Economics

The Austrians Told You So

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Canada's Financial Post sees "I told you so" opportunities for the Austrian school of economics in the Current Crisis:

Austrian economists hold that downturns are the inevitable aftermath of loose monetary policy, thus opposing explanations typically heard prior to the current crisis that attributed recessions to price shocks, underconsumption or central bank tightening of monetary policy.

But if, to rephrase a well-known Nixon quote, we are all Austrians now, it illogically only extends to the diagnosis of the crisis and not to the school's market-based cure. For it is just not consistent to simultaneously assign blame to Greenspan's easy money and then support government intervention to fix the damage, as so many of the business op-ed writers and talking heads on CNBC have.

As the Austrian tradition points out, the dilemma with easy money is that the central bank sets rates below that which the market would naturally set. The natural rate reflects people's willingness to trade present for future satisfactions. When the actual rate is established under this, entrepreneurs and firms are issued a false signal that people are willing to defer more consumption into the future than they really are. As a result, excess investments in capital goods industries, such as housing, are made on the expectation that these will pay off in the long-run. The boom ends when monetary conditions are tightened back to natural levels or the passage of time makes clear that the demand was never really there to sustain the investments made. At this point, a crisis takes place in which capital investments get liquidated and resources are shifted such that the economy's productive capacity more appropriately reflects people's time preferences.

The piece wraps up with an implicit call to make your reservations for Hooverville 2009:

Most commentators resist following the Austrian logic through to the end out of the fear of repeating the policy mistakes that led to the Great Depression. This reflects the orthodox interpretation of that period, according to which the economy fell apart in the early 1930s while U. S. president Herbert Hoover took a laissez-faire approach to the downturn and the Fed ran an overly tight monetary policy.

The truth is that the Fed at the time did try to add liquidity, lowering its rediscount rate until late 1931 and continuously increasing reserves under its control. Money supply nevertheless fell, but that was because people lost faith in the financial system and hoarded currency. Meanwhile, Hoover met the downturn with interventionist gusto. He passed the Smoot-Hawley tariff to help domestic industries and obtained the co-operation of business leaders to support wages and investment. We haven't gone down this protectionist and corporatist road yet but Hoover's attacks on short selling and his creation of the Reconstruction Finance Corporation, which among other things loaned money to banks, bear an eerie resemblance to the current policy response.

"We might have done nothing",Hoover said, "[but] we determined that we would not follow the advice of the bitter-end liquidationists." Thus has the Bush administration decided as well, having successfully cajoled a recalcitrant Congress to follow Hoover's example.

Matt Kibbe asked, what would (Austrian econ majordomo) Ludwig von Mises do? last week.

For lots of deep background into Austrian economics and its links to libertarianism, read my book Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement.

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  1. Money supply nevertheless fell, but that was because people lost faith in the financial system and hoarded currency.

    People who should know tell me that we are in the middle of a slow-motion run on banks right now. Lots of people are taking out lots of cash and mattressing it, to the point where the actual physical supply of banknotes is well below where it should be.

  2. it is just not consistent to simultaneously assign blame to Greenspan’s easy money and then support government intervention to fix the damage,

    I don’t know anyone at the LVMI who’s supported the bailout in any way. If anything, Lew Rockwell is at the forefront of condemning it.

    -jcr

  3. Oh, crap. You mentioned the Depression AND Smoot-Hawley. I wonder who will be along shortly to berate you for that…

  4. R C Dean – we are in the middle of a slow-motion run on banks

    We are, but it’s not that slow. WaMu was killed by the withdrawal of some $16b in unsecured debt.
    I mean, they were screwed anyway but that was the nail in the coffin.
    These same bank runs are the reason Greece, Ireland, and the FDIC (among others) have all increased their deposit insurance limits. Nothing more than a desperate attempt to keep deposits in their place.
    I wouldn’t be too surprised if we see some sort of “bank holiday” soon.
    Short selling should resume again tomorrow.

  5. HAHA! You libertarians are rich!
    BLAH regulations blah ethnocentric me blah blah blah

  6. Canada’s Financial Post sees “I told you so” opportunities for the Austrian school

    For ‘Canada’ and ‘Austrian school’ to appear in the same sentence is proof that we’ve moved into some kind of surreal alternate universe.

  7. For ‘Canada’ and ‘Austrian school’ to appear in the same sentence is proof that we’ve moved into some kind of surreal alternate universe.

    I know I did a double take.

