"If, however, a government refrains from regulations and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich, the worthlessness of the money becomes apparent, and the fraud upon the public can be concealed no longer."
by:
John Maynard Keynes
(1883-1946) British economist
Source:
The Economic Consequences of the Peace, 1920, page 240
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Reader comments about this quote:
Nuts to Keynes who caused the current bank crisis with his cockyed ideas on regulated and controlled markets. He is the acoloyte of Karl Marx.
 -- Nephisto, Holland, PA     
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    A Delusional Socialist.
     -- J Carlton, Clagary     
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    Socialist claptrap.
     -- jim k, austin     
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    I could take this qote one step further. Those who are worthy of the assistance of their brothers and sisters will be taken care of and those who try to control the situation will be left out in the cold.
     -- Me Again     
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    Supply and demand comes to mind. How will the fraud upon the public, concerning the worthlessness of the money, be exposed under any circumstance when the majority chattel believe only what they see and are told from the regulator's mass media (including education systems)?
     -- Mike, Norwalk     
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    Sounds like he was predicting the oil crises of the summer of 2008. The price of essential gasoline got out of reach of all but the rich, money became worthless in comparison to that price, and the fraud of speculators could be concealed no longer. The fact that oil prices went from near $150 this summer to $75 bucks today is scandalous. Some say oil prices was a contributing cause to the foreclosure problem as people had to choose between gasing up and paying the mortgage.
     -- Waffler, Smith, Arkansas     
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    Talk about delusional! Can't you people acknowledge the truth that it has been DE-regulation that has caused all of us to lose our ass to the "free trade" hi-rollers? Even the idiot McCain now, now, now admits that regulation was needed. When will people learn the REAL differences of socialism and capitalism???
     -- Dick, Fort Worth     
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    I'm going to give this 5 stars because Keynes does two things with this quote: he admits that fiat currency is a fraud upon the public, and second, that without regulation the system would self-destruct as it ought to do. Regulation means cornering the market -- it simply determines who should profit from the scam. There is absolutely no way to have a "free market" with a fiat currency -- it absolutely must be 'regulated' to prevent the fraud from being discovered. Dick, there is no capitalism with a fiat currency -- the game is fixed and has been for a long time -- more regulation will simply guarantee more monopoly money for the government and more tribute from you and me.
     -- E Archer, NYC     
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    Dick, you are a little confused, libs usually are. Obama, Waters, Dodd, Pelosi, Biden, Franks, and a host of liberal dems fought any oversite of Fannie and Freddie. Their finger prints are all over this mess. Naturally they blame it all on"The Market", "Wall Street', etc , anybody but themselves. These clowns and their ilk caused this mess.
     -- jim k, austin     
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    Can't you people read the quote?! Or is it just a Pavlovian response to the name Keynes?! Keynes is telling the truth that fiat money system is a fraud.
     -- Tony D., Toronto     
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    Even a clock which is broken is correct twice a day. However, regulation is not the correct fix for the problems caused by government monetary manipulation. The correct fix is to be rid of both. By the way, Keynes was a mathematician, not an economist.
     -- Bryan Morton, Stuart, FL     
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    For any idiot who thinks that capitalism caused this housing and economic debacle, I would first start by reading this - New York Times article from September 30, 1999 80% of the housing and economic debacle liability has been placed on the shoulders of Freddie and Fannie (socialist organizations founded and operating under Congressional oversight). It appears, from the article, that Congress alone wasn't the only one who had interests in the increased loans -- the Clinton Admin were the ones who first making the loans easier. So much for Socialism! Freddie and Fannie could underwrite as many bad loans as they wanted to; after all, what consequences would they suffer from? As a government founded entity, if it was found that they screwed up, the government would simply step in to save its own (which -surprise, surprise - they did! What a shocker!). There is no free-market when an entity can rely on the government bailing them out, because this eradicates the "moral hazard" and "risk" of underwriting bad loans. They can get the higher interest rates without the associated risk! Capitalism my ass!
     -- Logan, Memphis, TN     
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    Clinton Admin did start the practice and 8 years of Bush with 6 years of a Republican Congress continued it. I think we need a more responsive government. Have no fear O is going to make government cool again!
     -- Waffler, Smith, Arkansas     
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    Tony D. first time I have seen you on this site. Stick around and you will find that most responses are Pavlovian inspired. Most would appear to be not free thinking people.
     -- Waffler, Smith, Arkansas     
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    Archer, Tony, and Logan, the thumb down is for what it has done to this nation.
     -- Mike, Norwalk     
