Why we’re not on the gold standard
7 Responses to “Why we’re not on the gold standard”
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March 27th, 2009 at 10:35 am
Can you imagine, say, an average three-bedroom house priced at ten thousand dollars?
That “there isn’t enough gold” gag is nonsense.
There is always a ratio of value expression to goods in the market. Always. Anyone who thinks that there isn’t enough gold is economically ignorant.
March 27th, 2009 at 10:37 am
I think it speaks more to the value of currency than gold. After all, we’ll trade anything, including shiny rocks, 1s and 0s, plastic chips, full faith and credit of the government, and livestock.
March 27th, 2009 at 1:33 pm
Screw gold, let’s use silver. And hedgehogs. The Silver-Hedgehog Standard will lead us to prosperity.
Is it just me, or do supporters of the Gold Standard seem to hate the thought of central banking?
March 27th, 2009 at 1:51 pm
“I think it speaks more to the value of currency than gold.”
That is exactly the whole point.
“After all, we’ll trade anything,…”
People will do that only when they can afford to. Nobody in Zimbabwe right now is trading any of that shit. They are digging gold, every day, and people who can’t get out there every day with a shovel, a spoon, or their bare hands, are starving..
March 27th, 2009 at 2:39 pm
+1 for Billy Beck’s comment on economic ignorance. If we were to adopt a gold standard, which I don’t realistically expect, there’s no reason to peg the dollar value at the current market price of gold.
The one critique of the gold standard movement I take most seriously is that a polity willing to adopt a gold standard is also a polity with the willpower not to inflate a fiat currency. The really important thing about a gold or silver standard is not the gold or silver, it is that having a (relatively) fixed amount prevents arbitrary printing-press inflation, which always benefits the first people to get the dollars at the expense of the poor and people on fixed incomes.
March 27th, 2009 at 3:58 pm
“The one critique of the gold standard movement I take most seriously is that a polity willing to adopt a gold standard is also a polity with the willpower not to inflate a fiat currency.”
Is that what you call a “critique”?
Where I come from, that is a reason.
April 2nd, 2009 at 3:39 pm
Not enough gold means that it will be IMPOSSIBLE to convert to a gold standard. That is to say, I have a bank account with X dollars in it. At the end of the day, the bank has to have or be able to lay claim to X dollars worth of gold. There isn’ enough physical gold in the world to do this for the US money supply, much less the world money supply. I ran the numbers on this a year or so back, and it turns out you have to destroy 90% of the money in existance. Good luck with that.
Oh, that 2 bed house for $10K, and a car for $500? It also comes with an annual salary of $2000 and the vast majority of households having one primary wage-earner.
Finally, hard money doesn’t stop inflation, debasement of the currency, etc. It just makes it less transparent.