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Banned
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Dragonlich, I've posted the following to share with you why I believe von Mises statement to be correct, and why I am opposed to the concept of a central bank, like the Federal Reserve:
Quote:
(See article excerpts, below...)
......Mises’s conclusion, then, is that, once there is enough of a
supply of a commodity to be established on the market as money, there is no need
ever to increase the supply of money. This means that any supply of money
whatever is “optimal”; and every change in the supply of money stimulated by
government can only be pernicious.........
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I've also included ample evidence from articles, quotes, and testimony of former Fed Chairman, Alan Greenspan, which supports my position. I've included references and text of news articles that make a strong case, IMO for the idea that central banks around the world were engaged, for more than 20 years, at least since 1980 in selling gold from their respective national reserves at far lower prices than can be had in today's market, supplemented by leasing of gold to short sellers at rates commonly of 1% annually, in a co-ordinated effort to instill a public perception that gold was a weaker store of purchasing power, than fiat paper currency. This effort, as von Mises predicted, has failed, and much of the leased gold is reported to be still outstanding....owed by "investors" who leased it from the central banks and unwisely did not cover their short positions as gold more than doubled in price in the last four years.
Quote:
http://www.321gold.com/fed/greenspan/1966.html
(Excerpted from the Last 3 Paragraphs of the Article):
......“The abandonment of the gold standard made it possible for the welfare statists to use
the banking system as a means to an unlimited expansion of credit....... In the absence of the
gold standard, there is no way to protect savings from confiscation through inflation. There
is no safe store of value........ Deficit spending is simply a scheme for the 'hidden'
confiscation of wealth. Gold stands in the way of this insidious process. It stands as a
protector of property rights. If one grasps this, one has no difficulty in understanding the
statists' antagonism toward the gold standard.".....
<b>Alan Greenspan
[written in 1966]</b>
This article originally appeared in a newsletter called The Objectivist published in 1966 and
was reprinted in Ayn Rand's Capitalism: The Unknown Ideal
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Quote:
http://www.usagold.com/gildedopinion...span-gold.html
<b>The Greenspan-Paul Congressional Exchanges
1997-2005
In Hearings before the U.S. House of Representatives' Committee on Financial Services during the Questions & Answers sessions </b>
.........7/22/1998
......Dr. PAUL. A very quick question. You seem to welcome, and you have been quoted as welcoming, a downturn in the economy to compensate for the surge and modest growth in the economy. Is it not true that in a free market, with sound money, you never welcome a downturn in the economy? You never welcome the idea of decreased growth, and you don't concern yourself about this? And yet, here we talk about when is the Fed going to intervene and turn down the economy?
It seems that there is a welcoming effect to the fact that the Southeast Asia has tampered-you know, price pressures. Couldn't we make a case that the free market would operate a lot better than the market we use today?
Mr. GREENSPAN. I think you have to define what you mean by a ''free market.'' If you have a fiat currency, which is what everyone has in the world--
Dr. PAUL. That is not free market.
Mr. GREENSPAN. That is not free market. Central banks, of necessity, determine what the money supply is. If you are on a gold standard or other mechanism in which the central banks do not have discretion, then the system works automatically.
The reason there is very little support for the gold standard is the consequences of those types of market adjustments are not considered to be appropriate in the 20th and 21st century. I am one of the rare people who have still some nostalgic view about the old gold standard, as you know, but I must tell you, I am in a very small minority among my colleagues on that issue........
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Quote:
http://commdocs.house.gov/committees...hba65973_0.HTM
(Scroll 65% down the page
CONDUCT OF MONETARY POLICY
TUESDAY, JULY 25, 2000
U.S. House of Representatives,
Committee on Banking and Financial Services,
Washington, DC.
.....Dr. PAUL. Thank you, Mr. Chairman.
Mr. Greenspan, I have a couple of questions today. One is a general question. I want to
get a comment from you dealing with the Austrian free market explanation of the business
cycle. I will lead into that, as well as a question about the productivity statistics that are
being challenged in a few places.
But first off, I would like to lead off with a quote that I think is important that we
should not forget about our past history. ''Every new era in our history''—and we have had
several—''has been based upon the exaggerated enthusiasm and the inflationary forces set in
motion by some single new industry or industrial activity.'' This was written by Businessweek
in 1930, a couple of days after the crash.
