The Austrian School Deception : Austerity , Economic Snake Oil and Genocide

[Freeski]

as always freeski, couldnt have said it better myself.

Thanks!

[trailhound]

(2)  The Austrian School is far too austere in its orthodox form and has no social net which, I believe, is necessary for a civilized progressive functioning society.

 The prosperity of individuals would be the safety net.  If i am doing well enough i will help those i can and i am not alone.  At the very least if people had more holdings they could create more business opportunities for the 'less fortunate'.  I would not be opposed to some help for the truly disabled.

[grapecrusher1]

There has been some criticism over my point that some aspects of socialism should be considered.  These arguments are based on "trust" and voluntary charity -- which dont work in human reality (please present an example that goes beyond friend and family).  The top rated places to live on the planet are all pseudo- socialist countries (Canada, Scandanavia) there is a reason for this.   

[Freeski]

There has been some criticism over my point that some aspects of socialism should be considered.  These arguments are based on "trust" and voluntary charity -- which dont work in human reality (please present an example that goes beyond friend and family).  The top rated places to live on the planet are all pseudo- socialist countries (Canada, Scandanavia) there is a reason for this.   

It's a paradigm shift, with different rules.

Canada, BTW, is a nation of infants when it comes to understanding political philosopy and the concept of freedom. I suspect the rest of the world is just the same, and not by accident.

[trailhound]

I dont want to live in canaduh i know that.

[thrashbassist]

Canada, BTW, is a nation of infants when it comes to understanding political philosopy and the concept of freedom. I suspect the rest of the world is just the same, and not by accident.

I agree. I have a close friend in Toronto who's a huge truther, and he tells me all the time that most Canucks will just roll over when the time comes.

[Freeski]

I agree. I have a close friend in Toronto who's a huge truther, and he tells me all the time that most Canucks will just roll over when the time comes.

This is one seriously brainwashed society, but only because of a couple of centuries of programming and indoctrination.

Bottom line: the NWO can't exist as they do WITHOUT State support. The State gives them the infrastructure from which to milk us all in so many ways it should scare the shit out of you. The size and scope of government IS the root of the problem, IMO. Cut government and the mass sleaze magically fades away. Liberty works!

[VALiberaltarian]

This thread is very interesting to me because like the OP, I think the austrian school isn't really the "natural god given" solution to our economic troubles. Although I think that some of it's criticisms are legit, it's solutions are mostly regressive. Some of you are right on in identifying the paradoxical (and absolutist thinking vocalized by it's adherents. Here's one that I noticed in this very conversation.  lostdog2323 states that:

And even if you did you still have to stop the moron public from clamoring for their own demise through social programs.

and that:

The prosperity of individuals would be the safety net.

Now if the public really are all suicidal morons then how are they going to enable the infinite wisdom of the free market and all create a "safety net" of prosperity? The answer is they can't. So no great miracles will emerge from a population of morons.

Now what if the public aren't morons and the wisdom of the free market is exactly what creates the desire for cost sharing risk reducing "socialist" programs? Well in that instance then the mutually exclusive nature of free markets and government espoused by austrians is violated. So that doesn't work either.

In any case the comments and associated paradoxes, as  quoted above, are pretty typical ones to come out of fans of the austrian school.

[Freeski]

This thread is very interesting to me because like the OP, I think the austrian school isn't really the "natural god given" solution to our economic troubles. Although I think that some of it's criticisms are legit, it's solutions are mostly regressive. Some of you are right on in identifying the paradoxical (and absolutist thinking vocalized by it's adherents. Here's one that I noticed in this very conversation.  lostdog2323 states that:

and that:

Now if the public really are all suicidal morons then how are they going to enable the infinite wisdom of the free market and all create a "safety net" of prosperity? The answer is they can't. So no great miracles will emerge from a population of morons.

Now what if the public aren't morons and the wisdom of the free market is exactly what creates the desire for cost sharing risk reducing "socialist" programs? Well in that instance then the mutually exclusive nature of free markets and government espoused by austrians is violated. So that doesn't work either.

In any case the comments and associated paradoxes, as  quoted above, are pretty typical ones to come out of fans of the austrian school.

Can you say that another way?

[trailhound]

Can you say that another way?

dude, VA LIBERALtarian what else you need to know.

 I know this, i have worked many years and lived paycheck to paycheck and if pot were legal and i got to keep what i earn instead of investing it in govt programs i could be filthy rich by now and would be happy to show anybody else with their hand out how to do the same.  More successful people empowered to take control of their lives would produce more all around and the libs could survive off the food falling off the table if thats the best they could think to do..

[Freeski]

dude, VA LIBERALtarian what else you need to know.

 I know this, i have worked many years and lived paycheck to paycheck and if pot were legal and i got to keep what i earn instead of investing it in govt programs i could be filthy rich by now and would be happy to show anybody else with their hand out how to do the same.  More successful people empowered to take control of their lives would produce more all around and the libs could survive off the food falling off the table if thats the best they could think to do..

Groovy!

[Revolt426]

This is one seriously brainwashed society, but only because of a couple of centuries of programming and indoctrination.

Bottom line: the NWO can't exist as they do WITHOUT State support. The State gives them the infrastructure from which to milk us all in so many ways it should scare the shit out of you. The size and scope of government IS the root of the problem, IMO. Cut government and the mass sleaze magically fades away. Liberty works!

Actually, their influence over the Government is straight from the Private Banking Cartels, and they are currently allowing our infrastructure to collapse.

Liberty works just fine, but if your definition of Liberty would result in a devestating collapse of the economy if fully (or partially in many respects) implimented, that is not an accurate description of Liberty in my opinion.

Empire is a privatized entity, going back to the East India Company and Lord Shellburne ( A privatized navy ) during the Chinese opium wars. It will always be easier for them to gain control of the money if it is issued by a private entity as opposed to appropriated by Congress and issued by the Treasury. The TARP Bill got a massive protest for 750 Billion dollar - the FED (A Private Bank) has secretly loaned somewhere around 9 Trillion and guarenteed about 4 more in currency that have no value because it was merely printed to pay off bills, nothing was produced with it.

If there was no FED, this secret banking cabal would not exist, and the FED is a private entity.

[aerborne]

Again, you target Webster Tarpley when my entire essay merely quotes him a few times, can you say STRAWMAN?

THAT'S NOT A STRAWMAN!

Neocons wrap themselves in the American flag when promoting their views; Obama cultists wrap themselves in the "anti-racism" flag when promoting their views; and certain Austrian Schoolers wrap themselves in the Ron Paul flag when promoting their views.

It's a shameless appeal to emotion, nothing more.

And that's a shameless ad hominem attack.

No one here is advocating the Federal Reserve System, however - their views on inflation are quite absurd. "If you print money, you get inflation" , well.... How about if you build something that promotes economic growth with the currency you just printed?

Is that going to cause inflation? i don't think so.... This ignores the prospect of deflation as well, something never mentioned by the Austrian School as if it didn't matter (when infact, deflation has caused nearly every depression in U.S. history)

I am not even advocating any Economic School infact, i am pointing out the flaws of the Austrian School so people do not go around preaching it as if it is the only alternative to the status quo.

This is a real strawman. You still get inflation of the money supply (you're obviously misusing the word inflation (at least in terms of how it's defined by austrian economists), define it for me, so we're clear) but creating an increase in supply creates a reduction in prices. Reduced prices are a symptom of deflation, increased prices are a symptom of inflation. You misuse the word and say "There won't be inflation if the increase in supply goes up with with inflation" It's a distinction you leave out, and an important one. What you're proposing, is some sort of smart inflation to increase GDP, or, at least what the brains in the government THINK (or will lie about) increasing GDP to reduce prices.

Again you use factual errors, and leave out data to misrepresent and attack austrian economics. It's a STRAWMAN, and more factual errors.

No, as usual it's the Austrian School that is ass-backwards, because according to them, the mere fact that the gold-backed Federal Reserve Note had 20% more "purchasing power" in 1932 than in 1928 means that the average American should have been, if not better off than before, then at least no worse off.

The reality, of course, is that most Americans were considerably worse off than before.

