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Should We Return To The Gold Standard ???

Updated on November 15, 2012

The discussion of monetary policy is a complicated one with many aspects that are often misunderstood by the general public. The discussion of the Gold Standard in recent years has been brought back to the forefront by some in American politics, particularly the soon to be retiring congressman Ron Paul. While I personally don’t agree with all of his views, he makes some very valid points. He has been a very outspoken advocate of returning to the gold standard. So is there truly a benefit to the Gold Standard as a backing to the US currency ???

Is Gold Money ???

Technically speaking gold is not money in the sense that it is not our recognized currency. Only the Federal Reserve Bank can officially increase or decrease the money supply. They do this through multiple activities such as Federal open market operations, and the fractional reserve banking activity. Yet in modern economies, very little of the world’s currency is now in the form of physical currency. While we all enjoy the convenience of things like our direct deposits, is this something to be concerned with…Possibly.

The origin of the word “debase” comes from ancient Rome. During the rule of Nero from 54-68 AD and other previous emperors, the Roman Empire began to increase the money supply of coins without the gold & silver content it had previously contained. Nero was extremely popular with the lower classes who revered him as a savior. Rome had attempted to enrich its population with a worthless currency which provided its citizens with ever expanding benefits. By the rule of Emperor Claudius II Gothicus (268-270 AD) a silver coin that had once been made with 100% silver was being produced with only .02%. The ability to produce money without the inherent intrinsic value of precious metals proved fatal. This led to serious inflationary problems, and greatly contributed to the demise of the Roman Empire.

United States

In 1932 during the Depression, the expansion of government under FDR’s New Deal policies led many citizens to call into question the value of the paper money they held. FDR, concerned with his ability to finance his national programs issued Executive Presidential Order 6102 which required all US citizens with few exceptions to turn over their gold holdings to the Federal Government for a price of $20 per troy ounce. Once all the Gold had been redeemed, he set a new price of $35 per troy ounce. This significantly decreased the value and purchasing power of the dollar to the average American, and was likely once of the worst forms of an inflationary tax ever imposed on the American taxpayer.

In 1971 President Richard M. Nixon officially ended the Gold standard. In doing so, the Federal Reserve could produce money without the requirement of gold reserves to back its currency. Since that time the conventional wisdom among many economists has been that the flexibility of the Central Banks around world to increase or decrease the supply of currency is a vital tool to address economic contractions and overzealous expansions. Perhaps they are correct. Yet the evidence seems to be to the contrary.

While it is true that pinning a currency to a Gold Standard offers less flexibility in terms of addressing the immediate impact of an economic recession, the real question is if the damage done by the solution is greater than that of the initial problem. Since the creation of the US Central Bank in 1913 the US currency has lost more than 90% of its purchasing power. The gold standard on the contrary simply imposes fiscal discipline on the congressional branch of our government. It prevents political players from promising that which they have no resources to deliver. Politicians love to promise things to their constituents. The government can give you this…The government can give you that…But at what cost ??? Today, we are in late 2012 and the US GDP is currently at 15.4 Trillion dollars. Yet the unfunded liability of just the American entitlement programs alone (Social Security, Medicare, Medicare Prescription Drugs) is now 121.4 Trillion dollars. The evidence shows that the American people have already been promised more in benefits than there is money in existence to satisfy.

Over the last 4 years (2009-Nov 2012) the S&P 500 stock index has risen by better than 60%. Yet the price of gold over the same time period has risen by close to 130%. Much of this is a result of the expansionary policy of the Federal Reserve Bank. In simple terms, your assets have appreciated substantially, yet they buy less than they did before the appreciation. In reality the price of gold is actually fixed. Its intrinsic value does not change. The price of gold is more of a reflection of the increasing or decreasing value of a currency. It is in reality the currency itself that is changing in price. Although most developed nations do not use the gold standard, the marketplace still does. This is in reality as hidden tax on the citizens of the world by global central banks. It is not done because central banks are malicious by nature as many conspiracy theories have often suggested. Yet rather they attempt to solve the problems monetarily that are created by politicians who use the power of fiscal policy to grant the people things that they have no way to pay for. Elected officials make promises to the uninformed masses, and too often the central banks are asked to clean up the mess with financial tools that are inadequate and dangerous.


Even worse this, this type of an inflationary tax hits the lowest income earners the worst. The very people politicians promise benefits to are the least likely to hold financial assets. They must bare the same inflationary burden when they buy goods and services. However, they typically have significantly less exposure to financial assets like stocks and commodities…if any at all. In their case the appreciation in the price of tangible assets as a result of a devalued currency means nothing more than higher prices for gas and groceries. This is the root cause of the lower standard of living of many Americans, and the greater divide of wealth between the wealthy and the poor. Far too many of the world’s poorest citizens fail to recognize that the very people whom have promised them the security of the many things the government can do for them, have in reality simply had their pockets picked, and been placed on the equivalent of a political plantation for the poor.

So should we return to the gold standard ???

Some like congressman Paul suggest constitutionally we have to, and are in violation of the constitution. The constitution says he following….

"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

This seems to be best left to the interpretation of the constitutional attorneys. However, it seems apparent that the rapid expansion and reckless creation of currency is a threat to the stability of any nation. It has created more poverty than wealth, and more asset bubbles than price stability. Of the few nations that had chosen to maintain a gold standard much longer such as Switzerland, the divide between the wealthy and poor was not nearly as wide. I attribute much of this to their currency stability.

Yet there is a relatively small amount of gold in supply globally. Limiting money creation to something so rare does pose some problems. Yet a gold standard does not have to be the only option. It has been proposed and is feasible that money creation be limited not just to the supply of gold, but rather pinned to a basket of commodities. Possibly a combination of precious metals and other agricultural commodities could be a solution. The most important component is not the specific commodity, but the restraining effect that any currency standard places on the elected officials who are so willing to give away that which they do not have at the expense of those they represent.

Many economists agree with this view, but a larger number seem to disagree. So why is this ??? In my view, the inherent flaw of human hubris often leads those in power to believe they can outsmart the collective conscious of the marketplace. Yet, in reality the lessons of history tell us this is unlikely to be successful. Whatever solutions are eventually found, the current course of events unfolding will lead to economic ruin if we simply wait for our elected officials to develop a strong sense of altruism and tell our citizens the truth. Which is that they just can’t keep the promises they have been making to the masses.


