agrippa1

I didn't get this until I listened to "inflation and egalitarianism" in Philosophy, who needs it. I had to listen a couple of times and also refer to Greenspan's Gold Standard piece, but I eventually made the connection that printing money is a sort of government debt. If the dollars are backed by gold, then there is no real "debt" because the dollars and gold are interchangeable. But if the dollars are only partially backed or not backed, then they represent actual debt. Except: The dollars have a certain amount of value which is the additional efficiency that currency provides to the aggregate transactions of an economy. If the amount of currency expands and contracts based on the value of currency to the economic exchanges taking place, then the price indices will be stable. If it expands more, so that the value of each dollar to the exchangers decreases, then you will see price inflation. This excess can be counted as debt against the federal government. Now, if the federal government starts spending more than it takes in, and issues government securities to cover the additional spending, then those government securities are counted as additional debt against the government. The additional debt becomes a liability against the total amount of currency in the economy, and devalues that currency proportionately. (Once people catch on) Our current debt is about 65% of the GDP, which is far more than currency, and is a pretty good correlator to current gold price. Interestingly M3, the total amount of "money" including loans, accounts, securities, etc., roughly equals federal debt, which seems to indicate that M3 is backed ultimately by federal debt instruments (including currency). Greenspan's comment on the amount of public debt balancing out with the amount of money taken from the economy via price inflation gives the clue to the true nature of price inflation.

No. The gold would be worth 30 times what it was worth back then. The money supply (M1) has only risen 6.3 times. The discrepancy, I believe, is that inflation is not due primarily to expansion of currency, but to deficit spending by the government. That is, overall debt of the federal government, of which M1 is only a small fraction, and which backs the larger money supply, M3. The point here is that fiat currency is not the evil, it is only the facilitator of the true evil of deficit spending. A fiat currency not tainted by the government's (natural tendency for) deficit spending would hold its value, which value would be based on the natural value provided by a market currency (over barter systems). True enough, this could be provided by private institutions, and yes, the primary motivating reason governments mandate gov't currency is to allow for deficit spending. I'm probably being too theoretical here, because the reality is that bureaucrats will naturally discover the benefit (to themselves) of deficit spending, as well as the "theoretical" justifications of Keyensianism. The problem with private currency sources is that fraud would be inevitable (I know, stop chuckling) and I could imagine scenarios in which the economy would be fragmented by factional currency sources, reducing the efficiency of the overall market. I guess the question here is: what is the optimal coverage - geographically, economically, politically - of a single currency? There may be a good argument that a national single currency is stabilizing and efficient, which would argue for a government role - restricted, of course - in currency supply.

Backwards: the cost of production of cutting edge technologies keeps coming down all the time, thus producers are able to compete profitably at lower prices. So, would that be a net wash for the bakers, a gain, or a loss? If the (real) per capita production of a society falls, individual (real) incomes also fall.

I was unclear here. I meant that comment strictly in the sense of holding on to cash, waiting to buy products. With inflation, people tend to spend sooner because they see their cash value slowly declining. (Thus inflation effectively burns a hole in your pocket.) With deflation, people will tend to wait as long as they can to buy, hoping for prices to go down. "Saving" in the normal economic sense, does not include cash withheld from the economy by individuals.

Does anyone worry about the limitations that gold reserve would have on the economy? It seems to me that a gold-backed currency would be limited by the amount of gold available to back the currency. The amount of gold available would be a fraction of the total amount of gold in existence (a fraction, because as gold was sold to a bank in exchange for currency, the value of gold would rise due to scarcity, and eventually selling would end.) If the economy grew faster than the gold supply, the only way to keep from throttling the growth would be to lower the cost of goods to make the same amount of money cover more economy. This would tend to draw more gold into banks as the relative value of goods and services increased, with respect to gold, but there would still be a limit. It would also tend to lower demand for goods as people slowed down their buying to wait for lower prices. So the throttling effect would seem to still be there. Is this desirable? Or would we prefer a monetary system that expands with increasing national productivity? It seems clear to me that fiat currency is the means to deficit spending, which is the cause of inflation, and that fiat currency does not necessarily lead to inflation. A fiat currency that expanded with the productive capacity of the economy would tend to hold its value wrt gold and other commodities, as long as the government spent only what it took in, and limited its growth to a percentage of an objective valuation of the economy. If gold was used as that objective standard, the currency could be pegged to gold without risking a run on gold. If a run did start, the government would have to shift to surplus budgeting (increase taxes, decrease spending - yeah, right) in order to draw down excessive currency from the economy, until the demand for currency balanced the demand for gold. This would take more self-discipline than could reasonably be expected from a government, but it would seem to optimize free-market growth. Any thoughts on this?