And this was hardly the first time that "deflation" had had this sort of disastrous effect on people's lives (the very "effect" which Austrian Schoolers blindly insist it doesn't have):

Strawman. What austrian said this? according to whom or what do you make this statement representing austrian economics? You ignore the factual details of the great depression to make an arbitrary statement that "since prices went down 20% people should have been better off" ignoring the Unemployment numbers and the massive reduuction in GDP. This is an outright LIE and a strawman. Rothbard wrote an entire book, called "America's great depression" in which he very clearly didn't think that americans were better off.

----------------------------------

"[Andrew] Jackson and Van Buren removed the monetary power from the private bankers but did not re-establish it in the hands of the nation. Instead, Van Buren organized the Independent Treasury System, establishing 15 sub branches of the Treasury to handle government moneys in 1840. From December 1836 the government moved toward making and receiving all payments in coinage, or truly convertible bank notes....Once the state bank notes were no longer accepted by the government, their circulation was cut back dramatically.

"This was the closest our nation has ever come to implementing a real gold/silver standard. Operating under the commodity theory of money, Van Buren, who truly cared for the Republic, helped bring on the worst depression the Nation had ever seen, starting in 1837. It was reportedly even worse than that caused by the 2nd Bank of the U.S. in 1819. Bad as the state bank notes were, they had still been functioning as money!

"Those who proclaim that no gold and silver money system has ever failed should consider that whether you are a laborer, farmer, or industrialist, the money system's success or failure is not measured by the value of a piece of metal. When your job, your farm, or factory has disappeared in a monetarily created depression, the system has failed!" [Emphasis added]

-- Stephen Zarlenga, The Lost Science of Money, p. 426

More outright Lies. The state banks were still printing their own notes, fractional reserves, and inflating the economy. You have no factual numbers or evidence to support these outright lies, and you cherry pick your data. I've already debunked this in the webster tarpley (or reform thread) with the REAL numbers of inflation in the economy. It was not gold and silver that created this depression in the slightest. More over, the fractional reserve notes printed by banks often times had their specie redemptions suspended by the states. Gold and silver thrived in this period until gresham's law took over, because Jackson had the government fix the gold-silver ratio, something Austrian's are against.

The fact that Austrian Schoolers continually make blanket assertions that blatantly contradict historical reality shows that they are, indeed, in the business of peddling "economic snake oil."

http://monetary.org/refute.htm

No, it's YOUR assertions without factual support that are the lies. REAL Austrians have written entire books with the financial data OMITTED by you.

One could easily posit all sorts of ridiculous fearmongering scenarios concerning government-controlled police and government-controlled armies as a way of scaring the gullible into embracing the stateless utopian fantasy world of the Austrian School, wherein--according to those who promote this delusional, quasi-religious fairy-tale--a mystical, God-like entity euphemistically called the "free market" magically keeps privately controlled police and privately controlled armies from terrorizing, oppressing and enslaving people.

[citation needed] This is an absolute strawman. Austrian's don't advocate? Who do you suppose the austrians think would prosecute fraud and murder? Make sure when you answer this you include a source, from the horses mouth not some other horses ass.

What you're either deliberately ignoring or blissfully unaware of is how oppressive "governments" come to exist to begin with:

       http://forum.prisonplanet.com/index.php?topic=107307.msg653514#msg653514

Quit quoting lysander spooner and pretending like the black codes and jim crow laws weren't in effect. You completely and arrogantly ignore the context of this quotation by spooner, and the very ideals he stood for.

The typical skewing of facts, mis understanding of history and parroting will continue so long as people do not do their own research and use google with sourceless information.....

So, i am assuming you will keep searching the internet to copy and paste things with no concept of what you are pasting , that's fine.... just don't expect to be right about everything becuase you infact are not reading any books or documenting your sources.

ROFL Pot calling the kettle. Oh man that's hilarious.

I would think the "invisible hand" would work only with a sound economic system for typical corrections (that do not destroy countless lives). When you have a Depression or full blown collapse on your hands, you really have to produce your way out of it.

That's something the austrians say as well. liquidate malinvestment and put it into real production. Having a $500,000 invested in a house that pays only 1000$ in rent (in terms of neighborhood prices) is a bad investment. 

The way to do that is to provide the modernized economic infrastructure to spurr the private sector.....

I mean, a short example...... we have 1/3rd LESS hospitals in this nation than we did in the 1940's..... obviously the population has expanded....... And they are still closing down on a monthly basis...

Our Dams are falling apart, our energy is totally in-sufficient to expand the economy, our bridges actually fall down!  .

this is run by government today. As i said in another thread. What if i tried to build my own highway connecting austin to abilene tx?

This should not be occuring, and it surely does not help the private sector with their daily economic activities...

So if a sound system were implimented there would be no need for a tremendous intervention (like the Government freezing all Derivatives and putting the FED system into bankruptcy reorganization)..... There would be natural corrections but the current situation cannot be corrected in such a way.

It almost sounds like you'd support the NAFTA superhighway.... (hey my turn to make a straw man)

To hear certain Austrian Schoolers talk, Friedman was a flaming communist just for saying that! 

Which? Got a quotation?

[aerborne]

We are currently in the worst economic breakdown crisis in the history of humanity, and a worrisome grassroots movement of people who have been utterly brainwashed by the Austrian School of Economics, which is nothing more then a cult because there is never any compromising with the followers of this school. If it isn't their way, it's wrong. The Austrian school has been equated with the only solution to provide what they euphemistically call "Free Markets" and this is a lie.

Ad hominem. Your essay starts with insults. That shows a clear bias, and vindictiveness, and is a poor way to start anything. It shouldn't be here at all, period.

Due to this grassroots movement of brainwashed people ,  the issue must be raised that the Foundations of  the Austrian School of Economics are 100% distortions, lies and trickery. The fact of the matter is, if Austrian methodology is imposed on the people of the world it will result in a massive and sudden drop in population levels and the return to what some would call, the Stone Age. The primary flaw in this school is that it does not take into account that a physical economy is primarily based on science and not mathematics. If you use mathematics for all economic theory, you are eliminating something called Dynamics. Dynamics can occur in population levels, events (wars, disasters) , or even orchestrated economic breakdowns such as the one we are currently witnessing. The Austrian response to what we are currently experiencing is, "This is a correction" - on the contrary, this is an Orchestration via the privatized issuance of money, designed to de-populate the planet. The Austrian Solution , allow the system to collapse and de-populate the planet.

The fact of the matter is, prefacing a paragraph with the fact of the matter is, doesn't make it true. Please provide factual evidence rather then ad hominem attacks and arbitrary assertions.

In this thread, i will attack the primary foundations of the Austrian School thereby proving them to be falsehoods with factual information and thinking.

i promise you won't.

I. The GOLD STANDARD , Monetarism , and ignoring the importance of Productive Labor

Monetarism
A set of views based on the belief that inflation depends on how much money the government prints. It is closely associated with Milton Friedman, who argued, based on the Quantity Theory of Money, that the government should keep the money supply fairly steady, expanding it slightly each year mainly to allow for the natural growth of the economy.

Inflation doesn't depend on how much money the government prints. It depends on the supply, and demand, for money. More supply means less demand, less demand means higher prices for other goods. This economic principle is ignored in ALL of your statements and arguments.

Upon looking  at this definition you can clearly see that "Expanding" the monetary supply "Slightly" each year for growth is essentially putting a CAP on economic expansion, and hence Living Standards and Population Levels. Monetarism, is what the British Empire used to control it's population since it's core was formed via the East India Company. You can also see that Milton Friedman's view of an economy certainly does not take Labor nor a Physical Economy (infrastructure) into account.

That definition is wrong, more over, to refute this claim that we need to print money every year to lower prices we need only look at the electronics and computer industry. As that industry has grown it's prices have increased a great deal over inflation. Just compare an ATI 4890 today to the ATI 9800 when it came out.

Contrary to these foolish myths, a currency is a MEANS OF EXCHANGE, and a currency's domestic value--although due in part to how much of it is in circulation (tripling the supply overnight would obviously deflate its value)--is due even more so to the wealth production (or lack thereof) that it represents when it initially comes into circulation; while a currency's international value is entirely dependent on a Nations ability to produce, transport and sell goods that other Nation States wish to purchase.

