Reason Staff Around The Tubes: Nick Gillespie on Freedom Watch with Judge Andrew Napolitano and Peter Schiff

A blast from the semi-recent past: On December 9, 2009, Reason.tv's Nick Gillespie appeared with investment analyst, sound-money advocate, and likely Connecticut senatorial candidate Peter Schiff to discuss the Federal Reserve and government spending on Fox News' Freedom Watch with Judge Andrew Napolitano.

Go to Reason.tv for more media appearances and downloadable versions of all Reason videos.

Comments

[twv]

Contrary to Schiff, gold is NOT money. Money is the most marketable of commodities, and, as he says elsewhere, the market for gold is not that extensive at present. It is basically, now, used as a store of value by banks and governments and a few savvy investors.

When gold is exchanged readily for goods in the open market, then it will be money.

This "gold is money" rap that goldbugs so often give is economically illiterate. It's sad to see a smart man like Schiff repeat such rhetorical nonsense.

"Gold is money" is the piety of libertarians. It's a bizarre doctrine, and makes no sense. Read Menger, again, and see that money can be anything.

(This is not to say that I don't think gold should be made money, or that we wouldn't be better off if gold became money by a series of evolutionary steps in markets.)

[Warty]

I always got the sense that when he says, "gold is money", he means something like, "gold can't be manipulated by governments".

[R C Dean]

It is certainly true that gold is not money at the moment.

It is equally true that, historically, gold has been the specie of choice, the most high quality means of storing and exchanging value.

[Brandybuck]

Not only read Menger again, but Bohm-Bawerk and Mises and Hayek. In lay English, money is a "general medium of exchange". Money is what most people will readily accept for an indirect exchange. If I cannot take a lump of gold down to the corner liquor store to buy a fifth of Rumpelminz, then gold is not money. Hell, I can't even buy a one ounce Liberty Dollar with one once of gold (plus whatever exorbitant markup Nuthaus demands for his warehousing efforts)!

The economic illiteracy of most "paleos" is shocking. They've read the first page of a summary of Rothbard, and now think they're smarter than Hayek.

[Random Dude]

Yes, but in "layman's terms", money is also a "store of value." You can't just throw out one definition and ignore all the others.

Gold does not represent anything other than itself. I think this is what Schiff is really getting at. Gold is a commodity of trade, not just a faith-based representer of one. (Unless of course one maintains that the literal paper which the dollar is printed on is a "commodity").

Really it comes down to prioritizing the importance of a few of the many contradictory definitions of money. Schiff, rightly in my opinion, realizes that a currency which loses even 15% of its store of value a year very quickly loses its ability to be used as a stable--and some cases even primary--medium of exchange. You can look at any Latin American country for proof of this.

Also, your definition of money is pretty bizarre. I can't take a Euro down to the corner liquor store to buy anything. Does this make it not "money"?

While I may just be a neanderthal paleo, I would submit that there is a difference between "money" used as a zero-percent return savings vehicle and that of a physical exchange medium. If a definition of money logically requires that these cannot be separate, then gold is not money.... and neither is the dollar.

The definitions were always flaky. As the case with both you and myself, being pedantic doesn't make someone economically "literate." Most people understand what Schiff is saying.

[Jay J]

Well I'm not all that sure I understand what Schiff is saying, but I also want to avoid coming across as pedantic.

So, in that spirit, when you say,

"Gold does not represent anything other than itself. I think this is what Schiff is really getting at. Gold is a commodity of trade, not just a faith-based representer of one."

it makes me think that you are imagining that gold has some intrinsic value. But reading the rest of your post makes me doubt that you're making a mistake this elementary. So, will you help me out a bit? I'm not that economically sophisticated, but I'm not illiterate either I don't think, I just tend to look at the most big-picture, philosophical points first. And when I do with your post, it strikes me that *any* function of money, whether the ones pointing out by you, or by twv, involves some level of faith-based representation of value.

On the other hand, even if I'm right (and I am, but I doubt you would dispute this point) if the dollar loses 15% of its store of value every year and gold does not, then that's certainly something to consider. But, it doesn't seem like the difference between the two is that one has symbolic value, and the other intrinsic; they're both representations. So can you break it down a bit further for me? Thanks in advance.

[Jay J]

In other words, when you say,

"Gold is a commodity of trade, not just a faith-based representer of one."

I imagine you must mean something, but you can't mean what I take it to mean, because what I take it to mean is silly, and the rest of your post indicates that you wouldn't say something that silly.

So, neither gold nor dollars has intrinsic value. We agree on that, right? I just have to assume we do. Now, can you motivate the quote above for me a bit? In the terms of an educated layman?

[Wounded]

Between The Jacket, and The Helmet, the two of them ought to be able to lend poor Peter the modest amount of extra hair he needs to cover his shortfall.

(We baldheads are allowed to make fun of our own; furries, stay back!)

[Skid Marx]

Those guys in the pic look like Moe, Currly and Larry, respectively.

[Warren]

Why is this being reposted? PLZ don't turn H&R into the all reruns all the time blog.

[Ken Shultz]

I'm of the opinion that whatever solutions there are to our present money problems will be inflicted on our politicians rather than come from them.

But beyond that, listening to Gillespie talk to Peter Schiff makes for great television, and I hope we see them both on the air at the same time often in the future.

[Warty]

Threadjack: the reason cruise really should be combined with the heavy metal cruise.

[BakedPenguin]

Saxon and Raven are two bands I'm ashamed to admit I used to like. To be fair, that was 25 years ago and I was drunk most of the time.

Also, if you combine those cruises, you might as well call it "sausage at sea party". Add a vampire theme to at least get a few women on board.

[Solanum]

Who wouldn't want to hang out and get drunk with "Wacko"?

[BakedPenguin]

Wacko? You mean Lonewacko? He won't be there, the cruise is going to places with brown people.

[Paul Nimitz]

How old is this by the way? Dodd dropped out of the race a while ago. Anyone know?

[Paul Nimitz]

My mistake, December 9, 2009.

I guess I should pay more attention.