Alan Greenspan’s Advice for Brown

In Greenspan’s seminal essay in Capitalism : The Unknown Ideal he has some good advice for Brown about government borrowing;

“government bonds are not backed by tangible wealth, only by the government’s promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates… The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit… The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets. The law of supply and demand is not to be conned. As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy’s books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion… The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves… This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”

Gordon Brown initiated mass sales of gold by the Bank of England some years ago when gold was trading at some $300 an ounce. Baby Miss Fawkes got an ounce of gold this Christmas worth over $500 an ounce. The government’s debt (including pension liabilities) has now broken the trillion pound barrier. Gilt edged government debt is no longer backed by gold under the Bank of England, but by ever rising taxes. This is Gordon Brown’s shabby secret…



Tip offs: 0709 284 0531
team@Order-order.com

Quote of the Day

Michael Crick on Safe Seats:

“In effect, new MPs are being elected day by day now, as, amid huge secrecy, small cabals of party bigwigs pick candidates for safe seats.”

Sponsors

Guidogram: Sign up

Subscribe to the most succinct 7 days a week daily email read by thousands of Westminster insiders.

Facebook

Sunday Shows Sunday Shows
Leader of Anti-UKIP Protest Embroiled in SWP Rape Scandal Leader of Anti-UKIP Protest Embroiled in SWP Rape Scandal
Hollobone Agrees Tory-UKIP Pact Hollobone Agrees Tory-UKIP Pact
David Mackintosh Quits David Mackintosh Quits
Happy Ed Balls Day Happy Ed Balls Day
Campaign Report: 42 Days To Go Campaign Report: 42 Days To Go
Zac Back? Watch Our Guy News Special Zac Back? Watch Our Guy News Special
Campaign Report: 43 Days To Go Campaign Report: 43 Days To Go
Gallery Guido’s PMQs Sketch Gallery Guido’s PMQs Sketch
Farron U-Turns and Sacks David Ward Farron U-Turns and Sacks David Ward
‘Spring’ Breaks: Jolyon’s Short-Lived New Party ‘Spring’ Breaks: Jolyon’s Short-Lived New Party
More Selection Shenanigans More Selection Shenanigans
Bouattia Ousted Bouattia Ousted
David Ward Becoming a Problem for Farron David Ward Becoming a Problem for Farron
Clive Lewis Slammed by ICM for Fake News Poll Clive Lewis Slammed by ICM for Fake News Poll
Radio 4 Gossips Link Peston to Today Radio 4 Gossips Link Peston to Today
Mirror Chicken Fattened for Election Slaughter Mirror Chicken Fattened for Election Slaughter
Len Tries to Stitch Up Liverpool Walton for His Bag Carrier Len Tries to Stitch Up Liverpool Walton for His Bag Carrier
Starmer on Corbyn: Then and Now Starmer on Corbyn: Then and Now
Updates: Who’s Standing? Who’s Standing Down? Updates: Who’s Standing? Who’s Standing Down?