

 

Monetary problems in the Middle Ages were related to debasement as well. When royalty controlled mints they could dilute the metal as much as they wanted, very profitably.

[Gold Std vs Fiat Cuurency]

"Do you think that gold could support the above?" What specifically are you referring to?

 

"Would our economy be what it is if not for a fiat currency?" No. I think it would be far more stable and sustainable in the long term. Market corrections would be fast and short. Our GDP wouldn't be 70% credit driven consumption and we wouldn't be on the verge of stagflation. The government would be limited to a realistic budget. Your retirement funds would retain value over time.

 

I think you are referring to the years 1979/80. Gold prices increased during the 70's after the dollar became completely fiat. Gold price was driven up as a reaction to the huge inflation and political turmoil of those years, until Volker forced a corrective recession with high short term interest rates and individuals and banks sold off much of their gold. Oil prices, along with most other commodities, spiked at the same time.

 

Gold is not a good way to make a profit, its a way to preserve purchasing power because its the most ideal natural means of exchange, as proven by thousands of years of human history.

[Why does this give me a real bad feeling?]

I didn't notice the new post in your blog, I'll check it out

 

Instead of paraphrasing, I'll just link you to the literature that I've been learning from. Banks that try to distort money supply in a hard-money system always pay consequences.

 

In Defense of Bank Failures

 

Fractional reserve banking and boom-bust cycles

[Why does this give me a real bad feeling?]

There's a link to a legal defense page on the FBI Raid page on the Liberty Dollar website.

[Why does this give me a real bad feeling?]

Just a little thought here...

 

VonNothaus has not been arrested, has not been charged, and is opening up a new business. I actually hope this goes to court because that would mean that the confiscation was not just outright theft. Regardless of any outcome, I hope that the people who legally held receipts for bullion in the Sunshine Mint have their holdings returned to them.

[I'm just blown away]

It's global warming!!! I mean climate change!!! I mean climate destabilization!!! Call your congressman!!

[Virtuous Dilemma]

Indeed, that song is The Night and The Silent Water-ish. Nice find!

[The Theory of Education in the United States]

I'm for the free market in education, but I should say that I don't think it's a panacea. If the state monopoly in education were ended, a wide variety of competing educational philosophies MIGHT be put into practice, but it could also result in many minor variations of the dominant philosophy of education (Dewey). Moreover, even in the best case scenario, there would still be the problem of knowing which methods were actually working and which ones weren't. My guess is that a free market secondary school system would resemble the university system, where the reputation of different schools depends much less on the quality of training delivered than on the quality of the process of choosing already talented and motivated students. Not that that's entirely a bad thing.

I think that if free market education was continually allowed without central manipulation, it would take about as long to get out of this mess as it did to get into it: 100+ years. In the meantime a lot of errors would be made, but at least the cumulative effect would be productive.

[Holiday Tree]

I don't give a crap what anyone calls it, but if anyone (Christian or atheist or whatever) wants to abuse and degrade our legislative system with petty bull**** because they want to control terminology that might hurt some sniveling victim's feelings, then they're just a vicious asshole and I hope Santa takes a dump in their stocking. Merry Christmas/Hanukkah/Kwanzaa/Festivus/Holidays/Whatever!!!

[The Theory of Education in the United States]

I agree. If there's one thing that will ensure the prolonged survival of overly expensive services at low quality, it's a government enforced monopoly. Any real competition and free choice would greatly reduce expensive and defective schooling.

[Getting Ahead In The Workplace: Vol 1]

My daily driver is an 11 year old Civic sedan which has been rammed by idiot drivers on two occasions, has navigated some formidable off-road trails in order to go camping (I'll have to dig up some pics), has forded through a 3 foot deep torrent of water crossing the interstate, and has gotten me though numerous blizzards and ice storms without fail. Needless to say, it's seen better days but it's a beloved little machine.

[You are Intolerant! You Must Die!]

Imagine if she had named a pig Muhammad.

 

Or even worse... allow her students to name it!!!