Maybe he dabbled in Christianity while he was writing the Constitution. I'm a little confused about the focus on religious right here. The way I see it we have two parties, one of which promotes personal freedom and one of which promotes economic freedom. Americans, who value freedom in all facets of their lives, are forced to prioritize the two types of freedoms and align themselves accordingly. So the lefties vilify the right for infringing on personal freedoms and the righties vilify the left for infringing economic freedoms. Those who value both personal and economic freedom are labeled "moderates," as if they don't really believe in anything. The parties maintain the core issues that divide the nation, unsolved in perpetuity. Anytime a third party gains power, the two parties triangulate on just enough issues, and the press plays up the supposed futility of third party voting, until the new party is squeezed out. In '92, Perot won 19% of the vote, while 20% of the voters said they would have voted for him if they thought he could win. That's 39% of the vote, and Clinton only won with 43%. I'm not saying Perot wasn't at least a little nuts, just that the press and the parties conspired to manipulate Perot out of the running by appealing to citizens' political considerations. (and that was after he screwed himself by dropping out and picking Stockdale as VP) Both parties are equally despicable in my book, and in a very real sense are just two wings of the same party. What we need in this country are two things to break the Dem/Rep stranglehold: Term limits, to break the chain of seniority-driven power positions; and run off elections (majority wins only) to allow citizens to vote their conscious, not the political expedient.

Hmmm... I just tried an experiment. I left my office and walked around the parking lot really fast. When I got back, I asked my office mate how long I'd been gone. Sure enough, I had traveled five minutes into his future!!!

Wow, this is a...uhh, interesting thread. Not to confuse the issue more than it is, but Feynmann posits that antimatter is matter traveling backwards through time. The release of energy from particle meeting antiparticle, is, according to his view, the reversal of time direction of the same particle, with energy being releases forward in time. Similarly a blast of energy can result in the "creation" of a matter-antimatter pair, which can be thought of as an antimatter particle reversing to go forward in time. Not sure if Feynmann was as good an accountant as he was a physicist, so I have questions about the beginning and end balances of particles and antis in the universe. Pretty wild idea. There's a thin book called QED (Quantum Electro-Dynamics) that explains his theory. If you haven't read any Feynmann, do yourself a favor. He was a character.

Not anymore. Thanks. Look, I'll concede to the rest of what you write here. And I see that my approach is faulty, but: The fundamental question is whether the U.S. Government had the right to crush the seceding states. The only arguments I've heard on this thread to support that establishment of the U.S. government as a coercive uniting force (and please correct me if I misunderstand the nature of the States' agreement to join the U.S.) are: an exception: No, I'm questioning his right to attack the seceding states and to establish powers for the federal gov't not explicitly provided for in the Constitution. The only argument given here that the states had no right to secede is that they maintained slavery. The North maintained slavery at the same time, so there is a contradiction in that argument, but let's not argue on whether it was right or not to free the slaves. Of course it was. The fundamental question is: Did the U.S. have the right to forcibly prevent states from seceding, regardless of their motivations. The answer from the defenders of Lincoln here, seems to be "yes." Justifying in terms strictly of slavery is a dangerous stand to take, because there is no clear line to be drawn in morality. (Some argue that taxation is a form of slavery, for instance) Slavery, it is claimed here, justifies the imposition of Federal power. I know we hate hypos, but what if the South had seceded explicitly for economic reasons unrelated to slavery? Would the North still be justified in attacking with armed forces? What if the South had successfully and peaceably seceded from the Union. When the U.S. passed the 13th Amendment and achieved the moral high road vis a vis slavery, would they then be justified in attacking and annexing their neighbor to the south, with freedom of slaves as justification for their aggression? (and yes, I see that I'm contradicting a previous suggestion with this) I'll admit I don't know the answers, but I'm not sure anyone knows the answers definitively. I'm not a Constitutional scholar, so I don't know whether states had an option to secede (it doesn't appear to be addressed in the Constitution), or what the punishment was for entering into a confederation.

