Harvey Organ: Get Physical Gold & Silver!

[bbacq]

Travlin, we seem to have elicited Mr Hyde.
Erik/Hyde, you said you weren’t willing to rehash things.  That appears not to be the case.  You question my motivation, but I already provided it, by linking to my thoughts on Truth. If you truly seek to understand my motivations and psychology as you say, I can think of no better place to start.

I sit beside a volume entitled: "On Truth" by Harry G Frankfurt of Princeton.  He has a companion volume, "On Bullshit".  I have literally read volumes on how to distinguish the two.  I recommend them.

I agree with you when you speak clear truth, Erik (Jekyll?  Hyde?): [Moderator’s note: * ]

ErikT: "The metal needed to satisfy longs standing for delivery is obtained from shorts who are issued delivery notices.” 

bbacq: "True"

I couldn't have been clearer.  But then you spend pages of obfuscating vitriol ignoring the fact that I violently agree with you!  I hope this also clears up whether I understand from whence delivery occurs.  Shorts must provide, else face penalty.  In fact, I posted both the text and links to the COMEX/NYMEX rules and regs.  I consider that kind of post useful and helpful, maybe you don't.  Reading the rule-book certainly helps to understand the game, I find. 

Sorry, that’s a metaphor, Erik, it might confuse you. [Moderator’s note: * ]

I stand by the notion that in physics, "leverage" has common-knowledge definition.  In economics, it is imprecise.  We must argue what constitutes an "asset", what "collateral", what "equity", and all their relative values.  Book?  Mark-to-market?  Some other discount or premium?  At the instant of credit-lock-up in 2008, who amongst you think "leverage" was well-defined and well-known?  I submit it wasn’t.  I speak of the mis-application of mathematics in the soft sciences at my link above.  I recommend reading Nassim Nicholas Taleb to get one’s head around these ideas.  They are extremely important, and true.  Beware black swans, our financial pond is now full of them.  My bad.  Another metaphor.  (Erik, like a masochist, you seem to beg for this treatment;-). [Moderator’s note: * ]

Analogy and metaphor is a useful tool to aid in understanding, but it does not require identity 'twixt the compared, and that seems to confuse Erik. [Moderator’s note: * ]  The frac-bank/COMEX analogy was raised long ago on this thread by others, starting somewhere near here.

It is pointed out bacq there, and worth repeating here, as the expression is now bandied yet again by ErikT in rehashing what he says he will not - and we must not let this slide by if we seek truth -  that not "all longs" need to stand to have a broad COMEX delivery failure.  A small fraction standing might be sufficient to exhaust the shorts’ inventory.  It is not inconceivable that a large enough group actually do have the fiat cash to stand, especially as, after so many well-timed margin-hikes, trading account leverage is way down from historic levels: there is a much smaller gap to cross now in order to stand if you are already playing the game.

Travlin, it is this fact, and that participants are "leveraged" (in this case the meaning being "not running 100% margin in trading accounts") that makes your frac-bank analogy apt and even Erik acknowledges "the market is certainly leveraged".  We can ignore specifics of which counterparties are renegging on their deals in the analogy (Erik stumbles on this).  It is because I understand from whence delivery occurs (or should) in the COMEX  that I suggest in a previous post above that the appropriate way to interpret "leverage" in the COMEX analogy is the overhang between commitment and inventory for all those players net short.  Members who are net long don’t get their inventory encroached upon.

I think it might be useful in providing clarity to get agreement on who owns what and what responsibilities they have.

For example, Erik refers to "buffer" inventories.  Not sure what he speaks of.  My understanding is that the COMEX has a limited number of members, they have inventory reported under two classifications, and members are free to offer trading services to the public.  Members store physical inventory both for their customers and for their own trading activity.  Delivery obligations of end-customers are in general met by COMEX members on their customers’ behalf.  If a member is net-short for any contract, either because they want to be for their own prop-desk trades, or because their clients are net-short in aggregate, and the member has failed to take offsetting positions, then that member is under obligation to deliver some physical for that contract.  The rules of the COMEX state that if the member fails to deliver, he has to pay fiat.  They also state that a long that gets stiffed for delivery will be compensated for value of the contract plus some premium they cook up based on "reasonable market price" in fiat.  I quoted the rules and provided links above.