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    • LandmarkWealth profile image
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      LandmarkWealth 2 years ago from Melville NY

      @myesoteric

      I don’t think sustainability would be an issue. In very few cases would currency actually be converted into a commodity. I think the concept of a basket of commodities serves exclusively as a form of discipline for the potential of runaway spending by the gov’t. Some commodities may be agricultural ones, others may be precious metals and some could be energy driven. Gold is really the only one of these commodities that is in such extreme short supply, which is why it is really not practical as a stand alone benchmark. I think we would almost all agree that gold is impractical…but I don’t see any real limitations on a basket of things that consists of agriculture & copper.

      @bradmaster

      Being in procession of more commodities would not necessarily give a nation an advantage. The advantage is in the productivity. If China has the ability to produce more agricultural products…but not the skills or training to actually do it…that won’t change anything. Productivity is what drives the strength of an economy…not just the procession of a raw material. If I have a room full of construction materials, they are not worth nearly as much to me as to a contractor…because I can’t build what he can.

      The concept is about convertibility. If I as a currency holder have the ability to demand that my gov’t convert that currency to something of economic value which I can use in trade or production…then the gov’t has some degree of constraint around the creation of new currency. I think this would more closely link currency creation to economic output.

      With regard to China…be prepared for the fact that if they continue to embrace free markets, over time China and India will be larger economic powers than the US based simply on demographics. Whether or not they move forward with further market reforms is the question that nobody knows for sure.

    • My Esoteric profile image

      My Esoteric 2 years ago from Keystone Heights, FL

      It was @Landmark who was suggesting a new standard. I am not particularly persuaded that it is needed or is advisable. The problem with species money is that in an unstable economy there is a point where the species becomes the problem and magnifies it rather than providing a correcting force which it did before the economy passed the threshold.

      Yes, law does do that regarding contracts, but which serves the greater good?

    • profile image

      bradmaster from Orange County CA 2 years ago

      My Esoteric

      I was rereading this hub, because I didn't really understand the answer. I gather that you want a new standard that will add other commodities to gold. Depending on these other commodities, it could give China a leap to the top economy as they possess a lot of rare commodities. In general any selection of commodities would give a great advantage to the countries that have those commodities. So, it would be difficult at best to come up with an agreeable global standard.

      I was also noticing your quote on the phrase that includes gold and silver. What I found off topic that was interesting on this part of the paragraph.

      :Law impairing the Obligation of Contracts,"

      Isn't that exactly what Bankruptcy laws do, wash away the obligations of contracts?

      Just a thought.

      Thanks

      bradmaster

    • profile image

      bradmaster from Orange County CA 2 years ago

      My Esoteric

      Thanks for the research.

      The one thing that Cyprus didn't have was the rare elements that are needed for technology today. Unfortunately, the US gets most of them from China.

      At one time, salt was the gold of the world, but then we invented refrigeration.

      Thanks

      bradmaster

    • My Esoteric profile image

      My Esoteric 2 years ago from Keystone Heights, FL

      I looked that one up. It seems there are many reasons from simple politics to a hedge against a falling dollar. Apparently, if we sold our gold, it would wreck havoc on the worlds economy as it did when Cyprus considered selling its gold, 1/350th the size of the US, to get out of financial trouble.

    • profile image

      bradmaster from Orange County CA 2 years ago

      My Esoteric

      So what is the value or the reason for gold laying around in Fort Knox?

      There are many more elements that are rarer and more useful than gold today.

      Thanks

      bm

    • My Esoteric profile image

      My Esoteric 2 years ago from Keystone Heights, FL

      @Landmark, an interesting idea " I would like to see a monetary system which is convertible into a basket of commodities." But my first question would be the long-term stability of the market basket, especially today with technology increasing so fast which creates problems with substitutability.

      @Bradmaster - In addition to those you listed, another major reason for both FDR and Nixon's move was the flight of gold out of America seriously depleting our gold reserves.

    • stanfrommarietta profile image

      stanfrommarietta 2 years ago

      Nixon took the dollar off of gold because the economy was trying to expand and the French had been reducing our gold supply backing the dollar by exchanging dollars for gold. Furthermore, we needed to expand because we were fighting at home the War on Poverty and the Great Society programs and also overseas the Viet Nam War. Not enough gold backing to expand.

      But we have to consider that between 1913 when the population was about 97.2 million people, and now when the population is about 316 million, that dollars per person had to expand during that time or people would become poorer. So, maybe there was a little inflation, which over 100 years could

      reduce the dollar 90%. But the only people who are hurt by that are those who put all their dollars in sealed bottles buried in the back yard then. Over shorter spans the inflation rate is minimal. In the meantime, money expansion has allowed the economy to grow, technological advance to make every person far wealthier in standard of living with technological advances, even though their dollars now have been devalued compared to 1913 dollars. Expanding the money supply during recessions and depressions is essential to maintain full employment. Expanding it once full production and employment have been attained is bad form because it causes serious inflation. So, there are several ways to fight inflation: cut government spending, raise taxes (to drain money out of circulation), raise interest to reduce borrowing and lending, which create new money, encourage savings by tax benefits on savings, sell government securities to drain money out of banks and people's pockets, encourage imports to drain money out of circulation to foreign producers (most people overlook the role of imports in fighting inflation. Why did we not have inflation when Bush II was deficit spending on the wars in Iraq and Afghanistan? We were buying goods made in China at WalMart and Target).

      But during recessions government has to deficit spend new money into the economy. Fed buys securities from banks to put new money it creates out of thin air in their reserves. That eliminates the debt to the banks on the money they gave the Treasury for the securities, issued to cover deficit spending by Congress. As for the so-called 'national debt' the Treasury has been selling and rolling over securities to expand the money supply. It rolls over by swapping new securities at discount for mature securities at the banks. It can go on doing this forever, and even borrow money from some banks by issuing securities to cover the creation of new money to provide the interest to other banks. And those securities can in turn be rolled over too. But if there ever is a need for the banks to get quick cash for its securities, they can always sell them at public auction, and if times are deflationary, the Fed will buy them with money it creates out of thin air, redeeming for the government the debt of the government to the banks on the securities. The Fed will then swap mature securities for new ones to sell at discount with future maturity dates to banks when the economy develops inflation, to drain money from the banks and circulation, if it also sells to private investors like the Chinese and Japanese who get their dollars by selling us imports, which keeps their excess dollars from inflating the economy. So, our fiat money can be managed to control inflation and deflation. We need to consider not just stability of the value of the dollar (in terms of what it can buy) but unemployment, which increases when not enough money is circulating to clear the goods and services produced. Inflation only results when more money is in circulation than is needed to clear the market of goods and services produced at full production and employment at current rates.

