Al's Insights – Wed 12 Dec, 2012

Part Two with Jeff and Bob Wenzel

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Jeff Deist

  1. On December 12, 2012 at 5:44 pm,
    marc says:

    Big Al and Jeff,
    First of all, Big Al better be careful, Jeff might run Big Al out of a job. Ha. Kidding aside, you guys touched upon Iran and gold. However, gold being the ULTIMATE form of money is as we know is FINITE. One thing that wasnt touched upon, but dovetails with that thought process, was that the another quicker moving currency exchange is taking place that also threatens the dollars KING status. Countries that UNDERSTAND the critical risks involved with dollar denominated assets are becoming involved in major currency swaps and currency for goods exchanges OUTSIDE the dollar. As long as each participant understands what the surreptitious rules are with respect to continually anchoring their sovereign currency plays to a hard asset – namely GOLD. Thus, unlike Iran strictly wanting gold for oil many countries are now understanding the need to get involve with each other as long as that participant IS NOT completely BASTARDIZING their currency. Dollars coming back to ours shores is rapidly coming to ROOST much quicker than anyone would anticipate. Like I heard today – SOMEDAY PEOPLE WILL WALK INTO A LOCAL WALMART AND THE PRICES FOR THEIR GOODS WILL BE LIKE A NEIMAN MARCUS NIGHTMARE…….can you say STICKER SHOCK! Got physical gold and silver?

    • On December 12, 2012 at 6:06 pm,
      Jeff Deist says:

      Marc- Gold is indeed money, and oil won’t be too shabby either if the central banks around the world force us into a barter economy.

      • On December 13, 2012 at 11:46 am,
        marc says:

        Let me state that some of the countries BYPASSING the US dollar include: UAE, Brazil, Austraila, Russia, Turkey and many others with deals that are OVERT and NOT so overt. And, of course, when I stated that GOLD is FINITE. Of course not. What I really meant was that it’s “supply” properties are CONTROLLED systematically by mother nature and MAN’s willingness and technological capacities to harness and acquire. In other words, it doesnt involve a FRIKIN printing press which leads it be naturally IMMUNE to debasement and ill-will. Gold and SILVER stand on their OWN MERITS irregardless of MAN’S inherent bad nature to try to GO AROUND it on a continually historic basis. When will we LEARN?…..apparently NEVER!

        • On December 13, 2012 at 12:05 pm,
          marc says:

          One last thing,
          To give people there proper due, that saying about WALMART turning into Neiman Marcus came from DR. PAUL CRAIG ROBERTS…if you dont know his work, I suggest you look him up…he is VERY, very good!

          • On December 13, 2012 at 12:12 pm,
            Big Al says:

            Thanks Marc.

        • On December 13, 2012 at 12:13 pm,
          Big Al says:

          People are learning, Marc!

  2. On December 12, 2012 at 6:01 pm,
    Dennis M. O'Neil says:

    If you enjoyed Jeff Deist and Nob Wenzel’s discussion you may enjoy the below:

    Austrian Economics take of Santa Claus

    The Santa Claus Principle

    “The essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole doctrine of interventionism collapses when the fountain is drained off. The Santa Claus principle liquidates itself.”

    “He who does not take into consideration the scarcity of capital goods available is not an economist, but a fabulist.”

    “There is no need to tell us an ampler supply of various commodities would be welcome to all people. The question is whether there is any means of achieving a greater supply other than by increasing the productivity of labor by the investment of additional capital.”

    “The traditional tax policy of the age of interventionism, its glorified devices of progressive taxation and lavish spending, have been carried to a point at which their absurdity can no longer be concealed. The notorious principle that, whereas private expenditures depend on the size of income available, public revenues must be regulated according to expenditures refutes itself. Henceforth, governments will have to realize that one dollar cannot be spent twice(contemporaneously), and that the various items of government expenditure are in conflict with one another.”

    “…neither the success nor failure speaks a distinct language audible to everybody. The experience derived exclusively from complex phenomena does not bar escape into interpretations based on wishful thinking. The naive man’s propensity to ascribe omnipotence to his thoughts however confused and contradictory, is never manifestly and unambiguously falsified by experience. The economist can never refute the economic cranks and quacks in the way in which the doctor refutes the medicine man and the charlatan. History speaks only to those people who know how to interpret it on the ground of correct theories.”
    The above quotations are form Ludwig Von Mises- Human Action – Pub 1949 – The book accurately and specifically describe the dilemmas we face today. It is tragic that the lesson were so long largely ignored by so many.

    The difference between what is and what men think they know is immense. John Maynard Keynes has for decades provided a fig leaf which has provided a cover for the falsity of modern liberalism.
    All systems without a self-correcting mechanism will cease operation.
    What is unsustainable will end. The only true question is when?

