Gold Standard or Silvio Gesell, whats better you think?

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sosMsos's picture
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Gold Standard or Silvio Gesell, whats better you think?

Hi i just sent Peter Schiff this message as he is a big promoter of the gold standard and thought it might be interesting to place it here aswell.

What do you think about the content and the questions involved?

here it comes:

Hello Mr. Schiff,
I am a passionate listener of your radio show. But now and then questions come up. And the answer can be pretty important to wether we face inflation/hyperinflation or a deep global deflationary depression first.

1. you always tell about money printing causing inflation. But thats what i dont undertand.
a) The Fed (QE) is not printing additional money to the existing debts.
Thus it cant be a reason for "real" inflation, (but admit for a bubble that looks like inflation).
b) The asset exchange just leads into more liquidity but as long no one can afford any new debts it will take no effect on M3.

What QE and the cheap money policy is doing, it creates new speculative bubbles, as you always predicted correctly in history.
Thus  the rise in commodity prices is a bubblecreation, its not sustainable inflation.
You said it yourself that all those weather and crop reports is scaremongering and doesnt has anything to do with the cause of the priceincreases in the grain sector.
But on the otherhand you tell us that the priceincrease in the commodities is sustainable and not a bubble but result of real inflation.

You see it is very important for investors to know wether the trend in commodities is sustainable or not, wether QE produces a new inlationary look alike bubble in the commodities or if it really causes inflation and an increase of moneysuply without creating new debts!

When everyone invests in gold and QE2 is not creating new money without creating new debts, then they will be heading directly in the wrong direction!

Are you aware of this?

2.  Your solution:
shrink piublic debts. Thats not working in our system.
You know that shrinking debts means money destruction since debts = money.
You are always talking about the goldstandard as a solution. But you never talk about interests. Intersts on gold are more stupid than interest on fiat.
Also gold without intersts is still more favourable than the most tradable goods, thus still not a good solution, people wont make investments, thats the purest form of  deflation imo.
Instead why dont you ever mention Silvio Gesell as a solution.
In that system, if you dont invest your money it will depreciate in value (like negative interests on circulating money), but $100 today will be still $100 in the future (= Zero interests on invested money but without inflation).

It looks that the mainstream trend heads into  a goldstandard after the crash, and that is not a solution thats worse, + it has never worked for a longer period in history as you promote.

People must be educated not mislead regarding money system.

Sincerely, A.S.

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