Honest government= no inflation (generally speaking that is).

[[ForeverAlone]](29Feb2012) wrote:

Topic: Inflation is Theft - Ed Griffin
Why do we rely on GDP as a measurement of economic growth, when it continues to go up while communities are deteriorating?

PainRack wrote:

Really too simplistic. So no government, no banks= no inflation?
Also... its clear that he's an advocate of the return back to the gold standard(well, maybe silver or bimetalic standard). A policy that is even more problematic now than it was in the past.

Actually the gold std/ whatever other standard STILL exists today, but just in a reverse (indirect) way: I explain:
Pre circa.1937 or so where all USD currency was backed by its gold quantity in reserve, it is now no longer so. Now, only good faith/ fear of the US government is what gives the USD it value, ditto every other currency in this world; this is see in the ability for the USD to purchase other items of general value such as fine wines, art work, watches, property, gold or even everyday food stuffs. Despite being a favorable store of money (shiny, unique, fungible, natural element), the US govt decided beginning 1937 and culminating by their unilateral dissolution of the Bretton woods system [wiki] (circa.1973), that gold would no longer back the USD. The people's good faith in the impeccable conduct and integrity of the US government and economy would.
The way I see it, gold prices reflect the credibility of the US government in so far as all currencies, led by the USD continually deflate in per-unit value.
The US govt leaving the gold standard is akin to a country going for nuclear weaponry, the benefits are immense and so are the risks.

PainRack: "..Really too simplistic. So no government, no banks= no inflation?... its clear that he's an advocate of the return back to the gold standard"
I do not think TS is advocating a gold standard, illogical since the US govt has so little gold (8k tons/ 5% of world gold) which would result in hyperinflation of world gold prices overnight and attendant ills too painful to imagine.
What is necessary is an honest government that spends only what it gains through taxes rather than what it has managed to borrow through treasuries/ bonds- which oft result in $printing (theft) every-time interest/ repayment is due (the way a drug addict 'earns' $ to fuel his habit).

Bibliography:
- 'A Simple dichotomy to understand the 2 principle causes of inflation.' [SBYF: 14Feb2012]

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01Mar2012: Inflation is Theft - Ed Griffin