The Prophetic Dr. Hoppe on the Rise of the Phoenix

Update: I noted previously (Update: The Prophetic Dr. Hoppe on the Rise of the Phoenix; below) Professor Hoppe’s prediction years ago of the inexorable move to a single, worldwide fiat currency. It’s coming. As reported here, “The dollar dropped after China’s central bank reiterated a call for a worldwide currency.”

See also Hoppe’s fascinating discussion of money starting about 1:05:17 of Lecture 3 of his riveting 10-part Economy, Society, and History lectures delivered in 2004, where he talks about the tendency on a free market of multiple “monies” to converge to one–by the nature of money, it’s more valuable the more widespread it is, etc. Hoppe notes that there is a similar tendency now, with fiat currencies, only this time, it’s bad, not good. He points out that the world had alreayd achieved free market unified money (gold); this was destroyed with the outgrowth of dozens of country-based paper monies, leading to a world in a state of quasi-barter; and now when the major currencies like the dollar, yen, euro, talk about monetary unification, they are moving back towards what we already had with gold, except without the relatively fixed supply and other salutary aspects of a commodity-based money.

[Cross-posted at Mises Blog]

Original Mises post; archived comments below:

The Prophetic Dr. Hoppe on the Rise of the Phoenix

Oct. 7, 2008

In Hans-Hermann Hoppe’s important article Banking, Nation States and International Politics: A Sociological Reconstruction of the Present Economic Order (Vol. 4 Num. 1) (published in 1990 in the Review of Austrian Economics; reprinted as Chapter 3 in his EEPP)), he notes one possible end-result of the state monopolization of money and credit. He notes the then-imminent rise of the ECU/Euro, and then predicts what might happen next: the combination of the three dominant currencies (at the time, the US dollar, the Japanese yen, and the Euro) into a new one-world paper currency (which might be called the “Phoenix,” say) run by a US-dominated World Central Bank. (We might add in now the Chinese Yuan, too.) With all the talk of the need for “coordination” among central banks to deal with the current crisis, and the anti-capitalist regulations that are sure to come, maybe the Phoenix is about to rise.

An extended quote from Hoppe’s paper is below.

With the European calculational chaos solved, then [by the creation of the ECU/Euro], and in particular with the European hard currency countries neutralized and weakened within a cartel that by its very nature favors more against less inflationary countries so as to protect and prolong U.S. hegemony over Europe, little indeed would remain to be done. With essentially only three central banks and currencies and U.S. dominance over Europe and Japan, the most likely candidates to be chosen as a U.S-dominated World Central Bank are the IMF [International Monetary Fund] or the BIS [Bank for International Settlement]; and under its aegis then, initially defined as a basket of the dollar, the ECU, and the yen, the “phoenix” (or whatever else its name may be) will rise as a one-world paper currency–unless, that is, public opinion as the only constraint on government growth undergoes a substantial change and the public begins to understand the lesson explained in this book: that economic rationality as well as justice and morality demand a worldwide gold standard and free, 100-percent reserve banking as well as free markets worldwide; and that world government, a world central bank and a world paper currency–contrary to the deceptive impression of representing universal values–actually means the universalization and intensification of exploitation, counterfeiting-fraud and economic destruction.

Archived comments:

Comments (18)

• eric lansing
• the thing is, 6 billion people cannot be forced by, say a hundred thousand people, to accept a piece of paper as means of payment.”What will replace the US dollar? It can only be gold…”http://www.thelongwaveanalyst.ca/pdf/V5_1.pdf

• Published: October 7, 2008 12:17 PM

• Nick
• Quote:”…unless, that is, public opinion as the only constraint on government growth undergoes a substantial change and the public begins to understand the lesson explained in this book: that economic rationality as well as justice and morality demand a worldwide gold standard and free, 100-percent reserve banking as well as free markets worldwide; and that world government, a world central bank and a world paper currency–contrary to the deceptive impression of representing universal values–actually means the universalization and intensification of exploitation, counterfeiting-fraud and economic destruction.”ROFL…ROFLMAO…OMG I’m crying…

  Yeah, people are suddenly going to wake up and say – Hey, what’s that slapping my ass?