    Santa Clause or not……MERRY CHRISTMAS
    Merry Christmas HO HO HO
    I first posted the above on the yahoo Hecla Board December 20, 2010 the last time the Bush Tax cuts were due expiration. The Jeff Deist title, discussion and season made me think of the Von Mises quotes. Long before Paul Tsongas and Rush Limbaugh…Von Mises had called the overspending collectivists on their Santa Claus aspirations. I give Von Mises only one crtitique. Von Mises might be criticized for having predicted so long ago what has not already occurred. But the only reason he has not been spot on is the unforeseen fiat farcical lengths we have gone to make our financial precipice more severe. It is similar to aviation technological advances have enabled the common carrier jet to fly higher and faster than few in the 40’s envisioned. In “high finance” also known as fraudulent farcical monetary mayhem few would have predicted the lengths we would go to paper over what is not to make it what is.

    • On December 12, 2012 at 6:03 pm,
      Jeff Deist says:

      Dennis- it’s Christmastime in DC all year round…

      • On December 12, 2012 at 6:48 pm,
        marc says:

        Isnt that the truth!! Keep up the good work and hopefully you will make a run for the presidency…what do you think? :).

    • On December 12, 2012 at 6:58 pm,
      marc says:

      Where do you get all this stuff – you are one well-versed, “pull the literary rabbit” out of the hat type of guy – unbeeelievaaablllle.

  3. On December 13, 2012 at 9:43 am,
    MissiveDuTexas says:

    I enjoyed the discussion. Mr. Wenzel might find the principles underlying Raw Materials Economics sound and just. I find that Austrian Economics helps really helps define the symptoms of an unjust currency system, but lacks in presenting valid requirements for a “fair” system. If we were to do away with fractional banking, a very unjust system, and go back to gold and silver, we would find ourselves in the greatest depression ever seen.

    So what is the solution?

    Issue currency without its orthodox debt instrument attached, and issue it in proportion to raw material production and the needs of the people. The only variable left to manage is inflation, which can be managed by taxation, duties and tariffs.

    Deat to colonialism version 2.0!
    Long live the Republic!!
    Long live the Spirit of Liberty!!!

    • On December 13, 2012 at 10:14 am,
      Dennis M. O'Neil says:

      Missive why not let the market decide what circulates as the medium of exchange.
      One reason silver and gold have worked so well is that on average the metals annual mine production was in line with the growth of overall economic production.
      The solution I find in Austrian economics is that literally billions of individual decisions will admittedly not lead to a perfect result……. but will result in a far superior result as compared to the corrupt contrived dictates issued by a group of elitist meeting in Jackson Hole or Davos.

      • On December 13, 2012 at 2:32 pm,
        MissiveDuTexas says:

        If you study human economic laws, you will find that the money supply should at least grow at the same rate as the increase in population to avoid imbalances. Of course, for this to be sufficient for a just system, the system cannot favor any one particular group for distribution, as is the case with the “too big to fail” special group of needy since 2008.

        • On December 13, 2012 at 3:48 pm,
          Dennis M. O'Neil says:

          If I were you I would consider the context of “just”.
          In my world “just” is a result and not a condition.
          The problem with “social justice” is that when you “even the playing field” you must place weights on the ankles of the swift.
          I would rather lose a race as compared to winning a race in which I was given a head start. Remember the goal of the justice of collectivism is that those with talent will be treated similarly as those without talent. When a free market rewards merit the system evolves. When a top down directed economy attempts “justice” and/or “fairness” the system will stagnate at least until the inevitable revolution.

          • On December 13, 2012 at 4:20 pm,
            MissiveDuTexas says:


            You are interpreting “just” in a totally different manner than I do. Levelling the playing field is not justice in my book. That everybody respects and plays by the same rules is fair. Right now, the “too big to fail” play by their own rules and hand over the tab to We, The People.

            Not fair, not just.

          • On December 13, 2012 at 4:46 pm,
            Dennis M. O'Neil says:

            I am with you on the injustice of too big to fail banks.
            What I find is more epidemic is the overly subsidized masses.
            Why is it that with high unemployment it is difficult to fill an entry level position?
            Because 36 to 39.6 % is not the highest income tax increase in question.
            The world in which we live is a world where the conversion from being unemployed to be employed is made illogical. In other words why work for minimum wage when you can watch TV all day and make 80% of what you would for not even getting off the couch. We are subsidizing sloth. To put forth effort today means you only net 20% more than if you did nothing. It pays well to do nothing. It is as if the Second Law of Thermodynamics is proven by lawmakers each and every legislative session.

