The Daily Show on the anti Ron Paul media bias
 

This is pretty funny, and points out how blatant the mainstream news is:

http://www.thedailyshow.com/watch/mo...arch_multiline

cant view that site.

does it mirror this: http://www.theatlanticwire.com/enter...on-paul/41311/ ??

Yup, same segment, after the ad.

Because Ron Paul knows the difference between Capitalism and Corporitism.

Big Media wants to protect one of the two; guess which Ron Paul opposes.

It's pretty sad.

Ron Paul is anti war and anti gov't power, that's why the Republican Establishment hates him.

What's a bit puzzling is how the media owners exert that fine of editorial control over the news show writers. (The newscasters aren't journalists, they're basically talk show hosts)

Fair and Balanced, bros.


I'd vote for Ron Paul. Not just considering the alternatives, I think he'd be a good person for the job.

Hmmm:

Check out the headline near the end of the video, "Bachmann wins poll, Pawlenty gets third". LOL.

Even if I would not vote for ron Paul I'm still drawn to his campaign as a way to shake things up in the standard douche and turd sandwhich elections.

I spoke to a friend who has some knowledge of the media, and he says the editors of any news and opinion media outlet have complete control over content. Now these editors, are very highly paid, like VPs in large corporations.

Many years ago I googled the board of directors of the big five media corporations. (News, Disney, GE, etc). There was some overlap of these boards. (some dudes were sitting across multiple boards). And then I googled a couple of 'em. These same cats were also sitting on boards of Big Pharma, Defense, Big Finance, etc. These guys are part of a good ole boys network which include politicians. If you understand Corporatism, you will understand that these large corporations are effectively protected by gov't by anti-competitive laws in the name of "regulation". These cats like the status quo, and want to keep it.

I'm guessing that these editor types, who are very highly paid, are "useful idiots" - ideologues who believe in Statism, or are part of the good ole boys network, or just know that "something's up" but want to keep their high paying jobs. So they shut up and do what they're told - e.g. "you don't want to discuss Ron Paul because he'll never win". Or, "he's too complicated and the viewers will get bored if they hear about him".

So these editors are possibly how the mass media are very effective at putting out what is pretty much one message. They don't outright lie (lies of comission), they mislead the reader/viewer with "lies of omission". That is, they leave out pieces of information in order to lead the viewer to a different impression or conclusion than otherwise.

Slick.

Lets all just write him in.

The media is ignoring Ron Paul for the same reason they're ignoring the 1977 hijacking of Malaysia Airlines Flight 653.

Both are old news.

Ron Paul has been unsuccessfully running for president since 1988, when he received 0.47% of the popular vote. (source) His repeated candidacies are newsworthy only in that they are a unique form of protest, and deserve approximately as much coverage as whatever Michael Moore is obsessed about this year.

I agree with you until I envision the faces of Bachman, Kerry, Palin, Hussein, Bob Dole...and anyone else who's ever had a theme song.

I'm in Houston right now and I've had a hell of a time finding decent restaurants as usual because most of the reviews talk less about the food in adult terms, and more about "exclusivity". I suppose these are the same people who vote for the theme song rather than the policy.

this would be ron paul's theme song:

more on media bias:

Helps you believe who the true racists are(if you have not yet figured it out)

gotta love my Al Sharpton quote in my sig :rofl:

lol

Politico story

I wonder if this issue will get enough attention for the public to hold a gun to the media's head and make them report it? Ron Paul is really in a pinch because he doesn't pander to NBC or Fox, doesn't pander to GE and Newscorp, the DNC doesn't like him because he doesn't like entitlements, RNC doesn't like him because he supports a strong military and resists the "next Iran-Contra", and wants to shrink every program to a reasonable level.

I like his ideas as much as the next guy and if he continues to shut up about the gold-standard (flawed logic) and legalizing drugs (great logic), he has a chance at the GOP nomination. If Bachman keeps talking she'll effective behead her campaign and the Tea Party can support him as most philosophically parallel candidate.

BTW, I pray to Satan (Lord and Master, behold his darkness) for a proper Lincoln-Douglas debate.

Why don't you like gold-standard currency? It's no panacea, but I'd prefer it to a fiat currency that allows our government to inflate the money supply whenever we need another "stimulus."