Also, I would like to remind my colleagues about surpluses, and I know we look forward to
all the surpluses. First, that portion of the national debt we pay the interest on is still
going up. So there is a question about if we have true surpluses. But even if we did, I would
like to remind my colleagues that we were, as a country and as money managers, reassured in
the 1920's that our surpluses in the 1920's would serve us well, and it did not predict what
was happening in the 1930's.
Basically, the way I understand the Austrian free market explanation of a business cycle is
once we embark on inflation, the creation of new money, we distort interest rates and we cause
people to do dumb things. They overinvest, there is malinvestment, there is overcapacity and
there has to be a correction, and the many good members or well-known members of the Austrian
school, I am sure you are well aware of them, Mises, Hayek and Rothbord, as well as Henry
Hazlitt, have written about this, and really did a pretty good job on predicting. It was the
reason I was attracted to their writing, because certainly, Mises understood clearly that the
Soviet system wouldn't work.
In the 1920's, the Austrian economic policy explained what would probably come in the
1930's. None of the Austrian economists were surprised about the bursting of the bubble in
Japan in 1989, and Japan, by the way, had surpluses. And of course, the best prediction of the
Austrian economists was the breakdown of the Brettan Woods agreement, and that certainly told
us something about what to expect in the 1970's.
But the concerns from that school of thought would be that we still are inflating. Between
1995 and 1999, our M–3 money supply went up 41 percent. It increased during that period of
time twice as fast as the GDP, contributing to this condition that we have. We have had
benefits as a reserve currency of the world, which allows us to perpetuate the bubble, the
financial bubble. Because of our huge current account deficit, we are now borrowing more than
a billion dollars a day to finance, you know, our prosperity, and most economists, whether
they are from the Austrian school or not, would accept the notion that this is unsustainable
and something would have to happen.
Even recently I saw a statistic that showed total bank credit out of the realm of day-to-day
activity in control of the Fed is increasing at the rate of 22 percent. We are now the biggest
debtor in the world. We have $1.5 trillion foreign debt, and that now is 20 percent of the
GDP, and these statistics concern many of the economists as a foreboding of things to come.
And my question dealing with this is, where do the Austrian economists go wrong? And where
do you criticize them and say that we can't accept anything that they say?.....
<b>Mr. GREENSPAN.</b> Well, I will be glad to give you a long academic discussion on the
Austrian school and its implications with respect to modern views of how the economy works
having actually attended a seminar of Ludwig Mises, when he was probably 90, and I was a very
small fraction of that. So I was aware of a great deal of what those teachings were, and a lot
of them still are right. There is no question that they have been absorbed into the general
view of the academic profession in many different ways, and you can see a goodly part of the
teachings of the Austrian school in many of the academic materials that come out in today's
various journals, even though they are rarely, if ever, discussed in those terms.
We have an extraordinary economy with which we have to deal both in the United States and the
rest of the world. What we find over the generations is that the underlying forces which
engender economic change themselves are changing all the time, human nature being the sole
apparent constant throughout the whole process. I think it is safe to say that economists
generally continuously struggle to understand which particular structure is essentially
defining what makes the economy likely to move in one direction or another in the period
immediately ahead, and I will venture to say that that view continuously changes from one
decade to the next. We had views about inflation in the 1960's, and in fact, the desirability
of a little inflation, which we no longer hold any more, at least the vast majority no longer
hold as being desirable.
The general elements which contribute to stability in a market economy change from period
to period as we observe that certain hypotheses about how the system works do not square with
reality. <b>So all I can say is that the long tentacles, you might say, of the Austrian school
have reached far into the future from when most of them practiced and have had a profound and,
in my judgment, probably an irreversible effect on how most mainstream economists think in
this country.</b>
Dr. PAUL. You don't have time to answer the one on productivity, but in some ways, I am
sort of hoping you would say don't worry about these Austrian economists, because if you worry
too much about them, and these predictions they paint in the past came true, in some ways we
should be concerned, and I would like you to reassure me that they are absolutely wrong.
<b>Mr. GREENSPAN.</b> Let me distinguish between analyses of the way economies work and
forecasts people make as a consequence of those analyses. The remarkable thing about the
behavior of economies is they rarely square with forecasts as much as one should hope they
did. I know there is a big dispute on the issue of productivity data. I don't want to get into
that. We would be here for the rest of the month. I think the evidence, in my judgment, is
increasingly persuasive that there has been an indeed underlying structural change in
productivity in this country.
