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Newt's latest zany idea: go back to gold standard

Robert Prey said:
"No State shall... make any thing but Gold and Silver Coin a tender in payment of debt.'
Art. I, Sec. 10.
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All that means is that if say NY wanted to issue money it would have to be backed by gold or silver. As we have lost all non federal currencies it is not relevant.
 
Robert Prey said:
Nonsense. The Great Depression was made "Great" in part because of ending the gold standard.
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Nope. There is a strong correlation between leaving the gold standard during the depression and the start of economic recovery for the countries that did it.
 
The analyst I listened to on some NPR show or other held that being strictly bound to gold, fast adjustments to currency were impossible at a critical time.
 
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Bikewer said:
The analyst I listened to on some NPR show or other was that being strictly bound to gold, fast adjustments to currency were impossible at a critical time.
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The real issue is why do gold bugs believe the current supply of gold will back enough money to run our modern economy? Or that we should limit the growth of our economy by our ability to dig new gold out of the ground?

On a gold standard, all human effort and cleverness is limited by the supply of a shiny metal. As productivity rises and people produce more goods and services, prices have to go down unless new supplies of gold are found to match the rise in GDP. When prices go down, the best investment is to just sit on your cash. Keep it in a vault instead of putting it to work.

As people start to hoard money, the economy collapses. Welcome to the next depression. Consider yourself lucky if you don't starve to death.
 
I think we should go on the titanium standard so that we use all the titanium for money and golfers have to go back to using real woods just as the founding fathers intended.
 
Kestrel said:
The real issue is why do gold bugs believe the current supply of gold will back enough money to run our modern economy? Or that we should limit the growth of our economy by our ability to dig new gold out of the ground?

On a gold standard, all human effort and cleverness is limited by the supply of a shiny metal. As productivity rises and people produce more goods and services, prices have to go down unless new supplies of gold are found to match the rise in GDP. When prices go down, the best investment is to just sit on your cash. Keep it in a vault instead of putting it to work.

As people start to hoard money, the economy collapses. Welcome to the next depression. Consider yourself lucky if you don't starve to death.
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Stop with your economics schmeconomics. Gold is SHINY! And it's heavy. And it was given to baby Jeebus. One can understand that. It was good enough for the 19th century, it's good enough for the 21st century.
 
Kestrel said:
The real issue is why do gold bugs believe the current supply of gold will back enough money to run our modern economy? Or that we should limit the growth of our economy by our ability to dig new gold out of the ground?

On a gold standard, all human effort and cleverness is limited by the supply of a shiny metal. As productivity rises and people produce more goods and services, prices have to go down unless new supplies of gold are found to match the rise in GDP. When prices go down, the best investment is to just sit on your cash. Keep it in a vault instead of putting it to work.

As people start to hoard money, the economy collapses. Welcome to the next depression. Consider yourself lucky if you don't starve to death.
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Don't forget that population growth itself would cause deflation.
 
Kestrel said:
The real issue is why do gold bugs believe the current supply of gold will back enough money to run our modern economy? Or that we should limit the growth of our economy by our ability to dig new gold out of the ground?

On a gold standard, all human effort and cleverness is limited by the supply of a shiny metal. As productivity rises and people produce more goods and services, prices have to go down unless new supplies of gold are found to match the rise in GDP. When prices go down, the best investment is to just sit on your cash. Keep it in a vault instead of putting it to work.

As people start to hoard money, the economy collapses. Welcome to the next depression. Consider yourself lucky if you don't starve to death.
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Nonsense. The 19th century gold standard produced the greatest burst of wealth and prosperity in all of history.
 
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