Are there many TV segments detailing, examining, and looking into the Pro-Obama bias shown by the media over time?

You clearly have internet access. Look it up.

Suck it Trebek!
 

The gold standard is supposed to "hedge" against inflation by requiring that the value of money in circulation be "backed" by an equal value of gold. The problem is that as the economy grows - even Ron Paul would agree that the size of the M1 money supply today SHOULD be larger today than it was 200 years ago based on the value of the economy - the money supply has to keep up with that growth. If the gold exists to continue printing, then whether we are on the gold standard or not doesn't matter b/c we wouldn't have "passed" the "limit" imposed by the standard even if the standard had been in play. If the gold does not exist to permit more money printing, we either go dig it up or re-value the existing gold. Either way you're increasing the M1 supply of currency. If you don't do anything at all, that fucks with economic growth in general.

Beyond all that, why is gold actually worth anything? My boogers are a rare commodity. Nobody thinks they're worth much though. Pandas are hard to come by... they're valuable... why not peg currency to the panda population? The trees in most national parks are protects, their supply is predictable and fixed, why not peg a currency to the trees in Yellowstone? "Gold is different!" Eh, not really. It's a mineral we dig up and seem to like a lot. We *assign* it value just as we do everything else. The value of gold is backed up by faith every bit as much as the value of a dollar. The second people decide to stop taking gold as a form of collateral, or the second people fear a massive gold discovery will cause its value to plummet, gold loses its value. Funny... that's the very quality of paper money that the gold standard aims to solve.

There are plenty of other reasons to think the gold standard obsession is anywhere from silly and pointless to an economic nightmare, and a quick Google search should kick some of that up. There's a reason the economic folks aren't clamouring to rush into the gold standard.

Peace out.

Eat chesse.

i love cheese. not the goat variety.

I've long been bothered by the fact that we place such value in Gold as well. Where does this value come from, apart from the collective hallucination which we all share concerning its supposed worth?

Gold is nearly worthless from a practical standpoint. You can't make gun barrels from it, or use it as a building material, or fashion tools from it, or make bearings or other machine parts out of it. Its value as a dental filling has been superseded by synthetic compounds. It's a good heat-sink, though copper is better. It is one of the denser metals out there, so it would be useful for ballasting ships and making cannonballs, but lead is nearly as dense and far easier to cast.


The reality of the situation is that gold is really no different from any present-day fiat money. Neither has any "real" value except insofar as that we all agree to treat it as though it has value.


I also like cheese. The stinkier the better.

Hustler,

Gold historically became the most popular form of money, *not* because of some gov't enforced standard, but because it won out in the marketplace. People voting with their wallets. People liked using gold as money. Nobody will want to use your boogers. Governments later wanted a piece of the action and enforced a "standard" - e.g. coins with emperors faces on them.

Also, the more fundamental position isn't a "gold standard", but to have a free market in currencies. (Which gold has won in popularity, in millenia past). IOW gov't doesn't grant a monopoly on any bank (today it's the Federal Reserve).

The reason for suggesting a gold standard is as a check on central bank money creation / inflation.

Check out this chart

http://www.whichwayhome.com/skin/fro...3-picture2.jpg

Notice the more rapid inflation after 1971 when Nixon said "nobody can now demand gold in exchange for US dollars". Between 1946 (after WW2) and 1971, there was a pseudo gold standard aka the Bretton Woods agreement. That's why there was still inflation between 1913 and 1971. Before 1913 there was free coinage, (different companies could mint coins), and prices *dropped* while wages *rose*. Think about how cool it would be if everything dropped in prices like PC memory, LCD TV's, and miata BBK's.

You can go into waaaay more detail on the history and the mechanics. If you're interested I can give you links to free books on the topic.

Gold like anything else is valued by the marketplace. Supply and demand. Today it is not money (to the avg Joe). It's a commodity. Note that central banks buy it because they know it's a good commodity to keep; and between them, it's money.

When a currency is accepted widely in an economy, it is the economy itself that "stabilizes" said currency, in the short term, within said economy. This is why prices in USD of goods, say Starbucks coffee, don't fluctuate rapidly. However, because the central bank pretty much continuously over time, inflates the money supply, we have the 2-3% price inflation every year, which, over the decades, results in the USD being worth ~$0.18 today of what it was in 1913 (creation of the Federal Reserve).

