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Author Topic: "People Lose Trust In The Government Because You Lie To Them About Inflation"  (Read 920 times)
roo_ster
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« on: February 29, 2012, 11:44:47 AM »

Ron Paul To Ben Bernanke: "People Lose Trust In The Government Because You Lie To Them About Inflation"

http://www.zerohedge.com/news/ron-paul-ben-bernanke-people-lose-trust-government-because-you-lie-them-about-inflation

Quote
Anytime Ron Paul sits across from Ben Bernanke you know sparks will fly. Sure enough, they did: starting 3 mins 50 seconds into the clip below, Ron Paul, guns blazing, asks the Chairman if he does his own shopping, if he is aware of what true inflation is, and if he knows that Americans don't trust the government because they are being lied to about inflation. And it only gets better, once Paul starts brandishing a silver coin. The punchline: "The Fed will self-destruct anyway when the money is gone"

It is A reason, not THE reason.  But it is a reason that is easily verified as bunkum by folks who buy their own stuff.
« Last Edit: February 29, 2012, 12:21:16 PM by roo_ster » Logged

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roo_ster

"The world has long observed that small acts of immorality, if repeated, will destroy character. It is equally manifest, though never said, that uttering nonsense and half-truth without cease ends by destroying Intellect."
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Kingcreek
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« Reply #1 on: February 29, 2012, 12:08:53 PM »

Bernanke will have his likeness printed on the front of the new million dollar bill but there is no inflation.
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Angel Eyes
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« Reply #2 on: February 29, 2012, 12:09:41 PM »

"People Lose Trust In The Government Because You Lie To Them About Inflation Everything"


Fixed.

BTW, Got a link to the clip?
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roo_ster
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« Reply #3 on: February 29, 2012, 12:20:56 PM »

Fixed.

BTW, Got a link to the clip?


D'oh!

http://www.zerohedge.com/news/ron-paul-ben-bernanke-people-lose-trust-government-because-you-lie-them-about-inflation
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Regards,

roo_ster

"The world has long observed that small acts of immorality, if repeated, will destroy character. It is equally manifest, though never said, that uttering nonsense and half-truth without cease ends by destroying Intellect."
----Jacques Barzun

“Fallacies do not cease to be fallacies because they become fashions.”
----G.K. Chesterton
Balog
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« Reply #4 on: February 29, 2012, 01:06:05 PM »

I do like zerohedge, but the comments are as bad /as or worse than youtube comments... 
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RoadKingLarry
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« Reply #5 on: February 29, 2012, 05:34:52 PM »

Ron Paul for President!

I'm not against a return to a real currency based on something tangible but do we really have enough gold and silver to back the present amount of money in circulation?

I've got a particularly liberal(socialist/communist in reality) co-worker that insists there is only a fixed and constant amount of wealth in circulation in the world and when "rich people" have more wealth then of course "poor people" have less Face Palm!

Personally I'd like to see a bigger emphasis on barter/trade in the day to day business of people.
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zahc
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« Reply #6 on: February 29, 2012, 08:11:19 PM »

Quote
I've got a particularly liberal(socialist/communist in reality) co-worker that insists there is only a fixed and constant amount of wealth in circulation in the world and when "rich people" have more wealth then of course "poor people" have less

I understand why that idea is wrong and obsolete. But I still don't understand why a fixed money supply won't work with increasing wealth. Of course, deflation would occur, but I still don't understand why the market can't live with that, through negative interest rates if necessary. Maybe it's because I work in an industry that has been strongly deflationary for its entire existence (semiconductors).
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Warren
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« Reply #7 on: February 29, 2012, 08:44:59 PM »


I'm not against a return to a real currency based on something tangible but do we really have enough gold and silver to back the present amount of money in circulation?

The amount of metal is not relevant. Even if we were to go to a 100% reserve/ gold coin standard in which there is no fiduciary media, prices would adapt. The transition would be...interesting but it could be done. 

Of course there is a reason banknotes, checks, and ledger accounts were invented. That was to free people from having to use little discs of metal in their daily transactions.

Many Rothbardian libertarians and others abhor fractional-reserve banking  however they miss the point that it's not about metal it's about total wealth extant. It should really be called fractional-cash reserve banking in that as long as the money is backed by something such as land or factories the money is fine.

In Scotland and other free-banking areas banks issued notes based on loans for which they had collateral. The notes in that case were liabilities against the total assets of the bank, not just the 1 or 2 percent of it in gold in the vault. In fact, they carried so little gold because people did not want to turn in their notes. Notes were convenient for a number of reasons including the fact that you could take notes from one or many banks and then deposit them in your bank and get credit for them. (The banks would net out or clear the currencies every so often and any bank that came up short would have to shift gold to the bank it owed but that was not the customer's problem.)

So if you are going to hold something that does not bear interest why not something that is light and foldable and is easy to make change for?

And that's why we don't need to worry about the amount of gold.

Here's a link with more info on money growth the US that explores the issue from a slightly different perspective. Here.

Quote
Personally I'd like to see a bigger emphasis on barter/trade in the day to day business of people.