Travlin wrote:

That’s a very nice example of typical Erik T sarcasm.

ErikT: For a much better example, see my last reply to bbacq.

Huge smiles!  Thanks, Erik, it was masterful.

 A bbacq summary: 

- The COMEX market is "leveraged";

- It is hard to figure out how deeply, because we are not provided the information with which to determine the "leverage ratio";

- Others may have made mistakes in using the term "leverage" and this is not surprising;

- Some number of longs standing could force massive exercise of the fiat-settle rules; 

- We don’t know what percentage of longs this is;

- With every margin hike for longs, the gap between simply playing with paper and standing for delivery shrinks.

Erik, please consider the possibility that you simply aren't smart enough to follow the bouncing ball of logic under the abstraction of analogy and metaphor. [Moderator's note: * ]

I am happy to discuss it further, and will, if responded to.  I will agree with truth, but bullshit must be met head-on. I suggest quoting the COMEX rule-book as a way to arbitrate discord and guide us towards the Truth.

[Moderator’s note:  This post is a violation of the forum rules. Points marked in the text above – [Moderator’s note: * ] – represent personal insults which are a violation of the forum rules in any case, and particularly destructive in a highly contentious conversation such as this.  This is the line between acceptable and unacceptable, and this post crosses it.]

[erik-t-2 (Erik T.)]

bbacq, your inability to comprehend simple ideas is mind-boggling. [Moderator’s note: Ahem.] You still fail to grasp the basic concept of leverage, and why the COMEX inventory is not analagous to the reserves of a fractional reserve bank. I’m sorry; I just don’t know how to get through to you. Perhaps Bron or Victor will be willing to try to simplify these concepts so that you can understand them, but my own patience has run out.
I’m sorry I wasn’t able to get through to you, and I wish you all the best. But I’m just not interested in beating my head against a wall trying to get through to you any longer. I pity those here who are foolish enough to think you have the faintest idea what you’re talking about, and hope that some day you’ll recognize the limits of your knowledge so that you do less damage to others whose own naivity may cause them to assume you know what you’re talking about.

Best wishes,

Erik a/k/a Mr. Hyde

 

 

[bbacq]

ErikT: "I'm just not interested in beating my head against a wall trying to get through to you any longer"

He needn't feel obliged, and I don't really mean any harm in that.  I think we agree more than he realizes.  His senses may have failed-to-deliver, he may not have been served notice, so to speak,  that I re-entered this fray when he responded in a deplorable way to Travlin for being interested in exploring an analogy.  Yes, it had been discussed before.  He should be ashamed, he seems not to understand that, so I engaged so others could see his shameful behaviour for what it is.  I make no comment on his understanding of the COMEX or the frac-bank analogy in this, but on his character.  Has the man no decency?  If he were not a bully and a coward he would retract a great deal of that said above.

I feel I understand ErikT’s positions well, but the opposite seems untrue. 

Many of his positions I have agreed with, stated so explicitly, and this is a matter of record on this thread.  I will agree with anything he or anyone else says that I consider true.  I will argue with what I consider false.  Stick to the ideas.  I provided an analogy- and metaphor-free summary of where I believe the discussion has proceeded, in bold at the end of my post above.  I find it useful to occasionally summarize positions in discussions, as it helps to differentiate common ground from areas still in dispute…

Though I feel the need to respond to a few points Erik makes above, I think it would be more fruitful to proceed from the summary in bold above, or my succinct summary of COMEX operation, re-quoted at the bottom of this message.

