All right, y'all, top headline today at LewRockwell.com is The Gold Standard Never Dies.
It's by Lew Rockwell.
He's the president of the Ludwig von Mises Institute, and of course runs LewRockwell.com, which is the most read libertarian website in the world, and for very good reason.
I keep the blog open all day long, and nothing but great articles on the front page, as well as Lew's radio show, which I see you've been doing more and more.
Welcome back to the show, Lew.
Scott, great to be with you.
Well, it's great to have you here.
The gold standard does, too, die, because I heard, I remember from learning in class, I think even, government school even said, or maybe this is why it's wrong, Richard Nixon took us off the gold standard, gold standard no more, and now it's some funny debt-based money, like it says in Jekyll Island, right?
Well, there are actually probably three steps to what they feel was destroying the gold standard.
First was the establishment of the Fed in 1913, then it was Franklin Roosevelt's destruction of the domestic gold standard in 1933, and the seizure of the American people's gold.
If you didn't turn in your gold, you could go to prison, unless you were Rockefeller or Kennedy or somebody like that, of course.
Then, on the dread date of August 15, 1971, Richard Nixon ended the international gold standard, and the Keynesians all thought, whoopee, in fact, Nixon said, we're all Keynesians now, because Keynes had called gold a barbarous relic, and said it should be banished from the money.
And these guys felt they'd done it, and they thought that we'd go to the great new age of paper money and paper money inflation and prosperity, and, you know, let's have a party.
Well, of course, it didn't quite work out that way, because, you know, even aside from the evil nature of the state, even if you or I had a machine in our basement that could produce perfect hundred-dollar bills, you know, you might be tempted to use it.
Well, when it's the government, and they've got, of course, not something that's making perfect imitations of hundred-dollar bills, but actual hundred-dollar bills, on a far vaster scale through the banking system than just printing up the physical dollars, although the principle is the same.
They've wrecked the whole world money system, and it happened, you know, that really the end of it was Alan Greenspan's, George W. Bush's creation of an artificial boom after 9-11-1 to, they hoped, because entirely for Keynesian reasons, keep people spending.
If you remember, back to Bush, he said, don't stop spending.
Go to Disney World, go on a trip, spend your money, and so forth, based on the basic Keynesian idea that prosperity is to be achieved through borrowing and spending.
Now, we all know in our lives individually, that's crazy.
You don't, it's saving an investment that makes you more prosperous, not borrowing and spending, but then that's true, by the way, on a societal level, too.
So they had this big artificial boom, then the biggest bust since 1929, and in fact, a far vaster bust, I would argue, than 1929, much more global, much more serious, and Bernanke and Obama and, before him, George W. Bush, our friend, have responded with the sort of thing that Roosevelt did, which prolonged and deepened the Great Depression, and we didn't get out of it until really 1946, did we begin to even get out of it, all those years later.
So they are making, already all over the world, we're in a global depression, this is a depression, not a recession, recession is a euphemism for depression.
Well, the depression itself was a euphemism for panic and crash.
I like the word crash, it's a much more, it's a great 19th century word, and that became banned because it was supposed to be alarming.
But anyway, we're in a depression, we're after the crash, and gold is coming back.
They thought they'd gotten rid of gold, but they never got rid of gold in individual investments, people holding a few coins.
Well, and that's thermodynamics, Ray, and matter can either be created or destroyed through ordinary chemical means.
I guess you could nuke gold off the planet somehow, but...
Well, of course, they don't, even though they said it was useless, they kept it all in the bank, in the vault of the New York Fed, but even though gold was only for a long time demonetized, which was their goal, it's creeping back in as money.
When Robert Zelnick of the World Bank just the other day said, gee, the new monetary system has to include some role for gold, now he doesn't mean a real gold standard, maybe it's a phony gold standard, but just to have the head of the World Bank mention the word gold was quite alarming to Paul Krugman and Brad DeLong and similar Keynesians who flipped out over it.
But it's creeping back in, gold is coming back, and the reason is, as long as we have records, as long as we know about the human race, when people have been free to choose their own money, they have always chosen gold and silver as a subsidiary.
