I started this blog because of the lack of different views reaching us through the mainstream media.
Therefore I would like to share my view on things from a different angle. Encouraging people to think for themselves, and not follow a path without even knowing it, is my main purpose.
As I visited a lot of forums and engaged in a lot of discussions, this seems to be the most convenient way for me to express my view. This one is shaped in the last years. Ayn Rand, author of Atlas Shrugged, contributed a great part in this.
Also the Thought's of Another and FOA on exchanging value, and especially the role of oil and gold come together in this blog.
Adapting to the new reality, as the world around us changes quickly.
Convinced of the bright future that is in front of us even though the years ahead won't be easy.
Hope I can share my view with you, not one of modern western thought but one of the common sense.
25 comments:
hey,
kwam hier via Twitter en zag een aantal herkenbare zaken. (gouden tientje, Ayn Rand) wellicht ten overvloede: Een must see BBC documentaire met daarin Ayn Rand is "All Watched Over By Machines of Loving Grace, 3delig op Youtube en andere sites.
Zelf heb ik ook een blog - http://drwoodz.blogspot.com - die ik ben begonnen in november 2010. Hoofdzakelijk omdat ik me zorgen maak over de (huidige) ontwikkelingen in de wereld. Het begint in mijn ogen bij bewustwording. Hoe meer mensen op de hoogte zijn van bepaalde ontwikkelingen, hoe beter.
Ik ben zelf nogal fan van Kees de Kort via BNR nieuwsradio, maar ook Peter Schiff, Marc Faber, Jim Rogers en Gerald Celente via youtube. Mocht je de Trendsjournals willen van afgelopen kwartalen, dan kan ik je die toe sturen...
Groetjes! en blijf vooral posten
Mark W
Dear Mark,
First, as this is an international blog I would like to answer in English. Hope you don't mind.
Thank you for the BBC-documentary, when I've got the time I will watch it.
What you say about people to get conscious about the situation we are living in is also the goal of this blog.
But, the persons you come up with (familiar with all of them) tend to do all the same. They see the problems we're facing, but don't see the solution evaluating before our eyes. They keep walking around in the box searching for solutions in that same box. What we are facing now is so big, and so uncommon that for the solution it's time to search outside that box. Now, some people did this way before we were ever known with the problems facing today.
On this subject I recommend to read the postings of Another (top left of this blog), which makes it easier to discuss this subject to both us.
Thanks for your reply,
Hi,
English is not a problem, so I certainly don't mind.
I kind of disagree with you on your fourth paragraph. What to you is 'thinking outside the box'? Could you give me some examples?
The people I mentioned above do, in my opinion, come with some solutions that are not corresponding with the current train of thought or the policies currently implemented.
Peter Schiff is mostly famous for his Austrian School economics point of view (unlike the current Keynesian policies that are in place) and Gerald Celente is advocating direct democracy.
I quickly scanned the posts made by 'Another'. Are these posts only about oil, gold and the relationship between them? And if so, is your blog as well? I mean, I would love to return to the gold standard, but besides that, don't we have some other, big(ger) problems lying ahead of us?
Greetz
MW
Hi,
By thinking outside of the box I mean look for solutions other than presented in the past. Coming up with a gold-standard which hasn't worked in the past is a bit ignorant in my view. A fixed gold price pretends that it's currency is as good as gold. This is also limiting expansion of your money supply (which isn't always unhealthy).
With the creation of the Euro we have a new kind of currency. A currency which marks it's reserves quarterly on it's balance. A floating gold price showing the lose of purchasing power of it's medium of exchange (Euro's in our wallet). So the Euro doesn't pretend to be as good as gold, and therefore the main threat to the $. This is what Another was posting of more than ten years ago!
As you describe there are some big problems ahead. Could you describe a bit more what you mean by this?
The way I look at it, a lot of problems we are facing today are inherent with the financial system we're dealing with. In the book called "World" financial system isn't just a chapter, it's the main theme. A lot of actions are encouraged and similar with this, some are discouraged. People act (sometimes without even knowing it) by the rules of this system. By changing this my believe is behaviour will change simultaneously.
So a quick scan of Another's postings might be do a bit harm to your view on several things (smile). They're probably the most important posts I've ever read on the internet. It encourages you to dig deeper in issues which may seem clear on the first sight.
