@Bischoff

I don't know Ingo, Danny could probably become a chef, and he's definitely verging on some machine thinking. Sounds like his schooling took way too well. That bell should only be curved right into the trash.

@ Danny B

DANNY: "There is no way that man can hope to keep a large part of the population employed."

BISCHOFF: That argument has been advanced from the minute the first labor saving device (capital) was used. It has been proven wrong everytime. It will be proven wrong again. Just think of all the food growing and food preparation processes which sets out to produce quality instead of quantity. Do you think there'll ever be a machine to replace a culinary chef of a three star Michelin restaurant... ???

Mava, I'm impressed by your posts and your command of English. I presume that it is your second language. I'm not impressed with your posts because we are in agreement. I'm impressed with your posts because you always work towards clarity.

Some good books;

The Collapse of Complex Societies,, Tainter
The Rise and Fall of Society,,, Chodorov
The Bell Curve: Intelligence and Class Structure in American Life by Richard Herrnstein and Charles Murray

While there are thousands of good books, these three are very applicable.

We are in a paradigm change. There has always been a percentage of society who were unfit for jobs that demanded intelligence. They worked in menial jobs like stevedore. The industrial revolution wiped out lots of job niches that didn't demanded much intellect. It is still working it's way up the ability ladder.

7 billion humans and 1 billion computers. Mankind has been VERY successful at inventing labor saving devices. We are on the verge of making a quantum leap in manufacturing technology that will abolish much of todays manufacturing industry.

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There is no way that man can hope to keep a large part of the population employed.

He will have to come to a new arrangement. Traditionally, GOV produced make-work jobs to keep everybody busy. That doesn't seem to be an option anymore. The percentage of the population who are unemployable or otherwise redundant is growing far too high to be employed by GOV.

"Widespread investments in physical gold also mean that large pots of wealth sit idle, instead of being put to work in the broader economy."

Gold is a store of value, besides being the standard to measure value.

What is value? Value accrues as human exertion is expended to transform a natural resource into a commodity or a good.

Most commodity and goods are consumed. However, those which are not consumed, and which are instead set aside for savings are best exchanged for gold, particularly where long-term savings are concerned.

Gold does not earn interest, unless loaned out. If gold bonds were available, gold savings could be invested for an interest return, while the gold would be returned upon maturity of the bond.

Producers and consumers can clear commodities and goods intended for consumption by use of a redeemable paper currency. There is no need for gold to circulate. However, the difference that occurs in clearing commodities and goods for consumption is caused by those commodities and goods which are set aside for savings. Luckily, goldminers are ready to exchange those consumption items intended as savings for the most ideal store of value, namely gold. This is possible, because goldminers have to eat too...

Until 1933, when FDR nationalized existing gold holdings, and prohibited U.S. citizens from further holding gold in the future, producers and consumers were able to "save", because the paper currency used for clearing the commodities and goods from the market was a redeemable paper currency.

Since 1933, we have had an irredeemable paper currency, and a prohibition against holding gold, which was not lifted until 1975.

By 1975, every currency in the world was a "managed" central bank currency. For decades now, gold has been "bad-mouthed" and manipulated by central banks and big government politicians and their supporters.

It is the independence and security against looting of savings which is afforded an individual by holding gold that sticks in the craw of big government politicians and the central bank crowd.

Hey DannyB, that is an awesome post!
This is exactly how I see it. You are exactly right, I don't see anyone questioning these things.

No one seem to be able to comprehend that the reason for the economy is MY NEED, not someone else's need. So, if I don't need any profit, I must keep my money in "money" (gold). It is none of my business that someone, somewhere may be sitting without capital he "needs" to start a business. Too bad. He should have created the capital in the first place, sucker.

Because if this, fact is that when I keep the capital where others can use it, this DOS NOT BENEFIT the economy, unless that is what I want. Unless I want to make that profit, my capital in someone's hands can possibly create only a mal-investment.

Anyway, like you said, gold is portable. So, since I care so little, or rather, none at all about what the Keynesian fearless leathers think, I'll just keep it in gold. And the more they write about how bad that is, the more I seem to enjoy doing it.


And still, I have a lingering feeling that some may read my post and still believe the government, still think that there is some sort of harm done when people convert their paper to cold and go off the radar.

Like DannyB says, it is a lie.

Remember, that keynesians say there is no value in gold. It is a "barbaric relic". Well then, why the long faces? They have the freedom to replace all the paper that I convert to gold, and then some with brand new paper money. They can print to the moon. If gold has no value, then there is no reason to be upset, just keep printing what you call "money".

"Widespread investments in physical gold also mean that large pots of wealth sit idle, instead of being put to work in the broader economy."

Ahh yes, the oft repeated LIE.

Banks don't lend their depositors money. The borrower creates the money with his signature.

The currency flows into gold. The gold just sits there quietly and SAFELY.

It isn't accessible to be shrunken by fees or stolen. The states complain when somebody buys gold. What if they buy empty land,,, same thing. The difference is that the land can be taxed or confiscated.

Gold has the "quality" that there is no trust involved.
GOV has the "quality that there is NO trust merited.
GOV loves for you to invest in things that are either out-of-reach or non-portable.

Gold is nicely portable.

@mava

I don't think I'd go quite that far, many still have their heads stuck in the sand (or any orifice you'd care to think of).

When the music stops the people without any gold won't be looking for a chair, they will be shooting each other for food. And you won't be able to buy gold, for any amount of dollars.

Swiss banking may have been different but aparently their bankers weren't.