No a currency is a store of value. It's value has a supply and demand curve and what a currency is valued at changes the prices of other goods.

The underlying requirement for a Nation to produce, transport and sell goods is the Nations Infrastructure. Infrastructure is the Nations Physical Economy, and it is based on science.

"so you would have to be some kind of moron not to realize that every single one of the is absolutely true." -Weird Al.

The greatest historic example of this proven fact is Abraham Lincoln's Intercontinental Railway, which was funded with the State Issued "Greenback" , a debt free currency directly issued into productive infrastructure. The Intercontinental Railway project not only created employment at a time when the Nation was essentially bankrupt, but after it's completion it did far more:

Which was built on no bid contracts, and protected by noncompetitive laws from the other people like James J Hill who were building railroads with private money that were fare more successful.

- It allowed a scientific progression from British Empire dominated NAVAL Trade Routes to a Sovereign mechanism to transport goods across the country.

- It connected population centers and businesses allowing them to transport their goods and far greater speed at far less cost

- Most of all, it gave the Greenback real value by providing labor and increasing the populations ability to produce and sell goods , and consiquently made the United States the industrial powerhouse of the world after it's completion

Show me.

"Contrary to monetarist fetishes, the value and soundness of currency in the modern world are determined by the ability of a national economy to produce physical commodities that the rest of the world wants to buy." - Webster Tarpley

"Money has no intrinsic economic value, contrary to the opinions of such poor wretches as the marginal utilitarians.
Economic value is expressed in the form of a net increase, in an economy as a whole, of the potential relative population-density of the society...." - Lyndon LaRouche

No it's not, the value is based on the supply and demand for the currency. The soundness is based on whether or not it can be printed at the whim of someone or not.

Even Milton Friedman acknowledged that there is "no other proposition in economics that is as well established" as the proposition that "inflation" occurs only when the "quantity of money" -- even if it's fiat paper money not backed by a commodity or precious metal -- "rises appreciably more rapidly than [economic] output" (Free to Choose, p. 254)

i'm gonna keep beating my drum if you do. The supply of money reduces the demand for money thus increase the price of goods.

But according to the backwards monetary theory of the Austrian School, the issuance of fiat paper money-–even if done free of debt and in proportion to economic output--is automatically inflationary, merely because it is “fiat” and not commodity-based.

nope. Strawman. They insist that it increases the supply of money which increases the price of other goods. If for instance you increased the supply of other goods at the same time then the prices would go down. This however is like saying that there's no inflation in today's market even though we had a 75% increase in the supply of money, simply because computer prices went down due to the effeciency with which we are able to produce them compared to 10 years ago.

So the Austrian School insists that if we simply "stop printing" fiat money, let the market "correct" itself (read: let the economy collapse under the crippling weight of unpayable and ever-compounding interest debt), a mystical, God-like entity known as the "free market" will arise from the ashes of our destroyed economy and give birth a gold-based money system, and all will be well with the world.

Straw man. Not even worth debating because no one's said it.

The Austrian school would prefer "DEFLATION", which can be more destructive then Inflation as shown in nearly every Depression in United States history, including the Panic of 1837 which was caused by a Domestic Gold Standard. Regardless, there are OTHER solutions to the issue at hand then putting a CAP on Populations that will provide us with a sound currency.

Strawman. This is also an outright lie. Deflation didn't cause these depressions, it was a symptom of inflationary bubbles popping after the printing of money (in some stages redeemable in specie when redemption wasn't suspended by state governments and in some cases when it wasn't) Lets take an example of the IPO incidents of the 90's where stocks that pay no dividends were priced insanely high because everyone "knew" they could make money on the IPO. The price didn't reflect the value and the stock later crashed. Would you say that price deflation was the cause of, or a symptom of, the problem?

As one can see by looking at the definition of Monetarism, which is obviously associated with Milton Friedman, it does not take Population Levels , Infrastructure or a Nations Productive Capacity into account. When Deflation occurs (A Contraction in money supply) to the extent of the Great Depression years 1929-1933 which was about a 30% Contraction, it strangles the Nations private sector for currency. When there is less currency, it is obviously harder to obtain currency, and when the population is growing and there is less currency it inevitably leads to unemployment, poverty and eventually death.

That's an arbitrary claim without evidence, what of the velocity of money?

I am now going to highlight the major problems with instituting a Gold Standard, which would undoubtedly lead to genocide. Some of these are going to be hypothetical examples, regardless, realistic.

Emotional appeal. what evidence do you have that these proposals will lead to genocide? Worse, this is a strawman. What evidence do you have to contribute these examples to austrian economics? Should i bother refuting these since they're all straw men? I think not.

1.) First and foremost, there is not enough Gold in the entire world to facilitate the expanding population's need for currency and economic expansion. Rather then going into a plethora of writing, there are youtube clips available to explain this in an interview with Byron Dale :

Is he a geologist? There's enough gold to supply the world with rings, jewelry, computer equipment etc. I already provided you with a link for the uses of gold, all of which are supplied at a mere (insert spot).

After watching this clip, i am sure firstly, you will realize the Government has not created this mess, infact a Private Bank known as the Federal Reserve and it's entire private system that has created this mess. The FED's ability to bypass Congressional Appropriations and issue PRIVATE credit is the issue here, not the Government. Secondly, there is obviously NOT ENOUGH GOLD in the world to facilitate a planet of nearly 7 Billion (And Expanding) Human Beings!. The Video also highlights that you cannot put a VALUE on MONEY, but MONEY reflects the VALUE of the UNDERLYING ECONOMY, because the population is constantly EXPANDING and the Gold would inevitably have to be DE-VALUED to allow for population growth, which is the very thing the Austrian school Cultists scream about in any debate over monetary policy. The Video also highlights other absurdities of the Austrian School and the Gold Standard that require the Human Mind to address, as opposed to a utopian plethora of mathematical equations that allegedly prove the market will never make a mistake. Truth be told, the markets do make mistakes that are not correctable (at least not without needlessly destroying millions of lives in the process), specifically under systems where currency is issued by a Private Entity.

The supply of gold increases every year. I didn't watch the videos since this is a strawman and not worth the time: Did they campare the growthrate of new gold extracted, and gold recycled, to population growth? I've also already refuted your claim that there's not enough, as well as your claim that money is something it's not.

2.) With a Gold Standard implemented (As also highlighted in the above video) the Nation would be unable to provide the currency to build it's basic economic infrastructure. Without basic economic infrastructure, the private sector would be unable to function and the human race would return to the Stone Age, or go extinct. Basic Economic Infrastructure includes : Bridges, Roads, Railways, Transit, Water Treatment Plants, Power Plants etc...... As anyone who lives in the United States can see with their own eyes, the Nations Railways, Bridges, Roads, Energy Grids and the like are FALLING APART.

Return to the stone age? GO EXTINCT? Emotional appeal much? If we legalize drugs we'll have a pandemic of drug abuse and overdoses. Society will crumble we must ban drugs.... and gold.... and hookers. Surely you have evidence of extinction.

Now to take this particular issue a step further, without power plants, you cannot have factories or farms. Without Roads , Bridges and Transportation, you cannot have the transport (and hence the sale) of goods. So a Nations' underlying infrastructure reflects its ability to produce the goods that consumers not only within our own nation--but within other nations--wish to purchase.

Again, the best example to my knowledge of a Greenback system's economic infrastructure is Lincoln's Intercontinental Railway, which was built by spending currency into the economies infrastructure, though other Presidents have rebuilt the Nations Infrastructure with other monetary methods, the fundamental issue is the currency MUST be ISSUED into something that SPURS PRODUCTION, thereby attaching labor to it, if you will.

and again James J Hill did it better, more efficently, and consistantly with free market principles. Lincoln gave no bid contracts, to the haliburtons of his day. See Vanderbilt. You can google(or wiki) both those people for examples.

With a Gold Standard in place, Monetary policy is entirely dependent on Gold Production as opposed to Physical Economy Production in the form of Infrastructure.

