I have started reading more articles at mises.org.
This is what the Austrians believe.

"the end of the fiat money experiment seems closer"

Most of them believe that this is inevitable. (No news here)

My questions:

If the economy recovers, would that mean that they were completely wrong?

To me this seems like an obvious yes. Am i wrong in thinking this?

If their predictions end up being completly right, then what?

Politicians will never back down from this path.

Not entirely clear what you're asking.

I could be way off here, but I think the only real spur to end fiat currencies will be when a major economy goes back to a gold standard and money pours into that economy from investors seeking a sounds currency.

If it turns out that the economy recovers while the austrians have been saying that this can not and will not be the case. Would that not be a complete blow against the Austrian school of economics?

And for my second question. If it turns out that they have been right and we are certain that the politicians wont take us of this path of destruction, what can in that case be done?

The Austrians never claimed it can not recover. The Austrians have claimed that if it recovers, it will not be because of interventionism.

No way to know. The people who want to parasite off of productive people will always have to evolve their tactics. It's possible the average joe will learn a lot from this but it's also possible he won't.

I think things will get pretty brutal politically before they take a turn for the better. But when there's nothing left to take and all the money is elsewhere, add in the US traditions of people who claim to love freedom and all that, I don't think it's too far fetched that North America might move towards a very free economy (whether or not it can go the distance or get eroded again is anyone's guess).

Of course. Let me be clearer. Interventionism is according to the Austrians only making matters worse. If the economy recovers while everything was done to further damage it (according to the Austrians), what will that tell us?

Well I could be way off here, but is there even enough gold available to underpin a major first world econemy?

Nothing because of their convenient and unprovable belief system. As Nielso's post outlines: this allows them to always appear to be correct even when they are wrong.

http://forumserver.twoplustwo.com/sh...2&postcount=42

First, you really are misrepresenting the Austrian view. They claim that this type of interventionism causes more and deeper depressions along with various other problems like inflation. They have never claimed that we would not have up and down cycles even in a free market. Just that these cycles would be more predictable and not as drastic.

So turning your reasoning around, if in two years the economy "recovers" how will you know that it is because of the currently purposed intervention? If there had been no intervention how do you know that the economy wouldn't have recovered in one year instead of two? The people who advocated the intervention will claim that their actions solved the problem, but how will you know they did besides just accepting their claims because they "did something?"

Lisa: "By your logic, I could claim that this rock keeps tigers away.”
Homer: “Hmm; how does it work?”
Lisa: “It doesn’t work; it’s just a stupid rock!”
Homer: “Uh-huh.”
Lisa: “… but I don’t see any tigers around, do you?”
Homer: “Lisa, I want to buy your rock…”

didnt bother to read all posts here but:

if the economy recovers now it willl crash later, and the longer we manipulate and keep the bubble growing the bigger the effects of the crash will be. The best thing would be to let it crash, let the bad businesses/banks collaps and let the market correct itself. If we dont do this we are in for a long hellova ride imo

win win

How much is needed and why?

Pretty similar to the win win for the interventionists, barring a complete meltdown. They will claim the problems would have lasted longer without it the intervention. If things continue poorly for an extended period they can claim they didn't intervene enough. Easy to play this game when the only way for the austrians to win is a complete economic collapse.

Easy game.

If the economy recovers: Dems claim stimulus worked and take credit. Reps say it was Bush's tax cuts finally taking hold. Liberts say it's temporary and the end is nigh as ever.

So long as it doesn't recover, well, Dems claim Reps ****ed things up royally and economy needs more time before stimulus benefits are reaped, Reps say stimulus and Dems failed. Liberts say Gov is the problem and the end is nigh as ever.

Easy game for all involved.

So what do you think? Do you think that taking wealth from producers and consumers, through the government banking monopoly, and putting it into failing businesses and make-work jobs is going to benefit society? What do you think is the cause of the problems?

This is why the core of Libertarian theory is not based on the outcome of economic effects but based off moral theories. Unionism may not cause a lot of poverty in the local economy but its still immoral for one group of people to have their jobs and wages protected by the threat of violence.

Having said that ABCT will be more or less in vogue depending on the outcome of this crises for sure. Its really not the credit crises that is going to determine the final arguements for the validity of government intervention in the economy. The debt crises is going to make or break governments and at this point in time I dont see much budget balancing going on.

I didnt get the impression that they felt that the end of fiat money was inevitable. I know they believe it would be much better if it were ended. IMO opinion fiat money is harmful but I'd expect a one world fiat currency is more likely to actually happen then a end to fiat money.

Well, if we want enough gold to underwrite all cash in curculation, then the two factors are how much gold to the dollar and how much cash is being circulated?

If we take an arbitrary guess at the smount of cash in circulation and say 500 billion, then put the price of gold at $1k per ounce, then we's need 500 million ounces of gold, or 31.25 million pountd, or a little over 15 and a half thousand tons.

Fort Knox holds ~4600 tons of gold, and the Federal Reserve Bank of NY holds ~5000 tons, not all of it belonging to the USA.

Seeing as the gold deposit in fort Knox peaked after WWII at 20k tons, my figure of 500 billion cash in circulation is probably low.

Also, cash in circulation is only the M1 money supply. This doesn't take into account short term Federal debt (the M2 money supply) or long term Federal Debt (the M3 money supply) at all.

Actually I belive the gold that the fed is holding no longer belongs to the american people but has been payed as interest for the money lending the Fed has done to the Government. amirte?

Jimbo, lets test your big ol brains out there.

Give me a % of the chances you think the dollar collapses and we experience hyper inflation in the next 3 years.

gogogoogogogo.

Zero, got any that are more difficult?

Indeed. Wonder why the banks want gold instead of inflatobux?