    • LandmarkWealth profile image
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      LandmarkWealth 2 years ago from Melville NY

      That is how it happened.

    • profile image

      bradmaster 2 years ago

      My Esoteric

      You are right that I was totally off on the year.

      ---

      On June 5, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold. The United States had been on a gold standard since 1879, except for an embargo on gold exports during World War I, but bank failures during the Great Depression of the 1930s frightened the public into hoarding gold, making the policy untenable.

      Soon after taking office in March 1933, Roosevelt declared a nationwide bank moratorium in order to prevent a run on the banks by consumers lacking confidence in the economy. He also forbade banks to pay out gold or to export it. According to Keynesian economic theory, one of the best ways to fight off an economic downturn is to inflate the money supply. And increasing the amount of gold held by the Federal Reserve would in turn increase its power to inflate the money supply. Facing similar pressures, Britain had dropped the gold standard in 1931, and Roosevelt had taken note.

      On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 turned in for other money. It required all persons to deliver all gold coin, gold bullion and gold certificates owned by them to the Federal Reserve by May 1 for the set price of $20.67 per ounce. By May 10, the government had taken in $300 million of gold coin and $470 million of gold certificates. Two months later, a joint resolution of Congress abrogated the gold clauses in many public and private obligations that required the debtor to repay the creditor in gold dollars of the same weight and fineness as those borrowed. In 1934, the government price of gold was increased to $35 per ounce, effectively increasing the gold on the Federal Reserve's balance sheets by 69 percent. This increase in assets allowed the Federal Reserve to further inflate the money supply.

      The government held the $35 per ounce price until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard. In 1974, President Gerald Ford signed legislation that permitted Americans again to own gold bullion

      ---

      Thanks

      bradmaster

    • LandmarkWealth profile image
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      LandmarkWealth 2 years ago from Melville NY

      The Gold standard was broken by FDR...then Nixon eliminated the convertibility of paper currency to gold. I would argue the latter was the larger impact. I agree Gold due to it's limited supply is not a reasonable standard to keep up with productivity. However, I hate the premise of a fiat currency. I would like to see a monetary system which is convertible into a basket of commodities. I think that would be a much better mechanism to link growth in the money supply to productivity, and also hold the fiscal authorities accountable.

    • My Esoteric profile image

      My Esoteric 2 years ago from Keystone Heights, FL

      @Bradmaster, Actually, it was Nixon in the early '70s and it was done because it was once again "causing" havoc in the world economy, especially the American economy. Gold, or any other species, as a standard only works when the economy is relatively stable; in fact, it will help keep it that way, within limits.

      But once those limits are crossed, species works in reverse, actually making things much worse than they otherwise would. That is why in almost every serious financial crisis, countries moved off of the gold or silver or both standards until things quieted down again.

    • profile image

      bradmaster 2 years ago

      LW

      My opinion is simple.

      Gold is being speculated not for its industrial, or jewelry value, it is predominately the financial backstop because of its limited global availability.

      So when the economy goes downhill, the gold value goes up. It is like an economic blankey

      It was removed as the backing for the US currency sometime in 1964. And it has caused chaos in the economy because of its absence. Unless, of course you think that the economy is working fine today.

      The stock market is no longer the indicator of the condition of the economy. The stock market value is high today, but the economy isn't.

      that is it for me.

      Thanks

      bradmaster

    • LandmarkWealth profile image
      Author

      LandmarkWealth 3 years ago from Melville NY

      If you actually read their explanation in the BLS release it says in relation to the 1998 method:

      “Thus, the index does not reflect the fact that consumers can and do to some degree insulate themselves from the impact of higher prices by adjusting their spending to favor relatively lower priced goods or services. Consequently, compared with a measure that reflects this substitution effect, the current CPI tends to overstate the rate of price increase consumers experience”.

      Of course it is true that consumers alter their behavior based on pricing changes. If I make “X” amount per month, and “X” used to buy me “Y”…but now I can only afford to purchase “Z”…then I will be forced to buy more of “Z”. But it completely ignores the reality that the consumer is not always making these choices because they found a better quality product for less money. Sometimes we want to still buy “Y”…but just can’t afford it anymore. So my quality of life went down. The erosion of purchasing power is the most insidious tax levied on the poor and the middle class. They largely are forced to consume commodities, and don’t benefit from the increase in assets prices enough to counterbalance the cost to consume them.

      To be honest…I don’t think you really need to be an economist to figure this out. Most people who go grocery shopping know full well that their dollar is getting them less and less every year in percentages that are just not consistent with what the BLS is telling us. Unfortunately, most Americans are so oblivious that they don’t know what the BLS is…how this is calculated and why. And they don’t care either. They just know life is getting harder.

    • LandmarkWealth profile image
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      LandmarkWealth 3 years ago from Melville NY

      Which is why people need to make their own place to go, as I did. And if you can’t, then you may not be worth what you think you are. That’s why the people who sign the front of the check are paid more than people who only sign the back of the check. Some people look for opportunities, and others create their own opportunity. There is something that makes the CEO worth what their paid. That would be the fact that they are actually getting paid what they’re paid. If someone is willing to compensate you, then you are worth it. The public ultimately still dictates their compensation no matter how it is paid. If you don’t like the compensation plan, then don’t buy their products or services. Their compensation is only a function of the revenue and profits. And if you’re the employee, and you think your leadership takes too big a share of the profits, than create your own company. I felt I was underpaid at Fidelity, although that wasn’t really why I left. So I did something about it. And I started literally with nothing. I was born into some fairly extreme poverty for most of my childhood. I had no advantages compared to most and did fairly well. Some people definitely had some advantages I didn’t have. I don’t really care. What other people have is completely irrelevant to me. I make my own destiny

      I could say the same about an athlete. Should Derek Jeter get paid 20 million dollars to hit a ball ??? He should if I and enough people are willing to buy a ticket or watch it on TV. That’s not a moral judgment. I am not saying Jeter is a better person than a fireman who risks his life. Maybe he is a jerk…I have no idea…I don’t know the guy. But he is paid more because he is free to make whatever someone is willing to pay him. At the end of the day, unless that person works for me…it is none of my business what they get paid.