Abraham Lincoln's Greenback System:
http://www.larouchepub.com/eiw/public/2006/2006_1-9/2006_1-9/2006-3/pdf/38-42_603_ecogreenbacks.pdf

3.) A Very important issue to address is DEFLATION, because this is what would wreck the economy before we even had a chance to de-value the Gold. Suppose you have outstanding debt in the form of a Mortgage, Student Loan, Credit Card Debt, Installment Loan, Commercial Loan etc.... One MUST take into account that enstating a Gold Standard would inevitably contract the amount of currency in an economy. While the value of each unit of currency would go up, the population levels would remain the same making it impossible to obtain currency to pay off these obligations. If a Gold Standard were instated now, it would likely take you multiple lifetimes to pay off a mortgage, or years to pay off minor credit card debt, you would ultimately become a slave to your creditors. (This is what William Jennings Bryan meant by “mankind” being “crucified” upon a “cross of gold.”)

This isn't really worth addressing because it's built on a grave logical error. You assume that austrian economists think depression is a good thing (strawman). You assume that deflation is the cause of historical depressions (already debunked, it's a symptom). You ignore the preceding inflation and blame DEFLATION for the depression period and blame austrian's for the depression by association based on your erroneous assumption the austrians love deflation. It's nonsense.

A Gold Standard and resultant Deflation imposed by Andrew Jackson and Martin Van Buren is precisely what started the Civil War.What occurred is this, after introducing the Gold Currency the State issued notes disintegrated, leaving many people bankrupt. Following this, since Gold has absolutely nothing to do with the value of an economy, and you cannot put a value on currency (But a currency on a Value), a bubble formed. In 1837 as Martin Van Buren entered office and established Independent Treasuries to lend......, the bubble imploded resulting in massive deflation. This again, means it was far more difficult for people to obtain the currency they needed to conduct their daily economic affairs, and the economy consequently ground to a hault (destroying countless lives in the process.) As a result of this deflationary depression, brought on by the very precious metal-based money system that the Austrian School wishes to impose on us today. The Nation was De-Industrialized in the ensuing decades........ the South was hit harder then the North and became dependent on Slave Labour to produce goods due to lack of CURRENCY, which was at the time, Gold. When did this nightmare end? When Lincoln revived fiat paper money via the debt-free Greenback and thereby freed mankind (if only temporarily) from the “cross of gold.”

what deflation? I've already posted the numbers in the webster tarply thread that clearly showed INFLATION of money in circulation during this period. the State banks were still growing, new ones were still being created, and new ones were still prining new money backed by specie, which, thanks to andrew jacksons policies was actuall coming INTO this money, allowing banks to pyramid more printing on top of it. See History of Money from Rothbard. The factual numbers are in there. You have no factual evidence of this claim, just assertions.

The same can be said for the Great Depression. In 1901 the Gold Standard was re-instated........ As we all know , in 1913 the Federal Reserve Act was passed into law. As the FED gained control over the monetary supply they created a Gold Denominated Bubble from 1921 to 1928. In 1929 the bubble was deliberately imploded, and over the 1929 through 1933 period the monetary supply contracted by 30%. This was DEFLATION, and it resulted in the systemic collapse of the United States Banking System by the time of Franklin Roosevelt’s inauguration in March 1933. People were unable to withdraw currency , cash checks and there were daily bank runs. This obviously resulted in massive poverty, breadlines and starvation as the system did not "Correct" Itself. (Although many Austrian Schoolers would perhaps maintain that it did “correct” itself, since, by 1932, the gold-backed Federal Reserve Note was 20% higher in value than it was in 1928. And according to Austrian School dogma, that means more than the fact that the level of employment was much lower in 1932 than in 1928.)

here we have the error of you associating deflation as the cause and ignoring the preceding inflation as the cause of the deflation, and attributing the results of fractional reserve banking to austrian economic theory which is CLEARLY against fractional reserve banking. Have you ever read one single tidbit of information BY austrian economists or should i refer you back to the horses mouth vs ass phrase? Austrians are against this system why would you claim this as evidence that THEIR monetary theory wouldn't work? Unless you only information is from a horses ass, rather then the horses mouth?

4.) Arguments equating a debt-based fiat money issued by a private central bank with debt-free fiat money issued by government to inflation are pure lies. Our Government currently has NO ABILITY to issue CREDIT, it is issued by a Private Bank called the Federal Reserve. The Greenback system provides debt-free currency in exchange for labor (as opposed to debt in exchange for “promises” of future labor). Without Labor, you can have no Capital , and thus no Capitalism. In other words without first producing something to sell, you have nothing from which to "capitalize"..... As the Greenbacks are spent into the economies basic infrastructure it directly represents the population levels and ability of the Nation to produce, transport and sell goods. A very simplistic example of this in regards to the basic infrastructure required for human survival is the amount of Water Treatment Facilities directly represent the amount of Water the population needs to consume for survival, or a decent standard of living.

Here's the problem with this statement: Your labor is meaningless if the labor produces nothing, for reference see: Palin's bridge to nowhere. That's exactly the economic fallacy your promoting here. You have no way of knowing whether your infrastructure project is the *RIGHT* infrastructure project. In the free market (hill vs vanderbuilt) The success of the railroads lives or dies by which entrepeneur (or government) made the most efficient (in cost and time et al) artery for traffic. An example of this would be for instance taking I-35, vs 1(mopac) vs, 360 loop, vs the new tollway at 5pm in austin.

- The Austrian argument that paper money is backed by nothing , is a complete distortion. Infact, if the Money is issued the same way the Greenbacks were issued, which is spending them into Infrastructure, it is backed with something far more valuable then a piece of metal (Gold). It is infact, backed by labor and the Infrastructure that labor has created, since it comes into circulation only when such labor has been expended in the production of infrastructure, just as monetized gold coins came into circulation only when the labor that produced gold bullion had been expended. (That's what it is to "monetize" wealth.)

Strawman, but see above.
[/quote]

[aerborne]

I'm not going to go into posts 2 and three as they follow the same progression of logical errors. Strawmen associated to Austrian Economists, Arbitrary statements without factual data, Ignoring privately funded infrastructure projects, cherry picking of history and so on. The points i've debunked on inflation, deflation, the production of infrastructure more then make the subsequent posts irrelevant. But since during the course of reading this thread  i actually got lost in this thread and found myself in another thread, so i think all of this is relevant, as it addresses some of posts 2 and 3.

You cant have it both ways. You are either an Austrian or not, you cannot say "OH, Glass Steagall was needed but everything else isn't" and then say "OH social secrurity is bad but it would be rolled back LAST", "Oh, Derivatives are bad but everything else is ok".

Bullshit. You don't know what you're talking about. Some things are fraud some things are not. So in that respect you might be right, austrians don't support glass steagal because it "regulates" fraud, instead of prosecuting it. After all the derivatives are just a way of PYRAMIDING debt... and we seem to only prosecute that in the small scale.

You double speak quite often in regards to Austrian teachings, which are essentially the Government is the enemy and cannot under any circumstances build anything for the General Welfare of the population nor regulate the infallable economic system  that will never fail so long as the enemy, Government, stays out of it.

Really? who lead you to believe that? Citation please? This is a strawman.

Glass Steagall alone proves the Austrian school is complete hogwash but we can go deeper into the matter if you wish.

No it doesn't. Pyramiding is fraud.

As for the Greenback, if the currency was ISSUED by INVESTING it DIRECTLY into INFRASTRUCTURE it would have LABOUR attached to it - as opposed to a PIECE of METAL - and infact - you're Gold Standard policies have utterly FAILED numerous times in U.S. History, let's start with the Brilliant Andrew Jackson who blew half the countries wealth by disintigrating a currency?

More lies, aside from what i've already pointed out about there being no factual evidence to support these lies, Andrew Jackson's system as i've already pointed out was a bimetallic fixed ratio that the austrians don't support. More lieing.

No absolutely not, you worry about inflation - do you realize that if a Gold Standard were implimented you would slave for the rest of your life to pay a few Thousand dollars worth of debt off via the biggest Deflaitionary HELL ever  experienced?

You would literally be a slave for the remainder of your life

How about the Great Depression? we were ON THE GOLD STANDARD prior to FDR taking office , did it stop printing of money? No, 100 Billion dollars in Gold Redeemable currency was issued by a PRIVATE bank (Hey hey Private, the Austrians love it) when the FED had 4 Billion in it's reserves.

