Just when you think it can’t get any worse:
Republicans Eye Return to Gold Standard
By Robin Harding and Anna Fifield
August 23 (FT) — The gold standard has returned to mainstream U.S. politics for the first time in 30 years, with a “gold commission” set to become part of official Republican party policy.
Drafts of the party platform, which it will adopt at a convention in Tampa Bay, Florida, next week, call for an audit of Federal Reserve monetary policy and a commission to look at restoring the link between the dollar and gold.
The move shows how five years of easy monetary policy — and the efforts of congressman Ron Paul — have made the once-fringe idea of returning to gold-as-money a legitimate part of Republican debate.
Marsha Blackburn, a Republican congresswoman from Tennessee and co-chair of the platform committee, said the issues were not adopted merely to placate Paul and the delegates that he picked up during his campaign for the party’s nomination.
“These were adopted because they are things that Republicans agree on,” Blackburn told the Financial Times. “The House recently passed a bill on this, and this is something that we think needs to be done.”
The proposal is reminiscent of the Gold Commission created by former president Ronald Reagan in 1981, 10 years after Richard Nixon broke the link between gold and the dollar during the 1971 oil crisis. That commission ultimately supported the status quo.
“There is a growing recognition within the Republican party and in America more generally that we’re not going to be able to print our way to prosperity,” said Sean Fieler, chairman of the American Principles Project, a conservative group that has pushed for a return to the gold standard.
A commission would have no power except to make recommendations, but Fieler said it would provide a chance to educate politicians and the public about the merits of a return to gold. “We’re not going to go from a standing start to the gold standard,” he said.
The Republican platform in 1980 referred to “restoration of a dependable monetary standard,” while the 1984 platform said that “the gold standard may be a useful mechanism”. More recent platforms did not mention it.
Any commission on a return to the gold standard would have to address a host of theoretical, empirical and practical issues.
Inflation has remained under control in recent years, despite claims that expansion of the Fed’s balance sheet would lead to runaway price rises, while gold has been highly volatile. The price of the metal is up by more than 500 per cent in dollar terms over the past decade.
A return to a fixed money supply would also remove the central bank’s ability to offset demand shocks by varying interest rates. That could mean a more volatile economy and higher average unemployment over time.
So what will Republicans do when the imposition of the gold standard, which includes the prohibition of fractional reserve banking (a central feature of the Austrian Just Economy), causes a famine in the U.S? American farmers need to borrow billions of dollars every year to go about their business, which they pay back after selling their crops at harvest. If this supply of credit disappears under the gold standard, farmers won’t have the money to plant these crops, agricultural production will collapse, and we’ll see a famine in the U.S.
Perhaps the Austrian economists already know that the Austrian Just Economy would have this outcome. That might explain why Ron Paul’s friend, the Austrian economist Murray Rothbard, argues in one of his books that children have no right to eat, and that their parents can legally starve them to death (because of empty supermarket shelves?) without interference.
you gotta be freakin’ kidding!
that’s a legitimate foot in their mouth, and we better hope we have an acquired immunity to it;
would like to hear the Fed’s response to this;
China must be first baffled, then rolling on the floor laughing;
We’re becoming the laughing stock of the world.
@roger erickson, Erickson and Cutcheon, here was an old Video we used to pass around back in the day, It was Mr. T talking about the price of gold, some ananlyst had just invented the Mr. T gold price indicator (you remeember that one Ed Rombach? (freaking hilarous – you will laugh your azzes off):
http://videos.minyanville.com/video/Mr-T-and-the-Price-of-Gold-2?page=32§ion_id=23
Lets get mr. t and jack sparrow walking around the GOP convention, I can’t wait.
For the europeans here not familiar with so much US history,
Do a google image search for Mr. T and Nancy Reagan, Reagan was so enamoured with GOLD, they invited Mr. T over one Christmas to sit in Nancy Reagans lap and he brought them a MR. T doll for a present, LOL!
http://verydemotivational.files.wordpress.com/2011/04/demotivational-posters-nancy-reagan-sittin-on-mr-t-lap.jpg
@Save America, Art Laffer helped MMT get started. Why doesn’t he step up to the plate and tell some of the leadership in the Republican party that they are insane. Ayn Rand was right when she said that conservatives have no intellectual leadership.
@jcmccutcheon, Its not about sanity, its about winning the election at all costs. Look for the link with benko talking about the rasmussen poll and how the electorate feel on a gold standard and banking regulation. They are selling a message that is going to get them a lot of votes, even if it is total insanity.
