Learning from Europe while it is , in effect, on a gold standard

People who want to return to the gold standard make about as much sense as.....

of course if they didn't make sense the liberal would not be so afraid to say why this is so. Surely, your fear must be telling you something obvious?

That's why that commie Nixon did away with the precious gold standard. Because he was a liberal.

Why change the subject? If you feel opposed to the gold standard why be so afraid to say exactly why? Ans: as a liberal it does not occur to you to have a reason for your feelings.

Reasons are for conservatives and libertarians.
 
Why change the subject? If you feel opposed to the gold standard why be so afraid to say exactly why? Ans: as a liberal it does not occur to you to have a reason for your feelings.

Reasons are for conservatives and libertarians.

And nutjobs too, apparently.

You should try reading the thread one day. You might find out some of the reasons why I can't support a gold standard. Like gold is too volatile to make an effective currency, for one. Plus every gold standard ever tried failed and nobody uses it any more.
 
...Let's be happy with what works until we come up with something better.
....legalizing competing currencies and allowing the market to decide what works best...
That was tried for a big part of the 1800's and we still say things like 'let's see the color or your money' or 'good money puts the bad out of circulation'. We've come to understand that money has to be three things:
--medium of exchange (paying 3 bux for a sack of flour is easier than getting the grocer to accept poetry in exchange)
--store of value (3 bux in the bank will buy that flour next month
--unit of account (I still say my poetry is worth ten bux)​
Most people who've looked at it say open market currency did a poor job back then, especially compared to what we use now; but let me know if you manage to get anyone to go along with your idea to bring it back.


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You've never heard of Liberty Dollar? It was working rather well until the Feds decided it was working TOO well and shut it down.
 
Like gold is too volatile to make an effective currency, for one.

as a liberal you almost certainly can't understand, but gold as currency has almost no volatility which is why it would be the worlds best currency. There is very little of it in existence and new stocks have always grown very slowly so its value changes very little.

The most important thing to note about gold is that it would make it in effect illegal for liberals to mismanage economies and thus preclude the possibility of constant recessions and depressions.

How can paper money be a store of value when liberals print it at will to support their idiotic welfare programs and thereby ignore its function as a store of value?
 
Like gold is too volatile to make an effective currency, for one.
...gold as currency has almost no volatility...
'X' amount of gold is always worth that same amount of gold. No volatility. The amount of food an oz of gold buys changes wildly from year to year, and that's how it's been for centuries. The amount of food that dollars buy used to change wildly back when the dollar's purchasing power was fixed to that of gold and people starved.
yryrfoodprices.png

Since the dollar's purchasing power was set to food and other consumer goods people have had a lot easier time getting fed.


People have to eat. They don't have to have pretty gold coins.
 
Like gold is too volatile to make an effective currency, for one.

as a liberal you almost certainly can't understand, but gold as currency has almost no volatility which is why it would be the worlds best currency. There is very little of it in existence and new stocks have always grown very slowly so its value changes very little.

Gold's price stability was due mainly to the fact that its price was artificially set and maintained the major economic powers. And they had a very hard time doing that. When it was clear that they had failed Nixon abandoned the gold standard and the price of gold floated in a way that was more appropriate for the type of commodity it is.

The most important thing to note about gold is that it would make it in effect illegal for liberals to mismanage economies and thus preclude the possibility of constant recessions and depressions.

Nope - liberals mismanaged economies just fine under a gold standard. Recessions and depressions happened then too. You do comprehend the difference between a gold standard and a gold based currency, don't you?

How can paper money be a store of value when liberals print it at will to support their idiotic welfare programs and thereby ignore its function as a store of value?

Because the US government has consistently maintained the illusion that the paper has value. In fact, most of our assets have nothing to do with that paper. We may talk about how much paper our house is worth, but it's value is intrinsic and probably won't change much regardless of what happens to the value of that paper. The people who have to trust that the paper won't lose its value are the lenders who have agreed to accept paper in the future....

I'm sure you can agree with that.
 
How can paper money be a store of value when liberals print it at will to support their idiotic welfare programs and thereby ignore its function as a store of value?
Because the US government has consistently maintained the illusion that the paper has value...
Hey people, it's time we got together on what the question is here. Someone please say whether--
1922-Gold-Certificate-Gold-Coin-Note-xf-316062.jpg

--is made out of paper or not.
 