It is dumbfounding that someone can possibly argue for further de-regulation after witnessing what the PRIVATE SECTOR , not the GOVERNMENT, did in regards to creating 1.5 Quadrillion dollars of ficticious capital.

based on fractional reserve banking run by a private central bank... Funny you blame that for this in your monetary reform but then you blame austrians for something they too are against. Out right lies, and a strawman

It is even further dumbfounding that one would argue an investment into a maglev for instance, which would triple the speed of Trade Transit and cut the cost in half - to argue that it is worthless?

Great then perhaps you have all the numbers to make a sales presentation of the profitability and growth projections that this new rail will provide. Then, feel free to pitch that to private investors who would like to get an early jump on this up and coming market.

You want the Austrian School policies, go impliment them in the United Kingdom, and here in the U.S. we will use the American System, that was founded under our first President and Treasury Secretary - then we will see whos economy expands and who returns to the stone age.

The audasity of even suggesting pegging 7 Billion souls economic opportunities to a Domestic Gold Standard is in itself suicide - you may has well do what the Japanese do and take a katana and gut yourself, because that is exactly what the result would be if we follow the "The Government cannot interfere, let the system collapse and put it back on the gold standard policy" - which would result in Martial Law due to a complete economic failure on tune with the Lombard Collapse of 1342.

You want disease, plague , deflation, poverty and genocide? then allow the bubble to explode and let the whole system collapse, as if there would be a functioning currency after such a thing happened for the "Solvent" banks to buy up the "Insolvent" Banks, when in reality nearly all the Commercial Banks in the world, which nearly all businesses in the world depend on , on a daily basis, are 100% Insolvent.

Complete emotional appeal, Funny how you accuse austrians of using fear instead of evidence then do it yourself.

No it wasn't:

What did occur in July 1864 was that our government put a limit of $450 million on the Greenbacks and from that month they started rising (i.e. gold began falling in terms of Greenbacks)....

This is a bald faced lie. Lincoln printed $150M in the Legal Tender act of Feb 1862.  150M more in July, and 150M more in 1863, died in 1865. This is a lie, and a nice creative way to spin the situation.  See History of money by rothbard the chapter entitled "Greenbacks" for more FACTUAL data. http://mises.org/books/historyofmoney.pdf

Planning4crash your lack of education historically is unbeleivable. You say the amazing growth in the 1800s was a result of the gold standard and free markets when in REALITY the united states was virtually bankrupt during the runup to the civil war due to the exact policies you are proposing. And infact revival of the greenback by lincoln and his credit system is what reindustrialized our nation and was copied by bismark of germany which re industrialized germany...... Which is where king edward came in.. Forced the german keiser to oust bismark and orchestrated world war 1 as a direct result of the lincoln style system that industrialized both nations and therefor was a threat to the british empire. Your skewing of historical facts will not work here.

Pot calling the kettle. Provide factual evidence, you haven't yet, only lies and spin on history without the factual data. Also, lots of strawmen and ad hominems.

[Revolt426]

The troll has come from the monetary reform thread to this one! praise the lord! , the one that loves the words strawman and ad hominem, thinks money has instrinisic value and puts words in peoples mouths.....

In your world, we can have numerous currency's based on whatever the all knowing market tells us (as if it could) and you omit any dynamic events - and we can even return to the Stone Age!

In your world, a hunk of gold is more valuable to an economy than a railway, and you are a master of taking peoples arguments and changing the subject : http://forum.prisonplanet.com/index.php?topic=98465.0

[aerborne]

The troll has come from the monetary reform thread to this one! praise the lord! , the one that loves the words strawman and ad hominem, thinks money has instrinisic value and puts words in peoples mouths.....

In your world, we can have numerous currency's based on whatever the all knowing market tells us (as if it could) and you omit any dynamic events - and we can even return to the Stone Age!

In your world, a hunk of gold is more valuable to an economy than a railway, and you are a master of taking peoples arguments and changing the subject : http://forum.prisonplanet.com/index.php?topic=98465.0

Yes i'm a troll for pointing out the factual inaccuracies of your statements. Attack more support your assertions less.

Or are you saying lincoln DID put a 450M$ limit? Or James J Hill didn't exist?

[VALiberaltarian]

dude, VA LIBERALtarian what else you need to know.

 I know this, i have worked many years and lived paycheck to paycheck and if pot were legal and i got to keep what i earn instead of investing it in govt programs i could be filthy rich by now and would be happy to show anybody else with their hand out how to do the same.  More successful people empowered to take control of their lives would produce more all around and the libs could survive off the food falling off the table if thats the best they could think to do..

Let me get this straight, you're attacking me as a "liberal". The definition of which you probably got from a DRUG addled fool like rush limbaugh. Then you suggest that we all grow rich by growing pot, because if everyone grows pot, demand will increase and we'll all grow filthy rich selling dirtweed to each other. Then you imply that "successful people" need to be empowered to take control of their lives, by the government no less, in the same sentence condemning liberals for wanting social programs to helping those less fortunate. And all of this superman bootstraps claptrap is coming from a person who stated in the first sentence that they live paycheck to paycheck?

WTF? Your current position couldn't be more ridiculous. You should rethink things. Here's one clue:
Part of the reason why we're in the mess we're in is BECAUSE THE GOVERNMENT EMPOWERED SUCCESSFUL PEOPLE TO DO WHATEVER THEY SAW FIT AND THEY STOLE THE MONEY AND ARE STILL STEALING IT.  


  

[Revolt426]

Yes i'm a troll for pointing out the factual inaccuracies of your statements. Attack more support your assertions less.

Or are you saying lincoln DID put a 450M$ limit? Or James J Hill didn't exist?

You are a troll for
A) using the word Strawman and Ad hominem for 80% of your arguments
B) calling a Historical fact a lie
C) Manipulating arguments and changing the topic
D) Just plain old manipulating history in general
and
E) De-Railing threads , as you have tried to do for 3 weeks in someone elses monetary reform thread using the same exact tactics.

[aerborne]

You are a troll for
A) using the word Strawman and Ad hominem for 80% of your arguments
B) calling a Historical fact a lie
C) Manipulating arguments and changing the topic
D) Just plain old manipulating history in general
and
E) De-Railing threads , as you have tried to do for 3 weeks in someone elses monetary reform thread using the same exact tactics.

http://en.wikipedia.org/wiki/Ad_hominem

An ad hominem argument, also known as argumentum ad hominem (Latin: "argument to the man", "argument against the man") consists of replying to an argument or factual claim by attacking or appealing to a characteristic or belief of the source making the argument or claim, rather than by addressing the substance of the argument or producing evidence against the claim.

http://en.wikipedia.org/wiki/Straw_man

A straw man argument is an informal fallacy based on misrepresentation of an opponent's position.[1] To "attack a straw man" is to create the illusion of having refuted a proposition by substituting a superficially similar proposition (the "straw man"), and refuting it, without ever having actually refuted the original position.[1] [2]

You're going to attack me for having an understanding of formal debate instead of addression the factual errors in your own post? That's pathetic. Especially when you yourself in this very thread proved you didn't know the difference between a strawmen and an ad hominem.

Again, you target Webster Tarpley when my entire essay merely quotes him a few times, can you say STRAWMAN?

No, that's an Ad Hominem.

"Abraham lincoln put a limit of 450M$ on the greenback in 1864" is not a fact. It's an arbitrary claim, as i've pointed out, and the FACTS actually contradict it.

I wasn't hip to your nonsensical arguments in the monetary reform thread but it doesn't matter. All my posts were deleted. Attacking me based on that, instead of the Actual facts (like the 450M) Is an ad hominem.

[Revolt426]

Thank you for doing it again to prove my point.

[aerborne]

Thank you for doing it again to prove my point.

I hate to ad populum here (google it) but everyone who reads my posts will see the numerous factual errors in YOUR posts. So attack me all you want and continue to ignore the areas where you were wrong. It's obvious to me you haven't read one single work by austrian economists and base your accusations of what austrians believe entirely on word of mouth from these boards, and from stephen zerlengas, and webster tarpley's factually innacurate spin on history.

[Revolt426]

I hate to ad populum here (google it) but everyone who reads my posts will see the numerous factual errors in YOUR posts. So attack me all you want and continue to ignore the areas where you were wrong. It's obvious to me you haven't read one single work by austrian economists and base your accusations of what austrians believe entirely on word of mouth from these boards, and from stephen zerlengas, and webster tarpley's factually innacurate spin on history.

