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Gold Standard: Freind or foe?

16kadams
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3/4/2012 9:44:12 PM
Posted: 4 years ago
Many libertarians and conservatives on this site are for the gold standard. On this issue, on this site, I am the loner conservative standing opposed. The question: is the gold standard friend, or foe?

The gold standard has more disadvantages then advantages. [1] Only 142,000 metric tons of gold have been mined, this is not enough for any significant monetary value. [1, 2, 3] Also the Gold standard is unequal in production in countries therefore will encourage mining in other countries: now instead of energy dependance we have money dependency. [1, 4] China (our competitor) mines the most gold. [5] Yep sour your helping other countries.

How about growth? Doesn't the gold standard boom the economy? The gold standard actually restricts growth, like a cap on maximum growth. [1, 6] When the economy grows it is customary to increase money supply. We cannot do this with a gold standard as fast restricting its growth. [6]

Wouldn't constituting the money supply reduce inflation, and therefore less money = better economy? Actually economists think economic downturns may be caused by lack of money supply. [7] The amount of money woudl be dictated on the supply of gold. [1] Wait is this bad? Yes as a very small amount of increased money supply is good in bad economic times. [8] This reason actually is attributed to the great depression and worsened it. [9] Unless more gold is mined the economy CANT GROW. [10]

The gold standard creates deflationary motions. This is why the eat depression lasted so long. [11] Now lets diverge into my opinion on deflation. A strong dollar is generally good. A small amount of inflation is sometimes needed to keep a strong dollar, but the gold standards would create major deflation periods. Too much deflation would lead to economic peril.

Also as I stated above, the gold standard has sharp decreases in the money supply, leading to economic detriment. [12] These sharp decreases will lead to economic busts.

Also some economists even say low amounts of inflation are good! [13] So if your keysian and like inflation, then a gold standard is not with you. If you think sometimes slow steady decreases in money supply are good the gold standard is not right for you.

The gold standard is hard to change, so if the economy DEMANDS a slight increase in supply the economy will halt under a gold standard as the money supply will not grow. [14] Without the flexibility of slow inflation rates or slow deflation rates the economy will suffer and have capped growth. It would lead to booms and busts, mainly busts, that are not needed and will increase economic doubt.

THE GOLD STANDARD... IS FOE

http://en.wikipedia.org... [1]
Butterman, W.C.; Earle B. Amey III (2005) (PDF). Mineral Commodity Profiles—Gold [2]
http://research.stlouisfed.org... [3]
Goodman, George J.W., Paper Money, 1981, p.165-6 [4]
http://www.miningweekly.com... [5]
http://books.google.is... [6]
Mankiw, N. Gregory (2002). Macroeconomics (5th ed.). Worth. pp. 238–255 [7]
http://www.slate.com... [8]
Timberlake, Richard H. 2005. "Gold Standards and the Real Bills Doctrine in US Monetary Policy". Econ Journal Watch 2(2): 196–233. [9]
http://www2.econ.iastate.edu... [10]
Warburton, Clark (1966). "The Monetary Disequilibrium Hypothesis". Depression, Inflation, and Monetary Policy: Selected Papers, 1945–1953 [11]
http://www.theatlantic.com... [12]
Hummel, Jeffrey Rogers. "Death and Taxes, Including Inflation: the Public versus Economists" (January 2007) [13]
"the quantity of money supplied by the Fed must be equal to the quantity demanded by money holders" http://www.econ.washington.edu... [14]
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https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
16kadams
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3/4/2012 9:44:22 PM
Posted: 4 years ago
thoughts?
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imabench
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3/4/2012 9:51:06 PM
Posted: 4 years ago
you spelled friend in the topic title wrong.....
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16kadams
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3/4/2012 9:52:08 PM
Posted: 4 years ago
At 3/4/2012 9:51:06 PM, imabench wrote:
you spelled friend in the topic title wrong.....

oh lol XD to late i did this really fast :)
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"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
16kadams
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3/4/2012 9:55:23 PM
Posted: 4 years ago
At 3/4/2012 9:53:41 PM, Phoenix.Wright wrote:
At 3/4/2012 9:51:06 PM, imabench wrote:
you spelled friend in the topic title wrong.....

hahaha

I have a feeling that one statement will keep this forum off track...
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"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
16kadams
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3/4/2012 9:57:43 PM
Posted: 4 years ago
At 3/4/2012 9:55:00 PM, Phoenix.Wright wrote:
what would you want the alternative to be?

