"Dr. Richard Ebeling explains free-market economics, why betting against the dollar is a good idea and why holding gold may be an even better one "

[galtgulch]

Here is the link to the interview with Dr. Richard Ebeling on the Daily Bell site:

http://www.thedailybell.com/index.asp?fl=

<<<"Latest Daily Bell

Issue 345 • Sunday, July 12, 2009

"If Congress has the right under the Constitution to issue paper money, it was given to be used by themselves, not to be delegated to individuals or corporations."

- Andrew Jackson

Dr. Richard Ebeling explains free-market economics, why betting against the dollar is a good idea and why holding gold may be an even better one

The Daily Bell

The editors of The Daily Bell are pleased to present this special guest interview conducted by Scott Smith with famed free-market economist Dr. Richard Ebeling.

Introduction: Dr. Richard Ebeling is a senior fellow at the American Institute for Economic Research in Great Barrington, Massachusetts, and has been a visiting professor at Trinity College in Hartford, Connecticut (2008-2009). He also served as the president of the Foundation for Economic Education in Irvington, NY (2003-2008), and has been the Ludwig von Mises Professor Economics at Hillsdale College, in Hillsdale, Michigan (1988-2003). He is the author of Austrian Economics and the Political Economy of Freedom (Elgar, 2003), and is also the editor of the Selected Writings of Ludwig von Mises (Liberty Fund), based on the "lost papers" of Ludwig von Mises, which he recovered from a formerly secret KGB archive in Moscow, Russia. In the early 1990s, he consulted on market reform and privatization with the emerging new democratic government in Lithuania when it was still part of the Soviet Union, and witnessed the violent, attempted Soviet crackdown on the Lithuanian freedom movement in January 1991. He also was with Russian defenders of freedom in Moscow during the failed hard-line coup in August 1991. His new book, Political Economy, Public Policy, and Monetary Economics: Ludwig von Mises and the Austrian Tradition, will be published in 2009 by Routledge. He is also writing an intellectual biography of Ludwig von Mises that will appear before the end of 2010. Dr. Ebeling earned his PhD in economics from Middlesex University in London, England.">>>

I am hesitant to copy and paste copyrighted stuff such as this interview but you have the intro and the title and the link above.

www.campaignforliberty.com 12 July 7PM 181,143

Edited July 13, 2009 by galtgulch

[Selene]

Essentially, this is the most resilient way to spread Rand's ideas:

"When I was about 16 years old, I met two people who introduced me to the writings of Ayn Rand. I first read her non-fiction books, The Virtue of Selfishness and Capitalism: The Unknown Ideal. It gave me a totally unique and different view of the nature of individual liberty and the nature of the free market."

Adam

[Philip Coates]

> Dr. Richard Ebeling explains free-market economics, why betting against the dollar is a good idea and why holding gold may be an even better one.

An excellent interview - short, clear, simple.

However, gold is already at astronomical heights, having anticipated much economic bad news, so the time may have passed to expect gold to appreciate. One would have to hope that it will at least -retain- its value as a hedge against inflation.

[galtgulch]

> Dr. Richard Ebeling explains free-market economics, why betting against the dollar is a good idea and why holding gold may be an even better one.

An excellent interview - short, clear, simple.

However, gold is already at astronomical heights, having anticipated much economic bad news, so the time may have passed to expect gold to appreciate. One would have to hope that it will at least -retain- its value as a hedge against inflation.

Philip,

I think that many people, investors and institutions around the world still consider the dollar to be a haven and flock into the dollar in response to crisis keeping its value up and leading to a fall in precious metals.

Given the Feds agenda as well as Obama's policies we are witnessing a flood of paper currency and we have yet to experience its manifestation in prices of goods and loss of purchasing power of the dollar. Perhaps that is because although the money supply has already doubled much of the new paper is sitting in banks rather than finding its way out into circulation. That is one reason why the recent call for additional stimulus is foolish and wrongheaded. It may take many months or even years for the newly created dollars to find their way into the market place. Once they do the additional currency will drive down the purchasing power of the dollar as demand drives up prices. Then gold and silver will adjust perhaps at a much higher level.

gulch

Edited July 13, 2009 by galtgulch

[Philip Coates]

> It may take many months or even years for the newly created dollars to find their way into the market place. Once they do the additional currency will drive down the purchasing power of the dollar as demand drives up prices. Then gold and silver will adjust perhaps at a much higher level. [gulch]

In any investments, often a future rise of decline has been -discounted- or anticipated in a preemptive rise in the stock or asset. For example, suppose people think Apple will do very well. They bid up its stock. The it has a great new product and the stock doesn't move. Reason: Investor opinion already expected this and the stock is already high enough. Same applies to gold. It's already really, really, really high. Wen from $20 to $200 in the course of one lifetime. Has now done from $200 to $1000. [You have to adjust for inflation of course.]