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Quote:
http://www.mises.org/rothbard/scholarhero.pdf
Ludwig von Mises:
Scholar, Creator, Hero
by Murray N. Rothbard
(From Page 8):
......Even the best
monetary analysis, as in Ricardo, the Currency School, and Irving Fisher in the
United States, had been developed in terms of “price levels,”“velocities,” and
other aggregates completely ungrounded in any micro analysis of the actions of
individuals.
In particular, the extension of Austrian analysis to money faced a seemingly
insuperable obstacle, the “problem of the Austrian circle.” The problem was this:
for directly consumable goods the utility and therefore the demand for a product
can be arrived at clearly. The consumer sees the product, evaluates it, and ranks it
on his value scale. These utilities to consumers interact to form a market demand.
Market supply is determined by the expected demand, and the two interact to
determine market price. But a particular problem is posed by the utility of, and the
demand for, money. For money is demanded on the market, and held in one’s
cash balance, not for its own sake but solely for present or future purchases of
other goods. The distinctive nature of money is that it is not consumed, but only
used as a medium of exchange to facilitate exchanges on the market. Money,
therefore, is only demanded on the market because it has a pre-existing
purchasing-power, or value or price on the market. For all consumer goods and
services, therefore, value and demand logically precede and determine price. But
the value of money, while determined by demand, also precedes it; in fact, a
demand for money presupposes that money already has a value and price. A
causal explanation of the value of money seems to founder in unavoidable circular
reasoning.
(Continued on page 9):
In 1906, his doctorate out of the way, Mises determined to take up the
Helfferich challenge, apply marginal utility theory to money, and solve the
problem of the Austrian circle. He devoted a great deal of effort to both empirical
and theoretical studies of monetary problems. The first fruits of this study were
three scholarly articles, two in German journals and one in the English Economic
Journal in 1908-09, on foreign exchange controls and the gold standard in
Austria-Hungary. In the course of writing these articles, Mises became convinced
that, contrary to prevailing opinion, monetary inflation was the cause of balance
of payments deficits instead ofthe other way round, and that bank credit should
not be “elastic” to fulfill the alleged needs of trade.
Mises’s article on the gold standard proved highly controversial. He called for
a de jure return in Austria-Hungary to gold redemption as a logical conclusion of
the existing defacto policy of redeemability. In addition to running up against
advocates of inflation, lower interest rates, and lower exchange rates, Mises was
surprised to face ferocious opposition by the central bank, the Austro-Hungarian
Bank. .......
(From Page 10):
...........By basing his analysis on individual action, Mises was able to show the deep
fallacies of the orthodox mechanistic Anglo-American quantity theory and of
Irving Fisher’s “equation of exchange.” An increase in the quantity of money
does not mechanically yield a proportional increase in a non-existent “price
level,” without affecting relative utilities or prices. Instead, an increase lowers the
purchasing power of the money unit, but does so by inevitably changing relative
incomes and prices. Micro and macro are inextricably commingled. Hence, by
focusing on individual action, on choice and demand for money, Mises not only
was able to integrate the theory of money with the Austrian theory of value and
price; he transformed monetary theory from an unrealistic and distorted
concentration on mechanistic relations between aggregates, to one consistent with
the theory of individual choice.
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(From Page 11):
.........Moreover, Mises revived the critical monetary insight of Ricardo and the
British Currency School of the first half of the nineteenth century: that while
money is a commodity subject to the supply-and-demand determination of value
of any other commodity, it differs in one crucial aspect. Other things being equal,
an increase in the supply of consumer goods confers a social benefit by raising
living standards. But money, in contrast, has only one function: to exchange, now
or at some time in the future, for capital or consumer goods. Money is not eaten or
used as are consumer goods, nor used up in production as are capital goods. An
increase in the quantity of money only serves to dilute the exchange effectiveness
of each franc or dollar; it confers no social benefit whatever. <b>In fact, the reason
why the government and its controlled banking system tend to keep inflating the
money supply, is precisely because the increase is not granted to everyone
equally.</b> Instead, the nodal point of initial increase is the government itself and its
central bank; other early receivers of the new money are favored new borrowers
from the banks, contractors to the government, and government bureaucrats
themselves. These early receivers of the new money, Mises pointed out, benefit at
the expense of those down the line of the chain, or ripple effect, who get the new
money last, or of people on fixed incomes who never receive the new influx of
money. In a profound sense, then, monetary inflation is a hidden form of taxation
or redistribution of wealth, to the government and its favored groups and from the
rest of the population. Mises’s conclusion, then, is that, once there is enough of a
supply of a commodity to be established on the market as money, there is no need
ever to increase the supply of money. This means that any supply of money
whatever is “optimal”; and every change in the supply of money stimulated by
government can only be pernicious.[9]
[9]<i> When gold or some other useful commodity is money, an increase in the stock of gold
does confer a social benefit in its non-monetary uses; for now there is more gold available
for jewelry,for industrial and dental uses, etc. Only in its monetary uses is any supply of
gold optimal. When fiat paper is the monetary standard, in contrast, there are no non-monetary
uses to render palatable an increase in its supply.</i>
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Quote:
A Stirring, at Least, in the Long-Suffering Gold Market
Jonathan Fuerbringer. New York Times. New York, N.Y.: Mar 11, 2001. pg. 3.7
New York Times Company Mar 11, 2001
A TREMOR is rumbling through the gold market.
