Ron Paul Debate 15 Dec 2011

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**Lint**

ShumaGorath wrote:You do realize that half of the things you just posted never happened, and that his predictions were wrong? Two thirds of what he discussed was an inflation driven dollar crises. That never happened.

I would suggest that it hasn't happened yet. Because the current policy is to extend the agony, and prop up the failing intstitutions that are dictating this crisis, they're just prolonging the agony. I understand this is not a true argument against your point and only time will tell, but it is my belief that the real crisis is still coming. From what I've learned about the economic cycle, this is the postition I've taken. Nobody wants to be the "doomsayer" but I think it's an unfair label to place on an informed opinion. (ymmv on the "informed" part

)

**ShumaGorath**

Lint wrote:
ShumaGorath wrote:You do realize that half of the things you just posted never happened, and that his predictions were wrong? Two thirds of what he discussed was an inflation driven dollar crises. That never happened.

I would suggest that it hasn't happened yet. Because the current policy is to extend the agony, and prop up the failing intstitutions that are dictating this crisis, they're just prolonging the agony. I understand this is not a true argument against your point and only time will tell, but it is my belief that the real crisis is still coming. From what I've learned about the economic cycle, this is the postition I've taken. Nobody wants to be the "doomsayer" but I think it's an unfair label to place on an informed opinion. (ymmv on the "informed" part )

I think that if you wait long enough doomsaying will always become true. The trick is being right, which Ron more often then not isn't. Being pessimistic and consistently bewildered is a hallmark of Rons discussions and predictions and I personally think it's a terrible blend for a government official.

**Frazzled**

Lint wrote:
ShumaGorath wrote:You do realize that half of the things you just posted never happened, and that his predictions were wrong? Two thirds of what he discussed was an inflation driven dollar crises. That never happened.

I would suggest that it hasn't happened yet. Because the current policy is to extend the agony, and prop up the failing intstitutions that are dictating this crisis, they're just prolonging the agony. I understand this is not a true argument against your point and only time will tell, but it is my belief that the real crisis is still coming. From what I've learned about the economic cycle, this is the postition I've taken. Nobody wants to be the "doomsayer" but I think it's an unfair label to place on an informed opinion. (ymmv on the "informed" part )

Actually inflation is occurring.

**Lint**

You can't create money out of thin air without it happening, I think is the point.

@Shuma: Why do you dislike the idea of a gold standard? It seems to me that a fiat based money is unsustainable, do you believe otherwise?

**Jihadin**

Let me help clarify on Ron Paul on the racism tag. Not seeing it but found the closest thing I could that might have a perception of it

On July 3, 2004, Ron Paul was the only Congressman to vote against a bill hailing the 40th anniversary of the 1964 Civil Rights Act. In this speech to Congress, Ron Paul courageously spoke out on the often controversial issues of race relations and affirmative action. He explained why the Civil Right Act had failed to achieve its stated goals of promoting racial harmony and a color-blind society.

Ron Paul: Mr. Speaker, I rise to explain my objection to H.Res. 676. I certainly join my colleagues in urging Americans to celebrate the progress this country has made in race relations. However, contrary to the claims of the supporters of the Civil Rights Act of 1964 and the sponsors of H.Res. 676, the Civil Rights Act of 1964 did not improve race relations or enhance freedom. Instead, the forced integration dictated by the Civil Rights Act of 1964 increased racial tensions while diminishing individual liberty.

The Civil Rights Act of 1964 gave the federal government unprecedented power over the hiring, employee relations, and customer service practices of every business in the country. The result was a massive violation of the rights of private property and contract, which are the bedrocks of free society. The federal government has no legitimate authority to infringe on the rights of private property owners to use their property as they please and to form (or not form) contracts with terms mutually agreeable to all parties. The rights of all private property owners, even those whose actions decent people find abhorrent, must be respected if we are to maintain a free society.

This expansion of federal power was based on an erroneous interpretation of the congressional power to regulate interstate commerce. The framers of the Constitution intended the interstate commerce clause to create a free trade zone among the states, not to give the federal government regulatory power over every business that has any connection with interstate commerce.

The Civil Rights Act of 1964 not only violated the Constitution and reduced individual liberty; it also failed to achieve its stated goals of promoting racial harmony and a color-blind society. Federal bureaucrats and judges cannot read minds to see if actions are motivated by racism. Therefore, the only way the federal government could ensure an employer was not violating the Civil Rights Act of 1964 was to ensure that the racial composition of a business’s workforce matched the racial composition of a bureaucrat or judge’s defined body of potential employees. Thus, bureaucrats began forcing employers to hire by racial quota. Racial quotas have not contributed to racial harmony or advanced the goal of a color-blind society. Instead, these quotas encouraged racial balkanization, and fostered racial strife.