Central banks and goverments are symbiotic. The former gives the latter a blank check via money created out of nothing, to fund its warfare and its welfare. The latter then pay the former perpetual interest, from taxation. Thus central banking enables big gov't. It's a neat arrangement, but it's parasitic on the middle class, who pay the stealth tax, the inflation tax. Additionally the central bank is the legal enforcement arm with the power to bail out, with future tax earnings, the largest over-leveraged financial institutions when the free market is about to kill them.

And, the system of monopoly debt-fiat money creation and fractional reserve banking is inherently unstable, leading to the boom bust cycle. Debt-fiat money means new money is created out of nothing when it is loaned out, and vice versa.

Here's a physicists' paper, showing that a model of the debt-fiat system is unstable:
http://www.google.com/url?sa=t&sourc...XqzuiXxZVFSEEg

I'm not sure how in favor of the gold standard I am -- still reading and working through the issue.

But with regard to the objection that a huge gold strike or increase in supply would have the same effect as government-created money printing, I'm not sure that's true -- the amount of gold that currently exists means that for a given "strike" to noticeably increase the supply, it'd be something several orders of magnitude beyond anything found so far.

Additionally, the entire process of mining gold is a self-checking system -- if more gold is found, then naturally the purchasing power of gold goes down. If the value of gold goes down (but the cost of mining it remains the same), then less gold will be mined. Similarly, in a deflationary period, the relative value of gold will go up, meaning there is greater incentive to mine gold and increase the money supply.

I think the point has been missed. Until the people on the int3rw3bs learn to read what one poster has said and then respond to what the poster has said, topic threads will continue to be two idiots yelling at the wall between them. I did not say that gold is a bad currency. I said gold's value - just like any other commodity - is only intrinsic insofar as people are willing to accept that commodity as a form of currency. The second they aren't, it's value is just as extrinsic as a greenback's. Just because TODAY people would accept gold as a form of payment does not negate the fact that it's value ONLY stems from that willingness to accept gold as a form of payment.

The inflation argument turns on the INTRINSIC value of gold. A gold standard does shit to curb inflation if the value of gold is EXTRINSIC. My argument about boogers and polar bears might have seemed silly, but it highlights how intrinsic values aren't actually intrinsic. Again, the "intrinsic" value of gold only holds if it is an accepted form of currency. The point about a gold rush had nothing to do with a gold standard breeding inflation. Rather, it had to do with illustrating why the value of gold is every bit as "assigned" as the value of a dollar. (The fact that you all have talked about the market determining the value of gold speaks to the value of gold being extrinsic and not intrinsic. If a market determines value, that value can't be intrinsic because external forces are determining the value.) But guess what, that makes the value EXtrinsic. And because the value is extrinsic, gold standards only hedge inflation if we don't change the value of gold.

The bit about the size of the economy growing was a separate issue. The economy is "too big" for the existing supply of gold. We would have to devalue gold to be able to print enough money for the size of the economy. But if we're devaluing gold just to print more currency, that defeats the purpose of pegging the dollar to gold. This is simple.

That chart is super cool. One super cool thing it shows is that there have been fewer recessions since 1971. Some idiots called PhDs (in economics) think that with a gold standard it's nearly impossible to use monetary policy to get out of a recession, which in general makes it difficult to get out of a recession. They also think that gold standards curb spending which makes it difficult for the economy to grow, and difficult to get out of a recession. Weird.

That chart is also descriptive. It shows what happened. It doesn't say that some inflation is a sign of a healthy economy... bananas. A certain Asian country that targeted NO inflation seriously fucked up their economy. I'm sure you know which country I'm talking about since you seem to know all about how the economy works sugar lips. :)

That chart also doesn't say that we went off "the gold standard" in 1971. It doesn't say that, because we didn't. But it's super cool that you think we did. We went off Bretton Woods in 1971... but the BW "gold standard" isn't the same "gold standard" as what is commonly referred to as "the gold standard". But you knew that, right?