You are always free to scroll on down, of course.

When I see [bbacq] posting misleading, blatantly incorrect information, it frankly outrages me.

We are in much greater agreement about how the COMEX really operates than he realizes.  The analogy is not the reality.  He seems occasionally to attribute to me the thoughts and words of others.

That's a completely, totally different concept than the exchange being leveraged, or the ratio of paper to physical transactions having anything to do with leverage. It maddens me to see people like GATA and bbacq misleading you with so much horribly wrong misinformation

I want to point out that Erik himself is misleading you in misattributing these ideas to me.  I speak of a leveraged market and leveraged players, not the leverage of the corporation-that-is-the-exchange-that-makes-that-market, and nowhere (yet) of ratios of transactions having anything to do with leverage.  I acknowledge in my bullet-list that it is not surprising some have misused the term "leverage", and don't appreciate Erik's putting those words above in my mouth.  Further, see below.

bbacq: I am not sure what a "goldbug" is, nor what misconceptions they might have.  But it is worth noting that if the open interest exceeds the total inventory, then the exchange itself is "leveraged", much as a bank is leveraged by the inverse of its reserve ratio.

ErikT: No, your statement is blatantly false, and reveals that you simply have no idea of what you speak.

Actually, it's blatantly true in the sense I meant, pertaining to a single months' contracts, in the context of a, haha, long-standing challenge, which I had thought clear.  One month's delivery eating more than the whole inventory?  I'd say that's pretty leveraged, because there would be nothing left in the vaults to support any future futures contracts.  I meant in this that when it comes time for final delivery on a set of contracts, the open interest remaining defines the total delivery for the month and that if this exceeds the total inventory of COMEX members who are net short that month, we are certainly going to have delivery failures and forced cash settlement.  In the analogy the similarity is in the institution/organization failing to have immediately on-hand the assets it owes to creditors, and only being able to deliver a fraction to each, or to a fraction of all.  There are many differences.  A numerical formula for a COMEX market "effective monthly reserve ratio" or suchlike could potentially be defined as one minus the sum of all members' delivery deficit divided by open interest at delivery. That would be like a monthly-bank-run model.  It might have value.  Yes, there is lots of inventory not considered if modelled this way, etc etc.  It is just an analogy, folks, and clearly one ErikT doesn't like, and since they don't publish the data to analyze it this way, it is largely moot. 

Such vitriol from Erik, he is positively foaming at the mouth about this.  Does he go on like this all over this site?

ErikT: "... your analogy..."

No, not exclusively mine, folks, others proposed it, and I have provided a link to near where on this thread the analogy begins, in a spirit of helpfulness.  I am guilty of putting flesh on other's bones.  I hope the meaning of that metaphor is clear.  Others earlier and Travlin recently were finding it a helpful idea.  Excepting the weasle-word escape-clauses in the COMEX rules I quote above, the COMEX market, like a failing bank, can fail to clear properly should enough longs stand.  We can debate how probable that is and under what conditions it might occur.  We could drop the metaphor and discuss the details of actual clearing under crisis conditions, as I and Erik both start to do above.  I would propose quoting the COMEX rules and other sources in supporting the arguments, so we can know what is true and what isn't.  But blathering "you know nothing" and "I know better" is unproductive.

You still fail to grasp the basic concept of leverage

I think I demonstrate that the concept is clear in physics and subtle and open to interpretation in both definition and numerical value in economics, and that I understand the difference, and am therefore wary of blanket statements without suitable definition.  It is because I am aware of the limits of my knowledge that I am wary.

I pity those here who are foolish enough to think you have the faintest idea what you're talking about, and hope that some day you'll recognize the limits of your knowledge so that you do less damage to others whose own naivity may cause them to assume you know what you're talking about.

