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Fear of a Gold Planet

Discussion in 'Political Debate & Discussion' started by KenH, Jun 4, 2019.

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  1. KenH

    KenH Well-Known Member

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    "Should favoring some kind of gold standard disqualify a nominee from occupying one of seven seats on the Board?...My answer will be: no, favoring a gold standard in a serious manner should not disqualify a nominee from holding a seat on the Board of Governors."

    ...

    There are at least three additional arguments for a gold standard that others have made since the Great Recession. First, in contrast to the status quo system, a gold standard combined with free banking would have restrained the boom and the bust. Second, in contrast to fiat standards, gold standards historically have exhibited lower price level uncertainty at medium to long horizons, which means lower yield premia and thicker markets for 20+ year bonds, reducing an important obstacle to financing long-range real investment projects. What the dollar will be worth twenty years from now remains far less certain than it was under the classical gold standard. And third, as Alan Greenspan has noted in the light of recent sovereign debt problems, a gold standard without bailouts provides greater fiscal discipline, restraining government over-indebtedness."
     
    #1 KenH, Jun 4, 2019
  2. InTheLight

    InTheLight Well-Known Member
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    There is a finite amount of gold on the planet. That means there is a finite amount of money on the planet. The population keeps increasing; the number of goods and services keeps increasing. Therefore the amount of money needs to increase. With the gold standard the solution is for the government to continue to adjust, by decree, how much money an ounce of gold is worth. Ultimately, this is no different than the Federal Reserve setting interest rates except it is far less nimble.

    Since there is a finite amount of gold on the planet, a country could make it their national policy to hoard this resource. China, for example, could make it their foreign policy priority to buy up as much gold as they could. The country that controls the gold supply could dictate economic conditions to the rest of the world.

    Supposing there was a huge gold vein found somewhere? Everybody's money would be devalued. Supposing it was the United States? Great, huh? Now, supposing it was in Iran. Not so great, is it?

    Or let's say the Chinese fund an accelerated space mission to bring gold back from the asteroid belt between Mars and Jupiter. Let's say the mission was public knowledge. Now what? Let's say it wasn't public knowledge and China secretly increased their money supply by 25%. Now what?
     
    #2 InTheLight, Jun 4, 2019
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  3. KenH

    KenH Well-Known Member

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    "Austrian economics gives us reasons for thinking the opposite. Economic growth, defined as an increase in the quantity of goods produced per capita, requires the capital to labor ratio increases in favor of more capital per unit of labor. Capital accumulation must be funded by real investment. However, while nominal investment depends on the quantity of money, real investment does not. Any amount of real investment can take place with any amount of money because prices adjust not only to the quantity of goods but the quantity of money.

    Economic history also suggests the contrary: during the 19th century, the economy grew faster than the rate of gold mining. Prices remained constant or slowly fell over time."

    Chancellor: Not Enough Gold | Robert Blumen
     
    #3 KenH, Jun 4, 2019
  4. InTheLight

    InTheLight Well-Known Member
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    Translation: "As soon as we go on the gold standard get ready for crippling deflation, for decades."
     
    #4 InTheLight, Jun 4, 2019
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  5. KenH

    KenH Well-Known Member

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    #5 KenH, Jun 4, 2019
  6. Reynolds

    Reynolds Well-Known Member
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    I like deflation.
     
    #6 Reynolds, Jun 4, 2019
  7. InTheLight

    InTheLight Well-Known Member
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    Ha ha ha ha. And you think that was because of the gold standard? How about:

    End of civil war, rapid re-population of the US
    Massive immigration, cheap labor
    Proliferation of railroads, easy ability to transport goods
    Westward expansion, idea of manifest destiny
    Invention of electric light bulb
    Increasingly efficient use of machinery and automation
     
    #7 InTheLight, Jun 4, 2019
  8. Reynolds

    Reynolds Well-Known Member
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    I am not a conspiracy nut. Having said that, The Federal Reserve was a power grab by the world order to control our nation. It worked. The Gold standard would strip the Fed of its power. I completely favor that.
     
    #8 Reynolds, Jun 4, 2019
  9. KenH

    KenH Well-Known Member

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    Should favoring a gold standard disqualify a person from serving on the Federal Reserve’s Board of Governors? I say it should not.
     
    #9 KenH, Jun 4, 2019
  10. InTheLight

    InTheLight Well-Known Member
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    No, it should not disqualify them from consideration. But it's a given they won't get the job.

    Should being pro-life disqualify someone from winning the Democratic party nomination for President? No, it should not disqualify them, but it's a given they won't get the job.
     
    #10 InTheLight, Jun 4, 2019
  11. Rob_BW

    Rob_BW Well-Known Member
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    Give me a few more years to pay off the house, and then I can switch sides.
     
    #11 Rob_BW, Jun 4, 2019
  12. Reynolds

    Reynolds Well-Known Member
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    You hit the nail on the head. Debt is why both people and nations fear hard currency.
     
    #12 Reynolds, Jun 4, 2019
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  13. Rob_BW

    Rob_BW Well-Known Member
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    But I wouldn't want to put my kids into a world where their mortgage takes up an ever larger part of their earnings. I'm fine with managed inflation. Keeps money in the markets working instead of in grandma's mattress.
     
    #13 Rob_BW, Jun 4, 2019
  14. KenH

    KenH Well-Known Member

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    You might want to read up on the economic history of the 1970s. As one living on a fixed income now, and considering how many retired baby boomers there are and are coming, the last thing we need is for flawed humans to be attempting "managed inflation". That's like capturing a lion and keeping it in one's house as a "pet" and saying "I'm fine with a managed lion."
     
    #14 KenH, Jun 4, 2019
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  15. Rob_BW

    Rob_BW Well-Known Member
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    Or maybe I have read up on it, and came to a different conclusion than you did.
     
    #15 Rob_BW, Jun 4, 2019
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  16. KenH

    KenH Well-Known Member

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    Quite possible.
     
    #16 KenH, Jun 4, 2019
  17. Reynolds

    Reynolds Well-Known Member
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    I am not. Do like my grandparents, parents, and I did. Don't borrow money. We are not rich and not "old money." People only think mortgage. They don't realize there are other ways.
     
    #17 Reynolds, Jun 4, 2019
  18. Reynolds

    Reynolds Well-Known Member
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    The only problem is there will come a time it can't be managed.
     
    #18 Reynolds, Jun 4, 2019
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