Okay, so let's all play a fun little game. I like to call it, "Read something a politician, pundit, editorial columnist, activist, or blogger did NOT write about the gold standard." It's a fun game, and it's amazing what you can learn if you read about the economy as writted by... FUCKING SHIT A GODDAMN ECONOMIST!

My balls are sweaty from all this insanity.
bye bye darlings
xoxo

I like reading ecomonists that say a fake alien invasion that causes a massive arms build up, would save the economy.

It would also require different countries to cooperate very closely…which would make a power grab easier.

Cool argument, bro. Should we bother comparing the historical stability of gold vs. fiat currencies, or can we just agree that while neither gold nor fiat currency offers absolute security and stability, one of them has vastly outperformed the other?

This whole section is fail. All of your arguments presuppose the idea that government ought to be doing things like setting interest rates, controlling monetary supply, targeting inflation rates, and so on.

Let's play a different game, in which you stop pretending that:

1. You are the only one who has ever read an economist,
2. All economists are in agreement with you.

Normally when one forgoes valid argumentation and offers an appeal-to-authority, one also supplies the name and credentials of the supposed authority.

How about a more pragmatic question:

Given that 100% of the world's major economies are now, and have been for some time, based upon a fiat-currency standard, discuss the practical issues which would surround any single nation's dissolution of the fiat-currency policy and the re-implementation of a commodity-based monetary standard, such as the "gold standard."

Consider the ways in which the relative instability of the value of gold (as compared to fiat currency) would affect trade balances, foreign debts and credits, etc. between a gold-based nation and fiat-based nations.

Give special attention to the consequences to both consumers and retail businesses (eg: car dealers and car buyers) in the gold-based nation of rapid fluctuations in the value of gold relative to the retail price of imported consumer goods. Compare and contrast this to the effects on export-based businesses (eg: technology companies, US-based carmakers, etc) as their ability to do business abroad fluctuates inversely to that of import-based businesses.

If you guys want to do some more heavy lifting on monetary theory:
A "concise" guide to MMT.

This is a link; not an endorsement.

hustler,

as mgeoffriau alluded to, you need to take a step back and question some common assumptions:

- why should gov't have, or grant a, legal monopoly on, or otherwise "control", currency?
- why should there be a monopoly central bank?
- what would currencies or the economy look like in the absence of said currency or central banking monopolies?

I will type more later.

Joe,

Read what I wrote above about economies "stabilizing" short-term fluctuations in currency.
The recent (decade) rapid rise in the price of gold is not a reason to not use gold for backing currency. Gold is not money (except between central banks) that's why it has fluctuated. But that doesn't mean it's not good for backing currency if a "standard" is enacted. More later. Off to seam welding! :)

1: Stability.
2: Standardization. (All bills / coins work in all vending machines, parking meters, etc.)
3: Efficiency and low overhead. (No need to memorize and constantly update twenty different exchange rates, have twenty different sets of drawers in point-of-sale registers, etc.)
4: Guaranteed exchangeability. (Without a central bank, businesses in Area A might choose not to accept a currency which is popular in Area B, etc.)

See above answers.

The currency would resemble the state of affairs in early America, where various territories all used different currencies, the collapse of specific currencies relative to others was not uncommon, and interstate commerce didn't really exist.

The economy would resemble that of pre-Eurozone Europe, in which commerce between the various states was much more cumbersome and restrictive than it is today, and a de-facto tax on all interstate commerce (which benefited only the banks) existed in the form of currency-conversion fees.

lol, I'll get my GF to troll you guys more tonight. Good luck arguing with her on this shit.

First Some terminology:

Price inflation = prices generally rising

Money supply inflation = the money supply is increased, which dilutes the existing money supply and tends to reduce a currency's value. The world gold supply does inflate, but historically much slower than fiat currencies.

Fiat currency = a currency declared to be such, by gov't fiat (law)

Asset-backed currency = a currency, or paper money, with a 1:1 correspondence to an asset at a fixed exchange rate. For example, I may issue "miataturbo dollar" notes and say "backed by 6UL wheels", each mt dollar in circulation has a corresponding X amount of wheels in my warehouse. The notes are much more convenient for commerce than actual wheels. Or, I could issue debit cards instead of notes.