See above.  I share Erik's sentiment, in reverse, but also think he does have a faint idea.  (That means I am both foolish and self-pitying, if you do the math...;-)

Erik does say some things that are true, I’ll even grant many, but I think fails to adequately recognize not just his own limits, but the limits on knowledge in general, and lashes out at people when he should be more circumspect.  We can’t exactly predict chaotic systems, and markets are chaotic.  I mean the latter in the mathematical sense as well as colloquial.  That doesn’t mean we shouldn’t try and work it all out, but it does mean we can be wrong in our predictions, and need to take that into account in our planning.  Analogy is a useful tool.  One needs to be careful in drawing conclusions from them.  Did I draw any?  I don’t think so… I was exploring a concept others found useful.  I don’t think that is dangerous, as Erik accuses me of being.  Hey, folks, you are your own arbiter of truth.  I can pose no danger to you that you do not willingly embrace.  Pick dance partners carefully.

ONWARD!

Anyone interested in discussing ideas and not reputations and "authority", in order to advance our understanding? 

The bullet-list above was meant to summarize the state of the argument here, free of analogy.  Comments welcome.  I also provided a single-paragraph summary of the COMEX, with a couple of improvements, below.  Can anyone help improve on it in conciseness, completeness, or accuracy?  You might also pipe up if you think it is true ;-)  My understanding from what Erik wrote, which could be incorrect, is that he believes the COMEX itself carries inventory, insures delivery, and renders opaque delivery failures by COMEX members.  I didn’t include that because I don’t believe it is true.  Correct me, with links, please.

My understanding is that the COMEX has a limited number of members, they publicly report inventory in various aggregates, and members are free to offer trading services to the public.  Members store physical inventory both for their customers and for their own trading activity.  Delivery obligations of end-customers are in general met by COMEX members on their customers' behalf.  If a member is net-short for any contract, either because they want to be for their own prop-desk trades, or because their clients are net-short in aggregate, and the member has failed to take offsetting positions, then that member is under obligation to deliver some physical for that contract, to the exact extent that they are net short at contract close.  The rules of the COMEX state that if the member fails to deliver, he has to pay fiat, including a penalty.  They also state that a long that gets stiffed for delivery will be compensated for value of the contract plus some premium they cook up based on "reasonable market price" in fiat.  I quoted the rules and provided links above.

 

[bbacq]

From:  https://peakprosperity.com/blog/harvey-organ-get-physical-gold-silver/73933?page=33#comments

JAG writes:  A gold standard does nothing to limit credit-money expansion in the banking system, or the "roaring '20s" would have never occured.

Central banking had already been implemented at that point.  Central banking eliminates the natural market disincentives to excess.  Credit-money expansion is limited in a competitive gold-standard system, this system was centralized, not de-centralized, so correct market incentives were not present.

I might have addressed this before, but it is worth mentioning again.  It is frequently glossed over.

People should be very careful reading what is written on this site, this thread anyway.

Lots of half-truths and bafflegab.

[bbacq]

ErikT: You would do better to ask questions and allow people who actually know the answers to educate you.

 

Bertrand Russell: Men are born ignorant, not stupid. They are made stupid by education.

Do your due D, folks...

 

 

 

 

[bbacq]

ErikT: Wrong. So long as any formative spread can be arb'd, it will be arb'd. Law of efficient arbitrage.

Actually the below wasn't a joke, it happened. 

An economist is doing a presentation to a roomful of PhDs and asks: "How many of you teach an introductory first-year economics course?"

A large proportion of the hands in the audience go up.

"Leave your hands up if you teach the efficient market hypothesis in that course."

No hands drop.

"And how many of you believe in the efficient markets hypothesis?"

All the hands drop.

Houston, I think we have a problem.