The interest rate for lending gold, which generally hovers around 1 percent, was above 2
percent for 10 trading days and then surged over 6 percent on Friday.
What does this seismic change mean? Is it temporary, like some past spikes? Or will it
persist? If it does, it would mean higher gold prices ahead.
Higher prices are what the gold market needs. With a jump of $5.40 on Friday after the surge
in lease rates, gold for April delivery was at $271.50 an ounce. But gold prices are still
down 0.8 percent for the year and just $17.80 above their 20-year low.
A rally would help gold stocks, which are already among the stock market's best performers
this year. Investors betting on such a rally often buy gold-company stocks instead of the
metal because stocks get a bigger lift when the price of gold rises.
The lease rate is the charge for lending gold to producers, who sell gold to lock in prices
for future production, and to investors, who sell gold to go short, hoping to make a profit if
the price falls. The lease rate is normally very low because the world's central banks have a
lot to lend.
For years, gold producers and short-sellers have taken advantage of low lease rates. And
because the borrowed gold was sold to hedge or to bet against gold, lending added to the
downward pressure on gold prices.
So a high lease rate can shift market dynamics. The higher cost discourages short-sellers from
betting against gold. Many of them, in fact, buy gold to unwind short positions and, in doing
so, push gold prices higher, as happened last week. The higher cost also deters producers from
hedging.
But determining if the jump in lease rates is temporary or permanent is difficult. First, this
surge has no certain explanation. Second, it is hard to judge probable causes in a market so
divided between believers in the ''magical'' qualities of gold and those who dare to treat it
as a mere commodity.
The increase in the lease rate would be clearly significant if it could be traced to a
decision by one or more European central banks to curtail their gold lending. The World Gold
Council, which represents major gold producers, has been lobbying central banks to do just
that.
But while many analysts can say confidently that central banks are unhappy with low leasing
rates, they cannot say that a central bank has changed policy.
One possibility, however, is that the Bank of England has reduced its lending. That might not
be a bad tactic, given that the bank will auction 25 tons of gold on Wednesday as part of its
planned sale of 415 tons over three years. If lease rates hold and the price of gold rises,
the bank could do better than expected a few weeks ago.
It would make sense for central banks to curtail their lending as a way to support the price
of gold, which many of them are selling. The problem is that in recent years, any jump in
lease rates has attracted other lenders into the market, pushing the rates back down. So while
the price of gold has risen with increases in lease rates, it has also fallen quickly as lease
rates declined.
The last big lease-rate surge came in the summer and fall of 1999, after gold hit what was
then 20-year low of $253.70 an ounce.
By September, the one-month lease rate was more than 4 percent at an annual rate. Then, on
Sept. 26, European central banks announced that they would limit their annual gold sales in
the next five years to 400 tons and restrict the amount of gold that they would lend to
then-current levels.
That sent the lease rate to 9.9 percent. From Sept. 20 to Oct. 6, the gold price jumped almost
30 percent, to $326 an ounce. But by November, the lease rate was back below 1 percent and the
price was less than $300.
Even if the current lease-rate jump does not last, it should produce a nice pop in gold. And
though it may be brief, that is about as good as it gets in the gold market today.
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Quote:
http://www.findarticles.com/p/articl...08/ai_64998196
Uruguay gold sale stirs market
American Metal Market, August 25, 2000 by Alexander Corey
NEW YORK -- News that Uruguay had sold 750,000 ounces of its gold reserves sent jitters
through trading circles Wednesday, pushing down prices about $1 an ounce in a psychological
reaction to the sale.
Hint of the central bank sale came last week, when the Latin American country sent its entire
1.8-million-ounce gold stock to London for assessment before selling nearly 42 percent of its
reserves.
