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

[Toro]

You said "90% of economic volatility would be eliminated." [with a gold standard] That is what I'm "comprehending." And it is wrong.

We had a gold standard for ~40 years from the 1870s onward.

you are 100% confused. Do you remember William Jennings Bryant's "cross of gold" . We did not have a true gold standard. There was huge huge controversy about it. It was the main topic in presidential election precisely because it was by no means a settled matter. Liberals openly wanted fiat inflation so farmers in debt would be better off when they had to pay back with inflated fiat currency. Read your HS history!!

Want to give up or do you want to challenge the gold standard from another era??

Go away, ideologue. You sound like a Marxist who says "We've never tried true communism."

Lame.

 

[DSGE]

In the US it's marginally harder since they don't have a legal target, but they have an implicit target of 2% per year.

over the last 40 years its averaged 4%. Now, with BO in office and a $15 trillion debt and China targets are stupid and meaningless and worthless.

Under Bernanke (who announced a 2% target) inflation has averaged 2.2%.

Ah, what? "targets are stupid and worthless". What the fuck are you talking about? You're asking for (by using a gold standard) an inflation target of 0%.

 

[EdwardBaiamonte]

You're better off just giving the central bank an equally binding rule that they must maintain a stable price level, in which case they would counter changes in the demand for money, preventing wild swings in the price level.

actually our Fed was created to be used along with our gold standard.
This makes it much harder for the liberals to inflate the currency as long as the mandate is only price stability

Actually it was created for two reasons: 1) Lender of Last Resort - to attempt to prevent bank runs; 2) Currency elasticity - because the gold standard was resulting in, as mentioned, gigantic swings in the price level. Huge inflation followed by huge deflation. The Fed was supposed to keep the currency elastic (ie, offset the demand for money) so that there'd be short run price stability as well as long run price stability.

who's talking about why it was created???

Liberals don't want inflation.

cheack you history liberals have always wanted it so poor folks in debt would pay back less. Inflation is a form of liberal theft and always has been. Its welfare without taxes

Nobody likes the idea of monetising government debt.

except liberals you mean

And at the same time, most conservative economist recognise that the gold standard is a terrible way to run monetary policy.

why would they think that? Perhaps because then you don't need economists causing recessions and depression with their engineering??

 

[EdwardBaiamonte]

Under Bernanke (who announced a 2% target) inflation has averaged 2.2%.

I'm 100% positive there is no fool out there who is signing a long term lease based on 2% inflation.

Bernanke is in 100% uncharted territory and has no idea about tomorrow let alone 5 years.

#3 (February 15, 2006) “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

#4 (January 10, 2008) “The Federal Reserve is not currently forecasting a recession.”

#5 (When asked directly during a congressional hearing if the Federal Reserve would monetize U.S. government debt) “The Federal Reserve will not monetize the debt.”

Ah, what? "targets are stupid and worthless". What the fuck are you talking about? You're asking for (by using a gold standard) an inflation target of 0%.

of course it is cuckoo you would not be so afraid to explain why

 

[DSGE]

who's talking about why it was created???

You mentioned it was created to be used with the gold standard. I mentioned that it was created to address a failure with the gold standard.

cheack you history liberals have always wanted it so poor folks in debt would pay back less. Inflation is a form of liberal theft and always has been. Its welfare without taxes

You don't even know what a fucking liberal is. Have you ever actually listened to anybody's opinion other than your own for half a second, or if they disagree do you just instantly assume they're a caricature?

Nobody likes the idea of monetising government debt.

except liberals you mean

There's further evidence! Grow the fuck up.

And at the same time, most conservative economist recognise that the gold standard is a terrible way to run monetary policy.

why would they think that? Perhaps because then you don't need economists causing recessions and depression with their engineering??

"Causing recessions and depressions with their engineering"? What the fuck are you talking about.

 

[DSGE]

Under Bernanke (who announced a 2% target) inflation has averaged 2.2%.

I'm 100% positive there is no fool out there who is signing a long term lease based on 2% inflation.

