What's so great about the Gold Standard?

I don't know if I agree that Keynes would have not agreed. I suspect he was aware that governments would never actually follow his economic theories, but would do what they're doing. Keynes was a Fabian Socialist. The Fabians' goal is to implement a state-socialist one world government using the tools of big government and central banking. It's no surprise therefore that Keynes drafted the blueprints for the IMF/World Bank, which many of us know have bankrupted the second and third world, and now are bankrupting first world countries in Europe. It won't be long before they have bankrupted all first world countries.

 

Yep. The only reason government benefits people is so that politicians can stay in office, so they can continue to use their offices to benefit themselves and their cronies. akphidelt2007 is either absolutely delusional or he is just a troll.

 

But don't you realize what he did? He said the dollar was not linked to gold, and then immediately went on to explain why the dollar was still linked to gold. LOL! akphitroll strikes again!!!! EMBARASSING!!!!!!!!!!!!111111111111

 

Your lies have already been debunked. Gold standards fail when the money is allowed to be abused. That is not a failure of the gold standard, it is a failure of fractional reserve banking. Why do you continue to spout lies?

Who cares what people are using "these days"? Just because it's being done during the present does that automatically mean it's correct? How many countries in the world have all drugs legalized? Obviously having drugs illegal means it is much superior to them being legal, otherwise most countries wouldn't do it right?

 

~0% inflation

I disagree that 8.4% inflation in 1982 is "stable".

 

Because it's illegal. Many things that are illegal would be successful if they were legalized, like marijuana.

Governments like fiat currency because it enables them to spend as much money as they want. Banks like fiat currency because it enables them to create money and collect interest on it.

 

The US has never been on a true receipt gold standard in its history. It was on a fractional reserve standard until 1971.

I disagree that the business cycle of which we have recently experienced a massive bust is "superior".
I disagree that 14% inflation in 1980 is "superior".
I disagree that a system in which folks who are retiring have seen upwards of 80% reduction in the purchasing power of their savings is "superior".
I disagree that a system which has always historically failed is "superior".

Baseless claim that is completely contradicted by history.

Yeah and look at the state of the world economy right now.

LOL. Legal tender laws aren't force?

The resident troll strikes again!!

We don't have maximum productivity right now. Nor have we for the past 3 years. So much for that theory - it was easily debunked.

Free banking is not a free-for-all. You're intentionally blurring the distinction between it and anarchism. Don't be a troll.

Why don't you just admit that you have contempt for freedom?

 

There are none. It's illegal in every country in the world. How many times do you have to be told that governments hate when their people use gold as money?

 

More disinformation. It's not a fiat standard if it's pegged to gold, which you have admitted in this very thread. Why are you trolling?

 

He didn't forget, he is just trolling yet another thread.

 

Our currency was pegged to the gold for foreign exchange. Prices in the US were denominated in dollars regardless of the exchange rate for gold. We were a fiat currency after 1934... according to normal economists. According to the Dr. Righteous school of economics, everybody in the world doesn't know what they are talking about, lol!!

 

This is puzzling. Why would they make it illegal if it was so great for the country? You mean Govt's don't want a successful country?

 

but the constant devaluation of the currency is terrible for savers......a capititalistic system needs capital. At least with sound money you have the security in knowing that your money wont be devalued at some point in the future!

 

but they are good short term for speculation in the volatility of the metal.....for the long haul as I have already said the physical is far superior!

 

what I meant was that governments hate the discipline gold puts on them!

 

True. Which is why fiat currency is also detrimental. On the other hand, the reasons why hard currency such as gold is detrimental is because it does not encourage consumption. It is not conducive to demand driven economy. However, during the Industrial Revolution, a gold standard was exactly what we needed. From my perspective, both types of currency have their benefits, and both can be used in the closest thing to a balanced monetary policy. The one problem is that we first need to learn the wrong way of using a fiat currency.

Fiat currency should only be used for the following reasons:

1. As a hedge against deflation.
2. As a hedge against aggregate price collapses.
3. As a hedge against a contraction in the money supply.
4. In the event of a catastrophic economic downturn in which the one alternative economic policy in which an increase in the money supply is not necessary fails.

 

I really think you need to read up on the Bretton Woods agreement. The US assured everybody that by holding US dollar instead of gold they can at least earn interest on their reserves in a vault. And since the US dollar was backed by gold then their currency would also indirectly be backed by gold. Had the US told everybody in that room that 20 years later the US would screw everybody by going off the gold standard do you really think the rest of the globe would of accepted the US dollar to be the reserve currency?

 

the fiat system is also great for governments that want to do pork barrel spending on an election year!

 

a fiat system can only work if you could have honest governments that wont inflate away the currency...this is why all fiat systems eventually fail.....if you could have a guarrentee that no government can ever print at will no matter how much in financial trouble the country gets then yes a fiat currency can work but as we all know....governments by their very nature are all corrupt!

 

Well, this is why I favor a hard currency/fiat combination system. It is similar to a gold standard except hard currency is not pegged to fiat. The two types of currencies are separate of one another, but their benefits compliment each other. Hard currencies will be gold, silver, copper, bronze, essentially any metal that the United States can acquire. Fiat currency will have to be in proportion to the amount of hard currency in circulation and in reserves. Therefore, my system is not a fractional reserve system nor a full reserve system, but a proportional reserve system. The goal is to maximize the positive qualities produced by both currencies in regards to economic production and to utilize each currency in times of economic crisis to bring the economy back to equilibrium.

I think such a system is certainly possible if you put the responsibility back on Congress' shoulders to order coining/circulation of money. Unlike the Federal Reserve, they have to answer to we the people. The average American will not be happy if they see their elected officials engaging in such reckless activities, and will then put in someone that will actually be sane in their appropriations/money approaches.

The bottom line is that before any of this can occur, the United States must undergo a harsh lesson in the consequences of fractional reserve banking and seemingly endless expansionary monetary policy.

 

why not just a partial backing...say 30% gold?

 

US citizens haven't been able to redeem their notes for gold since 1934. The Bretton Woods agreement was for foreign exchange rates. By pegging the dollar to gold you can create a fx market where you know how much other currencies are worth compared to how much gold they can redeem based on dollars.

This was an utter disaster and lead to Nixon getting rid of any gold conversion by anybody and making our economy officially fiat. This did not change anything for American citizens in terms of their ability to redeem their dollars for gold.

 

So does the rest of the country, lol. Govts ditched the gold standard when real people were suffering or there was a serious threat to the nation. That should tell you that the gold standard was not successful. When people were suffering and the nation was threatened there was not enough gold to produce enough goods and services to feed the people or protect the nation.

Those evil Govts and their incessant need to help those who need help!! How dare they!!

 

There is literally no reason for a country to back their currency with a commodity or a metal. A currency is backed by the countries productivity, not by it's exchange rate with a useless metal.

 

How naive!