Greetings,
Hello,
I understand what people mean with thinking outside the box. I just think its a strange phrase. I mean, don't we all from time to time, and what is exactly thinking inside the box then? anyway...
In my opinion the paper money we use should be backed by something scares and valuable. Now its backed by nothing but promises to be paid back (99% of the time in an overtime devalued currency) and I think its kinda hard to keep this system in place by faith and promises alone. Sooner or later people wise up and realise it's just paper with ink, that's worth less and less. They will abandon the current fiat money just like it happened with a lot of fiat currencies in history. And rightly so...
Wouldn't it be nice to have a medium of exchange that is actually backed by something scares and valuable (like gold)? I mean, isn't that the whole point of money anyway...? And why didn't it work in history? The US (and the rest of the world)was pretty much build upon that system. But they ratted other countries out with their promise to be as good as gold, but in the mean time the were printing like crazy, while still having a fixed rate.
That's what's wrong, the way they used the system, not the system that is backed by something itself. But you cant be serious that you want money backed by nothing but promises and held up by faith... that's ludicrous and ignorant. (smile)
As long as we don't protect savings (with higher interest rates and stop printing), the world as we know it might indeed come to an end.
Some big problems we are facing, apart from finance:
- slow transition to energy sources other then cole, oil and gas
- growth of population
- shortage of fresh water
- the lack of a long term vision and consensus for the world as a whole
greetings, and I will look into the posts made by another some time soon.
MW
greetings
Thanks for your response,
It's nice to hear you say, paper money to be backed by something scarce and valuable. But I don't agree on this. When something is scarce it isn't often available worldwide. This would make it difficult to use as we need this "store of value" available to every person.
Valuable you say, is something we as people give to something. Something is not valuable by nature, it's because of us giving it value? See?
For example, when we look at the Central Banks they all use gold as an asset. By this gold is given the value as a store of value. Otherwise it would simply be a commodity.
Far more important is the steady availability of the store of value. With gold this is pretty well to track of an average mining capacity of 2% annually. You don't want your store of value quantity to double each year, this would undermine it's function.
So to come to your point wouldn't it be nice to have a medium of exchange backed by something, I stay to my view.....it would give to much credit to the currency, and limit our economy. It would also miss critical support. When we divide the behaviour of people in two camps, the debtors and the savers. We can conclude that the current system is in favour of the debtors.
Through inflation savers are going to pay a great part of the bill. Why don't we adapt a system that enables both to do whatever they want to? No discussions any more about this problem?
The only thing that has to happen is with the rise of the money supply (and less trust in this currency) we are met with a rising price of physical gold in that currency. Savers will be met with a compensation of their lost purchasing power.
The other problems you mention are in my view related to each other. We miss a natural "brake" on our spending drift. It's a result of stimulating the personal profit over the interests of others. People are fighting each other in case of cooperating.
To get this changed while our world is organized the way it is today is impossible to me. Something like Atlas Shrugged......we need a reset to evaluate further. More responsibility to each individual, more results due to corporation.
n.b. I read on your blog you took all your money out of the bank because you didn't agree on their actions. You understand the purchasing of this money will diminish, as your bank was filled with new money from the back-door. Who was doing harm to who there (smile). Actually you use your resented medium of exchange as a store of value now.....
Hello,
Gold is available worldwide, so I don’t see a problem there. And I don’t mind other countries, as long is my money is backed by something that’s scarce and valuable and won’t lose its value is rapidly as fiat money does.
And of course we the people allow things to be valuable. How other would it be valued, by animals? But that doesn’t mean it’s not valuable. I mean, for many, many centuries gold is valued all over the world by different societies. So I’m not sure what’s your point…
Gold don’t necessarily limit the economy. The price of gold just has to go up overtime, depending on the money printed.
All in all, I don’t think 0% growth is bad. Nothing grows forever and I think we should realize this sometime soon. Growth in itself is unsustainable…. Just think about that. To see what regular annual growth does, please see the 8 part clip on Youtube by Albert Bartlett, called: ‘the most important video you’ll ever see’
But to expect all people to limit their spending is a bridge to far. Changing human nature is a long shot in my opinion.
