Tag Archives: State Capitalism

Gold as the Silent Witness

Dan Norcini writes:

I wanted to post some brief comments to let some of the newer readers understand why many of us believe that there is a war being waged upon gold by the Central Banks of the West.

Let me start this off by quoting from none other than former Fed Chairman Alan Greenspan more than 40 years ago:

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … 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

What the former Fed Chairman was then saying was that absent a gold standard or some device for restraining the unlimited creation of fiat money, there was nothing to impede monetary officials from engaging in such activity to the extent that it would ultimately set in motion a process of inflation, which is really just another name for the erosion of the purchasing power of a nation’s currency by debasing it. Inflation was and is in essence, the transfer of wealth from one class to another.

Today we have the Fed engaging in the very process that Greenspan warned against back then. We also have the BOJ and the ECB effectively doing the same thing to an extent.

Unlike Silver, Gold is the main metal that most analysts and commentators look to when attempting to decipher whether or not inflation is a serious problem. That means the reference point of gold has become a target for Central Banks which want the world to believe that they can create unlimited amounts of funny money with absolutely ZERO impact on inflation levels. In other words, that they can conjure up wealth and produce prosperity with the electronic equivalent of a printing press and produce no serious inflationary impact by so doing.

A rising gold debunks their hubristic assertions to the contrary for it stands as a silent witness testifying against them. This is the reason the yellow metal is despised by so many Central Banks. It mocks their policies and displays their folly for all the world to see. Central Bankers, being the demigods that they are, will tolerate no rivals to their claims of economic omniscience. You see they have actually come to believe that it is their own wisdom and foresight which enables them to see through the fog that hinders and impedes our economic progress and that they are in a unique position to provide the rest of us with lasting prosperity. They attempt to do this by basically providing or withdrawing liquidity as they in their wisdom judge best and by the setting or manipulation of interest rates.

Those of us who believe that it is free market capitalism and the industry and efforts of mankind that produce wealth and prosperity would beg to differ but that is another story altogether. I would add that it is my opinion that the world would be better off without this plague of locusts that actually devour a nation’s wealth but the fact is that they are here.

While they are here gold will attempt to move in such a manner that it either blesses or curses their policies. Now we all would love to have our policies approved by the vote of the market but what about those times in which the market frowns on our course of action and refuses to smile upon it? Why this is but a simple matter – attack the messenger! If one can somehow manage to keep the price of gold under wrap so that it does not move sharply higher then one can attempt to make the claim that inflation is not a serious problem. The comments usually go something like this:

“Well Jerry, we are looking at the gold price and from what we can see, that while it is definitely higher, it is not soaring out of control. The market may be pricing in some gradual inflation but the action in the gold price is telling us that any fears of inflation getting out of control are definitely unwarranted. Besides, we all agree that some inflation is a good thing because the alternative is deflation and no one wants to see that”.

Imagine Fed Chairman Ben Bernanke testifying before Congress saying that the current rise in prices of many goods is only “temporary” and “relatively modest” if the gold price were soaring beyond $1650 and higher! Do you think anyone would take anything that the Chairman said seriously? Copper can soar higher and most will not notice it. Even if it does, it is generally explained as a positive because we are told it is a sign of strong economic growth ahead. Crude oil and energy prices can rocket higher and that can be attributed to geopolitical unrest among oil producing nations. Food can rise sharply and everyone notices that but such things are often explained away by citing weather conditions, supply constraints, etc. but a rising gold price? How does one explain that away?

The only reason that gold has a sustained price rise is because of a lack of confidence in the monetary system. It does not rise sharply because of such things as jewelry demand or industrial demand – it rises when fear, distrust, doubt, suspicion and uncertainty over Central Bank policy reigns. It rises when REAL interest rates are negative and investors understand the insidious process of currency debauchment practiced by these monetary authorities is underway. It thus cries aloud and issues a warning to those who can hear it and what it shouts displeases many Central Bankers because they are among those who while they despise its message, are all too keenly able to hear that message.

