George Gilder, whose new book publishes today, is one of the original pillars of Supply Side economics. As stated by Discovery Institute, which he co-founded, “Mr. Gilder pioneered the formulation of supply-side economics when he served as Chairman of the Lehrman Institute’s Economic Roundtable, as Program Director for the Manhattan Institute….”
Lately we have been engulfed by headlines reporting financial turmoil on every continent, in almost every nation, large and small. The commissars of central planning who so marred the history of the 20th century have been replaced by central banks in the 21st. In Cyprus, the new leadership now dares to confiscate citizens’ wealth with a one-time tax of up to 60 percent on bank deposits above 100,000 euros. Self-interested prime ministers blame continental monetary policies for instigating the currency wars that they themselves surreptitiously carry on.
The True Gold Standard (Second Edition)
The Gold/Oil Ratio: .0602 ounces per barrel
"For the last 26 years, the price of gold dictated the price of oil with 99.579 percent accuracy." Michael Jagger recently published a column in The Washington Times fact-checking a report by Fox 19 Cincinnati reporter Ben Swann which made the case that the price of a barrel of oil is indirectly set by the price of gold. Jagger: NEW YORK, July 17, 2012 – Does the gold price dictate the price of a barrel of oil? ... For years we’ve been told by the mainstream media that Middle East unrest, supply/demand, transportation hiccups, market conditions or trading activity are what causes major increases. High oil prices are a major sore spot among Americans..... Could Ben be right, in that there is another variable in the equation that has been left out and rarely if ever talked about: the value of the U.S. Dollar?
... Most Americans have little to no interest in monetary policy. Many do not even know what makes paper money valuable, or what money is. Does the value of the U.S. Dollar really matter? ... Could the price of gold dictate the price of oil? Stated differently (statistically), can we say with 99 percent confidence that the price of .0602 ounces of gold will translate into the price of a single barrel of oil? Let’s find out. Downloading daily gold and West Texas oil price data from readily available sources, one can perform a calculation to estimate the price of oil based on the price of gold. For example, if the price of gold for the given day is $326.30, multiply that number by .0602 ounces of gold to get a value of $19.643 per barrel. Perform that calculation for every daily interval downloaded, and for each interval, compare the calculated value to the actual price for oil by subtracting the calculated oil price from the market clearing price for oil. Rather simple actually. On a sample of daily interval data from January 2, 1986 to March 3, 2012 (6,457 matching intervals), using basic statistics, a 2-sample t test was performed and the results are eye-opening. We can say that .0602 ounces of gold times the price of gold produces the price of a barrel of oil, with an standard error of just .421%, or an average difference of just $6.10 dollars between the calculated price and the actual price since 1986. For the last 26 years, the price of gold dictated the price of oil with 99.579 percent accuracy. What does this mean? As Ben Swann stated, it means the strength of the dollar, more than anything else, determines the value of a barrel of oil in the marketplace. Sure, supply/demand, fear in the Middle East, trading activity all impact the daily price of oil, as seen in the daily fluctuations present in the data. .... But in the long run, the analysis proves that the calculated price matches the market clearing price for oil with an average difference of only $6. It means the policies of the U.S. central bank (the Federal Reserve) have a direct impact on our daily lives. With a dollar defined as a fixed weight in gold a precise unit of account is introduced into the American (and world) economy. A precise unit of account makes doing business far easier, eliminating the need to tie up capital in hedges against inflation and deflation. The gold standard, as noted by Lehrman Institute founder and chairman Lewis E. Lehrman in many venues, most recently in Fight the Fiat, originating in The American Spectator and rapidly finding exposure in significant venues on four continents, wherein he states how, under the true gold standard, With a stable long-term price level, speculators worldwide would abandon unproductive inflation hedges. This dishoarding would yield immense, liquid savings for productive investment in real goods and services. Equity and true capital investment would gradually displace debt and leverage. Under conditions of stable money and stable exchange rates, savings would be redeployed by entrepreneurs and investors in new and innovative plants, technology, and equipment- minimizing unemployment, as skilled and unskilled workers are hired to work the new facilities.     
Constitution.org provides an extensive and thoughtful Memorandum of Law by Larry Becraft, Esq., of Huntsville, Alabama, on Article I, Section 10, clause 1 of the US Constitution.
Sir William Blackstone courtesy of Wikipedia
One of many interesting matters the Memorandum treats is Blackstone's Commentaries, a book that was a fixture in the...
The value of the yuan has been slowly rising. The value of the Japanese yen has been sharply falling. Abenomics is attempting to reflate the Japanese economic – slowly, slowly. “Japan is back!” Prime Minister Shinzo Abe tells the Japanese.
Coming back isn’t easy. The Financial Times’ Jonathan Soble has noted...
via Google Translate: Milton Friedman was one of the most outstanding economists of the 20th Century. He came from...
Until early in the 20th century, gold played a central role in the world of money. Gold had an incredible...
|
Kathleen M. Packard, Publisher The Gold Standard Now
Board of Advisors: Senior Advisors Sean Fieler, James Grant, Senior European Advisor Advisors In Memoriam
Breaking News
|