      De-regulation has nothing to do with why Jamie Dimon makes millions at JP Morgan. There is no mechanism to correlate the two. In fact it’s probably the opposite if anything. Dodd-Frank is one of the most confusing disasters of increased banking regulation that the entire industry can barely understand. It is crushing the regional banks ability to compete with the large multinationals as they get bogged down in red tape. That just increases market share for the larger companies and helps their profits so a guy like Dimon can make more money. The biggest myth perpetuated by people outside of corporate America is that large companies want deregulation. For the most part they love more complex regulatory environments because it keeps the Mom & Pop shop from competing with them. I have never seen an industry lobby for increased complexity in the tax code as much as the large insurance companies. That fastest growing segment in financial services is the independent advisor channel for various reasons, of which I am a part of now. And guess who is lobbying the hardest to push for all kinds of new regulations on smaller advisory firms…that would the large brokerage firms. Because they are losing market share to us…and they want to bury us in red tape and 100’s of pages of compliance manuals. Guess who was the biggest objectors to the deregulation of brokerage commissions in the 1970’s when Charles Schwab wanted to open a discount brokerage. That would be the large brokerage firms. Fortunately they lost that battle, and now you can buy a stock for $5 in trade that would have cost $200 in 1975.

      As for geometric weightings, The past CPI calculations were constructed using a set of constant fixed quantity weights. They now use a geometric mean estimator in the index construction when calculating CPI using about 200 different categories. When behaviors change in terms of consumption, substitutions take place that can be product quality, brands, quantities etc. So in the example I cited earlier…if steak becomes less affordable and you’re now buying meatloaf, the impact of the weighting on CPI is increased for the meatloaf purchase and the impact of the steak is deflated. As Mr. Williams points out in his research…this is useful in measurements of GDP, because you want to study the activity taking place when measuring output. But in terms of measuring CPI…it may in fact tell you what people are doing when examining consumer substitution behaviors, but not whether their standard of living is being maintained…because Steak is not Meatloaf. The BLS put out this press release explaining their rationale for the new geometric weightings in the late 90’s. Perhaps you might agree with them…personally I say it’s pure nonsense and inflation has been much worse than they are trying to suggest. Maybe this helps explain it better…

      http://www.bls.gov/mlr/1998/10/art1full.pdf

    • My Esoteric profile image

      My Esoteric 3 years ago from Keystone Heights, FL

      I got about 1/2 way through the first one and am staying open-minded for the time being, but I did find one passage that bothers me a bit:

      "Usually, though, the purchasing consumer only had the option of paying out-of-pocket the full price for the product, again with little or no concept of the quality improvement being acquired and/or having no chance to opt out of paying for the improvements. "

      Even though a few examples are given, I am not sure it holds for the general case. However, he does make a great point with the airline example.

    • My Esoteric profile image

      My Esoteric 3 years ago from Keystone Heights, FL

      The "go somewhere else" presumes there is somewhere else to go; which, throughout much of American history has been rather hard to do; true job mobility has been limited to just a few decades, a few decades ago.

      In any case, all things have an intrinsic worth, including labor. For most labor, that would be the price they could command when it was neither a buyers or sellers market for labor. CEOs and senior execs of major corporations since the 1980s no longer fit that paradigm.

      In spite of what you present above, the compensation, regardless of how it is configured and what it is based on, should be in roughly the same relative relationship to the rest of the workforce now as it was 60 years ago. There is nothing you can point to that makes a CEO today worth 7080 times more than the average worker where he or she was worth only 20 times as much 60 years ago. There has not been that much structural change. The only change that has occurred is deregulation and a lowering of ethical standards.

      While I like some of the ideas on CPI you present, and will look at the links, you didn't answer my "geometric weightings" question; I still don't know what you mean by it. In terms of inflation or rates of growth "geometric" means this to me:

      -- If you put a $1 in savings today and get $1.20 out in five years, it grew by 20%. Many people would say the rate of growth was 4% per year, 20%/5. But the real answer is 3.7% per year, (1.2 ^ (1/5) - 1), the geometric average. Is this close to what you are referring to?

    • LandmarkWealth profile image
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      LandmarkWealth 3 years ago from Melville NY

      With regard for the CEO/executive compensation. There is a reason compensation declined around 2009 and has started to rise again. It is because they are heavily linked to stock price. In general the income of the wealthiest Americans whether in corporate America or not is heavily linked to capital gains. In the case of large fortune 500 companies, there has been a strong trend since the 50’s to take many of these companies public. And more and more of the ones that were always public have used company stock as a huge part of the compensation plans. So as such, the explosion in compensation is in many cases is linked to the rapid increase in stock prices. Placing a valuation on a private company or private shares is very different process. Taxes have nothing to do with it. The only impact taxes play is in terms of when one might choose to realize their taxes, such as deferring a stock grant or exercising an option based on changes in marginal rates. Company stock incentives are good and bad. The negative is certainly that is sometimes incents short term decisions to please the market with short term results. But stock compensation is much different than the 50’s. Things like the first ESOP plan wasn’t even invented until the late 50’s. And these are now very prominent forms of compensation.

      If you look at the compensation package for almost any CEO of a public company, it’s very common for stock incentives to be significant portion if not the majority of their compensation. If the stock takes off good for them. In some years if the stock does poorly, they are less likely to exercise a holding and may realize no such income. If you look at the filings for last year for JP Morgan. Jamie Dimon apparently took no income from stock incentives and had total compensation of about 1.8 million. Perhaps he has in years past, or was waiting for specific point in time for some reason such as vesting of a grants. Yet the CEO of the investment banking division had compensation of 23 million for the year. More than 14 million of the 23 million was the exercise of stock options. But at the time the option was granted, it wouldn’t have likely had a value of anywhere near 14 million. Probably half of that.

      Another example would be a case I have right now… I have a client who works for a smaller Pharma company here on long island who makes less than 200k annually as a director of his division. This year he had to exercise options before they expired (they’re typically good for 10 years). The taxable income to him will be about 1.5 million this year. But the value at the time they were granted was an aggregate of 75k. The stock just did really well, and he made a lot of money. What the company gave him in potential value at the time of the grant is far less than the actual value realized.