Thus the messenger, the prophet, the oracle, must be silenced or at the very least, his message blunted, toned down, marginalized, trivialized by whatever means possible. The mechanism employed to do just this is a subject for another time and place. Suffice it to say for now, without the efforts by the monetary officials of the West to discredit gold, it would be trading considerably higher. Even at that however, the ancient metal of kings refuses to go quietly and docilely into the night. It will yet have the final say.

What Friends of Freedom Can Learn from the Socialists — To Win Freedom! by Richard M. Ebeling

Richard Ebeling writes:

On March 14, 1883, a German philosopher living in exile in London passed away. When he was buried three days later in a modest grave where his wife had been laid to rest two years earlier, fewer than ten people were present, half of them family members. His closest friend spoke at the grave-site and said, “Soon the world will feel the void left by the passing of this Titan.” But there was, in fact, little reason to think that the deceased man or his long, turgid, and often obscure writings would leave any lasting impression on the world of ideas or on the course of human events.

That man was Karl Marx.

Advocates of liberty often suffer bouts of despair. How can the cause of freedom ever triumph in a world so dominated by interventionist and welfare-statist ideas? Governments often give lip service to the benefits of free markets and the sanctity of personal and civil liberties. In practice, however, those same governments continue to encroach on individual freedom, restrict and regulate the world of commerce and industry, and redistribute the wealth of society to those with political power and influence. The cause of freedom seems to be a lost cause, with merely temporary rear-guard successes against the continuing growth of government.

What friends of freedom need to remember is that trends can change, that they have in the past and will again in the future. If this seems far-fetched, place yourself in the position of a socialist at the time that Marx died in 1883, and imagine that you are an honest and sincere advocate of socialism. As a socialist, you live in a world that is predominately classical liberal and free market, with governments in general only intervening in minimal ways in commercial affairs. Most people—including those in the “working class”—believe that it is not the responsibility of the state to redistribute wealth or nationalize industry and agriculture, and are suspicious of government paternalism.

How could socialism ever be victorious in such a world so fully dominated by the “capitalist” mindset? Even “the workers” don’t understand the evils of capitalism and the benefits of a socialist future! Such a sincere socialist could only hope that Marx was right and that socialism would have to come—someday—due to inescapable “laws of history.”

Yet within 30 years the socialist idea came to dominate the world. By World War I the notion of paternalistic government had captured the minds of intellectuals and was gaining increasing support among the general population. Welfare-statist interventionism was replacing the earlier relatively free-market environment.

The socialist ideal of government planning was put into effect as part of the wartime policies of the belligerent powers beginning in 1914, and also lead to the communist revolution in Russia in 1917, the rise to power of fascism in Italy in 1922, the triumph of National Socialism (Nazism) in Germany in 1933, and the implementation of FDR’s New Deal policies in 1933, as well.

Socialism triumphed during that earlier period of the last decades of the 19th and early decades of the 20th centuries because while socialists advocated collectivism, they practiced a politics of individualism. They understood that “history” would not move in their direction unless they changed popular opinion. And implicitly they understood that this meant changing the minds of millions of individual people.

So they went out and spoke and debated with their friends and neighbors. They contributed to public lectures and the publishing of pamphlets and books. They founded newspapers and magazines, and distributed them to anyone who would be willing to read them. They understood that the world ultimately changes one mind at a time—in spite of their emphasis on “social classes,” group interests, and national conflicts

They overcame the prevailing public opinion, defeated powerful special interests, and never lost sight of their long-term goal of the socialist society to come, which was the motivation and the compass for all their actions.

The Lessons for Freedom

What do friends of freedom have to learn from the successes of our socialist opponents? First, we must fully believe in the moral and practical superiority of freedom and the free market over all forms of collectivism. We must be neither embarrassed nor intimidated by the arguments of the collectivists, interventionists, and welfare statists. Once any compromise is made in the case for freedom, the opponents of liberty will have attained the high ground and will set the terms of the debate.