I've felt much smarter over the past year - but it's just the Rand stuff. I read AS over the New Year's break last year (had never heard of her before), then read all of her other works over the year, and am rereading (MP3) AS now, to cap off the "course." I find that looking for contradictions - searching them out in every detail of what I do, read and hear - makes me much more aware of my surroundings and able to deal with them rationally. (is that a definition of intelligence?) I guess the question you should be asking yourself (if I may be so bold) is what "genius" means to you and why you want to be "it." You might just find a contradiction in your values, the resolution of which might well make you a happier and more purposeful person. Also, I listen to Mozart when I want deeper concentration and focus. And, although I hesitate to admit it, I find that the soundtrack of Jaws puts me into a productive frame of mind, and has since I was a kid. (I can't explain it) Sounds a little like me. I was bored and unchallenged in HS. (but grades slipping is often a sign of drugs/alcohol) If there's one thing I wish I could change in my life, it's that I would have discovered a rational philosophy earlier in life. Have you given your brother a copy of Atlas Shrugged yet?

Well, yeah, you're right, it might just be that the "mechanism on the clock" slowed down. The mechanism in question, in atomic clocks, is the frequency of radiation associated with the transition between two energy levels of a specific Cesium isotope. But every "mechanism" tested shows exactly the same frequency change, due to gravity (for general relativity effects) and velocity (for special relativity effects). You can argue that only the mechanism slows down, and that "time" stays the same. The evidence is pretty strong that your bodily functions will also slow down, that your neurological activity mechanism will also slow down, etc. So you could maintain stubbornly that all mechanisms slow down, but that "time" does not. But then you would be left with an impractical and objectively immeasurable concept called "time." The choice, I suppose, is yours, but since most humans define time in terms of measurements of time, and since we've agreed to define measurement of time in terms of the frequency of radiation associated with the transition between two energy levels in the ground state of Ce133, it would probably behoove you to join the rest of mankind and accept that "time" slows down under relativistic effects, and that it is thus "relative." Edit: mixed up special and general relativity.

There is still a contradiction here. The argument given for crushing the seceding states is to end slavery, but the continuing constitutionality of slavery makes that justification moot, doesn't it? The fact that certain areas of the seceding states, which had been recaptured by the Union were exempted from the 100 day moratorium on slavery (not to mention the fact that it was temporary) puts the lie to the argument that expropriation was punishment for rebellion. Was all property of the rebels forfeit then? Or just the slaves? The proclamation says nothing about the other property owned by the southern rebels, only their slaves, which were still allowed to be owned by northerners. So there is no "rebellion" principle behind the proclamation, only a slavery principle, but apparently, not a universal principle. EP was an executive order on the legality of owning slaves, which order could have been issued for all states, but for the need to maintain support of critical areas of the Union. Had the Union, upon secession of the South, quickly passed a Constitutional amendment outlawing involuntary servitude, then there would have been moral justification for seizing and freeing the property of the rebels. But that's not how it happened. The argument that Lincoln eventually freed the slaves fails partially, because politically, after the EP, it would have been impossible to maintain slavery; and mainly, because morality is not retroactive. This is a messy period in American history, and those who criticize Lincoln's actions are left uncomfortably seeming to defend slavery. The point of slavery is an admittedly powerful one, when pitted against the more abstract states rights and the right to property, but it does not free us from considering the impact Lincoln's means had on the ultimate ends - all of the ends, not just the freedom of African-Americans. To disregard the states rights and property rights issues as immaterial in the context of the barbarity of slavery is to prevent us from studying the history and understanding the roots of statism, and possibly, how we might reverse any harm done at the time. On edit: I may have overreached in stating that eventual freedom for all slaves was made inevitable by the EP (although, practically that was probably the case). The EP was a 100 day moratorium, as I stated, which implies that after the rebellion was crushed the door would be open to reestablishing slavery for the agrarian South. Another "political reality of the time?"

I wouldn't be so quick with the obits for Mitt. He "suspended" his campaign, which implies that it may or may not restart at some later time. After what happened in WV (McCain gave up his 12% of the votes in order to give Huck the win over Romney), Romney may (rightfully) believe that the Republican party machine is kicking in to shut him out of the nomination. There are one of two reasons for his dropping out: first, he has made a deal for a cabinet post (or, less likely, VP); or second, he is opting out of the party process, and will re-enter as a third party candidate if no one else emerges. This may seem like a Republican spoiler scenario, but I think the case could be made that McCain could be a Democrat spoiler if Obama is nominated. Obama sounds "okay" to those in a conceptual vacuum, but when it comes time for him to state exactly what he is for, you might find a lot of Dems decide to go for a seasoned McCain. Romney's business background and more consistent conservative background could put him in a position to squeeze both McCain and Obama to the left and take a plurality in the general. I know this is unlikely, but to be honest with you, if it's Obama v. McCain, my interest in participating in the political process will be just about nil.

