Gold standard again
Submitted by aksendz on Wed, 01/09/2008 - 23:46
Got into a discussion w/ my elderly gov't teacher.
-economy can't grow if money supply doesn't grow
so gold standard would not expand the economy
worked in America only bcs we had rural economies
-went OFF gold standard in 1930s
-our currency does compete w/ other countries
I told her that it doesn't have to be gold
but she said that it has to be a resource thats ever expanding
so unless we find a new deposit of gold/silver/other resource it won't work
SO SORRY, MISTYPE!
OFF THE GOLD STANDARD
»
e-gold
Tell her to go to www.e-gold.com That's gold-backed money. It works fine. No problem.
All Paul wants to do is remove taxes on gold and make gold and silver legal tender. The market will take care of creating the money. Government doesn't have to be involved at all. Gold backed money will be a feasible alternative. People would still use unbacked money if they wanted to.
She does know that gold is still being mined
Gold is still being mined, along with silver and other precious metals that could be used as money. The money supply still grows. There is nothing wrong with a gold standard. It keeps everybody out of trouble. If you can just make it out of nothing then that is what it is.
Your teacher must be very happy in her world of never paying bills just printing what is needed.
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not true
You don't have to have an increasing supply of gold. You could back the whole money supply with one brick of it. You would just have to issue certificates which guarantee you whatever tiny slice of that brick they're worth. Realistically, though, there is enough gold to have a dollar be worth a reasonable amount, especially if you allow free coinage, which means you can bring any gold into a certified minter and he can turn into a legal tender coin. Besides, there's a crapload of silver if you wanted to go there instead. Those are questions for the scientists and the economists, but the last thing you want is a paper currency backed by nothing and borrowed from a banking cabal at interest creating the need for more money backed by nothing. It's a ridiculous scheme.
bullion to coin
The Mint Act of 1792 provided for conversion of bullion into coin from the US Mint and from my research was never repealed. Of course the mint wants nothing to do with citizens carting metal up to their door but the provision exists, I believe. Anyone know otherwise?
"All laws which are repugnant to the Constitution are null and void." --Marbury v. Madison, 5 U.S. (2 Cranch) 137 (1803)
"All laws which are repugnant to the Constitution are null and void." --Marbury v. Madison, 5 U.S. (2 Cranch) 137 (1803)
the gold reserve act of 1934
terminated free coinage...bastards
Ahhh, but what about silver?
Any thoughts?
"All laws which are repugnant to the Constitution are null and void." --Marbury v. Madison, 5 U.S. (2 Cranch) 137 (1803)
"All laws which are repugnant to the Constitution are null and void." --Marbury v. Madison, 5 U.S. (2 Cranch) 137 (1803)
bastards indeed
you just saved me a lot of reading. what am i supposed to do with my bullion now?
"All laws which are repugnant to the Constitution are null and void." --Marbury v. Madison, 5 U.S. (2 Cranch) 137 (1803)
"All laws which are repugnant to the Constitution are null and void." --Marbury v. Madison, 5 U.S. (2 Cranch) 137 (1803)
incorrect info
We didn't get off the gold standard in the thirties. Pres. Nixon got us off the gold standard in 1973. To stop inflation crisis of the first oil embargo. Economies have been based on gold for centuries. Economic growth occurs when the job market grows and people are spending and saving, none of which happens when you have run away inflation.
also wrong
we got off gold in the depression, 1930's, roosevelt's confiscation, etc. That was INTERNAL. After that, we were still on the gold standard internationally, so that our national debts were redeemable in gold. That lasted until 1971 when Nixon got us off it. As far as I've read, it was mostly due to Charles DeGaulle demanding gold in all trade, not dollars...oh, the French.
Your teacher doesn't understand inflation
The economic growth is through inflation not increased wealth. Increasing the money supply so people have more money isn't the same as economic growth. It only means people have more money that is worth less since prices also rise.
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but wouldn't the money
but wouldn't the money supply create new businesses and more jobs and ect.
No
Sometimes inflation, especially if it is aggressive enough, will "create" new jobs and businesses as you say. This is what we call a boom. However, what the inflation really does is distort the signals to entrepreneurs, making them think the market is more ripe for the businesses opportunity that they wish to partake in than it really is. That is, investors indulge in riskier behavior than they otherwise would. What this does is misallocate resources to those areas. After a period of time, this misallocation shows itself, and that's what we call the bust. This is what's happening in the housing market. This is what caused the great depression.
