Saturday, December 22, 2007

Notable & Inflated: Henry the "Economist" and Val the "Architect"

"Tomas, we've been off the gold standard for more than 30 years. The value of the dollar is based on the collective health of our economy. Short term fluctuations can be influenced by speculation and by incomplete information but eventually it all comes out in the economic wash called equilibrium. As long as we don't encumber industries with too much arbitrary interference and regulation, the economy and therefore the dollar will do just fine. No apocalypse on the horizon. But hey what do I know, my degree is in Economics."Henry Gómez, "The Conductor's Report Card," Babalú, December 22, 2007

No, Henry. The United States went off the gold standard in 1933.

But if The Wall Street Journal can identify Val as an "architect," then Henry can certainly identify himself as an "economist." Oh, brother.


Tomás Estrada-Palma said...

I guess it's just semantics but I consider the gold standard date to be 1913 when J.P. Morgan and the other banking interests got the Congress to pass the Federal Reserve Act. From this point the dollar's value was not tied to anything concrete and the supply of money could be increased by fiat. I never said that a fiat money system could not work. I just say that the crooks running this scheme abuse it by printing up too much money - at least historically speaking.

But enlightened me. The 1933 date is when the US stopped paying Americans holding dollars in gold if they wanted it or silver? If that's right that means it took only 10 years from passage of the Fed Reserve Act to inflate the dollar so much they could no longer pay off dollar holders in gold in America. Wouldn't that be so?

Anonymous said...

Don't forget to add this to the title of the post:

Manuel the "pompous, egomaniacal, narcissistic asshole."

Manuel A.Tellechea said...


You are losing it; you are definitely losing it, and I know I am getting to you.

If I added what you suggest in quotations to the title of this post it would mean that I was as much a "pompous, egomaniacal, narcissistic asshole" as Val is an "architect" or Henry an "economist," which is not at all.

Manuel A.Tellechea said...


It all depends on your take on the Great Depression.

Supporters of Ron Paul believe that the seeds of the Great Depression were sown when a cabal of bankers, led as you say by J.P. Morgan, pressured Congress to pass the Federal Reserve Act.

Everyone else believes that it was as a consequience of the Great Depression and to palliate its effects that the U.S. went off the gold standard in 1933 (no question that was the year) and made it illegal for Americans to own gold bullion. This proscription remained in place until 1974.

When Henry said that the U.S. went off the gold standard "30 years ago" what he actually meant was that it finally became legal for Americans to own gold bullion about 30 years ago.

Tomás Estrada-Palma said...

As for the cause of the Great Depression, an economy is a complex thing. But look at this movie:

I know you are busy and this is about 40 minutes. But it logically explains the fiat banking system in terms that most can easily understand. I believe if you watch it you will agree with me that the bankers flooded the economy with dollars then once they realized it was causing price increases and other problems they slammed the brakes on the supply of money and that was the biggest factor. But also there was the trade tariffs that further stopped the economy. In reality no one thing kicked off the Depression but a collection of mistakes.