I think if anyone looks at the original arguments, then your arguments - they will realize your arguments rest on accusations of slander, "Strawman" , "Ad Hominem" and no actual productive counter arguments , hence you are just wasting time!..

[Revolt426]

This is an example of TROLLING, when the video clearly states how much Gold is available in the world;

This was your reponse to the fact that there is not enough gold to facilitate a population of 7 Billion (And growing) human beings:

Is he a geologist? There's enough gold to supply the world with rings, jewelry, computer equipment etc. I already provided you with a link for the uses of gold, all of which are supplied at a mere (insert spot).

So, you rely in this specific argument on accusation of slander without taking what was said in the video into account at all......

just one post of 3 pages of utter nonsense you de-railed (another) thread with.

[VALiberaltarian]

Can you say that another way?

I can try, I believe that austrians, while mostly well intentioned, are idealistic and ultimately rely on an unsubstantiated faith to support their views. I think the OP said as much in the essay. This belief results in paradoxes, one of which is what I was trying to point out. When they say market, they really mean the will and wisdom of the people exchanging goods and services, which they value highly. They also say that the reason that we don't have real free markets is because the people lack the will and intelligence to allow it. This is a paradox. More importantly, they want to "empower" the individual participants to make their own choices believing that the aggregate wisdom of the crowd creates a infinately wise utopian marketplace and then cry blasphemy when the "wisdom" of the crowd votes in government run services because it reduces risk and cost to the individual. This is another paradox. These particular views aren't unique to "austrians", but most austrians share them and I highlighted them because they were introduced into the thread by a "pro-austrian" and are good examples of the fallacy of the reasoning in that school of thought.            

[aerborne]

This is an example of TROLLING, when the video clearly states how much Gold is available in the world;

This was your reponse to the fact that there is not enough gold to facilitate a population of 7 Billion (And growing) human beings:
So, you rely in this specific argument on accusation of slander without taking what was said in the video into account at all......

just one post of 3 pages of utter nonsense you de-railed (another) thread with.

Right, because you were debunking a strawman that wasn't in anyway a position held by austrian economists. I Even conceded that i didn't watch the video and asked you if it answered those specific questions (unless that part got erased somehow). You attack me rather then answering yes or no. I simply feel that you understimate the amount of gold already in circulation.

infact i did so here:

The supply of gold increases every year. I didn't watch the videos since this is a strawman and not worth the time: Did they campare the growthrate of new gold extracted, and gold recycled, to population growth? I've also already refuted your claim that there's not enough, as well as your claim that money is something it's not.

Let me ad:
http://www.goldsheetlinks.com/production2.htm

gold and population growth rates.

[Revolt426]

Right, because you were debunking a strawman that wasn't in anyway a position held by austrian economists. I Even conceded that i didn't watch the video and asked you if it answered those specific questions (unless that part got erased somehow). You attack me rather then answering yes or no. I simply feel that you understimate the amount of gold already in circulation.

infact i did so here:

Yes, another "Strawman" - of course..... not having enough Gold to facilitate the monetary supply is a strawman!.. Although we already don't have enough Gold for the entire world population & the other problems were already addressed in the essay -Let's warp to the future , say 2050..... what if the Planet runs out of Gold completely (this is of course, putting the scientific facts from the video aside)... Shall we just stop expanding the economy and put a cap on growth for the sake of using Gold (With all it's other faults) as a currency?. Perhaps we should allow a Planetary collapse if there is a problem obtaining Gold, that would be an excellent monetary system.... or is the "Free Market" going to self consciously choose which currency to use this  time?.

by the way, i simply feel you are a shining example of an Austrian Cultist for the person who had questioned that subject earlier.

[aerborne]

Yes, another "Strawman" - of course..... not having enough Gold to facilitate the monetary supply is a strawman!..

Again You distort what i said. I know what is and is not a strawman. I called this a strawman:

I am now going to highlight the major problems with instituting a Gold Standard, which would undoubtedly lead to genocide. Some of these are going to be hypothetical examples, regardless, realistic.

Emotional appeal. what evidence do you have that these proposals will lead to genocide? Worse, this is a strawman. What evidence do you have to contribute these examples to austrian economics? Should i bother refuting these since they're all straw men? I think not.

And then asked for evidence of that example as quoted above.

Although we already don't have enough Gold for the entire world population & the other problems were already addressed in the essay -Let's warp to the future , say 2050..... what if the Planet runs out of Gold completely (this is of course, putting the scientific facts from the video aside)... Shall we just stop expanding the economy and put a cap on growth for the sake of using Gold (With all it's other faults) as a currency?. Perhaps we should allow a Planetary collapse if there is a problem obtaining Gold, that would be an excellent monetary system.... or is the "Free Market" going to self consciously choose which currency to use this  time?.

I thought i already addressed this: What of velocity? But to expand on this: How much "money" does the economy need. If I have a million dollars, and spend it on a ferrari, then i no longer have a million dollars. How much money per capita does the economy need, and at what velocity does it require to achieve this. Do you even understand velocity in the economy? I don't think you do.

by the way, i simply feel you are a shining example of an Austrian Cultist for the person who had questioned that subject earlier.

Ad Hominem. I think if you had actually fact checked your copy paste of stephen zarlenga your copy pasting of his money reform would have more weight. Let me ask you, what do you base lincolns $450M dollar limit on? That he didn't print a 4th 150M? Did he pass some bill preventing congress from printing more? Did he state he would veto any further bills? Or did you just read that he did from stephen zarlenga and not fact check it?

[planning4acrash]

The idiocy of suggesting that gold stops the economy growing!!! Is BEYOND BELIEF. And, as described below, the supply of coinage can grow in sound money, even tho the money supply does not alter.

Because, with a stable money supply, resources are well allocated, and, as supply in the economy grows, prices go down. Then, what we see, is an endless growth in the money supply, but via greater fractions. Like, how a pound (British Sovereign, 0.2354 ounces) was subdivided into 20 Schillings, subdivided into 10 pennies, then you get the tuppenny (half penny) and the threepence (quarter penny). If the economy doubles, we can go for an eighth of a penny, if it doubles again, we can go for a 16th of a penny. So the money supply grows in sound money without reducing its value.

The difference is, that the money supply, with sound money, follows growth in the economy, whilst, in fiat, the money supply grows without any relationship to the economy.  THAT IS THE PROBLEM. If the economy shrinks with sound money, small coinage goes out of use without degrading the value of the coinage, if the economy shrinks in fiat money, they can't get rid of excess liquidity.

[grapecrusher1]

I dont want to live in canaduh i know that.

Moronic, off-topic thing to say and the "canaduh" reeks of intelligence.  Who said anything about wanting you to move there - please dont even visit.
Since we are way off topic -- just a little point -- that Imperial regime that u live under would toss you in jail for 20 years for the crime that you cleverly imply you engage in.  Canada on the otherhand would let you walk after taking a lot of your stuff and cash and I would assert that Canada would have decriminalized pot long ago if not for the influence of the USA.
Wise up!!  loose lips sink ships lostboy!!

[trailhound]

Actually, their influence over the Government is straight from the Private Banking Cartels, and they are currently allowing our infrastructure to collapse.

Liberty works just fine, but if your definition of Liberty would result in a devestating collapse of the economy if fully (or partially in many respects) implimented, that is not an accurate description of Liberty in my opinion.

Empire is a privatized entity, going back to the East India Company and Lord Shellburne ( A privatized navy ) during the Chinese opium wars. It will always be easier for them to gain control of the money if it is issued by a private entity as opposed to appropriated by Congress and issued by the Treasury. The TARP Bill got a massive protest for 750 Billion dollar - the FED (A Private Bank) has secretly loaned somewhere around 9 Trillion and guarenteed about 4 more in currency that have no value because it was merely printed to pay off bills, nothing was produced with it.

If there was no FED, this secret banking cabal would not exist, and the FED is a private entity.