There's a reason money evolved, and that's because barter is a high-cost transaction process. Coincidence-of-wants and all that.
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MicroBalrog
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« Reply #8 on: February 29, 2012, 11:53:19 PM »

A very good book about fractional-reserve free banking is Larry Selchrest's Free Banking: Theory, History, and a Laissez-Faire model. Some of its chapters are only really comprehensible to experts (i.e. not me) but most of it is quite legible.
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erictank
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« Reply #9 on: March 01, 2012, 03:10:11 AM »

Ron Paul for President!

I'm not against a return to a real currency based on something tangible but do we really have enough gold and silver to back the present amount of money in circulation?

I've got a particularly liberal(socialist/communist in reality) co-worker that insists there is only a fixed and constant amount of wealth in circulation in the world and when "rich people" have more wealth then of course "poor people" have less Face Palm!

Personally I'd like to see a bigger emphasis on barter/trade in the day to day business of people.

Y'know, I've never thought that the term "gold standard" necessarily meant that money had to be backed by ONLY gold - heck, we include silver as an option in the "gold standard" and that's not mentioned in the term either.  Why not oil certificates and uranium certificates, too? Just back it with something real, which people recognize as valuable, instead of with nothing.

But then, I'm not an economist, so take that for what it's worth, I guess.
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HankB
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« Reply #10 on: March 01, 2012, 05:27:49 AM »

Y'know, I've never thought that the term "gold standard" necessarily meant that money had to be backed by ONLY gold - heck, we include silver as an option in the "gold standard" and that's not mentioned in the term either.  Why not oil certificates and uranium certificates, too? Just back it with something real, which people recognize as valuable, instead of with nothing.

But then, I'm not an economist, so take that for what it's worth, I guess.
At one time, the US issed silver certificates that fed.gov would redeem in silver. (Gold, too, but those were before my time.) Initially the silver certificates were redeemable in face value of silver coins, but later fed.gov would give you silver powder or granules. (I was a bit too young when this happened to get any granules.)

Now the only thing you'll get in return is federal reserve notes - more paper. (Or is it mere paper?)

Silver certificates were effectively rendered obsolete by debasement of our coinage.
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Waitone
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« Reply #11 on: March 04, 2012, 12:14:17 PM »

The problem with fractional reserve banking is not what backs currency (gold, silver, land, oil, etc.).  The problem is the ability to multiply an asset's value in currency and pass it off as something of value.  "Responsible" reserve levels have changed over time.  Drop $1,000 into the bank and it was able to loan out $800 and reserve $200 at 8:1.  Then loan out $640 and retain $160, ad nauseum.  In loaning out money the bank would be able to charge say 5% interest on $1,440 instead of the original $800.

The responsible thing to do in the past was to limit the reserve to 1:8.  In 2008 during the height of the meltdown major banks in the US petitioned the FED to go as low as 1:40.  Extreme circumstances require extreme measures

http://www.answers.com/topic/reserve-requirements
« Last Edit: March 04, 2012, 12:18:43 PM by Waitone » Logged

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« Reply #12 on: March 04, 2012, 06:30:29 PM »

That's not how it worked in free banking, what you had is what you had and if you emitted more currency than others are willing to hold you lost your gold, then your interest bearing items, (stocks, bonds, annuities, loans may have to be sold etc.) if that was not enough then it is the physical assets of the bank, and then if all that did not cover the outstanding issue then each stockholder was liable, as there was unlimited liability for the stockholders, for what is left in proportion to the amount of stock they owned.

So all of that kept over issuing to a minimum. An additional thing that kept depositors from suffering losses was after all of the above happened the other banks would step in and buy up the outstanding notes at par.  Over it's 13+ decades in existence there were very little depositor losses.* It was the very best of banking systems.

Our neighbors to the north had free-banking as well, and suffered none of the panics in the 19th century that the US did and got through the Great Depression without a single bank failure.

So get rid of the Fed and all that comes with it and these bad issues go away. No reserve requirements, no government provided deposit insurance...all of it just gone. And we can stop worrying about it in the same way we don't worry about our national food policy. Or socks or ammo or any of the other things the market brings to use on a daily basis.


This is a good intro into the history of the beginning of the Fed and a contrast and comparison of banking in  (mostly unregulated) Canada vs. ( the heavily regulated)**  US during the 19th century. The book linked above is excellent and a google search will lead to more. http://www.youtube.com/watch?v=JeIljifA8Ls

This is main blog of those at the forefront of going back to free-market currency and banking. http://www.freebanking.org/

* It stopping being really free in 1845 with Peel getting his National Bank Act passed. Though there are still a few banks that issue their own notes. There are a few note issuers left in N. Ireland and Hong Kong as well. There were more than 60 countries that had free-banking but I have not seen the full list. Sweden and Chile had free-banking so that's seven, I'd love to know what the other countries were but the info is behind the Jstor paywall and in books that I cannot afford just yet.

** There was a more unregulated banking system in the US in New England called the Suffolk System and not surprisingly it worked quite well.


And that is probably more than you wanted to know!
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