Paul Mladjenovic: Economists Exhibit Lunacy and Confusion over the Gold Standard
Published: March 28, 2012 by RssFeed
It drives me crazy when I read stuff by “economists” that is just plain wrong. Some of them are allegedly “MBAs” and “PhDs” but I think that their common sense is actually “DOA”. Unfortunately, millions in the public arena see their interviews and blogs and they seem to automatically swallow their commentaries… hook, line and sinker. Let’s address some of the nonsense that these pundits are expressing. Words: 870
So says Paul Mladjenovic (www.mladjenovic.blogspot.ca) *in edited excerpts from an article* which Lorimer Wilson, editor of www.munKNEE.comhas further edited below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
Mladjenovic goes on to say, in part:
Some conventional and well-known economists have expressed the idea that a gold standard is a bad idea and that the gold standard was a major (and possibly THE major) catalyst for the Great Depression. One well-known fellow surmises that an equivalent of the gold standard is the reason why today’s European financial crisis is going on. In due course, I am sure that they will blame the gold standard for global warming and probably the heartbreak of psoriasis…
The point that critics make is that the gold standard “removes financial flexibility” when a system-wide financial crisis unfolds. They don’t like a gold standard because it is viewed as a “rigid constraint”.
In a monetary system that is on the gold standard, the amount of currency you can produce at will is indeed greatly constrained since the amount of currency (dollars or euros or whatever) is limited to the amount of gold that is on reserve. This condition puts the breaks on the unlimited creation of a currency.
Home Delivery Available! If you enjoy this site and would like to have every article posted on www.munKNEE.com (approx. 3 per day of the most informative articles available) sent automatically to you then go HERE and sign up to receive Your Daily Intelligence Report. We provide an easy “unsubscribe” feature should you decide to opt out at any time.The real problems behind today’s (and yesterday’s) financial crises and depressions have nothing to do with constraints such as a gold standard; the problems come from mismanagement of spending and debt… and governments that are too expansive in their size and scope.
Economists don’t blame governments for spending too much or creating too much debt or printing up too much of their currencies; they blame whatever may stop them from doing so (such as a gold standard). This is insane; it is like blaming the seat belt for a car crash.
Imagine for a moment if a financial planner took the same line of thinking with their client. How would that go?
“Well Mr. Smith I see that you are spending way beyond your means and you are taking on a lot of debt as a result. You are now hitting your credit limit! Well…the problem is obvious to me! Your spending and debt are not the problem…I blame the credit limit! The creditor is not letting you borrow your way out of your excessive spending and debt! Yup… I blame the credit limit.”*Could you imagine that? That is essentially what these “educated” commentators are telling the public. The public confuses “eloquence” with common sense. They figure these guys “must know what they are talking about” since they “sound pretty smart”. Ugh…
We must remember that the gold standard was present when America had the depression of 1920-21 and we got through it and then proceeded into the roaring twenties. What’s that you say? You never heard of the depression of 1920-21? That is because the government did very little to intervene and the economy righted itself very quickly.
How about the Great Depression? FDR effectively removed the constraints of the gold standard in 1933 – but the Great Depression continued -*for over a decade! The Great Depression did not end until AFTER World War II ended (in 1945).
Look, we may not need a classical gold standard; but we need SOME type of standard. The essential point here is that our governments need some type of restraint… otherwise they will continue to spend and spend and create more and more debt.
Standards and restraints on endless money and debt creation do not cause financial catastrophes and depressions but it is the lack of this constraint (gold standard or a modified version of one) that opens the door to catastrophe. This is why I tell my students and readers to become as self-reliant as possible (financially and otherwise) since we are at risk as today’s economic ills get worse.
Unfortunately for pundits and economists, there is no “standard” to blame for the trillion-dollar disaster that is unfolding before our eyes today and in the months to come so, be prepared.
*http://mladjenovic.blogspot.ca/2012/...tandard.html***(To access the article please copy the URL and paste it into your browser.) Copyright 2012. Paul Mladjenovic. All rights reserved.