Yes cause we know the govt only gives out no bid contracts to precious little angels

[trailhound]

Moronic, off-topic thing to say and the "canaduh" reeks of intelligence.  Who said anything about wanting you to move there - please dont even visit.
Since we are way off topic -- just a little point -- that Imperial regime that u live under would toss you in jail for 20 years for the crime that you cleverly imply you engage in.  Canada on the otherhand would let you walk after taking a lot of your stuff and cash and I would assert that Canada would have decriminalized pot long ago if not for the influence of the USA.
Wise up!!  loose lips sink ships lostboy!!

 Smells like intelligence, eh?   Cana-Duh ,No offense to people from canada its a shot at your govt. I dont mind if you take shots at mine i wont be offended   There was a thread the other night where myself and i believe a canadian chipped in too were giving canada a hard time about being commies etc. Just having some fun.  Maybe i am dumb i cant figure out how to spell canadian. Actually i think im spelling it right but the spell check thing thinks its wrong.

[James Redford]

To quote Prof. Murray N. Rothbard (from "Anarcho-Communism," The Libertarian Forum, Vol. 11, No. 1 [January 1, 1970] http://www.mises.org/journals/lf/1970/1970_01_01.pdf ):

""
It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a "dismal science." But it is totally irresponsible to have a loud and vociferous *opinion* on economic subjects while remaining in this state of ignorance.
""

What caused this depression is the same thing that causes all depressons (a.k.a. recessions) which don't have an obvious destructive event such as war-damage or natural disaster: artificial inflation of the money supply. Of which occurs through fractional reserve banking and/or an increase in fiat money, i.e., through fraudulent banking and/or through counterfeiting.

The reason why is because all prices are determined by supply and demand, including the interest rate, which is the price on loans. By artificially increasing the money supply by means of fraud and/or counterfeiting, this lowers the price of the interest rate. It thereby falsely gives the appearance of more savings existing (i.e., more saved wealth available to loan) than is actually the case. More to the point, it makes business projects that otherwise would not have been undertaken seem ex ante to be profitable, but which are later found not to be viable. Hence, by lowering the interest rate below the natural rate, it causes malinvestments.

As well, the first spenders of the fiat/fractional reserve money (i.e., the government and its insider-connected elites who create it on fiat) get the benefit of obtaining actual goods and services by spending money that was, in effect, created out of essentially nothing. That is, the government and its favored elites who create the fiat/fractional reserve money get actual goods and services essentially for free (i.e., for the cost of typing a few numbers into a computer terminal, writing a few numbers in a ledger, or printing up some paper). Whereas the rest of the economy is saddled with a devauled currency. Moreover, actual goods and services in the economy are being funneled from genuine value-producers into a parasitical sector of society, thereby making society as a whole poorer and less productive than it would have been without this parasitical drain.

Hence, in addition to causing the destructive boom-bust cycle in the economy, a fiat/fractional reserve currency also acts as an obfuscated tax, although a particularly pernicious tax.

For more on this, see:

America's Great Depression, Prof. Murray N. Rothbard (Auburn, Alabama: The Ludwig von Mises Institute, fifth edition, 2000; originally published 1963) http://www.mises.org/rothbard/agd.pdf

The above book concerns how governments create depressions/recessions through credit expansion (i.e., fractional reserve banking and/or fiat currency).

See also:

"Against Fiduciary Media," Prof. Hans-Hermann Hoppe with Profs. Jörg Guido Hülsmann and Walter Block, Quarterly Journal of Austrian Economics, Vol. 1, No. 1 (1998), pp. 19-50 http://www.mises.org/journals/qjae/pdf/qjae1_1_2.pdf

Plank No. 5 of Karl Marx and Friedrich Engels's Communist Manifesto is "Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly." (See Manifesto of the Communist Party by Marx and Engels, English edition of 1888. http://www.gutenberg.org/etext/61 ) A central bank is a government-created institution that's in complete contradiction to a free market.

For the history on how the "capitalist" (i.e., mercantilist) elite in the U.S. bankrolled Communism as well as National Socialism, see the below scholarly books by libertarian Antony C. Sutton, Ph.D.:

Wall Street and the Bolshevik Revolution, Antony C. Sutton, Ph.D. (New Rochelle, N.Y.: Arlington House Publishers, 1974) http://reformed-theology.org/html/books/bolshevik_revolution/index.html

(Note: Chapter I of the above book refers to a 1911 St. Louis Post-Dispatch cartoon illustration by Robert Minor. This can be viewed here: http://en.wikipedia.org/wiki/Image:Robert-Minor-Dee-Lighted-1911.png .)

Wall Street and the Rise of Hitler, Antony C. Sutton, Ph.D. (Suffolk, England: Bloomfield Books, 1976) http://reformed-theology.org/html/books/wall_street/index.html
http://www.mega.nu:8080/ampp/sutton_wall_street/index.html

The Best Enemy Money Can Buy, Antony C. Sutton, Ph.D. (Billings, M.T.: Liberty House Press, 1986) http://reformed-theology.org/html/books/best_enemy/index.html
http://www.mega.nu:8080/ampp/sutton_best_enemy/index.html

See also:

"Thyssen Funds Found in U.S.," International News Service (INS), July 31, 1941 http://www.infowars.com/print_prescott.htm

Vesting Order Number 248, Federal Register, November 7, 1942 http://www.mbpolitics.com/bush2000/Vesting.htm
http://www.mbpolitics.com/bush2000/Vesting%20248.gif

"Bush-Nazi Link Confirmed," John Buchanan, New Hampshire Gazette, Vol. 248, No. 1, October 10, 2003 http://web.archive.org/web/20040510030611/http://nhgazette.com/cgi-bin/NHGstore.cgi?user_action=detail&catalogno=NN_Bush_Nazi_Link

"'Bush-Nazi Dealings Continued Until 1951'--Federal Documents," John Buchanan and Stacey Michael, New Hampshire Gazette, Vol. 248, No. 3, November 7, 2003 http://web.archive.org/web/20031119040002/http://www.nhgazette.com/cgi-bin/NHGstore.cgi?user_action=detail&catalogno=NN_Bush_Nazi_2

"How Bush's grandfather helped Hitler's rise to power," Ben Aris and Duncan Campbell, Guardian (U.K.), September 25, 2004 http://www.guardian.co.uk/usa/story/0,12271,1312540,00.html

"How the Bush family made its fortune from the Nazis," Attorney John Loftus, former U.S. Department of Justice Nazi War Crimes prosecutor and current President of the Florida Holocaust Museum, September 27, 2000 http://www.tetrahedron.org/articles/new_world_order/bush_nazis.html
http://www.john-loftus.com/Thyssen.asp

----------

In addition to the above, below are some excellent articles concerning the nature of government, of liberty, and the free-market production of defense:

"The Anatomy of the State," Prof. Murray N. Rothbard, Rampart Journal of Individualist Thought, Vol. 1, No. 2 (Summer 1965), pp. 1-24. Reprinted in a collection of some of Rothbard's articles, Egalitarianism as a Revolt Against Nature and Other Essays (Washington, D.C.: Libertarian Review Press, 1974) http://www.mises.org/easaran/chap3.asp
http://www.mises.org/books/egalitarianism.pdf

"Defense Services on the Free Market," Prof. Murray N. Rothbard, Chapter 1 from Power and Market: Government and the Economy (Kansas City: Sheed Andrews and McMeel, Inc., 1977; originally published 1970) http://www.geocities.com/vonchloride/marketdefense.html
http://web.archive.org/web/20040720094416/http://mises.org/rothbard/power&market.pdf

"The Private Production of Defense," Prof. Hans-Hermann Hoppe, Journal of Libertarian Studies, Vol. 14, No. 1 (Winter 1998-1999), pp. 27-52 http://www.mises.org/journals/jls/14_1/14_1_2.pdf
http://www.mises.org/journals/scholar/Hoppe.pdf

"Fallacies of the Public Goods Theory and the Production of Security," Prof. Hans-Hermann Hoppe, Journal of Libertarian Studies, Vol. 9, No. 1 (Winter 1989), pp. 27-46 http://www.mises.org/journals/jls/9_1/9_1_2.pdf

"Police, Courts, and Laws--On the Market," Chapter 29 from The Machinery of Freedom: Guide to a Radical Capitalism, Prof. David D. Friedman (La Salle, Illinois: Open Court Publishing Co., 1989; originally published 1971) http://www.daviddfriedman.com/Libertarian/Machinery_of_Freedom/MofF_Chapter_29.html

Concerning the ethics of human rights, the below book is the best book on the subject:

The Ethics of Liberty, Prof. Murray N. Rothbard (New York, New York: New York University Press, 1998; originally published 1982) http://www.mises.org/rothbard/ethics/ethics.asp

If one desires a solid grounding in economics then one can do no better than with the below texts:

Economic Science and the Austrian Method, Prof. Hans-Hermann Hoppe (Auburn, Alabama: The Ludwig von Mises Institute, 1995) http://www.mises.org/esandtam.asp

The small book Economic Science and the Austrian Method by Prof. Hans-Hermann Hoppe doesn't get into political theory, but only concerns the methodological basis of economics (i.e., the epistemology of economics). I would recommend that everyone read this short book *first* if they're at all interested in economics. There exists much confusion as to what economics is and what it is not. This book is truly great in elucidating the nature of what economics is and and isn't. If one were to read no other texts on economics, then this ought to be the one economic text that one reads. Plus it doesn't take all that long to read it.

