Why would anyone want gold standard?

[psionl0]

politicians printing "easy to make money" all these years has shaped the world around us, and hasnt that just worked out great

Actually, apart from a bit of QE'ing here and there, it is the banks that have created most of the money. The politicians simply borrow it.

 

[kevsta]

well yes, I was simplifying, the banks create it, but politicians spend way more of it than they have or can ever hope to have, simply because they can, and in fact have to, to get elected.

if they had to actually have something of value to back it up (like gold, but could be anything really) then this would not be possible.

its really very easy to see why the paper ponzi lovers hate gold so much.

 

[Sceptic-PK]

well yes, I was simplifying, the banks create it, but politicians spend way more of it than they have or can ever hope to have, simply because they can, and in fact have to, to get elected

if they had to actually have something of value to back it up (like gold, but could be anything really) then this would not be possible.

A gold standard is nothing more than a speed bump for politicians. See Roosevelt's fiddling with the gold price in the 30s.

its really very easy to see why the paper ponzi lovers hate gold so much.

I agree, it is rather easy. It is well established that the longer a country stayed on the gold standard, the longer/deeper their Great Depression (see Eichengreen, Bernanke). And also because gold's most ardent supporters tend to be nutters.

 

[kevsta]

did you just quote Bernanke as having something valid to say on the subject?

hilarious. how about Krugman or Hans Christian Anderson?

Bernanke has been wrong about everything, forever. if we have to quote the status quo's views (with their innate objectivity) how about we quote a few Greenspan instead?

there are both old and newer quotes out there, once freed from the shackles of minitruth he started making sense again.

 

[Sceptic-PK]

Bernanke's assessment is consistent with other researchers on the topic. There is also no denying the fact that the sooner a country left gold, the sooner its economy recovered during the Depression. As for quoting Greenspan, I am not aware of his research on the Great Depression so cannot comment.

 

[psionl0]

its really very easy to see why the paper ponzi lovers hate gold so much.

But not so easy to see why so few people (whether they be "paper ponzi lovers" or goldbugs) are willing to say anything about the banking system.

A commodity based currency might limit the amount that politicians can borrow but it will still be far more than all the gold put together if banks are allowed to continue to create money.

It is the banking system with its loan cycles that is the main cause of the financial troubles in the world.

 

[timhau]

politicians printing "easy to make money" all these years has shaped the world around us, and hasnt that just worked out great

Yeah, everything was so much better in the 1800s.

 

[kevsta]

Yeah, everything was so much better in the 1800s.

ok well if we're just answering with silly quips now my response is that is up until then it probably was for the vast majority of American Indians.

 

[kevsta]

But not so easy to see why so few people (whether they be "paper ponzi lovers" or goldbugs) are willing to say anything about the banking system.

A commodity based currency might limit the amount that politicians can borrow but it will still be far more than all the gold put together if banks are allowed to continue to create money.

It is the banking system with its loan cycles that is the main cause of the financial troubles in the world.

yes I understand this too, and Im more than willing to talk about the banking system along with many others, including Mervyn King (yes, there it is, the "appeal to authority" or whatever cute JREFy sniggering phrase this comes under)

http://www.positivemoney.org.uk

 

[kevsta]

Bernanke's assessment is consistent with other researchers on the topic. There is also no denying the fact that the sooner a country left gold, the sooner its economy recovered during the Depression. As for quoting Greenspan, I am not aware of his research on the Great Depression so cannot comment.

I was referring to his comments on "gold being money" in direct contravention to Bernanke's recent nonsense.

and of course there's the famous one about gold being the only thing that stands in the way of the central banks insidious inflation theft tax.

with regards to the great depression, there are alternative schools of thought that disagree with your status quo version of history.

Few events in U.S. history can rival the Great Depression for its impact. The period from 1929 to 1941 saw fundamental changes in the landscape of American politics and economics, including such monumental events as America ‘s going off the gold standard and the founding of Social Security. It was a watershed for the growth of the federal government.

The Great Depression created a widespread misconception that market economies are inherently unstable and must be managed by the government to avoid large macreconomic fluctuations, that is, business cycles.

This view persists to this day despite the more than 40 years since Milton Friedman and Anna Jacobson Schwartz showed convincingly that the Federal Reserve’s monetary policies were largely to blame for the severity of the Great Depression.

In 2002 Ben Bernanke (then a Federal Reserve governor, today the chairman of the Board of Governors) made this startling admission in a speech given in honor of Friedman’s 90th birthday: “I would like to say to Milton and Anna: Regarding the Great Depression, you’re right. We did it. We’re very sorry.”

http://www.thefreemanonline.org/featured/the-great-depression-according-to-milton-friedman/

 

[psionl0]

Yeah, everything was so much better in the 1800s.

Never before has the entire world been on an entirely fiat-based monetary system. If people lose faith in it then you have no idea how bad things could become.

 

[kevsta]

Never before has the entire world been on an entirely fiat-based monetary system. If people lose faith in it then you have no idea how bad things could become.

word. very few people get this.

IMO the next 2 decades will bring many things the world has never seen before, along with plenty that we have, and should have known better than to reproduce once more.

 

[Sceptic-PK]

http://www.thefreemanonline.org/featured/the-great-depression-according-to-milton-friedman/

Oh that old chestnut, haha. Have you actually read Bernanke's speech that you're quoting? I mean you're referencing the exact same speech where he outlines the role of the gold exchange standard in propogating and prolonging the Depression. It's amazing that the goldbugs quote the closing comments and ignore virtually everything else in it!

 

[Sceptic-PK]

If people lose faith in it then you have no idea how bad things could become.

If...but...when...maybe...could've...should've...would've.

 

[kevsta]

Oh that old chestnut, haha. Have you actually read Bernanke's speech that you're quoting? I mean you're referencing the exact same speech where he outlines the role of the gold exchange standard in propogating and prolonging the Depression. It's amazing that the goldbugs quote the closing comments and ignore virtually everything else in it!

no, I wouldn't waste my time reading his nonsense, we may as well read the bible for guidance or the facts. I read some Friedman many years ago.

 

[Sceptic-PK]

Then why are you quoting him in support of your argument?

 

[kevsta]

did you click the link ? technically Im quoting them, quoting Bernanke.

it feels somehow "cleaner"

 

[WildCat]

lack of counterparty risk is probably the tradition that people value it for the most. no "poof, and it's gone.."

Of course it can, in fact 99% of the current value of gold is artificial.

 

[WildCat]

actually I read "paper" money is actually only about 3% of circulation nowadays, the rest is digital 1s and zer0s so this argument is now becoming irrelevant.

Exactly that's another huge advantage of fiat money.

give it a few years and it will be primarily digital format. given that would you prefer to have the value of your digital credits based on something the central banks and planners can continue to manipulate and rob you through, or something they cant? (so easily anyway)

People can steal your gold too. And the market can drop it back down to $400/oz in a matter of weeks or months.

again, you say this as though it is a bad thing? its better than having the economy "expand" though money volume and not real growth isnt it?

It is a bad thing. Currently, the economy can expand because of new technology, new innovation, new products, new services, new ideas. Go to a gold standard and the economy can only expand as fast as gold can be dug out of the ground. Unless the price of gold rises, in which case you've just made gold an extremely inconvenient form of fiat money.

the illusion that is the "growth" of the US over the past decade is entirely based on your approach, and if you didn't notice, it hasn't worked out so well.

You have evidence that fiat money caused the current economic conditions?

 

[WildCat]

how about we quote mine a few Greenspan instead?

ftfy

You do know that Greenspan is not in favor of a gold standard, don't you? Of course you don't, because you're a gold bug.