          • On December 13, 2012 at 6:12 pm,
            MissiveDuTexas says:

            Dennis –

            “What I find is more epidemic is the overly subsidized masses.” – As I stated before, this is crumbs left from the full meal mega corps got. Congress even passed a law to garantee small businesses would get a piece of the manna, but even those rules are ignored in favor to big corpos.

            Here are just a few of the companies that were considered a small business in the past year: Apple, Chevron, Verizon, Bank of America and Disney.


            As for unemployment, economic theory will tell you that at a macro level, this may be desired to dampen the negative effect on aggregate demand during a downturn. That aside, the expense on unemployment is, again, nothing compared to the 40-45 billions the Fed gives monthly to the too big to fail.

            Come guys, these corporations own all the major media outlets, do not let yourselves be so easily deceived.

          • On December 13, 2012 at 7:19 pm,
            Matthew says:

            I’m not sure I know what your definition of a “level playing field” is. To me, it means that the laws are the same for everyone. No one is disproportionately helped or hindered because of who they are. In my definition, there are no weights on the ankles of the swift or the not-so-swift.

          • On December 15, 2012 at 3:19 pm,
            Big Al says:

            I could not agree with you more, Matthew!

        • On December 13, 2012 at 7:46 pm,
          Dennis M. O'Neil says:

          How do you resolve an environment of a plethora of pages of legislation when the burden of the resulting laws are selectively/politically enforced.
          I dare saw anyone reading this is in violation of multiple laws this very day.
          It then becomes an operation of what competition is eliminated by selective enforcement. But then we could seek remedy by having breakfast with Mussolini.

          • On December 13, 2012 at 9:50 pm,
            Matthew says:

            I am not at all talking about eliminating competition. Countless laws and regulations should be eliminated and no one should be above the laws that remain. It’s really not a radical idea. Take the S&L scandal of the ’80’s, thousands went to jail. Today, no one goes to jail for anything because the perps made sure that what they’re up to is legal -not right, just legal – and only for them, not us. Without just one set of laws that ALL must follow, society decays as morality and civility evaporates.
            As far as your question of “resolving” anything is concerned, there will be no fix for even the simplest of problems until a certain percentage of the masses actually know what the hell they’re talking about and what it is that they stand for. In my experience, most people suffer from cognitive dissonance in so many areas of life that any resolution to anything important seems very far-fetched. Ignorance is the root of evil. And it’s everywhere.

            “Only a virtuous people are capable of freedom. As nations become more corrupt and vicious, they have more need of masters.” -Benjamin Franklin

          • On December 15, 2012 at 3:18 pm,
            Big Al says:

            Amen, Ben, Amen!

          • On December 13, 2012 at 11:01 pm,
            Dennis M. O'Neil says:

            As I watch the meteor shower I cannot think of any resolve to all outstanding economic issues….that is unless one of these shooting stars delivers an unprecedented amount of AU…. preferably to my back yard….. so as I can spend it first.

          • On December 15, 2012 at 3:17 pm,
            Big Al says:

            Sorry Dennis M, already landed here last night!

    • On December 13, 2012 at 10:58 am,
      Matthew says:

      You are obsessed with avoiding the consequences that are now inevitable due to many decades of unsound money and all the insane promises and policies that are the result. Busybody do-gooders, pushing their idea of “fair’ on everyone else is part of the problem. It is ludicrous that you promote liberty with your words but not your beliefs.

      Your paper money, taxation, duties, and tariffs stand in the way of liberty. You seem to have conflated liberty with YOUR idea of fairness. I have yet to see you criticize the stupidity of those who took on far more debt than they should have and chose not to save a dime. Nor have I seen you criticize the welfare state. As long as you think that one part of society has ANY right the property of the rest of society, you are NOT for liberty. Isn’t it ironic that the very people who call the “rich” greedy are the same people who benefit most from state sanctioned theft. They are no different from the connected corporations that they hate -the middle class is being crushed by both the “haves” and the “have nots.”

      By the way, regarding your foolish indictment of Mises based on some funding by the Rockefeller foundation, did you know that Mises was in his sixties at the time? His great work began decades earlier.

      Dennis is right. Nothing could be more democratic than a free market. Your opinion (which you expressed months ago) that the bankers would like to see a gold standard, is preposterous. They desire to own it for the same reason that industry desires copper or iron. They recognize its natural properties and the unique utility derived from those properties. They can’t do anything about gold’s “moneyness” anymore than they can influence the merit of copper or iron for specific applications.

      Mr Wenzel was addressing YOU at the end of the interview.