Of course, America has made great strides in race relations over the past forty years. However, this progress is due to changes in public attitudes and private efforts. Relations between the races have improved despite, not because of, the 1964 Civil Rights Act.

In conclusion, Mr. Speaker, while I join the sponsors of H.Res. 676 in promoting racial harmony and individual liberty, the fact is the Civil Rights Act of 1964 did not accomplish these goals. Instead, this law unconstitutionally expanded federal power, thus reducing liberty. Furthermore, by prompting raced-based quotas, this law undermined efforts to achieve a color-blind society and increased racial strife. Therefore, I must oppose H.Res. 676.

**ShumaGorath**

Lint wrote:You can't create money out of thin air without it happening, I think is the point.

@Shuma: Why do you dislike the idea of a gold standard? It seems to me that a fiat based money is unsustainable, do you believe otherwise?

Gold values shift wildly depending on current global mood.
Gold is constantly being dug up, which results in uncontrolled inflation that can be directly manipulated by foreign bodies.
Gold has no inherent value.
Any functional gold standard works near identically to either a floating or pegged monetary standard, you just replace what your currency is pegged to with gold.
Gold prices have risen 500% in the last decade, imagine how much our economy would of collapsed if we were on the gold standard. What you should be imagining is "fully".
Inflation should match GDP growth YOY to maintain a liquid economy, the dollars inflation amount soared and bounced back wildly in the decades leading up to us leaving the gold standard (20% point shifts in either direction in a year at some points)
There is no reason to go gold, the current system has been working quite well for a long time
The gold standard wouldn't of fixed or prevented any of our current problems

Yes, I believe otherwise as there is no reason to believe it is unsustainable.

Automatically Appended Next Post:

Frazzled wrote:
Lint wrote:
ShumaGorath wrote:You do realize that half of the things you just posted never happened, and that his predictions were wrong? Two thirds of what he discussed was an inflation driven dollar crises. That never happened.

I would suggest that it hasn't happened yet. Because the current policy is to extend the agony, and prop up the failing intstitutions that are dictating this crisis, they're just prolonging the agony. I understand this is not a true argument against your point and only time will tell, but it is my belief that the real crisis is still coming. From what I've learned about the economic cycle, this is the postition I've taken. Nobody wants to be the "doomsayer" but I think it's an unfair label to place on an informed opinion. (ymmv on the "informed" part )

Actually inflation is occurring.

Inflation occurred under the gold standard and is healthy when it's at a controlled rate that roughly equals the growth in the economy.

**Frazzled**

Shuma, a sudden boom in gold supply would result in DEflation actually (a single dollar being worth more physical gold). Gold prices went up as a hedge against currency valuation. There is some argument that gold currently is in a bubble. I expect a bailout from the government and pronto!

**ShumaGorath**

Frazzled wrote:Shuma, a sudden boom in gold supply would result in DEflation actually (a single dollar being worth more physical gold). Gold prices went up as a hedge against currency valuation. There is some argument that gold currently is in a bubble. I expect a bailout from the government and pronto!

First of all I said that it would cause collapse, not sharp inflation. We've discussed this exact thing before frazzy, do try to keep up and read with your eyes and not your imagination. Secondly, deflation is bad, especially in an environment of unemployment. That much deflation would be devastating.

**Rented Tritium**

We actually want a little bit of inflation. It spurs people into actually investing in things to outpace it. One of the big problems the fed is dealing with right now is keeping a very precise inflation rate.

**Frazzled**

ShumaGorath wrote:
Frazzled wrote:Shuma, a sudden boom in gold supply would result in DEflation actually (a single dollar being worth more physical gold). Gold prices went up as a hedge against currency valuation. There is some argument that gold currently is in a bubble. I expect a bailout from the government and pronto!

First of all I said that it would cause collapse, not sharp inflation. We've discussed this exact thing before frazzy, do try to keep up and read with your eyes and not your imagination. Secondly, deflation is bad, especially in an environment of unemployment. That much deflation would be devastating.

Well, you did actually.

Gold is constantly being dug up, which results in uncontrolled inflation that can be directly manipulated by foreign bodies.

Its not a big deal as its just as reasonable to assume a shortage, which would cause inflation.

OT but don't you have to actually own the metal reserves?

**ShumaGorath**

Well, you did actually.