A modified version of current fiat money.
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"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
16kadams
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3/4/2012 9:59:41 PM
Posted: 4 years ago
At 3/4/2012 9:57:43 PM, 16kadams wrote:
At 3/4/2012 9:55:00 PM, Phoenix.Wright wrote:
what would you want the alternative to be?

A modified version of current fiat money.

You could always abolish the federal reserve or reduce their power on the economy.

You could keep a big bank full of gold that is the minimum each dollar is worth, like we have now.

Keep positive or negative inflation rates as needed in the economy.

keeping the money supply the same as the market demands.
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"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
16kadams
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3/4/2012 10:02:03 PM
Posted: 4 years ago
At 3/4/2012 10:01:10 PM, SuburbiaSurvivor wrote:
Yeah, man! What you said.

XD
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"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
Mimshot
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3/4/2012 11:06:11 PM
Posted: 4 years ago
I know Bernanke isn't going to win any popularity contests, but do we really want these guys in charge of our monetary policy?
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lewis20
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3/4/2012 11:09:07 PM
Posted: 4 years ago
Do away with legal tender laws...
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16kadams
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3/4/2012 11:12:01 PM
Posted: 4 years ago
At 3/4/2012 11:09:07 PM, lewis20 wrote:
Do away with legal tender laws...

Then what? Then currency in other counties are worthless.
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"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
thett3
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3/4/2012 11:17:41 PM
Posted: 4 years ago
I don't support a government mandated Gold standard, because it happened and failed.

But let fiat and hard money compete, and I think it would be quite obvious which one would come out on top.
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: At 11/12/2016 11:49:40 PM, Raisor wrote:
: thett was right
lewis20
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3/4/2012 11:23:39 PM
Posted: 4 years ago
At 3/4/2012 11:17:41 PM, thett3 wrote:
I don't support a government mandated Gold standard, because it happened and failed.

But let fiat and hard money compete, and I think it would be quite obvious which one would come out on top.

Exactly, legalize competing currencies by way of getting rid of legal tender laws.
But they'll never do that because they make a percentage of every single transaction we make (except food I think?)
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
thett3
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3/4/2012 11:51:07 PM
Posted: 4 years ago
At 3/4/2012 11:23:39 PM, lewis20 wrote:
At 3/4/2012 11:17:41 PM, thett3 wrote:
I don't support a government mandated Gold standard, because it happened and failed.

But let fiat and hard money compete, and I think it would be quite obvious which one would come out on top.

Exactly, legalize competing currencies by way of getting rid of legal tender laws.
But they'll never do that because they make a percentage of every single transaction we make (except food I think?)

The USA hasn't gone as far as levying a VAT on precious metals yet, but I would get my hands on as much as possible as soon as possible. Just look around you, the whole economic system is falling apart..
DDO Vice President

#StandwithBossy

#UnbanTheMadman

#BetOnThett

"Don't quote me, ever." -Max

"My name is max. I'm not a big fan of slacks"- Max rapping

"Walmart should have the opportunity to bribe a politician to it's agenda" -Max

"Thett, you're really good at convincing people you're a decent person"-tulle

"You fit the character of Regina George quite nicely"- Sam

: At 11/12/2016 11:49:40 PM, Raisor wrote:
: thett was right
FREEDO
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3/4/2012 11:51:36 PM
Posted: 4 years ago
At 3/4/2012 11:51:02 PM, FREEDO wrote:
Our money should be based on the total IQ points of the country.

We would start out poor but it would eventually make things better.
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lewis20
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3/5/2012 12:01:18 AM
Posted: 4 years ago
At 3/4/2012 11:51:07 PM, thett3 wrote:
At 3/4/2012 11:23:39 PM, lewis20 wrote:
At 3/4/2012 11:17:41 PM, thett3 wrote:
I don't support a government mandated Gold standard, because it happened and failed.

