Arab states make secret moves with France, Russia, and China to dump dollar

8 posts

Broseph
Yes. But it takes a long time for supply to react to price in the gold market. Everyone had moved away from the gold standard. This had caused the price of it to plummet. There was too much fiduciary media and debt going around in nominal terms to be backed by the amount of gold in circulation, with gold fixed to $35/ounce.

The conquistadors learned the lesson that even though gold was money, all the Inca gold they brought back bought some riches for the people who brought it back. When it got out into circulation, price inflation occurred. There is no problem with small and steady price deflation. It's the best environment for an economy to grow and be stable in.

I don't see how that would be the case.

I don't see where this comes from. Ron's been going on about this stuff since the 70's. He's voted against every kind of imperialist doctrine consistently. I think the arguments the make vocally are the ones they mean. I haven't seen any crypto-imperialist tendencies come through for Paul. Can't say about Forbes since I haven't followed him as much.

So far, the argument being made is this: "It's shiny, and that's why these people would have millions killed. To get more shiny stuff."

Paulian "adventurism"? Really?

Fiat - The term derives from the Latin fiat, meaning "let it be done", as such money is established by government decree.

It's not based in trust. It's based in "use this as the unit of exchange or we'll haul your ass to jail". It's based in power. The world wouldn't collapse without fiat currency. The world used the USD dollar which was backed by gold until 1971, and for pretty much all of history before that. I don't see how there would be a calamity of there was a return to a gold standard.

I really don't see how military adventurism is made more possible under a gold standard. The whole point of the USD going fiat was to support empire, to continue the growth of the budget and military operations, to funnel wealth from other nations to American interests. The gold standard would make this more difficult.
Beefy Rep

The experience of the Spanish with gold, but much more with silver, is telling. Price inflation, due to the massive Potosi mine coming online, gutted Spanish industry and developed export industries abroad, with folks connected to the crown and its coffers sending all that silver out of the country for cheap manufactured goods. Much of the Spanish export economy reverted to the growing of crops for export. This sounds familiar, doesn't it? Its basically the same situation the United States is in, the biggest difference being we, using fiat money, engineered things this way while the Spanish were prey to a combination of a glut of silver from Potosi and the inability to put the breaks on production because imperial entanglements--that is, wars--demanded constant supply.


The point is, though, that fluctuations in supply for a commodity-based currency can have the same effect as the purposeful changes in monetary policy we see today. In this case we see price inflation; in this coming era, if we were on a gold standard, we would see potentially crushing deflation as gold production hits its peak and sources dry up, while global demand for gold rises (in part because of its connection to the dollar.) The only way to alleviate this deflation and protect against supply disruption--other than say melting jewelry and breaking down old computers, which would surely be done en mass in the ensuing chaos--would be to maintain a strong, global military presence to ensure continued exploitation of the remaining resources.


And this would absolutely happen, because the real value of gold would have to go through the roof if used as a currency. The current value of all the world's gold ever mined is something like five trillion--a fraction of the total value of global GDP for even a year, let alone all the stored wealth in real estate, etc. The use of such a thing--which is a fraction of all the real wealth in the world--as a representation of all the rest of the world's value rips it entirely out of its context as a commodity and makes it a fetish. But a fetish that is also paradoxically tied to the very physical phenomenon of mines, supplies chains, etc. The gold standard would not some how magically absolve all the insane layers of leverage upon leverage upon leverage that is our financial system. It would simply impose on this system a crushing deflation that could only be alleviated by foreign wars.



He's also a kind of sycophant for capitalism, which couldn't/wouldn't exist without the foreign wars. So in that sense he could be said to be having his cake and eating it too: supporting the end reason for all the wars as some kind of unsullied ideology while also renouncing the wars themselves. A fellow like him cannot be understood logically, but only psychologically. Gold means something for him psychologically. So does the federal reserve, so does our current foreign interventions, so does capitalism. And psychologically he wants this thing--a gold standard--that in effect marries the function of the federal reserve and the military-industrial complex. Again: the most hardcore right-wing porno there is.
Broseph
It's gold-backed. Not straight up gold. Banks can easily get away with having less than a 5% reserve ratio of redeemable bank notes to gold, and still stave off the threat of bank runs. Nevermind that the USD can be fixed to gold at $20/ounce. Or $400/ounce. Or $8,000/ounce or higher if need be.

Or they can sidestep the issue and allow competing currencies.

Paul wants national defense, the abolishment of central banking, open markets in currency and respect for private property. He constantly argues against imperialism and foreign intervention, especially for reasons of blowback.

Are you saying he is unwittingly calling for greater intervention?

I don't know how you define capitalism. It's a bit of a loaded term at this point.
Beefy Rep
Or why don't we just make it a gazillion an ounce and forget the whole thing?
Niccolo and Donkey
More news:

Dollar to Be 'Discarded' by World: China Rating Agency

Broseph
No. It was the plan that got passed and the raising of the ceiling that caused the downgrade.
Theo

What does that rating actually mean? That the indebted party won't default, if it has good ratings or what?

Niccolo and Donkey