 

[bbacq]

Economics and message-board interactions can be modelled using game theory.
It is an interesting result that the simplest and smallest program wins the "game of life" competition.
Emergent order and information theory tells us this must be so, I believe.

http://en.wikipedia.org/wiki/Tit_for_tat

As in all economics, because it is a soft science, one that tries to model a complex system within the same level in the complexity hierarchy, game theoretic models are liable to be wrong and inaccurate and fail when stressed.  The concept of Nash equilibrium must be treated with great care, because power-law processes and black swans do exist in economics.  Look what happened to the lovely, elegant, Nobel-winning models of LTCM, mere months after they began implementing trading based on them.  They nearly blew up the entire financial system as we knew it.

Maybe all that is all too subtle for some.  More directly:

Folks, the bankers do not understand the systems they attempt to create and control.

End fiat central banking before it ends you.

Please educate yourselves, people, so that you are not made stupid though being "educated" by others.

Ask yourselves: do I see "central banks" in nature, or are all processes distributed in nature?

Ask yourselves: do I see coercive authority exercised in Nature, or does nature rely on competitive processes?

Ask yourselves: do animals and plants and spiral galaxies consult experts in making decisions?

We must get our heads out of the classical Newtonian mindset in the soft sciences, just as this paradigm has been evicted from the throne in virtually every hard science.  Thomas Kuhn tells us it will happen, and how.  In economics, we are currently at the right-hand side of the evolution, at the point labelled "crisis".

ErikT’s alleged claim of abandoning his attempts to change the system, to instead focus on predicting within it is like chaining oneself to a sinking ship while drilling holes in its hull.  He likely does not realize this himself, but you have an opportunity to escape the trap into which ErikT willingly walks.

Think, or be enslaved.  We do have a chouce.

ErikT wishes to analyze my motivations, he claims.  Erik, I am giving you lots of fodder so that you and others can try to figure it out.  ErikT: My true believer theory…"  I am sure it would make interesting reading, Erik, to understand the psychology of those who would attempt to resist the advancement of knowledge.  My best wishes to believers in truth, and confounding confusion to those who would seek to halt the advancement of our knowledge. Tit/Tat.

Truth is not a four-letter word.

 

 

[shudock]

bbacq, thank you.
I for one greatly appreciate your very fair and articulate assessment of the discussion here. As I believe I mentioned previously, many pages back, I do not need anyone, least of all self-important blowhards on the Internet, to teach me how to think. I have to say, and I know for a fact that I speak for more than just myself here, I am extremely grateful for the balancing perspective you have brought to this thread.

[victorthecleaner]

I haven’t followed this thread for a while (since page 33), but now I see that you are still alive and kicking.I’d like to come back to the question by darbikrash
To continue, the thesis around endogenous money creation fundamentally disagrees with the widely held belief on how money (debt) is created, and represents that this is a demand driven system that simply responds to debtor requests for loans, and backfills these requests (after the fact) with capital reserves, fiat or otherwise. Further, Minsky’s instability hypothesis suggests that a dominant failure mode in such a credit based economy is speculative and Ponzi based lending, all of which we can readily observe.
And from here we of course have the system of credit default swaps, estimated by some to be in the vicinity of $600+ trillion, which are really more akin to insurance policies than monetary instruments, overhanging the substantially credit based economy.
So, how, exactly does a gold standard provide any relief to this system, what would change specific to these subjects if we had a gold standard, and how would it change?
I like the endogenous money models of Keen and especially Richard Werner very much because they can actually be confirmed empirically (see Werner’s work on Japan).
Darbikrash, you are right. A gold standard wouldn’t provide any relief. In fact, it would make things a lot worse. The reason is that the present problems are due to excessive credit creation. This depends on the trust (or call it gullibility) of the savers who bring their surplus to the bank, but not on the question of whether the tokens are paper or metal. The problem is the lending of the tokens and that the borrowed tokens are now impossible to return, but not the nature of the tokens themselves.
A gold standard would make things a lot worse because once a bank runs out of gold, not only those at fault would get wiped out, but rather in addition also a whole number of innocent third parties would lose their deposits. Well, just as in 1929-33.
The problem of a gold standard is that two very different things trade at the same price:

