Tuesday, 16 November 2010

PUBLIC LECTURE TONIGHT: The role of gold in the monetary system [updated]

Reminding you all about tonight’s public lecture in Auckland, to which you’re all welcome.

PUBLIC LECTURE: The role of gold in the monetary system
With special overseas guest - Professor Antal Fekete

_Quote Gold is the leash on which the frugal must keep the
prodigal. It was this leash from which the banks and the
government wanted to escape when they first
sabotaged and then junked the gold standard…
One could say that since taxation and treasury departments
were invented, a great tug-of-war has been going on
between the frugal and the prodigal. The latter is the consortium of banks and government. The former is the saving public…

- Antal Fekete

    President of the World Bank Robert Zoellick wrote this week that a new international monetary system should  "consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values."  And yet many, including Paul Krugman, still see gold as a “barbarous relic” that has no place in a modern society.
    Tonight, the University Economics Group is pleased to present a seminar by Professor Antal Fekete, a proponent of the gold standard and critic of the current monetary system.
    With talk of currency wars and continued financial instability dominating the headlines, there has never been a more important time to examine the foundations of the current monetary system. This is a unique opportunity to hear an alternative view about what makes money ‘sound’ and ‘unsound’, as well as the historical (and possibly future) role of gold as the anchor in the monetary system.
    Born in Hungary, Professor Fekete is a retired Professor of Mathematics and Statistics from the Memorial University of Newfoundland in Canada who now devotes his time to writing and lecturing on fiscal and monetary reform with special regard to the role of gold and silver in the monetary system. He has taught at universities around the world including Columbia and Princeton.
    Date: Tonight, Tuesday 16 November
    Time: 7:00pm
    Location: Engineering School, 20 Symonds St, Room 3402
                             UPDATE: There’s been a late change of room to a bigger venue.
                             We’re now in “Case Room 4,” Level O, Owen G. Glenn Business School
                                        (NB:You can park underneath the Business School on Grafton Rd.)
Don't miss this opportunity to hear Professor Fekete speak about this important topic during his brief visit to New Zealand.
There’s no cost for an evening that could not be more topical.
All welcome!
And don't forget to invite your friends.


  1. If at all possible, could consideration be given to videoing this presentation? Get it on a disc & I will arrange editing and hosting.

  2. Last night, Professor Antal Fekete laments the fact that brilliant people (ie, speculators) who have more knowledge about financial economics are not the same ones that advise our lawmakers, because they're better than career bureaucrats who know very little or nothing about it. Those people that he mentioned are the inventors/designers of derivative instruments. So, I take it that Prof Fekete is still grounded in his belief about the mathematical nature of economics because of his endorsement of the derivative instruments' designers.

    Prof. Fekete dismissed the theory of money because it is a linear theory where the real world it is non-linear, which I agree with him completely. Also Prof. Fekete does support the work of Austrians as he mentioned it, and they (Austrians) do dismissed mathematical economics, but then Prof. Fekete himself (from what I read about his background - statistics, and his endorsement of derivative instruments' designers) like mathematical economics (either directly or indirectly). This is based on his quote about the instability of ask-bid price of securities (aka : non-equilibrium).

    Does this mean that Austrians must re-evaluate their out of hand position in the dismissal of mathematical economics? If not, then why not?

  3. Did you notice any mathematics last night, FF?

    PS: Professor Fekete is right that one of the most destructive aspects of the present system is that, instead of applying their enormous intelligence to production, the world's most brilliant people have been sucked into propping up and exploiting a bankrupt system.


  4. It was a stimulating & provocative lecture from a world class economist. My thanks to Julian and the AU Economics Group for putting it on.

    His thesis was 'the end is nigh' for the current fiat monetary system. I'm wary of such arguments but his was very convincing.

    His argument goes: while 'the barbarous relic', gold, is considered defunct, outdated and quaint by the mandarins of the current fiat monetary system, it does in fact underpin it in the form of gold futures. Gold futures are the real world backing for - and exit from - the paper shuffling shell game (and/or fraud) that is the bond market. The bond market - read: government debt market - has been the basis of our monetary system since 1971, and is the largest market in the world. 90 trillion.

    He argued that gold futures prices - traditionally always higher than the spot price - have steadily been falling to be closer to the spot price since 1971. They are now dipping below the spot price for periods. What this signals is that above ground supply is being held onto - horded - and those with it are not overly willing to exchange it for paper money.

    This means - to the bond market - that gold futures contracts may well not be fulfilled and so can't be counted on. So the only exit into hard currency from the paper shuffle is closed off. And that's game over for the bond market. Which is game over for paper money - and the numbers of it in your bank account. His view is that, at that point, no holder of gold will accept *any* quantity of paper in exchange for their gold.

    Can anyone point out any literature that explains how the bond market and gold futures are connected?


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