Yeah, but if you inverse that it implies the possibility or regularity of gold "shortages", which don't really occur. We don't eat it and industrial uses aren't out of control at the moment to the point where its actually harming the total amount. The big issue is more the evaluation of gold that foreign markets have. If they all suddenly invest or dis-invest in the metal then that seriously impacts dollar value.

OT but don't you have to actually own the metal reserves?

Not that I'm aware of. I don't even think there's enough gold on earth to back the U.S. economy were that true. If you don't own the entirety of what the currency is pegged too then it's vulnerable to outside interference. If we aren't using market prices for the cost of gold then we aren't pegging it to gold at all. We might as well have a sprocket backed economy in that case. As it is gold cost is extremely heavily influenced by foreign investment and industrial demand which makes it's "inherent worth' dubious.

There are few things with static presence and actual inherent worth and value. No one wants the water backed currency anymore these days though, so thats kind of moot.

**Frazzled**

ShumaGorath wrote:
Well, you did actually.

Yeah, but if you inverse that it implies the possibility or regularity of gold "shortages", which don't really occur. We don't eat it and industrial uses aren't out of control at the moment to the point where its actually harming the total amount. The big issue is more the evaluation of gold that foreign markets have. If they all suddenly invest or dis-invest in the metal then that seriously impacts dollar value.

OT but don't you have to actually own the metal reserves?

Not that I'm aware of. I don't even think there's enough gold on earth to back the U.S. economy were that true. If you don't own the entirety of what the currency is pegged too then it's vulnerable to outside interference. If we aren't using market prices for the cost of gold then we aren't pegging it to gold at all. We might as well have a sprocket backed economy in that case. As it is gold cost is extremely heavily influenced by foreign investment and industrial demand which makes it's "inherent worth' dubious.

There are few things with static presence and actual inherent worth and value. No one wants the water backed currency anymore these days though, so thats kind of moot.

What are you talking about? There's a buttload of uses for gold.

**Rented Tritium**

Tying currency to a consumable good is probably not smart. The last time we used the gold standard, gold wasn't being used in electronics. I can already imagine the damage those fluctuations will do to the currency markets.

**ShumaGorath**

Frazzled wrote:
ShumaGorath wrote:
Well, you did actually.

Yeah, but if you inverse that it implies the possibility or regularity of gold "shortages", which don't really occur. We don't eat it and industrial uses aren't out of control at the moment to the point where its actually harming the total amount. The big issue is more the evaluation of gold that foreign markets have. If they all suddenly invest or dis-invest in the metal then that seriously impacts dollar value.

OT but don't you have to actually own the metal reserves?

Not that I'm aware of. I don't even think there's enough gold on earth to back the U.S. economy were that true. If you don't own the entirety of what the currency is pegged too then it's vulnerable to outside interference. If we aren't using market prices for the cost of gold then we aren't pegging it to gold at all. We might as well have a sprocket backed economy in that case. As it is gold cost is extremely heavily influenced by foreign investment and industrial demand which makes it's "inherent worth' dubious.

There are few things with static presence and actual inherent worth and value. No one wants the water backed currency anymore these days though, so thats kind of moot.

What are you talking about? There's a buttload of uses for gold.

Which all involve markets. It's not of inherent value because without industrial applications that tie it to other materials and turn it into useful things it is valueless. It's just pretty. Not that any of that gak matters, you just breezed through a 9 sentence post that answered several questions and replied to more then one of your points so you decided to burp up this in response. You're not worth the effort of discussing these things with. I don't understand why I keep trying.

**Frazzled**

Other than electronics, catalyst manufacturing, films, jewelry, pigment, and heat transfer products you're completely right. There are no industrial applications.

The amount of gold my clients use is impressive. It some of my best moneymakers.

**Rented Tritium**

Frazzled wrote:Other than electronics, catalyst manufacturing, films, jewelry, pigment, and heat transfer products you're completely right. There are no industrial applications.

The amount of gold my clients use is impressive. It some of my best moneymakers.

Can you imagine how much all of those things would shoot up in price if gold suddenly backed everything?

**Jihadin**

Cockpit windows for military aircraft will go through the freaking roof be one

**ShumaGorath**

Frazzled wrote:Other than electronics, catalyst manufacturing, films, jewelry, pigment, and heat transfer products you're completely right. There are no industrial applications.

The amount of gold my clients use is impressive. It some of my best moneymakers.

I honestly don't think you read my post. It's either that or your comprehension of it was so abysmal that the effect is the same.

**Rented Tritium**

Jihadin wrote:Cockpit windows for military aircraft will go through the freaking roof be one

You mean, uh, higher through the roof.

