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

[Revolt426]

By the way [Aerborne] , you are going to ask me to prove that derivatives exist because i am aware of your trolling patterns so i'll do it now.

http://www.siliconvalleywatcher.com/mt/archives/2008/10/the_size_of_der.php

The Invisible One Quadrillion Dollar Equation -- Asymmetric Leverage and Systemic Risk
 
According to various distinguished sources including the Bank for International Settlements (BIS) in Basel, Switzerland -- the central bankers' bank -- the amount of outstanding derivatives worldwide as of December 2007 crossed USD 1.144 Quadrillion, ie, USD 1,144 Trillion. The main categories of the USD 1.144 Quadrillion derivatives market were the following:

1. Listed credit derivatives stood at USD 548 trillion;

2. The Over-The-Counter (OTC) derivatives stood in notional or face value at USD 596 trillion and included:

a. Interest Rate Derivatives at about USD 393+ trillion;

b. Credit Default Swaps at about USD 58+ trillion;

c. Foreign Exchange Derivatives at about USD 56+ trillion;

d. Commodity Derivatives at about USD 9 trillion;

e. Equity Linked Derivatives at about USD 8.5 trillion; and

f. Unallocated Derivatives at about USD 71+ trillion.

Quadrillion? That is a number only super computing engineers and astronomers used to use, not economists and bankers! For example, the North star is "just" a couple of quadrillion miles away, ie, a few thousand trillion miles. The new "Roadrunner" supercomputer built by IBM for the US Department of Energy's Los Alamos National Laboratory has achieved a peak performance of 1.026 Peta Flop per second -- becoming the first supercomputer ever to reach this milestone. One Quadrillion Floating Point Operations (Flops) per second is 1 Peta Flop/s, ie, 1,000 Trillion Flops per second. It is estimated that all the data found on all the websites and stored on computers across the world totals more than One Exa byte of memory, ie, 1,000 Quadrillion bytes of data.

Whilst outstanding derivatives are notional amounts until they are crystallised, actual exposure is measured by the net credit equivalent. This is normally a lower figure unless many variables plot a locus in the wrong direction simultaneously. This could be because of catastrophic unpredictable events, ie, "Black Swans", such as cascades of bankruptcies and nationalisations, when the net exposure can balloon and become considerably larger or indeed because some extremely dislocating geo-political or geo-physical events take place simultaneously. Also, the notional value becomes real value when either counterparty to the OTC derivative goes bankrupt. This means that no large OTC derivative house can be allowed to go broke without falling into the arms of another. Whatever funds within reason are required to rescue failing international investment banks, deposit banks and financial entities ought to be provided on a case by case basis. This is the asymmetric nature of derivatives and here lies the potential for systemic risk to the global economic system and financial markets if nothing is done.

Let us think about the invisible USD 1.144 quadrillion equation with black swan variables -- ie, 1,144 trillion dollars in terms of outstanding derivatives, global Gross Domestic Product (GDP), real estate, world stock and bond markets coupled with unknown unknowns or "Black Swans". What would be the relative positioning of USD 1.144 quadrillion for outstanding derivatives, ie, what is their scale:

1. The entire GDP of the US is about USD 14 trillion.

2. The entire US money supply is also about USD 15 trillion.

3. The GDP of the entire world is USD 50 trillion. USD 1,144 trillion is 22 times the GDP of the whole world.

4. The real estate of the entire world is valued at about USD 75 trillion.

5. The world stock and bond markets are valued at about USD 100 trillion.

6. The big banks alone own about USD 140 trillion in derivatives.

7. Bear Stearns had USD 13+ trillion in derivatives and went bankrupt in March. Freddie Mac, Fannie Mae, Lehman Brothers and AIG have all 'collapsed' because of complex securities and derivatives exposures in September.

8. The population of the whole planet is about 6 billion people. So the derivatives market alone represents about USD 190,000 per person on the planet.

The Impact of Derivatives

1. Derivatives are securities whose value depends on the underlying value of other basic securities and associated risks. Derivatives have exploded in use over the past two decades. We cannot even properly define many classes of derivatives because they are highly complex instruments and come in many shapes, sizes, colours and flavours and display different characteristics under different market conditions.

2. Derivatives are unregulated, not traded on any public exchange, without universal standards, dealt with by private agreement, not transparent, have no open bid/ask market, are unguaranteed, have no central clearing house, and are just not really tangible.

3. Derivatives include such well known instruments as futures and options which are actively traded on numerous exchanges as well as numerous over-the-counter instruments such as interest rate swaps, forward contracts in foreign exchange and interest rates, and various commodity and equity instruments.

4. Everyone from the large financial institutions, governments, corporations, mutual and pension funds, to hedge funds, and large and small speculators, uses derivatives. However, they have never existed in history with the overarching, exorbitant scale that they now do.

5. Derivatives are unravelling at a fast rate with the start of the "Great Unwind" of the global credit markets which began in July 2007 and particularly after the collapse of Freddie Mac and Fannie Mae in September this year.

6. When derivatives unravel significantly the entire world economy would be at peril, given the relatively smaller scale of the world economy by comparison.

7. The derivatives market collapse could make the housing and stock market collapses look incidental.......[continued]

[aLLyOuRbAsE]

you are actually providing the physical economic infrastructure required for a modernized economy to function......

this is the bit im not getting, how do you know the required infrastructure? what happens if that infrastructure isnt as "productive" as first thought?

[Revolt426]

this is the bit im not getting, how do you know the required infrastructure? what happens if that infrastructure isnt as "productive" as first thought?

You have numbers to prove a Mag-Lev would increase efficiency in the original post..... I mean, there are various cases where the "How do you know" argument is valid but in the case of the infrastructure i advocated in the original post - how does increasing railway speeds from 60-70mph to 360mph and reducing transit costs for freight (and people) not increase productivity?..... it is obviously going to save all businesses money, it is obviously going to drastically speed up freight shipments.

The same can be said for high technology energy output (Also in the original post).... a plant that can put out thousands of times more energy then the status quo is obviously going to decrease the price of energy correct?.

Yes, there is ALWAYS an element of human error but that element can be minimized to virtually nothing if you look at the numbers. On the other hand, if we impose what others would like to see [the Government cannot build anything] and leave it to the private sector - will these things ever be built, will they be built in enough time to allow a recovery of the economy? will the entire system meltdown while this insane monetary theory is implimented?

So, yea -  you are right there is no absolute knowledge that ALL projects will be as productive as you thought, but to say "You cannot possibly know if it will help the economy" (which is the other absolute mentioned by the Austrian school) is quite absurd after looking at some numbers [there is an article in the original post on energy output and a maglev with the numbers if you wish to look over it]

[aerborne]

It's not really about counter-acting inflation although it would have that effect when other nations purchase the physical goods this nation produces , it's actually about rebuilding the things necessary that would otherwise prevent a recovery... this nation has been de-industrialized to the brink of complete economic disintigration and certain people would have you believe the private sector is going to re-build roads, bridges, railways , water treatment plants and the like. The problem with this is they haven't done it thus far and the private sector is quite obviously dominated by lunatic malthusians that do not wish for the nation to be re-industrialized.

No you will not find anyone that thinks that the private sector is going to rebuild roads etc... because the private sector isn't ALLOWED to, as i've pointed out multiple times, you're argument that they WON'T is a subtle lie, because they USED TO, and now CAN'T.

As for the infrastructure projects (in your question regarding "how do we know that will be enough"..) , that question answers itself. How do we know? you spend the amount of currency into infrastructure that is needed to complete the project. That is a part of "Moneterism dogma" , that being the question asked is "How much is that going to cost" - well how to you value a currency?

Is a currency valued by digging gold out of the Earth or is currency a means of exchange that reflects the net production output of a nation?. the latter is obviously the correct answer.

This doesn't answer anything it's nonsensical babbling. At this point your whole proposal hinges on the infrastructure you want to build costing EXACTLY what's allowable, and the infrastructure projects deflating EXACTLY the same amount of inflation that was created.

And as for people who wish to bring up the "Venus Project" , if the Banking Empire wanted these things done they would have been done already - and they would be being built right now, it is an absurd argument (This is obviously not aimed at allyourbase).... What gives the people more control over the monetary supply, the mandatory appropriation through congress and the executive branch of currency or privatized issuence of currency?. It's really quite absurd to argue the Government is going to be responsible for something like that when it is illegal to appropriate currency without a congressional vote..... that is unless the private sector can bypass it

You act like congressional vote protected anything in the past. How'd the continental work out there? Aside from your revised history maybe you should read the actual numbers. I actually pointed out where you were misinformed on the greenback. At no point has congress shown they're not willing to abuse their power. Just look at obama's presidency and imagine how this congress would vote if they had an infinite printing press. You're argument hinges on election reform ousting NWO puppets, and yet you criticized me for saying derivatives should be prosecuted as fraud, rather then "regulated" by the NWO.

That is because you don't understand that you cannot de-regulate EVERYTHING and wait for sociopaths to orchestrate a collapse, THEN PROSECUTE them after the entire economy meltsdown....... but you will never understand that, and if you do - you will never admit it.

ROFL. it's fraud BEFORE they do it, not after the economy collapse, you're just attacking wildly with whatever thoughts come out your rectum. Is there going to be a 1.2Q bubble if we say "hey that's fraud" from the get go?

The idea for instance, that exchange rate controls are BAD is ABSURD - tell that to a person in argentina after George Soros shorts their currency into oblivion?....

