I wrote this on Karl Denninger's Market-Ticker. Seeing as I do most of my writing there, I will generally repost here what I believe might have some weight.
Balance sheet depression or recession=built too much shit that now doesn't perform so can't build more, loaned more money than can be paid back, so don't have choice but to pretend and extend, especially in the banks. The biggest problem in Japan was they waited 15 years or more to close any banks. The Japanese economy was built on a debt pyramid as savings is the mirror of debt in a debt system and you can only count book value in real savings, as stock prices are arbitrary and dependent on the other side of the economy (those that don't own stocks) being able to continue to spend. Stock prices supported only by the spending of those that own them equates to pulling ones self up by their own bootstraps.
The problem with the Libertarian party is those running the party aren't Libertarian. Kind of amazing the Dallas Fed mentions Mises. It must scare the crap out of Bernanke and company, the banksters to the moon, inflate, pretend and extend, we are all dead in the long run group. Modern banking is a statist system, bankers endowed to do what can't be done by the state. That is pretend something is there that isn't. Go on insolvent, while looting those that deal with them of everything. The facts are that government along with the Fed is allowing bankers to steal our property, pretend their assets are good, while allowing them to depreciate their liabilities, which is what they owe us without compensation. I think this violates the 5th amendment, but then again, the statists aren't concerned with the bill of rights, save for allowing politicians to mention them and courts to use them to justify some absurd ruling that violates other amendments.
America wasn't supposed to have a ruling class. The only group that wanted a ruling class in 1800 was the bankers and their cronies. No State shall make anything but gold and silver coin a tender in payment of debt. When the chips are down, who can't pay their debts, because they are up to their eyeballs in fraud? The bankers. Laws were rigged to change deposits in banks from bailment to loans. Now we have monkeys in buildings in DC and NYC that dilute the money, paying us with what we owe instead of what we put in. Over 100% of all currency in circulation is owed back to the Fed. They got our capital for nothing, as it takes some kind of liquidation of goods, services, property and such to acquire government debt or what ever the Fed monetizes. They might be getting the assets for free, but we aren't acquiring the money.
Contrary to belief, that clause didn't make gold and silver coin money. It was already money, but people could have made anything they wanted to be money, as long as they wanted to contract for it. Governments have used money to produce bondage ever since we have had written history. Read Genesis, with Israel getting trapped in Egypt. The writers of this clause knew government and banksters would find something besides gold and silver, like bills of credit (why the Fed can't be part of the government) to loot us.
A constitutional republic cannot stand for long without contracts payable in gold and silver. Pharoah and the banksters take over and before long the people are asking "mother may I". Gold didn't fail because it was economically wrong, but because it didn't satisfy the banksters and the socialists. Who has it all now? The governments and banksters. They owe it all back to us.
One of the Rothschilds said it 200 years ago, that he didn't care who made the laws, just let me control the money. Private money is the core of Libertarian thought. Gold was used because it was stable, portable, divisible and not consumed in the sense that it perished or turned to trash. Price stability is the antithesis of gold, as price stability is all about inflation and has nothing to do with finding the true liquidation value of anything. Price stability is the mechanism government uses to feed its cronies, at the expense of the rest of us. Once gold turns to paper, the gig is up.
Gold is antiquated, only because it isn't in agreement with modern banking and socialist governments. But, note they hoard it and keep it from us. There is no way you can lever gold 20 to 1 and have a 5% interest rate and have the system last very long. Leverage was done very carefully under gold. It was the paper redeemable in gold that was unstable.
I don't get into this battle about the price of gold, only its role in a libertarian, free society. People can promise a load of peanuts for a car if that is what is agreeable, but they can't take that to the bank today. This is the problem, what you can take to the bank. Isn't it the totalitarian system that is developing around us that we should be concerned with, the system of statists and their bankers?
How can you have a dollar of capital when we can't agree what a dollar is? Is it a dollar of capital or 50 cents of capital or in the case of the last 100 years, a couple of cents? In the meantime, we have a bankster led government that is taking on debt that can only be satisified out of the productive resources of the economy. The debt is to be payable to banksters, directly or indirectly. Many of which have no capital up, nor could they pay their debts themselves. The cartel, run by Ben Bernanke, creates bills of credit on bills of credit to continue this scheme. The scheme isn't for economic growth, as economies grow according to the people and assets in the economy and not according to the profitability and actions of the banks and governments.