Re: Long article on the dollar -- but worth reading

On Mon, 20 Feb 2006 12:55:24 -0600, "Harry Thompson" <me@xxxxxxxxxxx>
wrote:


"Rumpelstiltskin" <PleaseDoNotReplyByEmail@xxxxxxxxxxx> wrote in message
news:u9ehv11mh9d2sit0rgvjv1h8pnb0tsb86g@xxxxxxxxxx
On Sun, 19 Feb 2006 08:18:59 -0500, Gary James <gnjames43@xxxxxxxxx>
wrote:

The End of Dollar Hegemony

by Ron Paul

Before the US House of Representatives, February 15, 2006


Yes, that's the article sent to me by email, from which I quoted
just the last paragraph in a thread with MichaelC elsewhere.

Well, I have a couple of problems with Ron Paul's article. He's a good man,
an honest conservative, but hung up on gold mysticism. It's just a
commodity, like any other commodity. Traditionally, it has been used as the
medium of exchange, but that doesn't confer magic upon gold. I suppose that
in the remote past it worked for exchange because the amount of gold
increased in a very rough proportion to the increase in real economic
growth. Throughout the 19th Cent at least, and I suspect in other times,
there were frequent problems with gold not increasing enough to match
economic growth. Hence there were frequent bouts of "irrational exuberance"
with frequent bouts of depression.

I think we cannot use gold for exchange because the amount of gold we have
is insufficient for our actual economy. Our economy is worth more than our
gold.

Also, Paul's interpretation of our history is ok, but not quite enough.
Somebody, I forget who, said nations do not have morals, they have
interests. That's true for others and it's true for us. I get the feeling
that Paul thinks our national policy should be morally based rather than
interest based. But maybe I didn't read him carefully enough.


I was thinking of gold as a metaphor for genuine value, and
have no objection to what you point out as the shortcomings of
non-metaphoric gold in our own age. One of our problems is,
I guess, that we don't have anything as rock-firm to represent
true wealth nowadays. I guess wampum is out: an 8-year-old
child in India can turn out a ton of it in just one 18-hour day
nowadays, as long as she maintains constant diligence all day.

I know nothing about Paul except for this article. Gold is an
artificial standard, and pretty soon will be obsolete as a standard
once we achieve the alchemist's dream of making it out of other
elements at reasonable cost. Since we don't have anything
simple nowadays that generally represents wealth, we have the
problem of it being all too easy to sink in to irresponsibility,
while postponing and thereby amplifying a reckoning, as we are
doing in the US today and have done at other times in history.
The famous black tulips of Holland come to mind, when people
who thought they were wealthy were ruined overnight, because
the general population got out of bed one morning and, due to
Saturn having come into unfavourable aspect with Neptune,
suddenly realized that these black tulips were just flowers and
not really worth what they had been said to be worth. We have
hundred-dollar bills instead of tulips, but they're really just paper,
not in themselves bread or internal combustion engines both
of which have real worth but are unsuitable as currency for
varying reasons. I'd better get out my astrological ephemerides
and check where Saturn is with relation to Neptune at the
moment. I hope it's not about to move out of the House of
Franklin.



.

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