Fallacies against Gold

[Anarchist420]

Here's the link:
https://www.facebook.com/notes/greg...he-gold-standard-by-gregg-hil/174671762589047

"The gold standard is to economics what the flat earth theory is to astronomy: something that may have seemed to make sense back when people didn’t know any better but is ridiculous to suggest today." - Dr. Russ Anderson
"Ron Paul is saying: 'Let's make everything simple again. . . If we had a gold standard, we wouldn't need complex monetary policy. But how do we get from here to there? There might not be a way. It is just nostalgia for a time that never really existed." - Dr. Vincent Reinhart, American Enterprise Institute
“Inflation is low and relatively predictable. No Ron Paul supporter has managed to articulate to me what problem the gold standard solves. . . It's a terrible idea, which is why there are so few economists willing to raise their voices in support of it.” - Megan McArdle, The Atlantic magazine

Let me start off by saying the gold standard was never done the right way. As for the 3rd quote, it's wrong, because inflation is not low.

Many conservatives oppose Rep. Ron Paul (R-TX) on foreign policy and national security matters, but admire his economic agenda. The Congressman's isolationist defense policy is the complete opposite of the Reagan Doctrine, but few people on the right are challenging Paul’s economic arguments.
Since 1976, he has been promoting a return to the gold standard and is the author of four books on the topic. His other major economic theme is abolishment of the Federal Reserve which he calls "immoral, unconstitutional, impractical, promotes bad economics, and undermines liberty." All of Paul's claims are wrong, but I will address Federal Reserve issues in a separate article.

The 2nd word should read "neoconservative". It's already clear that the anti-goldite doesn't know what true conservatism is.

Long ago the gold standard made sense for America, but not today. Its advocates want to turn the clock back to the “Roaring 20’s,” but the economic growth of that decade had little to do with the gold standard and it ended in disaster.
America has now been off the gold standard for 40 years and its many flaws have been forgotten. There are excellent reasons it was rejected by right wing icons such as Milton Friedman. No court agrees with Ron Paul’s interpretation of "lawful money," or that paper money is unconstitutional. Ron Paul’s “sound money” claims are not correct.

Its advocates do not advocate for a return to the roaring twenties, where fractional reserve banking and a central bank existed as well as government having the power to print gold certificates.

The gold standard was in effect from about the middle of the 19th century to the last quarter of the 20th century (1971). In the late 19th century the growth of the money supply had nothing to do with population or the size of the economy. The resulting deflation was disastrous and led to the free silver movement (“Don’t crucify me on a cross of gold”.) The present system can tailor the money supply to the demands of the economy, which the gold standard failed to do.

The gold standard failed in the late 19th century because fractional rseerve banking existed, and was subsidized by many states. Fractional reserve banking artificially extends credit, so people were buying too much on credit, which were the problems. If Fractional reserve banking hadn't existed and hadn't been subsidized by many states, then the free silver movement would never have gained momentum.

Why Did America Leave The Gold Standard?
The Bretton Woods system (1945 -1971) came to an end when the United States stopped allowing dollars to be converted into gold. The "gold window" shut and foreign governments could no longer trade dollars for gold at $35/ounce. The U.S. dollar then became a "fiat currency" backed only by the "full faith and credit of the United States.” Since then the dollar has been the world's only reserve currency.
Under Bretton Woods, government regulations mandated that banks hold fixed ratio of gold as currency reserves. There was a greater need for gold as economies expanded. No nation has returned to the gold standard since the end of the Bretton Woods system. Switzerland has plenty of gold, but they have not opted for a gold standard with good reason.
If they had been on gold in recent years they would have suffered massive deflation and an extreme recession. The rapid price rise of gold would have tripled the value of their franc against other currencies and their exports would have been completely priced out of world markets. Our present fiat system allows the free market to determine the value of our currency.

The above quote is so full of blatant, complete inaccuracies that it doesn't need addressing.

Why Are So Few Republicans Challenging Ron Paul?
Ron Paul's presidential campaign is a serious threat to the GOP establishment, but few Republicans are challenging his outrageous claims regarding the gold standard , the Federal Reserve and America's currency reserves. There is nothing wrong with an audit of the U.S. gold reserves or the Federal Reserve. There have already been over 100 GAO audits of the Fed.
What is outrageous is when Paul claims “I think it is a possibility” there is no gold at Fort Knox! This is where 4.8% of the world's gold is held, and it represents 8,000 metric tons. The entire world gold supply is well known and if there was an increase in supply immediate inquiries would be made by currency traders and the World Gold Council.
The dollar is the world’s prime reserve currency, and since World War II it has dominated the currency markets. Any sale would have been known right away and it would have to be reported in the budget. It is conspiracy theory nonsense to claim the U.S. currency reserves have been sold, but facts never stop Ron Paul.

