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Slonob

Alan Greenspan (1967):
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

http://www.usagold.com/gildedopinion/greenspan.html

Gunnar

Read "The Lords of Finance" you will find the worst economic crisis happened while the world was on the gold standard.

"Gold has no inherent value, only mystique" - Warren Buffett

As for deficit spending - do you have a mortgage on your house?

Richard

You purchase a mortgage on an asset betting that the value of the asset will increase over time at a rate greater than the cost of the financing. Government deficits inevitably go towards expenses rather than capital improvements.

As for regulation itself, that presupposes that a select, politically chosen body can select appropriate rules governing the billions of transactions that take place every day. Regulations don't scale and their very existence creates moral hazard as players increasingly expect a perceived omniscient third party to protect them from loss.

Any economy greater than your family budget is far too complex a system to be externally managed. There's never enough information to make informed decisions and the information at hand is often only gathered after the fact. Large complex systems require self organization to be successful. Free market principals do not lead to a Utopian ideal, but neither does Socialism, Communism, Corporatism, or any other "ism" system that mankind has developed. What the free market has done is put the choices at the lowest level possible, leading to the greatest free society the Earth has seen to date. Any other system is steeped in government power (force) and eventually becomes a tool for the enrichment of a select group of controlling special interests.

As for Buffet's claim of gold, read up on Ludwig Von Mises treatise on money and credit. You can get it at Mises.org for free. Only precious metals have met mankind's need for a generic store of wealth over time.

Miguel Feitosa

Is is interesting how people still regard gold and similar things as wealth.
The discovery for example of precious metals in Spanish and Portuguese America so drove down the price of gold to make it self evident that gold holds no intrinsic value.
True wealth is holding the means of production. When you own say stock of an honest and productive enterprise you own in the end a piece of what that company produces...
That is the only and true "generic store of wealth over time" So if you own stock of say a cement company, in effect you receive over time a portion of cement to trade for whatever you need.
In this sense wealth can only exist in a stable society.
If a society is ransacked by revolution, which is uncommon, or as is very common, when governments are usurped by special interests, wealth cannot be held. Nazi Germany and the Russian Revolution are modern examples. When these revolutions happened, the wealthy were removed from the means of production that they held...and so their wealth was stripped from them.
Some few were able to trade their wealth for a stock of merchandise such as gold and migrated to another society were ultimately that wealth was transferred. The fact that gold was a vehicle of transferring wealth from one society to another still does not make it wealth.

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