Streams

Debt, Money, and the New World Order

Monday, February 06, 2012

Economist columnist Philip Coggan discusses why western economies have splurged on debt in the past 40 years, and what the repercussions are. In Paper Promises: Debt, Money, and the New World Order explains the origins of the debt crisis and how it will affect the new global economy.

Guests:

Philip Coggan

Comments [10]

David

This guest reminds me of this quote:

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

"We" did not go off the gold standard because "there wasn't enough of it," as this guest suggests. First of all, unfortunately, no country was ever on a 100% gold standard. What partial gold standard that most countries were on was eventually abandoned thanks to the takeover of the control of each country's money supply by the Banksters by establishing a central bank in each country. And the guest's comment about if gold were the medium of exchange, one week it could be worth $1,000, while the next week it could be worth $2,000 shows that he has zero understanding about how a stable real medium of exchange operates in a market economy.

Two more books to read on the subject of banking and, in particular, central banking.

The Case Against the Fed
http://mises.org/books/fed.pdf

Money, Bank Credit, and Economic Cycles
http://mises.org/books/desoto.pdf

I hope you all realize that the EXACT SAME PEOPLE who got us into this current mess (Bernanke and Geithner)—and were mistakenly declaring up to a few weeks before the banking/housing crisis that there was no banking/housing crisis—are the same people who are being relied on to get us out of it. Contrary to the lies you hear about and read about in the mainstream media, the economy is NOT getting better.

When is Leonard going to have on a real economist who can explain to him and his audience what a medium of exchange is, how it came about, and why over centuries the marketplace eventually evolved to using gold and silver as the preferred media of exchange? (And, no, Paul Krugman is not a real economist. He is a pseudo-economist who is basically a spokesman for the financial interests of the Banksters.)

Feb. 07 2012 02:06 AM
David

John A.: The expression "New World Order" has been around long before the Internet was thriving:

http://youtu.be/7a9Syi12RJo

Feb. 06 2012 09:17 PM
Buy CreditDefaultSwap Protection prior to default? from Is this a strategy for Greece ?


What if Greece (via intermediaries) secretly purchased
large amounts of Credit default swap protection and then
defaulted ? This would force the CDS to pay Greece
offsetting their losses and giving them the liquidity
they need to cover their departure from the Euro.

If Greece made sure the counterparties were major
banks from the stronger Euro economies - they may
also be able to use this as a hardball negotiating
advantage. Why ? Because if these strong Euro economies
don't cut Greece a better deal, Greece can default,
cash in on the CDS protection and take out the major
banks of all the stronger Euro countries in the process -
giving the stronger and stingier Euro nations a taste
of their own medicine. (With this as a credible threat,
all of a sudden, strong Euro leaders who were so intent
on giving Greece lectures and shoving austerity down their
throats will quickly learn to be more pleasant and accommodating).

This alone should enable Greece to renegotiate a less cruel
agreement that doesn't drown Greeks in a decade of austerity,
depression, unemployment and needless suffering.

In the remote chance that push comes to shove, Greece can
collect on it's CDS protection. It can use the funds
to FIRST pay Greek citizens - say up to 1 million Euro
per person (not per entity) in full. The next tier would
pay Greek businesses and wealthier Greek citizens in part,
and the subordinate tiers would be very small payments to
outside creditors - perhaps placing strong Euro nations
who tried to be particularly hard on Greece below those
of other Euro nations who were more sympathetic.

No doubt, the credible threat to pull out of the Euro
and cause a massive hemorrhage in banking sector
of the stronger and crueller Euro economies will
force those nation's leaders to withdraw and accept
a more reasonable deal for all.

Feb. 06 2012 05:56 PM
WhatIf Greece just PRINTED Euros ? from Helicopter Drops for Everybody!


What if Greece just PRINTED Euros and used them to pay off
everybody - particularly all debts outside Greece.

Now technically, they might not be allowed to issue
the currency - but then again - What can the EU do
about it ?

No doubt, Greece could make some very real looking Euros,
and well, Europe probably wouldn't want to create a
panic with everyone thinking they got the bad Euros...

Helicopter Drops for Everybody!

Feb. 06 2012 05:32 PM
David

If you want to learn about why we no longer use gold and silver as a medium of exchange, here's an excellent short book on the subject of what money is (and what money isn't).

http://mises.org/books/whathasgovernmentdone.pdf

Feb. 06 2012 02:35 PM
Amy from Manhattan

Mr. Coggan's comment about paper money being symbolic of gold or other things that have an intrinsic value reminds me of 1 the promos for "A History of the World in 100 Objects," in which the narrator says the credit card is not metal or paper but "a promise in plastic." But cash itself is a promise in paper, isn't it?

Feb. 06 2012 01:54 PM
tony from bayside

What does the Federal Reserve have to do with all this?

Feb. 06 2012 01:50 PM
Morris Gindi from Brooklyn, NY

Can the debate over whether or not to print more money be viewed through the lens not of liberal vs. conservative, of "old vs. young"? Meaning, printing more money and allowing for some inflation would benefit the young by stimulating the economy and reducing the real value of their debt, because young people have less savings and more debt. Older Americans have more savings, which would be eroded by inflation.

Feb. 06 2012 01:49 PM
John A.

Beware that 'New World Order' is an Internet meme meaning a US government conspiracy. It is a belief held by probably hundreds of thousands.

Feb. 06 2012 01:46 PM
jgarbuz from Queens

We went off "hard money" because the industrial revolution increased both the production of goods and people well beyond the ability to find and mine enough gold. In addition, as people left farms for factories, they no longer lived directly off the land, but had to get paid with something, and there was not enough hard lucre. So they had to be paid in scrip or paper money. Initially paper money was backed by hard money (gold or silver),increasingly it became backed by the credit worthiness and the taxation ability of the state instead.

Feb. 06 2012 01:43 PM

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