Bloomberg’s Tom “Tuxedo & Bowtie” Keene recently provided a 10-minute forum for Abby Joseph Cohen, Senior Investment Strategist at Goldman, to drone on about how the “recession is ending right now,” “consumer growth will be increasing,” and how she expects “profit growth,” etc, etc.
There was no mention of Ms. Cohen’s 1600+ call for the S&P made in early 2008, nor of course her continuous bottom calling in the wake of the dot-com bubble that she helped promote. No mention of P/E ratios, dividend yields, book values, debt loads, nothing. Just an opportunity for her to lecture the audience about the importance of longer term investment horizons. Mr. Keene even asked for questions from the audience and surely ignored a few from skeptics: we just love to have you on the show, he said, but “boy do we get the hate mail.” You don’t say! Why GS still keeps this dog in the house is beyond me.
Now, I know all you Prechter skeptics out there will come out and say I’m using a double standard, but that is not the case. This Goldman “strategist” offers her advice explicitly to retail investors, and continually urges them to buy the stock market, no matter what. She has never said anything else. Mr. Prechter’s services are intended for more sophisticated speculators and institutions, and he has shied away from offering advice to amateurs, other than admonishing them to stay in “the safest cash equivalents” ever since the bubble got rolling. Taking this advice would have saved most people lot of money and heartache over the last 10 years (admittedly, overeager shorts included).
Furthermore, when you read Prechter, you always learn something. Market history, valuations, and the mechanics of money and credit are explained with facts and figures. You can judge them for yourself. Cohen can’t be bothered to mention a single number, other than her expectations for 3% GDP growth. This interview, meant for everyday people driving to work in the morning, reflects absolutely reprehensible behavior from both Goldman and Bloomberg.
Most people in the USA were (and still are) quite naieve about Investing. Three major crashes and recessions from 1980 …. nearly 30 years where Wall Street has been brainwashing people with “BUY and HOLD” .. showing charts of the markets from the early 1900′s to convince us to invest and contribute into 401K accounts .. while all this time people have never questioned … What is Money? What are earnings?
People have very short memories …. they remember financial incidents until that time when they are back to normal again and the government and the media have painted a positive picture ….
Crashes and Recoveries and the continuation of the Ponzi scheme will never end because the generations that expereinced the pain and suffering of human greed are gone after 40+ years … if the wisdom learnt from the one’s pain and suffering was passed on to us from our parents, then heck, it will be a different world … but no, human are destiend to repeat the same mistrakes from generation to generation because the pain is lost and forgotten …
There will always be an AJC … and there will be another Madoff … but for the next 10 or 15 years while we try to muddle though this our generation will not forget … but the future generation will …
I still blame those who bought houses that they knew they should not have … and signed up for insane mortages that were going to re-set in a year …. and listen to so called financial pundits to give them the wisdom to make money when in fact people need to do their homework, study stocks and study how to invest … but 90% don’t have the guts or the ability to do it … heck, they are simply not numbers people or have the apptitude for it … not everyone is great at Math and the level of Math that is even taught in this country is poor … the result of a self entitlement based society and culture … now see the results … So, I say shame on AJC for leading people to financial ruin and shame on the Corporate world propping down estimates only to beat the numbers though lay offs and cost cutting …
In the end, the consumer has to have the confidence to do what is right for them and follow common sense … but most lack ability and dexterity ..
And when people Mike Norman and the following chap on Tech Ticker still push Emerging Market stocks without fully understanding what is going but naturally you are bound to loose money:
“Don’t panic. The overnight drop in China and other emerging stocks markets is not only overdue, it’s temporary. That’s the word from Uri Landesman, the head of global growth for ING Investment Management Americas. In the short term he expects the S&P 500 to pullback, then rise again and end the year around 1135. If that happens, Landesman says, “I would expect those emerging markets to outperform that rise. So, I expect them to behave very much like high beta options on the S&P 500.”
http://finance.yahoo.com/tech-ticker/article/304453/The-Rally-Isn%27t-Dead–Emerging-Market-Stocks-to-Own
What I like about Prechter is that he has not only the decency to urge ordinary retail investors to play it safe in cash, but also the humility to temper his forecasts with warnings that he may be wrong. That clinched my opinion of him as a genuine, honest guy. (Prechter puts this warning eloquently in the preface to Conquer the Crash.)
