Austrian Economics is not the answer. Gold is not the answer. Ron Paul´s idea´s are not the answer.

[jack]

Here´s my reply back to www.mises.org on when they asked me why i un-subscribed from their website. Dear Chad, I have been looking around on your website (www.mises.org) but i wasn´t able to find mathematically proof of presenting a sustainable solution for a sound monetary system en therefore economy. Even more worrying is the fact that your organisation also promotes interest as a tool to use. Interest in itself will make any monetary model terminal by default by further multiplication of debt. On top of that you promote a return to the gold standard. While the gold standard can neither save us from further multiplication of debt or rectify the other issues before us, simply re-invoking the gold standard would pave the way for immediate loss of "our" monetary gold, for already twenty years ago, the perpetual process of multiplying debt had plunged us from the greatest creditor nation in the world to its lowliest debtor nation. For the very purposes of the lie, "our" currency is now held in immense quantities across the world; and thus even if "we" held gold for money instead of paper, our inevitable collapse under perpetually multiplying indebtedness therefore will mean giving up the last of our former gold, rather than the last of a mere paper, as we tolerate the imposition of a Second Great Depression. I am now even more worried about our financial future, unless we advocate Mathematically Perfected Economy (MPE) in which we mathematically have proven the above, but are also offering a real immediate solution to the current terminal system. For more information you can visit the following links: www.perfecteconomy.com http://endtheecb.ning.com/video/mathematically-perfected Kind regards, Jack http://endtheecb.ning.com

[jack]

You also have to scrap the gold standard -- gold and interest therefore are mutually exclusive, wholly incompatible principles. But you still have to do this if gold is your only other concept of an alternative, because a circulation restricted to finite monetary reserves cannot sustain an eventual greater volume of industry.
So you're basically fucked in all of these directions, because you've insisted on restricting the discussion to either gold, or interest, or a pretended combination of the two which honors no principle whatever.
OK. So because you refuse solution, you have the fucks in power you least want -- doing all the things your adversaries in these forums want to do (even more effectively than they can rob each other). And what are they doing? All the things which I predicted so long ago -- artificial sustention -- purposely breaking the rules of the system -- for themselves -- to preserve the system of exploitation.
And then what, in the end, they're as much as giving away money in the form of vast and ever more fast artificial indebtedness that we can't even afford to service -- and haven't been able to afford to service since the first days of Reagan.
That's inflation -- perpetual inflation, which in fact, *because of* interest on this ever escalating sum of debt, must re-inflate the circulation on an ever greater scale.
And why can't they continue to do that to artificially extend the lifespan of the system of exploitation?
Well, if there were prevailing reason, it would already have prevailed, wouldn't it?
If you *can* write yourself illimitable checks, which you pretend to give to the people as a debt of the people, and if you take each of these checks away with the other hand (as they immediately pay all of each check out of circulation); and, if you thus *have* to continue to write these ever greater, irredeemable and uncollectable checks merely to perpetuate the whole facade; and if you are the immediate recipient -- what in the fucking world then is going to stop the central bank's inflation from continuing indefinitely?
They've already proven they'll break every rule to do it. Unless you admit the obvious consequences of interest, you're going to have to let them continue doing it.

[Todd Marshall]

Right on: Since DEFAULT = INTEREST + INFLATION and since we're experiencing huge DEFAULTs while recovering them minimally through too low INTEREST, we are causing enormous INFLATION.

[Rick Zimmerman]

Robert
I think you are missing the point about Austrian School Advocates:
If you have gold or silver backed currency,
the supply of money is finite, we would all agree!!!
So if you have a finite supply of money and let say banks charge a rate of 10%.
The more loans the banks make, the more interest they will earn, the more money they control!
So what happens when they are holding a majority of the money supply, our economic freedom is in their hands they can charge what ever the market will bear, think about that when the economy is robust and people need money. The true problem will be when there is not enough mnoney in circulation to service the debt FORECLOSURE then THE ECONOMY is done, just like the present economic problem same result THE ECONOMY is done. All you intellectuals cant see the obvious, interest is a means to transfer the wealth away from the people to the few wealthy people who control the banks and therefore the destruction ot the economy and the looting of property, it will always happen. Usury is wrong !!!! 1000s of years ago this was known how can we not be aware of this? Yes it is the lack of education I wonder why this is not taught these days??? Gold and Silver are just commodities they are not labor true money besides you cant eat either it would be bad for your teeth. LOL