[Schools and Money Don't Mix]

"Well I guess the school will just have to pay for this somehow even with all of our budgeting problems"

 

Good god.

[The Theory of Education in the United States]

All I can say is that you have my utmost admiration because if the human race turns out all right, it will be because of parents like you. At the moment, I'm personally too afraid to voluntarily bring any kids into the world, for their own sake.

[The Theory of Education in the United States]

It's just a new confirmation of the view that I have adopted which essentially states that forced mass schooling in the United States was designed from its very beginnings not to educate, but to manufacture human resources using a pragmatic, institutional 'machine' which by its very nature lacks any empathy or conscience. This was done for the 'common good' because it creates in the masses the potential for corporate efficiency and consumerist conditioning which are required to accommodate mass production. Both primary and secondary schooling, or instruction, were inspired by the systems set in place in the Kingdom of Prussia as attested to in Horace Mann's writing and by the rise of research universities in the German model such as Johns Hopkins, Stanford, the University of Chicago, etc.

 

The entire overhaul was undemocratically driven into government policy primarily by the educational foundations controlled by Rockefeller, Carnegie, Morgan, and Ford. In fact, there was strong opposition and rebellions from the lower class citizens who were supposedly the main beneficiaries of the new policies. I'm sure the intents were not malicious, but the effects were not misunderstood either. I see it as the efforts of these exceptionally capable and successful men (some of whom were self educated) to make the system work better in the same way you would improve a mechanical system. The problem with this is that it leaves no room for real education and that mechanical systems can never treat humans as humans and still be efficient at producing the intended results. Research universities can surely crank out discoveries useful to industrial progress using positivist methods, but resources would be badly wasted if they also attempted to create classical intellect. People who are unable to thrive in this system of labels, grades, and hierarchies are essentially separated out like chaff, even if they have intellectual potential.

 

The result as I see it is that this system produces the kind of people who are better managed by experts than having to manage themselves, which undermines our old tradition of democracy and self-sufficiency. Consider what Walt Lippmann has said:

 

The thesis I venture to submit to you is as follows: That during the past forty or fifty years those who are responsible for education have progressively removed from the curriculum of studies the Western culture which produced the modern democratic state; That the schools and colleges have, therefore, been sending out into the world men who no longer understand the creative principle of the society in which they must live; That deprived of their cultural tradition, the newly educated Western men no longer possess in the form and substance of their own minds and spirits and ideas, the premises, the rationale, the logic, the method, the values of the deposited wisdom which are the genius of the development of Western civilization; That the prevailing education is destined, if it continues, to destroy Western civilization and is in fact destroying it.

I realize quite well that this thesis constitutes a sweeping indictment of modern education. But I believe the indictment is justified and here is a prima facie case for entering this indictment.

 

The lesson is, I think, a fairly clear one. In the absence of institutions and education by which the environment is so successfully reported that the realities of public life stand out sharply against self-centered opinion, the common interests very largely elude public opinion entirely, and can be managed only by a specialized class whose personal interests reach beyond the locality. This class is irresponsible, for it acts upon information that is not common property, in situations that the public at large does not conceive, and it can be held to account only on the accomplished fact.

[And people wonder why]

What is going to happen to all these kids?

 

Well Moon, if they have a bit of common sense (rare, these days) and somehow manage to escape with a good sense of personal responsibility, I think they turn out OK. Especially if they have a good friend or two who will help them through the issues that their childhood will have invariably left them with.

 

Yeah, my wife is like that. She was responsible for herself and her idiot older siblings, while her parent were, and still are IMO, functioning like kindergarteners. Sort of 'scared straight' by the appalling example set by mom and dad.

[Oh the Joy!]

Sweeet!

[And people wonder why]

Ohhh god, don't get me started.

 

Justly and consistently delivered physical discipline is painful for a very short amount of time, yet it creates self-discipline, the life-long benefits of which cannot be understated. This is especially powerful when paired with positive reinforcement of self-disciplined behavior. Self-discipline has to be one of the most important aspects of living a fulfilling life. Yet, physical discipline not only draws an incredible torrent of unsolicited criticism, it can potentially entitle the State to assume ownership of your child. Pain is a remarkably beneficial thing, we owe to it the existence of life and the ability to experience happiness.