Freedom advocate, Leonard E. Read, once warned of sinking in a sea of “buts.” I believe in freedom and self-responsibility, “but” we need some minimum government social “safety net.” I believe in the free market, “but” we need some limited regulation for the “public good.” I believe in free trade, “but” we should have some form of protectionism for “essential” industries and jobs. Before you know it, Read warned, the case for freedom has been submerged in an ocean of exceptions.

Each of us, given the constraints on his time, must try to become as informed as possible about the case for freedom. Here, again, Read pointed out the importance of self-education and self-improvement. The more knowledgeable and articulate we each become in explaining the benefits of the free society and the harm from all forms of collectivism, the more we will have the ability to attract people who may want to hear what we have to say.

Another lesson to be learned from the earlier generation of socialists is not to be disheartened by the apparent continuing political climate that surrounds us. We must have confidence in the truth of what we say, to know in our minds and hearts that freedom can and will win in the battle of ideas. We must focus on that point on the horizon that represents the ideal of individual liberty and the free society, regardless of how many twists and turns everyday political currents seem to be following. National, state, and local elections merely reflect prevailing political attitudes and beliefs. Our task is to influence the future and not allow ourselves to be distracted or discouraged by who gets elected today and on what policy platform.

Let us remember that over the last hundred years virtually every form of collectivism has been tried—socialism, communism, fascism, Nazism, interventionism, welfare statism—and each has failed. There are very few today who wax with sincere enthusiasm that government is some great secular god that can solve all of mankind’s problems. Statist policies and attitudes continue to prevail because of institutional and special-interest inertia; they no longer possess the political, philosophical, and ideological fervor that brought them to power in earlier times.

There is only one “ism” left to fill this vacuum in the face of collectivism’s failures. It is classical liberalism, with its conception of the free man in the free society and the free market, grounded in the idea of peaceful association and individual rights. If we keep that before us, we can and will win liberty in our time—for ourselves and our children.

Quote of the Day

“Another major reason why crime is increasing is that crime pays, and in our tax-ridden, regulation crushed economy, many people cannot economically survive through low-end jobs. … ‘The income that offenders can earn in the world of crime, as compared with the world of work, all too often makes crime appear to be the better choice.’ In Washington, D.C., it costs $7,000 in city fees to open a pushcart. In California, up to eighty federal and state licenses are required to open a small business. In New York, a medallion to operate a taxicab costs $150,000. More than 700 occupations in the United States require a government license. Throughout the country, church soup kitchens are being closed by departments of health. No wonder so many people turn to crime and violence to survive.” — Jacob G. Hornberger American author, journalist, politician, founder and president of the Future of Freedom Foundation

Source: Will You be Safer if Guns are Banned?, The Tyranny of Gun Control, 9-10 (1997).

Understanding “Code Talk”

Click on the following link:

The Importance of Using a Code Talker (Especially when dealing with the government)

10 Things That Would Be Different If The Federal Reserve Had Never Been Created

From EconomicCollapseBlog.com:

The vast majority of Americans, including many of those who believe that they are “educated” about the Federal Reserve, do not really understand how the Federal Reserve really makes money for the international banking elite.  Many of those opposed to the Federal Reserve will point to the record $80.9 billion in profits that the Federal Reserve made last year as evidence that they are robbing the American people blind.  But then those defending the Federal Reserve will point out that the Fed returned $78.4 billion to the U.S. Treasury.  As a result, the Fed only made a couple billion dollars last year.  Pretty harmless, eh?  Well, actually no.  You see, the money that the Federal Reserve directly makes is not the issue.  Rather, the “magic” of the Federal Reserve system is that it took the power of money creation away from the U.S. government and gave it to the bankers.  Now, the only way that the U.S. government can inject more money into the economy is by going into more debt.  But when new government debt is created, the amount of money to pay the interest on that debt is not also created.  In this way, it was intended by the international bankers that U.S. government debt would expand indefinitely and the U.S. money supply would also expand indefinitely.  In the process, the international bankers would become insanely wealthy by lending money to the U.S. government.