ROFL! you have no idea what you're talking about here. Currency isn't a stock, you can't short currency that doesn't exist. George Soros and hedge funds can't manipulate currency prices like that.

You've shown your colors by declaring the housing problem is the result of people "Intentionally defaulting on their mortgages" i have NEVER heard such a ridiculous argument in my entire life, then you go on to say that there "have always been homeless people" in response to the massive phenomina of tent cities popping up all over the country.

http://www.google.com/search?hl=en&q=negative+equity+defaults&aq=f&oq=&aqi=

Yes my true colors: The ability to research stuff and actually read news. Also you're misrepresenting me again. I didn't say that was the cause, i said it was a result of falling prices.

 Here's a search on prison planet.
http://www.google.com/search?hl=en&q=site:prisonplanet.com+negative+equity+defaults&aq=f&oq=&aqi=
Counterpunch
http://www.google.com/search?hl=en&q=site:counterpunch.org+negative+equity+defaults&aq=f&oq=&aqi=
a good one specifically.
http://www.counterpunch.org/whitney04242009.html

Here: on homelessness.
http://en.wikipedia.org/wiki/Homelessness#21st_century

If anyone believes it is the U.S. populations fault that housing prices have collapsed as opposed to the Federal Reserve and Derivatives, then they deserve tyrrany.

No one believes that. It's the NWO fault. Quit trying to twist my comments about cause and effect into the blame game.

Uh, can you say TROLLING? ^^^^^^^ You know damn well the current housing price collapse is due to stagflation brought on by DERIVATIVES.

No, it's brought by INFLATED house prices way beyond what they're worth. Kinda like how a stock company in the late 90's would go IPO, jump up 10s of millions of dollars, and then go bankrupt because the company wasn't profitable. People thought they could make money off the IPO.

http://blog.jparsons.net/2009/01/graph-us-housing-prices-1890-2008.html look at this chart and tell me the growth from 99-2007 could go on forever and not put homes out of the reach of the middle class?

Derivatives, liar loans and a whole mess of stuff inflated house prices by creating demand for houses based on the printing of new credit from the fed reserve system and low interest rates.

You have this backwards,  Derivatives, cause the housing bubble, and the bubble popping caused the depression, the depression didn't cause the housing crises.

Spending money into the economy does not cause inflation - because it has labor and infrastructure to back it, so you are not "artificially inflating, to counter act deflation" , you are actually providing the physical economic infrastructure required for a modernized economy to function...... the resultant of modernizing infrastructure is an increase in production output, which is really what a sound currency is..... when your production output levels are equivalent to the amount of currency in circulation.

no. it *ALWAYS* causes inflation. That's what inflation is. If you print the money and invest it in labor is the money supply then BIGGER then it was before you printed it. You're confusing price inflation with monetary inflation. YOU DON'T EVEN UNDERSTAND YOUR OWN MONETARY PROPOSAL! Your own monetary proposal says the economic growth creates a slow steady deflation of prices, cost of living, etc, and that investing printed money into economic growth will counteract the inflation of printing money. You clearly don't understand that this is what your proposal is, and then you attack austrians because you can't seperate that gdp growth creates deflation, from Fractional reserve inflationary bubble popping deflation. Learn some basic economics before blindly following people who are *LYING* about history (like lincolns 450M$ limit in 1864)

By the way [Aerborne] , you are going to ask me to prove that derivatives exist because i am aware of your trolling patterns so i'll do it now.

No i'm not because i'm keenly aware of what derivatives are in the first place and how big the bubble is. Believe it or not, i actually understand the chains of cause and effect and know whether the chicken or the egg came first.

Nice attack there but i haven't once asked you about the derivatives bubble, nor claimed that it wasn't a role in this current collapse. Though i'm glad you posted it because i can use your numbers to support my argument. Do you know what these are?
b. Credit Default Swaps at about USD 58+ trillion;
They're insurance policies taken out on mortgages, lots of them, on lots of mortgages. I say it's fraud because it's like having your whole neighborhood put insurance policies on 1 car, and making a million$ among themselves if a 30,000$ car gets wrecked. It's insurance fraud plain and simple. It's an insurancy policy on a loan and it's cool make bad loans put out an insurance policy on it, sell the loan sell the policy package it all up and if the loan defaults you make money off the policy.

That's 58Trillion in pyramided insurance policies and you say we should wait till AFTER a disaster to prosecute that as insurance fraud.

You have numbers to prove a Mag-Lev would increase efficiency in the original post..... I mean, there are various cases where the "How do you know" argument is valid but in the case of the infrastructure i advocated in the original post - how does increasing railway speeds from 60-70mph to 360mph and reducing transit costs for freight (and people) not increase productivity?..... it is obviously going to save all businesses money, it is obviously going to drastically speed up freight shipments.

All business or only the business that ship goods via freight train? How's this going to affect trucking? How do you know this price decrease will offset the cost equal to the inflation you created to build the whole things.

The same can be said for high technology energy output (Also in the original post).... a plant that can put out thousands of times more energy then the status quo is obviously going to decrease the price of energy correct?.

not if the cost to produce the energy is more then market value. They would have to sell the energy at a loss to compete with the falling prices.

Yes, there is ALWAYS an element of human error but that element can be minimized to virtually nothing if you look at the numbers. On the other hand, if we impose what others would like to see [the Government cannot build anything] and leave it to the private sector - will these things ever be built, will they be built in enough time to allow a recovery of the economy? will the entire system meltdown while this insane monetary theory is implimented?

what numbers? you haven't posted any! I've also pointed out you have no historical evidence, to base this on, infrastructure was built with phenomenal success in the past by the private industry, and now no one is allowed to. This whole argument that private industry doesn't build infrastructure is a lie.

So, yea -  you are right there is no absolute knowledge that ALL projects will be as productive as you thought, but to say "You cannot possibly know if it will help the economy" (which is the other absolute mentioned by the Austrian school) is quite absurd after looking at some numbers [there is an article in the original post on energy output and a maglev with the numbers if you wish to look over it]

You can't possibly know if it will help the economy without knowing how much it will cost to build, cost to operate, and how long it will take to pay for itself. AGAIN, by printing the money you will create an inflationary bubble for as long as the infrastructure is offline. and if one segment costs 200B dollars when are you going to see the return on that investment? What's more, when are you going to see the investment reduce prices if it's only one segment. How are you going to pick that segment? We're back to the 1quadrillion over 50 years scenario: How much inflation, and deflation, is going to be created by this project at every stage of the game. But then you add the government "instead of private industry" building water treatment, and nuclear power plants ontop of it? No figures, no costs analysis, no benefit analysis no roi analysis.... just faith that this plan will work.

[planning4acrash]

"At no point has congress shown they're not willing to abuse their power. Just look at obama's presidency and imagine how this congress would vote if they had an infinite printing press. You're argument hinges on election reform ousting NWO puppets, and yet you criticized me for saying derivatives should be prosecuted as fraud, rather then "regulated" by the NWO."

- The best government is one so small that it doesn't matter who is running it

[trailhound]

The best government is one so small that it doesn't matter who is running it

 Amen

[Freeski]

The best government is one so small that it doesn't matter who is running it

Amen

You bet!

[Revolt426]

ROFL! you have no idea what you're talking about here. Currency isn't a stock, you can't short currency that doesn't exist. George Soros and hedge funds can't manipulate currency prices like that.

Another BOLD FACED LIE, you obviously haven't the SLIGHEST idea what you are talking about in regards to currency trading.... which ruins peoples lives so financiers can PROFIT off of them. You will say ANYTHING to attempt to brainwash people won't you?......... you are truely sick in the head. I could probably dig up over 100 articles on Soros ALONE destroying currency's.....

http://www.telegraph.co.uk/finance/2773265/Billionaire-who-broke-the-Bank-of-England.html
Billionaire who broke the Bank of England


1997 Asian Financial Crisis
The foreign ministers of the 10 ASEAN countries believed that the well co-ordinated manipulation of their currencies was a deliberate attempt to destabilize the ASEAN economies. Former Malaysian Prime Minister Mahathir Mohamad accused George Soros of ruining Malaysia's economy with "massive currency speculation."

No, it's brought by INFLATED house prices way beyond what they're worth. Kinda like how a stock company in the late 90's would go IPO, jump up 10s of millions of dollars, and then go bankrupt because the company wasn't profitable. People thought they could make money off the IPO.

http://blog.jparsons.net/2009/01/graph-us-housing-prices-1890-2008.html look at this chart and tell me the growth from 99-2007 could go on forever and not put homes out of the reach of the middle class?

Derivatives, liar loans and a whole mess of stuff inflated house prices by creating demand for houses based on the printing of new credit from the fed reserve system and low interest rates.

You have this backwards,  Derivatives, cause the housing bubble, and the bubble popping caused the depression, the depression didn't cause the housing crises

You have this backwards, without derivatives - there would be no housing collapse, without legalizing them ,there would be no derivatives, without repealing the glass steagall act, there would be no commercial bank exposure to derivatives........ and you haven't even addressed wheather or not you agree with FREEZING them?, Planning4Crash said he agreed they had to be "Shredded" - how about you?.

Instead of bankers, you blamed it on people for intentionally defaulting on their loans, and everytime you make an ass  out of yourself by doing something like i just mentioned, you make an elaborated post, seperate every line of text i write and respond by changing the subject and BUMP the post out to the next page so people don't see it.