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    "Regulation" entails MANY tricks, schemes and devices. The most obvious are the many illusions called "taxes". Illusions because taxes cannot be paid with anything less than silver coins and nobody wants us to pay taxes but our use of their "worthless" money must be ruthlessly regulated to keep the fraud concealed. Postage rates were "fixed". The Post Office could not raise rates so they created the Postal Service to "service." us. Farmers know what it is to get their cows or mares serviced. Then we have endless commemorative stamps and coins that they hope we hide and never use. With about 50 million dropping out of income tax. lotteries and casinos to the rescue. What you hate to give to the Imaginary Revenue Scum is fun to lose in a casino and you can come out ahead. The American Cancer Society was created by the same people who created the income tax at the same time by the same people for the same purpose: REGULATION OF CONSUMPTION. Cancer regulates consumption as abortion does by eliminating consumers. There can be no better way to enhance the ratio of production to consumption than to eliminate non productive consumers such as babies, retirees, cripples and military. IRA plans take more bucks out of circulation than "taxes" do. The perfidious press promotes a "1 cent" tax increase when it is readily a one per cent increase. When an earnings tax went from 1/2 per cent to one per cent, that was a 100 per cent increase. Missouri law permits cities with 700,000 population to have an earnings tax. St Louis has not had half that many for decades but they still have their illusion called "earnings tax." There are countless toxins besides chlorine, fluoride and aspartame to help insure that we expire before we retire. Cows milk causes a disease for every letter of the alphabet. www.notmilk.com. Milk, sugar and tobacco are subsidized---the list goes on. see: www.morpix.biz/x4 www.morpix.biz/x17
     -- Anonymous     
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    WAFFLER HATES SPECULATORS. IF THERE HAD NEVER BEEM SPECULATORS IN CALIFORNIA, WOULD THAT PLACE STILL BE HOSTILE INDIAN TERRITORY?
     -- Dave Wilbur, St. Louis     
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    I find it funny that the Keynes quote is from "The Economic Consequences of the Peace". I wonder what Keynes say about government intervention in our current economy of government induced "perpetual war"?
     -- Bruce M, Huntington Beach CA     
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    Keynesian policy has been an utter failure each and every time it has been implimented. It only increases govenrment control over individuals and business and leaves nations poorer for it.
     -- J Allen, Arlington, Va     
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    According to this quote, the government "must" regulate industry in order to conceal the worthlessness of the currency, as well as the underlying agenda of economic control of the masses. It's manipulation from top to bottom.
     -- J Carlton, Calgary     
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    all a part of the grand plan of "them" to take over "everything" all due to "worthless" money when we should be worshiping some shiny metal from the ground... yeah, that's it, that's the ticket... worship shiny things out of the ground...
     -- Anonymous, Thinking Amierica     
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    If Anonymous was truly 'thinking' he probably could have spelled America correctly. My guess from his simplistic response that he is another content recipient of a dumbed-down 'Amierican' ejoocashun. Perhaps even a simpleton can understand that if one person is given the power to create money out of nothing and another must produce something of value to trade, the one that prints his own money has the unlimited power to buy up everything. SO, to protect the guys with the money press, the government 'regulates' the slow bankruptcy of the nation rather than let it happen quickly unregulated. But the result is the same: indebtedness of all to the guys with the money press.
     -- E Archer, NYC     
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    Archer...Thinking Amierica needs to go back to grazing as "Thinking" is obviously not a strong point there. (Typical Lib Sheep)
     -- J Carlton, Calgary     
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     -- altaf saeem, Lahore      
    When the New York Fed said their system "works (us) only with credit" they essentialy said that no one pays any taxes" and that our misleaders spend nothing since taxes cannot be paid with anything less than silver coins. For them to work all of us with weightless credit and credit exists only in minds, they must control most minds to work all of us with credit, Don't YOU believe that government spends money? Why should they spend money when all of us are risking our lives for weightless credit?
     -- Harold Benson, Hardin, Illinois     
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    A good summary of the monopolistic tendencies of speculative capital, like when the Hunt brothers illegally cornered the silver market.
    I am glad to see so many five stars. There is ridiculous loose talk by the usual right wing extremists, who for the most part have no idea what they are talking about. For example, Bernanke is following a Friedman-based monetary solution, while Congress refused to implement a Keynesian based fiscal stimulus. 60% of the stimulus package was a supply-side style tax cut package.
    We can all see however that the great train wreck of 2008 was caused precisely by deregulation of Wall St. Congress repealed Glass-Steagall which was the great deregulation of the financial markets.
    The idiot yammerings of the far right will never amount to knowledge and barely qualify as speech.
     -- Storm999, LA     
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    Storm, are you suggesting that letting foreign elitist bankers run everything is the way to go? (or was that part of your analogy conveniently left out?) And that being in opposition to this criminal con job is irrational? And there we have the logic of the left...MORE Government and MORE regulations, all so we can keep the Bankers in profits...
     -- J Carlton, Calgary     
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    Sounds like Keynes missed the fundamental class about price responding to supply and demand.