Well, the bottom line is because it's a preventive currency.
That's why the ridges on the coins, right, so you can't clip it.
It's like, you know, you ask the Congress to put a debt ceiling on in the law, they just raise it every time they want to raise it, but you can't do that with gold, you can't just turn lead into gold.
That's really the whole point, that's why people want it, is because it's rare.
Well, you know, there are a number of reasons why they want it.
One, as you point out, is the fact that the government can't print it up.
Another one is that it's uniform, you know, one ounce of gold taken out of a mine in Alaska is exactly like an ounce of gold taken out of mines in ancient Egypt four or five thousand years ago.
Right, it's just an element.
And it's pretty, girls like it, and that's important to us.
It's beautiful.
When you just hold it in your hand, you realize you're holding something significant.
And it's also ductile, I mean, you can stretch it out, it can be cut into very, very fine pieces, it can be beaten into sheets that are thousands of an inch thick.
I mean, it's just, you know, and it's very divisible, so it's easy to have, you know, quarter ounces, tenth ounces, twentieth of an ounce, and so forth.
It really is, and also it's virtually, as you pointed out, virtually indestructible.
It is possible to destroy gold, but it's very, very difficult, and why the heck would you?
So it's...
How do you go about that?
Like some kind of, you know, round things, are they atom smashers or something?
No, there aren't.
Well, of course you could, like in the old Goldfinger movie, you could make it radioactive.
But no, the way to destroy gold is there are acids that will eat the gold and dissolve it.
Ah.
Very interesting.
Do not do that.
Oh, no.
Well, I don't know.
I guess it'd be good if I did that, if you're holding gold, I'd make it more valuable, right?
Well, no, but, you know, gold, unlike paper money, has more than a monetary purpose.
You know, it has a monetary purpose, obviously, but it's very valuable, whether it's in your fillings or in all kinds of industrial uses, in jewelry, so gold has a demand, aside from its monetary demand, which is one of the great things about it.
There is, of course, no demand for U.S. dollars outside of the monetary demand.
Nobody collects paper dollars because they think they're, you know, gorgeous and they wear them around their neck or whatever.
No, certainly not.
Well, and, you know, this goes to the whole thing, the subjective theory of value, really, right?
Is that just, you know, for these reasons that you've said, humanity has always agreed about gold for 5,000 years.
And not because there's something, you know, actually magical about it, just that it's useful.
It's, in a way, it's a fiat standard, too.
But it's just one that everybody assents to, rather than being told they must accept it by a court.
Well, that's true.
You know, I must say there are, you know, there are people who think that maybe there's even a spiritual, because there is no intrinsic value to anything from an economic standpoint.
However, there's something interesting about gold that it's found all over the face of the earth in pretty much the same, you know, the same quantities everywhere.
And anyway, it's quite, it's, thank goodness it's here.
Whyever it's here might be, you know, we could debate.
But it's just, it is money.
Because people value it as such.
All right.
Now, I have a problem.
And somebody wrote this on my Facebook page today.
And he's kind of got a point about, you know, the old golden rule.
He who has the gold makes the rules.
And of course, he has the Congress makes even more.
But I guess.
I was going to say, yeah, he who has the atomic bombs makes the rules, the actual, yeah.
Yeah, well, they're even fusion bombs nowadays, the super.
But if we had a gold standard, wouldn't that just mean that the guys who already have used the current manipulated standard to hoard all the gold now, they would still be the same evil people, would be in charge of everything.
They'd have everything.
No, I don't think that's right.
Gold.
Oh, make this answer real quick here.
We'll be talking when we get back.
Yeah, we'll do it when we get back.
And then also, I want to ask you about the globalization of trade.
I saw a dear leader talking about that on his world tour today.
We'll be right back with Lou Rockwell, y'all.
All right, man, economy and state here on anti-war radio today with Lou Rockwell, president of the Mises Institute.
We're talking about money and why gold is money because people seem to agree about that and why government money is money is because, you know, the paper, the bonds, because they got their guns pointed at us, basically, is the bottom line, eh, Lou?