      In terms of intrinsic value of the employee, I would suggest that your intrinsic value is only that which someone is willing to pay you. So if you believe you're underpaid...then go elsewhere. If you can't find anyone to pay more...than you're not worth it. In that sense, we're all paid what we're worth.

    • LandmarkWealth profile image
      Author

      LandmarkWealth 3 years ago from Melville NY

      The geometric weightings have been changed to depress the impact of a rising item and increase the impact declining item. By substituting items based on behavior. Economist John Williams has an excellent site that articulates the progress of these changes. As an example…let’s say the cost of steak rises and you substitute steak for meatloaf because the cost is less and you can’t afford the steak anymore. If large numbers of people begin to eat more meatloaf instead of steak, the meatloaf do to its larger consumption has a greater impact on CPI. Unfortunately, meatloaf is not steak. So while the CPI may represent the actual behavior and activity of the consumer that is taking place at that point in time, it doesn’t reflect the ability to maintain a constant standard of living. Which at one time it was designed to do. Mr. Williams has an excellent piece on the changes to CPI here. It’s a bit long but very interesting when we compare 1980’s and 1990’s methodology versus today, and not too tough of a read.

      http://www.shadowstats.com/article/no-438-public-c...

      There is also an annual report that gets put out by the American Institute for Economic Research which looks at this from a different perspective. They use what they call an everyday price index. This is a bit more of a simple approach. The method behind this is the thought that while electronics are substantially cheaper, we don’t by a new phone or TV weekly. Yet when we look at everyday items, the cost of living is rising dramatically higher than BLS data suggests. And obviously this is more impactful on those who can least afford it. Which is the root of my concerns with Gov’t policy attempting to manipulate economic activity and inflate away problems. It is only the hubris of man that leads us to believe that there is a select few that will be intelligent enough to constantly out think the collective conscious of the people, in the best interest of the people. I am not so confident. Link below.

      http://www.mainstreet.com/article/smart-spending/c...

    • My Esoteric profile image

      My Esoteric 3 years ago from Keystone Heights, FL

      @Landmark - not much I can add to your comment, but 1) what do you mean by "geometric weightings"? I understand its use in calculating the rate of growth (or decline) over a period of time but do you mean something else and 2) my comment on CEO pay (which, on average, has declined since 2009, at least for the time being) is that if you assume normal labor and staff is paid at their intrinsic value and that at some point in the past so were CEOs and other senior executives, to include their "entrepreneurial" value. If you take the ratio of the CEOs (I don't know why they don't have one for senior execs as well) to average labor at one point, then theory would have it that the ratio should be somewhat the same at another point in time unless something fundamentally changed to make the worth of one group change relative to the other.

      Well, in 1950, using the CEOs of the Fortune 500 companies, the ratio was 20 to 1 and just before the era of big tax reductions, deregulation, and conservatism taking politics back over, it was 42 to 1, according to Bloomberg. Could the change in the complexity and globalness of large corporations make CEOs worth more? Possibly, so I won't quibble over the doubling of the ratio in 30 years. But I will quibble of this, which led to my earlier comment; by today, 30 more years later, this ratio is now 354 to 1!!! I would love to hear a rational justification for such an abomination; this isn't geometric growth, it is exponential growth and has no bearing on intrinsic value of the CEO.

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      LandmarkWealth 3 years ago from Melville NY

      @ stanfrommarietta. Much of what you cited in the example of Iphone advancements are good examples of Hedonic changes in prices. The BLS attempts to incorporate many of these changes in their CPI data, although rather poorly. Many of these new added features are of no use to many of us. I have more junk on my i-phone than I know what to do with. Most of it I would like to delete if I knew how. So the value added is often of no value to many of us, and not a choice we made. This is a major flaw in such hedonic adjustments done by the BLS.

      @ My Esoteric. I think you’re overstating CEO pay a bit. A very big component is stock incentives via options, ESPP plans and grants. There is a good deal of incentive. The problem I always found when working for large organizations was the incentives were too short in nature. Too many of them are passing thru and instituting policies that are only a shorter term benefit, and don’t take into account the longer term impact on an organization. Yet that is itself a form of creative destruction. When I left my last firm, it went from being very well run to very poorly run quickly. That was my incentive to work independently and form my own organization.

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      LandmarkWealth 3 years ago from Melville NY

      I agree that Gold as a standard is probably not the best basis to use. Yet I do wish to have a monetary standard of sorts. I am just not entirely sure how that should look. Gold does have an intrinsic value. It is a tangible asset like many other tangible assets that has various uses. It is fixed in that its usage is the same today as it was yesterday. But the amount of gold you can buy with a unit of currency is different today than it was yesterday. It was the currency that changed. Its prior use as a standard was somewhat rooted in its scarcity, which is both a positive and a negative. All currency is simply a medium of exchange that we utilize for the purpose of efficiency. If we chose to barter out way thru life, economic transactions would slow to a snail’s pace. So currency itself has no intrinsic value on its own. It really derives its value from the productive capacity of the nation that issues the currency. It is solely about convenience. In an ideal world, we want the supply of money to increase in precise lockstep with productivity to prevent currency devaluation. Although that is a bit impractical, policy makers at the Fed are supposed to target price stability as one of two chief mandates.

      My concern about the fiat monetary system, which is now is largely universal across the globe is that there is not nearly enough constraints around how the creation of money takes place. We increase our monetary base via two mechanisms. One is Federal deficits, the other is thru central bank activity like Fed lending. In the case of fiscal deficits, this is an entirely political process. Huge amounts of entitlements can be promised to the masses by political actors who will be long gone when the impact of their actions begin to show. In the case of our mechanisms for central bank lending, there is almost no real regulatory constraint around the money multiplier. Money has become endogenous. Having no monetary standard makes the fractional reserve system much more volatile. When demand for credit increases, the Fed’s tools are not nearly as effective as they seem to believe. They can raise reserve requirements, but then they simply extend the additional credit in increased reserves for lending based nothing more on demand. Essentially demand for credit is what is dictating reserves during rapid economic expansions, not the Fed. Banks having unlimited access to reserve lending are less apt to be conservative in their lending.