Every single year, hundreds of billions of dollars in profits are made lending money to the U.S. government.

But why in the world should the U.S. government be going into debt to anyone?

Why can’t the U.S. government just print more money whenever it wants?

Well, that is not the way our system works.  The U.S. government has given the power of money creation over to a consortium of international private bankers.

Not only is this unconstitutional, but it is also one of the greatest ripoffs in human history.

In 1922, Henry Ford wrote the following….

“The people must be helped to think naturally about money. They must be told what it is, and what makes it money, and what are the possible tricks of the present system which put nations and peoples under control of the few.”

It is important to try to understand how the international banking elite became so fabulously wealthy.  One of the primary ways that this was accomplished was by gaining control over the issuance of national currencies and by trapping large national governments in colossal debt spirals.

The U.S. national debt problem simply cannot be fixed under the current system.  U.S. government debt has been mathematically designed to expand forever.  It is a trap from which there is no escape.

Many liberals won’t listen because they don’t really care about ever paying off the debt, and most conservatives won’t listen because they are convinced we can solve the national debt problem if we just get a bunch of “good conservatives” into positions of power, but the truth is that we have such a horrific debt problem because it was designed to be this way from the beginning.

So how would America be different if we could go back to 1913 and keep the Federal Reserve Act from ever being passed?  Well, the following are 10 things that would be different if the Federal Reserve had never been created….

#1 If the U.S. government had been issuing debt-free money all this time, the U.S. government could conceivably have a national debt of zero dollars.  Instead, we currently have a national debt that is over 14 trillion dollars.

#2 If the U.S. government had been issuing debt-free money all this time, the U.S. government would likely not be spending one penny on interest payments.  Instead, the U.S. government spent over 413 billion dollars on interest on the national debt during fiscal 2010.  This is money that belonged to U.S. taxpayers that was transferred to the U.S. government which in turn was transferred to wealthy international bankers and other foreign governments.  It is being projected that the U.S. government will be paying 900 billion dollars just in interest on the national debt by the year 2019.

#3 If the U.S. government could issue debt-free money, there would not even have to be a debate about raising “the debt ceiling”, because such a debate would not even be necessary.

#4 If the U.S. government could issue debt-free money, it is conceivable that we would not even need the IRS.  You doubt this?  Well, the truth is that the United States did just fine for well over a hundred years without a national income tax.  But about the same time the Federal Reserve was created a national income tax was instituted as well.  The whole idea was that the wealth of the American people would be transferred to the U.S. government by force and then transferred into the hands of the ultra-wealthy in the form of interest payments.

#5 If the Federal Reserve did not exist, we would not be on the verge of national insolvency.  The Congressional Budget Office is projecting that U.S. government debt held by the public will reach a staggering 716 percent of GDP by the year 2080.  Remember when I used the term “debt spiral” earlier?  Well, this is what a debt spiral looks like….

#6 If the Federal Reserve did not exist, the big Wall Street banks would not have such an overwhelming advantage.  Most Americans simply have no idea that over the last several years the Federal Reserve has been giving gigantic piles of nearly interest-free money to the big Wall Street banks which they turned right around and started lending to the federal government at a much higher rate of return.  I don’t know about you, but if I was allowed to do that I could make a whole bunch of money very quickly.  In fact, it has come out that the Federal Reserve made over $9 trillion in overnight loans to major banks, large financial institutions and other “friends” during the financial crisis of 2008 and 2009.