      • On December 13, 2012 at 11:37 am,
        marc says:

        An excellent “missive” WITHOUT the Du Texas in there…well done professor…..well done.

      • On December 13, 2012 at 12:17 pm,
        Big Al says:

        I obviously have to agree with you Matthew.

        • On December 13, 2012 at 3:02 pm,
          MissiveDuTexas says:

          You agree with all these as well, Al?

          “… obsessed…Busybody do-gooders… ludicrous… foolish indictment…preposterous…Mr Wenzel was addressing YOU at the end of the interview…”

          I do believe your opinions are a little bit more tempered, are they not?

      • On December 13, 2012 at 2:55 pm,
        MissiveDuTexas says:

        “Mr Wenzel was addressing YOU at the end of the interview.” – How flattering that would be. But of course, he was not. If you listen very carefully, he was talking about these upcoming politicians that piggy back on Ron Paul’s philosophy to gain political stature without fully understanding what they say.

        “You are obsessed with avoiding the consequences…” Not really. I just don’t see the need to follow the crowd who, like you, have no idea how bad things can get if we let the puppeteers define the path We, The People, need to take to get out of this mess.

        “Your paper money, taxation, duties, and tariffs stand in the way of liberty.” – That is probably why powers in such areas were granted to the House of Representatives. Do you believe the founding fathers were ignorant communists or what?

        ” I have yet to see you criticize the stupidity of those who took on far more debt than they should have and chose not to save a dime.” – What you call “stupidity”, I see as a successful social engineering effort on the part of the puppeteers. But even if you are right, should the sins of the parents be loaded on several generations of human beings not even born yet? Not to mention all the trillions corporations received while people still are loosing their home to doubtful claims on their property.

        “Nor have I seen you criticize the welfare state.” – I certainly don’t agree with the philosophy of money for nothing, but I don’t agree with stealing from those who contributed for decades to a non-existing fund (SS).

        “As long as you think that one part of society has ANY right the property of the rest of society, you are NOT for liberty.” I believe in the principle of “no taxation without representation”, whatever that means to you.

        “They are no different from the connected corporations…” Wow, that is a good one. I see the difference as the big, international mega-corporations getting a full course meal, and the rest of us scrambling for the crumbs on the carpet after everybody has left the table. BIG difference.

        “Your opinion that the bankers would like to see a gold standard, is preposterous.” They obviously cannot control everything, but I am confident that they will not only avoid negative consequences from this mess, but gain from it.

        Again, since you have obviously not made the effort to educate yourself yet:

        A Modest Enquiry into the Nature and Necessity of a Paper-Currency by Benjamin Franklin (1729)

  4. On December 13, 2012 at 1:55 pm,
    benb says:

    Didnt yak dung get used in an asian country for a couple hundred years, or tally sticks for about 700 years in britain, or how about the “greenback”? I am sure there are other successful examples.
    I think there is a solid argument that we dont need PMs as our currency. That doesnt mean that PMs are not money, just we dont need it as our currency.

    • On December 13, 2012 at 4:30 pm,
      Matthew says:

      So buy a yak and “print” your own money! You are totally missing the point benb. Your “successful examples” do not have any market value. To accept them as money is to accept that your leaders are also your masters. If they are mismanaging the sticks, paper, or any other dung medium of exchange, which history proves they always will, your savings get confiscated. Each has counterparty risk. That is, each relies on the actions of a powerful few for their value. Gold does not. None of those imaginary moneys could stand competition. Their acceptance is FORCED. Without legal tender laws and heavy taxation (or confiscation) of the precious metals, they would collapse. Given a choice, even morons would choose the high quality money. The money with the longest record, that: has never failed; is valued everywhere; and is durable, fungible, and convenient.
      There was a time not all that long ago when even “common folk” understood that money and markets should be separate from any and all government action. It was also understood that well enforced contract, property, and fraud laws are all the market needs to run fairly. All the so-called watchdog regulators today just add moral hazard, needless expense, and unnecessary complications to the markets.

      Gold is free-market money. Fiat turds, twigs, and TP are not.

      • On December 13, 2012 at 4:39 pm,
        marc says:

        “Fiat turds”? Love it. Maybe, though, professor – we could FLATTEN them out and use them for a throwing contest – a la cow chips. Of course, the banksters would have the job of picking them up and bringing them back to us over and over again. Kinda like “bankster servants” for our own entertainment. See fiat turds can be used for something.

        • On December 13, 2012 at 5:42 pm,
          Matthew says:

          I stand corrected. I’ll try to think things through next time.
          Thanks Marc!

  5. On December 13, 2012 at 1:57 pm,
    benb says:

    OOps forgot to say, I would prefer a PM backed currency, just might not be our only option.