I mean, i can't blame you for being a coward after saying "people caused housing prices to collapse by intentionally defaulting on their mortgages" then saying "tent cities are an emotional appeal and isolated incidents" when infact, they are springing up all over the country. Only a sociopath would say things like that, someone who didn't care about millions of people being kicked out on the streets ( I know that's an emotional appeal too)......... i know you will do anything to avoid admitting the private sector has made a mistake, even if it involves blaming innocent people then pushing policies that will put them on the streets.

So go ahead, seperate every line of this response with an elaborate post with nothing but BS in it by changing your argument everytime...... (I would urge onlookers to scroll from page 1 to page 9 and look at Aerbornes responses as opposed to just looking at the current page to see this).

I no longer recognize you as an actual poster, but instead someone who is intentionally attempting to de-rail threads and brainwash people (For whatever reason i have no idea) . The lies that you spew are unbelievable and i pray members of the forum use common sense and read what you have written in prior posts. I won't even argue with you anymore, anyone with the audasity to blame the citizens over the banks for the housing collapse doesn't even deserve a response.

[Revolt426]

"At no point has congress shown they're not willing to abuse their power. Just look at obama's presidency and imagine how this congress would vote if they had an infinite printing press. You're argument hinges on election reform ousting NWO puppets, and yet you criticized me for saying derivatives should be prosecuted as fraud, rather then "regulated" by the NWO."

- The best government is one so small that it doesn't matter who is running it

only in dreamland, can you prosecute people for fraud after they collapse the entire economic system. My argument "Hinges" on what U.S. History has shown us, your argument has no historical base whatsoever. The delusional fantasy that "the threat of proseuction" Is going to stop a sociopath from creating a situation like this is histerical.. only certain regulations (Like the regulation that prohibited banks from speculating with deposit money that you oppose) would stop the actual collapse. You would prefer to wait for the collapse, and then prosecute them after the entire economy is wiped out. And since i know there is someone in the thread that is going to equate what i just said to "thought crimes" , firstly i never said all regulation was good - secondly, Derivatives being private, off the book contracts is the REASON why this has occured... if there was a regulation on financial speculations, this could not possibly have occured.

Congress had quite a difficult time getting a bailout bill through (IT failed the first time) for 750 Billion dollars after they were lied to by Bernanke who said the entire planet would meltdown in 24 hours and we would have martial law (This would not happen without the FED)........ the remainder of bailout money has actually been issued by BYPASSING Congress, and if you don't understand that 13 Trillion is ALOT more then 750 Billion, then you should go do some math homework. If you recall, the first bailout vote had so many phone calls opposing it that it failed...........

And last i checked, Ron Paul's audit the fed bill has 190 co-sponsers? are they all evil?.

Just another argument made without thinking......... They should be prosecuted as fraud AND REGULATED to prevent this situation from occuring AGAIN.

[Revolt426]

- The best government is one so small that it doesn't matter who is running it

It is really unbelievable to see people blame the "Government" when it is common knowledge that the "Government" is not responsible for the Private Banking Cabals that have taken OVER the Government - then to see the solution "Get rid of Government"....... how about we get rid of the PRIVATE BANKING CABAL?:

http://forum.prisonplanet.com/index.php?topic=110299.0

Why America is a bank-owned state

Can people be rational ? does it always have to be this herd mentallity "Government is always the enemy" while completely disregarding that Banks are running the nation?. It is really mind boggling at this point..........

No one advocated "BIG GOVERNMENT" in this thread at any point, but the argument none the less comes up "We need smaller Government!" in response to a monetary reform thread.... sure go ahead and cut the beuracracies out of Government, that doesn't mean we don't need Government at all, these absolutes are really absurd upon examination.... you ignore how this situation started in the first place (By handing our monetary supply FROM the Government, To a PRIVATE BANK)

[aerborne]

Another BOLD FACED LIE, you obviously haven't the SLIGHEST idea what you are talking about in regards to currency trading.... which ruins peoples lives so financiers can PROFIT off of them. You will say ANYTHING to attempt to brainwash people won't you?......... you are truely sick in the head. I could probably dig up over 100 articles on Soros ALONE destroying currency's.....

http://www.telegraph.co.uk/finance/2773265/Billionaire-who-broke-the-Bank-of-England.html
Billionaire who broke the Bank of Englan


1997 Asian Financial Crisis
The foreign ministers of the 10 ASEAN countries believed that the well co-ordinated manipulation of their currencies was a deliberate attempt to destabilize the ASEAN economies. Former Malaysian Prime Minister Mahathir Mohamad accused George Soros of ruining Malaysia's economy with "massive currency speculation."

Again showing you don't understand how forex works. You don't even understand the article you posted. Let me ask you this if china liquidated it's treasury bonds and cashed out of the us dollar, and george soros placed a $10bn short order on the USD who would you blame for the results? From Your past results you'd blame china when someone discusses china, you'd blame soros when someone discusses forex, you'd blame the fed when someone discusses fractional reserve, and you'd blame austrians when someone discusses gold.

You have this backwards, without derivatives - there would be no housing collapse, without legalizing them ,there would be no derivatives, without repealing the glass steagall act, there would be no commercial bank exposure to derivatives........ and you haven't even addressed wheather or not you agree with FREEZING them?, Planning4Crash said he agreed they had to be "Shredded" - how about you?.

I have it backwards? Go back and reread it, i clearly stated that derivitives and other entities let banks pass off the risk. You're just butchering what i said to restate it so that YOU'RE right and i'm wrong.... It's not going to work. Secondly, i didn't know i was supposed to answer that question. I thought it was obvious when you prosecute fraud you don't honor fraudulent "contracts" guess that's another common sense point lost on you.

Instead of bankers, you blamed it on people for intentionally defaulting on their loans, and everytime you make an ass  out of yourself by doing something like i just mentioned, you make an elaborated post, seperate every line of text i write and respond by changing the subject and BUMP the post out to the next page so people don't see it.

Why do you keep trying to tell me who i "blame" i didn't blame homeowners you keep pushing this attack for it's emotional appeal value that i blame the rape victim for dressing slutty, when in fact i said that because she was raped she made the decision to go the police. Your blame game arguments are nonsense emotional appeals, I didn't blame home owners, I said that they've made decisions based on market changes.

I mean, i can't blame you for being a coward after saying "people caused housing prices to collapse by intentionally defaulting on their mortgages" then saying "tent cities are an emotional appeal and isolated incidents" when infact, they are springing up all over the country. Only a sociopath would say things like that, someone who didn't care about millions of people being kicked out on the streets ( I know that's an emotional appeal too)......... i know you will do anything to avoid admitting the private sector has made a mistake, even if it involves blaming innocent people then pushing policies that will put them on the streets.

Where did i say "People caused housing prices to collapse by intentionally defaulting on their mortgages? Aren't you misquoting me there? Didn't i say that people made the decision to let their mortgage default BECAUSE housing prices have collapsed? Since we're not holding back on baseless insults: Are you stupid? House prices go down, people intentionally default, house prices still go down. Where am I blaming people?

So go ahead, seperate every line of this response with an elaborate post with nothing but BS in it by changing your argument everytime...... (I would urge onlookers to scroll from page 1 to page 9 and look at Aerbornes responses as opposed to just looking at the current page to see this).

ok.

only in dreamland, can you prosecute people for fraud after they collapse the entire economic system. My argument "Hinges" on what U.S. History has shown us, your argument has no historical base whatsoever. The delusional fantasy that "the threat of proseuction" Is going to stop a sociopath from creating a situation like this is histerical.. only certain regulations (Like the regulation that prohibited banks from speculating with deposit money that you oppose) would stop the actual collapse. You would prefer to wait for the collapse, and then prosecute them after the entire economy is wiped out. And since i know there is someone in the thread that is going to equate what i just said to "thought crimes" , firstly i never said all regulation was good - secondly, Derivatives being private, off the book contracts is the REASON why this has occured... if there was a regulation on financial speculations, this could not possibly have occured.

You're the one living in fantasy land, didn't glass steagle come about BECAUSE of a derivatives collapse in the great depression? Why yes i believe it did... Didn't glass steagle make derivitives illegal? Why yes it did. Didn't making it illegal stop derivatives for decades? why yes it didn't. Isn't tim geither et al, proposing we let the federal reserve of new york "regulate" derivatives instead of making them illegal? You're the one living in a fantasy land if you think derivatives will be traded if they're illegal and prosecuted as fraud, when we know, for a fact that they are fraud.

Congress had quite a difficult time getting a bailout bill through (IT failed the first time) for 750 Billion dollars after they were lied to by Bernanke who said the entire planet would meltdown in 24 hours and we would have martial law (This would not happen without the FED)........ the remainder of bailout money has actually been issued by BYPASSING Congress, and if you don't understand that 13 Trillion is ALOT more then 750 Billion, then you should go do some math homework. If you recall, the first bailout vote had so many phone calls opposing it that it failed...........

You need to go back and reread what the TARP was... It wasn't a 750Bn$ limit, it was a 750bn revolving line of credit essentially, a credit card with a 750bn limit.

And last i checked, Ron Paul's audit the fed bill has 190 co-sponsers? are they all evil?.

207 now, and ron pauls on my side... swing and miss.

Just another argument made without thinking......... They should be prosecuted as fraud AND REGULATED to prevent this situation from occuring AGAIN.