Well, you know, it's because whether, I don't know if it's a fault in humankind or whatever, but Mises first wrote about this.
Money has to have originally have been something useful, a useful commodity.
And over the centuries, the millennia, the market shows gold and silver and copper and bronze as really subsidiary currency.
But once that, you know, once there's a dollar or a pound or a mark or a franc that's the weight of precious metals, the government can, you know, subtract the precious metals and people will still accept the name.
So it's, you know, at least for a very, very long time.
You know, I think I read in The Creature from Jekyll Island by J. Edward Griffin, although I could be wrong, but something about Marco Polo, which I guess they say made up the whole thing anyway.
So who knows?
But he said that in China, that this was like a remarkable thing.
How wonderful you can just, you know, put the face of the guy in charge on the thing and force people to accept it or else.
And most of the time they'll go along with it anyway.
And that was, I think he talks about the process.
It started out precious metals and then they switched it for political power.
Well, you know, it's a highly recommend The Travels of Marco Polo.
It's a great book.
I think it is actually not phony.
But anyway, in it, he does talk about the Emperor Kublai Khan and how he invented or his economists, his Council of Economic Advisors, invented paper money.
And Marco Polo says the most astounding thing.
They print this piece of paper, officials sign the piece of paper, and people actually accept it as if it were gold or silver.
He said it's really extraordinary.
He didn't have any moral judgment to make about it.
But it's a great passage in that book.
That whole book is fascinating.
It's true at the beginning, people in Venice and the rest of Europe thought this was phony.
But I think the current scholarly view is, and certainly my view, that it's the real thing.
Does that mean he didn't embellish it at all?
Like, you know, you can't say that.
But that story about Kublai Khan is very, it's a great story.
This is the first time we hear every year, by the way, paper money mentioned.
Because the Chinese did invent paper, you know, as a common good.
So who knows?
My guess is it's correct.
And maybe you're where I learned that story in the first place, too.
It's quite possible.
But so now, yesterday I was armistice day.
And I was thinking, you know, maybe the reason that they renamed it was because nobody knows what an armistice is.
Because that's old-fashioned.
We don't have those anymore, armistices.
Yeah, you know, it was originally, even before it was armistice day, it was called Decoration Day.
That was the day that people would decorate the graves of the war dead.
But I guess that was considered too depressing to recruit all the future war dead into the military.
But yeah, then it was the armistice.
And then it became Veterans Day, where we celebrate everybody, not only everybody who has been in the military, but everybody who is in the military.
Because of that reason only, not for any other thing about them.
Just because they're, you know, they're working for the government to support the troops.
Although my own view is, and people tell me, well, Eugene, you have to do that even if you're against the war.
So I said to a libertarian who's told that to me once, you know, and I said, I said, you know, and who's a big opponent of the drug war, I said, so you're telling me I have to support the DEA agents and the NARC squad members and so forth, even if I don't, even if I don't agree with the drug war, I have to support our boys in uniform who are fighting for us?
So, of course, you know, he didn't agree with that, but, you know, how's that a different argument?
Or maybe we should support all the IRS agents, or maybe we should support all, just, I don't know, the EPA agents, the TSA agents.
After all, they're, you know, they didn't set up these systems, they just wanted a job, they just needed a job, and don't blame them, just blame, I don't know, George Washington or whatever.
Right.
Yeah, in fact, I had that argument with a TSA agent, that, hey, don't get mad at me just because I'm searching your bag.
It's not my fault I'm searching your bag, and I said, yeah, of course it is.
Well, I'm just doing my job.
Yeah, but you could go get a real job, I says.
And her answer was, you know, look, what are you talking about, man?
This is a real job.
And I said, look, I got a little badge and whatever.
You know, she's participating in it, you know, she's the supply for their demand.
Well, sure, she's starting, she's probably making $40,000 or $50,000 a year, as she goes on, right?
A lot of them make $65,000 a year, plus a vast pension plan and vast medical plan and, you know, vast number of sick days and the whole panoply of parasite benefits that they get.
Well, it seems like one major deficit reform, as everybody's talking about reforming and limiting the deficit and stuff, one thing that we could do that I think would be a positive step would be to outlaw all government employee unions immediately.
