Re: [A-List] The Peso is a "Derivative" of the Dollar

["Annewilliamson" <Annewilliamson@xxxxxxx>]

Henry:

I quite agree with you that the present system is one of gangsterism -- but
it is definitely not based on "free market" capitalism.  This is crony
capitalism, and I am with you every step of the way in opposing it.  I just
don't believe that letting more foxes into the henhouse is going to solve
anything.

What I am having a problem with here is the notion that some government
somewhere someday is going to conduct itself altruistically on behalf of the
governed. All we need are new rules, or the correct ideology.  This reminds
me of college students in the 1970s, who used to say "One day we'll be in
charge....blah, blah, blah, blah."  At that time there was a popular poster
of a Nixon with the legend, "Would you buy a used car from this man?".  That
was "clever" back then, one of my older brothers informed me.  Yeah, well,
that generation finally did manage to get "in charge," and lo and behold,
their emblematic political hero turned out to be a man whose highest useage
would be as a used car salesman!  And those who frantically tried to correct
this tragicomedy ended up electing a jug-earred, bow-legged punk from
Midland who is such an ignoramous he has absolutely no sense of his own
incapacity (they are rewriting history in the White House these days by
correcting official transcripts of his words within a nanosecond of their
being spoken!)

Man is a flawed creature, and Christians tell us that is part of God's plan.
I can't answer for God's plan, I'm human.  But I certainly do not believe in
the perfectability of man - and certainly not of the men and women of the
governing class.

Liberty is the answer, and freely-flowing markets whose information is
untainted by either government or privileged corporate interference.  And
for liberty to work, the common man must have his essential property - his
labor which he exchanges for money - protected.  And only gold - inanimate,
unbribeable, unseducable metal - can provide that protection.

And on one point we do agree - you argue that money must be plentiful for an
economy to work properly and equitably.  In a weird way, I'm saying the
same - but differently.  I say property - access to it, use of it,
accumulation of it, transfer of it - must be widely available and
protected -- and money is but one form of property, though the most common.
And the only way to save that money from human parasites is by backing it
with a commodity of value.  Fiat is debt money, it is born of debt, and it
dies with debt (what we are about to witness once the defaults really get
rolling.)  Gold is the only asset that is not someone else's liability.  And
there is no such thing as the "price of gold."  Gold is the price.

BTW, is there any realistic chance in the near future that Asia would insist
upon payment for exports in national currencies?

Anne

PS  I do not think you base any of your ideas or comments on "fantasy."  I
do believe you to be a very idealistic person, and I don't mean that as a
negative.  It's just that I am not idealitic regarding the nature of man or
of the institutions he creates because I have never witnessed anything to
give me cause to be idealistic -- but I have witnessed enough in this life
to believe that only a free market made up of the multitude that can
mitigate the ill effects of individual self-interest for any society as a
whole.

----- Original Message -----
From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
To: <a-list@xxxxxxxxxxxxxxxxxxx>
Sent: Wednesday, August 21, 2002 11:44 AM
Subject: Re: [A-List] The Peso is a "Derivative" of the Dollar