Now, this same process destroys as many jobs and businesses as it creates though. The reason for this is that the labor and raw materials used in the businesses created by the inflationary boom isn't being used somewhere else. As Bastiat would say, you must also look at what is unseen.
Make sure you look over at mises.org if you interested in learning more about the gold standard.
She's wrong.
She apparently can't conceive of prices falling as productivity increases. Gold can be minted in extremely small weights if need be.
-jcr
"The problem with trying to child-proof the world, is that it makes people neglect the far more important task of world-proofing the child." -- Hugh Daniel
Gold standard - not - Gold
I've done a bunch of reading on this lately and have learned that it is correct to say that using just gold as money is constrictive to growth. Money demand can vary wildly and a fixed money supply then causes boom and bust cycles which is the history of hard money.
If you want stable prices, which is great for an economy, then you want a money supply that matches the demand for it. Simple but difficult to do as it is hard to measure this demand. The place for gold is as a standard of value to use as this measure - to indicate when the money is too plentiful (gold price up) or in shortage (gold price down)
If the FED was just a PC that watched the price of gold and injected or extracted money from the economy in order to keep gold stable, the money would be stable and sound. You wouldn't even need much gold as backing because why would you want gold if you trusted the money was of equal value? The problem is the leaders abuse this power and use money creation as a sureptitious tax upon the citizens.
Thou shalt not have in thy bag divers weights, a great and a small.
Thou shalt not have in thy bag divers weights, a great and a small.
Competing currency
Really? We have competing currency? Hot d**n! I want to start getting paid in Euros. At least those things have value! :D
If we "went on the gold standard" in the 30's, how did we buy and sell anything before then? And who were the '49ers(as in 1849) and what were they looking for? All that useless gold!!!!
As for a new source of gold, how about all the gold the U.S. government stole from the people when it went on the gold standard in the 30's??!!
Tell your teacher I give them an "F"
Inflate or die...
she must have a relative at the fed
The FED has a monopoly on credit and the money suppy
The FED has a monopoly on our dollar. It controls and has foreknowledge of rate increases/decreases which expand and contract our economy. For a private corporation to have that power and to be the nations lender which charges interest every dollar congress spends is to be ruler of this nation. The borrower is servant to the lender.
Competing currencies would take away that power. It's not about anchoring our dollar to a commodity it's about creating a market economy with regards to currency. This used to be the case before the FED stepped in.
"It does not take a majority to prevail ... but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men." - Samuel Adams
"The use of 'Conspiracy Theorist' or 'Truther' as a derogatory -- as an epithet almost -- is something the propagandists have perfected over the decades, and it's a useful tool for eliminating articulate dissent."
Your Teacher
Should be fired! The purpose of the Gold Standard is to have something that will always hold value, If Gold was found like Coal or iron that you would have worthless money like we have now. The expanding money supply is the fucking reason we have inflation , and expanding them makes bubbles that causes inflation to skyrocket when the market tries to correct then the fucking fed lowers interest rates further complicating the system and prolonging the agony.
The Gold standard was the excuse for the depression but the fed manufactured the roaring 20's and then gave us the dirty 30's so they could hold the gun to FDR's head and make him sign a law that outlawed Americans owning gold so they could sweep in and as Lindberg said and become the rulers of us all.
The Road to Serfdom...... Tell this fool to do your homework for you!!
The only people who don't want a Gold standard are the vampires in Washington and Wall street who suck all the money out of your pocket through taxation and inflation. As Dr Paul said the other night and ounce of gold still buys the same ammount of oil it always has it just our funny money buys less of both.
Elderly Teacher
Tell your elderly teacher that the greatest INDUSTRIAL expansion in the US occurred during latter half of nineteenth century with bimetallic (Constitutional) standard. Supplies of gold and silver did not keep pace with economic expansion so prices on average dropped.
Government teachers are trained by the government to promote the government. Her mind may well be so sclerotic that additional reasoning may be fruitless. If so, redirect your efforts to your classmates. All is never lost.
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