Gold does not cause deflation

A cornerstone of the libertarian position is having a gold standard. In the 2012 GOP primary Ron Paul championed this position. In 2016, Cruz, Carson, and Rand Paul have all suggested that US adopt the gold standard. A recent piece in the NY Time tries to show how Cruz is wrong for supporting the gold standard.

The writer of the article points to the deflationary spiral as to why we cannot have a gold standard.  The deflationary spiral says that if an economy enters into a recession then layoffs happen. Layoffs mean more people have less money which reduces demand. Less demand means lower prices. As prices for products fall the companies who produce the products will go out of business, starting the process all over again. This can be seen in the image below. Blog post 2

The theory also argues, to prevent this from occurring the government must be able to stimulate the economy with large infusions of money.  A government cannot do this with a gold standard because the amount of money that the government can put into the economy is limited to the amount of money the government takes in taxes. Without a gold standard the government can print dollar bills to infuse into the economy.

The writer of this article cites the great depression as proof of this occurrence. The problem for the writer of this article, is that this did not cause the great depression and the deflationary cycle does not exist.

The problem with the deflationary cycle is it ignores that falling prices will increase demand. As we see above, the falling demand has a downward effect on prices; however what the illustration leaves out is we also see that falling prices will put upward pressure on demand. While there may be some reduction in demand it is not a free fall. Once prices hit a point where people will buy the product for the price offered, then demand will stabilize.

The writer attempts to solve this problem by pointing out that once prices start to fall no one will buy anything. The writer says, “After all, if you believe that the price of, say, shirts will continue to drop, you’ll delay splurging on haberdashery.” But people splurge on things all the time that will drop in price later. Everyone knows that the new iPhone will cost less in 6 months than it will the day it comes out, yet tens of thousands line up to buy iPhones at the full price every day. Some people even sell the iPhone for thousands more online. That means that someone is paying thousands of dollars more on a product then if they bought it in store, they just have to wait a few days to get it.

Also some products are needs, not wants. If I need some milk I will buy it from the store even if it will be cheaper next week. The writer and those who support this theory overlook that people will buy what they can afford when they want it. No one will go hungry today to save a penny tomorrow.

The writer also says that gold is scarce and that the amount of gold is limited, while the number of people increase. While it is true that there is currently a finite amount of gold on earth, gold has kept up with the population. For the past 50 years, there has been roughly 42 grams of gold per person on Earth .Since 1959 gold production has risen by a factor of 2.1 and the population by 2.2. Increases in technology has allowed for more fine gold to be found. There is nothing to suggest that this will not continue. Scientists are already looking to mining asteroids for gold and other sources have been looked at, as well.

The writer’s last point against the gold standard is that it caused, or at least prolonged the great depression. The writer points out that the anti gold standard FDR took office in March of ’33 and the recovery took off. This is not true. For the rest of the 1930’s Americans suffered through a depression and in 1938 the unemployment rate got worse not better. Are we really to expect that FDR’s policies worked so well we remained in a depression that got worse, not better, for another 13 years?

Also the deflationary spiral cannot explain the  depression that occurs in America from 1920-1921. The depression started with a higher unemployment rate than what the great depression started with in 1929. The government did nothing in that depression and the economy recovered quickly. If the deflationary spiral is real, why did this not occur in this depression as well?

What lifted America out of the great depression after WWII was the fact that the rest of the world was in shambles. All of Europe, Japan, China, North African and parts of Russia were still smoldering from the bombs that leveled cities. America made it through the conflict without a bomb dropped on the homeland. While the rest of the world tried to rebuild, Americans were able to sell their products around the world to countries who no longer had the infrastructure to build their own.

The gold standard was one of the reasons Americans was able to achieve the wealth we have achieved. The gold standard limits government, by preventing the government from just printing new money. If we want to rein in the government, impose a gold standard. It will force to government to limit its budget to what it can take in taxes.

What About Yemen

President Obama has taken the past week to push for Syrian refugees to come to the US. Obama plans to let in a first round of 10,000 refugees. Republicans have opposed this, but Obama has fired back by trying to make a moral appeal to the Americans for taking in refugees. Obama tells us that we need “American leadership” to set an example for the rest of the world. However, our president does not deserve the moral soap box he is preaching from.