  LOL – If that’s what we have to rely on then I better stop paying my bills and use that money to buy guns, ammo, food, and smokes to use for currency.

• Published: October 7, 2008 12:21 PM

• P.O’B.
• How many of you guys are concerned about this “emergency summit” Bush has called for? You don’t actually think anything like above could come out of this, do you?

• Published: October 7, 2008 11:22 PM

• Anonymous
• Hey!? What’s that slapping my ass??

• Published: October 8, 2008 10:01 AM

• Bruce Koerber
• Today the secretive agreements among the central banks that serve as the basis of world monetary hegemony came to the surface (for air!). Two things are apparent: 1). The unConstitutional coup is fearful of drowning in its own cesspool, 2). The U.S. dominated world bank already exists and is the monster behind all the wars designed to weaken any and all rival monetary systems.After sucking in some air (the propaganda that a coordinated system of central banks is good for the world) the beast went back under the water of secrecy. Oh how sweet the vulnerablitity of the mammal in need of air, with all of its sucking and unweaned offspring!The next time it surfaces the waves of the cries for liberty will gag the oxygen deprived behemoth. As its members flail (We know who one of the members of the unConstitutional coup is – Paulson) the wave of liberty becomes as one and casts the scum of the earth (the ego-driven interventionists) on the shore to rot while the ocean current regain their equilibrium.

• Published: October 8, 2008 7:06 PM

• Richard Romaine
• What, practically, can we do to undercut the beast that will destroy our savings and enslave us to nonsensical policies? Buy gold? Live in mud huts? Grow our own vegetables? What can we do on a practical daily basis to avoid our hard-earned time and “money” being sucked up by the inadequate policies of our time.

• Published: October 10, 2008 2:06 AM

• M.A. Hargett
• I’m afraid I am seconding Richard Romaine’s question. For those of us who are Johnnie-Come-Latelies and have had no ability or time to prepare, what is the answer?

• Published: October 10, 2008 11:55 AM

• MG Kouba
• In responce to Misters Romaine and Hargett:Dr. Edwin Vieira of Harvard University has suggested that all it will take is one state out of the entire union to make sound money an option.I am petitioning my state legislature and putting the word out there that it is perfectly legal for Missouri, my home state, to take steps that would prevent the widespread devestation that will happen someday (sooner, more likely than later) from being quite as severe for us.

  As a citizen, I feel that it the best I can do for my state, and ultimately my country.

• Published: October 10, 2008 12:10 PM

• TC Bell
• Kouba,Please do not think that any meaningful change is going to come through electoral politics; no matter how “local” it is.

• Published: October 10, 2008 12:20 PM

• ugh
• This’ll be great! The evangelicals will be surprised to see that their own man (bush) is responsible for the one-world currency and the ensuing mark of the beast. (how else to impose currency controls on everyone?) Wasn’t it reported that Pope John Paul II feared he was the anti-christ?Excuse me, What?This isn’t prison planet.com?

  Oh, Sorry.

  Well, at least we’ll be able to stop worrying about the Amero.

  Ugh

• Published: October 10, 2008 2:19 PM

• MG Kouba
• Personally, I think consumers will be too suspicious of a new hard currency, unless the government approves it. If the state makes it legal to pay taxes in the new currency, I think it’ll have a fighting chance. If not, it’ll be much harder for a new currency to become useful in daily transactions.

