Doug Casey, the Money Moron

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Asset Speculator

Doug Casey is an asset speculator. That is his area of expertise. It is also the reason why he knows nothing about money, and his followers are morons for listening to him on the subject. Because of his deep ignorance, Mr. Casey can be quite convincing to the gullible sycophant when he proclaims that one asset or another is “money” and that they should support policies which help him and his crew as they corner the market on that asset and continuing to tie the value of money to that asset.

The truth of the matter is that money is currency, a fluid medium of exchange which should never be tied to an asset. The danger in making money an asset, a store of value, is precisely because the market for an asset can be cornered, because the assets can be controlled by a few speculators. This is great for asset speculators, of course, but horrible for anybody else. They ride up the value of their latest asset store, then dump their holdings for the same “free cash” they deride on the way to their peak value.

The rhetorical device of Doug Casey and the other asset-bugs is to malign currency, to discredit actual money, so that they can lend credence to their asset obsessions. You will hear them proclaim in high moral tones the nonsense that currency should hold the value of labor for an indefinite time. The truth is that wages are like fish: they stink if they are left around more than a few days.

Did you worked hard at your job? Good! Now spend your wages before you lose them. Do you want to save them up for something in the future? Good! Invest them in some productive enterprise for a good return or leave them with the banker for a smaller, safer interest. Do you want to speculate on the price of a gaudy metal like gold? It is your choice. You can spend your hard-earned wages on gold speculation, but realize that gold can tank.

That is the point, after all. Letting money be money, letting wages be paid in an unfettered currency allows you to spend it how you please, to invest it how you please, to speculate it how you please.

Yet Doug Casey will not allow you to use your money as you please. He wants to tie your hands and force your wages into playing his asset-speculation games. This he calls “moral”, as if that even means something.

The next demagogic turn of the Doug Casey fan club is to sneer at fiscal money creation as “printing money”. There are several gross errors in that assertion. First, there has been precious little fiscal money printing after 1971, when the Treasury stopped printing United States Notes. Second, the Federal Reserve Notes which are printed only allow liquidity of another style of money: ledger money. Third, the actual money creation is through loans issued by banks. The loan proceeds end up as ledger money in somebody’s account, from which they can withdraw Federal Reserve Notes, if they are so inclined, or use in a card transaction.

Even if the fiscal and banking systems were reformed and completely transformed, they are unlikely to take the form of printing money. Yet what of it? Doug Casey’s thoughts on this subject rely on inane memes which have no basis in reality. If the Treasury were to print United States Notes to buy the various goods and services required by the appropriations bills, they would generate various taxable economic activities, for which a portion would be taxes. The untaxed portions would generate further taxable economic activities, resulting in more taxes. Eventually all of the printed money would return in taxes. In the paradigm of all expenditures being newly created by printing, all of that money would be destroyed by taxes. Yet, reusing the tax revenue for expenditures would be equivalent to creation/destruction cycles. Seen in this way, there is simply no avenue for hyper-inflation from the chartalist cycle, no matter how petulant the advocates of the Casey dogma.

A scion of the Sherman and Delano families, C. P. Klapper comes from a long history of New England Communist Republicanism.

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