"ricochetboy" <philzberg@e...> wrote:
The price of gold has been systematically suppressed by the trmporary
delusion of the public that the fractional reserve fiat system is
working and can work indefinitely
This "temporary delusion" has been operating for a quarter century, in which
real GDP (in 1992 dollars) has grown from $5 trillion to $10 trillion. Do
you date the fiat system from the 1971 closing of the gold window, or the
1913 creation of the Fed? If the latter, then that quarter century can be
expanded to the half-century that includes the postwar golden age of high
growth and low inflation. At some point, you have to admit that being a
goldbug is a religion, impervious to empirical refutation.
Bill Bonner loves to tell the
story of a bbell hop in Berlin who kept the gold coins given him as
tips by wealthy patrons sooon after the war. By the time the
hyperinflation of the twenties was over, these gold coins could pay
off the mortgae on the whole hotel.
You might as well tell us a story about the Black Death of 1348. We've
learned a little about epidemics and hyperinflation since these respective
I do not know when it will happen, this month, this year or
maybe in a hundred years,
How about a thousand? How many millennia of mid-three-figure-dollar gold
prices would it take to convince you that fiat currency can work?
but history says that fiat money allweys
end in trdgedy.
History is subject to progress. For example, spell checkers get invented.
David Rhodes <dfrhodes@y...> wrote:
why is it that whenever someone tries
to debunk gold they always 'conveniently' reference
1980 or 1981 as the starting year? Was it not then
gold was at an all time high against the dollar? hmm..
I didn't reference the $850 record high of 1980, I referenced the $400 price
of 1982, for the obvious reason that 1982 is the start of the current era of
low dollar inflation that Phil untenably claims is illusory.
I am also curious about your cynicism towards Puplava
when you said - "EVERY homeowner knows that the point
of buying is to stop paying rent." I think this is a
grand over-generalization about homeowners. A major
aspect of the Austrian School states that is
essentially impossible to second guess everyone's
intentions for why they choose to purchase X over Y or
none at all.
Give me the name of a homeowner who does not know that owning the home means
they now do not have to pay rent to control who occupies it. Until you do,
my claim stands.
For instance, someone could buy a second home for
investment, vacationing or for in-laws - without ever
having the intention to rent it out. The way houses
are constructed or located also makes some of them
unsuitable for renting..conditions that would have
impacted their purchasing decision.
So at best, OER is distorted as it doesn't accommodate
variances between the two markets.
A recent National
<http://www.mortgagenewsdaily.com/382005_Second_Homes.asp> Association of
Realtors study drastically increased the usual estimates of
non-owner-occupied homes, but it still found that only 6% of homes are
vacation homes, and only 11% of the nation's 116 million homes are neither
rented nor owner-occupied. The study seems not to have included "in-law" or
"unsuitable for renting" homes as categories, presumably because they are
insignificant. Thus it's pretty clear that the overwhelming majority of
homes yield either actual or equivalent rent to their owners.
And why use the OER method just for housing?
Why not convert all capital expenses to services?
After all you can rent computers, cars,furs, cell
When consumers buy or rent these items for consumption/enjoyment rather than
production/investment, they are not capital goods, but rather durable goods.
The answer to your question is surely that, for all the expenditure groups
<http://www.bls.gov/cpi/cpi1998c.htm> in the CPI, the only other
significant kinds of durable goods besides shelter are vehicles and
household furnishings. These goods differ radically from shelter in how
long they are used after purchase, and the extent to which they retain
resale value. If a durable good only endures for a few years and only
retains a fraction of its purchase price, then amortizing its purchase price
is a perfectly adequate way to measure how much such a good costs a
For technical background on the CPI, see
http://www.bls.gov/opub/hom/homch17_a.htm. It's just not tenable to claim
that the CPI is part of a conspiracy to hide the alleged failure of the
dollar as a fiat currency. Such claims only increase the
self-marginalization of the Libertarian Party.
2004 Libertarian candidate for Congress, CA14 (Silicon Valley)