• Published: October 10, 2008 4:42 PM

• JB
• anyone ever read “The Reconstruction Acts 1868” from Civil War era? You may ask what does this have to do with anything today..well this is what stripped our “union” of any states rights…the states have about as much independence to choose this or that as a 10 year old child. we’re done for…JB

• Published: October 10, 2008 9:36 PM

• Erik
• Re: M.A. Hargett.What can you do to prepare? Go to SurvivalBlog.com This is “the” place to go and is the most popular site on the web for preparing. Buy the “Rawles Gets You Ready” preparedness course here… http://www.readyfortheworst.comFor the first time in nearly a year, it will be offered at 1/3rd off, starting on Monday. The course is centered around the concept of stocking up for a family, by making well-planned trips to a “Big Box” store.

• Published: October 11, 2008 2:03 PM

• Marco Costa
• ‘In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.’Gah! And how are they supposed to make us use them? International legal tender laws?I feel sick. :-0

• Published: March 24, 2009 2:01 AM

• EotS
• I second (or third, or whatever) the point that if we’re counting on a mass-scale awakening by the public, we’re in for deep, deep trouble.As the State fails, they’ll look to the State for solutions – right up until they’re loading people onto trains. Or perhaps not even then…

• Published: March 24, 2009 7:40 AM

• Dan
• igolder.com
  e-gold.com
  libertyreserve.comGoogle DGC…

• Published: March 24, 2009 9:25 AM

• Goldie Locks
• As long as their is food on the table and a roof over their heads, the world will tolerate inflationary theft and corruption. When the system fails to deliver the basic goods, no amount of paper money will make people comply with the wishes of their overlords.Of course, this is why governments need standing armies–to ensure their survival when policies fail. But if there were a true systemic failure to provide the necessities of life, no amount of bullets will make people comply with the wishes of their overlords.Globalization gives great power to the politico-financial cartel. It also creates the potential for global financial and industrial collapse. Just like interconnected electric grids in North America allowed continental blackouts, world-wide financial interconnections allow for world-wide catastrophe. Interconnections do not lead to stability; rather, they lead to a giant domino effect.

  Globalization is not being created out of a natural need. It is being artificially imposed in desperation to keep a ponzi scheme going. Pyramid schemes need to bring in ever increasing numbers of victims to prop up the scam. The scheme is going global because it is rapidly consuming every last available mark.

  The aftermath of ponzi schemes are ruined lives and financial failure. Generally this occurs in the context of a greater society that victims can integrate themselves back into and get a new start. But if the whole world is absorbed into a pyramid scheme, who will save us when it goes bust? And how much longer can it go on if we are literally recruiting every last person to be victimized?

  What is going to happen?

• Published: March 24, 2009 12:10 PM

• EotS
• Goldie Locks,I agree with most of what you said, with exception to this statement:”Interconnections do not lead to stability; rather, they lead to a giant domino effect.”

  As a general statement, the more interconnected systems are, the more stable they are. Nature itself is highly interconnected, and if you want to look at a man-made version, look at the Internet.

  Government doesn’t “interconnect” things, it conquers them. It imposes its rule on a greater and greater scale until it destroys everything in its domain.

• Published: March 24, 2009 8:21 PM

Update post; archived comments below:

Update: The Prophetic Dr. Hoppe on the Rise of the Phoenix

Re The Prophetic Dr. Hoppe on the Rise of the Phoenix: today’s Drudge Report reports: BEIJING TO PITCH NEW GLOBAL CURRENCY; DUMP DOLLAR.

3/23/09

Archived comments:

Comments (11)

• Keith
• EWWW!!

  The Chinese want to replace the dollar reserve system with something possibly worse. Something they credit to Keynes.

  What is the matter with these people? Keynes got us into this in the first place! Of course since the fellow who suggested it is part of a central bank there is no real surprise there….but still.

• Published: March 23, 2009 10:39 PM

• anon
• If this were to occur… what would it mean for the demonetization of gold, and the existing manipulation of gold markets?

• Published: March 23, 2009 10:52 PM

• Mike
• The second paragraph of this report is completely contradicted by the third, and rest of the article. It makes you wonder, if everything after the second paragraph were simply made up by FT partisans of IMF.