[mike montagne — founder, PFMPE™]

Much of what you write, Rick, flies fine; but if you don't mind, I'd like to put a few fine touches on what you have said, because if we are going to understand solution, we do have to understand where the so called "Austrian economists" stand. I will outline a few principles first; then I will come back to the Austrians:

Yes, a finite (and relatively fixed) circulation is adverse to solution of the problems, because to sustain industry and markets ("commerce"), a circulation must come into existence and retire accordingly; and so the real issues here are simply the life cycle and integrity of every unit of currency.

Gold or any other such relatively static/finite resource cannot serve such purposes. Suppose for instance that we determine even by seemingly logical processes that the value of the dollar ought to be so many fractions of an ounce of gold; and we issue this paper only as gold comes into the hands of the Treasury, by such exchange?

Well, our first issue, if this is to be our principle of monetization, is that we have eliminated the far greater advantages of assuming debts qualified by legitimate credit-worthiness. All of a sudden, our couple has to save all their lives, hopefully to buy their $100,000 home by the ends of their lives, and all the while subject to predation by a lord class which may prevent them from ever saving so much.

Furthermore, instead of using the gold for whatever we may benefit by, we instead keep so much of it in storehouses, that this might artificially drive up the price of gold for legitimate use — thus artificially inflating the cost of everything to which gold is a necessary or beneficial component.

These are hardly principles of justice; but worse, as industry grows beyond the circulation to which previous industry may have been considered proportional, thus the value of the currency falls. This has no effect of making things cheaper (as the Austrians regularly assert), for it drives down the rewards of labor or production as well.

So there no maintenance, nor even any means of maintenance of a circulation which preserves the value of money — or even the relative value of gold; for one volume of circulation ostensibly competes for a varying quantity of industry in proportion to gold — which thus defines perpetual corruption of value by the very principle the Austrians (merely) claim maintains consistent value. The principle, if applied, cannot do so, for in fact the proportions are constantly vacillating.

Worse still, the same circulation can hardly sustain greater industry; and, as prices may be forced down, this only erodes margins of solubility. Typically, such industry crashes, instead of making its production cheaper, because its commitments are such that it has little if any leeway to reduce prices but at terminal consequences to itself.

Even worse then, history has always resulted from these failings, in tolerance of further issues of artificial credit (a fractional reserve system exists then as a regular/inevitable consequence of the shortcomings of the gold standard). We don't actually borrow money from the pretended banking system; we are actually only borrowing our own promissory notes into existence — which of course we would be better advised to issue ourselves. Not only does this obfuscation perpetually multiply artificial indebtedness as I have described then; it makes the purported central banking system the inevitable owner of all our production/wealth, and thus even of our gold.

The Austrians tell you tell you tell you, that they want a return to Constitutional money; and to sound money. No bigger lie can be told!

Why not?

Check out their forums. Gold bugs everywhere; and what they want is NOT for gold to return to its Constitutionally defined value! They want to make out like the Federal Reserve!


Worse then is the lie that they want to "end the Fed."

Why?

As I have described, the fatal fault of the imposed monetary system is interest; and all further faults merely result from further failure to solve inflation and deflation. The Austrians, and Mr. Paul in particular, not only advocate interest; they advocate ELEVATED RATES OF INTEREST.

Effectively, what they want is to remove the embossed letters which now say "Federal Reserve Bank," and replace them with "Ron Paul's 'COMPETING' Bank(s)" — a principle which he refuses to debate, further define, or justify. Of course, any ostensible "competition" would ostensibly, on the contrary, drive interest rates down. But Mr. Paul tells us that we wouldn't have borrowed ourselves into this debt mess if higher rates of interest had discouraged excessive/reckless borrowing.