Yemen is located on the southeast corner of the Arabian Peninsula, directly south of Saudi Arabia. Yemen is the poorest country in the Middle East.  Yemen does not have oil reserves or any other substantial sources of natural wealth. Yemen has a population of around 26 million.

Yemen has also been host to an American Drone war since 2004. The drone strikes have increased since Obama took office. Almost 2,500 have died in drone strikes under Obama; many of those are civilians. The target for the drone strikes is Al Qaeda, but Al Qaeda is growing stronger and taking more territory.  Recent leaks have also raised questions on the legality of the drone war.

Over a decade of the drone war has also taken a massive psychological toll on the people of Yemen. Research has found that 92% of Yemenis are suffering from PTSD. Children are the most heavily effected demographic. Some of the children are afraid of small electronic devices that sound similar to the drones. Women are even experiencing miscarriages, because of the fear and anxiety caused by drones.

In early 2015, the leader of Yemen fled after fighting rebellions for years. This caused the country to fracture with the Shi’ite Houthis, Sunni loyalist to the old government, and Sunni Al Qaeda all holding some territory in the country.  The Saudis began a war against the Houthis and have been supporting their Sunni enemies. The Saudi war has been brutal on the civilian population of Yemen. The Saudis have bombed weddings and hospitals. There are reports of the Saudis using illegal cluster bombs. The Saudis have also blockaded Yemen, which means that there are many starving in a country that imports 90% of its food.

Without the US, it would not be possible for the Saudis to have this war. The US provided 90 billion in weapons to Saudi Arabia between 2011 and 2015. The US is providing Saudi Arabia with logistical support and intelligence.  The US is also refueling Saudi planes while they conduct bombing runs over Yemen.

The Saudis have kept reporters from entering Yemen. One reporter was able to smuggle himself into Yemen. He reported that Yemen “already looks like Syria after 5 years”.

President Obama will continue to stand on his moral soap box and wag his finger at the republicans, but if he really cared about those in the Middle East, who are poor, starving, and fleeing war, then he would end the drone war and stop US support for the Saudi war against the people of Yemen.

Ted Talks Syria

Ted Cruz appeared on The Glenn Beck Program yesterday to discuss Syria. From  8:00 to 10:00 in the interview Beck and Cruz discuss Cruz’s plan for dealing with ISIS.  Cruz’s plan is first bomb ISIS, then arm the Kurds to defeat ISIS. Beck and Cruz agree to the effectiveness of this plan; however this plan will lead to more terrorism, more instability in the Middle East and more innocent lives lost.

Cruz believes this strategy will work because it worked in the first Iraq war. Cruz points to the long period of heavy bombing then the ground force coming in to “mop up” the army. Cruz believes we can use our Air Force and then the Kurds will “mop up” ISIS. What Cruz does not realize is the US has been deploying this policy in Afghanistan, Iraq war 2, Libya and Syria.

In Afghanistan we bombed Al Qaeda and the Taliban.  We then sent in troops and trained an army for Afghanistan. Now the Taliban are reestablishing themselves as a major force in Afghanistan. ISIS recruits are coming from Afghanistan to Syria. Al Qaeda still exists in Afghanistan. We continue to have to bomb Afghanistan over a decade after starting this war.

In Iraq we overthrew the government with a combination of our Air Force and Army. At one point the US had over 150,000 ground troops in Iraq. The US then trained and armed and Iraqi army.  Today in Iraq ISIS holds a large part of the country spanning the Iraq-Syria border. ISIS has accomplished this by taking the weapons that the US government had given the Iraqi Army. The Kurds also hold area in the North. The United States continue to wage air war in Iraq to stop the Sunni terrorist groups. Iraq has now turned to Iran and Russia for help defeating ISIS.

In Libya the US and our NATO allies used air power to destroy the army of Muammar Gaddafi. We then armed a group of rebels that overthrow the Libyan government. Now the country is in shambles. Rival factions control different areas of the country, ISIS even hold territory in Libya.  A refugee crisis also exists in Libya and those refugees are washing up dead.

