Benjamin Graham on Commodity Based Reserve Currency

[Guest Broxburnboy]

For those inclined to reflect on the state of Global Currencies over the holidays:

 

Benjamin Graham's proposal:

 

http://www.brettonwoodsii.org/wiki/commodity-reserve

 

Any other light reading out there?

 

Cheers and Merry Christmas (or any other occasion you wish to celebrate by murdering a turkey)

BBB

[Guest ValueCarl]

I guess one who is inclined to ponder the principles of "stored up value" behind currencies, tied minimally to the US in this case, then one shouldn't ignore what Warren's father, Mr. Howard Buffett, believed was the proper approach for managing this "conundrum" at the same time Mr. Graham's ideas are re-visited!

 

It's a sad state of affairs when thinking about what he said in the 1950's whilst comparing his fears and concerns to his fellow politicians today.

 

http://mises.org/story/3745

 

 

[woodstove]

Thanks for the link to bretonwoodsii.org website.  I've long had an interest in Ben Graham's commodity based currency ideas.  Nice to see there is discussion in a contemporary context.  Some good reading indeed.

[mpauls]

Here is a site that I believe was put up by Irving Kahn specifically for that book. 

 

http://www.bufferstock.org/frames.htm

http://www.bufferstock.org/wcwcbook.htm

[Guest ValueCarl]

How is it that, men who have attained great success at exploiting the inefficiencies of markets as a result of man's fallibilities somehow believe that "virtue" will ever play a role in establishing "fair rules" to govern mens' actions?

 

Are not Mr. Graham's own ideas on IV, subjective? Intrinsic value to me is vastly different from Warren Buffett, for example, only to be differentiated by our own levels of "fear or greed" inherent in our own DNA or propensity to calculate. 

 

Who might be the GREAT DECIDER of prices tied to "a" basket of commodities? What is the IV of a kernel of corn, or barrel of oil, or any other commodity for that matter, at any snap shot in time and according to WHOM, and to what level of accuracy?

 

Indeed, if this measuring stick or "basket" is designed to eliminate inflationary and deflationary forces, other than incumbent underlying owners' of established " global resources," who would be benefit most from a nirvana like system being envisioned here?

 

Now, I realize there are legacy owners and family dynasties tied to the existing fiat banking system which continues to give their descendants dominion over the world's resources as a result of their long standing power, influence and control, but what would change by "changing the rules" in the middle of the game?

 

If the monetary system were always stable, wouldn't the value of underlying businesses, by default, always be "efficient" too?

 

How could an aggressive financial steward ever attain "new" wealth via usurping or gaining control of valuable businesses often subject to the "vagaries" of "Mr. Market," quite frankly, a dastardly scoundrel or sinner in his CORE? 

 

Both systems (fiat or defined commodities, singular or multiple), from this minds eye, will continue subjecting the majority of the world's population to be the serfs they have always been subject to similar masters by certain gene pools. Rather than the 80:20 rule where 20 percent of the fools do eighty percent of the work, in the world of global finance, maybe it's 99:1; where one percent of the world's wealthiest have dominion over the balance 99 percent!

 

Although I know I can't beat the BANKSTERS at their game, at least the current "INEFFICIENT" system of unchecked fiat currency gives me a one in a BILLION chance to become Warren E. Buffett.  :-\ 

 

Other than that, Edison, Graham and a host of others, even Warren picking up on Keynes' "sovereignty" concern with the advent of "trade certs" for import and export accounting (also ignored by the powerful pundits circa 2002/2003), are gifted geniuses, most likely, with kindred hearts for mankind as a whole.  ;D 

 

     

[Guest Broxburnboy]

 

Although I know I can't beat the BANKSTERS at their game, at least the current "INEFFICIENT" system of unchecked fiat currency gives me a one in a BILLION chance to become Warren E. Buffett.  :-\ 

 

 

and 999,999,999 chances to become impoverished.