Wouldn't that be fun?
Well, that would be great, yeah.
Especially the cops.
Then we need to outlaw all government employees.
Well, that could be a great next step.
In fact, I think we'd be able to if we could only get rid of those damn government employee unions in the first place.
All right, now, so here's the thing.
The dear leader was on the TV and he was saying to the people out there that, you know, around the world where he's on his world tour, that we have to keep globalization going.
We can't give in to protectionist tendencies.
And I guess he was really probably threatening them about what they better do for us or whatever and call that free market capitalism.
But I have a feeling that you somewhat agree with the emperor on this.
Well, I certainly agree with his rhetoric.
You know, I mean, you know, he would also say, you know, we're fighting for freedom in Iraq and Afghanistan, which, of course, is a lie.
No, what I want is the Mises.org version of why we need globalization of trade.
Well, you know, if you live in Southern California, here's free trade.
If you could drive to Mexico, buy everything you wanted, fill up your car, drive back across the border and wave at the guard, that is free trade.
Free trade is not Caterpillar getting some big contract vis-a-vis the federal government with Mexico, with the Mexican government, which is, of course, what they call free trade.
So Obama, the United States, in fact, the U.S., Donald Obama, Bush, all the American presidents going back a very long way have all been major league protectionists.
But of course, they lied.
So they say, we're not for protectionism, we're for free trade, which, as you say, means you foreign countries do things our way, benefit our big companies, because they don't care, of course, about American consumers or small American companies, benefit the big companies connected to the regime in power, and then we'll, you know, pat you on the back and say we're all for free trade.
So globalization is nothing new.
I mean, the word is new, but, you know, there was global trade 2,000 and 3,000, 4,000, 5,000 years B.C.
I mean, this has always been international trade.
International trade is wonderful, just like domestic trade.
Both parties benefit, at least ex-ante, you know, they believe they're going to benefit when the trade takes place.
That's the only way the trade can take place, if it's a voluntary trade.
So this is a great aspect of human civilization.
It builds social community.
It makes war less likely.
That makes us all far more prosperous.
It gets, you know, it enables us to know people in other cultures and other languages.
Just wonderful.
So the government, like it does with every good thing, takes it, twists it, turns it, and using, and oftentimes doing the exact opposite, says you have to support it in the name of the original thing, whether it's freedom or liberty or free trade or, I'm not a fan of democracy, but they, you know, they use democracy because all these things in the mouth of an Obama or a Bush means U.S. government control.
When they talk about free trade, it means the U.S. government will control you.
When they talk about democracy, they mean the U.S. government will control you.
Same with freedom, you know, et cetera.
U.S. government control, that's what that means.
Any time they use any good word or phrase, it means controlled by the U.S. government and, of course, the big corporations in cahoots with the U.S. government.
Well, but isn't he right that the giant crash, as you described it, global in nature, worse than 1929 in its scale, trillions of people's dollars of what they worked for destroyed out from under them and so forth?
Are we going to see, you think, a breakdown in the advance of the division of labor around the world?
Well, you know, I think that's very possible, but let's take a look at, for example, just what the U.S. is doing.
The U.S., with its quantitative easing, too, and, in fact, all the stuff it's done in the past since this crash, but especially with quantitative easing, too, by the way, is another name for money printing.
You know, it's just another lying euphemism of the government.
So they're going to do QE2.
The purpose of QE2, or at least a purpose of QE2, is to devalue the dollar to stimulate U.S. exports, which, when they do, when they have an artificial devaluation of the dollar like that, it hurts other countries.
So what Obama is doing is saying, you've got to take it.
We're going to kick you in the teeth.
You've got to take it.
You've got to like it.
We're going to call that free trade.
But it's not free trade.
And so he is the protectionist.
He is the criminal, just like the rest of U.S. presidents and all their pals.
Absolutely.
All right, everybody.
More of that at LewRockwell.com, at Mises.org.
This is Lew Rockwell.
Listen to his radio show.
Read his books, The Left, The Right, and The State, and Speaking of Liberty.
Thanks very much, Lew.