Mr. Paul has never done the math: he tells you that all of you are going to benefit somehow therefore — oh and we so willingly believe this preposterous notion, don't we? — he tells us we will benefit paying perhaps 17% interest on our homes than 5%. Sounds really like a good idea, doesn't it? Especially since the rate of interest is the rate of multiplication of artificial indebtedness — higher rates of which instead necessitate greater rates of borrowing to maintain a vital circulation.


Unfortunately, most people who exalt Austrian "economics" hardly know the first thing about it. They reject math — most of which is little more than counting — as if you could understand otherwise; and they could have possibly determined solution otherwise. In no legitimate discipline or walk of life does such reckless abandonment of principle hold.

But Mr. Hayek, God of the Austrians tells us why they advocate interest and the current banking model — which are our very problem. See Hayek's article at Mises org: "A Free Market Monetary System," I think it's called. Anyway, he thus justifies interest, that it makes banking "an extremely profitable business."


That's right. There IS no justification, just an outright confession of the motive.

[Todd Marshall]

You're right on ... but by accident and without a solution.

You say "As I have described, the fatal fault of the imposed monetary system is interest; and all further faults merely result from further failure to solve inflation and deflation. The Austrians, and Mr. Paul in particular, not only advocate interest; they advocate ELEVATED RATES OF INTEREST."

This is not correct. There is a "right" amount of INTEREST and it is only zero if DEFAULTs are zero. The object of the game in managing a medium of exchange (the media is "promises to complete trades") is to let trade flourish while maintaining INFLATION= zero. This is done my observing the relation:
DEFAULT = INTEREST + INFLATION. Collect INTEREST to match DEFAULT experience and INFLATION will be zero. Further, the INTEREST amount will be correct ... not some SWAG.

Todd Marshall
Plantersville, TX

[Robert M]

AMEN, Todd.

[Robert M]

Thank you, Robert. Well said.

As we keep selling our Heritage to China, let the "sellers" eat cake.

What a nasty world we inhabit!

[mike montagne — founder, PFMPE™]

"I think you're missing the point that the Austrian school is trying to make, namely that we have a statist economy controlled-by a central bank that manipulates the supply of money via the chicanery of fractional reserve banking."

Robert,

Another point that should be cleaned up here is, yes, perhaps the Austrians have created the idea of a state controlled bank, advocating that instead it should be in private hands. (See the Mises article, "A Free-Market Monetary System," http://mises.org/story/3204.) But these are obfuscations of the facts. We don't have a state controlled or a state owned bank, and it is amazing people so readily forget this, as they listen to or read Austrian dogma. On the contrary, we have the very kind of privately owned and controlled banking system the very Austrians themselves advocate. Not only do we not control those banks, effectively they not only control our government, but by omnipotent unearned taking, they can afford to put their favorites into every conceivable office.

So we have neither a state controlled or a state owned bank — they are still 12 private corporations which in fact are so audacious as to deny Congress (a pretended remnant of representation) their very authority to audit the Fed — an exercise which itself is a waste of time, because we can only find what we already know; and because if we're not ready to lay down our own law, then this exercise is only anemic, futile.

The Austrians thus advocate JUST SUCH A PRIVATE BANKING SYSTEM!

Nowhere do they advocate or recognize anything different. So then, if, as you write, they are advocating eradication of government control, are we to be better off for forfeitting the very control we are now seeking? (!)

Absolutely not!

Is it a matter of insufficient government control (responsibility and accountability to the people) that we should yield to — thus giving up these quests to "end the Fed," or even to "audit the Fed"?

The Austrians say that private banks will solve our issues. They do not show us how; and, uniformly, they refuse to respond to challenges of what different principles will possibly serve us; in fact, they not only advocate interest, but higher rates of interest, which can only engender terminal failure all the sooner; they dismiss any veritable application of math to analyze, to identify the flaws, to solve the flaws, and to prove solution. So what kind of $@$%@%$@3 people are these?

