{"id":32700,"date":"2018-03-23T06:04:27","date_gmt":"2018-03-23T11:04:27","guid":{"rendered":"http:\/\/olduvai.ca\/?p=32700"},"modified":"2018-03-23T06:04:38","modified_gmt":"2018-03-23T11:04:38","slug":"consequences-of-replacing-the-gold-standard-with-the-phd-standard","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=32700","title":{"rendered":"Consequences of Replacing the Gold Standard with the PhD Standard"},"content":{"rendered":"<header>\n<div class=\"story-header-area\">\n<div>\n<div class=\"story-header\">\n<h3><a href=\"https:\/\/www.themaven.net\/mishtalk\/economics\/consequences-of-replacing-the-gold-standard-with-the-phd-standard-iNN6atoFakG_cW_lmTqmgw\">Consequences of Replacing the Gold Standard with the PhD Standard<\/a><\/h3>\n<\/div>\n<div class=\"photo\">\n<div class=\"renderable configurableRenderable__3Z77r\">\n<figure class=\"image\">\n<div class=\"picture__28iqY picture loaded\">\n<div class=\"observable\"><img decoding=\"async\" class=\"\" title=\"\" src=\"https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2F6e6JNVgWbE26YheL32pdkQ\" srcset=\"https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2F6e6JNVgWbE26YheL32pdkQ?w=662&amp;q=75&amp;h=430.75342465753425&amp;auto=format&amp;fit=crop 1x, https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2F6e6JNVgWbE26YheL32pdkQ?w=993&amp;q=75&amp;h=646&amp;auto=format&amp;fit=crop 1.5x, https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2F6e6JNVgWbE26YheL32pdkQ?w=1324&amp;q=75&amp;h=862&amp;auto=format&amp;fit=crop 2x, https:\/\/imageproxy.themaven.net\/https%3A%2F%2Fs3-us-west-2.amazonaws.com%2Fmaven-user-photos%2Fmishtalk%2Feconomics%2FzmfATcSa4EegwR7v_znq6Q%2F6e6JNVgWbE26YheL32pdkQ?w=1986&amp;q=75&amp;h=1292&amp;auto=format&amp;fit=crop 3x \" alt=\"\" width=\"662\" height=\"430.75342465753425\" \/><\/div>\n<\/div><figcaption><\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"post-summary\">\n<div class=\"publish-info\">\n<div class=\"authorCard authorCard__SfNCX\">\n<div class=\"picture__28iqY false picture loaded\"><\/div>\n<\/div>\n<\/div>\n<div class=\"toolsMenu__1zgs3 toolsMenu\"><\/div>\n<\/div>\n<section class=\"deck\">In 2011, Jim Grant chastised the Fed about replacing the Gold Standard with the PhD Standard. Our &#8220;reward&#8221; is coming up.<\/p>\n<\/section>\n<\/div>\n<\/header>\n<article class=\"story-body clearfix\">\n<div class=\"body\">\n<div class=\"markdown\">\n<div>\n<div>\n<p>Here is the pertinent video clip of James Grant.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"renderable configurableRenderable__3Z77r\"><iframe loading=\"lazy\" id=\"embeddedehUJgfr-a0Kp6_1eHftXXQ-1\" title=\"YouTube video player\" src=\"https:\/\/www.youtube.com\/embed\/Qwj5fx1di1I?autoplay=0&amp;enablejsapi=1&amp;origin=https%3A%2F%2Fwww.themaven.net&amp;widgetid=1\" width=\"100%\" height=\"360\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\" data-mce-fragment=\"1\"><\/iframe><\/div>\n<div class=\"observable\">\n<div id=\"in-message-2\" class=\"adUnit__3ArIX CONTENT_BREAK_DT ad-unit\">&#8220;The 2007-2009 real estate debacle is the monetary equivalent of a chain reaction on a foggy California freeway. The trouble with our monetary mandarins is they [the Fed] believe impossible things. They have persuaded themselves that the central bank can pick the interest rate that will cause the GDP to grow, payrolls to expand, and prices to levitate by just two percent a year, as they measure it. It is impossible as experience and common sense attest. Yet, they hold it to be true. &#8230; <em>William F. Buckley famously and persuasively said that he would rather be governed by the first 400 names in the Boston phone directory than by the faculty of Harvard. Unaccountably, this Congress has entrusted the value of the dollar that we own, that we transact to an independent committee dominated by monetary scholars. In one short generation we have moved to the PhD standard from the gold standard.<\/em>&#8220;<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p>Grant is correct. The result has been a series of economic bubbles with increasing amplitudes over time.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p>The Alps Precious Metals Group commented on Grant in its <a href=\"http:\/\/www.alpspmg.com\/wp-content\/uploads\/2018\/03\/Alps-March-2018-Update-1.pdf\" target=\"_blank\" rel=\"noopener\">latest monthly letter<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p><strong>We&#8217;re Smarter Now<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<div>\n<div>\n<p>\u200b&gt;Jim Grant is spot-on in his description of what has transpired: \u201cWe have replaced the Gold Standard with the PhD Standard\u201d.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"markdown\">\n<blockquote><p>Consistent with our post-Modern zeitgeist, we have traded the wisdom of old for the cockiness of what I call the \u201cWe\u2019re much smarter now\u201d syndrome. Hence the propensity of Western governments over the last 50 years to deplete their supplies of the \u201cbarbarous relic\u201d as Gold\u2019s time \u201chas passed\u201d.<\/p>\n<p>Tulips, South Sea and Florida Real Estate ventures, Roaring \u201820\u2019s stocks bought at 10x leverage as a norm, as well as innumerable investment ideas since 1971 when Nixon closed the Gold window are all examples of investments based solely on confidence, the ebb and flow of which resulted in volatile \u201crisk on and off\u201d episodes.<\/p>\n<p>The last material loss of confidence in the system was in 2008\/early 2009; which resulted in a series of experiments whose 9-year anniversary is upon us.<\/p>\n<p>What happens when Common Knowledge changes and moves over to something else that \u201ceveryone knows that everyone knows\u201d? Not unlike the ferocious tornados which rip across the American continent when winter turns to spring, the change may be rapid and violent.<\/p><\/blockquote>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<\/div>\n<\/div>\n<\/article>\n","protected":false},"excerpt":{"rendered":"<p>Consequences of Replacing the Gold Standard with the PhD Standard In 2011, Jim Grant chastised the Fed about replacing the Gold Standard with the PhD Standard. Our &#8220;reward&#8221; is coming up. Here is the pertinent video clip of James Grant. &#8220;The 2007-2009 real estate debacle is the monetary equivalent of a chain reaction on a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,1183,9301,431,9300,14648,13390,534,19412,3650],"class_list":["post-32700","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-gold-standard","tag-interest-rate-observer","tag-interest-rates","tag-james-grant","tag-michael-shedlock","tag-mishtalk","tag-monetary-policy","tag-phd-standard","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32700","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32700"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32700\/revisions"}],"predecessor-version":[{"id":32701,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/32700\/revisions\/32701"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}