  8. Bad times gonna be Hoover-ing over us.

  9. Deflation and people hoarding money was as much as anything what made the great depression a depression. I don’t see a lot of signs of that right now. Commodities are keeping their prices and there are things like social security and huge government spending that didn’t exist in 1930 that will keep the demand up.

    It looks to me like we are headed for 1970s style stagflation. The cure is going to be raise interest rates, cut spending and taxes, take our medicine with one whale of a recession and come out better for it on the other side. That is why the bailout was such a bad idea. It is just delaying the inevitable.

  10. fyi: The Financial Post, is part of The National Post, which is the more conservative publication out of Canada’s two ‘national’ newspapers.

  11. Wow, only six minutes.

  12. right now. Lots of people are taking out lots of cash and mattressing it

    I don’t think this is true, unless you’re speaking ‘euphemistically’.

    I guarantee you no one who’s not a recent ESL immigrant is taking their money out of FDIC insured accounts and putting it in their closets.

    They are taking their money out of high-risk investments such as the stock market and any other non-fdic insured ‘high(er) risk’ investments. This does not really represent a ‘run’ on the banks, it represents a run on securities and other ‘paper’. Ie, a run on the stock market.

    Banks are hoarding cash because they’ve become paranoid about ratios– which they should have been years ago.

  13. If there was monetary tightening, shouldn’t one have seen gold inflows to the United States. Where were they?

  14. Stupid Canadians. Haven’t they watched the news? This whole thing was caused by free markets running wild.

  15. “I guarantee you no one who’s not a recent ESL immigrant is taking their money out of FDIC insured accounts”

    then why are the silver bars at the coin shops all gone? physical supply is tighter than it has been at anytime in the last two decades.

    go your local coin shop and try and buy a 5 or 10 oz bar…..good luck.

  16. Brian, please ask your publisher to make your book available in Kindle format.

  17. I don’t think this is true, unless you’re speaking ‘euphemistically’.

    I guarantee you no one who’s not a recent ESL immigrant is taking their money out of FDIC insured accounts and putting it in their closets.

    Its anecdotal (understandably, no one wants to go public with any data), but I can assure you that it ain’t just ignorant immigrants, and yes, it is coming out of insured accounts.

  18. For ‘Canada’ and ‘Austrian school’ to appear in the same sentence is proof that we’ve moved into some kind of surreal alternate universe.

    That’s nothing. The left-wing Counterpunch was quoting Mises approvingly just the other day.

    (Yeah, they’ve quoted anti-war libertarians approvingly a lot of times, but this is about economics!)

  19. then why are the silver bars at the coin shops all gone? physical supply is tighter than it has been at anytime in the last two decades.

    Buying a silver bar from a coin shop is hardly like pulling $135,000 and putting it in your living room. That only ends in tears.

    but I can assure you that it ain’t just ignorant immigrants, and yes, it is coming out of insured accounts.

    I don’t believe it. But! I can be convinced with a reliable link. Anyone?

  20. I can assure you that it ain’t just ignorant immigrants, and yes, it is coming out of insured accounts.

    What this should tell Paul is that the people doing this are less afraid of losing dollars than they are of their dollars losing value. Insuring deposits only works against a panic when the purchasing power of the currency isn’t eroded.

    When hyperinflation comes, there will be a run on the dollar: people will be climbing over each other to exchange FRN’s for anything of value before they become completely worthless. And if you doubt that hyperinflation is coming, take a look at the graph Gary North previously used to “prove” the Fed was actually deflating:

    http://research.stlouisfed.org/publications/usfd/page3.pdf

  21. Only the Austrians opposed the bailout. Other “free market” types might have held their noses, but they still supported it. The amount of faith otherwise intelligent people place in central government planning continues to amaze me.

    I’m a “liquidationist”. Letting the market correct will be painful, but it will be quick. Bailing out every troubled sector that holds out a tin cup will only result in years misery.

  22. Wasn’t Hitler Austrian????? The Austrian economists are NAZIs!!!!!!!!!!!!!!! One of them had this newsletter, see… and a blimp that looked suspiciously like the Hindenburg…

  23. You know, I really wanna go buy some gold, but I actually have no idea how to go about it. Do I just walk into the gold shop with a wad of $100s and say, “hook me up?” Seems weird. Can I pay with a debit card? I’m totally clueless.

  24. Only the Austrians opposed the bailout.

    A couple of notable lefties opposed it, too. Even a stopped clock and all that…

    -jcr

  25. A couple of notable lefties opposed it, too.

    Also Populists, judging from what I read on Net discussion boards.