Monopoly currency = a currency that has monopoly status by legal tender laws (laws which say "this currency is money, and it's illegal for sellers to say 'I don't want your stinkin' Federal Reserve Notes"

Seignorage privilege = a central unbacked fiat currency issuing authority will profit from creation of money, just like a counterfeiter would. So does a gold miner. However, printing money is very cheap (near zero cost if the money created is digital), while extracting gold is very expensive (>$600/oz). So extracting gold is no different than say, extracting oil or coal, you have to organize and find spots where it's profitable to extract them.

Federal Reserve Notes = look inside your wallet. In an earlier age they said something like "exchangeable for gold at $35 per oz". Today they're just paper.

Federal Reserve - the US central bank, designed by 7 Wall St. Banksters in 1910 and passed into law by Congress in 1913. It is the 3rd attempt of the banks to cartelize, having previously been unsuccessful thanks to Pres. Andrew Jackson. These Banksters were competitors, but were steadily losing market share to tiny banks sprouting up everywhere. They needed a mechanism by which their cartel would be protected by law, from smaller competitors. The model of "modern" central banking was invented by the Rothschild cartel in the late 1700s with the creation of the Bank of England, IIRC.

Central banks - secretive, quasi-governmental institutions with enormous power and which are shielded even from nations' legislatures. They are the enforcement arm of the banking cartel. They do not profit directly from their operations, but allow the biggest financial institutions enormous profits through leverage; they protect said large corporations via implicit bailout guarantees whenever said leverage goes belly up. Central banks do not make money directly from the seignorage privilege as they do not create money that they directly spend; instead they make money from the interest payments. Legally they create money out of nothing in order to loan to gov't. When this money is repaid it disappears. For this reason they don't want the principal repaid, but earn the perpetual interest. At some in the 1920s (?) when this scam was pointed out, the FED started returning the interest earnings to the US Treasury, minus expenses. This system of debt-fiat currency, plus Fractional Reserve Banking, creates an inherently unstable economic system which then oscillates between boom and bust. (see my post to physicist's paper)

Unbacked non-fiat currency - very rare historically, as people generally don't trust unbacked paper money, for obvious reasons. The exception today is Bitcoin: https://bitcoin.it/wiki/FAQ By design it has no central issuing authority, its inflation rate is low, fixed, known, and tapers to zero over time, and cannot (by any known methods), be counterfeited. The recent hacking was about bitcoins getting stolen from users' digital wallets, not counterfeited.

Now for Joe's concerns


1. Stability. The purchasing power of the dollar was more stable prior to the creation of the Federal Reserve (1913). Prices tended to fall before then, because productivity increases tend to reduce cost (see LCD TV's). After the adoption of the Bretton-Woods pseudo-gold-standard (during which the Federal Reserve could start inflating in earnest), peacetime steady inflation began in earnest. It accelerated after Nixon ended the USD->gold price ratio peg in 1971 (which ended the remnants of the gold standard).

2. Standardization. The private sector, and voluntary associations are perfectly capable of generating standards. Just look at your PC. USB, HDMI, VGA, etc. If legal tender laws were repealed, the banks would probably break up into competing central banks, and new metallic coins could replace existing coins with the same dimensions, but with actual metallic content equal to their face value today.

3. Efficiency, low overhead. This is what's nice about metallic standards. Say gold, silver, copper. Only 3.

4. Guaranteed exchangability. Again, this is what's nice about metals. But then, it's no different than using VISA vs. Mastercard. You have a VISA card. They have an exchange rate in the major metals and currencies, say, Gold, Silver, Platinum, Copper, and "Texas dollars". You go on ebay to buy some Virtual Texas Porn, and they only accept Texas Dollars, which is the Texas issued currency backed by oil. Ebay knows your profile and knows you use VISA. The ebay page automatically goes to the VISA site and does the conversion calculation. It shows you how many VISA BUX it will cost you (which btw is convertible to gold or silver).

Only unbacked currencies, and currencies wherein the issuers issued more currency than they actually had gold in store, collapsed. i.e. a bank has 10,000 oz of gold, then issues notes for more than that. That is fraud (illegal of course), and when holders of notes hear of this and come and demand their gold, they collapse. They are no different than say, ebay scammers. You wouldn't accept currency from Bank of Podunk, just as you wouldn't buy an expensive turbo from some Nigerian guy on mt.net with one post.