Editor’s Note: The above article has been has edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.Related Articles:
1. Why U.S. Will Never Return to Gold Standard and What That Means for Gold Price
The recent outperformance of precious metals, combined with budget problems in the United States and parts of Europe, has prompted some to speculate that gold or silver will become the next international reserve currency [but in my opinion that is highly unlikely. As such, investors would be highly encouraged to give pause [before] allocating a portion of their portfolios to precious metals. Let me explain further.] Words: 1094
2.*James Turk: Here’s the Real Reason the Gov’t Confiscated Gold in 1933
FDR confiscated American’s gold for the same reason Lenin confiscated it in Russia and Hitler confiscated it in Germany, namely, to get it out of the hands of the people. [That view is contrary to the prevailing belief that such was done] to re-establish confidence in the dollar. [Let me explain the background of this confiscation and my rationale for coming to such a conclusion.] Words: 815
3. A Return to the Gold Standard Has Major Shortcomings
World Bank president Robert Zoellick has stirred up a hornet’s nest with his recent call for a return to a gold anchor in the global financial system. The usual suspects immediately denounced him – Keynesian Brad DeLong has [gone so far as to] anoint Zoellick the “Stupidest Man Alive” – [and I would like to add my voice to the chorus by explaining] the dangers of Zoellick’s gold proposal, and why fans of the classical gold standard should be wary. Words: 1708
4. Be Careful! Owning Gold Bullion is a Revocable Privilege in the U.S. – Not a Basic Right!
The laws of gold confiscation are very clear in the U.S.: During any time of national crisis, it becomes illegal to buy, sell, or “hoard” gold bullion in any form. It is delineated under an Executive Order and can be re-administered as quickly as the assets in your checking account can be frozen. The penalties for violation are 10 years in prison, $10,000 fine, or both. Words: 821
5. Will U.S. Government Seize Private Gold and Then Devalue Dollar – Again?
Imagine living in a country where the government suddenly decides to make it illegal to hold a certain type of asset, and goes on a systematic process to relieve its citizens of such an asset? Such actions happen in wartime and by politically-corrupt regimes but how about private-asset seizure in the good old U.S.A.? Well, it has happened before. [The 64 trillion (in keeping with the times) dollar question is: "Will it happen again?"] Words: 585
6. Governments Will Want – Will NEED – Much Higher Gold Prices! Here’s Why
That governments will want – and will NEED – much, much higher gold and silver prices in the future is counter intuitive, given that they have done everything within their power to throttle back and to keep a lid on bullion prices. Let me explain why. Words: 1300
7. 2012: Is This How U.S. Financial Crisis Will Unfold Later This Year?
As economic and political matters become more desperate in the U.S., so will what the government considers acceptable. If a debt default cannot be engineered via continuous inflation as the Fed’s current money-printing is attempting to do, it will occur via a direct repudiation of obligations or a quasi-surreptitious one such the hypothetical one I present in this article. Here is… a look (not a prediction) at a series of not improbable events that could develop [and which] would change our economic world overnight[ - and your financial well-being too]. Words: 1365
8. Economic/Currency Collapse Could Bring Martial Law and Confiscation of Your High-priced Gold! Got Silver?
Do we really honest-to-God no-fingers-crossed cherry-on-top believe that the powers-that-be will simply allow us to mosey up to the cashiers cage and redeem or convert our Gold for whatever monetary unit reigns supreme or is created [should our current financial system and currencies collapse? As such,] IF there comes a time when the best move forward is to sell most of our Gold and switch to another asset class, one more likely to survive the transition intact, will we be able to see this as obvious and a no brainer? [Let me explain what could well happen and the effect such a development would have on all things Gold.] Words: 3037
9. IF Silver Goes Too High Government Might Interfere! Here’s Why
Silver has more than doubled [in price] from its 2008 multi-year high…primarily due to demand among the industries of the developing world…and among those industries where silver is virtually irreplaceable… If silver goes too high, however, it could provoke government interference in the name of ensuring national security. Let me explain. Words: 606
Please note, the content of this page was automatically generated from an external source using RSS Feeds technology. Gold Speculator associates cannot guarantee or verify any information provided on this page. By using this site you are agreeing to the terms of our disclaimer.
