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Business Title: Antal Fekete Responds To Ben Bernanke On The Gold Standard [Devastating Critique of Keynesian Stupidity] Yesterday, Ben Bernanke dedicated his entire first propaganda lecture to college student to the bashing of the gold standard. Of course, he has his prerogatives: he has to validate a crumbling monetary system and the legitimacy of the Fed, first to schoolchildrden and then to soon to be college grads encumbered in massive amounts of non-dischargeable student loans. While it is decidedly arguable that the gold standard may or may not have led to the first Great Depression, there is no debate at all that it was sheer modern monetary insanity and bubble blowing (by the very same professor!) that brought us to the verge of collapse in the Second Great Depression in 2008, which had nothing to do with the gold standard. And as usual there is always an other side to the story. Presenting that here today, is Antal Fekete with "The Gold Problem Revisited." THE GOLD PROBLEM REVISITED Antal E. Fekete The article The Gold Problem of Ludwig von Mises, published 47 years ago in 1965 Mises fails to answer his own question why gold is the best choice to serve Therefore if you substituted another commodity, or basket of commodities for 1. The futility of inflationary policies Mises ignores the fact that newly created money can be spent not only on goods By restricting the circulation of gold money or by other means, the governmen The paramount example is bond speculation. Of course, under the gold standard th As the Fed was originally constituted, it was only enabled to be a pass This was not the case, however, when the Fed assumed an active role and started The jubilation was premature. The policy of open market operation as an In an unhampered market risk-free profits that may occur from time to time The newly invented monetary policy of open market operations is responsible fo Herein lies the incredible failure of the policy of open market operations, The same thing repeats itself today. Interest rates have been falling for o Open market operations is a charade that can go on only so long as speculators 2. The futility of the policy of suppressing interest rates. The rate of interest is a market phenomenon just like prices. In fact, the de Mises (and, before him, Ricardo who was an advocate of the elimination of gol This was the reason for eliminating gold coin circulation first in Europe in 1 All economists, including Mises himself, missed the importance of the nexus of 3. The futility of the policy of boosting wages. Mises did not subscribe to Adam Smith’s Real Bills Doctrine (RBD). Although he Mises was unimpressed by the fact that bonds and mortgages could not circula But real bills had another great significance having to do with the labor mar The point was driven home most forcefully when the wage fund was inadvertently The victorious Entente Powers were afraid of German competition in the po This was the end of real-bill financed world trade, the great success story It was most unfortunate for economic science that Mises failed to put th Once again the world is facing the same dangers as it did four score o 4. The futility of the policy of gold valorization. The world has been witnessing the pathetic attempts of governments and central banks “to keep the gold price in check” since the 1971 fraudulent default of the US government on its international gold obligations. To be sure, a default is always followed by a depreciation of the dishonored paper, so the futility of the policy of gold valorization has always been a foregone conclusion. But what we have is far more than this self-defeating effort to keep gold out forever from the monetary system. What we have is a veritable brain- washing of the whole world about the role of gold in the economy, and blaming gold for results that only keeping gold in the system could have prevented.f years ago. Yet one can see only complacent governments in a self- It is alleged that gold has disqualified itself from playing the role as the It is also ignored that the debt crisis is a direct consequence of exiling gol Through a system of bribes, blackmail and intimidation research on questions rel Ben Bernanke, the Chairman of the Federal Reserve Board introduced a new phrase into the vocabulary of economics on July 11, 2011, in his testimony at a Congressional hearing. The new phrase is: tail risk. He defined it as the “really, really bad outcomes” in the economy, as if they were completely outside of human control on the pattern of floods, earthquakes, volcanic eruptions and tsunamis.ating to gold has been discouraged to the point that it is practically non- But ‘tail risk’ in reality is the wholly unnecessary risk taken with human lives Mises was a great warrior fighting these usurpers and monetary hijackers The day of reckoning for monetary insanity is on hand. The Constitution is there for the protection of all. If we fail to preserve and uphold it, and meekly succumb to the monetary hijackers’ and usurpers’ tactics, then we shall have only ourselves to blame for the consequences. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest #1. To: Capitalist Eric (#0) (Edited) The day of reckoning for monetary insanity is on hand. The Constitution is there for the protection of all. If we fail to preserve and uphold it, and meekly succumb to the monetary hijackers’ and usurpers’ tactics, then we shall have only ourselves to blame for the consequences. Tomorrow is default day for Greece. IF/when the dollar collapses, so does USSA Empire. IF/when the dollar strengthens, that does not mean that Empire is still intact. "In other words, economic actors accumulate assets increasingly reluctantly, up to their satiation point that will be reached sooner or later. For gold, this point is removed farther, so far indeed that for all practical purposes it is beyond reach....." Unless you are forced to get rid of your gold, then you will see that it only buys you food and shelter, and then only until the gold runs out.
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