Libertarian Alliance Statement on the Financial Crisis: Time to Return to Gold, 4th April 2008

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NEWS RELEASE FROM THE LIBERTARIAN ALLIANCE
In Association with the Libertarian International

Release Date: Friday 4th April 2008
Release Time: Immediate

Contact Details:
Dr Sean Gabb on 07956 472 199 or via sean@libertarian.co.uk

Statement by the Libertarian Alliance on the Financial Crisis: Time to Return to Gold

The Libertarian Alliance, the radical free market and civil liberties policy institute, today issues the following statement on the present run of crises in the financial markets. This statement is prompted by the various calls made for closer regulation of the financial sector.

Libertarian Alliance Director, Dr Sean Gabb, says:

"The world may or may not be on the edge of financial collapse. But the present run of banking crises is only the latest consequence of the ending of the gold standard. Since 1914, and more particularly since 1971, the ability of governments to create unlimited amounts of fiat money has led to bubble after bubble, each one larger than before. Financial markets have become little more than casinos. Immense resources have been diverted into the promotion and management of speculation. All other economic activity has been subordinated to and therefore distorted by such speculation.

"The latest set of problems, brought on by fooling lending on property in America, is not a failure of the free market system. It is ultimately the effect of government monetary policies. The answer does not lie in some new set of regulations, which may prevent the next speculative frenzy. The true answer lies in the return to a more sensible and more honest set of monetary arrangements.

"We mean by this the return to a fully convertible gold standard.

"The Libertarian Alliance calls on the British Government to do the following:

  • To order the conversion of all foreign currency reserves held by in the Bank of England into gold;
  • To sell every reasonably marketable asset of the British State, to convert the proceeds into gold, and to lodge these at the Bank of England;
  • To revalue the Pound, so that all claims on the Bank of England were equal to the gold reserve of the Bank of England:
  • To impose on the Bank of England a legal obligation to pay all claims on it in gold, on demand and without limit:
  • To impose on the Bank of England an obligation to do all within its ability, and nothing other than this, to maintain the new parity between the Pound and gold:
  • To impose on all deposit receivers operating in the United Kingdom (unless explicitly exempted by contract) to pay all claims on them in gold, on demand and without limit;
  • To make the directors or, if they are without the jurisdiction, the most senior management of all deposit receivers in the United Kingdom personally responsible for any failure to make such payments:
  • To impress on any foreign government or central bank that might choose to fix a parity against the Pound that no assistance whatever would be given to maintain such a parity.

"We note that these measures would bring about first a severe devaluation of the Pound, and then a credit squeeze that deflated the value of real and financial assets. But this is what we seem already to be facing. A return to the gold standard would provide us with a stable financial system, and would tend to protect us against future bubbles, and would abolish the need for intrusive financial regulation.

"We also note that a fully convertible gold standard would make all money laundering laws unenforceable, and would severely limit the ability of the British State to finance its activities by the unlimited sale of bonds to the banking system. We would unreservedly welcome both these effects.

"We look forward to a Britain, and preferably a world, in which fiat money has become as unusual as state ownership of telephone networks, and in which paper and electronic money is a rare substitute for gold and silver and copper coins."

END OF COPY

Note(s) to Editors

Dr Sean Gabb is the Director of the Libertarian Alliance. He is the author of ten novels and ten other books, plus about a million words of journalism. He can be contacted for further comment on 07956 472 199 or by email at sean@libertarian.co.uk

His latest novel, The Break, has been nominated for the 2015 Prometheus Award.

His recent book, Freedom of Speech in England: Its Present State and Likely Prospects, is a defence of freedom of speech without exceptions. 

Or his book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, explains how its current ruling class has turned England into a totalitarian police state, and how this ruling class can be overthrown and utterly destroyed.

Or another of his books, Smoking, Class and the Legitimation of Power, explains how the current "war" on smoking has nothing to do with making individuals healthy, but everything to do with enhancing the power of a totalitarian ruling class, and enriching its relevant client groups.

You can see other books by Sean Gabb here.

Extended Contact Details

The Libertarian Alliance is Britain's most radical free market and civil liberties policy institute. It has published over 800 articles, pamphlets and books in support of freedom and against statism in all its forms. These are freely available at http://www.libertarian.co.uk

Our postal address is

The Libertarian Alliance
Suite 35
2 Lansdowne Row
Mayfair
London
W1J 6HL
Tel: 07956 472 199