The person quoted apparently has too much faith in the government (which lies to us time and again), and apparently, will believe whatever government tells them. Also, it's opposite of currency traders' interests to make inquiries about the gold supply.
In addition to all that, the pound was once the world reserve currency, but due to UK having policies like the U.S. does, it lost that status, and the pound also immediately lost 90% of its value after losing world reserve currency status. Just because a currency is currently the world's reserve currency doesn't mean that.

What Are the Problems With A Gold Standard?

• Many economists believe adopting a gold standard could decrease the U.S. monetary supply by about half. This would cause massive deflation and could threaten an economic collapse.

It would cause massive deflation, but there could always be bankruptcy legislation passed to protect average or light debtors.

Do we really want to make the size of the money supply dependent on the success of gold miners? It would also export control of our nation’s money system to foreigners. Over 90% of the world’s gold is produced by foreigners. In 1970’s OPEC cut-off oil, and Russia and South Africa could do the same thing with gold. Why not have our currency controlled by Americans?

The market should control the value of gold, and only 3% of the gold in the Continental US has been mined. Oil is consumed, gold is not; once gold is mined and out of the exporting country, the market can more easily control the price of it than oil. Also, gold is found all over the earth, unlike oil. If a gold mining country gets to be like the OPEC, then they will quickly be outcompeted.

The gold standard did not work in the past, and no country has ever been able to maintain it. It was abandoned by many nations during major wars and when there was an economic crisis. The government printed too many gold back dollars and then refused to redeem them for gold.

The problem is solved by writing a constitution that prohibits:
fractional reserve banking, or at least does not allow governments to subsidize it in any way.
the government from creating money.
the government from chartering a monopoly on the money supply
legal tender for private debts.
the government from accepting anything other than gold.
altering or abolishing any of the above provisions without unanimous consent of the legislature or member states.

There is not enough gold in the world for it to be a medium of exchange.

Not true. People can use platinum or diamonds if there is not enough gold. It also depends upon how much you can buy with 1/6 of an ounce of gold.

• Ron Paul says "Congress should only permit currency backed by stable commodities such as silver and gold." Gold advocates also claim currency values would be stable if they were based on gold, but they have no evidence. Gold is highly unstable. The real value of goal has more than doubled in recent years.

Which can be good for everyone, as people need to save more.

• To demonstrate that gold is stable, Congressman Paul says the value of the dollar, pegged to gold, was about the same in 1915 as it was in 1789. What he is not mentioning is that it fluctuated with inflation for 80 years and deflation for 40.

That's because the government arbitrarily changed the value of it.

Using gold and silver is not going to prevent the government from making bad monetary decisions or creating more debt. The government could still spend too much and it would still have to contend with compounding debt and interest.

Government is prevented from making bad monetary decision and from accumulating debt if they are prohibited from creating money and prohbited from borrowing. If they're required by their supreme law to not borrow money and to tax in gold at its market value, rather than a national (e.g., dollar, pound) value, then they're prohbited from debasing and borrowing the gold. If revenue is sufficient, then borrowing is never necessary. Revenue can always be made sufficient if there is a crisis.
Despite Ron Paul’s numerous claims, gold and silver are not sound money. They can just as easily be manipulated as fiat currency. The government can easily devalue gold based dollars. They have done that in the past to make our exports cheaper.

