Fascinating Q call Question:

One of the Q callers this week asked, “How does the free market determine interest rates?” as if the idea that markets could determine rates was some sort of a ridiculous notion. The caller presented his question intelligently, and certainly sounded like a somewhat intelligent and educated person, but how fascinating that such a question would ever be asked. Do we really live in a time where we are so separated from our own self-reliance that a non-government or non-agency mediated solution appears to be beyond our intuitive understanding. Are we getting to the stage where it has become normal to think that systems cannot operate by themselves without intervention of some sort? It is certainly that way in medicine. I am sure most of you reading this do not know this, but a fever is part of the body’s natural mechanism for fighting disease. Numerous studies have shown that the human organism will heal faster with a fever. It will feel sicker, but it will heal more quickly with any temp between 100.6 and around 105.7 degrees. Most patients don’t believe this. They look at me strangely when I suggest the idea as if they are thinking that I don’t know what I’m talking about. This is probably what you are thinking right now. Fortunately you have Google, so you can look it and see that this claim is scientifically accurate. It is incomprehensible to most people that the body just might have a better idea of how to heal itself than some bearded scientist in a lab somewhere who first isolated Tylenol. This loss of respect for the orderly functioning of natural systems is a part of our modern mindset which demonstrates a great deal of arrogance.

Now this Q caller didn’t sound like an arrogant individual or boastful, but he is part of a social group that has become so enamored with its seeming intelligence and ability to figure things out that it has forgotten, that most things don’t need figuring out. They just need respecting. No one needs to teach a lion how to kill and eat. Just set it out on the savanna and let it do its own thing. In an era of manipulation of markets and money systems, the abnormal seems normal and the truly bizarre becomes so expected that we no longer acknowledge it as totally strange. Tampering with natural processes has become so commonplace, that we are beginning to wonder how such processes could have ever worked before we showed up on the scene to fix everything. How great we are!

From James Dines’ Book, The Invisible Crash, page 116, “During this debate, remember that under the gold standard a nation lost gold when it ran a balance of payments deficit. This contracted its credit and increased its domestic interest rates. As a result, commodity prices fell and made it a more attractive county form which to buy and a less attractive market in which to sell. The nation with a gold loss then has rising exports and, by necessity, a discouragement of imports. Furthermore, relatively high interest rates not only discourage lending as home, but also attract funds from abroad. This is the magnificent self-adjusting mechanism of the free market, and we do not have to pay a politician to run it. It is free. Fire the politicians running our economy and give the taxes saved back to the people.”

I include this here because it is not only a very good and concise explanation of the way the gold standard regulates free markets, it also underscores this key point of regulation and control and how unnecessary human intervention, so often, is. We get ourselves into such messes with our crooked desires and our attempts to improve on perfections that exist as they have always right there before us. And what a mess we have gotten ourselves into now. What a mess we have made of money. What an absolute abomination. Bull