#7 If the Federal Reserve did not exist, it is theoretically conceivable that we would have an economy with little to no inflation.  Of course that would greatly depend on the discipline of our government officials (which is not very great at this point), but the sad truth is that our current system is always going to produce inflation.  In fact, the Federal Reserve system was originally designed to be inflationary.  Just check out the inflation chart posted below.  The U.S. never had ongoing problems with inflation before the Fed was created, but now it is just wildly out of control….

#8 If the Federal Reserve had never been created, the U.S. dollar would not be a dying currency.  Since the Federal Reserve was created, the U.S. dollar has lost well over 95 percent of its purchasing power.  By constantly inflating the currency, it transfers financial power away from those already holding the wealth (the American people) to those that are able to create more currency and more government debt.  Back in 1913, the total U.S. national debt was just under 3 billion dollars.  Today, the U.S. government is spending approximately 6.85 million dollars per minute, and the U.S. national debt is increasing by over 4 billion dollars per day.

#9 If the Federal Reserve did not exist, we would not have an unelected, unaccountable “fourth branch of government” running around that has gotten completely and totally out of control.  Even some members of Congress are now openly complaining about how much power the Fed has.  For example, Ron Paul told MSNBC last year that he believes that the Federal Reserve is now more powerful than Congress…..

“The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress.”

#10 If the Federal Reserve had never been created, the American people would be much more free.  We would not be enslaved to this horrific national debt.  Our politicians would not have to run around the globe begging people to lend us money.  Representatives that we directly elect would be the ones setting national monetary policy.  Our politicians would be much less under the influence of the international banking elite.  We would not be at the mercy of the financial bubbles that the Fed has constantly been creating.

There is a reason why so many of the most prominent politicians from the early years of the United States were so passionately against a central bank.  The following is a February 1834 quote by President Andrew Jackson about the evils of central banking….

I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. You tell me that if I take the deposits from the Bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out and, by the Eternal, (bringing his fist down on the table) I will rout you out.

But we didn’t listen to men like Andrew Jackson.

We allowed the Federal Reserve to be created in 1913 and we have allowed it to develop into an absolute monstrosity over the past century.

Now we are drowning in debt and we are on the verge of national bankruptcy.

Will the American people wake up before it is too late?

Austrian Economics in Fortune Magazine

From Fortune Magazine:

Will the Fed be able to survive Ron Paul?

December 14, 2010 11:48 am

The erstwhile presidential candidate and soon to be head of Congressional oversight of the Federal Reserve talks gold, jobs and the presidency with Fortune.

If there’s anything to be said about U.S. Congressman Ron Paul, he sure is persistent. And lately, that inner flame that’s helped him gain the reputation for sometimes being the “G.O.P. loner” appears to be paying off.

The soft-spoken obstetrician has represented the 14th District of Texas on and off since 1977, spending much of his political career arguing that the Federal Reserve is evil for America and far too secretive. He doesn’t see why there’s so much faith in paper money, including the U.S. dollar. If Paul had it his way, there’d be a return to the gold standard. He even laid out his case in his book, End the Fed.

What’s more, Paul is a big believer in Austrian economic thought – the idea that government has no role in regulating the economy. And for years, he’s supported keeping Congress from any action not explicitly authorized in the Constitution, or that he sees as wasteful spending, including – as a recent New York Times article highlighted – on issues as ceremonial as honoring Mother Teresa with the Congressional Gold Medal.

No doubt Paul’s views fall outside the mainstream. At times, his thoughts are arguably off-putting and easy to brush off as extremist political rhetoric. Even Libertarians don’t always see eye-to-eye with the Texas politico.

Lately though Paul’s views are garnering the attention that he and supporters have long been waiting for. Earlier this month, Paul was picked to head the House subcommittee on domestic monetary policy. That means he will help oversee the body he’s opposed to — the Federal Reserve — as well as currency and the dollar’s value.

If anything, it appears the timing somehow worked out for beliefs that Paul has held for decades. The congressman’s backing has grown considerably with the rise of the Tea Party, whose frustrations with government bailouts of big banks and corporations following the financial crisis seem to fall in line with Paul’s views.