Last year in Syria we began to bomb different Sunni terrorist groups and arm others. Our bombings have been focused on ISIS. The bombing have not had much affect as ISIS still hold significant amounts of land. ISIS continues to grow and is being funded by selling oil to our ally Turkey. The Kurds hold area in the North of Syria, but are under fire from Turkey.

This has been the result of Cruz’s plan in the rest of the Middle East and North Africa. It is a disaster that has led to the mess we face today.

Increased bombing in Syria will lead to more of the same. As we have seen in the past US bombs have been the best recruiting tools for terrorist. ISIS holds major cities with innocent men, women and children being held there by ISIS.  It will be impossible to bomb ISIS with out others dying with them.  Bombing innocent people leads to more people becoming radicalized, leading to more terror.

Continuing or increasing America’s air war in Syria we also risk international disaster with Russia. With both countries running an air war in a country the size of Missouri the risk of accidents exists. Also with US special forces on the ground and possible Russian troops we run the risk of bombing each others ground forces.

Arming the Kurds is not as simple as Cruz makes it appear either. In the past, the groups we have armed have then used those weapons against our interests in the region or given the weapons to terrorist groups. Weapons given to Libyan rebels are now in the hands of jihadist in Syria. Also arming the Kurds might not go over so well with our ally Turkey, who has warned the US against doing this. There is also the problem that the Kurds may not want to destroy ISIS. So far the Kurds have fought ISIS over cities with large Kurdish populations, but have made no moves against the ISIS capital.

The reason this strategy worked in Iraq war 1 is we were facing an army. All the operations since have been against terrorism. Terrorism differs from an army because it is an idea. You cannot bomb an idea to get rid of it and you cannot arm the enemies of an idea to get rid of it. ISIS groups exist in countries across the Middle East and Africa. Are we going to bomb all of these counties to eliminate ISIS there as well? People who claim to be members of ISIS live in a number of Western counties. Are we going to drop bombs in Canada and France? We cannot fight terror this way.

What to do about Syria

The Syrian refugee crisis has caused a lot of debate recently. On Capital Hill, the left is for letting them in and those on the right are trying their best to prevent this. Rand Paul recently introduced a bill that will make it much more difficult for refugees to come to the US.

People who want to prevent refugees from entering this country will argue that it is too great of a risk to let the refugees in. They will point to Paris and say that will happen here. They will say that they pay taxes for the US government to protect us and this will decrease how secure we are. They will also argue that our country is already broke and borrowing money. They will point to homeless vets and say “we must care for them first”.

Those on the left will argue that blocking the refugees is Islamicphobic. They will say that we have a duty to let the refugees. They will say that the refugees will die if our government does not let them into our country, and to let them die is unAmerican.

And everyone is right about somethings…

The USA does have a duty to the refugees as we are responsible for causing the crisis. We destabilized the region and armed the terrorists. It is also a bad policy to deny people entry into the country based on their religion. There is also an increased chance of a terrorist using the refugee program to enter the country.  Syria is a country that we have been bombing for a year. It is very possible that an attack could occur as a result of blow back from our bombings. It is also true that there are poor, starving and homeless in the United States today and it is the duty of the country to take care of citizens and tax payers first.

So what could be done…

Rand could introduce a bill that would not allow refugees from countries that we have current military operations in and also remove any cap on the number of refugees. Obama would then have to stop the bombings Syria to let Syrian refugees come into America. Let’s plug the hole before bailing out the water.

Ending the bombings will stop the flood of new refugees. It is our bombs that are creating the conditions for so many of these people to become refugees. We can take 100,000 refugees or 1,000,000, but there are too many people in the Middle East to come to America. In order to help the Syrians, lets stop creating the conditions in which they become refugees.

The bill could also help to shed light on the vast amount of American military operations that are currently ongoing. Most Americans are aware of the military operations in Syria and Iraq, but few remember that the US is still fighting the Taliban in Afghanistan. American is once again bombing Libya, some American missed the 2011 war in that country. This could also help to expose the military operations in Somalia, Yemen, Pakistan, and across Africa.

The problem for the Syrian people  is not that they do not live in the West. Their problem is not that they do not receive welfare from Americans. Their problem is their homes have been destroyed. Their problem is their country is being torn apart by multiple militias. Their problem is America and America’s allies involvement in their country.