I too want to hurl when I see all the supremely confident blowhards on CNBC – young guys with glasses and goatees, old guys with CEO hair and distinguished square chins – cavalierly spouting their “rock-solid convictions” when they don’t have a clue. Maybe, like car salesmen, they’re just doing their jobs; maybe, like Vegas casinos, they’re just giving the public what it wants.
Oh well, I guess the silver lining is that without that stinking game it wouldn’t be possible for speculators like us to make a lot of money shorting the market back down to sane prices.
I feel like you were aiming at me with your “all you Prechter sceptics”.
As I told you before, I have drawn the same conclusions that he did, and think the markets will probably collapse 80% in real term.
I even closed half of my short USD position because of him telling us that the USD bullish index was at 3%.
But then, the GS strategist is just a cheerleader. As long as people are following “advisers” without doing their homework, well, you can’t do anything about them. And of course, they will always follow the bullish strategist because of greed and hope, two things that have no place in the markets. Finally, if after a couple of ridiculously wrong calls, people still follow the strategist, then those lemmings really deserve their losses…
In my early days a followed a friend’s recommendation and also a brokers one. Both ended up in tragedy. I was a beginner, but eager to learn. So should they be, or else, just leave the market or leave your shirt…
I also want to put in a good word for Prechter. He makes his calls, and gives his reasons in full detail — so that you can evaluate his position for yourself. He admits when he’s unsure, admits when he’s wrong, and implores you to do your own homework. But mostly I am indebted to him for getting me out of equities in October 2007, back in on March 2009, and now out again, thereby preserving and even growing my hard earned savings while many others got hammered in the downturn.
Well PEJ, it did strike me as more than a little ridiculous when you said you had read Conquer the Crash and that everything in it was wrong. In fact, it is startling how accurate it has proved to be now that the crash is on. It was only wrong in that it was early, but I don’t recall specific timing in the book, just advice to “get your affairs in order,” so to speak. It was Prechter’s understanding of the debt-based system that allowed him to make such prescient, specific calls such as worldwide stock markets and commodities would fall together as the dollar would rise, and that despite the Fed printing away, prices would drop.
This deflation call, in the face of Helicopter Ben’s well-publicized threat to do whatever it took to weaken the dollar, was an argument not one in a million understood before a few months ago, but Prechter laid it all out for us in impeccable logic. All you had to do was make sure you really understood what he was saying and not dismiss him outright because he was a “perma-bear” or because you thought it was insane to think that the Fed couldn’t just create inflation with ease. Actually, it was Mish’s blogging about the same case that enlightened me, along with helpful email response. I later found Prechter.
The second half of the book is extremely valuable advice on depression-resistant asset protection and should not be taken lightly.
Thanks Mike, for deleting my email. That does a lot for the credibility of your site.
I mean my comments on Prechter….
Paul, I didn’t delete anything, nor see anything. Just post again and don’t be so quick to draw conclusions.
Wait, are you the guy I banned (the only one to actually get banned and not just asked to leave like 2 others who were extremely impolite) about 10 months ago? That guy was a gold-hating socialist who didn’t bother to read the posts but just wanted to rant and fight. If you’re not him, I’m sorry.
Regulars here know that I don’t censor this forum, but that basic courtesy is expected towards others. Lack thereof is the only thing that isn’t tolerated.
Mike: Glad to see that my comments had some effects on you. Is that the reason why you stopped commenting and decided to let us all alone in the dark?
More seriously, I just wanted to balance a bit the conversation, and remind that he has been wrong in the past, he could be wrong again, like all of us.
That said, I told you I loved the first part and ordered several of this other books. But remember that he was so bearish that he probably missed the mega bear market rally of 2004->2007.
Let me also emphasize that I turned a mega bear, and that’s the reason why I got to set up a blog (just check my very first post on my blog). And I also think markets will fall 80% in real terms (whatever that means in $ terms).
Also, regarding the second part of Conquer the Crash, he spends about 100 pages explaining that EVERY asset class declines in dollar terms. I don’t need 100 pages for that, and even so, I don’t think he’s done a great job at that.
Ironically, he recommends Comstock Funds. They are as perma-bear as he is. I like those guys and have read their posts for several years. But they also lost money during the mega-bear rally.
Also, he mentions that even 30 year AAA bonds take a big hit during deflations (I think you don’t agree with my short long-bond stance).
Finally, I disagree with him on the deflation side. Not because I don’t believe we’ll have a deflation (we already are in one!) but that I think – as a said before several times – that the Feds and the Fed might destroy the dollar in trying to reflate. I will write a post about that really really soon to explain my point of view.