I caught up with Paul this week to talk about his new role, the Fed, how the world could possibly return to the gold standard and the 2012 presidential election. The following is a lightly edited transcript of our talk.

What are the Federal Reserve’s shortcomings?

They’re doing a job that’s impossible to do. So it’s not a single person’s fault. It’s not just former Chairman Alan Greenspan or just current Chairman Ben Bernanke. It’s the assumption that anybody knows what interest rates should be, or the assumption that they know what money supply should be, or the assumption that they can have stable prices or the assumption that they could deal with unemployment.

Do you think we’re better off without a Central Bank?

Sure, it’s better off that we don’t have depressions and inflations and financial chaos and the problems that we face. We of course wouldn’t have this backdoor financing of big government fighting wars overseas and getting people to depend on the welfare state. None of that can happen without a Federal Reserve.

What do you think of the Fed’s latest move to start pumping $600 billion into the economy in hopes to boost the recovery through huge purchases of long-term bonds?

I think it’s terrible. They got us into trouble because there was too much quantitative easing. I mean it was a continuous inflation and artificially low interest rates that Bernanke gave us – he gave us all the bubbles so you can’t solve all the problems of quantitative easing with more of it. So we had one, we’re on number two. But actually we had it under Bernanke. They didn’t call it that but it was essentially the same thing – massive monetary inflation with interest rates way lower than the market.

So what do you think the economy would look like without the Fed?

We’d probably have a much healthier economy – it wouldn’t be so fragile. Nobody would be worrying about currency exchange rates and people wouldn’t be in and out of currencies and spending all their energy doing what they’re doing. Also, we wouldn’t have a situation where the Fed creates money and hands it out for free and let’s the banks make billions of dollars. And the poor people who are retired and have CDs get nothing and because of the downturn in the cycle, which the Fed creates, people lose their jobs and lose their houses. You wouldn’t have any of that.

This was all very clearly predicted by Austrian economic theory and it’s come about and it’s very disturbing to the Fed because they’re going to have to recognize that their theories are completely wrong and they’re not about to do that gracefully.

As chairman of the House subcommittee on domestic monetary policy, which among other things oversees the Federal Reserve, you’ve mentioned you will renew your push for a full audit of the Fed. What do you hope this will do?

It would tell us who the beneficiaries are.  They’ve released recently some information but they really didn’t tell us exactly about everything and where the money has gone and what kind of collateral they have. The people in this country deserve to know who are the beneficiaries and their budget and what they hand out is bigger than the Congress, which is pretty amazing. They’re off budget. They’re not responsible to anybody.

Who do you think the beneficiaries are?

We don’t know exactly but obviously banks and big corporations and foreign central banks and foreign governments.

How do you think these corporations have benefited from the Fed?

They receive free money. I mean they tide them over. The free market would have allowed General Motors (GM) to go bankrupt and the various companies that got the benefits. The banks would have had to reassess and the bad debt would have been liquidated rather than have all the derivatives and the illiquid assets being dumped on the taxpayer, which is what the Fed holds. Instead of the people who made all the money in the boom times suffering they got bailed out and the people who got stuck with it will be the American taxpayer.

You’ve long advocated returning the world to the gold standard. Where do you see the US dollar going?

The world will eventually give up on the dollar. That’s why the markets are so shaky – they don’t know what to do. Gold prices are up and commodity prices are starting up. And most people realize that the world will not be suckers forever and just take our dollars at will. I mean if we can create trillions of dollars and expect to buy goods and services someday they’re going to put their foot down and I think we’re just starting to see the signs of that happening.

The euro conveys no more confidence than the dollar. All the currencies are paper money. So the only way you can measure the value of the currency is by something that has been used for 6,000 years and that is in its relationship to gold. And that of course shows that all the currencies are weakening, which means in time all the crisis will go up. So the measurement has to be on what the money purchases.