How do you regulate crime? Seriously did you just make an argument without thinking. That's like saying murder should be prosecuted AND regulated? Are you say some people but not others should be able to commit murder in some situations under certain regulations? Or should we just not allow it at all since it's MURDER(fraud)

It is really unbelievable to see people blame the "Government" when it is common knowledge that the "Government" is not responsible for the Private Banking Cabals that have taken OVER the Government - then to see the solution "Get rid of Government"....... how about we get rid of the PRIVATE BANKING CABAL?:

It really is unbelievable to see people pretend like replacing the people in without stripping them of the power they abused in the past is going to change anything regardless of how many bankers we eliminate.

You're seriously proposing that we replace the cabal of evil men with a cabal of benevolent men, instead of removing the cabal all together.

[trailhound]

You're seriously proposing that we replace the cabal of evil men with a cabal of benevolent men, instead of removing the cabal all together.

 Its faith based economics

[planning4acrash]

Its faith based economics

Yes, finance is no less a religion than Christianity or Atheism!!   

[aerborne]

faith has nothing to do with religion, If you say you'll make another post in this thread in 2 weeks i have but faith to take you at your word =P

[Geolibertarian]

(Note: In my view, a more accurate title for the following essay would be: "Mr. Anonymous and the Not-So-Spontaneous Birth of the Royal Libertarian Movement")

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

http://www.scoop.co.nz/stories/print.html?path=HL0812/S00378.htm

Mr. Anonymous and the Not-So-Spontaneous Birth of the Libertarian Movement

William S. Volker (1859-1947)
Mr. Anonymous

William Volker, alias "Mr. Anonymous," alias the "First Citizen" of Kansas City, Missouri, "was an extremely modest, enormously wealthy home-furnishings tycoon. He became the unrecognized donor of thousands of gifts, large and small."

Volker was born on April 1, 1859 into a prosperous household in Hanover, Germany. At age 12, Volker's family immigrated to Chicago. At 17 he went to work for a picture frame manufacturer. With the death of his employer in 1882, Volker bought out the company and moved the enterprise to Kansas City. From there, his "little window shade business" grew into a national giant.

In 1911, 52 year old William Volker married. Returning from his honeymoon, he announced he had put one million dollars in his wife's name and, he said, intended to give the rest of his enormous fortune away. Over the next 36 years, he donated millions of dollars, much of it anonymously. When Volker died at age 88 on November 4, 1947, many schools, parks, and public spaces were named for the furnishings tycoon.

So why pick on this guy?

The answer is that the overwhelming priority of Volker's "philanthropy" was focused, not on public spaces but on reactionary ideology. Dismayed by the rise of Socialism in America and doubly dismayed by what he saw as the evolution of government and political thinking towards accommodation and a "new liberalism", eventually personified by the widespread adoption of the economic views of John Maynard Keynes and the New Deal policies of Franklin Roosevelt, Volker set out to create a new and much more reactionary "mainstream" ideology based loosely around his own ideas of "laissez-faire" capitalism (i.e. a largely unregulated economy) and social Darwinism (the pseudo-scientific notion that in society, unhindered competition would allow the "cream to rise to the top").

In truth, Volker was no great scholar or thinker. The ideology he set out to create was built upside down, starting only with a set of foggy conclusions for which he had a predisposition. From these conclusions, it was the task of Volker's considerable fortune to find a set of justifications, then an enabling ideology or "theory" that gave it all perspective and unity and, eventually, a true philosophical platform from which to launch the whole. But if this task was analogous to building the Great Pyramid, starting from the top, Volker was undaunted. He may not have had a brain but he had money... and he had a personal connection to one of the most reactionary sections of that most reactionary of organizations - the National Association of Manufacturers. Volker's "associates", who would all participate closely, included Jasper Crane of DuPont, B. E. Hutchinson of Chrysler, Henry Weaver of General Electric, Pierre Goodrich of B.F. Goodrich, and Richard Earhart of White Star Oil (which through many mergers and acquisitions would eventually become Mobil Oil). Moreover, Volker had "influence" at the leading scholarly institution in his home town: The University of Chicago was founded by none other than John D. Rockefeller and created with a certain ideological "bent".

In 1932 Volker established the William Volker Fund and, with that, started on the road to becoming perhaps the most significant anonymous asshole of our times. In every way, William S. Volker was the true "father" of Libertarianism and Modern Conservatism.

For the first dozen years, the fund largely floundered. There is some evidence that Volker may have flirted with Fascism. That ideology though, which attracted such celebrities as Henry Ford and Charles Lindbergh, was thought to have a limited future in America. In the face of Keynesian economics, widespread social spending, and the CIO, what was really required was a return to pre-New Deal economic policy and an anti-communist/anti-union social policy.

Eureka!

The breakthrough came in 1944, when Volker's nephew, Harold Luhnow, took over, first the business and then the Fund. In the same year, Friedrich Hayek's The Road to Serfdom was published. The book was a product of the "Austrian School" of economists, originating at the University of Vienna and first coming to modest prominence at the end of the 19th century in its attacks on Marxist and Socialist economics. Hayek's book was an almost mystical (and hysterical) defense of laissez-faire capitalism and the "free market". According to Hayek, market prices created a "spontaneous order, or what is referred to as 'that which is the result of human action but not of human design'. Thus, Hayek put the price mechanism on the same level as, for example, language." In turn, any attempt at regulation would inevitably lead to "totalitarianism" and in this, both Marxist and New Deal "socialism" were essentially similar. The theory was perfect . Volker and Luhnow had found their ideology. The cash began to flow.

In short order, the Volker Fund and its larger network arranged for the re-publication of Hayek's book by the University of Chicago (a recurring and important connection) despite the fact that it had been almost universally rejected by the Economics establishment. A year later, the book was published in serial form by the ultra-reactionary Readers Digest not withstanding the fact that it was supposed to be a "scholarly text", ordinarily inappropriate for the readership of the Digest, and despite the fact that it had also had been panned by literary critics. In 1950, the Fund arranged for Hayek to secure a position at the University of Chicago and when the University only granted an unpaid position, they arranged for the Earhart Foundation to pay him a salary. Hayek was only the first of a veritable flood of émigré, "scholars".

Recruiting the Homeless

Hayek's teacher in Vienna had been one Ludwig von Mises who, in turn, had been the student of Eugen von Boehm-Bawerk (who had gained fame for his attack on Marxist Economics) and who, in his turn, had been the student of Carl Menger, the founder of the Austrian school. Each of these had published several books that were virulent attacks on Socialism and defended "pure capitalism". It was all very good. Von Mises book was called Socialism: An Economic and Sociological Analysis and it too had been received with yawns when it was published in English in 1936.

While von Mises really had "taught" at the University of Vienna, his was an unpaid position. The University had turned him down on four separate occasions for a paid position. Not surprisingly, in 1940 the nearly destitute von Mises had emigrated to the United States. In 1945, an unpaid "visiting professorship" was obtained for him at NYU while his salary was paid by "businessmen such as Lawrence Fertig". Fertig was an associate of the Volker Fund and a friend of Henry Hazlitt, the Fund's friendliest journalist. In all, they would fund von Mises for 25 years and von Mises never would need a "real job".

In fact, this was typical of the Fund's "bait and switch" tactic for developing resumes. In the United States, von Mises was the "famed economics professor from the University of Vienna". In Europe, he would become the "famous American economist from NYU".

Local Reinforcements

The economist Milton Friedman, during his fifteen minutes of fame, took the opportunity of the publication of his opus, Capitalism and Freedom to decry the shabby treatment that the likes of Hayek and Mises had received from the Economics "establishment". On his own similar reception, he wrote in the 1982 preface of his book:

"Those of us who were deeply concerned about the danger to freedom and prosperity from the growth of government, from the triumph of welfare-state and Keynesian ideas, were a small beleaguered minority regarded as eccentrics by the great majority of our fellow intellectuals.

"Even seven years later, when this book was first published, its views were so far out of the mainstream that it was not reviewed by any major national publication--not by the New York Times or the Herald Tribune (then still being published in New York) or the Chicago Tribune, or by Time or Newsweek or even the Saturday Review--though it was reviewed by the London Economist and by the major professional journals. And this for a book directed at the general public, written by a professor at a major U.S. university, and destined to sell more than 400,000 copies in the next eighteen years."

It is attractive to believe that Friedman was really this foolish and that his expertise in the "politics of fame" was similar to his expertise in Monetary Policy. In fact, his separate acknowledgements of the importance of the Volker Fund belie this possibility. In truth, the Fund and its progeny identified Friedman early on, shepherded his career at the University of Chicago, subsidized him through a paid lecture series (which eventually were combined into Capitalism and Freedom), paid his way to Mont Pelerin, arranged for the serialization of his book by Reader's Digest, and bought a significant number of the books that Friedman was so proud of "selling".

Friedman was only one of dozens of such local "scholars" who were suddenly "discovered" through the efforts of the Fund.

The Fund also now began to recruit friendly young "future-scholars" and subsidize their development. Not only was the cause thus advanced, but a modest intelligence network became a part of the "Libertarian Movement". One such early recruit was Murray Rothbard, later to become famous as the "father" of "Left Libertarianism", "Libertarian anarchism", and "anarco-capitalism". Later much castigated for his "sellout to the Right-wing Republicans", Rothbard had, from the first, been intimately wrapped up in Anti-Communism, McCarthyism, the "Old Right", and the right-wing ideology of the Volker Fund. It was through the Fund that he became an associate of Ayn Rand and a student of Mises.