  Furthermore, the assertion that China has no other choice than to keep its reserves in US dollars, being entirely preposterous, does indicate the FT shilling for the one world order maniacs.

  The second paragraph is clearly describing a commodity money such as gold and silver coin.

  Moving $2 T to the gold market supply of 4 billion oz. would add at most $500 to the price; but most importantly pave the way for clear sailing ahead.

  Perhaps there is something to what he says about it taking courage (to imagine the effects of this on the many trillions of dollars now flying around).

  Take this, for sending a carrier destroyer after a fishing boat.

• Published: March 23, 2009 11:55 PM

• Geoffrey S.
• I’m sure the Fed wouldn’t object to buying those reserves if China doesn’t want them. They already purchased $300 billion of U.S. debt recently.

• Published: March 24, 2009 2:18 AM

• Kalim Kassam
• Looks like the Russians are on board as well: http://www.themoscowtimes.com/article/600/42/375364.htm

• Published: March 24, 2009 3:17 AM

• jeffrey
• I’ve always looked at a single world fiat currency as the worst of all worlds, but now I’m not so sure. How could it really be enforced? Maybe it would make more room for alternative market-based currencies than the present system. And it is hard to argue that it would be more inflationary than the dollar at this point. The worst possible system is the one we have right now.

• Published: March 24, 2009 7:44 AM

• Bruce Koerber
• Apolitical Political Commentary!
  Tuesday, March 24, 2009

  Is China A Lapdog? Please Don’t Lose Face!

  How do you say in Chinese “Like a good socialist I cannot let the market decide the medium of exchange?”

  One way is to praise Keynes!

  Another way is to surrender monetary control to the International Monetary Fund!

  The Chinese leaders are acting just like the ego-driven interventionists everywhere else. They are proposing destruction of the economic future instead of facing the necessarily painful corrections now. China should just ‘bite the bullet’ and take its losses that are the result its ill-advised buying of the debt of the unConstitutional coup in the United States.

  China is afraid of ‘losing face’ but it should allow the unConstitutional coup to ‘lose face!’

  Otherwise China will ‘lose face’ to an even greater extent by being seen as the little puppydog being lead on a leash by the greatest economic terrorists the world has ever seen.

• Published: March 24, 2009 8:52 AM

• J Cortez
• These idiots can do whatever they want. They can create any fiat currency that appeals to them, but it doesn’t matter. It might take years, but in the end, they will fail. History has shown this to be true.

• Published: March 24, 2009 9:42 AM

• Geoffrey S.
• I believe it was Murray Rothbard in MES who said that if a one world fiat currency failed we would be in a much worse position than national fiat currencies failing. This is because of the money regression theorem and the fact that a new medium of exchange would have to emerge from barter. If a national currency fails you can just peg to another national fiat currency.

• Published: March 24, 2009 2:13 PM

• Mike
• We know it will fail, and the sooner the better. The terms of barter are not dispensed with just because a money is introduced and adopted; they are extended and refined.

  In the wings, ready and able, are the electronic gold and silver vault instantaneous payment mechanisms which are very efficient at rapid and secure settlement of transactions of any amount, down to the tiniest fractional weight.

  These systems are already working successfully, especially in on line and ATM transactions. Equal or greater success should attend the expansion into daily purchase and sale transactions, — and wages, if permitted by legal tender.

  If this be regression, let’s make the most of it.

• Published: March 24, 2009 5:02 PM

• George
• Moving $2 T to the gold market supply of 4 billion oz. would add at most $500 to the price

  The largest pile of gold on the planet is held by the US (around 8000 tons or 256 million oz) and is only worth around 260 billion at current prices.

  A $500 jump (50% increase) wouldn’t help in finding someone with a pile 8 times larger — let alone someone who would sell it to you for a pile of US bonds.

• Published: March 24, 2009 10:10 PM