Saturday, August 11, 2012

Ugh, The Clueless Gold Hater Joe Weisenthal

Weisenthal tweets:
Ugh. Paul Ryan appears to believe in something akin to the gold standard. 

Aside for this tweet displaying Weisenthal's hate for gold, it displays more confusion per character than I thought possible in a tweet.

First and foremost, it is as likely that Ryan is close to a gold standard supporter as it is likely that Weisenthal is the second coming of Jesus Christ.

Weisenthal links, not to Ryan, but to a New Republic article which does not quote Ryan either but quotes Frum Forum's Noah Kristula-Green on Ryan.

Frum's Green totally misunderstands the gold standard in relation to what Ryan is calling for. Green does get the gold standard itself correct:
Gold standard advocates, by definition, want a system where the currency can be exchanged for a specified amount of gold.
His confusion begins when he thinks Ryan wants some kind of  basket of commodities for a currency that acts like a gold standard. Green doesn't say this outright, but he confuses the issue when bringing in the gold standard as a comparison. There can be no comparison unless Ryan was calling for the dollar to be  fixed relative to basket of currencies. That's what the gold standard is about, fixing the dollar to a specific amount of gold. Ryan wants no such thing, Here is what Ryan actually wrote in the op-ed cited by Green:
I'm introducing legislation that would rewrite Humphrey Hawkins and give the Fed just one mandate: price stability. The bill, called the Price Stability Act of 2008, allows the Fed to choose how it will put this single mandate into practice (my preference would be an explicit price rule anchored to a basket of commodities), as long as its overriding policy goal is to control inflation.
In Ryan's plan, he is not calling for a fixed amount of commodities for each dollar, BUT for the Fed to inflate or deflate the currency to maintain, not the amount of commodities, but the price of a basket of  commodities. This would mean there is no fixed amount of commodities per dollar. If global productivity increases over a given period and, say, commodity prices fall by 50%, Ryan would want the Fed to pump dollars in until prices are pushed up to the old level. This would  mean a huge increase in the money supply, perhaps something around a 100%. The  newly created money being an advantage to those who received the new money first. Ryan gives no indication that he wants to change the technicalities of how the new money is pumped into the system, which means under Ryan's "new plan", just like the old plan, it is edge to the banksters, since they get the new money first.

Note this Ryan proposal carefully. It is a perfect example of Ryan at work. He creates complex proposals that throw everything in upheaval that appear to be going in directions they are not. When things finally settle, they ultimately end up where banksters and elitists want things to end up in the first place. He is, in otherwords, a slick phony, who had Frum's Green so confused that he thought Ryan was talking about an alternative to the gold standard.

As for gold-hater Weisenthal, he slaps together a tweet three links away from the original source that makes him look twice as dumb as the average gold hater.


  1. Higher supply no longer means lower price.

  2. And he is the head of business insider mag but is rather clueless on many topics, not just gold.

  3. Another clueless idiot. I guess that means he's next in line for a Nobel prize.

  4. I think I missed something. This seems like six of one, half a dozen of another.

    Is the author drawing a distinction between tying the currency to the price of X and tying it to an amount of X?

    To peg the price of an ounce of X through monetary operations is different from pegging the currency to the price of an ounce of X through monetary operations? Setting aside the problem of central banking and so on, this seems like a distinction without a difference.

    I grant that this is not a proper gold standard, even assuming that X refers to gold, but I wonder if Ryan might not believe that this is a close approximation. And, I would even go so far as to say that targeting commodity prices rather than inflation and/or employment would be a massive leap forward.

    I see that the author has put "fixed" in bold, but assuming that we are not going to be able to stroll into a bank and exchange a dollar for a fixed amount of chicken, wheat, oil, and copper, I think that the tweeter being skewered committed no other sin than beginning his tweet with "Ugh" and the implied disgust at the very notion of a gold standard. Words like "appears" and "something" and "akin" water the statement down a lot.

    In the end, this all seems rather political. Weisenthal is trying to bad mouth Ryan by connecting him to the gold standard. Perhaps Wenzel is trying to do Ryan a favor by disowning him?