Nb. Please read the text again about my withdrawal. I’m sure I didn’t do it because of the actions the RABO bank was undertaking. I’m not sure what the RABO is doing, and I probably will never know. I did it because I think you should stand tall behind what you advocate. And I rather withdrawal my money and be able to take it everywhere, then be limited by a bank to withdrawal my own money, or having to wait because of ‘bank holidays’. That this withdrawal in some way leads to inflation because of the money handed out by the ECB, I couldn’t care less, and I think it’s kind of a dull argument.
greetings!
MW
To put things straight. You wanted a scarce store of value. I stated that gold isn't scarce, far from that. It's available in 1000th's of tons!
By giving value to something I mean we the people decide what's useful as a store of value. This gives this asset more value than an other asset, which doesn't mean it is more scarce (think about this).
When you say the price of gold has to go up overtime you aren't talking about a fixed gold standard. This is a floating gold price.
Growth is not sustainable. I don't agree on that. The problem here is I think how we define "Growth". When you see growth as consuming and producing without limits you could be right. In my opinion growth can be measured in multiple ways. Innovation and making our society more durable is also growth. It is a mean to evaluate further as man.
I'm sorry I didn't understand the action you made with the cash withdrawal. I was wrong on your intentions. When your purpose is to take your money everywhere I understand your position better. But again, I think it's better to exchange your Euro's for a more liquid asset. An asset that is accepted worldwide. What would happen to the value of your Euro's when the ECB keeps printing?
You think this is a dull argument, we must agree that we both disagree on this subject. It's just about this, keeping your purchasing power.
Greetings,
hi,
even if there are hundreds of millions of thousands of gazillion tons of gold, if their is more demand then supply, its automatically kind of scarce. Scarcity isn't measurable by itself and hasn't a fixed quantity or cant be stated in some amount. Agree?
What makes gold scarce is that it's valued by a lot of people in different societies trough many centuries and the amount can't be doubled in a day, month or year. we have to agree on that right...? Let me put it in another way, can you give me some type of money that stood the test of time better then gold?
So you think perpetuated growth can be sustainable? Please give me one example where tangible things can grow on forever. I bet you can't name even a single thing. Since the earth is a closed environment, this should speak for itself actually...
On the withdrawal part: what in your opinion is more liquid then Euro s? I mean, I live in the Netherlands, not planning to move or go on holiday, and its (still) the accepted currency everywhere... Apart from the amount I withdrew, I do own gold, but that doesn't mean I can pay with it at Albert Heijn. I just own gold because I don't want all my purchasing power to be diminished. But in the end I still need cash, and cash is in my opinion the most liquid asset there is at the moment. Agree?
And that I called it a dull argument, is only because I think I should, no, I HAVE TO protect my wealth by withdrawing the money I have when I find it necessary. And not hesitate because it might have some other unintended consequence. It's not my fault the ECB gives the RABO money. That's the other way around, the cart before the horse...right?
greetings
MW
---
'What would happen to the value of your Euro's when the ECB keeps printing?'
it will diminish...
Hi,
I'm not talking about demand and supply here. Supply we can agree on, it's not the problem. What you described is easy to solve. Wouldn't do the price mechanism the job?
Let me do the next thing. I copy your 2nd paragraph and make 2 changes. Than we can agree on that 1?
What makes gold A GOOD STORE OF VALUE is that it's valued by a lot of people in different societies trough many centuries and the amount can't be doubled in a day, month or year. we have to agree on that right...? Let me put it in another way, can you give me some type of ASSET that stood the test of time better then gold?
Agree?
What I meant with growth is this. The way our society is organised evaluates. For example energy sources. From the coal and the nuclear energy supply we could shift to a more responsible way of generating energy. This is a form of growth, not hard to get though?
So you think cash is the most liquid there is? You must be joking me ;).
So when you've got the choice, to be frozen and come back 100 years later.....you choose to bring with you your assets namely Euro's?
Now this isn't reality, but you put a lot of confidence in the currency here. Go with your Euro's to Africa, sure you won't be able to exchange them for goods everywhere. What I'm not going to say here is that we are going to pay each other with golden coins. Hope not!!
What I do say, is that wherever you are, whenever you want, against whatever currency you need.....you can exchange gold for that currency. Is currency here the liquid asset than?
