Steve Forbes predicts we will return to a gold standard.

Forbes is out today saying that we will eventually return to a gold standard not because we want to but because coming economic "circumstances" will require it.  While I agree with this sentiment, the rest of the article, as is usual in these cases, is so misleading and lacks the explanation of so many implications that it makes me want to gag.

First off, Forbes discusses Nixon taking us off the gold standard as if it were some kind of administrative executive action.  In other words, he makes this sound like it was just some kind of bad decision by Nixon.  In truth, Nixon had to either tell the truth which was that the US was gaming the gold backing of the dollar by printing up many more dollars than there was gold to cover it at a paltry $35/ozt OR he had to default.  There was no choice number 3.

Either way would eventually lead to the same thing which was a repricing of the gold-dollar ratio.  In other words, a massive devaluation of the dollar relative to gold.  $35 per ozt is a complete joke at this point.  Nixon simply chose to default on the conversion contract entirely because most people didn't understand that it was the largest economic default in the history of man to date.  If he had admitted that we had been lying and cheating then it would have detracted from confidence even more than the default did, mainly due to mass ignorance about what the default actually meant.

Next, Forbes completely avoids any discussion of the real problem which is the fraudulent concept of fractional reserve banking.  It will help to have a real gold standard of course.  By "real" I mean, a verified system, not one which requires the people to take the word of a lying, cheating government with a long track record of dishonesty and outright criminal behavior in these and many other matters.  But a real gold standard by itself is only a partial fix, and a small part of the fix at that.  Until we get rid of the scourge of fractional reserve banking, the pump and dump aspect of the money supply will remain.  "Special people" (bankers and insiders) will pump the credit up, profiting the whole way, until it collapses at which time they will step out of the way, let it all pile up in a heap, and with money in their pockets from the pump phase they will buy all the good assets that got sold off with the bad ones.  And they will buy them at fire sale prices.  This is how the money elite steal the productive labor of the people with their corrupt money con.  The only way to get rid of it is to get rid of BOTH fiat currency AND fractional reserve lending.

Finally, Forbes shows that his wealth is more a function of luck than intelligence by asserting that had we stayed on the gold standard, the DJIA "wouldn't be at 16,000 to 17,000," but "would be at 25,000 or 30,000." .   What a load of bullshit.  In truth, remaining on a true honest money supply would have killed the massive speculation that is currently built into the DJIA.  So perhaps it would be 5k instead of 17k.  The dollar would simply have been stronger, with higher buying power.  A family making $30000 would be able to live nicely instead of being at the poverty level.

The DJIA at 5K might not seem like a very good outcome to many people but it would have been steady, predictable growth for all, not a wild pump that benefits the few and then the massive dump that wipes out the lives of good people, causes massive social unrest and which historically takes nations to war.  Also, by the time this credit Ponzi collapses I think most people will wish for DJIA at 5k.  That will seem like a good price after the coming collapse.