"Rothbard began his consulting work for the Volker Fund in 1951. This relationship lasted until 1962, when the VF was dissolved. A major part of Rothbard's work for the VF consisted of reading and evaluating books, journal articles, and other materials. On the basis of written reports by Rothbard and another reader - Rose Wilder Lane - the VF's directors would decide whether to undertake massive distribution of particular works to public libraries.

The VF also asked Rothbard to submit reports on particular questions, such as how to rank sundry economists in terms of friendliness to the free market, surveys of the literature on monopoly, Soviet wage structures, etc., etc. Rothbard's memos number several hundred, covering works in economics, history, philosophy, and political science. The memos, which range in length from one page to seventy pages, provide a window into the scholarship of the period - and Rothbard's views on that scholarship. They thereby shed much light on Rothbard's emerging worldview and his systematic defense of liberty."

They also shed "much light" on how the Fund decided which "scholars" to promote, and which to attack. Rothbard later called his work with the Volker Fund, "the best job I've ever had in my life".

Multiplying Like Rabbits

In support of the imported scholars and the new ideology, the Volker Fund also pioneered a process which would become the hallmark of the "Libertarian Movement". The Fund started to spin-off organizations by the boatload, each intended, not just to serve specific purposes but to give the appearance of many "independent" efforts spawned by a "mass" appeal. The list of "begats" is too numerous to chronicle but the first set are illuminating.

Among the very first "front organizations" of the Volker Fund was the "National Book Foundation". While the Foundation's affiliation to the Volker Fund was not hidden, it was circumspect enough to suggest, even to most "Libertarians", that it was independent. The fund began modestly enough by distributing free copies Eugene Böhm-Bawerk's works to thousands of libraries and universities across the country. As the Volker efforts geared up, the Foundation began to distribute millions of books from dozens of authors, all coming from the Fund's stables. Many educational "incentives" were initiated such as "teach a course on Hayek, get 10 (or 100) textbooks for free"...

The Foundation for Economic Education was spun out in 1946, under the leadership of Leonard Read, a leading figure in the Chambers of Commerce. The grand-daddy of all libertarian "think-tanks", the FEE initiated the original Mont Pelerin Society meetings. Its own publication, The Freeman, became the founding journal of "Libertarianism". The rent was paid by Volker.

The Institute for Humane Studies was created by Floyd "Baldy" Harper, the "ace recruiter" of the Volker Fund, in 1961. The IHS identified and subsidized "bright young students" and "promising scholars" friendly to the new "Libertarian" doctrine. Not only did the IHS fund thousands of "students", but it spawned dozens of similar organizations throughout the world. After the Volker Fund was finally closed, subsidies for the IHS shifted to some of the most reactionary organizations in America: The Scaife Foundation, Koch Family Foundations, The Bradley Foundation, and the Carthage Foundation.

The Intercollegiate Studies Institute was founded in 1953 to combat what they would eventually call "political correctness" and "'left-bias" in colleges and universities. The organization now consists of 50,000 college students and faculty and through its lavish subsidies, sponsors dozens of programs representing the entire spectrum of right-wing "Libertarian" causes. The first president of the ISI was a young William F. Buckley Jr.

The Earhart Foundation was created by and named for Richard Earhart of White Star Oil, one of Volker's original collaborators in the National Association of Manufacturers. This foundation was used to subsidize various émigrés and not only financed Hayek but also Eric Voegelin, yet another "Austrian". Through Voeglin, the Earhardt Foundation became connected with the infamous Leo Strauss and, since then, various "projects" of not just a "libertarian" but of a "neo-conservative" perspective have been beneficiaries of the Foundation. In addition, The Earhart Foundation helped to pioneer still another use of the newly-emergent Libertarian think-tanks. As the network of these think-tanks grew, they undertook not only to promote ideology but also specific points of policy, particularly in support of private corporations. The culmination of the Foundation's efforts in this direction came with the founding of the George C. Marshall Institute in 1984. The Institute was initially a foremost proponent of the Strategic Defense Initiative (SDI), heavily promoted by the Defense Industry, and later became the leading non-industry critic of "Climate Change". The CEO of the Institute is currently a registered lobbyist for ExxonMobil.

Through the list of organizations, above, the Volker Fund's near-biblical "begats" encompass nearly every single prominent individual and organization of the "Libertarian" and "New Conservative" movements of today.

The Not-So-Secret Society

"In 1947, 39 scholars, mostly economists, with some historians and philosophers, were invited by Professor Friedrich Hayek to meet at Mont Pelerin, Switzerland, and discuss the state, and possible fate of classical liberalism and to combat the "state ascendancy and Marxist or Keynesian planning [that was] sweeping the globe". Invitees included Henry Simons (who would later train Milton Friedman, a future president of the society, at the University of Chicago); the American former-Fabian socialist Walter Lippmann; Viennese Aristotelian Society leader Karl Popper; fellow Austrian School economist Ludwig von Mises; Sir John Clapham, a senior official of the Bank of England who from 1940-6 was the president of the British Royal Society; Otto von Habsburg, the heir to the Austro-Hungarian throne; and Max von Thurn und Taxis, Bavaria-based head of the 400-year-old Venetian Thurn und Taxis family."

If the above rings of "Bohemian Grove" and similar fodder for conspiracies, it is because informal "retreats" at out-of-the-way resorts are one of the favorite methods by which the wealthy of many countries formulate a common international policy. What distinguishes the Mont Pelerin Society, however, is that it did not consist primarily of the wealthy. Instead, it was comprised of a majority of marginal, thread-bare "scholars", united only by their common hatred of "socialism" and Keynesianism (which were one and the same for most of them) and sprinkled with only a handful of rich patrons and journalists. In fact the Mount Pelerin Society was organized as much by the Volker Fund as by Hayek himself and the Foundation paid the way for all 10 of the American "participants".

Once in Switzerland, the "scholars" agreed on their hatred of "socialism" but on little else except to meet yearly to "facilitate an exchange of ideas between like-minded scholars in the hope of strengthening the principles and practice of a free society and to study the workings, virtues, and defects of market-oriented economic systems."

From this not-so-secret-but-thoroughly-right-wing society's more than humble beginnings, the phoenix of laissez-faire capitalism would rise, propelled skyward by unlimited funds. Over a dozen of the scholars who could not previously get a job, a review, or a book deal would go on to win the "Nobel Prize in Economics" (this "epic" story will be told separately). More importantly, the Mont Pelerin Society would itself beget 500 foundations and organizations in nearly 80 countries... again with strategic contributions from Mr. Anonymous. Once transformed into an "international movement", there was no end to what was possible. One example tells the story.

Initiated at Mont Pelerin and copying the FEE, the Institute of Economic Affairs (IEA) was created in London in 1955. Serving as a conduit for both cash and "ideas", the IEA set about the task of "rejuvenating" the dead and decaying British Tories. By 1985, the "Iron Lady", Margaret Thatcher, would positively gush on the occasion of the Institute's 30th Anniversary: "You created the atmosphere which made our victory possible... May I say how thankful we are to those who joined your great endeavor. They were the few, but they were right, and they saved Britain." With that, the IEA begat the Atlas Economic Research Foundation, which in turn created a network of over 50 "think-tanks" in more than 30 countries.

[Continued...]

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

Notice how the above dovetails with the following interview of Webster Tarpley:

       http://www.youtube.com/watch?v=tuHCAXtjZ6Q (part 1 of 4)
       http://www.youtube.com/watch?v=rlJT-5w21IY (part 2 of 4)
       http://www.youtube.com/watch?v=rxe-LlAO_cQ (part 3 of 4)
       http://www.youtube.com/watch?v=bl5jOUvIcuI (part 4 of 4)

[trailhound]

 Yeah the rockefellers are behind austrian school got it, thats why Ron Paul was so well funded

[Geolibertarian]

News flash: critiquing the Austrian School, not mindlessly praising it, is precisely what this thread is about, so the above pic is more of the usual...

Freudian Projection:

"A defense mechanism in which the individual attributes to other people impulses and traits that he himself has but cannot accept."....

"Attributing one's own undesirable traits to other people or agencies, e.g., an aggressive man accuses other people of being hostile."

"The individual perceives in others the motive he denies having himself. Thus the cheat is sure that everyone else is dishonest."

-- http://www.heretical.com/sexsci/bpsychol.html

[trailhound]

News flash: this thread is devoted to critiquing the Austrian School, so the above pic is more of the usual...

Freudian Projection:

      "A defense mechanism in which the individual attributes to other people impulses and traits that he himself has but cannot accept."....

      "Attributing one's own undesirable traits to other people or agencies, e.g., an aggressive man accuses other people of being hostile."

      "The individual perceives in others the motive he denies having himself. Thus the cheat is sure that everyone else is dishonest."


-- http://www.heretical.com/sexsci/bpsychol.html

 Nice sidestep ya got

[Revolt426]

Nice sidestep ya got

Considering you haven't the slighest idea what the Austrian school is attempting to impose, and you even admitted you would go bankrupt due to the resulting deflation wrecking your mortgage earlier in this very thread - it find it extremely difficult to understand why you consistantly post things here that have absolutely NOTHING to do with the subject at hand, and you even support the very economic reform that would kick you out of your own home. It is completely dumbfounding to me!