    The only thing Keynes ever said that is correct is that in the long run we are all dead. It's why his economic theories did not give a damn about what we are leaving to future generations. I can't be that callous nor evil to my children and grandchildren.
     -- J. Allen, Arlington, Va     
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    Only for the little kings and queens, does it matter. For the common man and woman, the stealing away of hearth and home, reducing the individual to a continual struggle to meet the need of so much extra burden placed upon the yoke of necessity. It is sickening, the fraud, the fraud, the fraud. !
    The monster called slavery, like the natural law of gravity, eventually brings the kingdom tumbling down. The truly Free Republic has been under siege sense 1865. Barter and trade were the norm for the common folk till 1937, gold and silver were always that of the wealthy. Though it was the silver most common to the working class and landowner. The term land rich and cash poor, does not mean the farmer was poor ! He built himself a fine home also. by the sweet of his brow and the laboring hands that worked for him. All without the wealthy mans gold and silver.
     -- Ronw13, Yachats Or     
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    It is accurate that, paper notes when presented as money, is a fraud that will eventually be exposed. It is false (making the entire statement false) that "If, however, a government refrains from regulations and allows matters to take their course, essential commodities soon attain a level of price out of the reach of all but the rich" It has been exposed over and over again, when government interferes with the free market by regulation and otherwise, the entire market deteriorates.
     -- Mike, Norwalk     
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    Indeed, proverbial Pavlov...
     -- Iyah     
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    It's not a bug but a feature.  ;-)
     -- E Archer, NYC     
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    Think Venezuela — same thing.  A rich and prosperous country brought to its knees via 'socialist democracy' — otherwise known as 'voting for money.'

    The fatal flaw with an interest-bearing fiat currency is that the 'money' you exchange for labor and capital is a debt with rent due.  It's a leaky vase, eventually draining to nothing if you don't pass on the hot potato before it's worthless.

    Essentially we are renting the poker chips needed to play the game, and the odds are fixed in favor of the house.

    And all property is taxed, gold is forbidden at the cash register — in fact, real money like gold and silver coins are not permitted for purchasing of goods.  The entire economic system is designed to increase the level of debt obligations exponentially — the more you produce, the higher the rate of taxation. 

    Ultimately a fiat currency's value is always approaching zero.  If the issuers of the currency were indeed wise and incorruptible, there could be a government that would not need to tax the people but merely issue the currency they needed interest-free. 

    But power corrupts, and absolute power corrupts absolutely, and there is no other absolute power than the power to create money by simple decree.

    Until we throw off this iniquitous system, there can be no real prosperity, justice, freedom, independence.  The goal is to keep people in crisis and in fear.  THAT is the currency of governments. 


     -- E Archer, NYC     
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