1. physical gold (e.g. gold coins in circulation)
2. promises to deliver physical gold (including bank deposits and all loans)
   The problem is that these two are not the same. (1) has no counterparty risk, but (2) has a lot of counterparty risk. So Gresham’s Law will be in effect, and people who understand the system will hoard physical gold, but spend credit. This eventually causes the system to run out of reserves and eventually collapse.
   This is not to say that gold wasn’t a fantastic asset to own. But the "hard money school" (including the U.S. branch of the Austrians) totally miss the point. They always want to make gold the tokens of exchange and then lend these tokens. This is foolish. The fantastic property of gold is that you own it outright. It doesn’t have any counterparty risk. So why would you want to construct a system in which people are encouraged to lend their gold? That negates the main advantage of gold. This is like noticing you can run 100m in 9 seconds and then have both legs amputated.
   No, the answer is to own gold outright as wealth (just as wealthy people own paintings, fancy diamonds, etc.), but not to lend it to other poeple. Gold (in your possession) is an ideal store of value.
   The medium of exchange, in contrast, can be anything that works in practice and that is reasonably stable (i.e. has a predictable rate of inflation). If you want to lend something, lend the medium of exchange. There is no reason why government issued paper money couldn’t work as the medium of exchange. Look around you. It works fine.
   The problem with government issued paper money is that it fails as a long terms store of value. That’s why you need gold.
   It should be clear now that saving in physical gold in your possession while transacting in and lending paper money, solves a problem of the present financial system, whereas going back to a gold standard, creates a problem that people had already solved.
   Sincerely,
   Victor
    
    

[bbacq]

Victor!  Hello again.  What a surprise.  Others, please excuse me, but I have bumped into Victor and his spurious and specious argument before.Victor, I may not have directed you, as I did ErikT, to Harry’s Frankfurt’s "On Bullshit" but I believe I provided links to ErikT that you could follow, above.

A gold standard wouldn't provide any relief. In fact, it would make things a lot worse.

There are an infinite number of possible "gold standards".  I am sure the one you have in your head wouldn't work, Victor, because that is your objective, ie to demonstrate that because one version does not work, all cannot.  It is a common mode of rhetoric, and can easily confuse people if they are not familiar with it as a sly way of misleading them.

The problem of a gold standard is that two very different things trade at the same price: 1) physical gold (e.g. gold coins in circulation) 2) promises to deliver physical gold (including bank deposits and all loans)

One of EriktT's favourites, the law of efficient arbitrage, will take care of this price differential.  Arbitrage works very well to flatten value disparities when coercion is not used to preclude its operation in markets.  If there are multiple freely-competing gold-backed currency issuers competing in the market, the situation you describe does not occur.  In the pre-broken straw-man system that you propose, yes, that will fail, and prices will separate, as they did for the USD in '71.  You prove nothing.  Gold-backed currency doesn't work with only a single issuer.  Move on.

(1) has no counterparty risk, but (2) has a lot of counterparty risk.

Door number 2 has no counter-party risk unless some coercive authority, like a government, say, forces one to use a currency issued by an untrustworthy issuer.  Left free, the market will eschew untrustworthy issuers and the problem is resolved.  The only passengers who go down with a sinking currency ship are those who decide to.  The rest escape to the life-rafts provided by all the other currency issuers, whose boats are not so leaky.  That is, as long as there are enough lifeboats (other issuers), and no-one is standing at the gunwales with guns and shackles to stop us from dis-embarking. This is all very, very, simple folks.  Twelve-year-olds can figure it out, once the blinders are removed.

This is not to say that gold wasn't a fantastic asset to own. But the "hard money school" (including the U.S. branch of the Austrians) totally miss the point. They always want to make gold the tokens of exchange and then lend these tokens. This is foolish. The fantastic property of gold is that you own it outright. It doesn't have any counterparty risk. So why would you want to construct a system in which people are encouraged to lend their gold? That negates the main advantage of gold. This is like noticing you can run 100m in 9 seconds and then have both legs amputated.

