Manmohan, while returning from the G-20 meet, spoke to reporters aboard his special plane, during which he said:
“There is one more message and that relates to the harm that excessive speculation can do. As Lord Keynes said: Speculators are harmless as bubbles on a steady stream of enterprise. But the position is serious if enterprise becomes a bubble on the whirlpool of speculation. When the capital development of a country becomes the by-product of the activities of a casino, the job is likely to be ill-done."
Actually, casinos are more honest than central banks. When you return your chips, casinos give you cash. But the central banker goes on and on issuing notes without ever redeeming them for real money. And that is the precise cause of this Crash.
What do we do?
First, we must have casinos everywhere!
Second: We must have competing suppliers of private money – GOLD.
The government money monopoly must be ended.
Note that the newspapers today are full of stories about the CAT entrance examination to the IIMs. This shows that all our young people are happy to compete. There is CAT, there is the JEE for the IITs, and there are the tough civil service examinations in which young people face intense competition.
But there are people in the country, very rich people, who do not want to compete. There are the protected industrialists, there are the auto MNCs who have opened shop here but do not want to allow direct car imports, including used car imports, and now even the head of the mighty government company that makes steel, SAIL, wants protection.
Ditto with the money: they do not want to compete. Hence the "legal tender" laws.
Yet, for ordinary people like you and me, currency competition is our only hope. At least then we can demand payments in gold, and not have to bother about inflation, deflation or anything else. Our own individual household economies will grow at a steady pace forever and ever.
And recall the words of the great Bastiat:
“Competition is Liberty and the absence of competition is Tyranny.”
We must get rid of all these government-backed tyrannies.
And breathe the free air of Liberty Under Law.
Even the price of gold goes up and down all the time. Plus gold is offered at different prices by different banks. Do you suggest it remains fixed?
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ReplyDeleteVaruna,
ReplyDeleteprice of gold is almost fixed at most of the times; the fluctuation in market price reflects the purchasing power of 'money' which changes abruptly.
So, actually its not gold's value; what changes is: 'price' in 'currency'
The price of gold may vary - but when it falls, gold miners stop mining, thereby raising gold prices. Similarly, if gold prices rise, gold miners dig harder, supply more gold, causing its price to fall back.
ReplyDeleteBut do think of paper currencies today and how their values are going up and down all the time, adversely affecting international trade.
A global free trading order needs the return of the International Gold Standard.
But gold is a finite resource and the world is bound to run out of it one day. Then what?
ReplyDeleteIt is indeed an EXCELLENT thing that the supply of gold cannot be rapidly expanded. This means that the price of gold will steadily rise - and all other prices will steadily fall. This will help improve the living conditions of the poor of today. This is the very opposite of what is happening under central banking - which is "inflation" in the original sense that the "supply of paper money" is steadily increasing.
ReplyDeleteSecondly: we will never "run out of gold money" because no one keeps money for anything else except as a means by which to acquire other goods and services. Money circulates.