Paul: I can confirm that Mike has been really fair since I have known him (known meaning whatever it means in cyberspace
) not like that other guy Stefan Karlsson, who deleted all the comments that where opposing his opinions. Academics are really idiots to avoid as much as possible.
PEJ, the 30-year is crap, but even crap can rally for year or two. Remember what happened last fall? Everyone piled into TBT in the summer, when I was calling for sub-3% yields, and then they were crushed by the bond rally as stocks tanked. I waited for 2.5% before shorting the long bond, and I might wait for even lower yields next time.
I don’t post here every day because this is not a business, and I don’t post on every move in the markets because I feel no obligation to or have nothing to add. Sometimes, the markets speak for themselves, like the past 2 days: strong bearish signals for stocks, bullish for bonds and the dollar.
I also would hate for people to make trading decisions based on what they read here or feel that I can always offer guidance. Remember, this blog is as much for me to organize my evolving thoughts as it is a way to sometimes shed some light for others or provide a forum.
I am enjoying this blog, lots of views and interesting points …
Just got back from a 5 Mile run and I have been pondering … Maybe, just maybe .. Prechter (and the other Bears) is right on in terms of Timing …. It just is odd that nobody wants to believe the pragmatic people anymore …. I get my sentiment readings from lots of people at random … the average Joe etc … Anyways …. Regarding Home Depot and Target:
Home Depot, the world’s largest home improvement retailer – and a bellwether for both the retail and housing sectors – announced “better than expected” earnings of $1.1 billion for the second quarter. Of course, the most prominent feature of its earnings is that they were below last year’s second-quarter earnings of $1.2 billion… just like almost every other company that has beat analysts’ expectations. (Wall Street analysts’ perennially low expectations must make them wonderful marriage partners.)
In this case, Home Depot 2Q Profit Beats Expectations – can be misleading. The headline doesn’t tell you a huge chunk of Home Depot’s earnings came from one-time cuts. About $410 million of total earnings (37.3%) came from cutting costs and tax settlements.
And of course, like so many other companies, Home Depot’s sales fell 9.1% to $19.1 billion. Sales from stores open more than one year (comp sales, a key retail measure) dropped 8.5%.
So in reality, Home Depot’s sales are down a lot, profits are down a little (buoyed by cost cutting and tax settlements), and comp sales are down a lot…
If Home Depot keeps turning in “above expectations” performances like this one, it should be completely out of business in about 10 years. Mr. Market reads the daily news and swears by every word, bidding Home Depot shares up more than 3%.
Target’s second-quarter earnings report was – you guessed it – “above analysts’ expectations,” even though revenue declined 2.06% (ouch) and earnings fell 6.4% (ouch, ouch).
At Target, the wonderful “above expected” earnings were the result of the same cutting everyone else is doing… In this case, staff reductions, salary freezes, tighter underwriting standards at the credit-card division, and fewer store openings all helped Target increase its gross margin to 31.9% from 31.2%.
Target’s credit-card operation is still deteriorating. Profits fell 15%. Expenses for bad debt jumped 19%, and delinquent accounts are soaring. Accounts at least 60 days late increased to 5.8% from 4.5% a year earlier. The 90-day delinquency rate rose to 4.1% from 3.1%.
Mr. Market, of course, reads the Wall Street Journal like a good little apparatchik and swears by every word. He sent Target’s stock up almost 7%.
What really happened at Home Depot and Target: Less money came in the door. Period. They sold less. They earned less. And this ain’t poetry or painting: Less isn’t more in finance. In finance, less is less.
Sell in Sept. and go away … and get ready for the Winter rally into Q1 2010 ….
Finally! My HERO Taleb says it as it is !!! Oh Mr. Obama what a frigging hero and your socialism … this video says the truth as it is … BUT, most don’t get it due to lack of any understanding of the the Money system …. the prudent are getting jacked up the ass whereas those who made the mistakes are being rewarded! What has the USA come too?
http://realpropertyalpha.com/2009/08/12/fantastic-video-taleb-roubini/
Sorry to all for the -ve language … but this Govt. is ruining our lives (of the prudent) …
PEJ: So Target’s and Home Depot’s revenues are down less than 10%, and they take permanent cost-cutting measures that fatten the bottom line. If unemployment continues to increase to 11%, revenues will fall a little more as will the profits, but probably not enough to warrant an 80% slump in the shares. The quarterly comparisons will start becomming easier.
Mike: How can you be so confident that the markets can not be manipulated by the govmnt for years, ie. how can one comfortably bet against the govmnt which just prevented a market capitulation so forcefully?