This is how worthless both political parties have become for the american people, their games and struggle for power has come FIRST, even if it takes insanity and world destruction to win the election, that is what they will do, the people be damned, we are FREAKING DOOMED cutcheon!
http://www.youtube.com/watch?v=_49iNqxOnH4 I will miss you futurama 🙁
intellectual dishonesty
@Warren Mosler,
Intellectual Dishonesty is still winning elections.
And will continue to do so until:
1) we achieve a more informed electoate; or
2) we somehow regulate production of more informed politicians.
Simple to say, hard to do.
On to bankrupting the next 3rd of Western civilisation …
http://www.heritech.com/ymagchy/mcgeer/mcgeer.html
“ I think we all owe a very great debt of gratitude to the American President for having defeated the conspiracy at the Economic Conference to get the world back on to gold. I agree with you, however, that unless he appropriates the national credit in order to give the people of the States the necessary purchasing power to enjoy the vast abundance of real wealth which is at their disposition, his domestic policy must in the long run fail.”
This view is by no means the personal view of Mr. A. deV. Leigh, the Secretary. It is expressive of the viewpoint of the Chamber as presented from time to time by the writing and addresses of Lord Melchett, its President, and the views that appear in its official publication, the London Chamber of Commerce Journal.
In the July, 1933 issue of its official publication, that great organization of Great Britain’s industrial leaders repudiates the policy of the Bank of England and the recorded views of Lord Macmillan and Mr. Bennett in these plain and unmistakable statements :
“ Having evaded recognition of the root cause of the trouble, which, as has been consistently stated by the London Chamber of Commerce for the last eighteen months, is a vicious monetary system, the Conference will now concentrate upon trying to mitigate effects. The problems of tariffs, exchange restrictions and quotas, cannot be solved until the monetary system has been reformed, nor can prices be raised and stabilized. There is about as much chance, with the restoration of the old monetary system in sight, of inducing the nations to modify their tariffs or exchange restrictions, as there would be of persuading, by argument, a drowning man to leave go of a lifebuoy. He must first be lifted out of the water, lifebuoy and all, and then finding himself safely seated in a boat he will begin to wonder why he is hanging on to the lifebuoy and will voluntarily let go of it.
“ That the conventions of the International Gold Standard are so fundamentally opposed to modern social and economic conditions that no government could, even if it wished, give effect to them, must be evident to anyone who is prepared to recognize that he is living in the Twentieth, and not in the Nineteenth Century.
“ The International Gold Standard system is an anachronism in the Twentieth Century ; it can never again function, but as its high priests still hold sway over the nations and regard it as sacrilegious even to discuss alternative systems, there appears nothing for it but to await the further inevitable collapse of the structure built upon it.”
BWAHAHA@ Jokes on you grandpa of MMT, pirate days are come again!
Young brown people don’t want to dig that GOLD, so instead they get a little LEAD. My dad warned me about this, he would deliver the ammo to the howsers in the black virgin mountains, and the guns just mowed down row after row of poor vietnamese who tried to fight back with pitchforks and plows! He couldn’t let go of the images, decades later and he saw poor innocent farmers brains splatter every night in his nightmares, you go Ed Rombach! Gold Austrian Pirate days BABY!
Couldn’t Republicans go back in history one stage further and become cave-men? To judge by their I.Q.s they’d be fully qualified for the role.
@Ralph Musgrave, Musgrave, mining Youtube strikes gold again!
The Rip Van Winkle Caper, airdate 1961, some guys go steal some gold and go into cryogenic sleep and wake up 100 years later and no one takes thier gold, this Tube is for you Ed Rombach! Make sure you don’t miss it! LOL!
@Ralph Musgrave,
There’s quite a bit of evidence Cavemen were pretty intelligent.
I blame it on the evolutionary degrading effects of access to too many resources for too long.
We should starve them for several generations and let the ‘law of the jungle’ do its work. They could hardly object to such a ‘natural’ process.
Where da gold at?
http://www.wheredagoldat.com/alabama-leprechaun-video-page.php
Cutcheon, I almost totally forgot the leprechaun crackhead from Alabama. We need to have him and his leprechaun running around the GOP convention too.
Again for you euro boyz, several years back a leprechaun was spotted, and all the crackheadz kept asking where da gold at? LOL! The local news kept interviewing people where da gold at? It was a national rage, people from all over the country were driving to Alabama to find the leprechaun and his gold!!
