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Comment: That should not be the argument

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That should not be the argument

for sound money (gold included.) Central banks have many strategies (short-term and long-term) related to thier reserves. Without gold standard, market prices of gold do NOT reflect its potential price under the gold standard. Originally, the FED was fully backed (40% gold and 60% corporate paper) until the government legislation forced the FED to take care of the government unbalanced budget and curb unemployment.

Regarding gold, however, I found Milton Friedman idea of fixed-FIAT (fixed paper supply mandated by law) somewhat reasonable. Milton wanted to avoid inflation and wealth waste that production of gold generates under the gold standard. Herman Hoppe tried to address Milton's argument, but did a poor job. (Example of Milton's argument: new techologies allow drilling very deep into the Earth. If Russia discovers immense reserves of gold, they become instantly rich and we instantly poor. Inflation will eat all our gold value.)