U.S. Government Bonds, Treasury & Municipal Bond Yields - Bloomberg

Market is expecting around 2% inflation over the next ten years.

[quote[Bernanke is in 100% uncharted territory and has no idea about tomorrow let alone 5 years.[/QUOTE]

So what? You know the Fed is able to control the rate of inflation right? It doesn't really matter what happens tomorrow, the Fed will adjust policy to get about 2% inflation.

#3 (February 15, 2006) “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

#4 (January 10, 2008) “The Federal Reserve is not currently forecasting a recession.”

#5 (When asked directly during a congressional hearing if the Federal Reserve would monetize U.S. government debt) “The Federal Reserve will not monetize the debt.”

Yet he still managed to keep inflation at an average of 2.2%.

On the topic of monetizing the debt, that actually illegal.

Ah, what? "targets are stupid and worthless". What the fuck are you talking about? You're asking for (by using a gold standard) an inflation target of 0%.

of course it is cuckoo you would not be so afraid to explain why

What does that mean? That sentence doesn't make sense. For god's sake use fucking grammar and punctuation.

 

[EdwardBaiamonte]

You mentioned it was created to be used with the gold standard. I mentioned that it was created to address a failure with the gold standard.

more accurately, it was created to improve the gold standard, and certainly not to replace it.


check you history, liberals have always wanted it so poor folks in debt would pay back less. Inflation is a form of liberal theft and always has been. Its welfare without taxes

You don't even know what a fucking liberal is.

classical liberals or modern conservatives are those who want freedom from government. Sorry!

Have you ever actually listened to anybody's opinion other than your own for half a second, or if they disagree do you just instantly assume they're a caricature?

if I'm mistaken about something why be so afraid to point out what?

There's further evidence! Grow the fuck up.

what subject are you on?? Do you know??

And at the same time, most conservative economist recognise that the gold standard is a terrible way to run monetary policy.

why would they think that? Perhaps because then you don't need economists causing recessions and depression with their engineering?
[/quote]

"Causing recessions and depressions with their engineering"? What the fuck are you talking about.

a Republican free market gold standard would avoid most economic volatility. Most agree now , including Bernanke, that liberal mismanagement caused the Depression

 

[DSGE]

You mentioned it was created to be used with the gold standard. I mentioned that it was created to address a failure with the gold standard.

more accurately, it was created to improve the gold standard, and certainly not to replace it.

Right. Then it turned out that the gold standard isn't actually optimal monetary policy.

check you history, liberals have always wanted it so poor folks in debt would pay back less. Inflation is a form of liberal theft and always has been. Its welfare without taxes

You don't even know what a liberal is. You are attacking a strawman. You've made a caricature to disagree with.

a Republican free market gold standard would avoid most economic volatility. Most agree now , including Bernanke, that liberal mismanagement caused the Depression

It would not. There's no theory or empirical evidence supporting that.

Don't call this a depression. And most do not agree that "liberal mismanagement" caused it.

 

[EdwardBaiamonte]

Under Bernanke (who announced a 2% target) inflation has averaged 2.2%.

I'm 100% positive there is no fool out there who is signing a long term lease based on 2% inflation. [/QUOTE]

Market is expecting around 2% inflation over the next ten years.

pretty stupid given it was 4% over th every calm last 40 years.

Bernanke is in 100% uncharted territory and has no idea about tomorrow let alone 5 years.

So what?

lets see, we had 4% inflation for 40 years, Depression, and recessions, Bernanke's quotes show he is guessing about tomorrow,had had now idea that tomorrow the Great Recession would start, all the Republican candidates say Iran won't be allowed to have the bomb, we have a communist in the White house and a little new competition from China and India, and you want to bet on Bernanke??

You know the Fed is able to control the rate of inflation right? It doesn't really matter what happens tomorrow, the Fed will adjust policy to get about 2% inflation.

yes it controlled it to about 4% over a very very stable period of time. Who knows the future? Certainly not any of those who got burned very badly thinking of low inflation over the last 40 years

#3 (February 15, 2006) “Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.”

