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"That is a tough notion but if the value of the paper and the value of the commodity rise simultaneously with the net wealth, all remains in balance with a net deflation rather than a perpetual inflation. When we were on a species standard, prices did not rise yet wealth grew."

Under a gold standard, deflation is the norm. You do not need a 'return' on your gold savings to increase your wealth. Normal deflation will result in the ounce of gold that you save today being 'worth' much more in terms of goods and services when you retire.

We are under the false impression that denominating the same quantity of assets in ever-increasing numbers of fiat currency means that we are getting 'wealthier'.

“We are under the false impression that denominating the same quantity of assets in ever-increasing numbers of fiat currency means that we are getting ‘wealthier’”

But we are better off now than we were 70 years ago wouldn’t you say?

32 posted on 04/17/2011 7:38:10 PM PDT by Christian Engineer Mass (25ish Cambridge MA grad student. Many conservative Christians my age out there? __ Click my name)