      In the case of a monetary standard…the obligation to convert currency into a tangible asset places an inherent limit on the increase in the monetary base. I would regard gold as probably too constraining because it doesn’t really accurately represent the overall productive capacity of a nation in modern times. But what if the convertibility was into a basket of commodities. This is just for the sake of example. But such an obligation would require that the monetary base expansion be linked at least loosely to activities like the mining of new resources, which is invariably linked to productivity. Even with a monetary standard, we can and have run deficits. But then there is a greater degree of accountability. Now some would argue that inflation is the accountability, and how we measure the value of a dollar relative to other currencies. The problem with that is we are in a global race to devalue currencies all over the world. The BLS has actively changed the way in which we measure inflation for the better part of 35 years to hide the true devaluation of our currency. Our inflationary measures were once designed to measure a constant standard of living. That was thrown out in the late 70’s/early 80’s. Now we use geometric weightings designed to suppress the impact of a rising price, and inflate the impact if declining price. Very little of the BLS data is representative of the average consumers experience. The officials at the BLS suggest that today’s various models of CPI are more accurate. Too those people that believe that the current models that report CPI are in fact more accurate, then I would ask one question. If we applied the same models today to the late 1970’s, than the stagflation of the late 70’s never actually happened. So are we to believe that it was imagined ??? Or have we simply been utilizing geometric weightings to hide the true decline in our currency ??? My point here is simply that I believe our currency has in fact lost a great deal more purchasing power in recent years. And that is a function of too lose a monetary and fiscal policy over man years.

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      My Esoteric 3 years ago from Keystone Heights, FL

      @Stan, not too much to argue with (I wonder what @Landmark's take is) but I do disagree with

      - "Why all the debate over whether CEO's of major corporations, or baseball players are getting paid too much for what they do? Computers, smart-phones are advancing in capabilities while prices are falling, so you do not get the same service ....",

      in that you are mixing apples (CEOs and top execs of major corporations) and oranges (Baseball players, computers, etc - commodities bought on the open market), I would be tempted to throw labor in with the oranges.

      To a large degree; setting aside elasticity, necessity, monopolies, and the like; the oranges have their prices set by their intrinsic value to the purchaser at the moment of sale. In America, and to some degree England, the price of CEO's of major corporations are set by the CEO and it is rarely (anymore) connected with their actual contribution to the corporations success. Unlike most everything else money is paid for, they are unique in that the amount paid for them is often determined by them and not their intrinsic value to the purchaser.

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      stanfrommarietta 3 years ago

      It seems to me that the idea that a certain amount of gold has an inherent value that is unchanging is an illusion. To begin with, I view money as simply some token or means of representing in units of account the debt-obligations between parties in exchanges of goods and services in the economy. The value of money is the result of billions, maybe trillions, of negotiations between parties as to what they will exchange in goods (and services) for a given unit of money. And this will change from one good, one service to another. Why all the debate over whether CEO's of major corporations, or baseball players are getting paid too much for what they do? Computers, smart-phones are advancing in capabilities while prices are falling, so you do not get the same service or use from an iPhone 3 costing $440 as an iPhone 5c costing only $220. The later models give you much more per dollar than you had in earlier models. So, the idea that you can have a fixed value in a commodity like gold does not correspond to the varying values of money units across different goods and services. The attempt to procrusteanly force everything into the gold standard just doesn't work in our modern technologies and economies.

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      LandmarkWealth 4 years ago from Melville NY

      Additionally comparing the early 1800's is a bit more difficult because of very different economy. Just as one example, the environment of global trade was very different. But even interstate commerce in the US was vastly different. You could have a much greater divide between states than you do today. There was no income tax and less that bound the nation together economically. Whereas today, one state could improve over another to some extent, but there are so many policies that overlap accross the nation that effect us all, the divide does not have the potential to be as wide. I think it's more useful to compare the period long after the industrial revolution was over. Late 1800's to early 20th century up until today.

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      LandmarkWealth 4 years ago from Melville NY

      Keynes had met with FDR personally to discuss his ideas on several occasions. However I don't regard FDR's ideas to be a success for the reasons I illustrated in the tale of 2 depressions. When Bush 41 raised taxes he generated less revenue. His luxury tax was one of the biggest failures he had and nearly destroyed the New England Boating industry. From a tax perspective. Since the end of WW2 the gov't consistently gets 15-20% of GDP in revenue regardless of the rate of taxation. All the tinkering with the tax code is little more than political three card monty.

      In looking at the period of contraction and recession I think there is a bigger picture. I think you have to pre vs post, granted there was more volatility, but the expansion were often more vigourous and more equitably distributed. Keynes model is greatly dependent on great monetary flexibilty to satisfy fiscal stimulus. Yet the dollar has lost more than 90% of it's purchasing power over the last century. So while we may see more stability in terms of contraction, what were really seeing is a decline in the value of purchasing power. It's simply a hidden contraction. This impacts those on the lower end of the economic scale more as they consume assets like commodities rather than invest in them. I attribute this to the fact that as I mentioned early, politicians are not really implementing Keynesian ideas. But rather a quasi version of it to perpetually expand Gov't.

      The altruism is relevant in that in order for fiscal stimulus to be effective it has to be targeted unlike the blunt force of Monetary expansion through the central bank, which cannot target specific areas of the economy. As such politicians have to make sure the stimulus is spent in the most constuctive ways. The 2009 stimulus is the example of the failure of politicians as a result of corruption. All 50 states received millions of dollars that were sent to congressional districts that don't exist. We paid for university studies to evaluate how to educate prostitutes in china to drink responsibly while working. Huge sums of money went to local municipalities that did nothing to fix their budgets and pushed off the problems for another year. Then eventually had to issue job cuts anyway a year later. There were various forms of waste that we always see in Gov't, just on a larger scale. Hence the expansion of the labor force is barely keeping up with the popultation growth much like the 30's. Every dollar the gov't spends on stimulus has to come from somewhere else in the economy which is not being used for more productive means. The question is who is better at allocating resources. The gov't or private sector. I think the gov't has shown itself to be a complete failure in this regard.

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      My Esoteric 4 years ago from Keystone Heights, FL

      Yes, FDR was basically a fiscal conservative but willing to think outside the box as both Bush I (raising top marginal tax rates) and II (TARP)did. However, Keynes didn't officially publish his new ideas until 1936.

