Recovering Austrians

Austrian School of Economics in One Lesson

Anthony Migchels — Mon, 20 Feb 2012 14:37:35 +0000

The Austrian School of Economics was funded by the Rockefeller Foundation and the William Volker Fund. The same people who created the United Nations and wrote the Federal Reserve Act of 1913 got what they paid to have funded, a utopia for bankers and bureaucrats and a dystopia for the rest of us. To understand this dystopia, you only have to follow the deductive logic of the Austrians. First, you have to borrow gold from the bankers to pay rent to the bankers to be on their land. Next, you have to borrow …

Libertarianism’s main fault: Blaming the State while ignoring the Money Power

Anthony Migchels — Mon, 20 Feb 2012 14:36:25 +0000

Reblogged from Real Currencies:

“In all corners of the earth the words “Liberty, Equality, Fraternity” brought to our ranks, thanks to our blind agents, whole legions who bore our banners with enthusiasm. And all the time these words were canker-worms at work boring into the wellbeing of the goyim, putting an end everywhere to peace, quiet, solidarity and destroying all the foundations of the goyim States.” Protocol 1 Among its many failings this one stands out: Libertarianism and Austrian Economics blame the State for everything, while …

Why Gold is so strongly deflationary

Anthony Migchels — Sun, 19 Feb 2012 23:13:05 +0000

Reblogged from Real Currencies:

‘You are aware that the gold standard has been the ruin of the States which adopted it, for it has not been able to satisfy the demands for money, the more so that we have removed gold from circulation as far as possible.’ Protocol 20 One of the key problems with Gold as currency is that it is strongly deflationary. Austrian Economics both denies deflation is disastrous and that Gold is deflationary and this is one of its major weaknesses. The fact that Gold is strongly deflationary has always been one …

Paper Beats Rock: The Gold Standard is Theft

Anthony Migchels — Sun, 19 Feb 2012 23:12:36 +0000

By Keith Gardner, Liberty Revival

Paper Money is Better than Gold Money

If you convert the $15T in US money supply to gold, the government would need to add $15T to the national debt to purchase gold. That means the national debt would be $30T, and we’d owe $1.5T/year at a 5% interest rate on that national debt. Even if spending was drastically cut, you would still need to increase taxes to pay interest on the national debt to convert to a gold standard.

During that process, it would be quite reasonable to expect gold to reach $5K/oz, if not much more. That means you would need to pay $5K/oz in dollars backed by gold. You would only need to pay $1.5K/oz in paper dollars.

You can buy more gold with paper than you can buy with dollars backed by gold. The simple reason for this is that the supply of gold is now being wasted to back the legal tender. If you love gold, you should not want the government to intervene in the free market for gold by declaring it legal tender.

How Gold Money Steals from your Real Assets

If you have 50 ounces of gold under your mattress and your home is worth 120 ounces, you home will lose more value than your gold will gain. If gold doubles in value, you will still have 50 ounces of gold under your mattress and your home will only be worth 60 ounces of gold. You went from a net worth of 170 ounces of gold to 110 ounces of gold. You lost 60 ounces of gold in net worth, more than you have under your mattress. With gold doubling in value, you gained 50 ounces of purchasing power with your gold and you lost 60 ounces of purchasing power with your home. Your purchasing power dropped from 170 ounces to 160 ounces, with a net loss of 10 ounces of gold.

If you own a home, you need to buy gold just to hedge your assets if we went onto a gold standard. If you love gold and your other assets, you should not want the government to intervene in the free market for gold by declaring it legal tender.

Why Commodity Basket is not an Option

As we saw above, if the government selected multiple commodities, the government would need to corrupt multiple commodity markets, making those commodities more expensive. In order to prevent inflation and deflation, the government would need to constantly adjust the basket and actively buy commodities to keep the economy growing. This means the government would need to collect taxes in order to allow the money supply to increase. If you do not trust government to deliver the mail, you should not trust the government as a commodity trader.

Furthermore, all commodities in the free market have unstable and volatile valuation. Even in gold markets, there is a constant change in supply, from mining and recycling operations, as well as a constant change in demand, from investment, jewelry, and technological applications. The government would need to constantly research trends in the different commodities and consider multiple factors with each commodity.

If you love commodities, you should not want the government to intervene in the free market and become commodity traders.