"Many people believe that both UBS and Credit Suisse are not in physical possession of all the allocated gold they currently store for customers, not to mention the unallocated gold they store for customers. If this is the case, both institutions should benefit significantly from the sale of western central bank gold reserves. "

Many people believe? I would agree and go further.

Like in "many people believe that the earth is round".

It is a certainty, SoundMoney. These banks work very hard to make it possible for some talking head on US TV to ask this question "how come the price of gold is not rising?". The answer, never mentioned on TV, is, of course, that the price of gold is rising, but for that to be visible people need to actually inquire about the price of gold and not paper fool's dream. When they are buying paper, they should not expect the price of paper to rise, unless there is a natural disaster that wipes forests, recycling plants, power grid and computer networks all at once.

Nithsdale is generally correct, except for his remark on commonwealth direction antedating the Austrian economics. US no longer cares for private property, there is no such thing as private property in America, and there lies a major root of all current problems.

Economics, being a real science, such as what is called "Austrian" (and no other, currently) can certainly show the way on how to deal with economic questions, provided that there is a desire to actually have an economy. Without private property there is no economy, current US does not desire to have any economy.

UBS is a primary dealer of the New York Federal Reserve Bank Corporation, and as all primary dealers, is very heavily influenced by the US. Given the size and businesses of both UBS and Credit Suisse, they are no longer traditional Swiss companies, but global companies with Swiss addresses. It could be argued that the actions UBS and Credit Suisse took were designed to lift the veil of banking secrecy from Switzerland, and it should also be remembered that both were instrumental in removing gold backing from Swiss Franc on May 1, 2000.

Many people believe that both UBS and Credit Suisse are not in physical possession of all the allocated gold they currently store for customers, not to mention the unallocated gold they store for customers. If this is the case, both institutions should benefit significantly from the sale of western central bank gold reserves.

Good article and as a result of Swiss banker actions their debt v. GDP is something like 70% now, if memory serves. No idea how much gold they have left as the shell game continues among the whales. Everyone appears to be scrambling for it right now, including the central banks. Would not be surprised to see the Swiss go hat in hand to the Asian alliance that's forming. Sad they folded a winning hand and the equity they had built into their system to a bunch financial criminals running a bluff.

@ nithsdale,

Cardozo and Brandeis served on the Supreme Court from from 1932-1938 and 1916-1939, respectively. Carl Menger's "Principles of Economics" was first published in 1871. Ludwig von Mises' "Socialism" was published in 1922.

Thus, your comment about the influence of these jurists predating the "Austrian economic geniuses" you to hold in contempt "by half a century" is patently false.

DB

I give up. What can you say to these people? Never trust anyone Leary slipped a micky to?

@ nithdale

NITHDALE: "This important 'dicta", now the law of the West (who hears about common law these days) antedates all your Austrian economic geniuses by half a century."

BISCHOFF: Quite so... . What to do about it? How about a constitutional amendment which provides freedom to disregard lower courts as precedence setting. The amendment could apply to all Supreme Court decision rendered after a certain date.

The proposal and ratification of such an ammendment could be a solution to returning common law. It would not require that Supreme Court decisions be disregarded as precedence. It merely lifts the requirement that higher court decisions be precedence setting, and it leaves lower court judges free to disagree with higher court decisions.

Yes indeed, UBS brought shame to Helvetia with all their crooked actions. My brother lost 90% of his holdings in UBS stocks. When you are retired that is a monumental hit. And thanks again to UBS, the IRS put pressure on all the Swiss banks and government to change the Swiss bank secrecy laws. As a result I received a letter from one of the popular smaller Swiss banks to close my account and transfer a very small amount of money out of the country. I bought Swiss Francs for 189 Euros per month, my small German pension pays me. After six years, you can calculate the amount quite easily. For this minute amount, the bank caved in to IRS demands! Shame to the Swiss government for giving in to the professional thieves at the IRS and the current gangster government. And shame again to UBS for starting this avalanche of losses to the Swiss economy and banking system.

Send your staff for a brief history of the law! THere is your answer to all your questions. There are thousands of books, papers, court decisions all rendered in fine prose regarding this same topic, all about "private property", "private persons".

The West, once governed by "common law", which tried to define Man's rights to his life, his work, his "things" made and bought and then his ability to will all to his heirs, was turned on its head in the mid 19th Century. In the USA, two men sitting on the US Supreme Court, sons of immigrants from Spain and Portugal, Cardozo and Brandeis, scrapped "common law" and began its replacement with "commonwealth law" in effect raising commune over person. Henceforth all good governance mandated that community took precedence over person and the well was established for taxes and fees and all sorts of fines etc. for anything anybody had to use or to keep "to maintain the common good".

This important 'dicta", now the law of the West (who hears about common law these days) antedates all your Austrian economic geniuses by half a century.

Boys, get with it. You are beginning to sound foolish!

More and more it is obvious that the Swiss are responding to pressure by the PTB. Responding as the PTB want, or not, will destroy them just as surely.

Ehm DB, there is no sales tax on gold in EUrope. Most EUropean countries have no capital gains tax on gold if one holds it for a longer time (mine sadly does tax it at 1,2%) and Europe didnt confiscate gold in the great depression like FDR did. Since the end of the classical goldstandard no EUropean country defaulted on gold. Unlike the USA. The ECB and member banks mark their gold to market. The USA treasury (note not the FED) marks its gold still at $42.22.

Reply from The Daily Bell

Thanks, Hugo. Did we imply the EU was about to tax gold? Our point was that elements of Swiss society are increasingly technocratic and this article represents a larger trend.

The more money put into circulation, the more there is to bid up prices. Posted by Jim Cardoza at Thursday, February 21, 2013

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Simply supply side economics as a currency policy, and with the same results!