 

Here's a recipe for the worst kind of abuse, completely legal and guaranteed to drastically lower your child's ability to enjoy life and increase their potential to spread misery to others:

 

Generally treat your child as a nuisance.

 

Only show them love as a means to manipulate or obligate them.

 

Only discipline them when you need to release your own stress, insecurity, humiliation, anger, etc and be sure to do it for extremely petty offenses for which you yourself are most guilty.

 

Discipline them by tearing down their self-esteem, playing mind games, turning their words back on themselves, and generally making them confused, frightened, and unsure until you break their will.

 

Once you break them down, tell them you love them.

 

Let them get away with almost anything because you don't want to have to deal with providing guidance.

 

Try to ignore them unless you have something negative to say or something unpleasant for them to do.

 

Exploit any trust they give you.

 

Use them against your spouse.

 

Only give them what they want when they throw fits.

 

Never be satisfied with accomplishments and spike any praise you give with some belittlement.

 

If they try to resist manipulation, make them feel guilty.

 

Support them only when they do not take responsibility for themselves.

 

I'm not a parent, I've simply paid attention to how ninety-something percent of parents I see interact with their children. I was eating dinner at a restaurant several nights ago and I was completely astonished to see a parent paying full, loving attention to his two amazingly well behaved young children. I was also astonished by the fact that I was so astonished, then it actually enraged me and I became despondent. What is going to happen to all these kids?

[Why does this give me a real bad feeling?]

Of course gold reserves are finite. Thats the point. Used as money, we can only lose it all if we blow it and stop producing goods to trade for it. We only have as much as we earn and are able to save. Fiat money also has a finite value, however it has a potential for control that gold doesn't have.

 

Do you realize how much value we sucked out of the other IMF members' currencies from 1944 to 1971? Once they got wise, they realized that 'interest paying' US Treasury securities were actually a means of exporting US inflation and they wanted out of the deal because they were getting shafted. It's the same old story of un-backed monetary expansion which causes the run on the bank, except we shut the window before we had to own up to our guarantees.

 

Now, theres nothing to back dollars except the trust of everyone who holds a dollar. Once people, businesses and countries realize that this trust allows the Federal Reserve to suck away the value of their holdings through monetary expansion, they will try to transfer their holdings to something with real value, such as gold, as we saw with the Liberty dollar. (flashback to 1971?) I'm sure you can understand what will happen if foreign banks decide to switch to Euros and send their dollars back to the US.

 

It ultimately doesn't matter what the Fed does right now, past actions have yet to catch up with us. We need a currency that forces responsibility, not one that relies on the responsibility of politicians and bankers. If you want to be financially secure, you have to be fiscally responsible. We traded our real money for a huge credit card that we've now maxed out and we need to go back to acting responsibly with real money. How is it even feasibly possible to pay off our current debt and meet our unfunded future obligations which are even more expensive?

[Why does this give me a real bad feeling?]

Moon, have you seen this book?

 

I saw this today in The Strand and almost bought it. But when I glanced through the index, I didn't see any entries for Liberty dollars or NotHaus. Thought I'd ask you first if you know whether it's worth picking up.

 

-- Nephele

No, I wasn't aware of that book. I'll have to file that one into the bottomless queue of books-that-I-want-to-read-but-haven't-had-time-to.

 

And yes, Uncle will make any event his business that can possibly involve anything with any perceived value. Anything that interferes with this is illegal.

[Why does this give me a real bad feeling?]

I understand the technicality of corporate barter transactions, but if the transaction did not occur at a barter exchange, and two people simply swap items, how can you really prove it? If I give you some used books in return for a numismatic Roman coin, who and what will be taxed? Barter happens everywhere, everyday without being taxed.