Negative Rights and Positive Rights

Rand Paul recently stated,

“Government was instituted among men to protect your rights, not to create rights. So you don’t have a right to a chair, you don’t have a right to shoes, you don’t have a right to pants, you don’t have a right to health care, you don’t have a right to water — you have a right to be free.”

You can watch the video here.  In response to the video, this article ran on  The article attacks Rand’s philosophy on rights. The writer has some misunderstanding about Rand’s position that I will clarify.

The writer spent the bulk of the article attacking Rand’s view on rights. The writer starts out by agreeing with Rand that we do have a right to life, liberty and the pursuit of happiness. Then the writer goes on to say that the Declaration of Independence does not limit us to these three rights, so there are more and the three listed are just examples. The writer does not offer any evidence for this claim and just makes the one assertion. This assertion is simply untrue. The ideas of life, liberty and the pursuit of happiness as being rights is based off of John Locke’s philosophy that was limited to just those three rights.

For the next few paragraphs the writer goes on aimlessly about rights. So I will try to provide some clarification on rights. Rand Paul subscribes to the natural right theory. This means that humans have certain rights that they receive for being human or from their creator.  Paul believes that no one can ever morally take any of these rights away from someone.

The other theory is legal positivism. This theory states that rights come from government and are given to the people. In this theory, the government is granted the power  to take and give rights as they believe is moral.

Natural rights are also negative rights. Negative rights say that you have the right to be able to do something. Positive rights differ, as positive rights give you the right to something. We will use pants as an example.

If I have a negative right to pants, then no one can prevent me from owning pants. If I do not have a negative right to pants, then I am unable to own pants. If I have a positive right to pants, then someone must provide pants to me when I do not have my own. This also implies the moral authority to take pants away from others if you do not have enough of your own.

What the writer failed to understand is that Rand was saying you do not have the moral authority to take pants, chairs, shoes, healthcare or water for others if you do not have enough. However you do have the moral authority to own as many of these things as you would like.

The writer seems unable to comprehend how one can have the right to own something, but not the right to take it. The writer claims without a (positive) right to water, then people will die. The writer assumes that in order for people to have water they must have the right to take it from others. Rand’s position is that you have the right to own water, but you cannot take it from someone else. Water, like pants, can only be acquired through voluntary interactions.

Next the writer moves to critiquing Rand on his criticisms of Bernie Sanders for being a socialist. The writer uses a joke to show their belief that Rand is absurd for making these arguments. Bernie Sanders’ political identity is a democratic socialist. Pol Pot, Mao and Stalin were all the dictatorial leaders of socialist societies, or communists.  Rand’s argument against Bernie is that he is a socialist like the others only differing in who should rule, the majority or a single leader. Rand’s claim is that it does not matter who the leader is, all socialism leads to the atrocities of the communist regimes.

The writer next says that Rand does not believe in laws. This likely comes from the confusion about rights that I addressed earlier. Rand’s position on laws and the role of government is that they are meant to protect people’s negative rights from other people. Rand is in favor of police stopping theft, but not in favor of jailing people for smoking pot.

The writer then quotes Hobbs to prove the need for government. The writer claims that Hobbs is correct in his position because he thought of it a century before the founding fathers. Completely ignoring  many of the other philosophies about the purpose and role of government. Locke for example, disagreed with Hobbs on the role of government and wrote at roughly the same time.

Where rights come from and what form they take is very important. In either view rights determine the role and scope of government. A government that gives rights to people can always take those rights away. Millions have been slaughtered by their own governments that asserted they had the right to do so. Governments that are restricted by right given to people from their nature do not have this same brutal record.  To ensure peace and liberty for all, government must be restricted in what it can do.



Jihadists are Environmental Terrorists

Bernie Sanders stood by his statement from Saturdays DNC debate that global warming is caused by terrorism. You can watch him in this video.  Bernie’s argument is that global warming fuels terrorism and even uses it to explain the Paris terrorism attack.  Most might simply dismiss this as Bernie saying something crazy, but this argument is catching on. Even  Hillary and O’Malley have agreed that terrorism is in some part caused by global warming.