In a similar vein, it is clear that Fed printing can not stoke consumer demand or bank willingness to loan, but direct expenditures by the federal govmnt via rebates or direct grants of money certainly could, and there is no limit to this as long as the Fed monetizes the debt. Would a 5 trillion dollar Federal deficit next year be inflationary? How about 10 trillion? There must exist an accumulated debt burden that would crush the dollar.
I have mentioned several times the huge bullish (declining) wedge forming in VIX charts.
MS & GS are apparently doing the exact opposite (huge rising wedge), with MS already breaking down yet attempting to re-test. GS has not broken down the wedge formation, but the wedge formation isn’t as beautiful as MS’s or VIX’s.
Those wedges don’t seem very obvious, which perhaps add to their credibility. Furthermore, it’s confirmed by the breaking of RSI 14-period trendline.
Add to that the belief that GS rules the world, the government is controlled by GS, therefore GS can’t go bust. You have a near perfect contrarian indicator here. What could possibly bring GS to its knees? I don’t know! Isn’t it beautiful?
Or maybe this?
http://seekingalpha.com/article/128778-is-goldman-tempting-the-interest-rate-black-swan-with-1-056-risk-exposure
PS Keep up the great work Mike. I follow many financial sites but always stop here first hoping to see a post.
Leonard, the Fed had nothing to do with the rally since March. It is just herd behavior swinging from extreme to extreme.
Credit is still contracting much faster than the Fed is doing anything, so inflation is out of the question for a while.
Mike: I was not thinking about you posting trade recommendation, but rather not even replying to comments, which you usually do quite frequently.
Also, I’m telling you that Prechter says to stay out of long term bonds, even AAA take dips. But on this one, you consider it “crap”
Leonard, Axclr8: corporate earnings cannot be trusted yet since “creative accounting” has probably been improving results for almost any company, that input prices have dropped but these have not yet been reflected on output prices, and that from every company that I see reporting, I also see capital rising or borrowing. Next quarters might be seriously ugly (and I’m not even mentioning banks, with no mark to market, gains on falling debt rating, gains on stock markets rebound, and avoidance of foreclosure in both housing and CRE…).
Again, I am very bearish. I might be proven wrong…
Mike, I am certainly no conspiracy theorist. However, it is hard to entirely dismiss the possibility of market manipulation. How else could one explain the very funny technicals, the 3:30 ramp-ups, etc that the bears have been screaming about. Also very hard to believe any numbers coming out of China, all filtered by big brother. You did not address the ability of the Federal government to spend massively and independently of the Fed.
These would not be considered as market manipulation.
The closest thing to manipulation that I can think of, is the quant/statistical funds pouring money into very thin markets and accounting for 90% of the volumes. But even then, I wouldn’t call it manipulation.
It can still go on for many months. Yet, I would still not call it manipulation.
Bears screaming manipulation is like gold bugs screaming manipulation every time gold loses a couple of points.
The contrarians know they are against the market, the feds, the central banks, the banks, etc. That is part of the game…
My only problem with Pretcher is his simplistic approach to gold. He regards it as nothing more than an inflation hedge, but its role is much more complicated. I prefer Mish’s musings on gold as they are more informed.
That’s not accurate, because he recommends owning some gold as a disaster hedge and he is anything but an inflationist. He has always said that gold is money, and often measures stocks in terms of it.
He simply reads the market differently and believes for technical reasons that it is going much lower. In an environment of falling real estate, stock and commodity prices, it is hard to imagine the gold bugs’ various quadruple digit scenarios coming to pass.
Prechter wants to buy more gold, just at lower prices. I am in the same boat, and have been since February or March 2008. I’m patient about this, and to the surprise of most, that top from 17 months ago still holds, despite all that the Fed and government have done since.
Of course he isn’t an inflationist. However, his call for gold to go lower seems wedded to the idea that it has to do horrible in deflation. In didn’t do horrible in the depression, and it hasn’t done horrible in the current deflation, and its performed well in past deflations. Sure it isn’t 10 bagging, what does in deflation, but that doesn’t mean its going to come crashing down.
I too don’t like buying more gold at this point, but I’m looking at more reasonable pullbacks like $700 or $800 dollars. I’m not doing something ridiculously foolish like calling for $200 or less gold like Pretcher has. Credit stress is a good reason to own gold. Even in deflation government debt isn’t risk free, it can be subject to selective non-inflationary default just like many countries did during the depression. Even in deflation, gold can never be wiped out with the stroke of a pen like that. The kind of things that would cause the deflation you looking for $200 gold would also cause society to fall apart, thus increasing its value.