The key here is that, according to Objectivism, some functions need to be done by, and in fact, are the justification for, government. Law enforcement (including courts) is one. So the example of how private law enforcement fails is supportive of Objectivism. The other examples, fire and roads, are open to debate, in my view, though roads more so. A privately contracted fire department might well result in increased effectiveness as the focus shifts from human effort (the hallmark of gov't work) to technology. I haven't heard a good argument on how roads would practically be built and maintained privately. Talking all roads, not just toll highways and bridges. At some point the shared nature of roads dictates a "government" solution, even if it's a local neighborhood government. As for insurance companies, the situation is not as clear cut as the wonks would have us believe. Here's an article in this week's WSJ about a contributing cause of high insurance costs. When reading it, think about what insurance properly is, and what things it should properly cover. on edit: Then think about whether the failure of privatized socialism is an indictment of its private, or its socialist nature.

Okay, but what's your point? And what exactly do you mean by "family influence?" No genetics, obviously, as that would blow your ideals of equality of man. It sounds like you're backpedaling now from the specific wealth argument to the more general argument that your origins influence your success. I think you've hit on a general concept that we can all agree on, but to what purpose? America has probably the most mobile social system in the world, and it is fueled primarily by the vestiges of capitalism. My examples of the richest 7 of 11 men in America put the lie to the myth of inherited wealth as the primary source of wealth. Wealth does not become a perpetual motion machine once it reaches a certain level. It is squandered faster by the rich fool than the poor one, in a natural process of efficient resource allocation. In all cases, it is the intelligent, rational (those are two distinct characteristics, by the way) person who allocates resources in ways that optimize productivity, and it is the optimization of productivity, not the socially enlightened re-allocation of wealth, that optimizes all members of society's earning potential and standard of living.

"Achievement," huh? Garnering the votes of a bunch of rich white guys, newspaper publishers and academics like Danielle Allen, "Professor, Departments of Classics and Political Science and the Committee on Social Thought, University of Chicago" (Did Ayn Rand write her job description?) is your idea of "achievement?" One wonders at an ideology that resents the economic power held by productive members of society, but gladly pools immense political power in the hands of a very few on the basis of their "social enlightenment," or whatever floating abstraction you use to describe their "qualifications."

The fact that you can read Gates' early life and focus simply on the wealth of his parents speaks volumes towards your biases. Gates' advantage was a very high intelligence (his 1590 SAT was not financed), not any source of wealth to finance his achievements. (While I erred is saying he did not come from wealth, it is crystal clear that his technical skills, the source of his success, were self-developed.) So I guess the fact that both his parents were very intelligent gave him a genetically unfair advantage over the "average" person. Maybe after redistributing wealth and watching it flow back to the productive few, the social scientists can prescribe pre-frontal lobotomies or sterilization to give the "average person" a chance. Ellison's father made a "small fortune" (oxymoron, no?) in real estate in the bubble leading up to the depression, then lived in a lower middle class neighborhood of Chicago during the post war business boom. Given the number of people who made "small fortunes" during the 20's, "life skills" is a little bit of a stretch, don't you think? Paul Allen's father was an associate director of libraries at U Washington. "Successful?" okay, maybe, but certainly not in the context of this discussion. As for the private school angle, given the success public social "scientists" have had creating an effective education system, I think you'd better just drop that line. Sergey Brin's parents were intelligent, too, but weren't from any great wealth. So which approach do you propose, lobotomies or sterilization? It's clear to me you see wealth as an uncaused, unearned resource, unfairly distributed between those who hold an undefinable, arbitrary "power" and those who don't. I'm guessing you're one of those who argues (and may even believe) that "no one is better than anyone else," with absolutely no understanding that this is one of the most inherently evil concepts devised by man.

That's really not a realistic idea... The United States of America is the closest we've ever come to an Objectivist society, which protected individual rights and restricted the power of government. Look what a worthless, greed-driven nation it ended up being before the social scientists rescued it. By the way, we forgive you for your wealth. You can stop feeling guilty about it if you want.

