Deseret News | Government has duty to preserve value of currency

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George F. Will: Government has duty to preserve value of currency

GWB | 6:31 a.m. Nov. 12, 2009

You gotta love the conservative mind.

Why did George Will wait to write this column until now? Everything said in the article was timely 3-5 years ago when the dow was soaring to new heights, along with the price of gold.

It is funny that when he talks about the deficit as a percentage of GDP, he refers to the Reagan years and never mentions George W. Bush, who was the President that is accountable for the 2009 fiscal year that started October 1 of 2008.

I guess when you have a political axe to grind, presenting the whole truth can never get in the way of political spin.

JMT | 6:44 a.m. Nov. 12, 2009

I'm on a few economic type newsletters or groups. This morning I had this sent to me (group) by one world renowned economist stating that he wished he had said it as well. He then added way too much geek jargon but the point is...George Will stated this very well.

Earl | 8:00 a.m. Nov. 12, 2009

Liberals and conservatives both are Keynesians who believe that saving money dampens the recovery. George Will is no exception, unfortunately. Even Milton Friedman was a type of Keynesian, called a monetarist, the economic school to which Will seems to also belong. They believe that inflation of the money supply is a good thing as long as you can moderate it at a constant level, say 3% increase per year. Bernanke more than doubled the money supply over the last year, so this brings out the monetarists' concern. But it's too little too late.

I have been investing in gold for the last 5 years because I know that increasing the money supply can only lead to a devaluation of the dollar. The greater the monetary inflation (not price inflation), the greater the devaluation. With the huge surge in the money supply as of late, commodity prices (including gold) are rising quickly. And it will continue to do so as more of the bailout and stimulus money seeps into the economy.

Here's the bottom line: no recovery will occur until the money supply stabilizes and creates a stable currency. Throwing more paper money at it is the worst course.

Comments continue below

Roland Kayser | 8:22 a.m. Nov. 12, 2009

We are currently in a deflationary environment, so increasing the money supply is the right thing to do now. Those who argue that we should be fighting inflation are fighting the wrong war, although history being cyclical, it will probably be necessary again at some point in the future.

Anonymous | 8:41 a.m. Nov. 12, 2009

The dollar was at record lows during the Bush years, and now George wants the government to step in? I thought the conservatives wanted government out and let the free market decide. Here we go again, they are hypocrites and want the government to intervene when it is something they want.

@roland | 8:41 a.m. Nov. 12, 2009

we are not in a deflationary cycle. We are in the bursting of a inflated bubble in housing prices. The massive unfunded government is crushing all. The hard goods will become even more valuable. Gold and productive land.

Brother Chuck Schroeder | 9:24 a.m. Nov. 12, 2009

Then, you gotta ask yourself.....

WHY DID......

SILVER MARKET: During the last five years, the price of silver has risen 158% ?. Now, why is that?.

As THEY say.....

You gotta love the conservative mind.

More in a minute......

Part II

Brother Chuck Schroeder | 9:28 a.m. Nov. 12, 2009

Part I

WHO really TRUSTS the GOP in Congress?. NO ONE DOES. The stats and growth prognostications from tout television, New York banksters, our Federal Reserve, U.S. Treasury, and various U.S. Government fiscally incestuous cabal members are replete with liars, exaggerators, and crooked politicians. The U.S. Government and several others are economically dead; they just haven’t admitted it yet.

The United States' financial affairs are an empty burning hulk of disaster.

There is not enough taxing power, stealing power, money and bond-printing power on this globe for these dudes to worm their way out of a major collapse. It may take some time, but its coming for sure. There is no way out except to inflate. And, we know how that one ends. Read about Germany's hyper-inflation of 1921-1922.

We are not yelling fire in this theatre of the absurd but rather giving an untenable situation the cold, blank, fishy-eyed stare of an auditor. Two and two isn’t 20 and never will be. Most everyone is broke and going broker. Even those with no debt and holding supposedly strong assets in government paper and real estate reside in quicksand.

Earl | 9:39 a.m. Nov. 12, 2009

Roland and I have gone over this before and we're pretty much diametrically opposed regarding what course the Federal Reserve and the federal government should take. I know that stabilizing the currency will result in job losses, business failures and hard times. But it is temporary, much shorter than the Great Depression. Then the rebuilding process starts again on firm ground. The other option is to flood the economy with new money (created by fiat), artificially propping up prices and assets. The theory says that eventually the recovery will take hold and we can then "sop up" the monetary flood and stabilize the currency again. This is a flat-out myth that works on paper only. It has never happened in real life, and never will. I'm betting against it, which is why I'm in gold. Where is your money?

If Only | 9:55 a.m. Nov. 12, 2009

If it were not for our "elastic" currency we could just ignore those mischievous dilettantes in Congress, and those rogues in the Fed.

We're still rich in commodities and have plenty of labor to produce wealth.

Schroeder backer | 10:36 a.m. Nov. 12, 2009

Bro Chuck is right again.

Has a new floor been set at $1,000 per ounce?

India's deal to buy 200 metric tons (6.4 million troy ounces) of gold from the International Monetary Fund (IMF) is a huge deal - not just the fact that the New Delhi government is handing over $6.7 billion for the metal, but what it may mean for gold going forward.

India, the world's largest gold jewelry market, is making a rational and bullish call on gold. The supply of gold continues to decline - the biggest supply is from governments with socialist policies that are selling their gold to pay for social welfare and bailout programs. The IMF is a classic case of this.

What's particularly interesting in this case is that the buyer is a developing economy that’s the largest democracy in the world. I see this as another sign of the wealth shift away from the developed markets of North America and Western Europe toward the emerging world.

A decade ago, many of the major emerging markets were in shambles, with contracting economies and huge current account deficits.

The GOP built em up, letting America sink.

Earl | 11:40 a.m. Nov. 12, 2009

@Brother Chuck: nice cut-and-paste. Any thoughts of your own? What you've posted applies to Democrats as well as Republicans. Do you know what it actually says? I'm guessing not.

Sterling | 12:57 p.m. Nov. 12, 2009

Consider: At SOME POINT in the future China will lose faith in all the U.S. Treasury securities they're buying and QUITE POSSIBLY start to unload them (for whatever they can)and go into gold. Who knows whether they'll do it surreptitiously, or DUMP THEM OVERNIGHT, but I'm betting they will based on the political landscape in the U.S. Without going into WHICH POLITICAL PARTY is MOST to blame, one has to wonder how we can, as a nation, continue to BORROW without cutting spending on ANYTHING!
How about cutting SPENDING on something, ANYTHING, before we talk about BORROWING more?

Roland Kayser | 5:33 p.m. Nov. 12, 2009

To Earl: Although you and I obviously disagree on this issue, I respect your opinion because you have certainly done your homework. Let's just agree to disagree. Have a nice day.

Larry | 8:26 a.m. Nov. 13, 2009

Get rid of the Fed.....

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