Posted on 12/04/2011 8:33:58 PM PST by Comparative Advantage
Those making public calls for a return to the gold standard are a bunch of lunatics and hacks who are doing nothing but calling for a repeat of the Great Depression, says New York University Nouriel Roubini.
Loose monetary policies have done little to lower unemployment rates and have many saying the U.S. should return to the gold standard, which pegs the value of the dollar to gold.
Supporters say a gold standard, abandoned in the 20th Century, would force the government to live within its means and end inflationary pressures that come with expansive monetary policy.
"That's total nonsense." Roubini tells Yahoo's The Daily Ticker, calling the gold bugs who support a return to the gold standard a "bunch of lunatics and hacks."
A gold standard prevents authorities from stimulating the economy when needed.
(Excerpt) Read more at moneynews.com ...
Thanks Comparative Advantage.
Keynesians see the world differently than the rest of us.
We confine them to ivory towers for a reason.
Maybe the gold standard’s the way to go or maybe it’s not. But this fiat thing sure ain’t working.
“Lunaticks and Hacks”...pretty well sums up the average Ron Paul aficionado.
Well, then, I am a lunatic and hack.
That's the general idea, yes...
I appreciate the concept of a gold, or similar, standard.
Two problems I haven’t seen addressed:
- there isn’t enough of the stuff. Too many people would lose too much value to tolerate the switch.
- rate of gold supply increase does not match general wealth creation rate. Inflation or deflation ensues as GDP increases.
GOLDBUG ping
C’mon, nobody ever said you were average!
GOLDBUG ping
Well then, just keep having Gov'ts borrow and spend on their cronies and social engineering projects. And then when it looks like they may default, have their Central Banks print money.
Because that's working out so well all around the world....
Correct.
Therefore, Keynesian "economists", the demand stimulators, fear the gold standard.
First they ignore you ... we're making progress.
The confinement is imperfect, unfortunately.
Prices are relative determinations. When something is elevated to the role of money in the marketplace its value is determined by the participants on an individual case by case basis. There are 'enough' yen to price everything in the world, just as there are enough Federal Reserve notes. A currency denominated in gold weight would just as readily by priced by the market against all goods available.
Too many people would lose too much value to tolerate the switch.
Who? Those who get the loans of 'new money' first? Surely not those seeing the value of the dollar driven down by Bernanke's deliberate inflation of the money supply. Why do you care more about Goldman Sachs than the people who live on your block? They're losing too much now to continue with this system of institutionalized robbery in lieu of taxation.
- rate of gold supply increase does not match general wealth creation rate. Inflation or deflation ensues as GDP increases.
Changes in value (price) consequent to relative levels of production are how free market economies prioritize production. If the rate of production of two goods are different, then an increase of the money supply can't match them now anyway. This point you raise is actually irrelevant. In the event that production in general outpaced the production of gold specifically this would actually confer additional benefit upon savers, and automatically encourage even greater levels of capital formation to support even greater capital investment and increased productivity.
You mean like all the central banks and major investment companies buying gold as fast as they can?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.