> Anne,
>
> One can attack government intervention of the economy on many grounds, but
> fantasy is not one of them.  All economic regimes, including so-called
"free
> markets" are constructs of fantasy.  When suficient data are accumulated
through
> the longtime operation of fantastic constructs, what Gramsci called
cultural
> hegemony, it takes on the appearance of reality, when in fact it is merely
> entrenched fantasy.  Government sets the rules of the market which affect
the
> level of gainful employment in the economy.  NAIRU sets non-inflationary
> unemployment, the so called natural rate, at 4-6%.  Market participants
create
> nothing, they merely particiapte in a game set up by government.  Free
> marketeers tirelessly argue for self-governance and market discipline.
What
> they are really arguing for is ganster capitalism.  The Mafia operates
within
> straight rules of its criminal culture and view law enforcement as
tyranny.
>
> Money cannot be a storer of value and at the same time has intrinsic
value,
> unless its market value is in excess of its intrinsic value, otherwise it
stores
> nothing. It is basic logic.  Thus when money operates as a storer of value
it
> must be fiat money.  The difference between gold and paper is only a
difference
> of degree.
>
> As for government being tyrannical, you have a point.  But that is a
separate
> issue from monetary policy or market fundamentalism.  Governments that
promote
> "free" market can also be tyrannical. Corruption is the twin of freedom.
> Just by claiming to be democratic does not make it so.
>
> Henry
>
> Annewilliamson wrote:
>
> > It is not the purpose of government to "create" employment, or
> > money.  Any employment organized by government is government
> > employment and has to be supported by tax revenues.  The market,
> > human activity creates beneficial employment  - and that is reality.
> > Austrian theory is not a theory meant to prevent revolution,
> > but rather to prevent government tyranny, generally speaking.
> >
> > And money must be a store of value; otherwise commerce and industry can
not
> > flourish,
> > and the common man is endlessly cheated through currency confiscation
> > in the fiat system.  What Henry outlined is, in fact, fantastically
> > idealistic
> > because no government is not made up of well-meaning robots working for
> > the common good, but of flesh and blood human beings who seek their
> > own self-interest (in democracies they seek re-election through the
> > buying of votes with money confiscated from other people, for example)
> > and succumb to parasitism.  This is why every paper money system ever
> > devised has collapsed to its intrinsic value (zero) or is collapsing.
> >
> > I am travelling and am constrained from responding more fully, but could
> > not allow such misrepresentations of the Austrian school and the purpose
> > of money without making some noise.
> >
> > Anne
> >
> > PS  I notice Mugabe is never discussed on this list.  Anything for
> > the "revolution," eh?
> >
> > ----- Original Message -----
> > From: "Mark Jones" <markjones011@xxxxxxxxxxxxx>
> > To: <a-list@xxxxxxxxxxxxxxxxxxx>
> > Sent: Tuesday, August 20, 2002 4:43 AM
> > Subject: Re: [A-List] The Peso is a "Derivative" of the Dollar
> >
> > > Henry, thanks for the invaluable discussion of value! I have a few
points
> > > to raise about that, but it is wonderful stuff. But here first is my 2
> > > cents about Chinese use of energy:
> > > Henry wrote:
> > >
> > > >As for Mark's concern about a properous China consuming energy, I
have
> > two
> > > >comments.  I have calculated that at the rate of the past two
decades, it
> > > >will take
> > > >China two centuries to catch up with the US in per capita
consumption.
> > > >Secondly,
> > > >China's romance with market captalism will be very short lived as
reality
> > > >will fail
> > > >to deliver the fancy promises of market fundamentalism.  My view is
that
> > > >pretro
> > > >energy will be replaced within the next century.  There was a time
when
> > it was
> > > >thought that if the world kept building fireplaces, there won't be
any
> > > >trees left
> > > >to fuel them. Then the world found coal, and oil and gas and nuclear
> > > >power.   We
> > > >have not even began to tap geo-thermal enegery.  The energy problem
is a
> > sunk
> > > >investment problem, totally solvable but not without some serious
> > > >Schumpeterean
> > > >creative destruction.
> > >
> > > The best official source I know of is the US government's Energy
> > > Information Administration. The EIA webpage on China is at
> > > http://www.eia.doe.gov/cabs/china.html
> > >
> > > The EIA says:
> > >
> > > >China currently is the world's third largest oil consumer, behind the
> > > >United States and Japan. Consumption of petroleum products totalled
4.78
> > > >million barrels per day (bbl/d) in 2000, up from 4.36 million bbl/d
in
> > > >1999. China is expected to surpass Japan as the second largest world
oil
> > > >consumer within the next decade and reach a consumption level of 10.5
> > > >million bbl/d by 2020, making it a major factor in the world oil
market.
> > >
> > > Current global oil consumption is of the order of  77 million bbl/d.
> > > Various estimates of future demand show consumption of 110 million
bbl/d
> > > (some more, some less) by 2020. But this flies in the face of the view
> > > strongly argued by petrogeologists such as Colin Campbell that world
oil
> > > production is peaking and may already have peaked. Therefore, if this
view
> > > is correct (I believe it is) the world oil industry will be incapable
of
> > > meeting increased demand. At the End of the Oil Age, the crunch will
be a
> > > contest fought primarily between the world's two largest consumers:
the
> > USA
> > > and China. Given the centrality to modern economies of oil and natural
gas
> > > as energy (80 of all transport) and as raw material feedstock, the
danger
> > > is obvious that the world energy supply position is precarious in the
> > > extreme and that growth in consumption by China (but not only China,
> > > obviously; all industrial states continue to increase consumption) is
> > > unsustainable.
> > >
> > > The official US government view is that there is no problem because
oil
> > > supply will rise to meet demand. The unofficial view is--well, what
ARE
> > > they doing in Iraq?
> > >
> > > Henry argues that as or if oil runs out, substitutes will be found,
and
> > the
> > > main problem he sees is that it will be necessary to write off the
world's
> > > huge capital investment in the existing energy-supply base: pipelines,
> > > refineries, tankers, the billion-plus global vehicle park etc. I take
his
> > > point. At the End of Big Oil there sure is going to be a lot of
rusting
> > > scrap metal out there. But finding substitutes will not be easy and
the
> > > past is no guide.
> > > Shell's energy scenarios to 2050 -
> > > www.shell.com/downloads/publications/51852.pdf
> > > is interesting and upbeat about renewables, geothermal etc. But the
scale
> > > of the problem is this. Renewable energy from all sources  includes
> > > hydropower, solar, wind, tide, geothermal, solid biomass and animal
> > > products, biomass gas and liquids, industrial and municipal wastes and
> > > amounts to less than 10% of total global energy consumption. I think
there
> > > are many reasons why oil is irreplaceable, in time or at all, without
> > there
> > > first being a general crisis of capitalism.
> > >
> > >
> > > Mark
> > >
> > >
> > >
>
>
>