  26. I’m a “liquidationist”.

    Apparently, Im a “bitter-end liquidationist”.

  27. I’m pretty sure libertarian politics would get a boost out of abandoning gold standard fantasies…

  28. james_joyce: check out http://apmex.com/

  29. james_joyce: Typically you will need cash. If you come in with a check, they will need to wait for it to clear before you can take delivery, though they will usually guarantee you a price on the spot. If you come in with a credit or debit card, they will probably laugh at you.

    The best way to buy bullion IMO is to do it mail-order through a funds transfer. The places I’m most familiar with are http://www.coloradogold.com/ and http://www.cmi-gold-silver.com/. CMIGS insures their shipments and ships via registered mail, which (as well as anything else) guarantees you’ll get it.

  30. I’m pretty sure libertarian politics would get a boost out of abandoning gold standard fantasies…

    I don’t know of many goldbugs whose main point isn’t that government and currency should be separated, thus making the “gold standard” tangential. Even Ron Paul has called for that.

  31. There is nothing libertarian about a GOVERNMENT-MANDATED gold standard, but several competing commodity-backed currencies (I like electricity) would be great.

    The real fantasy is thinking that fiat (paper) money could ever really be stable in the long run.

  32. Wait! So apparently people are hoarding money and taking it out of circulation? Sweet! If enough idiots do this, they can stave off inflation! My purchasing power will increase!

  33. Is apmex.com legit/a good place to get silver?

  34. everything is unstable in the long run. How stable a pegged currency is depends on how stable the relative value of the commodity pegged is.

    Nigel, an independant central bank is exactly that – a way to separate government and currency. We can argue about how independant they really are – thats another story. Fiat currency is pegged to nothing. It has it’s drawbacks, but price stability (at least in terms of volatility of essential goods) isn’t one of them.

    Buying gold when getting food, energy and shelter is more likely to be in demand because it is a “timeless store of value” makes me think we are a bunch of shiny paper hoarding packrats.

  35. inflation is hardly the problem. Market is expecting less than 1.5% inflation average for the next 30 years. if you disagree, buy TIPS – it’s cheaper, easier, and less likely to get stolen.

  36. Wait, wait, wait.
    If there isn’t enough physical money in the economy, can’t we just print a shitload more?

  37. But Head, the narrators have English accents. And they explain how gold has kept its value even since the time of Ancient Egypt! How can you resist buying with logic like that?

  38. Head, either you’re being purposefully dense or you’re totally missing my point. Government-mandated centralization of currency supply is a form of government control over the currency.

  39. Wait! So apparently people are hoarding money and taking it out of circulation? Sweet! If enough idiots do this, they can stave off inflation! My purchasing power will increase!

    Naw, we’ll just print some more, turkey!

  40. Notice how they are always selling gold to suckers at the top? I got a call from one of those guys once – luckily I kept my hand on my wallet while we spoke.

  41. Damn you Fed! Damn your black heart to hell!

    *shakes fist in air*

  42. shitHead, “stable” is a relative term. Obviously the idea is to pursue the best possible monetary policy, not some idealized perfect policy and certainly not the madhouse fractional reserve fiat money policy we have today.

  43. I find it interesting that many people who claim to be pro-free market and anti-centralization have decided that central planning of the money supply is preferable (or necessary!).

    What exactly is the unique problem with money making it unfeasible or suboptimal to allow the free market to determine the price of capital? Or, to flip it around: why is central planning bad at managing everything but the price of capital?

  44. Nigel,

    I take it you are coming from the anarchic-currency wing of monetary economics. It’s an interesting argument in theory – but I think competing currencies of individual choice are likely to be very inefficient. A standard one is empirically better and has emerged spontaneously in almost all societies.

    Assuming that, a fiat currency controlled by an independent central bank is far superior to one controlled by the economic Philistines that happen to get elected by their brain-dead bread-and-circuses electorate. It is also superior to a metal backed currency that is subject to exogenous shocks that have nothing to do with supply and demand for currency and credit.

  45. He passed the Smoot-Hawley tariff to help domestic industries and obtained the co-operation of business leaders to support wages and investment.

    Translation: He passed the Smoot-Hawley tariff, which raised the price of imported goods, thus forcing more money into present consumption and less into savings and investment that would have ended the Depression sooner. He also implemented wage controls, keeping unemployment at record high levels for years longer, further delaying the recovery.

  46. nonPaulogist: shitHead? hmm, school yard taunts seem so unbecoming an economic discussion. You should either contibute something meaningful, or pop a couple Xanax…

  47. It is also superior to a metal backed currency that is subject to exogenous shocks that have nothing to do with supply and demand for currency and credit.