But let fiat and hard money compete, and I think it would be quite obvious which one would come out on top.

Exactly, legalize competing currencies by way of getting rid of legal tender laws.
But they'll never do that because they make a percentage of every single transaction we make (except food I think?)

The USA hasn't gone as far as levying a VAT on precious metals yet, but I would get my hands on as much as possible as soon as possible. Just look around you, the whole economic system is falling apart..

As long as precious metals are only an investment I doubt they'll mess with any tax, however if their monopoly on money is ever circumvented, or as you mention falls apart, I'm sure they wouldn't hesitate to throw a VAT on precious metals.
Also it's a good thing there isn't a precedent for confiscating precious metals from citizens or anything crazy like that...
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

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darkkermit
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3/5/2012 6:40:08 PM
Posted: 4 years ago
I believe it is legal to create your own currency. Ever heard of bitcoin? Legal. Ever have it where you can earn point and the points earns rewards, legal. Chuck-e-cheese tickets, that's a form of currency.
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lewis20
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3/5/2012 6:46:31 PM
Posted: 4 years ago
At 3/5/2012 6:40:08 PM, darkkermit wrote:
I believe it is legal to create your own currency. Ever heard of bitcoin? Legal. Ever have it where you can earn point and the points earns rewards, legal. Chuck-e-cheese tickets, that's a form of currency.

Neither of those are hard currencies, no one is going to trust Chuck-E-Cheese coins or tickets.
However realistic Competing currencies based on gold and silver have been shut down by the govt.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
Lordknukle
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3/5/2012 6:49:04 PM
Posted: 4 years ago
The Great Depression lasted so long because of FDR and Hoover's failed economic policy. The Gold Standard had little to do with it.
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16kadams
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3/5/2012 6:58:30 PM
Posted: 4 years ago
At 3/5/2012 6:49:04 PM, Lordknukle wrote:
The Great Depression lasted so long because of FDR and Hoover's failed economic policy. The Gold Standard had little to do with it.

I agree, but having a poor money system didn't help it.
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https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
lewis20
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3/5/2012 7:10:28 PM
Posted: 4 years ago
At 3/5/2012 6:58:30 PM, 16kadams wrote:
At 3/5/2012 6:49:04 PM, Lordknukle wrote:
The Great Depression lasted so long because of FDR and Hoover's failed economic policy. The Gold Standard had little to do with it.

I agree, but having a poor money system didn't help it.

Are you implying the all knowing Federal Reserve didn't do its duty, that is, protect us from a great depression...
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
16kadams
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3/5/2012 7:22:01 PM
Posted: 4 years ago
At 3/5/2012 7:10:28 PM, lewis20 wrote:
At 3/5/2012 6:58:30 PM, 16kadams wrote:
At 3/5/2012 6:49:04 PM, Lordknukle wrote:
The Great Depression lasted so long because of FDR and Hoover's failed economic policy. The Gold Standard had little to do with it.

I agree, but having a poor money system didn't help it.

Are you implying the all knowing Federal Reserve didn't do its duty, that is, protect us from a great depression...

No. I am saying you need a money equilibrium for an economy to thrive, and the gold standard didn't and cannot create this equilibrium. [1]

"In 1933, President Franklin D. Roosevelt nationalized gold owned by private citizens and abrogated contracts in which payment was specified in gold." [2]

Yep. You hate FDR? This is a failed gold standard under a socialist... So really the gold standard LK fits in your description, and no gold standard is better than a gold standard.

1. Warburton, Clark (1966). "The Monetary Disequilibrium Hypothesis". Depression, Inflation, and Monetary Policy: Selected Papers, 1945–1953
2. http://www.econlib.org...
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https://rekonomics.wordpress.com...
"A trend is a trend, but the question is, will it bend? Will it alter its course through some unforeseen force and come to a premature end?" -- Alec Cairncross
lewis20
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3/5/2012 8:04:36 PM
Posted: 4 years ago
At 3/5/2012 7:22:01 PM, 16kadams wrote:
At 3/5/2012 7:10:28 PM, lewis20 wrote:
At 3/5/2012 6:58:30 PM, 16kadams wrote:
At 3/5/2012 6:49:04 PM, Lordknukle wrote:
The Great Depression lasted so long because of FDR and Hoover's failed economic policy. The Gold Standard had little to do with it.