"Toward a Reconstruction of Utility and Welfare Economics," Prof. Murray N. Rothbard, On Freedom and Free Enterprise: The Economics of Free Enterprise, Mary Sennholz, editor (Princeton, New Jersey: D. Van Nostrand, 1956), pp. 224-262. Reprinted in The Logic of Action One: Method, Money, and the Austrian School, Murray N. Rothbard (London, England: Edward Elgar, 1997), pp. 211-255 http://www.mises.org/rothbard/toward.pdf

Man, Economy, and State, Prof. Murray N. Rothbard (Auburn, Alabama: The Ludwig von Mises Institute, second edition, 2004; originally published 1962) http://www.mises.org/rothbard/mes.asp

Power and Market: Government and the Economy, Prof. Murray N. Rothbard (Kansas City: Sheed Andrews and McMeel, Inc., 1977; originally published 1970) http://web.archive.org/web/20050923192825/http://mises.org/rothbard/power&market.pdf

[trailhound]

aerborne wrote

Inflation doesn't depend on how much money the government prints. It depends on the supply, and demand, for money. More supply means less demand, less demand means higher prices for other goods. This economic principle is ignored in ALL of your statements and arguments.

 Yeah I have been trying to get her to address that too but she just says you dont know nothing you dont read books bla bla blah.  The fact is i ,and i doubt any austrians, could care less how many notes you print as long as they are anchored to a standard.   The bigger the economy gets the lower prices go so you may have to print notes that represent a fraction of a penny at some point to 'represent the expanding economy', but you still have the bar standard of gold and silver. This is in reality what we have anyway just look at the price of gold, but we have an outer circle who are above the law and are manipulating us all to some horrific end. This is where revolt,geo, and i agree, i just dont agree that giving the govt power to print as much as it see's fit would solve our problem at all. Sounds like damage control to me. If the people demand the fed goes down this is their back up plan.  Honestly just look at the scum in washington and would you really feel good about giving them power to print money for whatever 'it' deems 'necessary'.

 

[adissenter2]

Hi, I am an Austrian and I would like to thank aerborne for his replies to Revolt426,  I actually learned a tad more and now am a much more of a hardcore Austrian thanks to what I have gleaned.

I actually think more people here would be Austrians also but they like big pharma controlled doctors use their industry taught diagnostic skills to treat the symptoms rather than getting to the root cause of ones ailment thus keeping the patient stuck in an endless web and sucked dry.

I would recommend getting to the root of the problem and breaking free, if anyone finds out how to do this please let me know. 
 
adissenter2

Rev 18:1    And after these things I saw another angel come down from heaven, having great power; and the earth was lightened with his glory.

Rev 18:2    And he cried mightily with a strong voice, saying, Babylon the great is fallen, is fallen, and is become the habitation of devils, and the hold of every foul spirit, and a cage of every unclean and hateful bird.

Rev 18:3     For all nations have drunk of the wine of the wrath of her fornication, and the kings of the earth have committed fornication with her, and the merchants of the earth are waxed rich through the abundance of her delicacies.

Rev 18:4    And I heard another voice from heaven, saying, Come out of her, my people, that ye be not partakers of her sins, and that ye receive not of her plagues.

[Revolt426]

Again You distort what i said. I know what is and is not a strawman. I called this a strawman: Emotional appeal. what evidence do you have that these proposals will lead to genocide? Worse, this is a strawman. What evidence do you have to contribute these examples to austrian economics? Should i bother refuting these since they're all straw men? I think not.
And then asked for evidence of that example as quoted above.

I thought i already addressed this: What of velocity? But to expand on this: How much "money" does the economy need. If I have a million dollars, and spend it on a ferrari, then i no longer have a million dollars. How much money per capita does the economy need, and at what velocity does it require to achieve this. Do you even understand velocity in the economy? I don't think you do.
 Ad Hominem. I think if you had actually fact checked your copy paste of stephen zarlenga your copy pasting of his money reform would have more weight. Let me ask you, what do you base lincolns $450M dollar limit on? That he didn't print a 4th 150M? Did he pass some bill preventing congress from printing more? Did he state he would veto any further bills? Or did you just read that he did from stephen zarlenga and not fact check it?

I love how you took someone elses quote and inserted into my mouth, as if i typed it - another aspect of trolling. If you go ahead and scroll up, you will realize numerous quotes you made from me, were never typed BY ME, THANK YOU.

[Revolt426]

By the way, your argument that "Look i have a chart that says the Gold production expands every year" , somehow eliminated the *FACT* That there is still not enough Gold to use as a currency is a typical remark from your type (The type that de-rail threads with substanceless remarks by accusing the opposing end of "Lying" instead of providing an "Argument").

[Revolt426]

aerborne wrote
 Yeah I have been trying to get her to address that too but she just says you dont know nothing you dont read books bla bla blah.  The fact is i ,and i doubt any austrians, could care less how many notes you print as long as they are anchored to a standard.   The bigger the economy gets the lower prices go so you may have to print notes that represent a fraction of a penny at some point to 'represent the expanding economy', but you still have the bar standard of gold and silver. This is in reality what we have anyway just look at the price of gold, but we have an outer circle who are above the law and are manipulating us all to some horrific end. This is where revolt,geo, and i agree, i just dont agree that giving the govt power to print as much as it see's fit would solve our problem at all. Sounds like damage control to me. If the people demand the fed goes down this is their back up plan.  Honestly just look at the scum in washington and would you really feel good about giving them power to print money for whatever 'it' deems 'necessary'.

 

And what determines supply and demand genius? PRODUCTION! ohhhh! we've left the dynamic out of the situation again (*Already addressed in the essay*)..........

What determines production? INFRASTRUCTURE! now we are getting somewhere....

I can understand people that actually follow the Austrian school responding (though no rational arguments have actually been made other then the allegations of slander), but you time and time again respond with things that absolutely nothing to do with the subject

[Revolt426]

The idiocy of suggesting that gold stops the economy growing!!! Is BEYOND BELIEF. And, as described below, the supply of coinage can grow in sound money, even tho the money supply does not alter.

We playing a game of jump in with the troll with the same debunked argument?.

Why the hell do you think FDR, Lincoln and even MADISON had to take the dollar OFF the Gold Standard? to collapse the economy , or to FIX the collapse?

As i said, you need to RE-INDUSTRIALIZE a Nation to get out of a Depression with a massive infrastructure deficit - this means you need CURRENCY to exchange for LABOR in the form of infrastructure.

With the GOLD STANDARD you cannot ISSUE CURRENCY IF YOU ARE BANKRUPT.

[aerborne]

Inflation doesn't depend on how much money the government prints. It depends on the supply, and demand, for money. More supply means less demand, less demand means higher prices for other goods. This economic principle is ignored in ALL of your statements and arguments.
 That definition is wrong, more over, to refute this claim that we need to print money every year to lower prices we need only look at the electronics and computer industry. As that industry has grown it's prices have increased a great deal over inflation. Just compare an ATI 4890 today to the ATI 9800 when it came out.

Oops proofread fail, computer prices decreased over inflation was what i meant to say here.