    You are correct: an ideal fiat currency is far superior to a metal-backed currency. I don’t think any intellectually honest commodity money advocate would refute that. The problem is that ideal fiat currencies have never and will never exist, for two reasons: (1) central planning always fails and (2) politicians won’t allow it.

    Solve those two problems and I will be happy to give another look at fiat currencies. Barring that, a gold-backed currency is the least of multiple evils, if you’re going to mandate a single legal tender in the first place. Of course, free market currency is probably the best way to go, and would provide the greatest restraint on central bankers.

  48. But Head, the narrators have English accents. And they explain how gold has kept its value even since the time of Ancient Egypt! How can you resist buying with logic like that?

    Ah, I see someone else caught Colbert last night.

  49. Naga, exactly – it always amazes me how libertarians hate the one institute in american politics where their ideas have significant influence.

  50. Real nutcase goldologists are entertaining if nothing else. So if the world goes to hell in a hand basket and all money is worthless and the government collapses, the people who are hoarding the stuff you really need like food and fuel are going to accept gold coins for it as opposed to barting for something equally useful. Yeah, that is the ticket.

  51. Kolohe,

    I got lucky when I was doing homework before work.

    Head,

    I’m not for the fed. I remember reading about how Volcker stuck it to the middle class so rich people wouldnt have to suffer.

  52. Not exactly John. If the government collapses I’m turning warlord. Then I’m going to find these “goldologists” and decree they are leprechauns so I can steal their gold . . . and their cereal.

  53. “I’m not for the fed. I remember reading about how Volcker stuck it to the middle class so rich people wouldnt have to suffer.”

    How did he do that. Volker did a lot for the middle class by finally killing off inflation. Better that than Bernake and that old goat that is married to Andrea Mitchell who refused to face reality and just kept pumping out money.

  54. For a (relevant) laugh, check out the photo on the NPR front page:

    http://www.npr.org/

  55. I don’t believe it. But! I can be convinced with a reliable link. Anyone?

    Nobody in banking wants to go public with this, because banks runs become self-fulfilling prophecies. What I know is anecdotal, based on conversations with bankers.

    So, no, I don’t think you will find any well-sourced links.

  56. “The problem is that ideal fiat currencies have never and will never exist, for two reasons: (1) central planning always fails and (2) politicians won’t allow it.”

    1) agreed
    2) thats what independance is supposed to be about.

    We are fortunate in the extreme that we have a very independant CB. I’d remind the unstable stability hawk that when central banks actually do “print money” you get inflation with 3 digits not 1.

    As far as ideas to idealize a fiat currency scheme, I have several including a cap and trade system for different levels of financial leverage. I am writing about that one right now, however so far my letters to senator Menendez of New Jersey have been unreturned…

  57. If the government collapses I am going warlord to. I live in a rich white yuppie suburb full of non-gun owning pacifists. The take over should go pretty smoothly.

  58. John, thanks for saving me the trouble.

  59. Gold is available on EBay. Over the years I have bought a number of gold coins, had them made into pedants, with a bezel around the coin and a nice chain. I paid gold price plus 10 % and the price of the bezel, labor and a little profit to the jeweler to make it. Expensive way to buy gold but the recipients have some jewelery to wear (show off today). Fortunately gold was about 350 an ounce when I was doing this, about 7-8 years ago. Some happy ladies today.

  60. John,

    I haven’t read anything on Volcker in roughly seven years but I will try to paraphrase. Basically he chose to end inflation with high interest rates but allegedly got the word out to major investment groups ahead of time.

  61. John,

    Don’t forget a head on stick outside your keep. Nothing says obey me like a bloody head on your fence.

  62. Naga,

    That was crappy of him but all too typical of central bankers. He was still right to raise interest rates and kill off inflation though.

  63. Oldtimer, you didn’t happen to give any of those pendants to a bunch of speedo wearing Italians down the shore, did you?

  64. What this should tell Paul is that the people doing this are less afraid of losing dollars than they are of their dollars losing value.

    SquareRooticus:

    I think we’re talking at cross-purposes. On one hand, there are people (literally!) claiming that depositors are running to the bank, getting all of their money drawn out, bundled into small, unmarked bills and hiding them in their “mattress”. On the other hand, we’ve got arguments about people making a reasonable calculation that they’re worried about currency devaluation and are moving their money into commodities (non FDIC insured) such as gold– method of purchase ranging from buying gold and silver from the shady coin dealer on the corner, to purchasing gold via mainstream markets.