#4 (January 10, 2008) “The Federal Reserve is not currently forecasting a recession.”

#5 (When asked directly during a congressional hearing if the Federal Reserve would monetize U.S. government debt) “The Federal Reserve will not monetize the debt.”

Yet he still managed to keep inflation at an average of 2.2%.

yes and the fool he managed not to know a huge huge recession would start tomorrow

On the topic of monetizing the debt, that actually illegal.

what???????????????????


"targets are stupid and worthless".

What the fuck are you talking about? You're asking for (by using a gold standard) an inflation target of 0%.

of course if it is cuckoo you would not be so afraid to explain why

What does that mean? That sentence doesn't make sense. For god's sake use fucking grammar and punctuation.

 

[EdwardBaiamonte]

You don't even know what a liberal is. You are attacking a strawman. You've made a caricature to disagree with.

a classical liberal or modern conservative is someone like Jefferson who is for freedom from big liberal government based on the historical ubderstanding that liberal government will be somewhere between inefficient at best and genocidal at worst.

 

[DSGE]

Market is expecting around 2% inflation over the next ten years.

pretty stupid given it was 4% over th every calm last 40 years.

How on earth do you think that matters? Or for that matter, how on earth do you think you possibly have more information or analytical ability than the entire fucking treasuries market?

lets see, we had 4% inflation for 40 years, Depression, and recessions, Bernanke's quotes show he is guessing about tomorrow,had had now idea that tomorrow the Great Recession would start, all the Republican candidates say Iran won't be allowed to have the bomb, we have a communist in the White house and a little new competition from China and India, and you want to bet on Bernanke??

Relevance?

yes it controlled it to about 4% over a very very stable period of time. Who knows the future? Certainly not any of those who got burned very badly thinking of low inflation over the last 40 years

Knowing the future is irrelevant. Monetary policy doesn't need to know the future.

yes and the fool he managed not to know a huge huge recession would start tomorrow

I guess that means he can't meet the 2% inflation target he announced. Oh wait, he already did.

On the topic of monetizing the debt, that's actually illegal.

what???????????????????

It's illegal for the Fed to buy bonds directly from the Treasury. It's currently illegal to monetize government debt. The only way to do it would be for congress to amend the Federal Reserve Act.

And learn to use the fucking quote system.

 

[DSGE]

Right. Then it turned out that the gold standard isn't actually optimal monetary policy.

if so why be so afraid to present you best example??

What the fuck are you talking about? My best example of optimal monetary policy? NGDP level targeting.

You don't even know what a liberal is. You are attacking a strawman. You've made a caricature to disagree with.

why be so afriad to present an example?? What does your fear tell you??

You're not making any god damn sense.

sure there is, gold exists in a fixed supply while paper does not. American is about freedom from government, not letting liberal government guess at or decide how much money to print.

That is not evidence, theoretical or empirical, of how a gold standard would avoid recessions.

 

[Middleoftheroad]

Right. Then it turned out that the gold standard isn't actually optimal monetary policy.

if so why be so afraid to present you best example??



check you history, liberals have always wanted it so poor folks in debt would pay back less. Inflation is a form of liberal theft and always has been. Its welfare without taxes

You don't even know what a liberal is. You are attacking a strawman. You've made a caricature to disagree with.

why be so afriad to present an example?? What does your fear tell you??


a Republican free market gold standard would avoid most economic volatility. Most agree now , including Bernanke, that liberal mismanagement caused the Depression

It would not. There's no theory or empirical evidence supporting that.

sure there is, gold exists in a fixed supply while paper does not. American is about freedom from government, not letting liberal government guess at or decide how much money to print.



Friedman and Bernanke do, and no one can say with a straight face that government was not heavily involved.