Is there any problem in the world which can be solved by dismissing the only science or discipline which can solve it? Are there any credible proponents of solution who actually advocate exacerbation of the problem by dismissing every possible means of genuine analysis and solution?


So you say then, "This is not free banking, the Austrian school advocates a free-banking economy, that is not controlled by the federal government and its proxy the Federal Reserve System."

We have the very thing they advocate! And worse, they want to increase interest. And worse yet, they advocate complete elimination of government control. All these things are the very things we are trying to end here!


You conclude then, "A return to money, that is a store of value, such as gold is the only means to wrest our world away from the statists and the political capitalism and cronyism as practiced by mega-banks...."

Well, we have already explained that gold is not a store of value, as the Austrians merely claim; and you can readily discern this from the relevant principles. If by consistent quantity for instance, a circulation limited to the finite quantity of gold cannot sustain a circulation increasing above that volume of gold to sustain further industry, then it is mathematically impossible to abide by the very principle which is supposed to endow the currency with immutable value. This very fault of the gold standard is the very reason every pretended economy (subject to multiplication of debt by interest) has resorted to fractional reserve.

Worse then, you should realize by now that it is mathematically impossible for the purported Austrian "economists" to in fact abide by this advocated return to the gold standard, IF THEY ACTUALLY ADVOCATE INTEREST!


So these are some of the most preposterous appeals to your emotions ever told. There isn't a grain of truth in these promises. You're not wresting control away from statist and political capitalism; you're removing YOUR RIGHTFUL authority over what is not even private enterprise, but instead is unauthorized and unassented privatization of our very own promissory notes, for illimitable and even terminal unprofit, at our unassented expense — all of which is even unlawful, on every count! Effectively then, the "Austrian economists" are telling you that you need to give up any control over just such an arrangement as we are presently resisting, FOREVER, and that, without altering a principle, and even by increasing interest rates, SOMEHOW this is going to be better for you!

HOW, Robert? Just think about all that.

You've been buffaloed.


So, finally, let's consider this concept of "privatization" which in fact is advocated by the purported "Austrian economists."

Their concept is privatization of a means of exploitation. The only concept which can serve you is RETENTION of the ALREADY private right, authority, and responsibility of issuing your promissory notes.

Rather than repeating myself with ten paragraphs which would well serve us all to digest, I'll just point you to them: "Nature of Monetization."

[Todd Marshall]

A return to money, that is a store of value, such as gold is the only means to wrest our world away from the statists and the political capitalism and cronyism as practiced by mega-banks such as Goldman Sachs in concert with the Treasury department and the Federal Reserve.

-------------
Todd Responds:
This is absolute nonsense. Gold is proposed to bring "discipline" to arbitrary Fed behavior. But it (and no other commodity base) can do that. There is only 1oz per world trader on average. To produce a new oz costs about $1,000 ... so that's what gold is currently worth. Require all trades to be based on gold and demand for gold goes through the roof. As a result, much energy gets wasted digging for the yellow stuff. And in the meantime, trade is strangled because there isn't enough gold to go around and it's poorly distributed (held largely by those proposing a gold based system).

[Robert M]

Because CHINA is buying OUR gold out from under us, and we stupid in America are letting it happen. Ring a bell, dope-O?

[Robert M]

Robert,

What about the fact that China is buying up all the GOLD it can get its hands on? Where does that leave us in the long run?

The Fed is bullshit, Goldman Sachs is a jew-run thievery and Obama and his "administration" is all about Socialism and the collapse of the US economy, more to their monetary advantage. This is an outrage. These Lib-Nutz really do piss me off. They're welfare/communist/socialist pieces of non-US garbage.

I'm for the back to Gold/Silver standard, and these "clowns" are of no consequence to my survival outlook. They are anti-American. No less!!!

[Todd Marshall]

Amazing. You say China is buying up all the GOLD. Then you say you're for the gold standard. That means if you want to make a trade you have to go to China to get the media of exchange. Why would you want that???