I think what’s going to happen is what’s happened in the last 10 years. People will start using gold as money, shift some of their paper assets into gold. Purchasing power of gold goes up and it will go up in all currencies, even though there may be minor fluctuations where the yen may do better than the euro – that sort of thing.

Do you really think America could adopt the gold standard? How can this practically happen?

Not only the faith in the gold standard, it’s the lack in confidence in paper and insanity of creating money out of thin air. Throughout history, we’ve seen that money ought to be a real asset whether it’s silver or whether it’s gold depending on the situation. People always want something of real value.

Look at how many people have money in exchange-traded funds for gold. Billions and billions of dollars. I’ve always considered myself being on the gold standard. I studied this in the 1960s and the predictions made that Bretton Woods couldn’t work. When it failed in 1971 it really caught my attention. Back then you can buy gold at $35 an ounce. I put my reserves in gold and it hasn’t hurt at all. People who would have had at the same time parked a bunch of paper dollars back then they would have lost about 80% of their purchasing power where the purchasing power of gold has skyrocketed.

But then some would argue that investment in gold is also a bubble. What would you say about that?

They can believe it, but I think it’s the bonds that are at a bubble and the dollar is at a bubble. But no, I don’t consider that a bubble at all. There will be corrections – you can have gold go down $200 or $300 and it wouldn’t prove a thing.

Although I wrote the book End the Fed, I don’t say that you should end the Fed in one day. All I say is allow the constitution to be used – you can use gold and silver as legal tender, that’s what the law still says. We have multiple currencies being used around the world all the time. There’s no reason why we can’t have a couple of currencies circulating here in this country. So we should be allowed to have gold and silver as legal tender to pay our debt.

How do you think the economy would improve if the gold standard were adopted?

The transition is one thing, but if you were on a gold standard the economy would be many, many fold stronger and you wouldn’t have the business cycle. You wouldn’t have to go through booms and busts. Prices would be relatively stable, the purchasing power of your money would be stable, balance of payments would be adjusted automatically.

But gold over the century has increased in supply by 2% to 3%. If more people are demanding gold and there doesn’t seem to be enough physical gold, it pushes the purchasing power of gold up. Then the incentive grows for the people to mine gold. So it has worked many many times over hundreds if not thousands of years of history.

Do you want to end the Fed?

Well, I don’t expect to. The Fed’s going to end itself when they destroy the system. So yes I would end the Fed but I would do it gradually and have a transition. I would let people voluntarily opt out and not be forced to use depreciating money. Just think about how terrible it is that people make 1% or less on a certificate of deposit and banks get money for free and then they buy Treasury bills for 3% or 4% making billions of dollars. It’s just not fair and people are waking up to this.

You’re a big believer in Austrian economics, which holds that government does not have a role in regulating the economy. Some people would argue it was the lack of government regulations that contributed to the financial crisis. What would you say to something like that?

I think it was too much regulation. What they did was create the imbalance by keeping artificially low interest rates, which causes excessive debt and mal investments. For instance, interest rates were low, builders built too many houses, prices of houses seemed to go up, seemed like it would last forever, congress comes in and they pass a law, affirmative action that you must give loans to everybody even people who don’t qualify.

Will you run for president in 2012?

Sure, there’s always a chance. Probably depends on my mood come next January or February. I have not made up my mind. I have a lot of people supporters who are very anxious for me to do it. Right now I’m totally undecided.

It seems a lot of presidential candidates will neutralize their positions on certain touchy topics.Would you ever characterize yourself as extreme?

No, I think what we have is extreme. It’s out of wack. I mean I want to balance the budget – I don’t know why that would be extreme. I want limited government, I wanted personal liberty, I want to bring our troops home.

But some would consider ending the Fed is a bit extreme, don’t you think?