• They claim the government could not deficit spend under a gold standard. This is nonsense. The government would do the same thing they do now. They would borrow by issuing bonds. America did that when it was on the gold standard.
• One of the best arguments for gold is that it can act as a good hedge against inflation. Gold advocates claim it will prevent governments from inflating the currency. That is not always true because a government can modify its gold standard.
• From 1980 to 2001, gold lost 70% and silver lost 92% of its value, despite inflation. Inflation went up and gold and silver went down. They were no hedge. The safety the libertarians are seeking in the gold standard does not exist. Once again, the government can debase the value of the currency by printing too many gold backed dollars or devaluing them.
• Even if America went back to the gold standard the currency would still fluctuate because all nations would not adopt this policy and we would trade with them.
• Libertarians want the money supply to be privatized. Banks would issue currency backed by euros a basket of several currencies. It would accomplish nothing. The gold standard was a creations of governments, similar to fiat money.
• The only way to stabilize the real value of gold would be for central banks to hold large gold reserves, but that is exactly what libertarians and some Tea Party groups oppose. They want to "End The Fed." Without reserves a gold standard is really no standard at all.
• Gold price fluxuations would be highly detrimental, and as Professor Scott Sumner has noted: “A 10% increase or decrease in the real value of gold seems very small when it is just a commodity. But under a gold standard that sort of shift can be accommodated only by changing the overall price level by 10%. A sudden 10% rise or fall in the price level is very destabilizing to the economy.”

Would a Gold Standard Stop Wars?
Despite past history, gold standard advocates continue to claim they are motivated by anti-war sentiments. They claim central banks and fiat money enable war. They say a major reason to go back on the gold standard is because it would make it difficult to finance a future war.
The past gold standard did nothing to avoid war. All the nations involved in the start of World War I were on the gold standard. A gold standard would not have stopped Adolf Hitler. During the Napoleonic Wars and World War I, they simply went off the gold standard. America fought both WW I and WW II without having to devalue gold.
Gold Would Not Give Us a Stable Monetary Base
Gold advocates claim it would give America a fixed monetary base, but gold flows can create huge swings in the broader money supply. Gold would not result in a stable monetary base. There has been a decades long search for price stability, but there are no stable commodities.
They claim gold is a good monetary indicator and point to 2008 when gold dropped 30% along with the global recession. All commodities were then a good indicator, but gold has not been a good indicator since then. It is wrong to claim the price of gold always goes up directly to the value of the dollar going down. There is not a direct link. The price is determined by global supply and demand, not directly by the dollar.

The person quoted is making the same fallacious arguments again and again.

What Happened During The Bretton Woods Era (1945 – 1971)?
This is explained by economist Bruce Bartlett who served on Ron Paul’s staff. He correctly notes Bretton Woods worked while gold constraints were ignored. Gold was highly overvalued after the 1933 devaluation, and then the US grabbed a huge share of the world’s gold in the run-up to WWII.

• After the war those two factors gave us an unprecedented amount of slack, so the United States could mildly inflate until gold was no longer overvalued.
• As Bartlett notes, “once we reached that point in the late 1960s, the system immediately fell apart. It would have collapsed even sooner if Americans had been allowed to own gold. And if President Johnson had tried to deflate to stay on gold, Americans (if allowed to) would have hoarded gold. They would have done so in the correct expectation that the next president would devalue the dollar. That hoarding would have had the same effect as the hoarding of the early 1930s–deflation and depression.”

The Gold Standard Made The Great Depression Worse
The global recession of 2008 could have become another Great Depression if America was on the gold standard. In 1929, the Hoover Administration and the Federal Reserve both made the depression worse because of their concerns about gold.

• Today the government would react to a recession or depression by purchasing Treasury securities so there would be cash in the hands of investors. That policy did not work in the 1930s because investors used the cash to buy gold and this contributed to a gold drain.
• The Hoover administration did not react sufficient to the economic crisis because they were worried about the currency. The countries that quit the gold standard, such as Great Britain, suffered the least. There is a strong correlation between how long a country hewed to the gold standard and how much it suffered. This is explained by David Frum of CNN:

But why did decision-makers make so many bad decisions? The short answer is that they were trapped. Almost all of the right decisions would have ballooned the U.S. federal budget deficit. As budget deficits expanded, investors would inevitably worry that their dollars might lose value in the future. They would demand to trade their dollars for gold at the fixed price of $20.67 to the ounce. Under the rules of the gold standard, the U.S. government would be obliged to sell.As long as the deficits continued, the U.S. government would lose gold. Threatened with the exhaustion of its gold supply, the government felt it had no choice: It had to close the budget deficit. So, in the throes of a severe downturn, the U.S. government did exactly the opposite of what economists would otherwise advise: It cut spending and raised taxes -- capsizing the economy even deeper into depression.It's very strange to hear gold standard advocates criticize President Hoover for imposing steep tax increases in 1932, the Depression's worst year. Yet the gold standard they champion was the reason for the tax increases they deplore.