The only scenario where gold ends up that low is if things go back to “normal” and I don’t think Pretcher is in that camp.
I’d believe gold will decline during a deflation. That would be normal, since we’re talking about a $ deflation.
He isn’t calling for $200. But he is right that gold might be overbought at these levels.
I just saw that David Einhorn who investment a huge amount in gold has also bought puts on GLD this month.
Finally, this is an interesting piece of news (self adverto to my blog): http://realitylenses.blogspot.com/2009/08/central-bank-gold-agreement-3.html
Perhaps I failed to push the post button. Not really sure what happened. Okay, no worries.
I am, however, that guy you banned. But “gold-hating socialist” really isn’t accurate. I quite like a good deal of your market commentary. I’ve been playing silver throughout this crisis, and I’ve done quite nicely.
However, if you want to know, I do have a philosophical disagreement with gold bugs. I strongly disagree with the idea that gold–or anything else–is some kind of inherent store of value, and I was expressing that opinion in strident bloggy posts, I admit. But nothing beyond the pale. That you should ban me for those seems wrong, especially given your libertarian views.
If you want to know, I believe that value is grounded in and arises out of the most valueless thing of all: paper money. Or, in other words, in a social will-to-value. My view is far more Nietzschean than it is socialist. I believe that only assets that “work” in some way have the potential for true value because only these can grow and produce profits. Rather capitalist, don’t you think? To my mind, gold bugs express a deeply anti-capitalist position because they don’t put their money to work. Now, that doesn’t mean you should be invested in the market 100% all the time. Far from it. But capital does something. It invests itself in the potential for income, something that gold cannot do. It’s a pretty standard capitalist argument I made. No reason to ban me for it.
Paul, I banned you because you were uncivil, the only reason I’ve asked anyone to leave. BTW, the other guys were gold bugs.
I remember your argument well. You don’t really grasp what money is — a means of exchange and a store of value. Gold certainly stores value as well as anything, and it is a very good means of exchange. Paper money is fine for exchange in most situations (except for hyperinflation or under certain government controls), but it is a poor store of value.
You express a version of the “money on the sidelines” fallacy here:
“To my mind, gold bugs express a deeply anti-capitalist position because they don’t put their money to work. Now, that doesn’t mean you should be invested in the market 100% all the time.”
By that regard, owners of T-bills don’t put their money to work. This is silly — money is just something that you exchange with another person when you want something they have — then they have the money. The pool of money doesn’t change — it is always “on the sidelines.” Money doesn’t flow into the stock market — it just changes hands like the stock itself.
Dave, people often mention gold’s performance in the GD, but you have to remember that it was pegged to the dollar at 20, then 35 dollars per ounce. It wasn’t floating, so we don’t know what it would have done. Silver, on the other hand, fell about 75% to a low of 25 cents per ounce.
Dave,
What I am going to say has nothing to do with me being a gold bug or not.
The way you talk about paper currency shows a complete lack of understanding of what money is and also a complete ignorance of historical precedence and empirical results (i.e. historical facts).
Paper money is NOT in ANY WAY a store of value. It can sometime be, during a short period of time (short on the scale of human societies).
The view you suggest, ignoring historical facts (along with theoretical thinking) would resemble more to the view of a “Keynesian fool” than the one of a “Nietzschean”.
Sorry, I don’t mean to be uncivil or rude, it’s just facts and reality.
Gold stocks rose in value long before FDR devalued gold. They rose through the entire early 30s crash. Gold has risen in value during the current deflation despite no country being on the gold standard. As an Austrian you should know that the market sets the value of gold, not a government.
Silver is no surprise, its always been an inferior monetary metal. Its primary attribute, being more plentiful then gold and thus useful for small transactions, lost its relevance a long time ago. I would not look to silver as a guide post for gold, both what happened in the last year and the depression should be evidence enough.
You still get it upside down. Wrong causality.
Government doesn’t set the value of gold. Gold backing the USD used to set the value of the currency.
There is a historical average value for the GC/SI ratio. Markets tend to diverge temporarily from “normal” ratios, but then converge back to those ratios.
As Prechter said (and god knows I haven’t been supporting everything he says) there is a too much bullishness on gold, and this is bad for the short term prices.
Dave, the government fixed (and increased!) the price of a commodity as its producers’ costs fell dramatically. It was no wonder the stocks went up.
