Gold Bills Doctrine of Adam Smith – Antal Fekete

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

Broken Bonds – Seeing Deflation in Our Everyday Lives

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.

 

That’s deflation.

Continue reading Broken Bonds – Seeing Deflation in Our Everyday Lives

The Conclusion to Deflation: Retrospect and Prospect – Antal Fekete (1986)

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)

The Wrecker’s Ball of Swinging Interest Rates, by Antal Fekete (2002)

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)

Deflation: Retrospect and Prospect, by Antal E. Fekete (1986)

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)

Gold Backwardation vs Hyperinflation vs Hyperdeflation: What are the differences?

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?

Portrait of Deflation

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.

The Black Hole of Zero Interest
Graph showing 30+ year decline in US 10YR Treasury bond yields

Avert your eyes or grab some popcorn. Bond bears will be gored.

Can anything other than gold coin settle real bills of exchange?

Max Photon’s question to Antal Fekete and FOFOA

(last modified: 2013/09/06)

Dear Prof. Fekete and FOFOA:

It appears you two are in direct opposition on a fundamental issue concerning monetary gold.

I would like to offer the opportunity for the two of you to present to the public your best, cleanest, most concise* responses to a carefully selected question that I believe pierces the hearts of the Keynesian, Austrian, New Austrian, and FreeGold schools.

Can anything other than gold coin settle real bills of exchange?

Continue reading Can anything other than gold coin settle real bills of exchange?