Deficit spending is never necessary, so the tax increases were not necessary. The reason we got into the mess we were in was because credit was not only overextended, but the governemt subsidized via having a central bank.

Ron Paul is Wrong on the Constitution and the Colonial Period
Ron Paul is also wrong in his understanding of Constitutional intent regarding the coining of money and its value. He claims paper money is unconstitutional and always quotes George Washington: "Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice." What he does not say is that Congress approved paper money in 1791 “to simplify trade,” and it was Washington who signed the bill. This was two years after the Constitution was adopted. Congress also approved an early version of the Federal Reserve which was known as the “Bank of the United States.” It was authorized to issue paper bank notes.
Under the Constitution, Congress has the power to coin money "and regulate the value thereof".
The Constitution does not say the money has to be gold or silver, and it was never intended for them to be our only means of trade. The Constitution does not authorize a gold standard.

I agree with that, which is why we need to reinstate the Articles of Confederation with some modifications, particualarly giving monetary decisions to the individual and taking it away from governments, both state and federal.

The Government Was Manipulating The Currency Even In The Colonial Period
This information comes from Ron Paul’s top economic advisers, the Ludwig Von Mises Institute. As they have demonstrated, the government was debasing the value of their hard money coins, to make their exports cheaper, and it caused inflation. That happened with silver coins, not fiat dollars. It demonstrates once again that gold and silver are not a hedge against inflation.
http://mises.org/books/historyofmoney.pdf
From "The History of Money"
In their own mercantilism, the colonial governments early tried to hoard their own specie by debasing their shilling standards in terms of Spanish dollars. Whereas their natural weights dictated a ratio of 4 shillings 6 pence to the dollar, Massachusetts, in 1642, began a general colonial process of competitive debasement of shillings.
Massachusetts arbitrarily decreed that the Spanish dollar be valued at 5 shillings; the idea was to attract an inflow of Spanish silver dollars into that colony, and to **subsidize** Massachusetts exports by making their prices cheaper in terms of dollars.
Soon, Connecticut and other colonies followed suit, each persistently upping the ante of debasement. The result was to increase the supply of nominal units of account by debasing the shilling, inflating domestic prices and thereby bringing the temporary export stimulus to a rapid end. Finally, the English government brought a halt to this futile and inflationary practice in 1707. . .
In 1744, another losing expedition against the French led Massachusetts to issue an enormous amount of paper money over the next several years. From 1744 to 1748, paper money in circulation expanded from £300,000 to £2.5 million, and the depreciation in Massachusetts was such that silver had risen on the market to 60 shillings an ounce, ten times the price at the beginning of an era of paper money in 1690.
The result was that silver went up in price because of inflation of the money supply. There is nothing to stop a government from arbitrarily price fixing the value of any specie, as they have done in the past.

All of that is a fallacy.

How could anyone agree with the anti-gold author I quoted and refuted?
Also, is there anything I should've added to prove my point that gold works perfectly fine?
​

 

[CitizenKain]

According to Wikipedia, a gram of gold can be hammered into a square meter. Pretty amazing for a lump of metal.

 

[manimal]

but where will I get my gangster grillz?

 

[YoungGun21]

The best estimates available suggest that the total volume of gold ever mined up to the end of 2006 was approximately 158,000 tonnes, of which around 65% has been mined since 1950. Adding to this the number of tonnes that have been mined since 2006:

2007 2,478
2008 2,414
2009 2,589
2010 2,689

gives a total of 168,180 tonnes or 5,407,112,558 ounces. To visualise this imagine a single solid gold cube with edges of about 19 metres (about three metres short of the length of a tennis court). That's all that has ever been produced. The population of the world is 6,692,030,277 so there are 25 grams of gold per person on the planet.

At today's price of $1525.8 an ounce, the value of all the gold in the world is $8,234,768,878,853 or $1,231 for each person on the planet.

It is estimated that the total amount of gold yet to be retrieved from the Earth is about 100,000 tons.

A study by the UN in 2006 put the world's wealth at $125 trillion making the value of the world's gold about 6% of the total.


http://gold.yabz.com/facts.htm

 

[ProfJohn]

We are using Facebook for sources now?

Is LewRockwell down?

 

[thraashman]

We are using Facebook for sources now?

Is LewRockwell down?

It's Anarchist, I'm often surprised the sources from him aren't The Onion.

 

[Anarchist420]

We are using Facebook for sources now?

Is LewRockwell down?