Why Free Market Currency is not an Option

We can’t trust the government nor the free market to provide currency with stable valuation. If the government selects any free market currency to be legal tender, the government has intervened in the free market for currencies. The government will be favoring one currency provider over another.

Furthermore, if you have multiple currencies, there will be extensive money market manipulation. Adam Smith warned us about this in his economic treatise, Wealth of Nations, published in 1776, after observing money markets in the American colonies, and his why colonial currencies were banned in the U.S. Constitution.

If the government selected commodities or free market currencies, everyone would need to become commodity and currency traders to stay ahead of the curve. Those with the most wealth and credit would still win since they would be able to borrow in the inflationary currency and accumulate the deflationary currency.

If you love free market currencies, you should not want the government to intervene in the free market by selecting free market currencies as the legal tender.

Why a Public Debt-Free Legal Tender is Best

Our best chance of a having a stable currency is with a public debt-free legal tender. We can’t trust the free market nor the government. However, the government would be our best choice since we would all have equal representation and there would be direct accountability and transparency.

It would be immune from credit expansion/contraction cycles because there would be no interest. Our only concern would be making sure the government prints enough to prevent deflation and allow economic growth with enough investment and job creation to meet growing populations, which would be easy to demand from the government. Since the wealthy would not profit on interest, our concern for inflation would be less since the wealthy would no longer lobby for deficit spending but would lobby against it. Inflation would eventually be corrected with investment and job creation, which the inflation would encourage. We would need to be concerned about hyper-inflation, which would be easy to demand from the government.

Inflation is easily avoided as a tax through savings and investment, but the tax rate is still nonetheless low, taxing only average daily cash balance. The advantage of inflation as a tax is that there are government forms and the tax encourages production.

We would be able to ban the government from borrowing. If the government needs to borrow money, it would simply print money rather than borrow it as interest-bearing debt. Usury would be eliminated from public finance.

We would be able to pay off the national debt and end income taxation when the interest on national debt is eliminated. If the government ends fractional reserve banking, it would need to print a lot of money to prevent deflation while private debts are paid off to bring reserves to full reserves. This printed money can be used to pay off the national debt.

A gold standard would require a doubling of the national debt and an increase in taxation. A public debt-free legal tender would eliminate the national debt and income taxation. Inflation would benefit the tax payer rather than the usurer and could be more easily managed. Furthermore, the total destruction and theft of deflation would be easy to prevent.

If you love the free market and low taxes, you should want the government to stay out of the free market for credit, commodities, and currencies, and provide it’s own legal tender, free of usury and economic rent.

The Barking Dogs of the Daily Bell and Lew Rockwell

Anthony Migchels — Sat, 18 Feb 2012 17:23:46 +0000

In response to my article about how the Money Power created Libertarianism and Austrian Economics, the Daily Bell replied.

Here’s Daniel Krynicki’s response to that.

First my Feedback:

Your Words:

“Migchels has explained that his version of social credit is free-market oriented and “private,” but Douglas’s certainly does not seem to be. We can see from this brief description that Douglas apparently intended to use social engineering (government power) to redistribute wealth via a “national dividend” and also via his idea of a “just price” that would fix prices across a given society.

Of course, price fixing via force is likely, in our view, to further distort an economy, not bring it justice. As Adam Smith (and then others) showed, the only methodology of true economic growth resides in the marketplace itself, which can efficiently distribute capital via the Invisible Hand of competition. Without competition, one simply has the hand of man. The “hand of man” (government) murdered some 150 million people in the 20th century.”

My Reply:

Your response to Migchels seems ad hominem as much as it is cursory. You never discuss why there is always a shortage of money, also how it is created and then injected into the currency stream. You write about CH Douglas, but never that he pointed out why there is always a shortage of effective purchasing power among the working class and the apparent reasons for this.

This article by Migchels is a follow up to numerous others which demonstrate that any debt/usury based private creation of money is always destructive of the people’s economic freedom and health. This is where we draw the line with the likes of Lew Rockwell, Gary North and Justin Raimondo. The libertarians refuse to let go of their desire to create the money supply. The reality is that while they demand usury for their created money, they lock their gold up in a vault and never risk anything in the process. At the same time, the borrowers of their created money may risk a home that they paid principle plus interest for twenty years or more because the money creators orchestrate another hiccup in the money supply.