I don't come from a wealthy family. My father used the GI bill after WWII to become an engineer and make a pretty good living, but there was not enough money for a college for me or my four siblings. I joined the USAF in my early twenties to get the GI bill, worked in the Air National Guard and at UPS to get myself through engineering school. I look at America and the wealthy and I see opportunity, not closed doors. Those who point out inequality of wealth do so with one purpose: to advocate reallocation of wealth from the productive to the unproductive. Interesting that your example of extreme wealth is Steve Jobs. How about another: Bill Gates. And some others: Sheldon Adelson Larry Ellison Paul Allen Sergey Brin Kirk Kerkorian Jack Taylor Who are they? They represent over a third of the top $1/2T of wealth in America, and none of them come from wealth. If you don't count the Walton family, they represent 7 of the 11 richest men in America. Not bad for a nation in which the vast majority of those with real wealth comes from real wealth. Not exactly. Diamond was discussing the reasons for the success of certain societies, not the reasons for success of individuals within a society. Inventors are not commanded, they are self-made. And yes, there are just a relatively few individuals with the [you know the list] to make things better for the rest of us. Next time you're in an airport, look at the crowds of people trying to figure out how to read a departures sign, then look out the window at those shiny metal cylinders taking off and landing like clockwork, then ask yourself how many in the crowd could conceive and build the simplest mechanism that makes those things fly.

I agree with that. If you don't have special insight, almost any investment you can make is crap shoot. Read: A Random Walk Down Wall Street. However, if you're an Objectivist and you understand the principles of inflation, deficits and debts, and the tendency of governments to "fix" problems that they don't realize they caused in the first place, you can begin with a big advantage over most "small picture" investors. If Objectivism is correct, (and this is just my opinion) the government will continue to "stimulate" the economy through direct deficit spending and credit infusion, both of which have short term effects, but tend to have an impeding effect on actual recovery as well as a long term inflationary effect. From what I've learned over the past year, governments faced with economic challenges tend to do exactly the wrong things, and recovery is in spite of their efforts. Betting on gold is a hedge against an economic collapse, which seems more and more prudent as the situation worsens. A hedge against bad times, but certainly not a guaranteed win. Thanks. That explains why both indices rose slightly over the past three months.

I'm not sure exactly what UDN and UUP actually are. From Nov 1 through Feb 5, the Euro has gained 1.4% against the dollar. The broad weighted exchange shows the dollar losing 0.4% over the same period. (Source Fred Euro and trade weighted broad rates) But UUP is up 0.5% and UDN is up 1.0%! (Source Yahoo: UDN and UUP) Are these indices backed by any currency or are they speculative, Vegas-style shares? Either way, I'm not sure why both would rise, unless it reflects more demand, which would mean there's no inherent value to the shares. But, if UDN was backed by foreign currency, then buying UDN would in effect wash Forex with dollars and we'd see a large drop in $ value. BTW, news reports this morning have businesses in New York starting to accept Euros. (a little misleading, since these businesses are probably giving a poor exchange rate to customers and exchanging for dollars themselves.)

Good point, except I was ignoring political power, rather than conflating the two types of power. But the result appears the same, doesn't it?

If I remember my history, Lincoln "freed the slaves" only when France was about to help the South. Emancipation was ultimately a politically, not philosophically, motivated act. If I remember a little more, the Emancipation Proclamation specifically exempted Northern border states. Aah, yes: So, I'm interested in exactly how you will defend the morality of a man who "frees" slaves in states not under his control (as if), but maintains slavery in states and territories still under his control.

