Gold Will Destroy The Keynesian Fallacies
The comments below are an edited and abridged synopsis of an article by Patrick Barron
Leaders of the Western democracies are unprepared to deal with the forces that will end the US dollar’s dominance as the preferred medium of international trade settlement, in place since the end of the Bretton Woods Agreement in 1971.
The BRICS summit, currently taking place in South Africa, is expected to include an agreement toward establishing an alternative international trade settlement system based on commodities, including gold. Dozens of nations are attending and watching with great interest. Six new members have been invited to join Brazil, Russia, India, China and South Africa—Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates.
Although the coming change may be characterized as one between the Western democracies and the BRICS nations, the real battle is one of ideas, between Keynesian economic theory and gold. The winner will be gold.
Gold was never proven to be inferior to fiat money. The gold standard was not replaced by a better monetary system. It was suppressed in stages to satisfy an insatiable need for money—first to make war and then to corrupt the people via welfare. The result has been never-ending wars, a creeping expansion of the welfare state, unsustainable public deficits, and the accelerating debasement of the currency.
The challenge to the fiat dollar began with its debasement, which has lowered its purchasing power to gold by 98% since 1971, and this challenge has recently accelerated.
Baron discusses putting paid to Keynesian fallacies and the basics of a gold settlement system.