Search Gold Speculator Articles
Similar Articles You May Enjoy
|Article Title||Source||Last Comment Date|
|Leap Day Lunacy||5min Forecast||February 29, 2012|
|Ron Paul: We Cannot Even Maintain the Zinc Standard||The Daily Reckoning||July 26, 2010|
|Gold: The Crowd’s Confusion||Jim Sinclair||April 14, 2009|
|Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)|
What do you think? Your comments are welcomed.
We appreciate all of your comments and feedback. You need to be registered in order to post comments. You can register here, or sign in. if you have a comment off topic you can post it in our forums section.
Search Gold Speculator Articles
- (MUST READ) Behind Closed Doors
- Neil Barofsky: Another Financial Crisis All But Inevitable
- Your Government Is Spying On You… What to Do
- What Happened To Gold? Part 2
- The War on Silver
- The Gold Stocks Compared to Past Bull Markets
- Most Important Message Since 2001: The Rig Is Up, Gold Will Go To $3500
- Gold, Gold Mining Shares, and QE An Attempt to Answer Two Persistent Questions
- Casey Research Summit Special Report Part II: Drilling Down into Oil & Gas Prices
- Rick Rule's Primer on Contrarian Speculation
- Casey Research Summit Special Report: Reality Check or Checkmate? Interview with Rick Rule
- European Tsunami Alert: Send in the Bond Squad
MOST POPULAR ARTICLES
- Caesars Report's Second Most Important Factor in Picking a Winning Mining Investment
- Italy's industrial output falls back to 1970s
- Japan's Economy Minister sets off Selling Cascade in Silver
- Caesars Report's Second Most Important Factor in Picking a Winning Mining Investment: Jurisdiction
- Bubble Views
- Brent Cook's Primer on Reading Drill Result Press Releases
- Two Biotech Ideas You May Have Missed: William Gregozeski
- Gold Chart
- Gold Drops for 6th Consecutive Day
- The Other Side of the Wall
- Surging US Dollar derailing Gold and Silver
- CME reporting Silver Trading halted 4 times last evening
- Gold and Silver Divergence Suggest Lows Could Form
- Japan storms back on weak yen but Asia trembles
- The Hottest North American Shale Plays: Josh Young
- BIS and IMF attacks on quantitative easing deeply misguided warn monetarists
- The Resurgence of the Nuclear Reactor
- Have the Mining Shares finally Bottomed?
- Trader Dan Interviewed at King World News Markets and Metals Wrap
- How George Topping Is Profiting from Copper Price Volatility
- Today's Commentary by Trader Dan posted over at King World News
- Risk of vicious circle for gold as hedging returns
- Investors Versus Traders: A Battle for Oil & Gas Profits
- The American Story… Abroad
- One Of The Best Bull Markets In The World — Mongolia Is A “Buy”
- EU arms second front in China trade war with Huawei probe
- Crude Oil, Gold Look to Fed-Speak for Direction Cues
- Drop in Gold May be Old but More Evidence Needed to Reverse
- Platinum and Palladium: A Fundamental Shift
- The Hidden Bargain – Uranium
- Sprott Is Bullish on Silver—and Gold—Equities
- Can Two Senators End “Too Big to Fail?”
- Gold May Rise as Fed Dents QE3 Reduction Bets
- BRICS risk 'sudden stop' as dollar rally builds
- Crowds, Mencken and Wisdom from Two Great Investors
- US Dollar - back to being King
- Long Term Interest Rates grinding Higher
- Where’d All the Fear Go?
- Drop Daily Range is Large but End of Day Little Changed