    I’m only speaking to the first example: people pulling their money out and sticking in a potato sack in the cellar. In this instance, it protects their money neither from a bank collapse OR currency devaluation. Your $1 in a potato sack has the same value as your $1 in an FDIC insured low-interest savings account. Except in the former case it can be stolen by your delinquent son or burned up in a fire because the old lady fell asleep with a lit cigarette near a tipped over bottle of cheap vodka.

    I find it very difficult to believe that someone savvy enough to think about money supply and currency devaluation on the international market is going to stick their money under their pillow. I still contend that this is for the recent immigrants (story linked above).

  65. That’s nothing. The left-wing Counterpunch was quoting Mises approvingly just the other day.

    Cats and dogs, living together!

  66. 2) thats what independance is supposed to be about.

    Mmmmmkay.

    The Fed may be more independent than most other central bankers, but even they seem to frequently reduce the price of capital in a (vain) attempt to keep the numbers on the stock market from crashing rather than to maintain price stability.

    Being appointed by the President should be a signal to you that they aren’t independent at all. On the contrary, that means they’re very likely to respond to downturns with massive infusions of cheap capital precisely because the numbers on the stock ticker going up will make their reappointment more likely. And guess what? That’s exactly what they do. Imagine that.

    But even if they were truly independent, you admit you agree with point 1, which is that central planning always fails. If that’s the case, then any central bank—independent or not—is going to underprice or overprice capital on a regular basis. Either way you go on point 2, central banking is still guaranteed to fail.

  67. I’m only speaking to the first example: people pulling their money out and sticking in a potato sack in the cellar.

    Did R C Dean literally mean “mattressing”, or was he referring to people taking money from banks and putting it into some inflation hedge (e.g., gold)? It’s not clear from re-reading his initial message. Regardless, I interpreted it as the latter, which explains our disagreement.

  68. libertarian politics would get a boost out of abandoning gold standard fantasies…

    What we want is to get the government back within the confines of the constitution, which expressly forbids states from making legal tender out of anything but gold or silver.

    The federal government is permitted to coin money, not to issue paper.

    If there’s some compelling utilitarian argument for permitting the Federal government to issue paper money, then we should have that national debate and amend the constitution. Simply ignoring the constitution is why we have a government that’s been out of control for a very long time.

    Now, if we were to revert to constitutional government, there’s nothing to prohibit private issuers of currency from making bills of credit with any backing that people are willing to accept.

    -jcr

  69. “but even they seem to frequently reduce the price of capital in a (vain) attempt to keep the numbers on the stock market from crashing rather than to maintain price stability.”

    No. Thats like saying you give water to a man in a desert to keep him from getting a tan. They lower the price of money to encourage lending when otherwise people would be disinclined to. There is not enough money in the system: you are both thirsty and sunburned from being in the desert.

    “Appointed” – score 1 for you. We have had some independant minded charimen though. The other thing we have going for us is that the job sucks and doesn’t pay that well compared to what they could make – most don’t do it cause they want to be reappointed. Except for Greenspan who just loved to hear himself talk.

    “…is going to underprice or overprice capital on a regular basis…”

    Maybe, but it’s an inevitable requirement of fractional banking. People forget that rates were manipulated by common agreement even under a gold standard. As long as there is fractional banking, many currencies, and we want to have enough credit to efficiently allocate capital, manipulated rates must remain a reality.

  70. I just read that counterpunch article. I nearly fell out of my chair. Everyone! H&R regulars! That article required reading. I’m relinking it for emphasis. Thank you Franklin Harris.

    http://www.counterpunch.org/whitney10062008.html

    Squarerooticus:

    Did R C Dean literally mean “mattressing”, or was he referring to people taking money from banks and putting it into some inflation hedge (e.g., gold)?

    You didn’t read upthread enough. I was making a response to someone who suggested exactly that. RC Dean made a less specific comment that I assume was more related to my more realistic scenario.

    I’m still skeptical that large numbers of people are moving away from FDIC insured deposits, and RC Dean responded appropriately.

  71. an ideal fiat currency is far superior to a metal-backed currency.

    Yeah, and an all-knowing, benevolent dictator is superior to democracy, too. Trouble is, fiat currencies are a source of power, and power corrupts.

    -jcr

  72. JCR,
    Arguing
    “The federal government is permitted to coin money, not to issue paper.”
    on consitutional grounds is like saying Hillary could never have been elected because the constitution refers to the president as a man.