I was refuting a source from facebook Why would a refute a source from lewrockwell.com?

 

[ProfJohn]

We should lock you and Craig in a room together and throw away the key.

 

[Vette73]

 

[ShawnD1]

Here is a chart showing the world population

What happens when the amount of money available is static but the number of people who want that money grows exponentially? :hmm:
I think the scientific term for that is MASSIVELY HUGE DEFLATION.

It also means lending would be confusing and weird and stupid people wouldn't get it. Right now money is worth less every year, so interest rates are positive. I borrow $100 from you now and I pay you $110 next year. Because of the way gold would deflate as the population grows, the interest rates would be negative. Instead of borrowing $100 and paying you $110 at a later time, I would borrow 100 gold coins today and pay you 95 gold coins next year. It seems like I'm getting a killer dealer because I pay back less than I borrowed, but the gold is worth a lot more next year than it is this year so those 95 coins next year are actually worth the equivalent of 105 coins today. Whoa. What? How many people would understand that? How many would not understand it and fuck themselves over with debt?

 

[QuantumPion]

What? How many people would understand that? How many would not understand it and fuck themselves over with debt?

Probably just as many people that don't understand credit and fuck themselves over with debt now.

 

[McWatt]

You didn't even try to refute a single argument. You simply pasted the arguments you dislike and said, "but they're wrong!" I, for one, won't settle for anything less than a bitcoin standard. Unlike gold, which actually is consumed in a lot of manufactured products that aren't recycled, bitcoins are eternal!

 

[shira]

Here's the link:
https://www.facebook.com/notes/greg...he-gold-standard-by-gregg-hil/174671762589047

Let me start off by saying the gold standard was never done the right way. As for the 3rd quote, it's wrong, because inflation is not low.



The 2nd word should read "neoconservative". It's already clear that the anti-goldite doesn't know what true conservatism is.

Its advocates do not advocate for a return to the roaring twenties, where fractional reserve banking and a central bank existed as well as government having the power to print gold certificates.

The gold standard failed in the late 19th century because fractional rseerve banking existed, and was subsidized by many states. Fractional reserve banking artificially extends credit, so people were buying too much on credit, which were the problems. If Fractional reserve banking hadn't existed and hadn't been subsidized by many states, then the free silver movement would never have gained momentum.

The above quote is so full of blatant, complete inaccuracies that it doesn't need addressing.

The person quoted apparently has too much faith in the government (which lies to us time and again), and apparently, will believe whatever government tells them. Also, it's opposite of currency traders' interests to make inquiries about the gold supply.
In addition to all that, the pound was once the world reserve currency, but due to UK having policies like the U.S. does, it lost that status, and the pound also immediately lost 90% of its value after losing world reserve currency status. Just because a currency is currently the world's reserve currency doesn't mean that.

It would cause massive deflation, but there could always be bankruptcy legislation passed to protect average or light debtors.

The market should control the value of gold, and only 3% of the gold in the Continental US has been mined. Oil is consumed, gold is not; once gold is mined and out of the exporting country, the market can more easily control the price of it than oil. Also, gold is found all over the earth, unlike oil. If a gold mining country gets to be like the OPEC, then they will quickly be outcompeted.

The problem is solved by writing a constitution that prohibits:
fractional reserve banking, or at least does not allow governments to subsidize it in any way.
the government from creating money.
the government from chartering a monopoly on the money supply
legal tender for private debts.
the government from accepting anything other than gold.
altering or abolishing any of the above provisions without unanimous consent of the legislature or member states.

Not true. People can use platinum or diamonds if there is not enough gold. It also depends upon how much you can buy with 1/6 of an ounce of gold.

Which can be good for everyone, as people need to save more.

That's because the government arbitrarily changed the value of it.


The person quoted is making the same fallacious arguments again and again.

Deficit spending is never necessary, so the tax increases were not necessary. The reason we got into the mess we were in was because credit was not only overextended, but the governemt subsidized via having a central bank.


I agree with that, which is why we need to reinstate the Articles of Confederation with some modifications, particualarly giving monetary decisions to the individual and taking it away from governments, both state and federal.


All of that is a fallacy.

How could anyone agree with the anti-gold author I quoted and refuted?
Also, is there anything I should've added to prove my point that gold works perfectly fine?
​

People who argue for a return of the gold standard - claiming "Oh, we just did it wrong the first time; THIS time it will be wonderful" - remind me of the religious nut-cases who continually tell us of their new, super-improved, "this time for sure" end-of-the-world date: They're wrong, have always been wrong, and always will be wrong, but are incapable of seeing just how nutty they are.