You really need to take a chill pill, and realize where you stand. Its not just liberals that don't want to be on a gold standard. Its also Republicans and independants. Also pretty much every viable economist in america. Its mainly just libertarians. And not all libertarians, only the ones that think Ron Paul is some kind of savior.
Here's a really fun fact for you. Ben Bernanke is a libertarian.

 

[EdwardBaiamonte]

You really need to take a chill pill, and realize where you stand. Its not just liberals that don't want to be on a gold standard. Its also Republicans and independants.

the point is that 100% of the support for a gold standard rather than an liberal inflation standard comes from saintly Republicans and libertarians.

Also pretty much every viable economist in america. Its mainly just libertarians. And not all libertarians, only the ones that think Ron Paul is some kind of savior.
Here's a really fun fact for you. Ben Bernanke is a libertarian.

please cut the BS. At one point everyone followed Hitler, but that did not make them right. If you don't like the gold standard explain why, don't waste our time telling us what polls show, or admit you don't know the issue. Then, ask questions to learn.

PS: when Ron Paul asked Bernanke why the board was better than a gold standard he said, "because it functions like a gold standard."

 

[Middleoftheroad]

You really need to take a chill pill, and realize where you stand. Its not just liberals that don't want to be on a gold standard. Its also Republicans and independants.

the point is that 100% of the support for a gold standard rather than an liberal inflation standard comes from saintly Republicans and libertarians.

Also pretty much every viable economist in america. Its mainly just libertarians. And not all libertarians, only the ones that think Ron Paul is some kind of savior.
Here's a really fun fact for you. Ben Bernanke is a libertarian.

please cut the BS. At one point everyone followed Hitler, but that did not make them right. If you don't like the gold standard explain why, don't waste our time telling us what polls show, or admit you don't know the issue. Then, ask questions to learn.

PS: when Ron Paul asked Bernanke why the board was better than a gold standard he said, "because it functions like a gold standard."

my point was NOT that the support comes from republicans and libertarians. It was that it came from everyone. This was in response to you calling everyone a liberal who dared to disagree with you.
And you Hitler non-sequitar does not fit the situation. One is about killing millions, and the other is about using a standard of currency that works better then all the others based on past experiences and real life examples.
If you want reasons why it works better, why don't you re-read all the posts that everyone was arguing against you.
1) wildly volatile prices of all goods in the past.
2) The price of our dollar is worth what other people do in other countries (since we aren't the only miners of gold)
3) we should stop mining gold so it will make our dollar stronger!
The reasons are endless. A better idea would probably be to peg the dollar to oil since its what our economy runs on anyways.

 

[EdwardBaiamonte]

my point was NOT that the support comes from republicans and libertarians. It was that it came from everyone.

Actually 100% of the suppport for the gold standard comes from Libertarians and Republicans who are opposed to government created inflation and recessions. Keep that in mind please.

And you Hitler non-sequitar does not fit the situation. One is about killing millions,

Hilter Stalin and Mao were the great liberals of human history who like you believed government was magical.

and the other is about using a standard of currency that works better then all the others based on past experiences and real life examples.

of course if this is true why are you so afraid to give your best evidence for the whole world to see?

If you want reasons why it works better, why don't you re-read all the posts that everyone was arguing against you.
1) wildly volatile prices of all goods in the past.

are you pretending or do you have an example??
Also, please don't say you are middle of the road. Its like letting people know you lack the IQ to decide between right and wrong. If you were in 1930's Germany would you be in the middle between Nazis and communists so you didn't have to think or offend anyone?

The reasons are endless. A better idea would probably be to peg the dollar to oil since its what our economy runs on anyways.

thats really really idiotic, which explains why you forgot to say why our currency ought to be based on it? Our economy runs on food clothing water air etc. THese are all very very highly highly unstable compared to gold. That is exactly what you don't want.

 

[samjones]

To help you understand further: if the government prints too much gold backed currency people simple return it to the bank in exchange for gold and thus liberal inflation is impossible.

That's exactly what happened in '71. I would hesitate to say that the government printed to much currency and would instead say simply that the value of the underlying metal (gold) was no longer controllable and that the gold was worth more than the dollars used to buy it.