Traders were not reacting to hints; however. "As central banks keep selling, it doesn't do any
good for gold's image as an investment vehicle," a trader told Reuters.
The sale is expected to put downward pressure on gold prices at a time when the precious metal
continues to languish despite a-robust economy and a strong U.S. dollar. "There will be a
small decline, which is odd because news (of the sale) was out for a few days," said George
Milling Stanley, gold market analyst for the World Gold Council.
The trader told Reuters Wednesday that the sale could cause gold to slip. "Gold ... is now
sitting uncomfortably around the $272 level, and looks in serious danger of testing $270 and
possibly lower."
Despite the pessimism, Uruguay's sale is not expected to have a significant impact on the
market. "Actually, it's not a large amount of bullion," said Refco Inc. metals analyst James
Steel. "It's about 24 tons. The fact that it was publicized means -(the sale) already
occurred. Any sentiment is anecdotal now. The physical has already adjusted to the gold."
The liquidation of national gold reserves, a trend in the early 1990s, has abated in recent
years, partly because of the Washington Accord, a pact signed by 15 of the world's largest
gold holders who agreed not to sell more than 400 tonnes per year. Uruguay was not part of the
agreement.
Analysts speculated that Uruguay sold a sizeable portion of its gold reserves to either raise
U.S. dollars or to balance the country's portfolio.
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Quote:
When Central Banks Put Their Gold into Play
Glynn, Lenny. Global Finance. New York: Sep 1991.Vol.5, Iss. 9; pg. 50, 2 pgs
Abstract (Document Summary)
An intriguing effect of last year's collapse of Drexel Burnham Lambert was to uncover the
fast-growing but little known practice of gold lending and trading by central banks. It seems
that the firm's New Jersey-based trading arm, DBL Trading, had managed to borrow nearly $650
million worth of bullion from half a dozen central banks in the months before Drexel's fall.
Portugal's central bank emerged as the most visible loser, having lent DBL Trading 9 tons of
bullion worth more than $100 million. Exactly how much gold central banks routinely put into
play in the market is unknown. Sitting on more then 35,000 tons, central banks own well over
1/3 of all the gold mined since King Solomon's days, more than 15 times the amount that comes
to market annually from all the mines in the world. That enormous overhang and the risk that
central banks will lend, write call options on, or sell their gold combine to depress or cap
gold's price.
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Quote:
http://www.federalreserve.gov/boardd...8/19980724.htm
<b>Testimony of Chairman Alan Greenspan</b>
The regulation of OTC derivatives
Before the Committee on Banking and Financial Services, U.S. House of Representatives
July 24, 1998
...<b>Potential Application of the CEA to OTC Derivatives</b>
The vast majority of privately negotiated OTC contracts are settled in cash rather than
through delivery. Cash settlement typically is based on a rate or price in a highly liquid
market with a very large or virtually unlimited deliverable supply, for example, LIBOR or the
spot dollar-yen exchange rate. To be sure, there are a limited number of OTC derivative
contracts that apply to nonfinancial underlying assets. There is a significant business in
oil-based derivatives, for example. But unlike farm crops, especially near the end of a crop
season, private counterparties in oil contracts have virtually no ability to restrict the
worldwide supply of this commodity. (Even OPEC has been less than successful over the years.)
<h3>Nor can private counterparties restrict supplies of gold, another commodity whose
derivatives are often traded over-the-counter, where central banks stand ready to lease gold
in increasing quantities should the price rise</h3>......
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Quote:
http://www.house.gov/paul/congrec/co...2/cr071702.htm
7/17/2002
The gentleman from Texas, Dr. Paul.
Dr. PAUL. Thank you, Mr. Chairman. Welcome, Chairman Greenspan. I have listened carefully to
your testimony, but I get the sense I may be listening to the chairman of the board of Central
Economic Planning rather than the Chairman of a Board that has been entrusted with protecting
the value of the dollar.
I have, for quite a few years now, expressed concern about the value of the dollar, which I
think we neglect here in the Congress, here in the committee, and I do not think that the
Federal Reserve has done a good job in protecting the value of the dollar. It seems that maybe
others are coming around to this viewpoint, because I see that the head of the IMF Mr.
Koehler, has expressed a concern and made a suggestion that all the central bankers of the
world need to lay plans for the near future to possibly prop up the dollar. So others have
this same concern.