And also note that Mike used “price” while I used “value”
Pej, a couple of posts above you address Dave when you mean Paul.
Good point there about price vs. value. I expect the former to go down and the latter to go up, and so does Prechter.
Gold wasn’t revalued until 1933. However, gold stocks went up in 30-32 long before gold was revalued.
Is there too much bullishness in gold, sure. But just as Pretcher missed the entire early 2000s gold bull market trying to buy it below $200, if you insist on waiting for gold to crash your going to be waiting a long long time. You’d be a lot better off buying on pullbacks of a couple hundred dollars.
Dave & Paul, sorry for the confusion. Mike is right, I meant Paul.
I think the value of gold doesn’t change. Its price does. Gold is immutable. Jastram spoke about the purchasing power of gold as the Golden Constant.
Mike, I can understand why you think it’s price will go down (you’re on the deflation side) but why do you think its value will go up?
Dave, I don’t think Prechter has mentioned $200 for ages. All he says now is “below 680,” the low of last autumn. I don’t expect 200. Even 400 I give a 10-30% chance. I’ll start to buy under 800 and play it by ear.
Also, in the Depression, the fact that the price was fixed at $20 was enough to increase margins because labor, equipment, transportation and fuel costs fell dramatically. Companies with mines that had been economical in the 1920s absolutely cleaned up in the ’30s, even before the fix was raised.
Oh, value can increase as price decreases if the prices of everything else decrease even more.
And Pej, gold’s value is no constant. It is as close as we have to one, but look at how it lost about 85% of its purchasing power (CPI basis — on a stock market basis, it lost 97%, and it probably lost 90% on a real estate basis) from 1980 to 2000.
Also look at how little people were paid 2000 years ago: a Denarius a day was a standard wage in Rome. That is about 4.5 grams of silver, if I recall, worth about $2 today. Yet that was enough to feed a small family back then.
Pej,
Sorry, I think you believe that Gold is an objectively valuable thing. Yet value, just like beauty, is in the eye of the beholder. In other words, value is a function of exchange, and the expression of that function is some kind of contractual assertation of value–i.e. a price. Gold is valued in dollars. Dollars are not valued in Gold. Even the most strident gold bug will argue that its value will go up as expressed in a paper currency. And, in the end, in order to use it, you have to exchange it back into that paper currency.
Another way to think about this is that when you buy stock, you buy a claim on profits. What do you buy with gold? “Value.” Sorry, but that sounds like mysticism to me.
It’s valuable because its physical properties make it the perfect material for a store of value and medium of exchange. We need something to serve as money — if it not gold or fiat script, it might be seashells, cigarettes, vodka, blocks of tea, or a certain kind of sticks (as in England at one point). Gold holds its value through the ages because its physical properties make it simply the best choice.
Paul doesn’t understand the function of a store of value. Value represents labor, or knowledge or food or energy, something that people desire and are willing to exchange assets or services for. A store of value allows savings, and savings are necessary for investment. Without investment, there is no progress. Therefore, the best store of value best fosters progress. Witness a little era called the industrial revolution, when a dollar was a dollar and a pound was a pound, and western civilization made its greatest strides.
Mike,
We’re just going to go in circles. We disagree. Let’s leave it at that.
The one point I will make though in response to your last post is that to credit the gold standard with the rise of the West is specious historically at best. In order to establish that, the first thing you’d have to do is compare it to other societies and cultures that didn’t rise.
If I recall my history, a lot of the dominance of the West had to do with science–you know, the printing press, galileo, invention. Those are not a function of a currency standard. Why would you privilege economics as a determining field over other historical causes, such as most simply, geography, population, etc.?
Paul, don’t put words in my mouth. I didn’t credit the above to the gold standard, though I would say that it certainly helped more than most realize.
Paul, you need to read some of Mises books as well as some history books.
A society cannot evolve if its foundations are rotten, mainly because price, which is the only possible way to measure output and input value, is completely distorted due to inflation of credit and currency.
Rome collapsed into hyperinflation. Hitler raised to power after hyperinflation. Most of the major events in our history find their source into economic reasons.
Pej,
Don’t be patronizing. I know far more history than you might imagine. I also know about economic history and the origins of modern economics in eighteenth century Enlightenment thought–and its relation to a host of other developing sciences, including, might I add, the crisis of both rationalism and empiricism.
“I know more than you” or “I know better than you” has never really been a convincing argument, specially when not followed by any example, explanation, detail. Anyway, I just saying…