Anarchist, you're a nut-case.

 

[piasabird]

You can not control the price of Gold! Doubt my statement? Let me explain. The value of Gold does not change. It is the value of the currency used to buy the gold that changes not Gold Itself.

Gold could be considered to be able to change in value, but only if it became more available or less available, or the demand for actual gold increased or decreased. One could make an argument that when the cost in currency for gold increases, that the demand for Gold may be increasing. But usually the reason why demand for gold increases is because the money one can get for its eventual sale is increasing. This is a cirular argument that goes back to the value of money. It is all based on how much money in currency it takes to buy an ounce of Gold. If the value of the currency goes down, it takes more to buy the Gold. So when the price of Gold increases, it is a sign of a worsening economy.

You could say gold is real but the value of currency is not, because it keeps changing. Money is a conceptual construct. What is a piece of paper or a coin really worth? An apple or a house is worth something. You can eat an apple or live in a house, what can money do for you? If the stock market crashes your money is gone. However, if the stock market crashes your house that is paid for, still exists.

 

[Anarchist420]

People who argue for a return of the gold standard - claiming "Oh, we just did it wrong the first time; THIS time it will be wonderful" - remind me of the religious nut-cases who continually tell us of their new, super-improved, "this time for sure" end-of-the-world date: They're wrong, have always been wrong, and always will be wrong, but are incapable of seeing just how nutty they are.

Anarchist, you're a nut-case.

Not quite. You apparently didn't read the arguments and my refutation to them as to why the gold standard didn't work before.

Here it is again, since you missed it the first time:
The problem is solved by writing a constitution that prohibits:
fractional reserve banking, or at least does not allow governments to subsidize it in any way.
the government from creating money or money substitutes.
the government from chartering a monopoly on the money supply
legal tender for private debts.
the government from accepting anything other than gold.
altering or abolishing any of the above provisions without unanimous consent of the legislature or member states.

None of those limitations have been placed on governments when gold was used with money. Instead, the governments had unlimited power to coin money, to issue and accept money substitutes, they had the power to borrow, they had the power to create legal tender, they had the power to subsidize fractional reserve banking. Until a government requires unanimous consent of its legislature or unanimous consent of its member states to do those things, gold as money will never work.

 

[Jaepheth]

...bitcoins are eternal!

Until the next solar superstorm.

Even if you have back-ups on non-EM sensitive media, the entire bitcoin economy would be insolvent for 2-3 days.

 

[ShawnD1]

Probably just as many people that don't understand credit and fuck themselves over with debt now.

I think it would be worse. Right now it's pretty clear cut why debt is bad. You borrow 100 and you pay back 110 or 120? That sucks. That's money that just disappears into nothingness. When you borrow 100 gold and pay back 95, it's not exactly clear why that's such a bad idea. It looks like a great deal if you don't understand how inflation and deflation work. I think way too many people would get sucked into that.

You didn't even try to refute a single argument. You simply pasted the arguments you dislike and said, "but they're wrong!" I, for one, won't settle for anything less than a bitcoin standard. Unlike gold, which actually is consumed in a lot of manufactured products that aren't recycled, bitcoins are eternal!

So it's just like US dollars? Most fiat money doesn't exist in a physical form. A "bank run" is when everyone tries to withdraw money from the bank and it can't be done because that physical money doesn't exist.

 

[thraashman]

The gold standard is a bad idea and Ron Paul is a nitwit for thinking it's a good one.

 

[sMiLeYz]

While we're talking about 18th century ideas we've long since abandoned, how about slavery?

 

[thraashman]

While we're talking about 18th century ideas we've long since abandoned, how about slavery?

I think we maybe just didn't give the steam engine and the musket rifle their fair opportunities too.

 

[Doppel]

Here's the link:
https://www.facebook.com/notes/greg...he-gold-standard-by-gregg-hil/174671762589047

Let me start off by saying the gold standard was never done the right way. As for the 3rd quote, it's wrong, because inflation is not low.



The 2nd word should read "neoconservative". It's already clear that the anti-goldite doesn't know what true conservatism is.

Its advocates do not advocate for a return to the roaring twenties, where fractional reserve banking and a central bank existed as well as government having the power to print gold certificates.