South park parodied it:
But I liked the mario wario parody better:
Ed Rombach, I really do like you dude, but I can’t help but laugh in total hysterical abandon at da gold bugs! Where da gold at!? LOL! Oh I could go on and on, must sleep. Erickson, sadly, Chinese people are not laughing about this, as Rickards has pointed out in top secret policy breifings, China is killing children and workers all over thier country with massive cyanide leech mining trying to hoard some glittering metal. As the former acting emporers grandson told me, they are trying to engineer a global reserve currency reset at some point in the future, but as rickards points out, even if it comes down to “where da gold at” USA has everyones gold in our bunkers, this is all so silly, pathetic.
Bre X – a gold scandal that caught many and left several of my old mates flat broke with multi-million dollar losses – for those who want some more history:
There must some sort of natural bias in humans that propels them to place constraints and limits on their potential and their ability to think critically and that bias is clearly not inversely proportional to their wealth or stature ..If anything evidence points to a higher propensity for this bias in politicians and public servants ..
we run economy as if it was on gold standard.
nobel prize winner paul krugman think people deposit money in bank, which bank turn around and lend back out at reserve ratio.
this is simply operating economy the way we think it works.
it is, at least, honest and consistent
@zanon,
Right. It’s the pervasive view. Looking at this way, many see the problem as excessive credit due to fractional reserve banking and the fix as either narrow banking or free banking with a full reserve policy or specie.
“Marsha Blackburn, a Republican congresswoman from Tennessee and co-chair of the platform committee, said the issues were not adopted merely to placate Paul and the delegates that he picked up during his campaign for the party’s nomination.” (emphasis added)
If one were skilled at reading between the lines and taking hints, one would recognize that Blackburn is confirming that the call for an audit of the Fed and a commission is precisely what she says it is not, and therefore a big nothing-burger.
However, if one intended to make one’s blog more appealing to the denizens of the left-wing blogosphere, then one would post this nothing-burger as a way to bash Republicans and thereby attract, in a mere 10 hours, more than twice as many posts as the previous one dealing with serious issues of QE and interest rate channels.
@ESM,
Did you notice that the Tea Party is taking over the GOP? This is an establishment admission of having to cave. They are riding the tiger and the tiger has their balls in its claws.
@Tom Hickey,
Not really. Mitt Romney is definitely not a Tea Party candidate.
In any case, it is a misconception that the Tea Party wants smaller deficits. The Tea Party wants smaller government – big difference. In fact, TEA is often considered an acronym for “Taxed Enough Already.” Warren has acknowledged in the past that the Tea Party cares about reducing the gross amount of government spending and taxes, and not so much about the net.
@ESM,
Not really. Mitt Romney is definitely not a Tea Party candidate.
Exactly, and the (much shrunk) big tent is ripping over it.
In any case, it is a misconception that the Tea Party wants smaller deficits
Then what is all the noise over a balanced budget amendment about?
@ESM,
“Then what is all the noise over a balanced budget amendment about?”
Noise. Do you not understand that when somebody claims support for an amendment to the constitution to do something for which there is at best slight majority support, e.g. ban abortion, balance the budget, define marriage to be between a man and a woman, that what they’re really doing is supporting doing nothing?
they have the votes to pass the amendment
Yes, originally it was about taxed enough already, particularly with Michael Johns, one of the founders who included me in their discussions early on.
but it took a turn for the worse, picking up ‘fiscal responsibility’ to the point of a balanced budget amendment.
In CT, for example, the extreme ideologue tea party candidate to the point of absurdity, peter schiff, publicly rejected my call for a full payroll tax holiday as being irresponsible without first cutting spending to the point of balancing the budget.
@ESM, ESM, I wouldn’t call it doing nothing:
Here is the founder of the APP talking about arresting pornographers on the basis of what he decides is Obscene.
Paul Little is a friend of mine, the rest of you many know him as Max Hardcore. Bush had him locked up in tampa and threw away the key for YEARS because he made in california what some Tampa Judge deemed Obscene. That is not doing nothing, that is police state!
@ESM, http://www.youtube.com/watch?v=Ggfgyh429Ao
Here you go ESM, you seem to have a problem with clinton and his objectification of women, but paul did 4 years of his LIFE, that is not nothing. As Paul said in this interview, Bush was looking for a bad guy to make his miserable life feel better.
Here is Mitnick, 4 years in jail WAITING on trial, so much for a fair and speedy trial, APP folks like Robby George scare the FREAK out of me, monsters who will use the state to make SLAVES of us all!!
Mosler, here is the American Principles Project people talking about A rasmussen poll on the electorates consideration of a gold standard.
