. To put banking back on sound footing, the dollar must be defined by weight in gold,
Okay, now I know this guy get's HALF of the problem. He's a goldbug.
To fault the FED is unquestionably correct. Our Fed is out of control, on that he and I quite agree.
But o imagine that the solution to our economic woes is to back all money with gold is a tragic mistake that many people (usually people who have gold, I might add) make.
HOW, I ask do they imagine that will help?
By preventing out government from printing too much money?
What would prevent out government from electing to revalue money whenever it needed to have more money in the system?
Oh, I see... these gold bugs think that we would ALSO BY LAW pin the dollar's value to a specifc amount of gold, right?
Let's assume they could actually control the treasury and government and do that.
Then what happens?
A continuous DEFLATIONARY cycle. As more goods and services are created, adding to the world's aggregate wealth, the value of those goods and services HAS TO decline in prices in order for them to be EQUAL to the amount of gold in the world.
There is no escaping that fact IF we play the gold standard game.
Is continuous DEFLATION preferable to the problems we are facing right now?
I rather doubt it.
We are already bearly coping with the DEFLATION caused by the paper losses we are experiencing with the decline in real estate values and now the mostly PAPER losses to the perceieved wealth that came with the crash of the stock market.
How will further DEFLATING the money supply fix that problem?