The gold standard failed in the late 19th century because fractional rseerve banking existed, and was subsidized by many states. Fractional reserve banking artificially extends credit, so people were buying too much on credit, which were the problems. If Fractional reserve banking hadn't existed and hadn't been subsidized by many states, then the free silver movement would never have gained momentum.

The above quote is so full of blatant, complete inaccuracies that it doesn't need addressing.

The person quoted apparently has too much faith in the government (which lies to us time and again), and apparently, will believe whatever government tells them. Also, it's opposite of currency traders' interests to make inquiries about the gold supply.
In addition to all that, the pound was once the world reserve currency, but due to UK having policies like the U.S. does, it lost that status, and the pound also immediately lost 90% of its value after losing world reserve currency status. Just because a currency is currently the world's reserve currency doesn't mean that.

It would cause massive deflation, but there could always be bankruptcy legislation passed to protect average or light debtors.

The market should control the value of gold, and only 3% of the gold in the Continental US has been mined. Oil is consumed, gold is not; once gold is mined and out of the exporting country, the market can more easily control the price of it than oil. Also, gold is found all over the earth, unlike oil. If a gold mining country gets to be like the OPEC, then they will quickly be outcompeted.

The problem is solved by writing a constitution that prohibits:
fractional reserve banking, or at least does not allow governments to subsidize it in any way.
the government from creating money.
the government from chartering a monopoly on the money supply
legal tender for private debts.
the government from accepting anything other than gold.
altering or abolishing any of the above provisions without unanimous consent of the legislature or member states.

Not true. People can use platinum or diamonds if there is not enough gold. It also depends upon how much you can buy with 1/6 of an ounce of gold.

Which can be good for everyone, as people need to save more.

That's because the government arbitrarily changed the value of it.


The person quoted is making the same fallacious arguments again and again.

Deficit spending is never necessary, so the tax increases were not necessary. The reason we got into the mess we were in was because credit was not only overextended, but the governemt subsidized via having a central bank.


I agree with that, which is why we need to reinstate the Articles of Confederation with some modifications, particualarly giving monetary decisions to the individual and taking it away from governments, both state and federal.


All of that is a fallacy.

How could anyone agree with the anti-gold author I quoted and refuted?
Also, is there anything I should've added to prove my point that gold works perfectly fine?
​

WALL OF TEXT

Did anybody actually respect themselves so little they read that?

 

[BansheeX]

While we're talking about 18th century ideas we've long since abandoned, how about slavery?

Paper money forced on people with an issuer who doesn't have to work for it is a new idea? Hardly. We had a paper dollar before the gold standard called the continental dollar. It was predictably destroyed by the issuer issuing to many for themselves and their friends. That's what prompted the gold standard. When the federal reserve dollar is destroyed the same, that's what will prompt it again. Grow a brain.

And this idea that there aren't enough gold "units" for population growth is equally hairbrained. Gold doesn't have indivisible units like a dollar. It is an element that can be divided down to the microgram. There are gazillions of micrograms of gold.

 

[Jaepheth]

Why gold?

We could use uranium coins. That way anyone who hoards money will die sooner and their hoarded wealth will re-enter circulation sooner. You also couldn't smuggle it effectively because you'd likely trigger a criticality accident having too much in one place at one time. It'd be easier to track, harder to counterfeit, and would help counter the rising costs of social security due to rising life expectancies.

In short, forget the gold standard; we need a radio-isotope standard.

 

[First]

Paper money forced on people with an issuer who doesn't have to work for it is a new idea? Hardly. We had a paper dollar before the gold standard called the continental dollar. It was predictably destroyed by the issuer issuing to many for themselves and their friends. That's what prompted the gold standard. When the federal reserve dollar is destroyed the same, that's what will prompt it again. Grow a brain.

You're telling people to grow a brain when not a single nation backs their currency with gold or trades in gold in any significant quantities. Fiat has worked in the U.S. for a century now, kiddo.

And this idea that there aren't enough gold "units" for population growth is equally hairbrained. Gold doesn't have indivisible units like a dollar. It is an element that can be divided down to the microgram. There are gazillions of micrograms of gold.

Gold is a type of fiat currency, you're just not particularly intelligent enough to understand manufactured scarcity vs. true scarcity.

 

[ShawnD1]

I think we maybe just didn't give the steam engine and the musket rifle their fair opportunities too.

Actually we still use steam engines every day. They're used to generate electricity.