What the crap are talking about?
Personal attacks more than anything rational from the looks of things.
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What the crap are talking about?
Billt I am curious about what you know about the gold standard and why you think it would be bad for our country.
Far from it being "lunacy" to return to the gold standard it could help restore us to prosperity and limit government power by making it impossible for them to print (digitally or otherwise) new money. Not to mention that the constitution prohibits the government from issuing paper money.
Not to mention that the constitution prohibits the government from issuing paper money.
But who on this forum really cares about that silly ol thing anyways?
Instead the Federal Reserve would have raised interest rates considerably
Commitment to the gold standard prevented Federal Reserve action to expand the money supply in 1930 and 1931
If the U.S. and a substantial number of other industrial economies adopted a gold standard, the U.S. would lose the ability to tune its economic policies to fit domestic conditions.
For example, in early 1995 the dollar weakened against the Yen. Under a gold standard, such a decline in the dollar would not have been allowed. Instead the Federal Reserve would have raised interest rates considerably in order to keep the value of the dollar fixed at its gold equivalent, and a recession would probably have followed. Under a gold standard, the burden of adjustment is always placed on the weak currency country.
Countries seeing downward market pressure on the values of their currencies are forced to contract their economies and raise unemployment. The gold standard imposes no equivalent adjustment burden on countries seeing upward market pressure on currency values. Because of that, a gold standard regime will see a higher average unemployment rate than an alternative managed regime. A gold standard played a major part in keeping governments from fighting the Great Depression, and was a major factor turning the recession of 1929-1931 into the Great Depression of 1931-1941.
The purpose of a gold standard is to produce stable money. I don't know of any major negative economic event in all of history that was caused by money that was too stable. However, the gold standard did keep governments from fighting the Great Depression via currency devaluation, an economic band-aid that governments have reached for over thousands of years.
Today economists like to think they invented currency devaluation. And, like I said, when Germany, Britain and Japan (and many other parts of their empires like Argentina, India, Korea etc.) devalued, this created a competitive disadvantage for countries that remained on the gold standard, notably the U.S. and France.
Countries that were not on the gold standard in 1929--or that quickly abandoned the gold standard by and large escaped the Great Depression. Countries that abandoned the gold standard in 1930 and 1931 suffered from the Great Depression, but escaped its worst ravages. Countries that held to the gold standard through 1933 (like the United States) or 1936 (like France) suffered the worst from the Great Depression.
Commitment to the gold standard prevented Federal Reserve action to expand the money supply in 1930 and 1931 and forced President Hoover into destructive attempts at budget-balancing in order to avoid a gold standard-generated run on the dollar. Also, commitment to the gold standard left countries vulnerable to "runs" on their currencies--Mexico in January of 1995 writ very, very large. Such a run, and even the fear that there might be a future run, boosted unemployment and amplified business cycles during the gold standard era.
In today's world economy, a gold standard sounds a lot more wonderful than it actually is. When you look at past history, and compare it directly to today's monetary systems in place all over the world, a gold standard simply is no solution to current economic problems. Thinking that going back to a gold standard in this country would solve this nations economic crisis, is just about as naive as thinking taxing the top 1% even more will alleviate this countries debt problems. But you cannot communicate this to Ron Paul's 10% base that broadcast from their mothers basement, by simply regurgitating his nonsense without any additional thinking on their part. Mostly due to the fact they don't have a clue, and follow him like blind Lemmings.