Keynes vs. the Barbarous Relic

There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” –John Maynard Keynes, 1919

Re: [politics456] More symptoms of fiat money.
From:”Josh” <@gmail.com>

Hi Bill:

As often as Rick [Rick is me, L. Reichard White] recycles this quote of Keynes on inflation, note that Keynes invented Keynesianism, and called the gold standard the “barbarous relic.” Quite obviously Keynes would whack Rick with a book, and cut up his library card, and wouldn’t take ten years to do it. It is as though he dug a quote out of Galileo’s recantation and then over and over used it to imply that Galileo was a staunch believer in geocentrism. Each time Rick uses this quote of Keynes I ask myself these three questions: Does he really not know; Does he really know, but does it anyway; Which is more disturbing?

As for your question, Rick, about when it is right to borrow money, here are two general cases where it is right. Please clip and paste these, somebody, because two months from now, when he assumes the rest of you will have forgotten, he will claim that he has hounded me for an answer, and I have never provided one (let alone two). Keep him honest.

One: It is right to borrow money when, by borrowing, you will make more money than the interest payments will cost you. Examples of this are so numerous that it is hardly worth citing some, but obvious ones include: the carry trade; any company financed by venture capital; anyone who takes out a mortgage to buy property when the market is growing faster than the interest rate.

Two: If a purchase must be made immediately for something you cannot otherwise afford. Some examples of this would include: student loans (you may be able to afford the tuition for graduate school later in life, but there are many reasons why, for most people, the only practical time is immediately after completing undergraduate work); medical emergencies (I am having a heart attack this minute, but gee, I think I will wait until next year to go to the emergency room after I have saved up to pay for the treatment).

I fully expect Rick to come up with thrilling examples of people waited until they were 84 to go to grad school or performed their own neurosurgery with a Boy Scout knife. And cautionary tales of people who took out mortgages and then … lost money.

But the rest of you are fully satisfied that I have answered Rick’s question? That’s all that matters.

Best,
Josh

Hi Josh!

So, from your post:

1. you don’t like Keynes clear statement warning of the dangers of debauching the currency,

2. you finally, for the first time, answered my question, “When does it make sense to borrow?” quite well. Particularly your first answer which theoretically also coveres borrowing for grad school. Until recently. However, apparently sensing the trap, you ducked the context: When does it make sense for governments to borrow?

You also seem to have missed the possibility of a savings account.

3. you apparently didn’t like how today’s headlines mirror the historical record of past fiat money debacles.

OK – – –

As often as Rick recycles this quote of Keynes on inflation, note that Keynes invented Keynesianism, and called the gold standard the ‘barbarous relic.’” –Josh

Unfortunately, I’m forced to recycle Keynes because well-intentioned if severely confused folks keep economically recycling Keynes as the excuse for their chronic one-way deficit-spending.

Keynes DID call GOLD (not the Gold Standard) “that barbarous relic.” He knew, as did French Finance Minister Cambon during The French Revolution that circulating (transactional) gold and silver would sink their fiat money (bankster/government counterfeiting) scheme.

Anyway, Keynes inventing Keynesianism — he didn’t — is not relevant anyway. Others — William Foster and Waddill Catchings — had already suggested a previously existing unwise practice that was already being used by some European governments. It was rapidly perverted into an excuse for continuous deficit spending and is now unfairly named after Keynes. He expected the elected liars, their appointed bureaucrats and the banksters to pay the debt off.

And what does calling something “barbarous relic” have to do with Keynes’ 1919 straightforward statement that, “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose?”

The statement is unequivocal, Keynes never recanted it, and that was — and still is — very close to a universal truth, even for modern faux-Keynesians and neos. No one in their right mind disputes the dangers.

Maybe you believe the current crop of elected liars, bureaucrats and banksters will forego the profit and power they get from the practice, and resist the urge to debauch the currency?

I hope you won’t mind if I break out your answers to “When does it make sense to borrow” into a separate thread.
Finally, I apologize for conveying the disquieting historical record of past fiat money debacles. It’s a dirty job but someone has to do it.

Health, happiness, & long life,
Rick

P.S. You can get a hint of Keynes’ “Johnny-come-lately” status simply by observing that his magnum-opus, “The General Theory of Employment, Interest and Money” wasn’t even published until 1936, two-thirds of the way through the Great Depression and much too late to be used as a legislative excuse for the pre-1920s Federal Reserve enabled paper money inflation that preceded and powered “The Roaring 20s” which in turn caused the hangover we call “The Great Depression.

Keynes, who many suggest was, in his later life, an anti-Keynesian as a result of how it was being practiced, had become the icon and figurehead; an excuse for funding bureaucrats and politicians to unconstitutionally meddle in our affairs and afford wars — and for banksters and connected businesses to profit.

See, Keyns’ idea was that governments at least pay back their spending sprees, not keep the tab running to today’s (2022 A.D.) $30 trillion or so U.S. “National” Debt. And then there’s the more than $100 trillion in unfunded liabilities, mostly owed to old folks in the form of the Social so-called “Security” Ponzi scheme and Medicare, theoretically pre-paid by the F.I.C.A. etc. taxes you’ve already paid and see charged on your pay stub.

P.P.S. Apparently, Josh, you mistake someone disagreeing with your seriously unsound ideas — and supplying evidence — as lying?

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