I'm not saying you shouldn't withdraw your money, in the end it's your possession. But there are better way's.
FOFOA: Any trading partner knows full well that if all else fails, gold will be paid.
While the euro is not on a classic gold exchange standard, it is alone among currencies in that it is "backed" by gold. If the market won't provide gold to the currency holder who is looking for it, the ECB will themselves ensure it is made available.
'What would happen to the value of your Euro's when the ECB keeps printing?'
What would happen to your economy if the euro became strong during a recession/depression and people hoarded it instead of buying goods and services, which are going down in price? It may help to consider a few related items as you ponder this question:
1) The 1930's depression
2) Japan these last couple of decades
3) The ECB's ----> Single mandate <----
The short answer is that the euro is designed to track up and down in value, along with the real world of things as measured by the HICP consumer price index. This is by-design, in order to avoid a deflationary depression spiral. So, given that you know there is a recession, that the currency WILL be weakened against the real world of things, and that gold is the premier "real thing" according to the ECB's instruction manual... the only rational course of action for anyone wishing to preserve their wealth, is to move it from euro-denominated investments and cash or near-cash, into the real world of physical gold.
Gelukkige nadenken!
Thanks for your reply DP!
It is killing for any currency if the value against other currency's is rising to much. Just look at the Swissie's. Same problem, openly devalued against other currency's and gave it a maximum rate against the Euro.
2 things.
-Are this floating currency rates? Partial, but all currency devalue in real terms. As they all do (also the Euro) it isn't so obvious for everyone.
-So why hold excessive savings in the devaluing currency?
There is nothing more to it. Plain simple.
Can't wait for Aristotle to pick up his writing at the FOFOA-blog again. What a surprise that was hey?
ASSET, STORE OF VALUE, MONEY, TO ME ITS ALL THE SAME, IT JUST DEPENDS WHAT YOU WANT TO DO WITH IT...
So yes, sure I agree, but whats your point exactly with all the different names for it?
And i know what you meant by growth in your paragraph, but is 'growth of society' really measurable? Some think it might be declining where others thinking we're growing. So to me, it can not be measured. What can be measured are tangible things. And they cant grow on forever, of that i'm sure....
And I don't think Euros are the most liquid thing there is in the world. But as I already stated: I'm not planning to move or go on holiday, I just need to pay my bills and pay for groceries. So for me for the time being, yes, Euros (living in the Netherlands) are most liquid...
I wasn't talking about the future (hence I got some gold for myself, because I'm bearish for the future) and I'm not planning to freeze myself any time soon...
So yes, currencies (Euro to me) are, at the moment, the most liquid asset because its accepted everywhere I go, and I don't have to exchange it before I can buy something with it.
---
What are the better ways?
How on earth can rising currencies be a bad thing? What would you rather have, a very strong currency or a very weak currency? And if those are the two flavours you can pick, you must be in favour for a very strong currency...right? So if very strong is better than very bad, then rising must be better then declining, right? You can't somewhere down the line change declining in bad, and at some point in to good... Its either a good thing or a bad thing...
In other words: how can declining currencies be a good thing. Cause we all know where those countries are heading for... that's right, bankruptcy
That's the same as stating deflation to be a bad thing. No its not. How can buying stuff for less money be a bad thing...?
We have a society that's too much focused on debts and not enough on savings. But those societies will bite itselfs some time around...
What you want is not a strengthening or weakening currency. You want a stable, predictable, highly boring currency.
You want the security of a currency that will still buy you about as much consumer staples in a few months time, as it buys today. Not more, not less. Just about the same.
Fortunately for you, as a resident of the Eurozone, that is exactly what you have.
If you want your savings to perform better than this, you just need to look beyond saving euros and get into investing/asset management.
Gold is the premiere asset for longer term "saving", when you don't wish to get involved with "investing" (or you don't see any compelling investment opportunities). Time reveals all things.
How can buying stuff for less money be a bad thing...?
You didn't ponder for long on my 3 suggestions, did you.
Check the T-shirt. I think you'll find it says "Vote for Euro" (or maybe I just need to get my eyes checked...)
ps: While you're watching Napoleon's swEET moves ... think about the words and why I sent THIS song for your viewing pleasure this afternoon.