In the world of free markets in currency, countries wouldn't have monoplies, and currency issuers would have to compete. It's the competition that keeps them in line, and limits their profits. State-issued currencies OTOH, don't compete - any given citizen is forced to more or less only use that state currency.

Having said all that, government issued currency could be a *service* the gov't offers, in the same way it runs the post office's overnight deliveries. (Ignoring the fact that they lose money and eat taxes while UPS and Fedex make money). However, there *must* be competition i.e. no legal tender laws. It is this competition that will prevent abuse. If the USD is continually being inflated then common folk would prefer not to use it. Said gov't issued currency doesn't need to be asset-backed; however, it should not be debt-based, but rather created debt-free at a fixed rate (i.e. a low, fixed inflation rate), and used to pay for some of government's expenses. This is colloquially called the "greenback" type of currency. IOW no Federal Reserve, the Treasury creates the money and gov't takes the seignorage profits. However again, without competition, (i.e. in the presence of legal tender laws), the temptation is there to inflate the currency, steal from the masses via inflation, for politicians to fund its pork, welfare, and warfare.

The USD *could* transition into this, however, it is politically impossible because the financial elite profit tremendously from the status quo.

JasonC_SBB - I would be interested in your response to Joe's more pragmatic questions.

What would it look like if the US reverted to an asset-backed currency but the Eurozone kept the relatively floated euro and China kept the more directly controlled renminbi?

A transition would probably be very rough. There will be massive bankruptcies in the financial industry. They would have to liquidate, but this is like the pain an alcoholic has to go through to get on the road to recovery. But these bankruptcies are part of the free market process - inefficient businesses go out of business. Right now the financial corporations are propped up by the system.

The USD would appreciate instead of depreciate while fiat currencies continue to be inflated. in the USA there would be slow and relatively steady price deflation instead of price inflation. Prices on most goods would go down instead of up. Wages would probably stay about constant or rise slowly. The US consumer and the middle class would prosper.

The financial industry would shrivel down to a size to where they actually generate wealth by providing a real service to their customers, instead of a big parasite. It would be easier to save for retirement, (no need to try and "beat inflation"), and booms and busts would be shorter and less severe.

Interest rates would be higher but then prices of goods which are traditionally financed would be lower - such as education, homes, and cars. Companies would in many cases find it cheaper to self-finance than to borrow. The gov't would not be able to run huge deficits nor run up huge debts. Consumer debt would also go down.

Due to smaller booms and busts, and the absence of "regime uncertainty" (e.g. "what's the FED gonna do now?"), companies would find it easier to forecast further into the future and would therefore find it easier to do long term planning and investment. These all improve productivity.

As US productivity increases, the goods and services made in the US will become cheaper to the general population; as productivity improves they will be cheaper for foreigners to buy as well. Things which are made more cheaply with cheap labor overseas will be imported and will be very cheap for US consumers.

China's central control over the exchange rate will continue to be a means for the gov't to reward its exporters to the detriment of the general population.

The Euro CB would continue to bail out its biggest banks, to the detriment of more prudent banks and the middle class.

Basically free markets tend towards economic efficiency. Central control mucks with that and ends up favoring politically connected groups over the majority, resulting in reduced overall economic efficiency. Economic efficiency comes partly from division of labor - whosoever is the most efficient producer of a good will gain the most market share. Consumers get to buy from the most efficient producer. The money they don't spend on less efficient producers, goes towards other, efficient producers. Gov't intervention in the form or tariffs and selective taxation, mucks with this process.

One possibility to move to a sound currency, is to simply abolish the Federal Reserve, and repealing legal tender laws, while keeping the existing USD in circulation, with no possible new-money creation. Because it is so widely accepted, the USD will continue to function as a currency. The market will then decide if it stays. The fly in the ointment here, is the oustanding US Gov't debt, which is denominated in USD, and which is UNPAYABLE.

I'd still like to hear your input on the relatively straightforward thought-experiment which I posited in post #36 of this thread. In other words, rationalize the implementation of speculative academic ideals vs. the realities of modern-day international commerce.