The first problem with this argument is that Bernie is applying possible future events to a current crisis. He says that global warming is “going to” cause droughts. Not that this has already happened and that people have already been relocated, but this might happen. He then takes that idea and attributes it to why the attacks in Paris happened.  For Bernie’s argument to explain what happened in Paris it would mean that drought would have to have already been so significant in Syria to cause people to relocate to cities and become radicalized. Even Bernie does not claim this occurred.

Now let’s look at how Bernie claims people become radicalized. Bernie argues that after farms close down and people will move to cities and not have jobs. Bernie’s argument is dehumanizing to Muslims, as it claims Muslims become jihadists due to boredom and unemployment. This argument also overlooks the fact that most of the wealth in the counties that jihadists come from are oil rich countries.  Moving away from oil will cause more unemployment and loss of wealth in these countries than global warming.

Bernie also claims that drought will lead to border conflicts and land battles in the future. However border conflicts and land battles are already occurring. Just look at Syria where Al Qaeda controls some area, the government controls some, ISIS has most of the east of the country and the Kurds have a growing land mass in the North. None of this was caused by global warming. It was caused by our bombs destabilizing the region and leading to mass migration.

This argument by Bernie shows how he is no better than any other candidate. He is just another hack pandering for votes. He knows full well that he cannot blame today’s terrorism on tomorrow’s global warming. He makes this argument because he wants to score points on the left and because he is too afraid to speak truth to power.

If Bernie were a honest man, than he would point to the US bombs that fall, not on terrorist, but on women and children. It’s well known that the US intervention in the Middle East is the best recruitment tool the terrorists use. Bombing of wedding and the strafing of doctors and patients as the flee from a hospital will radicalize far more people than a dry spring ever will.

It’s time to take a honest look at what has occurred in the Middle East since we started out interventions there. No one can honestly argue we are safer today than we were back then. We have made a mess of things and every “fix” we have tried only made matters worse.

Signed, Economic Reality

Blog post 1

I saw this meme circling on facebook and thought it would be an excellent place to start for Kyle’s Fyles. In one sentence we get two of the most false and destructive arguments we hear from those on the left. This post makes the argument that we have a consumer based economy, and that a raise in the minimum wage will stimulate that as it will put money in the hands of more workers.

Lets start with the consumer based economy myth. Today mainstream economist push that our economy is consumer driven. They claim that what causes an economy to grow is spending, especially on consumer goods. They often use the example of the great depression and claim that because the people could not buy anything the economy stayed bad for so long, and it was only FDR and his work and welfare programs saved us from this danger
produced by the free market.

People who make this claim always overlook the fact that you have to produce before you consume. You cannot have something that does not exist. This means that not everyone can always be spending all of their money on consumption because someone must be saving enough capital to build inventory to be sold to the consumers later.

The belief that we have a consumer driven economy also ignores how an economy grows. In order to grow an economy you need savings. When people save they can invest. Investment leads to improvements in quality of life for everyone. If you want to design a new drug to cure diabetes no one can consume the drugs until 10-20 years after it was thought of. Someone needs to have saved enough  wealth and be willing to lead it to other so they can spend 10-20 not producing, but on testing and development. If everyone spends everything, how can this happen?

This meme also says the minimum wage in nearly a decade. This is a lie. On a state a city level minimum wages have been raising all over the country.

Even if we did have a consumer driven economy raising the minimum wage will not help. Minimum wage laws leads to people losing jobs, more automation and less jobs being created. It also takes out more rungs at the bottom of the ladder making it harder for people to climb up. Remember the minimum wage makes it illegal for you to sell your labor for less than the minimum wage. With a minimum wage you have to convince an employer you can produce at least the minimum wage, at a $15 minimum wage its going to be hard for an employer to justify taking a chance on a 16 year old high school student.

Real wealth is created by innovation and investment. We need to save so other can borrow that money to research and develop new technologies that better everyone’s life.

Hello Everyone!

My name is Kyle and this is my blog Kyle’s Fyles.

Kyle’s Fyles is a blog to promote the libertarian message. I will do this by refuting and debunking the false claims and fallacies that we libertarians face everyday while defending our positions.  Each day I will pick an article, meme or video and refute it. If you have anything that you would like help refuting email me a link at

If you like what I have to say please share it around. Lets move towards a more free and prosperous society together!