It seems to me the primary motivation was the understanding that Saddam had bribed a good number of Eurasian politicians, enticed particularly the French, Russians and Chinese with lucrative business opportunities and had secured a path to ending the sanctions against him. It is clear from the evidence that Saddam was playing a balancing act, trying to abide by UN resolutions to secure a lifting of sanctions, but also trying to keep Iran (and thus the rest of world) guessing about WMD. He had visited Niger in 1999 seeking Uranium ore, according to Amb. Wilson, and he had maintained the personnel infrastructure with the intent to resume WMD production once he regained sovereignty of Iraq. (Iraq was still technically at war with U.S. coalition under the ceasefire agreement of 1991.) The evidence of an Iraq-al Qaeda tie is not strong, but it is noteworthy that bin Laden's 1998 fatwa declaring war against the U.S. does not even mention the usual reasons for hating the U.S., i.e., Palestinians and barely mentions the U.S. presence in Saudi, but mentions Iraq prominently three times. Why would bin Laden openly ally himself with Iraq in a declaration of war against the U.S. if there was no relationship with Saddam, who was already at war with the U.S.? Add in the facts that Iraq was heavily involved in the first WTC attack in 1993, and an assassination attempt against Bush 41 the same year, and you have a colinearity between Iraq and al Qaeda too strong to ignore. Given Saddam's past use of WMD and his open support of international terrorism ($14k to family of each Palestinian suicide bomber), and you have a situation of potential state-sponsored terrorism (i.e., intentional attacks against civilian targets) on a huge scale. It is also possible that we got wind of an Iranian plan to invade Iraq once WMD were ruled out. If they had gone in and established forces there, it would have been extremely expensive in $ and lives to drive them back out, especially if they were joined by the large Shi'ite population (17 out of 27 million total Iraqis), newly freed from the barbaric Sunni/Ba'ath rule. We saw defeat of Saddam as a relatively low risk venture (no more than 10 thousand casualties, if I remember correctly the estimates), and that would have been much preferable to dealing with an entrenched Iran/Shi'ite force. Bush had no choice but to subvert the course of the U.N. conciliators and to force Saddam out of power. Those who say we could have contained him (indefinitely, apparently) ignore the facts and context of the situation. On a higher level, the prime motivator was stability of the oil supply. Had Saddam returned to power and allied himself with the Sunni al Qaeda, remember who bin Ladin's enemy is, and who Saddam's enemy is. Had war broken out between Iraq and Iran and/or between Iraq and Saudi, the oil supply would have suffered a major pinch and our economy would have been hit hard. Had Iran moved on a weak Iraq, the situation would have been equally difficult. Democracy in ME was a cover story, a quaint, "oh, by the way, look what else you get..." ploy. The ME is Muslim, which literally means "submission" and there is no reason to believe that even under true democratic conditions they would choose anything but Islam and sharia. Democracy, as a tool of freedom, is not an end in itself, but a means to the end of individual rights, which are wholly and fundamentally contradictory to the tenets of Islam.

Government debt, or more precisely, anticipated government debt, is the source of inflation. Under the gold standard, debt causes a run on gold, which is why the government had to forbid the private ownership of gold. In the 60's, people started to understand that the growing federal debt was causing the dollar to devalue, but because they couldn't buy gold, we saw gold hold steady and the value of the dollar dropped as people realized we couldn't maintain the gold standard for long. By 1970, the situation became untenable and we were forced to depeg ourselves from gold. At that point inflation skyrocketed. Gold rose to a level that reflected the anticipated future price of gold if inflation continued in double digits, then spiraled higher as people rushed into a gold bubble. Gold eventually hit $850/oz in 1980. When inflation settled down in the early 80's, the price of gold plummeted to a more reasonable level, reflecting a level in line with price indices. If you want to calculate the effect of government debt on inflation, do this: Calculate the amount of GDP lost each year due to inflation (it's apx. GDP*(CPI(+1)/CPI(0))^(1/2)), then every year, index the prior years' GDP loss by the CPI change (CPI(+1)/CPI(0)) and add to the GDP loss from that year. Then graph the yearly result with the level of federal debt. Prior to 1970, you'll see the cumulative GDP loss is less than federal debt, reflecting the artificially low inflation imposed by the restrictive gold standard. (Restrictive in that the gov't wouldn't actually sell gold for dollars) At around 1970, the cumulative GDP loss crosses above federal debt as inflation began to runaway, making up for the unaccounted federal debt, then rose far above federal debt, as increased deficit spending soared and anticipated federal debt shot up. In the 80's, as deficit spending began to stabilize, the cumulative inflationary GDP loss settled down and started tracking very closely to federal debt. The bottom line of this exercise is that inflation is the government's way of "borrowing" money from your future productivity. This is exactly what Greenspan meant when he wrote: (on edit:) With Federal debt at 65% of GDP and rising, an impending recession, and a likely victory by one of two socialist candidates, it is almost certain that federal debt will rise quickly over the next few years. If you calculate the value of gold, in dollars, by comparing the current federal debt to the debt in 1932 (when we repegged from $20 to $35/oz), assuming we have the same amount of gold in reserve, you get somewhere between $800 and $1200/oz. With a potential large rise in debt and a larger rise in debt/GDP, coupled with a potential dollar collapse as the credit mess expands, it is possible we will see gold continue to rise. I will hold and continue to buy gold until I see some evidence that the credit problems are easing, and/or recession likelihood decreases, and/or favorable business policies are on the way, and/or government spending will ease and/or inflation will be held in check and/or the dollar is stabilizing, and/or gold has entered a panic bubble. Right now, all of those factors are heading in the wrong direction. I don't know about the rest of you, but I'm buying gold with my rebate, either bullion or shares of GLD.