[trailhound]

Considering you haven't the slighest idea what the Austrian school is attempting to impose, and you even admitted you would go bankrupt due to the resulting deflation wrecking your mortgage earlier in this very thread - it find it extremely difficult to understand why you consistantly post things here that have absolutely NOTHING to do with the subject at hand, and you even support the very economic reform that would kick you out of your own home. It is completely dumbfounding to me!

 Its not my home its the bank's. Foreclosure would not be the end of my life.

 Furthermore what i just posted was a simple point that pokes a hole in the article geolib posted that boils down to the rockefellers support austrian economics If thats not relevant im not not sure what would be.

[Revolt426]

(Note: In my view, a more accurate title for the following essay would be: "Mr. Anonymous and the Not-So-Spontaneous Birth of the Royal Libertarian Movement")

I would 100% agree with you there - i've met rational Libertarians that are concerned with EVERYONE'S liberty as opposed to only their own. You happen to be one of them.......

The Royal Libertarian article should be read by all.

http://geolib.com/essays/sullivan.dan/royallib.html

[trailhound]

Considering you haven't the slighest idea what the Austrian school is attempting to impose,

 You make alot of assumptions and that in itself casts serious doubt on the integrity of your conclusions.

[Revolt426]

Its not my home its the bank's. Foreclosure would not be the end of my life.

 Furthermore what i just posted was a simple point that pokes a hole in the article geolib posted that boils down to the rockefellers support austrian economics If thats not relevant im not not sure what would be.

Well, that is essentially saying to the Private Bankers "Rape our country, we won't fight back" then deflecting the argument to the "Rockefeller" family rather then addressing the very important issues mentioned in the original and other posts in this forum highlighting certain issues about Austrian economic reform that would drastically reduce the world population levels aka "Genocide" .

If you want to deflect the rational debate to things like "The Venus Project" and the "Rockefeller's" ,  make a thread dedicated to it rather then ranting about it in a thread dedicated to something else.

 You make alot of assumptions and that in itself casts serious doubt on the integrity of your conclusions

My assumptions are based on your absurd comments througout this entire thread which anyone can just click back and see. If i am wrong , then provide me with rational answers to the questions i posed and tell me why you are willing to let everyone in the country get foreclosed on JUST to impose what the Austrian school considers "Sound Money" when in reality, as highlighted in this and other threads, there are alternatives that would not wreck the entire country.

[aerborne]

Considering you haven't the slighest idea what the Austrian school is attempting to impose, and you even admitted you would go bankrupt due to the resulting deflation wrecking your mortgage earlier in this very thread - it find it extremely difficult to understand why you consistantly post things here that have absolutely NOTHING to do with the subject at hand, and you even support the very economic reform that would kick you out of your own home. It is completely dumbfounding to me!

ROFL Oh Irony the guy who hasn't read a single work by an austrian economist is telling those that have they don't understand what they themselves read because mr high and mighty here has it on good faith that stephen zarlenga knows better then the austrians.

[aerborne]

My assumptions are based on your absurd comments througout this entire thread which anyone can just click back and see. If i am wrong , then provide me with rational answers to the questions i posed and tell me why you are willing to let everyone in the country get foreclosed on JUST to impose what the Austrian school considers "Sound Money" when in reality, as highlighted in this and other threads, there are alternatives that would not wreck the entire country.

So your assumption that gold would cause a deflationary holocaust is based on this thread? Where? I have YET to see any evidence to defend that assumption, you refuse to do it. I've showed you that in history gold has never caused deflation, show me where you think it did and i'll find the financial data and post it.

I've already disproven the 1837 lies would you like me to repaste those numbers?

[trailhound]

My assumptions are based on your absurd comments througout this entire thread which anyone can just click back and see.

http://www.telegraph.co.uk/finance/financetopics/g20-summit/5072484/Russia-backs-return-to-Gold-Standard-to-solve-financial-crisis.html

The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.

It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.

The world's fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold.


absurd..

[Revolt426]

http://www.telegraph.co.uk/finance/financetopics/g20-summit/5072484/Russia-backs-return-to-Gold-Standard-to-solve-financial-crisis.html

The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.

It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and "Great Society" social spending forced President Richard Nixon to close the gold window in 1971.

The world's fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible - or less likely - under the discipline of gold.


absurd..

Quite absurd, because during the 1800's Andrew Jackson's "Gold Standard" Imploded the economy (Which is the 19th Century as the propaganda you posted just mentioned). 


In addition - as i've mentioned about 50 times, the Bretton Woods system (1944-1971) was infact, not a domestic Gold Standard but a Fixed Exchange Rate system based on an International Gold Standard..... but people just don't want to read do they? 

[trailhound]

Quite absurd, because during the 1800's Andrew Jackson's "Gold Standard" Imploded the economy (Which is the 19th Century as the propaganda you posted just mentioned).

 Thats interesting because when it suits your argument you and geo argue there never was a true gold standard.

[Revolt426]

 Thats interesting because when it suits your argument you and geo argue there never was a true gold standard.

Are we deflecting again because we've posted inaccurate information that we've "Googled" again? .

For those who not comprehend , an international gold standard (The bretton woods system) is a system in which Currency Exchange Rates are FIXED to prevent currency speculators from "Shorting" them......

Each country has an exchange rate based on their Gold Reserves as opposed to using gold as an actual currency. The system did indeed work very well and i hope it is revived.

On the other hand, a Domestic Gold Standard is when Gold is used as an actual currency, which i hope never returns (For reasons described in the original post)

[trailhound]

 
Besides the early years of the Great Depression (before its full impact or length could be known), he used the Panic of 1837 as an example. It was caused by heavy demand for loans to buy land, build businesses, and invest in the country's development. Prices began rising, economic strains built up, and a speculative bubble developed that burst in New York on May 10 when every bank stopped payment in specie (gold or silver coinage). A five year depression followed. Many banks failed, and unemployment soared to record levels.
 
Andrew Jackson was blamed for requiring that gold and silver currency (not fiat paper) be used to pay for government land. Also for not renewing the Second Bank of the United States charter and withdrawing government funds from the bank. Most historians believe it but more recent scholarship cites other causes instead. What's not disputed was the speculative excess that came to a painful end.

http://www.rense.com/general84/dfla.htm

[Revolt426]

Besides the early years of the Great Depression (before its full impact or length could be known), he used the Panic of 1837 as an example. It was caused by heavy demand for loans to buy land, build businesses, and invest in the country's development. Prices began rising, economic strains built up, and a speculative bubble developed that burst in New York on May 10 when every bank stopped payment in specie (gold or silver coinage). A five year depression followed. Many banks failed, and unemployment soared to record levels.
 
Andrew Jackson was blamed for requiring that gold and silver currency (not fiat paper) be used to pay for government land. Also for not renewing the Second Bank of the United States charter and withdrawing government funds from the bank. Most historians believe it but more recent scholarship cites other causes instead. What's not disputed was the speculative excess that came to a painful end.

http://www.rense.com/general84/dfla.htm

You forgot the post the title of the article you just posted, here i'll do it for you:

Excess Debt And
Deflation = Depression

^ I have been attempting to explain this throughout the entire thread!

You also forgot to mention that Andrew Jackson's Gold based currency disintigrated the " Competeing " State issued currency, which needlessly bankrupted all people who held state issued notes ( I guess they were just too stupid and they deserve to have their currency destroyed right?)

One more thing you forgot to mention is during the 19th Century the British Empire held a monopoly on Gold Reserves (and they still do till this day) and at a whim could expand or contract (MANIPULATE) the monetary supply. I would consider that worse then the so called "Speculation" Of the Second National Bank of the United States of which the Government had 100% Control over the printing presses via Congressional Vote and Treasury issuence of credit for that bank to even be able to print currency in the first place.

lastly, that Depression was the worst Depression ever up until that point in U.S. history, and infact - the economy never really recovered (Particularly in the South) which paved the way to the Civil War due to further reliance on Slave Labor to produce raw materials for the plantation owners to capitalize off of (By the way, Andrew Jackson owned Slave Plantation!, isn't that ironic.... he was a Southern Democrat too.)

[trailhound]

One more thing you forgot to mention is during the 19th Century the British Empire held a monopoly on Gold Reserves (and they still do till this day) and at a whim could expand or contract (MANIPULATE) the monetary supply. I would consider that worse then the so called "Speculation" Of the Second National Bank of the United States of which the Government had 100% Control over the printing presses via Congressional Vote and Treasury issuence of credit for that bank to even be able to print currency in the first place.

Well its ironic then that we have become the british empire seeing how your hero lincoln saved us from that.


Lincoln, Gold, and Greenbacks

by Thomas J. DiLorenzo

Save a link to this article and return to it at www.savethis.comSave a link to this article and return to it at www.savethis.com  Email a link to this articleEmail a link to this article  Printer-friendly version of this articlePrinter-friendly version of this article  View a list of the most popular articles on our siteView a list of the most popular articles on our site 

When Abraham Lincoln first entered politics in 1832 he announced to Illinois voters that "My politics are short and sweet, like the old woman’s dance. I am in favor of a national bank . . . in favor of the internal improvements system and a high protective tariff." These three things – central banking, protectionism, and what we today call corporate welfare (for the railroad and road-building industries) are what Lincoln would devote the next twenty-eight years to achieving, working tirelessly in the political trenches of the Whig and Republican parties. In doing so he became a master politician, a designation that the founding fathers warned all citizens to be fearful of.