Through the second story roof?

**Frazzled**

Rented Tritium wrote:
Frazzled wrote:Other than electronics, catalyst manufacturing, films, jewelry, pigment, and heat transfer products you're completely right. There are no industrial applications.

The amount of gold my clients use is impressive. It some of my best moneymakers.

Can you imagine how much all of those things would shoot up in price if gold suddenly backed everything?

very much so.

After a quick perusal there are multiple systems for linking to a precious metal. You couldn't use gold to cover all the currency in circulation, but you would need substantial reserves.

Automatically Appended Next Post:

ShumaGorath wrote:
Frazzled wrote:Other than electronics, catalyst manufacturing, films, jewelry, pigment, and heat transfer products you're completely right. There are no industrial applications.

The amount of gold my clients use is impressive. It some of my best moneymakers.

I honestly don't think you read my post. It's either that or your comprehension of it was so abysmal that the effect is the same.

You mean the part where it had no industrial uses right? is this like the part where you said "A" but then deny you said "A"...again?
Having said that, a smart person would shut up now, because I'm actually supporting your position about the gold standard being nicht gut, but of course, you won't.

**sourclams**

Big issue with gold standard right now would be that you'd need the bullion reserves to back the existing currency. If the monetary supply is pegged directly to the value of gold (which I think is what those supporting a gold standard are looking for) then the only way to create money would be to go out and dig up or buy more gold.

That does three things in my mind:

Create a near-term liquidity trap, wherein international commerce has difficulty exchanging goods for US dollars or vice versa and credit becomes more difficult to acquire as a result; trade slows down.

Incent aggressive expansion of gold mining efforts globally, with all of the human and environmental issues that go with it.

Create massive demand for physical and paper gold, which the Gov't must buy to back the dollar. All of the industrial processes gold is involved in become more costly, and prices have to go higher. The dollar becomes stronger in the near-term as it's repatriated (in order to buy gold to back itself) and then remains volatile based on the value and demand for gold in the global economy.

In the end, the only people who win here are the ones who are holding big gold positions that see big writeups in the value for their inventory.

**Rented Tritium**

Additionally, what is the advantage even? Replace a paper currency whose value is based on supply and demand with currency backed by an arbitrary consumable good whose value is based on supply and demand?

I mean at least with the first one, the fed can adjust things and keep inflation in a good place. But I guess the same people think that's wrong too, so I'm not sure what to suggest.

**Jihadin**

Time to start extracting gold from sea water or head on up to Alaska Gold Rush to be part of the reality show.

**Lint**

sourclams wrote:...

This actually makes sense. I don't fully understand what a return to the gold standard would mean, which is why I asked. However, it does seem like the constant tinkering by the FED is an inside job that constantly leaves the working poor (previously known as the middle class) holding the check. I wonder if we can't find a way to reign in the constant creation of money out of thin air.

**Melissia**

Rented Tritium wrote:Tying currency to a consumable good is not smart.

Fixed.

**Joey**

Lint wrote:
sourclams wrote:...

This actually makes sense. I don't fully understand what a return to the gold standard would mean, which is why I asked. However, it does seem like the constant tinkering by the FED is an inside job that constantly leaves the working poor (previously known as the middle class) holding the check. I wonder if we can't find a way to reign in the constant creation of money out of thin air.

Is this true? The US government is printing money? If so it'd explain why US exporters have been booming...

**Melissia**

The US government has always been printing money. Creating a slight level of inflation through printing money (and controlling heavy inflation through taknig money out of circulation) is essentially the primary modus operandi of the Federal Reserve System, the eponymous "Fed" that Republicans love to bash so much.

I'm fairly certain any country with a unique currency does the same thing to varying levels.

**ShumaGorath**

You mean the part where it had no industrial uses right? is this like the part where you said "A" but then deny you said "A"...again?
Having said that, a smart person would shut up now, because I'm actually supporting your position about the gold standard being nicht gut, but of course, you won't.

This is what I said. I can't believe I have to quote myself for you.

It's not of inherent value because without industrial applications that tie it to other materials and turn it into useful things it is valueless.

Christ, you are a troll beyond all comprehension. You didn't read it the first time. You didn't read it when I pointed out that you didn't read it. How in the name of the emperor do you get "Has no industrial uses" from "Without industrial uses it has no value"?

IT MEANS THE ALMOST EXACT OPPOSITE THING.

**sourclams**

Joey wrote:
Lint wrote:
sourclams wrote:...

