[maester_miller]

I saw the movie. I thought it was well-made, but sort of missing the greater point. It presents something of a personal attack (via character study) of Obama specifically, rather than a detailed refutation of why his actual positions are terrible. The unstated implication throughout the movie seems to be something like: “Obama takes the positions he does because of his odd background with a non-present African father and Communist-sympathizing mother and grandparents.” Which of course, begs the question, “Why are Ted Kennedy and Hillary Clinton also extreme leftists?”

Anyway, it seems to me that when neocons refer to “anti-colonialism” they mean people who are vehemetly against the traditional colonial powers (of which America is included as one). An anti-colonialist, for example, would side against America, France, or England in a dispute against any African or Asian nation, regardless of what the facts are or what the dispute actually involves. The underlying belief is that essentially all “developing” nations are only developing because they were exploited and taken advantage of by “the west.” That evil on the part of the colonial powers is the only reason that world peace and prosperity have not been achieved.

In any case, if you watch the movie hoping for a detailed discussion of colonialism, you will be quite disappointed. The movie is about two thirds a biography of Obama (mostly retelling of his book “Dreams from my Father” with a negative spin), and one third a brief rundown of some of the current political issues with a neocon spin. If you’ve read Obama’s book, and if you ever listen to conservative talk radio, you’ve already experienced pretty much everything this movie has to offer.

[maester_miller]

RealMises,

My point was more that so long as QE3 fails to magically fix the economy (which will cause consumers and businesses to remain uncertain and desire to save) and as it starts to raise the expectations of inflation (whether it actually materializes or not) that will increase the appeal of gold, even to the common man. I agree that most people have no economic smarts, but basically everyone understands the argument that gold protects against inflation, many just disagree that inflation is a serious concern.

So once the fed successfully convinces them that inflation is a serious concern, perhaps these people will start buying gold. Confiscation would be impractical, true, but maybe something else like just making it illegal to own or purchase any gold. Many would do so anyway, but many would also be scared off by the threat of running afoul of the government.

If the fed wants us to spend more on consumption, it will have to do something to stop us from buying gold, right? So long as we desire to save (which we do because of a low time preference and uncertainty about the future) and we desire to avoid inflation (which QE3 is designed to make us believe will actually happen), we won’t simply cash out our 0.05% APY savings account and buy a house or a car or a vacation, we’ll simply convert our cash savings into gold savings. They’ll have to do something about that, won’t they?

[maester_miller]

Isn’t the same true for Obama? I was under the impression that the banks donate to both sides, so they own whoever ends up winning regardless of how the vote goes.

[maester_miller]

You could also make the comparison to a subscription service, like Netflix or something. Because you pay Netflix a monthly premium regardless of the amount of movies you watch, you are tempted to watch as many movies as possible in order to “get your moneys worth.” If Netflix charged you per movie watched, you would probably watch fewer.

The same idea with health “insurance” in that it’s really more of a subscription/membership service than insurance (by any traditional definition). You pay monthly premiums rather than per visit/procedure/etc, so you are motivated to have more visits, procedures than you otherwise might.

[maester_miller]

Thanks for the quick response, but I’m still a little confused. When you say that even today gold is used in inter-country exchange, how exactly do you mean? Is China buying our debt with gold? Is the German government buying natural gas from Russia in gold? I thought that the US dollar being the official reserve currency meant that everything was traded in dollars or local currencies.

As far as the point that government cannot eliminate by force people getting their preferences satisfied, does he mean this to apply to gold/money specifically, or is it more of the general argument that is used in the sense of “government can’t really ban religion because even if they do people will still worship in secret?” That type of “government cannot effectively ban something because people will resist and find ways around it” argument applies to practically everything, not just money, right?

[maester_miller]

““Indeed, if $50 trillion printed tomorrow sat as excess reserves (the most likely event), it would have the same effect as if it was buried in the ground, or not printed at all. Such is the nature of a credit-based economy, and a point that has caused hugely inaccurate inflation forecasts from many Austrian economists.””

Wait… isn’t this not necessarily true? Wouldn’t there be something of a crowding out effect? Reserve requirements have changed, but there were required reserves before. So, if a bank formerly had $20 million in reserves, and then the requirement is raised so that it needs $30 million, all of which is supplied to them from the federal reserve, the original $20 million is now freed up to be lent out and shuffled through the economy, yes?

In other words, if the Fed gives banks any funds that exceed the amount of new funds needed to meet a higher reserve requirement, all of those funds will end up NOT just sitting in a vault, but being spent. Am I wrong here?

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