      I am not sure why it would be difficult to compare back in time, the principles of economics are pretty immutable. When you do, the statistics appear to do a number on your assertions. If you break history up into pre- and post- Keynsian periods, 1857 to 1933 and 1953 - 2001, respectively, you end up with some very interesting results when looking at business cycles. They are, # of months between:

      - Last Peak and Next Trough (contraction): Pre - 21.7 Post - 10.3

      - Last Trough and Next Peak (expansion): Pre - 25.3 Post - 59.1

      - Last Trough to Next Trough: Pre - 47.0 Post - 69.4

      - Last Peak to Next Peak: Pre - 44.1 Post - 71.5

      In addition, you have to read those numbers in the context that "virtually all" of the Pre-Keynesian recessions were Major recessions while "none" of the Post-Keynesian recessions were. How is this explained in your model?

      As to "altruism" on the part of politicians, I don't see where that plays at all. I see pragmatism and philosophy playing major roles, however. If you are conservative, you will let the economic downturn play out to its ultimate conclusion, that is the philosophy you are expousing. If you are anything else, you will try measures to mitigate the effects of the downturn. That expains why most of the Pre-Keynesian recessions were Major and none of the Post-Keynesian recessions were ... until 2008.

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      LandmarkWealth 4 years ago from Melville NY

      Acutually the GSE's were first created in the 1930's. There not so recent. But there mandate greatly expanded over time. If it's a master plan, it's a bad one. I don't think it is quite so organized. I think over time politicians just want to show what they did for the poor. Unfortunately much of their soical engineering ends up making more poor people than they help.

      QE does not really shift the debt burden in reality. In terms of the Fed buying MBS products (which is illegal as per the Federal Reserve act under open market operations) The debtor remains the same. The creditor, the one holding the note which must be paid off becomes the Fed. But the vast majority of these MBS products do not have high default rates. So the Fed doesn't really lose money. But they continue to artifically inflate markets, which I believe will create more asset bubbles and misallocation of capital. I would really consider it a transfer of debt. My mortgage was sold off to a GSE. However, I still have to pay it.

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      CHRIS57 4 years ago from Northern Germany

      About Fannie and Freddie i think there is/was some kind of masterplan behind. It is not a coincidence that Freddie Mac was established in the same time frame when the going got tough, the Gold standard was abolished, Vietnam war and Cold war drained money out of the economy and the US producing industry started to loose its competitive edge.

      In the early 70ties first trade deficits and current account deficits occured in the US. It was the presidency of Richard Nixon and no president ever after really tried hard to reverse this development.

      Current account deficit is nothing else but the accumulated debt of the entire economy: public, corporate and private household debt. Besides maxing out credit cards, private household could not be held elligable for this total debt. So in the late 60ties, early 70ties some smart and farsighted people came up with the idea of the subprime stuff. That was very convenient to offload some of the accumulated total debt to private households. Today accumulated current account deficit is some 70% plus of GDP.

      In this light, all quantitive easing and bailout measures by the government after 2008 were nothing else but changing debt from corporate hand (GM, AIG..) and private hand (subprime..) to public hand. Of course that doesn´t change a thing in the overall economic situation, so nobody should have expected any change for the better.

      I can´t forget Nixon. I think he was much smarter than most presidents and knew what was coming. Hence, didn´t he create the masterplan?

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      LandmarkWealth 4 years ago from Melville NY

      From a regulatory perspective, I would argue that it was excess and foolish regulation that caused 2008. The GSE's like Fannie and Freddie were creating artifical demand for the MBS market. They bought up supply beyond that with which the marketplace would demand on it's own. That coupled with already in place CRA standards which were being aggresively enforced from the mid to late 90's on banks created an environment for social engineering of the housing sector. Banks generally don't want to loan money to people who can't pay them back or present a great risk without collateral. But if a gov't agency will buy the loan off of your balance sheet, why wouldn't you write the loan.

      Imagine selling paper cups for a living. You would only produce as many as the market demands. Yet if the Federal gov't went on a spending spree to buy up paper cups, you would not sit by and watch your competitors get rich why you simply sat on the sidleines. Even though you know the gov't is manipulating the market, that isn't your problem. The intentions might have been good. But social engineering almost anything in economics is bound to end badly. Once the accounting scandal of these gov't agencies broke, the demand dissapeared and the market crashed.

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      LandmarkWealth 4 years ago from Melville NY

      My understaning was that during and leading up to WW2, FDR embraced Keynes as a philosphy. Interstingly he did it with great hesitation and thought his ideas were far fetched. But felt he had to something. And I believe there were clear political advantages to Keynes ideas.

      I think it's quite difficult to go back as far as the early 1800's to make a comparison to the 20th/21st century. However, I would argue that less intervention by the gov't can create greater swings in the ecomomic cycles. However, they are shorter lived to the downside as markets correct distortions faster without interference. Essentially ripping off a band aid rather than slowly peeling it. The problem I have with Keynensian theory is the dependence on fiscal stimulus essentially means you are dependent on the altruism of politicians that control the fiscal purse strings. However, I have not met many altrusitic politicans. So in reality, Keynesian theory has never really been attmepted. We do not run counter cyclical cycles of deficit spending. We simply constantly spend more, and promise undeliverable things to the electorate. We use tricks in the budgeting process to hide the reality at times and call unbalanced budgets, balanced. I think Keynes ideas are great in a theoretical world. But humans can not be trusted with great power concentrated in small groups of elected officials to affect the lives of masses. Markets are inperfect, but they correct themsevles much faster. And nothing is more effective than the collective conscious of the marketplace to distribute resources and set prices in terms of economics.

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      My Esoteric 4 years ago from Keystone Heights, FL

      In debating issues like this, started a hub and ended up writing a book about it, it is somewhere in the publishing cycle; my focus was recessions and depressions. The gold and silver standards played a key role, not in their cause (expect one) but in their exacerbation. It is that "pegging" aspect which appears to be the problem. It seems that in economic downturns, it acts as a positive feedback loop making the downturn increasingly worse than it normally would have been on its own, at least that is what the research says. That is why every country who dropped the gold standard after the 1929 downturn was able to begain recovery; it didn't cause the recovery, but allowed it to happen; those that waited the longest, recovered last.

      One other thing fell out of my research which keeps getting evaded when I ask the question. The American economy was basically driven by the Austrian School from its inception until 1946 with FDR trying out the first principles of Keynesian economics before it became a formal theory (which was developed to explain why the Austrian model kept failing in unstable conditions) in 1933 - 1937. I am not really sure what principle was in vogue during WW II. Keynesian ruled until 2000. Here is the question: "Why in the period from 1815, not counting recessions caused by external factors like Civil Wars, etc, did a recession or depression the "size of the one in 2008" or larger occur "every 5 to 6 years", on average, until 1940 and "none" occured afterward until we started to try to replicate the economic and regulatory policies of the 1800s?"

