oh really ? and you know this how ?
Most people find the answer too boring, but it does affect every one of us in a dramatic way.
Western wealth is/was built on credit and the availability of credit. Without the gold standard governments all over the world where able to create an endless amount of credit to finance their own as well as consumer expansion. Easy credit meant consumers could borrow and spend like there's no tomorrow. Credit standards got lax and was given to anyone that could breathe, regardless of their abaility to repay. The debt was combined into bonds, graded by credit agencies, sold and traded on exchanges and used as collataral - all the while the bonds themselves where worthless as the bonds had nothing tangable backing it up.
Fractional Reserve Banking.
In the days of a gold standard governments was limited to how much they could borrow and spend.
Governments had to keep reserve of gold to pay it's obligations. It could only spend as much as it had in reserve. International trade often meant that countries had to pay for goods by trading physical gold. Does it now make sense to you why there was two "Boer" wars in S-Africa in the 1880's and 1899 ? Back then in the days of the Gold Standard there it meant that getting your hands on the gold would've meant in credible wealth. South Africa left the gold standard in 1927. The South African Reserve bank was also one of the first (actually the 4th) contry in the world to have a central bank. Although supposedly independant, Central banks and corporate interests are usually closely linked.
In many countries the going off the gold standard initially lead to an credit fueled economic boom, often called a miracle economy.
Don't you think it is silly to supply more credit to someone who has no idea how to work with money ? It might bore you to death to read the why's and the if's. If you would rather watch a movie i advise you to watch the movie
I.O.U.S.A. and
Zeitgeist 2.
If you think
Obama is an angel ? He is no different than Bush, just continueing where Bush left off. And how does this affect S-Africa ? The Reserve Bank keeps USD reserves. Need I say more ?
What is inflation ?
No it's not when prices go up. That is because of inflation. Inflation is an increase in the money supply. It is and increasing amount of money chasing after a supply of of goods/services which remains constant in their supply/availability.
Inflation is a tax on on the poor while the wealthy has learned how to use inflation to their advantage to actually increase their wealth.
- Gold is no one's liability. Unlike fiat paper money, Gold cannot be conjoured out of thin air.
- Removing the gold standard meant that countries could start issueing debt and paying for their bills.
- Fractional Reserve Banking: Meaning that for every R1 you deposit into the bank the bank can lend out R10. The bank can then lend out the R10 to someone else who can use this loan to secure another debt, and put this money back into (another)bank. The bank can then use this R10 as security and turn that into R100 and so on. All from just your R1. That is fractional banking, and it has every bit to do with the current financial crises. As you can see, this is a simple example of what banks do to blow up their balance sheet. The R1 could also have been borrowed, and NOTHING tangable like a gold coint backing it. This is a simple example of the derivatives meltdown.
The current policies followed by British, EU and American are Keynesian. After theories developed by British economist John Maynard Keynes in the 1930's. Keneysian is also very much favoured by corporatists.
However, I am an Autrian Economist follower.
What is Austrian Economics ?
I advise you to read the free PDF book: What has the Government Done with Our Money by Murray Rothbard.
If you would rather watch a video, go and look on Youtube for video "Ron Paul What If remastered", "
Peter Schiff was right", "Ron Paul questions Bernanke 2010" videos.
If you are currently a student at Uni or Tech, you are probably being taught the Keneysian economics.
If you listen to Dr Ron Paul's predictions from 1985 you'd be shocked to see/hear how many of them has come true.
http://mises.org/etexts/Menger/principles.asp
If you don't believe me, just check out the charts for 1 ounce of gold and a barrel of crude oil.
Gold had a low of $252
ten years ago, and today it's more than
Books:
Jorge Besada - "Economics and the Social order".
Robert Kiyosaki - "Rich Dad, Poor Dad: What the rich teach their kids that the poor and middle class do not". This should be available at most book sellers, you local CNA/PNA, and costs around R50. These two books might change your life.