[Brant Gaede]

> It may take many months or even years for the newly created dollars to find their way into the market place. Once they do the additional currency will drive down the purchasing power of the dollar as demand drives up prices. Then gold and silver will adjust perhaps at a much higher level. [gulch]

In any investments, often a future rise of decline has been -discounted- or anticipated in a preemptive rise in the stock or asset. For example, suppose people think Apple will do very well. They bid up its stock. The it has a great new product and the stock doesn't move. Reason: Investor opinion already expected this and the stock is already high enough. Same applies to gold. It's already really, really, really high. Wen from $20 to $200 in the course of one lifetime. Has now done from $200 to $1000. [You have to adjust for inflation of course.]

Adjusted for inflation since the early 1930s gold should be about $700. The U.S. back then devalued the dollar against gold by 41% in one fell swoop after confiscating gold. The dollar cannot be devalued against gold today because we went completely off any kind of gold standard in 1971. The 1971 dollar is now worth 25 cents. The Obama Administration is trying to de facto devalue the dollar today by flooding the world with dollars. Gold will likely be worth $3000 in ten years while today's dollar will be worth 25 cents. If it's worth only $1500 then the dollar will be worth 50 cents. All these figures are exceedingly rough approximations.

The safest way to short the dollar is by buying a home to live in with a fixed rate 30 year mortgage. Price inflation will chew up the value of that mortgage to the lender. If 4% mortgages become available in a few years simply refinance at the lower rate. There are caveats, of course, property taxes for instance.

--Brant

[Philip Coates]

Thanks, Brant. Your post is very helpful.

Especially this, if accurate: "Adjusted for inflation since the early 1930s gold should be about $700." If you're correct then gold at $1000 (slightly less right now) would seem to still be a good, safe idea to buy.

Certainly unlike to go DOWN long term under Obamonomics.

(When gold was $24 an oz., I started buying a gold coin every paycheck. By the time I started to sell them off over a span of years, my investment had gone up about *tenfold*. Wish I still had them now.)

[Brant Gaede]

Because of the real short-term possibility of price deflation as debt and credit are destroyed and we sink deeper into what I fear will be a depression, gold should be purchased using dollar-cost averaging. If you want physical gold you can smooth your purchases by buying the ETF GLD and selling it from time to time to buy the physical. Gold mining stock is much iffier. I'd only buy a gold mining company for an investment if the price of gold was knocked down to $750. Short-term bonds is possibly a good way to hold cash. I mentioned buying a home to live in: you really must grub for the lowest price as home prices, especially expensive homes, aren't likely to form a risible bottom for two more years.

--Brant

[Robert Campbell]

you really must grub for the lowest price as home prices, especially expensive homes, aren't likely to form a risible bottom for two more years.

Brant,

Did you mean a visible bottom?

Or a rise-able bottom?

There's nothing humorous about the current housing market.

Robert Campbell

[James Heaps-Nelson]

I'm moving back to Phoenix where prices have fallen about 55% since the peak. It's good to be a renter.

Jim

[Christopher]

The only semi-logical short-sighted explanation I've heard for devaluing the dollar is to devalue the government debt owed to foreign countries. Of course, this destroys the domestic economy in the process by hindering international commerce. And of course if government was doing this, it wouldn't make sense to pay off bad debts from the subprime mortgage crisis via stimulus package to foreign investors. And this still speaks nothing of the fact that most of the U.S. debt is owed to Americans! This in itself is a little known fact, unless things have since changed under the Bush administration.

I think, therefore I am. I think that it is still too early to bet against the dollar if we're betting on a massive shift in the dollar's relative value. I'm not sure the dollar will ever drastically devalue given the current organization of the world economy. But... the dollar might continue a steady devaluation. Still, I'd put my money elsewhere than betting against the dollar. AMD is really a bargain, but then again, AMD has a huge debt as well... could always invest in the State of California. They have a handle on their finances, don't they? No wait...