You have in your testimony expressed concern about the greed factor on Wall Street, which
obviously is there, and you implied that this has come out from the excessive capitalization,
excessive valuations, which may be true. But I think where you have come up short is in
failing to explain why we have financial bubbles. I think if you have fiat money and excessive
credit, you create financial bubbles, and you also undermine the value of the dollar, and now
we are facing that consequence.
We see the disintegration of some of these markets. At the same time, we have potential real
depreciation of the value of our dollar. We have pursued rampant inflation of the money supply
since you have been chairman of the Federal Reserve. We have literally created $4.7 trillion
worth of new money in M-3. Even in this last year with this tremendous burst of inflation of
the money supply, it has gone up, since last January, over $1 trillion. You can't have
anything but lower value of that unit of account if you keep printing and creating new money.
Now, I would like to bring us back to sound money, and I would want to quote an eminent
economist by the name of Alan Greenspan who gives me some credibility on what I am interested
in. A time ago you said, ''in the absence of the gold standard, there is no way to protect
savings from confiscation through inflation. There is no safe store of value without gold.
This is the shabby secret of the welfare state that tirades against gold. Deficit spending is
simply a scheme for the hidden confiscation of wealth. Gold stands in the way of this
insidious process. It stands as a protector of property rights.''
But gold always has always had to be undermined if fiat money is to work, and there has to be
an illusion of trust for paper money to work. I think this has been happening for thousands of
years. At one time the kings clipped coins, then they debased the metals, then we learned how
to print money. Even as recently as the 1960s, for us to perpetuate a myth about our monetary
system, we dumped two-thirds of our gold, 500 million ounces of gold, on to the market at $35
an ounce, in order to try to convince people to trust the money.
Even today, there is a fair amount of trading by central banks in gold, the dumping of
hundreds of tons of gold, loaning of gold, for the sole purpose of making sure this indicator
of gold does not discredit the paper money, and I think there is a definite concerted effort
to do that.
My questions are twofold relating to gold. One, I have been trying desperately to find out the
total amount of gold either dumped and sold on the markets by all the central banks of the
world, or loaned by the central banks of the world. This is in hundreds and hundreds of tons.
But those figures are not available to me. Maybe you can help me find this.
I think it would be important to know since all central banks still deal with and hold gold,
whether they are dumping or loaning or buying, for that matter. But along this line, I have a
bill that would say that our government, our Treasury, could not deal in gold and could not be
involved in the gold market, unless the Congress knows about it.
That, to me, seems like such a reasonable approach and a reasonable request, but they say they
don't use it, so therefore, we don't need the bill. If they are not trading in gold, what
would be the harm in the Congress knowing about handling and dealing with this asset, gold?
<b>Mr. GREENSPAN.</b> Well, first of all, neither we nor the Treasury trades gold. My
impression is that were we to do so, we would announce it. It is certainly the case that
others do. There are data published monthly or quarterly which show the reported gold holdings
in central banks throughout the world, so you do know who holds what.....
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<b>Additional Reading:</b>
RE: Your comments on US military spending vs. GDP.
As recently as the fiscal year ending 9/30/2001, combined annual spending on security and intelligence was less than $350 billion. Total federal treasury debt was $5.7 trillion, and the annual deficit at the end of that fiscal year was $32 billion, only because of the newly innaugurated Bush admin. tax rebate check mailing.
Contrast that description with current treasury debt of <a href="http://www.publicdebt.treas.gov/opd/opdpdodt.htm">$8.6 trillion</a>, an increase of $570 billion in just the last 12 months, $700 billion in annual spending for security and intelligence, factoring in supplemental war appropriations, debt service interest costs have risen from $359 billion in FY 2001, to <a href="http://www.publicdebt.treas.gov/opd/opdint.htm">$405 billion in FY 2006</a>, and will certainly rise if the dollar continues to diminish in value.
US 2001 GDP was $10,128 billion and in <a href="http://64.233.161.104/search?q=cache:KTiGa9z90XIJ:bea.gov/bea/dn/gdplev.xls+bea+us+gdp+2001&hl=en&gl=us&ct=clnk&cd=1">2005, was $12,455</a> The 5 year GDP increase is 22.9%.... $2,327 billion, while the increase in security/intelligence spending is 100% and the annual accumulation of new treasury debt is up from $32 billion annually, to $570 billion, or more than 17 times the 2001 level. Five years ago, $260 bought an ounce of gold or $312 Euros. Today, $260 buys .42 of an ounce of gold, or 198.4 Euros.
These trends and comparisons do not concern you, yet? When do you predict that they will?
Last edited by host; 12-31-2006 at 10:08 PM..
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