Victor, you, ErikT, and others I have observed in the anti-sound-money, anti-sound-banking camp (tit for tat!) seem to often lump together a whole class of people under some common flag, like "US branch of Austrians" or "goldbugs" whatever they might mean.  I suppose you seek to discredit some group, and some whole class of ideas in one swell foop.  I have no need for "gold tokens".  I would like it if we had sound and boring banks, so that I could save my surplusses, and the bank could worry about making prudent loans to productive people who will pay them back.  It's pretty simple, Victor.  Gold-backing does not mean pieces-of-eight, peg-legs, and parrots make a big comeback. We don't really know "the advantage of gold".  The market does, it picked it over an evolutionary process of thousands of years duration.  My sister asked me "Why gold?"  I responded "Why tree?".  Same question/answer.

The problem with government issued paper money is that it fails as a long terms store of value. That's why you need gold.

My god, Victor, you are either dense or have a hidden agenda.  The problem with government-issued paper money is that it is issued by a centralized government.  A central bank is no better.  Centralized system control does not exist in nature, and that is why it doesn't work for man.  Get over it, move on.  The math proves it.  Seriously, we need to get this through our heads and move on. Victor, you advance the same stupid idea here as was soundly discredited over at tfmetals, where the cockroach of deception was caused to scurry away by the light of truth.  Before making a mess over here, you should at least try to clean up the intellectual mess you made over there. Victor you are clearly not ignorant, but the profoundness of your stupidity is staggering.  "Men are born ignorant, not stupid.  They are made stupid by [the wrong] education."  People, Bertrand Russell asks you from the grave not to follow the ideas this man presents.  [Moderator's note: This post is a violation of the forum guidelines.  Appropriate corrective action has been undertaken with the user.]

[bbacq]

 

darkbikrash: So if you buy this frame of reference, than the key is not trying to modulate the economy with how fast a mineral is extracted from a hole in be ground, but how and to what purpose is the vast amount of credit that is being extended used.

bbacq: I will be candid.  I don't buy the frame, no one should be trying to modulate the economy at all, other than by their own productive work, talk of holes in the ground makes me suspicious of your agenda, and credit is still extended under sound specie-backed money, and it is extended and the money supply expanded beyond the quantity of specie to the exact extent of the inverse of the fractional reserve ratio, dynamically, in response to market demand, with appropriate feedback mechanisms to ensure prudence, by the banks, if fractional reserve banking is present.

If Victor were not being duplicitous, he would have addressed the arguments after darkikrash's message that he quotes.

Why does Victor not deal with the model I proposed in response to darkbikrash?

Those that argue for more fiat are those who benefit from it: the unproductive, the coercive.

Those that argue for sound money are those who would benefit from it: everyone else.

Which are you?  Please abandon the dark[bikrash] side, see the light and let the force be with you.

[travlin]

Bbacq

Since I’ve already criticized one poster for their demeanor it is only fair to point out the same to you. You have directed a harsh personal attack at Victor that spoils your arguments. Here is just one example, “Victor you are clearly not ignorant, but the profoundness of your stupidity is staggering. “

With Victor and Erik T it looks to me like you are baiting them. These forums are for debating ideas, not denigrating people or indulging in theatrics. If you don’t see this, and persist in this manner, we can call in the moderators to decide. Please read and follow the forums guidelines so that does not become necessary.

https://peakprosperity.com/forum/forum-guidelines-and-rules/9528

Travlin

[bbacq]