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      LandmarkWealth 4 years ago from Melville NY

      The is a huge difference in entitlment inflation. For example SS beneifts are linked to CPI-U. When the economy expands the benefit is ajusted up as my Gas bill is adjusted up to heat my house. However, in the contraction of 2008, my Gas bill went down as a result contraction and some new natural gas development. Yet SS benefits still went up. Unlike a private pension, were the future liability must be funded now based on the future actuarial value, entitlements do not do this. They increase regardless of the economic expansion or contraction because politicians are reluctant to cut anything that will cost them a vote. So the gap between GDP and entitlments gets wider and wider. This is my point about imposing fiscal discipline. They promise more and more with no regard for where this will come from without adapting a benefit (current and future) to the changing economic environment.

      In terms of asset bubbles, I would argue the places in the world that are the more developed economies that have been embracing this unfettered credit expansion are all in the middle of a debt bubble right now for the reasons I mentioned earlier. The US and all across Europe, they have overpromised. Their only solution is to print more money via the US central bank and the ECB. Austerity is killing the Europeans because their economny is already so dependent on the government providing things. The US is not far behind. The probablility that the gov't can expand and contract the money supply in such a way as to mitigate the problem seems unlikely. Instead all that we are getting is market dislocations. Retiree's buying risky assets because they can't get yield in more conservative assets. If the economy was more self sufficient with credit being based on creditworthiness, we'd all be better off. My overall point is the monetary side is subsidizing the lack of fiscal discipline of politicians in developed markets globally. The political class will not correct their behavior as long as the monetary authorities will bail them out.

      However, I agree that gold alone is not the solution. More likely a basket of commodites in my view. Dr. Friedman wanted to have a limit of federal spending to a share of GDP. The problem I see with that is even if it was a constitutional amendment it would be useless. US polititicans trample all over their constitutional requirements routinely. Our congress and the President are by law required to pass a budget every year. Yet their as not been ONE budget passed since 2009. As a result numerous Federal agencies received 30% budget increases in a single year. Not once to they ever look at the rampant waste in every agency. Why ...Because they don't have to...The Fed will print away the problem.

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      CHRIS57 4 years ago from Northern Germany

      I have to pay my electricity bills. And as long as i am not a basket case i will have to do so for the rest of my life. There will be inflation involved in the future. Now - is this a future liability that i have to take into account if i aggregate my debt and asset balance sheet.

      I think not, and it is the same with any future payments for whatever they may be ment for.

      About productivity and Gold standard: May be i made a mistake in looking only at the time period after Nixon resolved the standard. But if we look at productivity gains and Gold mining before 1971, we shall find the same issue. There was simply not enough Gold produced to back GDP growth from productivity gains even before 1971.

      It only took 2 years from 1971 on to let the fixed currency parity system go bust. Currency exchange rates actually express differences in productivity. We are talking about more than the use of capital. While capital may be the kickstarter for new developments and improving productivity, real growth does not rely on capital, but comes from being more productive.

      Even without Gold standardit does not necessarily lead to economic bubbles. There are enough economies on this planets that proove this.

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      LandmarkWealth 4 years ago from Melville NY

      Lastly I would not equate a commodity link to a currency as a virtual money world. Commodities in all forms have some form of intrinsic value. Some more than others. But there is a real value.

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      LandmarkWealth 4 years ago from Melville NY

      The reason for future liabilites mentioned in a full sum is that the cost of those liabilities will continue expand with inflation. The presumed cost of a medicare payment to a Dr or SS payment to a future recipient will be increased accordingly. So for example, what ever we believe that cost to be today, we must increase it by 5% if the actual rate of inlfation associated with the benefit increases at 5%. Over time the liability continues to compound.

      In terms of productivity gains. The delvelopment of new capital, (innovation in new technologies etc) would in no way be impaired by a gold standard. I don't believe such a standard would halt creativity and innovation. What drives GDP is the creation of capital. If GDP is however expanding rapidly because we create to much currency through aggressively expansive monetary policy, than we end up with excessive leverage, asset bubbles and artificially inflated GDP through excessive borrowing.

      I agree that the ability to mint new currency to circulate in an economy in attempt to keep up with economic expansion would be problematic as gold is in short supply. This is why I favor a basket of commodities type approach rather than exclusively gold. In a sense not unlike the way currency traders measure the dollar in comparison to a basket of other currencies. I believe it would provide both the flexibility and fiscal restraint at the same time. In terms of what would make up this basket is up for discussion. I would think all commodities could make up this basket with a weighting towards those that are most useful in industrial production. That is a dicussion worth having. I am primarily concerned with imposing some form of discipline on political bodies. What that discipline is can be debated.

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      CHRIS57 4 years ago from Northern Germany

      Can someone explain to me why so often future liabilities are mentioned in full sum? I understand that just looking at the huge amount of unfunded liabilites will eliminate any reasonable discussion on money, debt or fund raising. Don´t those future liabilities have to be denominated to current values?

      For the Gold standard: GDP in most developed world rose some 7 times since the standard was given up in 1971. Gold production only doubled (at max. tripled) within the same period of time. In other words: sticking to the Gold standard would have crippled economic development, would not have allowed productivity gains...

      If you suggest to add a commodity mix to complement the Gold value then we have the next discussion going on: Who says which commodities to rely on for the next decades.

      Currently en vogue are rare earth minerals. They are used in electronic equipment and in the renewable energy industry. Would that be a choice? Isn´t the composition of a commodity basket already the next bet in a virtual money world?

    • Gotridame profile image

      Gotridame 4 years ago

      I hear you. It is still something of substance.

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      LandmarkWealth 4 years ago from Melville NY

      Well, Dr Paul makes a strong case. I am just not sure it should be just gold. I prefer a more flexible discipline like the basket of commodities idea.

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      Gotridame 4 years ago

      I doubt if it will happen, but at least there is one person who can deliver a great, well documented plea for the case.

      The Native Americans had a better foundation for wampum than we do for currency.

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      LandmarkWealth 4 years ago from Melville NY

      Thanks

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      Gotridame 4 years ago

      I think you have a good point. Keep it real!