It seems the people are disgusted with failed monetary policy, and what they perceive as an EPIC FAIL in regulation. Therefore they support gold standard policies because they feel this will limit the corrupted cronies and central bankers.
So if you want to help Obama, you must convince him the best thing to win votes from the people is to assure them a non-convertible monetary system as we have is best and to implement your per capita distribution of cash, and there is going to come from the crats a firm regulation overhaul, where they can appoint your friend William Black as the regulator czar. He must promise and deliver to the people some jailtime because the people are thirsty for it. Can he lock up some of the wealthy that have funded him?
If Obama fails to unite the people with hope that thier is real change coming for regulation, and they are going to get some money, according to rasmussen it seems, there is a real chance we go back on a gold standard. Obamas presidency will be remembered as one of the worst in economic history for allowing this to happen, what a pathetic disgrace.
@Save America, http://www.youtube.com/watch?v=MvBCDS-y8vc&feature=related
Friedman on why even bankers do not understand the monetary system and are confused by a gold standard.
And our American Principles Project people again with the CEO of BB&T bank on confusions about gold standards, guess friedman was right.
@Save America, Who are these “american principles project” folk going to bring the goldbug armageddon on us? http://www.youtube.com/watch?v=n0slQgtVwvE In this Video they want to take away my porn, that alone will bring ww3 on this planet. Remember what stossel said in his interview of a state prosecutor, she would take away all our freedoms to make sure sex is policed.
http://www.youtube.com/watch?v=vs5uFBw-PT0 This guy from that group can’t take his hands off my pecker either. He claims since the 1800’s the crats have tried to bring sexual freedom to this country and they must be STOPPED! Wow I never realized there were so many republicans reaching for my private parts! I feel so molested and violated!
http://www.youtube.com/watch?v=oOB1uCegUPc Wow here they are again, this girl takes the cake. It starts off pleasant enough, that the crats want to take away freedom of parents to teach thier kids, but then she says we can’t teach any of the bad history of america (so much for zinn and his “people’s history of the US”) Then she says we have to stop sex education too, hell that was some of my favorite classes in school 😉 Then she says we shouldn’t teach the kids to question the religious or political beliefs of thier parents!
Using a rock for currency is right out of the Stone Age
Looking at the current system and not seeing the parasites is totaly guaged by the ammount the looker has invested
http://www.usnews.com/news/blogs/god-and-country/2009/03/16/did-obama-allow-human-cloning-part-1-of-an-e-mail-debate
Here is the APP founder, mad at Obama for allowing funding for clones. I want to clone myself, don’t all you mosler flock want about 5000 of me coming here posting? 😉 Will Sasso as Arnold Schwarzanegger from “the sixth day” clone movie (one of my favs)
APP founder, Gold Bug and guy that wants to take away my porn was former DEMOCRAT! BWAHAHA! The Anti-Hillary! George don’t like me, I want to clone me and then marry myself to get all the tax benefits.
http://en.wikipedia.org/wiki/Robert_P._George
George twice served as Governor of the West Virginia Democratic Youth Conference, and attended the 1976 Democratic National Convention as an alternate delegate. George moved to the right in the 1980s, largely due to his views on abortion,[1] and left the Democratic Party as a result of what he saw as its increasingly strong commitment to legal abortion and its public funding, and his growing skepticism about the effectiveness of Great Society social welfare projects in Appalachia and other low income rural and urban areas
I think the heart of the matter is that there is a trend of people distrusting institutions. It is deeper in GOP circles but it is a trend in all of societies today, especially the US. Is the 4th wave – 4 generation cycles – real?
@Roger,
Is the 4th wave – 4 generation cycles – real?
It’s a sociological hypothesis that seems to be in the process of being borne out. Anyway, the evidence so far is that the hypothesis, e.g., of Strauss & Howe, is not a dud. Rather, some of what they wrote reads as uncannily predictive.
Krissy from NPR said Barry Eichengreen will be the new guy going up against rickards.
” I spoke to Barry Eichengreen at UC Berkeley earlier who I also think will be a worthy opponent when it comes to the debate over the gold standard. Glad to know about Mosler too, and will try to contact him for future stories. ”
Krissy has found a worthy champion I think, she is a bright journalist.
The MMT succession plan now has a start, if mosler falls off the boat, Eichengreen can pick up the torch.
http://twitter.com/B_Eichengreen
http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_cw1nNUYOXSAKwrq
Here is a large panel of academic economists weighin in on a gold standard, eichengreen, lazear, goolsby, thaler, etc etc They all reject it as foolishness. Goolsby’s sarcasm cracks me up!