The year 1832 is significant because that was the year of the big showdown over the rechartering of the Bank of the United States between President Andrew Jackson and the bank’s president, Nicolas Biddle. Jackson won the showdown, the bank became defunct, and the Whig Party was created largely in response to it and in response to Henry Clay’s failure to prevail with the "Tariff of Abominations," which would have raised average tariff rates to nearly 50 percent.

A central bank was the potential political lifeblood of the Whig Party, and no one was more devoted to resurrecting it than was Lincoln. As University of Virginia historian Michael Holt writes in his treatise, The Rise and Fall of the Whig Party, during the 1840, 1844, and 1848 elections Lincoln "crisscrossed the state ardently and eloquently defending specific Whig programs like a national bank . . . . Few people in the party were so committed to its economic agenda as Lincoln." In 1848 Lincoln stumped for Zachary Taylor, promising that if he were elected he would revive the central bank. He would continue to criticize Jackson and advocate central banking for the rest of his political career.

In Monetary Policy of the United States Richard Timberlake clearly explained the paramount importance of central banking to the political ambitions of Lincoln and his fellow Whigs: "To the Whigs . . . a national bank was their life – the vital principle – without which they could not live as a party – the power which was to give them power . . . . To lose it, was to lose the fruits of the election, with the prospect of losing the party itself." In other words, the Whigs always intended to use a central bank, and the printing of paper money not backed by gold or silver, as the means of financing massive patronage schemes ("internal improvements") that they hoped would keep them in power indefinitely. This is precisely why the Jacksonians were so opposed to it.

Andrew Jackson and the Bank War

The best published account of the "bank war" between Andrew Jackson and Nicolas Biddle is Robert Remini’s Andrew Jackson and the Bank War. Jackson considered fiat money to be "the instrument of the swindler and the cheat. For Andrew Jackson, hard money – specie – was the only legitimate money; anything else was a fraud to steal from honest men." (Remini, p. 19). Jackson also believed that the doctrine of states’ rights meant that a central bank was unconstitutional. This view was quite pervasive, especially in the South. As Timberlake writes (p. 83): "The states . . . . were properly jealous and fearful of encroachment by the federal government. Since a central bank would necessarily be a federal bank and would maintain and operate state branches from a distant center, proponents of states’ rights found opposition to a national bank almost mandatory."

Jackson suspected that a central bank would be controlled by Northern bankers and would be used to manipulate politics. Remini does point out that the strongest support for the bank came from New England, whereas the fiercest opposition came from Southern politicians like Jackson.

Jackson had good reason to fear political manipulation by a central bank. The first president of the Bank of the United States (BUS) was Navy Captain William Jones, who had no banking experience and who had just gone personally bankrupt. Murray Rothbard blames him for the Panic of 1819 in his book of the same title, which is cited by Remini.

The Second BUS was run by Nicolas Biddle, who continued to politicize the bank in many ways, including granting low-interest loans and "consulting contracts" to politicians who would support the bank’s expansion. Jackson’s Treasury Secretary, Roger B. Taney (the future chief justice of the U.S. Supreme Court) complained of the bank’s "corrupting influence" and "its patronage greater than that of government" for good reason. As Henry Clay biographer Maurice Baxter wrote in Henry Clay and the American System, Clay (Lincoln’s political role model) left Congress for two years in 1822 after having incurred $40,000 in personal debt to become general counsel of the BUS. His income from this caper "apparently amounted to what he needed" to pay off his personal debts, writes Baxter. "When he resigned to become Secretary of State in 1825, he was pleased with his compensation."

Another prominent Whig, Daniel Webster, did not even bother resigning from Congress before collecting bribes. He simply demanded a "retainer" from Biddle "If it be wished that my relation to the Bank should be continued."

Biddle proved Jackson’s charges of political corruption to be correct when, during the 1828 election he spent more than $100,000 of the bank’s money in support of Jackson’s political opponents; promised BUS money to friendly politicians to spend on "internal improvements" schemes; paid for the reprinting of Henry Clay’s speeches in support of the BUS; and paid for newspaper ads that promoted himself and the bank and attacked Jackson.

The U.S. Supreme Court ruled that a central bank was constitutional, but it is important to keep in mind that, prior to the War for Southern Independence, it was not at all universally agreed that the federal government itself should be the arbiter of the limits of its own powers. That is, Supreme Court decisions were viewed by many, including President Andrew Jackson, as mere opinions and not Holy Writ, as they are today. As Jackson said in response to the Court’s decision:

    To this conclusion I cannot assent. Congress and the president as well as the Court must each for itself be guided by its own opinion of the Constitution . . . . the opinion of the judges has no more authority over Congress than the opinion of Congress has over the judges, and on that point the president is independent of both. The authority of the Supreme Court must not, therefore, be permitted to control the Congress or the executive when acting in their legislative capacities.

For the next several decades the political battle would continue over central banking, with such advocates of a more centralized and omnipotent state as John Quincy Adams, Webster, Clay, and Lincoln on one side, and John C. Calhoun and the Jacksonians on the other. As Remini writes, "Calhoun argued in favor of a system that would convert the United States to the gold standard exclusively."

The Independent Treasury System

The demise of the BUS led to an alternative banking system known as the Independent Treasury System, which was put into place in 1840, ended by the Whigs in 1841, resurrected in 1846, and ended finally during the Lincoln administration. As Jeffrey Hummel wrote in an essay on President Martin van Buren in Reassessing the Presidency, the Independent Treasury System, under which the only legally recognizable money was gold and silver coins and all currency was redeemable in specie on demand, "ushered in an era of financial deregulation at the national level." It was probably the most stable monetary system in American history, according to Hummel. Timberlake writes that "The Independent Treasury may well appear in retrospect as the optimal monetary-fiscal institution within the basic framework of a gold standard."

Lincoln the Bank Whig

Abraham Lincoln was fiercely opposed to the Independent Treasury System. On December 26, 1839, he gave a speech in opposition to it and in support of central banking in Springfield, Illinois. The speech was Clintonian in length and charged that the system would generate economic instability, be extremely expensive to operate, would be an insecure depository of money, and would "reduce the quantity of money in circulation." These turned out to be red herring arguments.

Lincoln’s speech was quite extreme and even bizarre in some respects. He quite hysterically claimed, for instance, that under a gold and silver standard "All [will] suffer more or less, and very many will lose everything that renders life desirable."

Lincoln was not a religious man, and many of his contemporaries believed he was an atheist. But being a consummate politician he frequently invoked Scripture in his speeches, including this one. "The Savior of the world chose twelve disciples, and even one of that small number, selected by super-human wisdom, turned out a traitor and a devil. And, it may not be improper here to add, that Judas carried the bag – was the Sub-Treasurer of the Savior and his disciples." An Independent Treasury System would supposedly be a "traitor" to the American public just as Judas betrayed Jesus, said Lincoln.

About a year later Lincoln had become a leader in the Illinois legislature and he repeatedly opposed proposals by Democrats to audit the Illinois state bank. In December 1840 the Illinois Democrats wanted to require the bank to make payments in gold or silver instead of paper. The bank was authorized to continue its suspension of specie payment through the end of the year. Lincoln wanted desperately to avoid this outcome, so he bolted for the door and instructed his fellow Whigs to follow him. Without a quorum the legislature could not vote to adjourn, and the suspension of specie payment would continue.

But the door was locked and guarded, so Lincoln literally jumped out of the first-floor window, followed by his lemming-like Whig followers. The Democrats ridiculed him as "Lincoln and his flying brethren," and his stunt failed anyway.

In What Has Government Done to Our Money? Murray Rothbard explained the significance of the phrase, "suspension of specie payment." This explanation clarifies just what it was that Lincoln and the Whigs (and later the Republicans) were fighting so vigorously for.

    The bluntest way for government to foster inflation . . . is to grant the banks the special privilege of refusing to pay their obligations, while yet continuing in their operation. While everyone else must pay their debts or go bankrupt, the banks are permitted to refuse redemption of their receipts, at the same time forcing their own debtors to pay when their loans fall due. The usual name for this is a "suspension of specie payments." A more accurate name would be "license for theft," for what else can we call a government permission to continue in business without fulfilling one’s contract?

Richard Timberlake was right: The Whig Party failed to revive the BUS and, without an ability to promise taxpayer-financed subsidies to its big business supporters, the party imploded in the early 1850s. Many of the same special interests that had supported the Whig Party then supported the new Republican Party. Lincoln assured his Illinois constituents that there was not policy difference at all between the Whig and Republican Parties.

Lincoln’s Banking Legislation

As soon as Lincoln took office the old Whig coalition finally controlled the entire government. It immediately tripled the average tariff rate, began subsidizing the building of a transcontinental railroad in California even though a desperate war was being waged, and on February 25, 1862, the Legal Tender Act empowered the Secretary of the Treasury to issue paper money ("greenbacks") that were not immediately redeemable in gold or silver. The National Currency Acts of 1863 and 1864 created a system of nationally chartered banks that could issue bank notes supplied to them by the new Comptroller of the Currency, and a 10 percent tax was placed on state bank notes to drive them out of business and establish a federal monetary monopoly. The government’s paper money flooded the banks so that by July 1864 greenback dollars were worth a mere 35 cents in gold.