 

Take a video arcade for example, the exchange between the official currency and the private barter currency which exists in the form of tokens is what is taxed. Who and what is taxed when you voluntarily purchase entertainment services using the tokens?

[Why does this give me a real bad feeling?]

I don't know what the truth is, but I trust the government least.

 

Here's some good spin:

http://blogs.usatoday.com/ondeadline/2007/...-seize-two.html

Federal agents have reportedly seized illegal "Liberty Dollars" and other currency, including two tons of copper coins bearing the likeness of GOP presidential candidate Ron Paul.

 

The raid took place yesterday in Evansville, Ind., at the headquarters of the National Organization for the Repeal of the Federal Reserve Act & Internal Revenue Code, a group that the government accuses of producing and distributing illegal currency

 

Yet, there are these statements made prior to the current administration:

Claudia Dickens, spokeswoman for the U.S. Treasury Department's Bureau of Engraving and Printing,

said American Liberty Currency is legitimate.

"There's nothing illegal about this," Dickens said after the Treasury Department's legal team reviewed

the currency. "As long as it doesn't say legal tender there's nothing wrong with it."

 

"It's not counterfeit money," concurs Ron Legan, Special Agent in Charge (SAC) of the Seattle,

Wash., Secret Service field office. Having investigated this regulatory matter closely, he concludes that

the silver certificates are well within the highly restrictive boundaries of American monetary

guidelines.

 

This is revealing:

http://blog.washingtonpost.com/the-trail/2...6/post_203.html

In the affidavit, an FBI special agent states that he is investigating NORFED for federal violations including "uttering coins of gold, silver, or other metal," "making or possessing likeness of coins," mail fraud, wire fraud, money laundering and conspiracy. "The goal of NORFED is to undermine the United States government's financial systems by the issuance of a non-governmental competing currency for the purpose of repealing the Federal Reserve and Internal Revenue Code," he states.

 

The following is from the President's July 17th Executive order, which I posted in this blog:

http://www.whitehouse.gov/news/releases/20...20070717-3.html

The Secretary of the Treasury, in consultation with the Secretary of State and the Secretary of Defense, is hereby authorized to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA as may be necessary to carry out the purposes of this order. The Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the United States Government, consistent with applicable law.

 

I suppose its all justifiable in a variety of ways by the plethora of laws and orders which exist. The point is, those metals are gone, even the metal lawfully owned by the certificate holders, and a rapidly growing alternative, untrackable, and untaxable means of trade has been shut down. FBI agents don't raid video arcades for tokens because those barter currencies are harmless. That's why I have a bad feeling, because precedents always open a door.

[Why does this give me a real bad feeling?]

The grounds on which the FBI confiscated the metals was money laundering or mail fraud according to the warrant. It has already been acknowledged by government officials that Liberty dollars are not illegal as long as they are not labeled as 'legal tender' and are used as voluntary barter items. The coins have "Liberty Dollar' on them and even a website URL. People who would confuse a Liberty dollar for official US currency would also probably confuse a Krugerrand.

 

Most of the money was actual metal, a small percentage of Liberty dollars were redeemable certificates of ownership of metal at the Sunshine Mint, also raided. http://sunshinemint.com/

 

However, the popularity and use of Liberty dollars as voluntary tender had been growing among small businesses because barter transactions cannot be taxed.

[Why does this give me a real bad feeling?]

0.8% inflation rate??? Must be a 'core' rate, i.e., ex the things we buy, such as food, energy, clothing, telecommunications, air plane tickets, and lest I forget, stamps. Maybe that's a goof. Perhaps the inflation survey was conducted on Pitcairn Island.

Apparently, it hasn't been that low since 1963.

 

I guess there's not much chance of putting in my order for some Ron Paul dollars now.

 

-- Nephele

If you want a safe way to buy metals that can't be confiscated:

http://www.perthmint.com.au/certificateprograms.aspx

 

If you wanted the Ron Paul coin specifically, I'm sure you can still find it. I just did a quick search on ebay and there are quite a few 1oz silver ones, but I bet you'll pay quite a bit more than the silver value.