People who want to return to the gold standard make about as much sense as.....

of course if they didn't make sense the liberal would not be so afraid to say why this is so. Surely, your fear must be telling you something obvious?

That's why that commie Nixon did away with the precious gold standard. Because he was a liberal.

He did away with the GOLD STANDARD BETWEEN nations because had he not the USA wouldn't have had any gold.
 
of course if they didn't make sense the liberal would not be so afraid to say why this is so. Surely, your fear must be telling you something obvious?

That's why that commie Nixon did away with the precious gold standard. Because he was a liberal.

He did away with the GOLD STANDARD BETWEEN nations because had he not the USA wouldn't have had any gold.

That makes no sense as a root cause. The problem was that the major economic powers had been trying and incrementally failing for centuries to keep the price of gold set at a fixed, artificially low price. By the time Nixon got into office, even the shell game known as Bretton Woods wasn't enough to hide the fundamental realities that gold is no longer an appropriate basis for a currency.
 
gold is no longer an appropriate basis for a currency.
I know you are a liberal but can you say why you think this is true? So, what is the best basis for a currency? Bananas? Tin? Water? Grapes?

Of course as a liberal you cant say because liberals can't think, sadly.
 
Nope - liberals mismanaged economies just fine under a gold standard. Recessions and depressions happened then too. You do comprehend the difference between a gold standard and a gold based currency, don't you?

a gold standard implies that there is always a direct and consistent relationship between gold and money. If such a Republican situation exists 90% of economic volitility would be eliminated.
 
Nope - liberals mismanaged economies just fine under a gold standard. Recessions and depressions happened then too. You do comprehend the difference between a gold standard and a gold based currency, don't you?

a gold standard implies that there is always a direct and consistent relationship between gold and money. If such a Republican situation exists 90% of economic volitility would be eliminated.

No it wouldn't.

We had lots of economic volatility when we've been on a gold standard.
 
Nope - liberals mismanaged economies just fine under a gold standard. Recessions and depressions happened then too. You do comprehend the difference between a gold standard and a gold based currency, don't you?

a gold standard implies that there is always a direct and consistent relationship between gold and money. If such a Republican situation exists 90% of economic volitility would be eliminated.

No it wouldn't.

We had lots of economic volatility when we've been on a gold standard.

reread for comprehension. What kind of gold standard are are you talking about and when exactly.
 
a gold standard implies that there is always a direct and consistent relationship between gold and money. If such a Republican situation exists 90% of economic volitility would be eliminated.

No it wouldn't.

We had lots of economic volatility when we've been on a gold standard.

reread for comprehension. What kind of gold standard are are you talking about and when exactly.

Any of them. A bunch of meatheaded know-nothings seems to think that a gold standard will solve economic problems even though it never has and it has never been designed to.

THere's a difference between a gold standard and a gold based currency. Some people seem simply to not be able to grasp that concept.
 
Watching the current European crisis is a great way to learn about the gold standard. The gold standard is similar to the Euro standard Europe is on.

Greece, for example, cant print Euros to pay its debts so it must spend less and earn more to get the money it needs to pay its debt. This is very healthy and realistic for a country or person or family.

On a gold standard you cant print money either because only the amount of gold, not politicians, determines the amount of money

America is not on a gold standard or a Euro standard. We can and do print paper money at will. But, printing at will cause 4 problems

1) it rips off our creditors, who then won't trust us, since they are getting paid with devalued dollars.

2) it rips of the American people since prices go up by the exact amount of the liberal money printed

3) it makes the economy less efficient since prices rise erratically as the new money works its way through the economy. Prices then don't reflect real costs, and thus make comparison shopping and economic efficiency impossible

4) Most importantly, there is little obvious pain so there is little incentive to discontinue the irresponsible 3rd world behavior that got us into debt in the first place.

US has very low taxes compared to Europe, so they can’t get in the same trouble. If they have to, they can just rise taxes on the rich and kill the debt in no time. The federal reserve is really a flat "hidden" tax. The rich people benefits from a flat tax and money printing in the federal reserve.

But it seems like the politicans has an agenda to protect the rich, and by prinitng money they do so by a flat "hidden" tax. US is really a pseudo-communistic country, with a few people with connections to the politicians living a life in amazing wealth. The people are being fooled by the federal reserve printing "hidden flat tax". The people has to pay this "hidden flat tax" in infaltion.