Ever since the days of Andrew Jackson American presidents had opposed a fiat money system. The Jacksonian opposition to central banking was ended, literally, at gunpoint. Lincoln’s main role was to avoid doing what presidents had done for the previous three decades: veto central banking legislation. There was no chance of that since Lincoln, unlike Jackson and President John Tyler, was a career-long advocate of central banking and fiat money.

Financing the American Empire

The Republican Party establishment, led by Lincoln, was very clear on what it hoped to achieve with a central bank. As Heather Cox Richardson recounts in The Greatest Nation on the Earth: Republican Economic Policies During the Civil War, Senator John Sherman, brother of General William Tecumseh Sherman and chairman of the U.S. Senate Finance Committee, declared, "nationalize as much as possible, even the currency, so as to make men love their country before their states. All private interests, all local interests, all banking interests, the interests of individuals, everything, should be subordinate now to the interest of the Government." This is a perfect rendition of the collectivist philosophy that would plague the twentieth century with its insistence that citizens are to be the mere servants of the state, rather than the other way around.

The sponsor of the banking legislation in the House of Representatives was Congressman Elbridge G. Spaulding, a New York banker. Spaulding clearly argued that the new fiat money system would finally clear the way for the mercantilist system of massive "internal improvement" subsidies. The New York Times published a celebratory editorial on March 9, 1863, in which it said, "The legal tender act and the national currency bill crystallized . . . . a centralization of power, such as Hamilton might have eulogized as magnificent."

Kentucky Democrat Lasarus Powell was not as enthusiastic. "The result of this legislation," he said, "is utterly to destroy the rights of the states. It is asserting a power which if carried out to its logical result would enable the national Congress to destroy every institution of the States and cause all power to be consolidated and concentrated here [in Washington, D.C.]." But of course it would; that was always the intention of The Party of Lincoln.

The Party of Lincoln wanted to transform the American government from the limited, constitutional republic of the founding fathers to an empire that would rival Great Britain’s, and they knew they needed a central bank to achieve that task. Empires are very expensive propositions, as they require sending armies and navies all over the globe. As Richardson explains: "By 1863 the Republicans envisioned a dominant international role for a unified American nation, and [Senator John] Sherman promised that the bank bill, with its implicit strengthening of the national government, would advance that goal" (emphasis added). The Republicans under Lincoln "were building a new economic role for an increasingly powerful national government, permanently involving it in the country’s monetary affairs."

[Revolt426]

http://www.blackpast.org/?q=perspectives/other-hermitage-enslaved-andrew-jackson-plantation

The Other Hermitage: The Enslaved at the Andrew Jackson Plantation



Established in 1804, The Hermitage is an 1,120-acre National Historic Landmark located just east of Nashville, Tennessee. Known as the “Home of President Andrew Jackson,” this historic cotton plantation was also home to over 200 enslaved men, women, and children, whose histories have been largely recovered through archaeological research conducted on the property over the past 40 years. In addition to the Hermitage mansion, the property includes a kitchen, smokehouse, and three log slave cabins that date to Jackson’s occupation of the property from 1804 to his death in 1845. An additional ten slave dwellings have been discovered through archaeological excavation. The nearly 800,000 artifacts recovered on the property represent one of the single largest archaeological collections from an enslaved community anywhere in the New World.

[trailhound]

You forgot the post the title of the article you just posted, here i'll do it for you:

Excess Debt And
Deflation = Depression

^ I have been attempting to explain this throughout the entire thread!

  yeah its depressing for bankers who's scams are up, the salt of the earth will scratch it out and in the end most likely be far better off for it.

[Revolt426]

Well its ironic then that we have become the british empire seeing how your hero lincoln saved us from that.

I don't understand what you are attempting to do, but judging by the above posts you have made a complete mockery of yourself and still, you go on "Google" without any knowledge of history and attempt to dig up articles that always turn out to be propaganda.

Everytime you make a mockery of yourself, you go ahead and dig another load of propaganda up, post it , and it is debunked.

What exactly do you think you are accomplishing here other then highlighting that you haven't the slightest idea what you are talking about and filling the thread with pages full of utter bullshit?. I mean, i know you've seen the REAL history in regards to Lincon's term because i provided numerous links that even the global moderators agreed with - yet you still relentlessly attempt to "Debunk" reality and again, make a complete fool of yourself.

Why can't you just say "Oh, that is interesting" and give up when you are wrong?.

If i posted false historical nonsense and was debunked time and time again - i would probably shut my mouth.... you on the other hand, continue to post the re-written history with no concept of what you are doing.

[trailhound]

I don't understand what you are attempting to do, but judging by the above posts you have made a complete mockery of yourself and still, you go on "Google" without any knowledge of history and attempt to dig up articles that always turn out to be propaganda.

Everytime you make a mockery of yourself, you go ahead and dig another load of propaganda up, post it , and it is debunked.

What exactly do you think you are accomplishing here other then highlighting that you haven't the slightest idea what you are talking about and filling the thread with pages full of utter bullshit?. I mean, i know you've seen the REAL history in regards to Lincon's term because i provided numerous links that even the global moderators agreed with - yet you still relentlessly attempt to "Debunk" reality and again, make a complete fool of yourself.

Why can't you just say "Oh, that is interesting" and give up when you are wrong?.

If i posted false historical nonsense and was debunked time and time again - i would probably shut my mouth.... you on the other hand, continue to post the re-written history with no concept of what you are doing.

 Just because you say something is 'debunked' doesnt make it so.

 Instead of attacking me why dont you address the point that we are the empire now. Debunk that.

[trailhound]

http://mises.org/story/607

Murray Rothbard accurately defined mercantilism as "a system of statism which employed economic fallacy to build up a structure of imperial state power, as well as special subsidy and monopolistic privilege to individuals or groups favored by the state." This is what Lincoln devoted his entire political career to achieving. He was a master politician who once told a friend that his career ambition was to be "the DeWitt Clinton of Illinois." DeWitt Clinton was the notoriously corrupt governor of New York who is credited with inventing the spoils system.

The so-called American System of mercantilism could only be implemented by a highly centralized government of the sort that the U.S. Constitution attempted to deter. That’s why it could only be put into place by force of arms, which it was. As soon as Lincoln maneuvered the South Carolinians into firing the first shot (at a customs house, Fort Sumter) tariff rates were immediately raised to an average of 47 percent and higher, and remained historically high for decades after the war.

During the war Lincoln established a number of tyrannical precedents, including unconstitutionally conducting a war without the consent of Congress; suspending habeas corpus; conscripting railroads and censoring telegraph lines; imprisoning without trial some 30,000 northern citizens for merely voicing opposition to the war; deporting a member of Congress, Clement L. Vallandigham of Ohio, for opposing Lincoln’s income tax proposal at a Democratic Party political rally; shutting down hundreds of Northern newspapers and imprisoning their editors for questioning his war policies; ordering federal troops to intimidate voters into voting Republican; and intentionally waging war against civilians.

The second plank of the American System of mercantilism, central banking, was achieved with the National Currency Acts of 1863 and 1864, and there was a virtual explosion of government subsidies to railroads and other businesses that bankrolled the Republican Party. The inevitable consequence was the notorious corruption of the Grant administrations.

In 1861 Senator John Sherman, brother of General William Tecumseh Sherman and a major power in the Republican Party, announced that "Those who elected Mr. Lincoln expect him to secure to free labor its just right to the Territories of the United States; to protect . . . by wise revenue laws, the labor of our people; to secure the public lands to actual settlers . . . ; to develop the internal resources of the country by opening new means of communications between the Atlantic and Pacific."

Translating from the politician’s idiom into plain English, this meant that Lincoln’s main objective was always protectionism for Northern manufacturers; buying votes with cheap federal land sales; and the purchase of even more votes and campaign contributions through a massive spoils system created by government subsidies to the railroad industry. The corrupt political strategy of DeWitt Clinton writ large is Abraham Lincoln’s true economic legacy.

[Revolt426]

Just because you say something is 'debunked' doesnt make it so.

 Instead of attacking me why dont you address the point that we are the empire now. Debunk that.

Pardon me, but do you understand

#1 Lincoln prevented Britain's Prime Minister Lord Palmerston from completely disintigrating the United States.

#2 Lincoln was ASSASSINATED after doing this.

#3 Lincoln's successor reversed his policies and was impeached.

#4 The fact that there is STILL an Empire only supports my argument that the Austrian school's "All regulation is tyrrany" Propaganda is indeed that, propaganda. My whole point in regards to regulation was that history has taught us that sociopaths will always be around - all we can do is prevent them from looting and pillaging our nation. Of course, Lincoln did destroy Lord Palmerston's plans for wrecking the United States with his Greenback system, railway and alliance with the Czar of Russia - why is there still Empire?.... Why is the sky blue?

It's just an absurd question. You think Lincoln can come back from the Grave and fight the British off again ? lol

[Revolt426]

http://mises.org/story/607

You continue to make a complete fool of yourself ...... do so at your own demise because i am not wasting my time responding to the repeated postings of utter propaganda FROM the mises website that i have REFUTED in the original post as HOGWASH.

If you want to make a fool of yourself over and over again be my guest, i am going to eat.

[trailhound]

#4 The fact that there is STILL an Empire only supports my argument that the Austrian school's "All regulation is tyrrany" Propaganda is indeed that, propaganda.

 Wow that must be a painful pretzel you had to tie yourself up in to come to that conclusion