The simple truth is this: Money can be created in more ways than one. It can also be created without usury. We have the power to destroy this Ponzi model foisted upon us by using the finest document ever devised by the minds of men in 1787. But Rothbard and Rockwell insist that they keep this power in private hands with the ability to collect usury for their money creations.

As always, these ‘experts’ always reject the the only means the people have for redress of grievances – the state. The people need to stop listening to these ‘barking dogs’ and use the state in the way that the Unanimous Declaration and Constitution provided us with to promote the general welfare by means of Article 1 Section 8 Line 5. A national dividend to establish a money supply with a compensated price mechanism would certainly keep a free market economy moving briskly.

Daniel S. Krynicki

http://www.thedailybell.com/3625/The-Anti-Freedom-Movement-States-Its-Worst-Case

Alex Jones’ New World Order Agenda

Anthony Migchels — Mon, 13 Feb 2012 13:11:34 +0000

Reblogged from Liberty Revival:

Alex Jones revealed “The New Pearl Harbor” document from the Project for the New American Century (PNAC) called “Rebuilding America’s Defenses” as part of the New World Order’s agenda. Alex Jones fails to mention the other PNAC document, the book written by PNAC board member Lewis Lehrman, called Money and the Coming World Order: The Creation of International Monetary Order. The document is hosted on web site called, “Gold Standard Now,” which is a project for the Lehrman Institute. The title is quite …

Keith Gardner strikes another powerful blow on the Gold Standard.
It transpires that PNAC is calling for it!

Hate the State, buy Gold and all will be well: an Alternative Media in Crisis

Anthony Migchels — Sun, 12 Feb 2012 15:14:13 +0000

Reblogged from Real Currencies:

A little more then ten years after the Truth Movement was born, its key asset, the Alternative Media, is dying. Austrianism, ego and over reliance on too few news aggregators have allowed the Money Power to stall the opposition. A little more than a year ago Activist Post compiled a widely read Top Ten of the Most Influential People in the Alternative Media. Let’s analyze this list and see what kind of ‘opposition’ can be expected from these people. 10. Dr. Paul Craig Roberts Activist Post: “Roberts scores …

Ron Paul: Freedom is Slavery

Anthony Migchels — Sat, 11 Feb 2012 16:34:36 +0000

Reblogged from Liberty Revival:

Ron Paul wants government to declare gold to be legal tender for payment of debt and taxes. Ron Paul wants to get government out of the free market in gold by having government intervene in the free market for gold. Ron Paul loves free market currency and gold so much, he wants government to end the free market in gold and other currencies by making gold and free market currencies legal tender for payment of debt and taxes. Ron Paul believes in the separation of markets and state so much that he believes …

The Daily Bell tolls for another round in the debate

Anthony Migchels — Wed, 01 Feb 2012 10:16:27 +0000

Reblogged from Real Currencies:

In an ongoing debate the Daily Bell rehashes the ‘free market’ version of the Gold Standard and defense of the indefensible: deflation. In these matters another problem of Austrian Economics comes to light: too much reliance on deduction, blinding them to the obvious practical issues. …

For a third time in a row the Daily Bell responded to an article I wrote for Henry Makow’s site about Gold as Currency. Here’s my response to that.

The Austrian School is a classic example of crank science

Anthony Migchels — Mon, 30 Jan 2012 14:38:03 +0000

“Perhaps the first thing to stand out about Austrian economics is its relationship to mainstream economics. The two completely reject each other, and proudly so. (…)“

Mainstream economists dismiss the Austrians as cranks. Nobel economist Paul Samuelson wrote that “I tremble for the reputation of my subject” after reading the “exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods].” (1) Noted economist Mark Blaug has called Austrian methodologies “so cranky and idiosyncratic that we can only wonder that they have been taken seriously by anyone.” (2)

Continue reading at source

Of course these words are by Mainstream Economists, so it’s hard to take them seriously.

But Samuelson does make a very valid point saying “exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods].”

I have also noted that Austrians like to mistake their definitions for the real world. They’ll try to involve you in deductive arguments, ignoring what is actually happening. This is what blinds in their defense of deflation, for instance. They have their logic explaining it should be beneficial, which makes them vehemently disagree that deflation is usually related to contraction.