Jim Rickards was interviewed today alongside Jim Grant on Bloomberg News today and it was a fascinating interview, as it always is with either of them, but especially together it was excellent. You can see the interview here. He’s the author of the just released book Currency Wars, which every Austrian should read, not to mention everybody else. He’s a self-described Austrian (partly) and a major advocate for gold, and much of the book has to do with gold (at least I think, I haven’t read it yet as it hasn’t arrived from Amazon yet). But he’s also a serious insider when it comes to global finance. In the above interview he mentions having recently participated in a Pentagon Financial War Game where instead of missiles and tanks they were dealing with stocks and bonds. He was also involved somehow in the Iran Hostage Crisis in 1980.
In short, he’s a seriously brilliant guy who knows what’s up, and I just wanted to put this out there that people on this site should read this book. I personally can’t wait to get my hands on it. You can find a host of good interviews with Rickards on Youtube, but one of my favorites is his interview with James Turk of GoldMoney, which you can find here.
Rickards made the point that I’ve been trying to make lately. Going back to a gold standard would actually benefit the l33t because, assumeing that they own most of the gold, they would own the stuff that would be used as money; meanwhile, everyone else holding stocks, bonds, etc. denominated in dollars, euro, etc. would get wiped out during the transition. (It would be like when a currency gets devalued.) This is why I’m optimistic that we are heading for a gold standard (which would then be debased all over again).
@Muffinburg: Exactly, that’s why all this “oh my god, you want to go back to the GOLD STANDARD???” knee-jerk response to Austrian theory is so much crap; we don’t espouse the gold standard, we espouse market money and competition in the production of money. In the short term, gold likely would not be money precisely because most of it has been hoarded by the goat-sacrificing, baby-eating, sociopaths who already own 95% of the planet.
What are you talking about? How would a free market in money prevent gold from capturing a significant piece of such market? What does it matter who owns what % of gold today? If your (paranoid) accusations are correct, who’s stopping you (or anyone else) from selling paper (currency, stocks, bonds), perhaps even borrowing in said paper at low rates, and buying as much gold and real property as you want/can right now? Would you also include Ron Paul into your cabal of “sociopathic gold hoarders”?
Daniel, I was replying to Clayton’s post. I included your name because he agreed with yours. Sorry, I should not have done that. I’ll edit your name out of it.
Flipped through the book in the store and, on first glance, it looked too basic for someone who is reasonably well read on the monetary issues, so didn’t buy it. (Sections on “Monetarism”, “Keynesianism”, a graph of the normal distribution bell curve, etc.) If anyone here has read it I’d love to hear their impressions.
After the collapse of the Barre regime in Somalia, there was nothing to induce people to continue to use Somali shillings besides market demand for them and, guess what, people continued using them for small transactions because they worked. People were free to use gold coins or US dollars or anything else for money yet these did not become money because they were simply too valuable for anything but very large transactions. I’m not sure what the situation is today but the last I knew, Somalia had several co-circulating currencies, including the old Somali shilling.
See above. If I’m a merchant in a post-fiat money world, why the hell would I demand my customers to pay in a currency which they do not have on hand and which is too costly for them to exchange what they do have in order to get??? No, I will accept the prevalent currency(ies) and the prevalent currency(ies) will be whatever the market chooses.
That makes no sense whatsoever.
Of course not. I own gold. I’m not dissing gold. You gold-bugs (yes, some of you are gold-bugs) need to quit being so hyper-sensitive to any suggestion that gold may not become hand-to-hand money in a fiat collapse scenario. It’s only common sense. For most of history wherever silver and gold have co-circulated, gold has usually been more valuable - it has sometimes been called “the King’s money” because of its association with nobility and elites. Silver has, in most places, been the hand-to-hand money of the masses. If we experience a fiat-money collapse, I expect silver - not gold - to be the first commodity metal to begin circulating as a hard money.
Clayton, I’m not a gold bug (whatever that means) either. No idea where you got this from. I’ve repeatedly been a proponent of a free market in money. What bugged me most about your post was the unexpectedly strong language you used to describe the gold “hoarders”. It seems like there is some misunderstanding – for which I may partially be reponsible for – and I don’t care to invest any more time into resolving it so I’ll let it go.
@z: The “gold hoarders” was a reference to the Old Money establishment which controls the central bank gold holdings (approx. 50% of all above-ground gold) and, I believe, accumulates the vast majority of private gold production into their private family coffers. These are the people who really understand that gold is, in fact, money and hoard it for that reason while doing their utmost to force the rest of us to hold their worthless paper. These are the baby-eating, goat-sacrificing sociopaths that rule the world.