Namaste!
To me...since a strong(er) currency is better than a weak(er) currency, how can a stable currency suddenly be a 'good' thing then? I want to buy more stuff for the same amount of money. If you don't, I have a PC here for you for 1500 euro's that's made in 1990. (probably a good deal to you)
And please don't overstate that 'deflationary depression spiral'. I don't see you not buying a new pc because of the possibility that it may (and actually WILL) be cheaper over 3 years time, and for that reason postpone your purchase... It's government propaganda, fear tactics. Things have changed, and people will buy the stuff they need. We're not living a century ago. And if they don't, they probably have a reason for it.
People hoarding cash... you actually mean saving cash. Not buying the shit they don't really need. That's called saving. Or is saving now a bad thing, and is consuming and debt all of a sudden a good thing? when people start saving (or as you say: hoarding) they probably have a good reason for it. Kind of hard to tell them from behind your desk they are wrong. It's also a function of the market and its probably better to save some in harsh times, then to go in debt en print.
sorry m8, better things to do than watching t-shirts...
I want to buy more stuff for the same amount of money
You still haven't given too much thought to my 3 suggestions of earlier, it would seem. Oh well. I'm sure you have a solid plan for how you will provide income to the people without a job because you stopped buying their products - because they will only get cheaper, so why not wait to buy them later?
You're looking at the wrong kind of stuff, comparing apples with computers. How different is the apple you buy today from the apple you would buy a century ago? The productivity of the workforce growing it and bringing it to market for your buying pleasure has changed, sure. But the apple isn't fundamentally different. The computer, however, most assuredly is.
I don't think it much matters to people what price a computer is, but it sure matters about apples, bread, milk, gas, a pound of mince, etc. These are consumer staples. These are what people really care about and revolt over. A computer of a given specification is cheaper because it has been made obsolete by technological progress? So what.
We're not living a century ago.
No. A century ago "money" and credit were very much in scarce supply, compared to the unbridled abundance of the last few decades. During those last few decades we sure brought forward a lot of demand from the future and made some massive improvements in our standards of living, particularly in the West. Too bad it's time to pay the bill for it all now. We might later look at "a century ago" with some deep regret for what we did to ourselves and our offspring in the intervening period. :-\
Have a great day!
:-) TBH, I doubt it buddy. Sometimes it's better to relax and let your mind wander as it assimilates new information, rather than bending it to fit what you already thought.
Bonne journée mon ami!
What we are experiencing now is the separation of the 3 functions of money. To me it seems that you are still convinced these 3 functions remain the one and only.....and best option.
Medium of exchange, unit of account and store of value. Why do I bring in these 3 functions and qualifications you ask? Because they are fundamental in the way you and me look at these functions.
Cash is nice for the first two functions, so here we can agree. But the third function (store of value) is not what cash is meant for. Why not is very well explained by DP....it affects your economy, and not the way you want! By the way, store of value of your excessive savings....as for your goods you pay and will pay in the future with Euro's. For the hard money camp this is difficult to see because they focus on the 3rd function (SoV), and want this combined with the other 2. But with people hoarding legal tender coins (Whatever they're made of) the implications will still be the same.
History has proofed this, if you see this different.....better look further back ;)
How money works in "hard money advocate" minds: The Modern Monetary Triangle
How money works in "today's unfolding real [Freegold] world": The Freegold Monetary Quadrangle
Namaste!
As our host, Boefke, says. Thinking of a currency (even if made of metal) providing all 3 aspects of "the money concept" in 1 handy dandy package... is SO last century: it has been proven not to work [several times] already.
So, let's try something new and better. It's unfolding slowly, like a Lotus Flower. But I understand, you don't have time to stop and see how the changes around you are unfolding. After all, you're busy already, writing about it so others can see instead!
So I wish you good luck.
Sincerely,
DP
Thank you DP for the FOFOA post of honest money. I am a FOFOA reader for 2 years now, and read it before. But I've read it different now. As we move on in the transition, so does the understanding develop.
And during this process, more and more people are beginning to see the signs of time. Seeing the problems, searching for solutions.
Isn't it funny that decades ago a small group of people already was preparing for the problems we face today?
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