No, I think printing money is extreme and crazy. I think the obscenity is allowing the Federal Reserve to print $3.3 trillion and we don’t even know where it went. That to me is what’s so extreme. And that’s what the American people are waking up to. Government is extremely out of control. That is what I think everybody agrees on in the Tea Party movement.

Volt Fraud At Government Motors

More evidence of the error of “central planning”…

From IBD:

Volt Fraud At Government Motors

Posted 10/19/2010 06:55 PM ET

Standing behind the first lithium-ion battery off the Brownstown, Mich., assembly line of the Chevrolet Volt in January were, from left, Rep. Sander...Standing behind the first lithium-ion battery off the Brownstown, Mich., assembly line of the Chevrolet Volt in January were, from left, Rep. Sander… View Enlarged Image 

Green Technology: Government Motors’ all-electric car isn’t all-electric and doesn’t get near the touted hundreds of miles per gallon. Like “shovel-ready” jobs, maybe there’s no such thing as “plug-ready” cars either.

The Chevy Volt, hailed by the Obama administration as the electric savior of the auto industry and the planet, makes its debut in showrooms next month, but it’s already being rolled out for test drives by journalists. It appears we’re all being taken for a ride.

When President Obama visited a GM plant in Hamtramck near Detroit a few months ago to drive a Chevy Volt 10 feet off an assembly line, we called the car an “electric Edsel.” Now that it’s about to hit the road, nothing revealed has changed our mind.

Advertised as an all-electric car that could drive 50 miles on its lithium battery, GM addressed concerns about where you plug the thing in en route to grandma’s house by adding a small gasoline engine to help maintain the charge on the battery as it starts to run down. It was still an electric car, we were told, and not a hybrid on steroids.

That’s not quite true. The gasoline engine has been found to be more than a range-extender for the battery. Volt engineers are now admitting that when the vehicle’s lithium-ion battery pack runs down and at speeds near or above 70 mph, the Volt’s gasoline engine will directly drive the front wheels along with the electric motors. That’s not charging the battery — that’s driving the car.

So it’s not an all-electric car, but rather a pricey $41,000 hybrid that requires a taxpayer-funded $7,500 subsidy to get car shoppers to look at it. But gee, even despite the false advertising about the powertrain, isn’t a car that gets 230 miles per gallon of gas worth it?

We heard GM’s then-CEO Fritz Henderson claim the Volt would get 230 miles per gallon in city conditions. Popular Mechanics found the Volt to get about 37.5 mpg in city driving, and Motor Trend reports: “Without any plugging in, (a weeklong trip to Grandma’s house) should return fuel economy in the high 30s to low 40s.”

Car and Driver reported that “getting on the nearest highway and commuting with the 80-mph flow of traffic — basically the worst-case scenario — yielded 26 miles; a fairly spirited backroad loop netted 31; and a carefully modulated cruise below 60 mph pushed the figure into the upper 30s.”

This is what happens when government picks winners and losers in the marketplace and tries to run a business. We are not told that we will be dependent on foreign sources like Bolivia for the lithium to be used in these batteries. Nor are we told about the possible dangers to rescuers and occupants in an accident scenario.

There’s the issue of asking grandma to use her electricity for the three or four hours necessary to recharge your car so you can get home to charge it again. Where’s the electricity going to come from considering that solar and wind don’t work when the sun don’t shine and the wind doesn’t blow? We aren’t building any nukes.

And since electricity rates are necessarily going to skyrocket as a result of this administration’s energy policies and fondness for cap-and-trade, what’s the true cost of operating a not-so-all-electric car like the Volt?

In 2008, candidate Obama pledged to put 1 million plug-in vehicles on the road by 2015. Not likely. It was a tough sell when we thought it was all-electric and could get 230 mpg. It will be a tougher sell now that we find it’s a glorified Prius with the price tag of a BMW that seats only four because of a battery that runs down the center of the car.

President Obama likes to talk about not giving the GOP back the keys to the car. It’s his industrial policy and central planning that have driven us into the ditch.