  73. No. Thats like saying you give water to a man in a desert to keep him from getting a tan. They lower the price of money to encourage lending when otherwise people would be disinclined to.

    Exactly: the market raises the price of capital because conditions are riskier. The central bank setting a ceiling on the price of capital therefore encourages excessive risk-taking that would not occur if the price of capital were set by the free market.

    “Appointed” – score 1 for you.

    Among many.

    People forget that rates were manipulated by common agreement even under a gold standard.

    Which is part of the reason I don’t advocate a gold standard. I advocate free market money: everyone should use whatever money suits them. You can have your permanent inflation, and I can have my permanent deflation, and we both can be happy. Right now I am restricted, both by law and by tax policy, from using the medium of exchange of my choice.

  74. What’s the point in withdrawing bank notes? Looking for fuel to burn during the forthcoming depression? Paper does make good kindling.

    Actually the bailout was nearly universally opposed on both Left and Right. You just wouldn’t know it from listening to the mainstream media. The only people in favor of it were establishment people who have their fortunes invested in the status quo.

  75. jcr:

    Yeah, and an all-knowing, benevolent dictator is superior to democracy, too. Trouble is, fiat currencies are a source of power, and power corrupts.

    My thoughts exactly.

  76. Lots of people are taking out lots of cash and mattressing it,

    I’m taking out lots of cash and buying up all the mackerel I can.

  77. For a (relevant) laugh, check out the photo on the NPR front page:

    Square, are you talking about the picture of Hank Kingsley?

  78. “the market raises the price of capital because conditions are riskier.”

    Not exactly. Under a metal backed system short supply of specie can be caused by many things. Lack of production, destructive uses of metal, increases in population. The last occurred in the roman empire – silver coins that started out solid ended up barely coated at the end. debasement to be sure – but one that resulted from increased population and need for currency, not from rampant inflation as is commonly thought. Their debasement process lasted many hundreds of years and produced around 6% annualized inflation despite going from silver to essentially bronze currency.

    you can pay me for my thoughts in pork bellies if you wish – your meat-money is always accepted with me.

  79. “Yeah, and an all-knowing, benevolent dictator is superior to democracy, too. Trouble is, fiat currencies are a source of power, and power corrupts.”

    Look – any system you have is going to have good and bad points. My original point is that libertarians time and energy could be better spent addressing things that a) actually have a chance of becoming national issues and b) are more unjust than a 3% per year tax on cash.

  80. a) actually have a chance of becoming national issues and b) are more unjust than a 3% per year tax on cash.

    It keeps from being a big and unwieldy party. Kind of like the drug legalization thing. We’re making big strides on that front.

  81. squarooticus – how exactly would free market money work? you are using gold, im using paper – wouldn’t we end up having to exchange if we wanted to transact? I think that would be a barter system – not a monetary system.

  82. “It keeps from being a big and unwieldy party. Kind of like the drug legalization thing. We’re making big strides on that front.”

    At least that makes the softball games more entertaining.

  83. What we want is to get the government back within the confines of the constitution, which expressly forbids states from making legal tender out of anything but gold or silver.

    I keep hearing this! Have states been mandating other currencies recently? Cause otherwise it’s a non-sequitur.

    The federal government is permitted to coin money, not to issue paper.

    And the First Amendment protects speech and printing presses. It doesn’t mention radio waves or electrical signals, so radio, TV, or the internet aren’t protected. Right?

  84. Oh, I’m against a gold standard. Just getting my vote in.

  85. Head:
    “how exactly would free market money work? you are using gold, im using paper – wouldn’t we end up having to exchange if we wanted to transact?”

    Me:
    “how exactly would free market apples work? you are using apples, im using nickels – wouldn’t we end up having to exchange if we wanted to transact?”

    Yes. That’s the point.

  86. It’s not a schoolyard taunt, shitHead. Your mellon is full of excrement. Can’t you get that into your feces-packed cranium?

    I can throw down with Rothbard and Hayek and Mises. Those dead guys are the only ones who predicted this clusterfuck. That makes them worth reading (more than I can say for you).

    When the Head hits the fan, I get to be Tina Turner. Bust a deal, face the wheel! Chainsaw cage matches and methane dragsters, baby!

  87. Tensions always run so high after the government steals hundreds of billions of dollars from taxpayers. Why can’t we work across the aisle, get along, and jerk each other?

  88. My nickname for US dollars after this clusterfuck shall forevermore be “Continentals”.

  89. Okay, maybe not forevermore.

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