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View Diary: CO-Sen: Buck and the gold standard (113 comments)

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  •  You don't actually carry around "gold" (2+ / 0-)
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    jasonw, BentLiberal

    it's just the money supply must be backed by a certain amount of it to retain value and fight off inflation.  

    The big trade off for the gold standard is that it is much harder to get credit and have that credit available to everyone.  The cost of the gold standard is that the world economy would slow to a crawl and if you're a poor person with a great idea that would revolutionize the world and make you rich, well you are probably going to your grave with that idea in your head.  Less credit = less innovation = less mobility.

    On the flip side, it kicks inflation and our "serial bubble" economics in the crotch every single day it is in effect.  A gold standard would definitely solve our problems there.

    •  $35 per ounce (0+ / 0-)

      The gold standard was set at $35/oz. Try to make that work today.

      •  That fact alone (0+ / 0-)

        That gold was $20/ounce until the 1930s, when FDR adjusted the standard to $35, until Nixon cancelled the gold standard altogether in 1971 and gold is now worth north of $1200 tells me all I need to know about the longterm future of dollars.

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