On paper US has a progressive tax system, but because the comprehensive use of federal reserve money printing they have a "flat tax" that are paid through inflation.
 
...because the comprehensive use of federal reserve money printing they have a "flat tax" that are paid through inflation.

Good post because taxes and inflation are important and we need to know about them. Please tell us where you got that take because the BLS says there's no inflation and the Fed says they've got no printing presses.
 
gold is no longer an appropriate basis for a currency.
I know you are a liberal but can you say why you think this is true? So, what is the best basis for a currency? Bananas? Tin? Water? Grapes? Of course as a liberal you cant say because liberals can't think, sadly.
Whether Ed's a liberal or not won't change facts such as we don't use gold because when we used it prices were crazy. They went wildly up one year then wildly down the next. Instead of fixing the dollar to buy gold, America decided to set the dollar on things people actually need to buy every day. FWIW, inflation last month was 0%.
 
a gold standard implies that there is always a direct and consistent relationship between gold and money. If such a Republican situation exists 90% of economic volitility would be eliminated.

No it wouldn't.

We had lots of economic volatility when we've been on a gold standard.

reread for comprehension. What kind of gold standard are are you talking about and when exactly.

You said "90% of economic volatility would be eliminated." That is what I'm "comprehending." And it is wrong.

We had a gold standard for ~40 years from the 1870s onward. Then we had a quasi-gold standard after WWI to the 1930s. We had LOTS of economic volatility during both time periods. Other countries had gold standards as well, and also experienced significant economic volatility.

... Central banks have been built on financial crises, with each major tremor expanding their role. And today's economic convulsions foreshadow more changes to come at the Fed.

If it wasn't for crises, central banks might not exist. In Britain, after years of civil war and the ouster of King James by William III in 1688, the country's public finances were in tatters, with tax collection falling short of what the government needed to pay its bills and lenders unsure about the stability of the government. The Bank of England, one of the first central banks and for centuries the most important one, was founded in 1694 to purchase government debt and curtail the funding crisis.

The establishment of the Bank of England came at the beginning of a great societal shift, when new ideas were challenging old doctrines, and rising world trade was giving new power to merchant classes. But the expansion in commerce and banking also made financial crises more prevalent. Speculative bubbles led to spectacular market crashes.

"The Bank of England received heavy criticism in many of the crises of the 19th century when it didn't act fast enough," says Rutgers University economic historian Michael Bordo. "It learned to be lender of last resort." ...

But for much of the 19th century and into the 20th, the U.S. had no central bank. Many Americans feared that nothing good could come from one bank wielding so much power. In 1816, a central bank to help fund government finances that had been badly depleted by the War of 1812 was established. In his 1832 veto of the extension of the bank's charter, President Andrew Jackson wrote that "Great evils...flow from such a concentration of power in the hands of a few men irresponsible to the people."

While financial crises in England diminished through the 19th century, they were a regular feature of American life.

"Crises are much more frequent when we don't have a central bank," says New York University Stern School economic historian Richard Sylla. With nobody willing to step into the fray when borrowers ran into trouble, small credit-market problems could easily spin into major ones.

The turning point came in 1907. The availability of credit was tight throughout the world that year, and that October, a speculative attempt to corner the stock of United Copper Co. failed. That sparked a run on the deposits of Knickerbocker Trust Co., which had helped fund the scheme, eventually leading to the firm's collapse. John Pierpont Morgan, the giant of American finance, took on the role of lender of last resort.

Struggling with a bad cold, sleep-deprived and sustaining himself with little more than cigars, Morgan put up millions of his firm's money to avert the crisis and cajoled other bankers into doing the same. In a famous incident, Morgan gathered a throng of bankers and trust executives in his library on the evening of Nov. 3, locking the doors and not opening them until 4:45 the next morning, after the men had agreed to take part in a $25 million loan.

The Panic of 1907 helped push aside longstanding worries over the economic power concentrated in an American central bank, and in 1913 the Federal Reserve Act was passed....

Central Banks Are Creatures of Financial Crises - WSJ.com
 
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We had lots of economic volatility when we've been on a gold standard.

if so why be so afraid to tell us why a gold standard would lead to volitility.

I'm not afraid to tell you why it would lead to volatility. I just have to point to history. The onus is on you to tell us why it would not lead to volatility given that it has in the past.
 

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