Excerpt from: The Unadulterated Gold Standard, by Antal E. Fekete, 2002. (Lightly edited.)
Let us raise the question: what is capitalism? In its simplest form capitalism is an economic system which is based on the conception that individuals should and would produce as generously as possible and live on something less than they produce, in order that they may posses a residue in the form of property to insure the education of the young, the support of the elderly, and other future projects. However, in order to achieve these ends we must have a facility to exchange income for wealth and wealth for income. Interest, in this view, is not a premium on present goods as opposed to future goods, but the indicator of the efficiency of converting wealth into income and income into wealth. In particular, zero interest marks the least efficient way of converting, namely, the conversion of income into wealth by hoarding gold, and of wealth into income by dishoarding it.
Continue reading The Relevance of the Unadulterated Gold Standard to Capitalism
Circulating physical gold harmonizes human activity.
Synthetic credit pits man against man.
Continue reading Gold Standard Simplified
Professor Antal Fekeke responds to my question to Fekete and FOFOA:
Can anything other than gold coin settle real bills of exchange?
“It is preposterous to suggest that a bill of exchange can be settled in anything but gold coins.” ~ Antal E. Fekete
Here is the original question posed by me, Max Photon, to Antal E. Fekete (New Austrian School of Economics) and to FOFOA (FreeGold) regarding the settling of bills of exchange.
FOFOA’s response was to ban me from his website.
In contrast, Fekete’s prompt, courteous, and powerful response is provided below.
Continue reading Gold Bills Doctrine of Adam Smith – Antal Fekete
Bring back golden bonds!
The horrors of deflation are all around us, yet not one in a million will notice.
Worse, to the millions of sheep asleep, the horrors are fashionable.
The biggest horror is the routine breaking of solemn promises.
Today the breaking of promises is an entrenched cultural standard.
Continue reading Broken Bonds – Seeing Deflation in Our Everyday Lives
Hyperinflation has been called a flight from irredeemable paper money into tangibles. Hyperdeflation can be described as a flight from irredeemable paper money into government bonds. This flight epitomizes the inner contradictions of irredeemable currency. The irredeemable dollar promises nothing and pays interest at the annual rate of zero percent. Why not exchange it for a better promise of the same promissory? The bonds of the United States promise to pay interest at a double-digit rate and they have huge potential for capital appreciation, while commodity prices may well be falling. Why hold cash under these circumstances?
Such are the inner contradictions of the regime of irredeemable currency. It is an insult to man’s intelligence, and a travesty of honorable dealings among men. It is a mockery of the ideal of limited government.
~ Antal E. Fekete (1986)
From: Deflation: Retrospect and Prospect, by Antal E. Fekete (1986)
Continue reading The Conclusion to Deflation: Retrospect and Prospect – Antal Fekete (1986)
Businessmen must understand what is happening to their capital. Issues that the national debate on the accounting scandals dare not touch.
Gentle readers, below is a scanned copy — the only copy on the internet — of Prof. Antal E. Fekete’s article: The Wrecker’s Ball of Swinging Interest Rates (2002).
This article is necessary to fully comprehend Fekete’s prophetic 1986 warning of the deflationary bond/derivatives bull market that for decades has been, and still is, destroying the capital base of the world economy.
Continue reading The Wrecker’s Ball of Swinging Interest Rates, by Antal Fekete (2002)
A “Monetary Crank” Vindicated
Dear Universe, here, a gift from Max Photon: below is the only scanned copy on the internet of Antal E. Fekete’s prophetic monograph Deflation: Retrospect and Prospect (1986).
(Also see: The Wrecker’s Ball of Swinging Interest Rates, by Antal E. Fekete (2002)).
Be sure to compare Fekete’s spot-on 27-year-
old-young warning of deflation with my Portrait of Deflation, a long-term chart of 10YR US Treasury Bond yields. His prediction is still unfolding before our very blind eyes. The wrecker’s ball is in a powerful deflationary swing.
Continue reading Deflation: Retrospect and Prospect, by Antal E. Fekete (1986)
Gyrating interest rates induce a destructive “emf” in balance sheet circuitry.
Think: Faraday’s Law of Induction. (Take it from Mr. Maxwell’s Equations himself.)
(Oh God, I just know there’s going to be resistance.)
Here, for the less myopic:
Long term chart of 10YR US Treasury Bond yields, by Max Photon (2013)
The Wrecker’s Ball of Swinging Interest Rates, by Antal E. Fekete (2002)
Permanent gold backwardation is the sudden withdrawal of all sellers from the physical (cash) gold market. So you wake up one morning to find that there are plenty of BIDS, but zero ASKS. In a flash, the entire quadrillion dollar bond and derivatives pyramid is no longer exchangeable for a single gram of physical gold, because the gold futures market is no more. The world’s monetary payment system just evaporated. Now it’s all about barter. Think: cash-and-carry (but cash = physical gold, or something highly marketable).
While “barter” may sound cool to all you hipsters, we are talking about a global catastrophe.
Backwardation is the predictable denouement of the United States’ serial defaults on the gold-redeemable US Dollar. What is the value of a broken promise? Zero. Backwardation puts an exclamation point on that fact.
Continue reading Gold Backwardation vs Hyperinflation vs Hyperdeflation: What are the differences?
We are careening into the Black Hole of Zero Interest Rates (and zero capital), unless permanent gold backwardation short-circuits the process and forces the world to rebuild from barter.
Or we could just open the Mint.
Avert your eyes or grab some popcorn. Bond bears will be gored.