This represents a complete and total failure of the monetary system...

Overly simplified, if a guy can go to the Fort Knox and trade $45.00 for an ounce of gold and then can walk over to the nearest pawn shop and trade that ounce of gold for $50.00 then all the gold in Fort Knox is going to disappear really quickly. That type of arbitrage is 100% unacceptable in any monetary system and we were threatened with it in '71.

In other ways many countries have had this happen and we have all heard tale of it happening in our own currencies. If the base metal of a coin is worth more than the face value of that coin than the currency disappears from circulation rather quickly - people favor the trade of bullion or simply the raw material in the coin.

We always hear about the copper in a penny being worth more than $0.01 for instance, and we hear about what a problem that is.

 

[expat_panama]

...The gold standard meant stable prices only for buying volatile gold and it meant volatility for all other prices.

That would mean the quantity of gold was less stable than the quantity of paper money and thats 100% absurd of course...

Quantity is all well and good, but prices are a function of supply and demand--

Things are what they are whether we understand them or not, whether we agree with them or not.

People need food so we regulate the dollar's value to get stable food prices--

--and not gold prices--

 

[samjones]

...The gold standard meant stable prices only for buying volatile gold and it meant volatility for all other prices.

That would mean the quantity of gold was less stable than the quantity of paper money and thats 100% absurd of course...

Quantity is all well and good, but prices are a function of supply and demand--

Things are what they are whether we understand them or not, whether we agree with them or not.

People need food so we regulate the dollar's value to get stable food prices--

--and not gold prices--

I fail to see how a gold price fixed by the government is fundamentally different than fiat. We all believe that gold is worth what the government is willing to sell it for, because they own a significant amount of it and they set specific restrictions on the trade of gold to make it impossible to have a truly free gold market.

I don't see why people think that's a good thing. If you were to have a gold *BASED* currency, i.e. a specific amount of gold alloyed in coin or a specific amount of gold (10 grains) printed on a certificate than that would be a different story.

You post a graph of historic gold prices and talk about supply and demand. The 19th century saw an incredible increase in the supply of gold based on the North American West Coast gold discoveries. And yet price does not change. How does this in any way resemble a free market currency?

It seems fanciful science fiction to imagine that we might see a huge increase in the supply of gold in the 21st Century - but maybe not. A significant scientific discovery about how to deal with radioactivity could make gold production feasible. Or global warming could uncover a previously unknown motherlode. Or technologies used to exploit new hydro energy sources could yield economical processes for extracting gold from sea water.

If gold supply increases significantly is a 21st Century US Government going to be able to maintain controls on pricing like the 19th Century US Government did? I doubt it. Would they even want to try if the sources of gold were foreign companies rather than tens of thousands of small mines in California? I don't think so.

 

[samjones]

you are 100% confused. Do you remember William Jennings Bryant's "cross of gold" . We did not have a true gold standard. There was huge huge controversy about it. It was the main topic in presidential election precisely because it was by no means a settled matter. Liberals openly wanted fiat inflation so farmers in debt would be better off when they had to pay back with inflated fiat currency. Read your HS history!!

Edward, I'm not going to get involved with name-calling like some of the other people who are responding to you, but I will point out that the Cross of Gold speech was a call for a return to bimetallism, which has been status quo since Alexander Hamilton proposed it.

It is true that free silver meant monetary inflation, but the proponents of free silver felt that this would merely bust the newly created gold cabal who had artificially deflated currency. It is also true that the free silver movement cemented the Democratic Party as the party of labor and the new Republican Party as the party of finance...

It is not true that Bryan was advocating fiat currency. It is not true that "everyone got behind Hitler". Not everyone in Europe, not everyone in Germany, not everyone even in his own Brown Shirt Party. That simply doesn't describe how Hitler rose to power..... Ever.


It's not true that Stalin was particularly "liberal" in any sense of the word.

In many of your posts you seem to be either badly misinformed or badly misinforming.