[Guest ValueCarl]

Ultimately, if there are eight Buffett's in the world simultaneously, too many miracles would have occurred. Four Buffett's roaming the planet past, present and future populations might be more accurate.

 

So, maybe a 1:30 Billion chance is more correct by the time 4 quality names and characters are determined looking ahead, and then behind.

 

With respect to poverty from a current population stand point, according to data circa 2001; a 1:3 chance is more correct for the current masses.  :(

 

<Absolute poverty

Poverty is usually measured as either absolute or relative poverty (the latter being actually an index of income inequality). Absolute poverty refers to a set standard which is consistent over time and between countries. The World Bank defines extreme poverty as living on less than US $1.25 (PPP) per day, and moderate poverty as less than $2 a day. It estimates that "in 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than $2 a day." >

 

Regarding working around Wall Street's Den of Thieves, this is why it is disingenuous for Mr. Buffett to encourage main stream investors at home or abroad with "average intelligence" to play his game. Recently, he has changed that tune, thank God, to forking over their hard earned money into a "low cost index" fund, ala, Bogle's Vanguard, maybe.

 

He would better advise them to shovel their money to him for even better performance, but ONLY when markets have been pummeled by 50 percent or greater including his stock like last March, and maybe a somewhat similar drubbing soon, again? 

 

Better for the common man to keep the ODDS in his or her favor by giving their money to the most gifted player on the board during times of despair.  :D     

[nodnub]

How is it that, men who have attained great success at exploiting the inefficiencies of markets as a result of man's fallibilities somehow believe that "virtue" will ever play a role in establishing "fair rules" to govern mens' actions?

 

Are not Mr. Graham's own ideas on IV, subjective? Intrinsic value to me is vastly different from Warren Buffett, for example, only to be differentiated by our own levels of "fear or greed" inherent in our own DNA or propensity to calculate.  

 

Who might be the GREAT DECIDER of prices tied to "a" basket of commodities? What is the IV of a kernel of corn, or barrel of oil, or any other commodity for that matter, at any snap shot in time and according to WHOM, and to what level of accuracy?

 

Indeed, if this measuring stick or "basket" is designed to eliminate inflationary and deflationary forces, other than incumbent underlying owners' of established " global resources," who would be benefit most from a nirvana like system being envisioned here?

 

Now, I realize there are legacy owners and family dynasties tied to the existing fiat banking system which continues to give their descendants dominion over the world's resources as a result of their long standing power, influence and control, but what would change by "changing the rules" in the middle of the game?

 

If the monetary system were always stable, wouldn't the value of underlying businesses, by default, always be "efficient" too?

 

How could an aggressive financial steward ever attain "new" wealth via usurping or gaining control of valuable businesses often subject to the "vagaries" of "Mr. Market," quite frankly, a dastardly scoundrel or sinner in his CORE?  

 

Both systems (fiat or defined commodities, singular or multiple), from this minds eye, will continue subjecting the majority of the world's population to be the serfs they have always been subject to similar masters by certain gene pools. Rather than the 80:20 rule where 20 percent of the fools do eighty percent of the work, in the world of global finance, maybe it's 99:1; where one percent of the world's wealthiest have dominion over the balance 99 percent!

 

Although I know I can't beat the BANKSTERS at their game, at least the current "INEFFICIENT" system of unchecked fiat currency gives me a one in a BILLION chance to become Warren E. Buffett.  :-\  

 

Other than that, Edison, Graham and a host of others, even Warren picking up on Keynes' "sovereignty" concern with the advent of "trade certs" for import and export accounting (also ignored by the powerful pundits circa 2002/2003), are gifted geniuses, most likely, with kindred hearts for mankind as a whole.  ;D  

     

 

value carl,  

 

I respectfully submit that postings without "air quotes" and ALL CAPS are more intelligible and much easier to read. Have you noticed how clear and concise Warren's writing style is? That is something we should all aspire to.

 

best regards,

 

nodnub