… for the link to guidelines and rules.   I will read them and abide by them.I pre-apologized for what I was about to do to Victor, I hope you caught that.
It may not have been sufficient, and I apologize to others who may have been offended by my words.
I think the arguments stand on their own merit they are ideas, and without "reputation", but you are right to call me out, as I do do myself a disservice when I let emotion get the best of me.
I have spent a great deal of time in trying to elicit and summarize the details of Victor’s position, elsewhere, which I linked to.
I was hoping to head off a lengthy repetition here of exactly the same discussion, which remains unresolved.
I would be extremely interested in Victor’s response to "F: Frederico the Foreigner" in his toy gold-economy model from his own site.  Frederico is an imaginary Italian Lamborghini enthusiast who provides an arbitrage function in Victor’s model, one who was conveniently overlooked within the model, but fundamental to understanding how the system would actually work.
I use terms like "truth" and "bullshit" in the formally-defined sense, as defined in the volumes linked.
The same is true of my use of "ignorance" and "stupidity", I mean them as Russell does.
I don’t regularly bandy these terms about.  I am quite civil in fact.
I just don’t tolerate bullshit well, and I have a particular distaste for those who would try to feed bullshit to others, and thus move them from a position of ignorance to one of stupidity.  Of the two, ignorance is far preferable.
I repeat my apology to those readers who finds my use of these words offensive. 
Perhaps these words, in the sense I mean them, are censored on this site.
I will consult the guide.
Thank you again, Travlin.

[bbacq]

Travlin I had not read the terms of use.  My bad.  I would have read and quoted them if I had, instead of be as confrontational as I have been.
If CM chose to censor my posts above, I think it could be justified under his terms of use.  They are not unreasonable.

I hope that censorship does not occur in the interest of providing (non-stupefying) education to those who would choose to see my words anyway, despite the occasional outburst.  I’ll rein it in some and abide hereon…

[Moderator’s note: All users on this website are required to certify that they have read the forum guidelines and rules.  The user must indeed check a box specifically stating that they have read and understood the forum rules before they can post.  We take the forum rules seriously, as they embody ideas which form the foundation of our community.  Appropriate corrective action has been undertaken.]

[travlin]

Bbacq

I did not flag your post 370 to alert the moderators. I preferred using a personal reminder. Apparently someone felt your response wasn’t suitable.

Travlin

[bbacq]

Shudock, thank you for your kind words, I missed them first go-around.   It can feel very lonely being me sometimes.  Speaking out clearly for truth draws a lot of attention these days, mostly negative. Travlin:  I did not suspect it of you.  Thanks for the confirmation.
Moderator:

[Moderator's note: All users on this website are required to certify that they have read the forum guidelines and rules.  The user must indeed check a box specifically stating that they have read and understood the forum rules before they can post.  We take the forum rules seriously, as they embody ideas which form the foundation of our community.  Appropriate corrective action has been undertaken.]

I am imperfect.  Not only did I fail to internalize the Ts and Cs on signing up and creating my account here, I have also occasionally let my passions get the better of me, and responded in kind where I saw attack, condescension, ad-hominem, unreasonable appeal to "authority" and pejorative being used.  Perhaps we all attend different styles of weddings. My link to the "Tit for Tat" strategy definition was not random.  My choice of words is often quite intentional, and specific in definition.  Others may misinterpret my words in a more negative tone than I intend in their use.  I have already elaborated on "truth", "bullshit", "ignorance", "education", and "stupidity".  'Nuff said. Moderator, I assert that should you choose to censor my words alone, you would be demonstrating severe bias, and doing your readership a serious dis-service.  If you choose to censor, please just cut out my excesses, as perhaps I would have done myself, had I been perfect. I find it quite unlikely that either Victor or Erik will be frightened away, if it is your objective to prevent their fleeing.  This discussion here should suffice to assuage others' fears of a similar tongue-lashing. I think the record should stand.  It happened.  To deny it is to deny truth.  If "appropriate corrective action" means you intend to censor my words,  please first read my thoughts on truth and Truth, here. Echo-chambers don't discover truth, but finding common ground can. Move on.  End central banking before it ends you. bbacq