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Gold And Value
By Dick Eastman
"The article you have sent me contains this statement: "Either gold is a portfolio asset or everything else is." I say that when gold as a portfolio asset is monopolized by an organized network like the existing Money Power and they are able to destroy the currencies of nations at will, then their gold monopoly gives them total control of any and all assets."
Dear Trace,
Thank you for sending this interesting article, "Value Calculation." (below) I suspect you were fishing for a reaction.
Here it is.
The argument rests on the "constant marginal utility of gold."
Neither as a commodity (in art, electronics etc.) nor as a medium of exchange does gold have constant marginal utility. As a commodity its marginal utility varies with the marginal utility of the products in which it is incorporated. As money or base for money, its marginal utility varies more or less inversely with the marginal utility of substitutes for gold in exchange and in storing purchasing power.
The purchasing power of anything is conditioned by many variables, but it is a conditioned behavioral process. We learn to rely on "gold" as we learn to rely on any brand name for a product or any chemical formula needed for doing a particular job. But we don't care if cards we play poker with are cardboard, plastic or thin plates of gold (except that the latter is impossible to shuffle) -- as long as they are accepted as an honest deck.
Gold has the reputation that when currencies fail people will always trade in gold. This is not a natural thing. It is a well planned outcome. The international Money Power that wrecks a currency always makes sure that they have used the earlier inflation to buy up all of the gold. As you may or may not suspect, the people who engineered the Kleptastrophe are holding the world's supplies of gold as monopolists. Now that they own all of the assets and especially the bonds -- the IOUs of the people of the planet -- they want to lock the world into a gold system so that no national-interest-minded government can repudiate indebtedness to the Money Power by inflating the fiat money supply. Rather the Money Power wants the value of the stream of debt payments they recieve to be maximized through deflation. And no recovery will happen that is not based on their gold as the monetary base for all extensions of credit needed for recover. In other words all recovery will have the golden ball and chain of compound interest to the Money Power to eventually drag us all down again when it suits their purposes. And yes, the gold does not prevent credit expansion -- and certainly never by the fiction of "constant marginal utility" -- so the Money Power will continue to create inflationary booms to exploit our entrepreneurship and engineering and hard labor only to follow it with deflation through contraction of credit to harvest all of that newly created wealth into their own garners -- our factories becoming their factories, our homes becoming their rental properties, our public roads becoming their public toll roads, and our national defense become thing army of bullies to collect debts and overthrow anti-money-power nationalists wherever in the world they try to emerge. I am the enemy of gold as I am the exposer of charlatans like Ron Paul -- whose anarcho-capitalist views on this subject mirror exactly those of Alan Greenspan.
Of course I no more expect that you will agree with any of this than I expect you to join me in supporting Lousi Farrakhan for president in 2012. But I may need a good lawyer some time.
One more thing -- value is subjective, conditional and conditioned -- learned and variable with new circumstances regarding means, ends and knowhow. There is no measuring of value -- and ones reservation price for selling a "valued object" (how much must I offer for you to sell me your wedding ring) is not a measure of value -- the problem of comparing apples and oranges is not resolved by establishing their relative price.
All neo-classical, Keynsian, Austrian, Marxian etc. views of value are besides the point (and wrong) when it comes to solving the problem of the Money Power and its system for engineering our slavery through a succession of Kleptastrophes.
What is needed is purchasing power appearing first in households, where consumers, as first spenders, realize in practice rather than false-assumptions of mainstream economic theory, the ideal of consumer sovereignty. Household demand can only direct the economy when purchasing power originates in the households -- through social credit -- rather than Money Power bankers in Wall Street funding their corporations to sell whatever they find easiest to sell -- usually war sold to government that runs up unlimited debt and doesn't really care about quality.
The article you have sent me contains this statement: "Either gold is a portfolio asset or everything else is." I say that when gold as a portfolio asset is monopolized by an organized network like the existing Money Power and they are able to destroy the currencies of nations at will, then their gold monopoly gives them total control of any and all assets.
Please don't feel offended that I used your letter as an occasion to express my views on this subject. I really don't know your own views on these questions. I was just responding to what you sent.
Jim Busser just sent me this link to Celente telling people at last that the Rothschilds control the gold market.
With warm regard,
Dick Eastman
Yakima, Washington
Farrakhan 2012 or sooner
From: Trace Mayer, J.D.
To: Dick Eastman
Sent: Saturday, September 05, 2009 7:34 AM
Subject: Value Calculation
RunToGold Archive
Value Calculation
Published 25 August 2008
Estimated reading time 3-5 minutes.
Commodities are produced because they add value to society. Wheat is for food, oil for fuel and steel to build things. Why do mines burrow over two miles into the earth, process tons of hard rocks to refine the yellow metal that is then shipped and buried in some vault? What value does gold add to society that results in its production?
The value gold adds to society is in performing mental calculations of value. The constant marginal utility is unmatched by any other commodity. Therefore, gold is money and a currency for ordinary daily transactions. Most people perform mental calculations of value, the pricing mechanism, in US$, C$, Euros or some other national currency. However, all are 'bills of credit' and subject to Payment Risk.
Those who disagree, and most financial professionals do, are like those who disagreed with Copernicus. Politicians who disagree can no more change this fact than vote to repeal the law of gravity.
The earth (US$) revolves around the sun (gold). Either gold is a portfolio asset or everything else is. This is monetary law. This principle has been taught for centuries.
"What we fancy to be a rise in value of our products is merely an alteration of the name in money that we exchange them by; they are not altered thereby, in their exchange value, with regard to each other." - Charles Holt Carroll in an 1857 essay on page 54.
From An Enquiry into the Paper Credit of Great Britain, an 1802 book written by Henry Thornton who was an economist and governor of the Bank of England: "We assume that the currency which is in all our hands is fixed, and that the price of bullion moves; whereas in truth, it is the currency of each nation that moves, and it is bullion which is the more fixed."
Gold is currently the center of the financial universe because of the large above ground stockpiles. But gold is not the only commodity that can function as a currency. If gold ceased to exist the free market would quickly find a substitute. Only a commodity based currency can be 'risk-free' or in other words subject only to Exchange-Rate Risk.
Some key ratios are available to save you time. For these reasons it would be wise to use gold as the unit of account for financial statements. Mr. Maloney's recent book is a great treatment on this topic. I recommend using gold as apresentation currency. It would also be prudent to be able to use it as a backup currency like GoldMoney.
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