This actually makes sense. I don't fully understand what a return to the gold standard would mean, which is why I asked. However, it does seem like the constant tinkering by the FED is an inside job that constantly leaves the working poor (previously known as the middle class) holding the check. I wonder if we can't find a way to reign in the constant creation of money out of thin air.

Is this true? The US government is printing money? If so it'd explain why US exporters have been booming...

The Fed has began printing money aggressively when there was fear that big banks were going to fail and create a bank run. What Geithner and Bernanke undertook at the beginning of the downfall was to create so much free cash and so much liquidity that banks could not possibly fail and credit would continue to circulate. In doing so they staved off completely any real threat of one big institution after another toppling, meteoric unemployment, and long term depression, however they also cheapened the dollar and therefore what a dollar can buy, boosting US export competitiveness but also creating inflation. Bernanke has kept the printing presses running pretty hard until recently, buying 10 year bonds to elevate interests rates further out on the yield curve. This is important because banks take loans in the short term, but give loans long term. A 'positively sloped yield curve' makes even the dumbest banker into a genius, basically taking his nickel and turning it into a dime (over the life of the loan). This has led to accusations of fatcat politicians shoveling free money into bankster pockets, but the goal here is to simply make credit and lending a no-brainer, to keep capital flowing into the markets and allowing entrepreneurs to create business, which generates true economic growth.

That economic growth has been slow to realize, however, one big reason being the absolute lack of coordination or leadership from the government. Brinkmanship politics (deadlock resulting in two gov't shutdown scares), Obama's promise of huge healthcare costs, regulating agencies that completely missed the corrupt practices leading into the '08 bubble now headhunting and scapegoating, and tax uncertainty keeping profits overseas all contribute. I think Bernanke has largely done the right things for the areas he has control over, but there has to be cooperation and trust between the Fed, Executive and Legislative gov't branches, and industry to get the economy hitting on all cylinders, and that's been in short supply.

The tinkering of the Fed sure appears to be designed to keep class warfare alive and profits funneling to rich people because in general, the things that promote economic health also result in higher gas and food prices and therefore hit the lower income brackets the hardest. The machinations of the Fed aren't meant to exist in a vacuum, however. Think of Bernanke as a Psyker Battle Squad and Obama/Congress as a platoon command squad and 10 IG. Economic Recession is 8 Ork Boyz. The Psyker Battle Squad hits the Ork Boyz with their leadership nuke, dropping them to Ld2. Then they look over at the IG and say 'just kill two lol'. The PCS gives the IG squad the Bring It Down! order and the Guardsmen roll a 5 on their run roll. The Psyker squad stands there going 'WTF??' while the 8 Ork Boyz run into a heavy weapons team (representing economic confidence) and butcher them all.

**dogma**

Lint wrote:
As far as his "crazy" ideas about a gold standard and economics I'll say this: He has been right about everything so far thats happened to the world economy, and has been accurately predicting this recession for the last decade at least.

Well, he's been predicting a recession, which isn't exactly rocket science unless you can specifically do so. For example, predicting that the next quarter will see the economy enter a recession. Simply claiming that, in a modern capitalist economy, there will be a recession at an undefined point in the future is like predicting that someone will eventually die.

Lint wrote:
And while a return to the gold standard would be devastating to the economy, a move in that direction and away from the debt-laden fiat currency we currently have could certainly be a good thing.

How does one move in the direction of the gold standard? In every case that particular monetary system requires the fixed exchange of some form of currency for a sum of gold currency, or gold bullion. Which, if gold is freely circulated, encounters many of the same problems inherent in fiat currency.

Lint wrote:
On foreign policy, neither party likes him. The left wants to homgenize and placate the entire world and destroy America's autonomy. The right is full of warmongers who would like to shove "democracy" (how's that working out in Pakistan btw?) down the world's throat and get rich in the process.

While the right certainly has a thing for exporting democracy (so does the left, its just accomplished differently) it had no hand in doing so in Pakistan, they established their present system all on their own.

Also, I'm not sure where you're getting the idea that the left wants to "destroy America's autonomy" considering that there's very little that Democratic politicians have done which amounts, in any sense, to that (What commitment, binding or otherwise, can the US not simply ignore, outside of economic issues?). And even if you believe America is less autonomous because of actions on foreign policy taken by members of the American political left, it still seems unlikely that said group desires a less autonomous America in any explicit sense.

Lint wrote:
He has never claimed that 9/11 was an inside job so please don't misrepresent him. He has however said that 9/11 was a direct result of our forieng policy in the middle east over the course of the last 5 decades or so.

That's true, but I'd contend that such a statement is a significant case of confusing correlation and causation.