I already explained that a widespread currency, asset backed or not, will be stabilized by the general economy. At the time when gold was money, prices did not fluctuate in the same way that the gold price today does. Ergo day to day, it wouldn't be any different than using USD. The difference is in the long-term inflation.

Your argument seems to presuppose the universal adoption of gold as currency by all nations. But when only one nation adopts a gold-based currency, while all other nations continue to treat gold as a commodity, this supposed stabilization will not occur.

You also state that a number of very nice things would occur (eg: "Prices on most goods would go down instead of up. Wages would probably stay about constant or rise slowly. The US consumer and the middle class would prosper.") without offering any explanation for why these events might occur.

I offer the contrary opinion that such a system would cause the value of "money" within the US to oscillate wildly relative to the values of foreign currencies, with the result that foreign trade (both import and export) would become extremely difficult.

Uncertainty about exchange rates would lead to the rise of an entirely new form of speculative "exchange hedging" very similar to the present system of crop futures, and since we all "know" that anything which benefits large-scale investors is detrimental to the economy (I'm paraphrasing your past arguments here), this would be inherently "bad."

Furthermore, the retail costs of all imported goods (cars, appliances, petroleum) would become far more variable than they are today (as the foreign purchasing power of one US "goldback" would change rapidly from day to day), leading to a decline in overall consumer confidence very similar to that which occurs during an inflationary period. With no way of knowing whether the price of gasoline is going to triple in a year's time, or the price of that new car will fall by 30% in a month's time, discretionary spending will fall and the velocity of money will decrease severely.

No I did not presuppose adoption by all nations. I was talking about a state or the USA; any popular currency will not have rapid fluctuations because the general economy will smooth that out.

With a fixed money supply, the price of money (its value, and the inverse of the price of goods), will vary in relation to supply and demand of goods/services in the economy as a whole. There is a supply/demand curve for currency, just as there is for tires, or oil. As goods increase in relation to the currency, the demand for currency increases and its value increases (prices of goods denominated in the currency, drop).

Do you agree that with a fixed money supply and zero productivity growth, general prices would remain flat? If so, then you will agree that increased productivity would reduce the cost and thus price of goods. Increased human labor productivity would increase its value which would tend to increase wages.

A large demand for a currency due to its widespread use, will damp any fluctuations, as I keep saying. Where would "wild oscillations" come from? Today gold is not money and that is why its price has been changing more rapidly than the value of currency.

Futures markets are not a bad thing, in the absence of special privileges granted by gov't (which distorts the operation free market). I never said "anything which benefits large-scale investors are not detrimental". I said "gov't is in the protection racket of protecting big business" and that is bad.

Futures market speculation serve to reduce price fluctuations, because if a say, bad weather is foreseen, speculators will buy up wheat (which drives the price up now), but they will re-sell it when supply is low (which reduces the prices which would have otherwise even higher). They make a profit, but this profit is limited by competing speculators and by being able to forecast accurately.

I keep explaining that the "goldback" would not fluctuate in the same way gold today does, if it is adopted widely.

I am not trying to nit-pick here; I am genuinely interested in this dialogue. I tend to pay more attention to what is and what is likely to be, rather than what could be or what was - at least in terms of monetary policy.

What is your reasoning for this?

What would drive these price changes?

Why would wages act in this way?

Why would this be?

Using the assumption that the US goldback appreciates in price and other nations using fiat currencies keep theirs artificially low in comparison, wouldn't this put US exporters at a significant disadvantage?

Under what circumstances are you pre-supposing that there is a fixed money supply? There may be a finite amount of gold in the world, but I don't think anyone has that exact number calculated. Are you assuming that the dollar is pegged to a specific portion of the current US gold holdings and that the gold holdings will never be increased or decreased via market operations (e.g. buying more gold either from foreign central banks or domestic miners or selling to the public or foreign investors)?

I think this is where I am getting hung up. What is your definition of "adopted widely?" I think Joe and I are assuming the US would be the only one adopting a gold standard in this situation.

Scrappy,

I will type more later, but here's the free book that made the stuff about currency supply and demand, inflation and overall prices, clear in my mind:

http://mises.org/Books/mysteryofbanking.pdf

Chapters 1 & 2.