I agree, but having a poor money system didn't help it.

Are you implying the all knowing Federal Reserve didn't do its duty, that is, protect us from a great depression...

No. I am saying you need a money equilibrium for an economy to thrive, and the gold standard didn't and cannot create this equilibrium. [1]

"In 1933, President Franklin D. Roosevelt nationalized gold owned by private citizens and abrogated contracts in which payment was specified in gold." [2]

Yep. You hate FDR? This is a failed gold standard under a socialist... So really the gold standard LK fits in your description, and no gold standard is better than a gold standard.


1. Warburton, Clark (1966). "The Monetary Disequilibrium Hypothesis". Depression, Inflation, and Monetary Policy: Selected Papers, 1945–1953
2. http://www.econlib.org...

Oh money equilibrium of course.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
SuperRobotWars
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3/7/2012 11:10:06 AM
Posted: 4 years ago
At 3/5/2012 6:46:31 PM, lewis20 wrote:
At 3/5/2012 6:40:08 PM, darkkermit wrote:
I believe it is legal to create your own currency. Ever heard of bitcoin? Legal. Ever have it where you can earn point and the points earns rewards, legal. Chuck-e-cheese tickets, that's a form of currency.

Neither of those are hard currencies, no one is going to trust Chuck-E-Cheese coins or tickets.
However realistic Competing currencies based on gold and silver have been shut down by the govt.


The problem of liberty dollar [as has been stated so many times before] was their likeness to the US dollar there was also the issue of putting USD values upon the currency which was considered as fraud for it was an asset backed currency and hence the individual denominations which are supposed to be backed in a certain quantity value of said assets and hence the USD [$] values placed upon the coins in question did not adequately display the shifting values of gold in terms of USD.

http://en.wikipedia.org...
http://www.howtovanish.com...

If you want a decent medium of hard asset [which really isn't that hard unless you have copper, aluminum, iron, iridium, or other such truly useful assets] currency see shire silver or maybe you could try The Hampshire model. However The Hampshire model might as well be our current model for our currency for in order to prevent the forgery [well the making of good forgeries] of USD we make the cost of printing practically the same as the cost forgeries [its either equal/greater or the potential profits to be made are marginal at best (100 notes printed and I made 5 cents, I think I'll get a job now)] which has one key difference which is that USD is accepted everywhere, plus The Hampshire model ends up suffering from a "Free Rider" problem all of it's own which doesn't really happen in USD.

http://shiresilver.com...
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lewis20
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3/7/2012 11:42:17 AM
Posted: 4 years ago
At 3/7/2012 11:10:06 AM, SuperRobotWars wrote:
At 3/5/2012 6:46:31 PM, lewis20 wrote:
At 3/5/2012 6:40:08 PM, darkkermit wrote:
I believe it is legal to create your own currency. Ever heard of bitcoin? Legal. Ever have it where you can earn point and the points earns rewards, legal. Chuck-e-cheese tickets, that's a form of currency.

Neither of those are hard currencies, no one is going to trust Chuck-E-Cheese coins or tickets.
However realistic Competing currencies based on gold and silver have been shut down by the govt.


The problem of liberty dollar [as has been stated so many times before] was their likeness to the US dollar there was also the issue of putting USD values upon the currency which was considered as fraud for it was an asset backed currency and hence the individual denominations which are supposed to be backed in a certain quantity value of said assets and hence the USD [$] values placed upon the coins in question did not adequately display the shifting values of gold in terms of USD.

http://shiresilver.com...

Chuck E Cheese looks more reputable than shire silver
Also liberty dollars looked nothing like dollars and has no reference to federal reserve notes nor do they claim to be legal tender. The term "dollar" isn't unique to the federal reserve note.
The federal government simply wanted to set a precedent that investing in an alternate currency will result in an FBI raid and a loss of all your assets.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler