How to debunk the whole 'We should return to the gold standard' meme

andrew

On this forum (sometimes) and on lots of other forums (and in real life too) there's a pretty vocal minority of Austrians who want a return to the gold standard etc. I'm sure everyone's seen them. Anyway, I was wondering if there are any particularly good sources debunking the main claims Austrians like to make. They're always the kind of arguments I know are wrong, but I just can't explain why and my pointless internet arguments are suffering as a result.

Time Magazine

Barry Eichengreen, Jim Hamilton, Paul Krugman and Brad DeLong all have papers/information on their websites outlining why it's a bad idea.

More generally, I put those type of Austrians in much the same bracket as creationists. It's better in the long-run to just ignore them.

thebman

TBH I'd more interested in an objective comparison about what both offer myself.

The people that do want to return to the gold standard generally aren't very objective :P

Austerity

Compare the value of fiat currency against gold over a long time period...
You who advocate fiat currency also advocate the debasement of said currency and you advocate making people poorer and poorer.

Why do you want to destroy purchasing power?

Time Magazine

Austerity wrote: »

advocate making people poorer and poorer.

Here we go again with the pure nonsense.

The gold standard was dropped in 1971. American GDP per capita was $5300 in 1971. In 2010, it is $46,000.

Austerity

Time Magazine wrote: »

Here we go again with the pure nonsense.

The gold standard was dropped in 1971. American GDP per capita was $5300 in 1971. In 2010, it is $46,000.

The value of the US dollar measured in gold has dropped significantly since 1971. The value of gold in nominal terms has increased much more compared to the American GDP per capita.

So as I said before, people who only have cash savings have been getting poorer. That is what inflation will do.

Time Magazine

Austerity wrote: »

The value of the US dollar measured in gold has dropped significantly since 1971. The value of gold in nominal terms has increased much more compared to the American GDP per capita.

So what? Hold your wealth in gold if you want to. Nobody is stopping you.

So as I said before, people who only have cash savings have been getting poorer. That is what inflation will do.

The people who would have lost their jobs had we allowed the recession to become even worse would have become poorer. And all that goes with it. That is what a gold standard will do.

Austerity

What caused the recession? Excesses during the boom is the answer. We need a proper recession to clear out the problems in the system. With the stimulus packages you are only making the problem worse and nations are pushing themselves deeper into debt. That will lead to more problems down the road.

Current economic policy all over the world seem to be only about kicking the can further down the road.

I unlike you truly believe in free market capitalism.

silverharp

The problem I have with the "move along, nothing to see here" approach is the blind spot to the role of leverage in an economy. The tradtional Keynesian view was that the government would have a counter cyclical role in the economy. This is fine and if you show me a country that has an 80 year history of running a cumulative surplus/deficit in the 20% range and runs its accounts using GAAP accounting (ie future liabilities funded) I'd say fine, no gold standard need here, inflation will be low, credit will not disconnect from the real economy etc.
The reality is that the "krugman" view of the world is that in the good times the view is "let the imbalances build up" and in the bad times "the economy must be stimulated" . If you look at the US after each recession they have ended up with more gov. and private sector debt, this becomes the new normal, then its rince and repeat. So the establishment consenus is deeply flawed and short term in its thinking. I'm guessing that when the next wave of the credit crises hits and the governments are seen to be "out of ammo" there maybe a reassessment.

I am conflicted though, personally I wouldnt want a gold standard as I've made good money out of the last couple of asset bubbles :pac:

Time Magazine

Austerity wrote: »

What caused the recession? Excesses during the boom is the answer.

Agreed. Excessive risks taken by bankers who (evidently) wouldn't suffer much if the coin turned up tails. I'm not sure why you think this wouldn't exist under a gold standard.

We need a proper recession to clear out the problems in the system.

I'd say we need proper regulation to clear out the problems in the system. That seems somewhat apparent, given that regulators internationally didn't do their job. What's your reasoning? Think the Great Depression was a good thing for the world? Know something that goes against the accepted literature on the long-term scarring effects of unemployment on future incomes that you'd like to share?

With the stimulus packages you are only making the problem worse

Links? References? Evidence?

and nations are pushing themselves deeper into debt. That will lead to more problems down the road.

Yes there will be debt. The alternative is habitual unemployment. Do you not realise what that implies in a democratic world?

Current economic policy all over the world seem to be only about kicking the can further down the road.

I unlike you truly believe in free market capitalism.

Have you not read any economics developed since the 1970s? Akerlov on how the lack of regulation can lead to markets not existing; Stiglitz and Weiss on free markets leading to credit rationing; Kahnemann and Tversky on persistent errors in human decision making; Shiller on the inefficiencies of even the most liquid markets; the network economics literature that shows that networks and systems are inadequately coordinated by free markets?

Manach

As an uninformed neutral in this debate, is there a recommended book for the the anti-gold standard viewpoint,tks?

Time Magazine

Manach wrote: »

As an uninformed neutral in this debate, is there a recommended book for the the anti-gold standard viewpoint,tks?

I don't know of any books about it per se since the argument is reasonably simple: with a gold standard, monetary policy is restricted. Gold bugs think the bad things about discretionary monetary policy (inflation) is worse than the good things (preventing Great Depression 2).

I don't think inflation is all that bad, seeing as people like Austerity are still more than welcome to hold gold (or simply put their money in a current account). People like Austerity think preventing a worse recession is a bad thing ("We need a proper recession") or impossible ("only about kicking the can further down the road.")

I disagree with both of these arguments. I think they can only hold if markets are perfect and people are super rational (e.g. people see a government deficit now, assume that means higher taxes in future, therefore save now the exact amount that they think they will be taxed in future). This argument is called Ricardian Equivalence, which doesn't seem to hold in the real world in any meaningful way.

This also lends itself to the Great Depression. Some nations believed in the Ricardian Equivalence argument and held on tight to gold. Others didn't. This graph shows what the effects were. This post outlines some reasons why sticking with the gold standard might sound okay in theory but not in the real world.

Mr Crazy is quite sensible in his Op Ed on the topic [url=here.

On a more general point, I really like Warren Buffet's take on gold:

Warren Buffett wrote:

[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head...

Économiste Monétaire

Chapter 3 in the Handbook of Macroeconomics surveys the history of monetary policy, including the classical gold standard period. It has some nice summary statistics on inflation and real GDP growth between 1881 and 1995. There's also a section using SVARs to look at permanent and temporary shocks under each regime.

There's an NBER WP version here.

Time Magazine

Économiste Monétaire wrote: »

There's an NBER WP version here.

And with 19 pages of references, that should keep you busy, Manach!

southsiderosie

To bring politics into the debate a bit, there is the argument that the gold standard can have dire social and political consequences, as countries with open market economies and fixed currencies can only adjust their domestic economies through grinding deflation and wage repression. This may in turn spark the rise of a heavy-handed state, which must repress its own citizens to maintain the currency and international trade balances. Karl Polanyi linked the rise of European fascism in the early 20th century to the desire of the state to subordinate the needs of its citizens to the needs of the economy. And the lack of a variable currency in a nation's 'policy toolkit' is a huge point of debate within the EU today, especially for small countries like Ireland.

Yes inflation may be bad for some, and printing ones way out of trouble is no sure way to avoid social unrest, as many an Argentine finance official will tell you. But from a government perspective - especially governments of large countries with big internal markets and international credibility in currency markets, a fiat currency may seem like the lesser of two evils.

Finnbar01

Time Magazine wrote: »

Barry Eichengreen, Jim Hamilton, Paul Krugman and Brad DeLong all have papers/information on their websites outlining why it's a bad idea.

More generally, I put those type of Austrians in much the same bracket as creationists. It's better in the long-run to just ignore them.

The OP asked for some arguements, not for name calling. :rolleyes:

Économiste Monétaire

Finnbar01 wrote: »

The OP asked for some arguements, not for name calling. :rolleyes:

Use the report post feature if you want to highlight an abusive post.

Time Magazine

southsiderosie wrote: »

.

Welcome back to the forum

Finnbar01 wrote: »

The OP asked for some arguements, not for name calling. :rolleyes:

I apologise to Barry Eichengreen, Jim Hamilton, Paul Krugman and Brad DeLong for calling them their names.

profitius

I don't know about you folks but I'm buying gold and silver for long term investment and security.;)

Hasschu

Gold fluctuates too much to be a good investment. My own take on it is, if you have serious doubts about the competence of your gov't and central bank then it would make sense to put 15 to 20% of your liquid assets into gold. The ECB is highly reputable and hence the Euro is about as sound a currency as you will ever see. However, there are signs the Irish gov't are continuing along the familiar path of wink, nod, nudge policies and will string it out to 2012 relying on the gullibility of the public and the lack of street protests. Irish politicians are good judges of the public mood. To get back to gold, if you believe that a change in gov't will lead to withdrawal from the Euro Zone you should be taking pre-emptive action now by moving your liquid assets out of Ireland. Again I would emphasize that gold is now overinflated and it should not amount to more than 20% of your liquid assets.

ballsymchugh

Manach wrote: »

As an uninformed neutral in this debate, is there a recommended book for the the anti-gold standard viewpoint,tks?

i'm sorry, i couldn't resist!

https://www.youtube.com/watch?v=Wi8zVVLTEjE

Austerity

Hasschu wrote: »

Gold fluctuates too much to be a good investment. My own take on it is, if you have serious doubts about the competence of your gov't and central bank then it would make sense to put 15 to 20% of your liquid assets into gold. The ECB is highly reputable and hence the Euro is about as sound a currency as you will ever see. However, there are signs the Irish gov't are continuing along the familiar path of wink, nod, nudge policies and will string it out to 2012 relying on the gullibility of the public and the lack of street protests. Irish politicians are good judges of the public mood. To get back to gold, if you believe that a change in gov't will lead to withdrawal from the Euro Zone you should be taking pre-emptive action now by moving your liquid assets out of Ireland. Again I would emphasize that gold is now overinflated and it should not amount to more than 20% of your liquid assets.

What is sound about the Euro? They decided to bail out Greece, I think the Euro will suffer from serious problems down the road because of deficit problems.

Hasschu

In the EU Greece amounts to a pimple on an elephants buttocks. I will leave it up to others to come up with an analogy for ireland vs EU. Portugal is also insignificant, Spain is cause for mild concern add in Belgium and Italy and there is a real problem. I see no doomsday scenario for the EU or the Euro. America is anxiously bad mouthing the Euro but if you correctly interpret that as envy, greed and wishful thinking it will put things in perspective. Individual countries are each saddled with their individual problems. Ireland on its own without the generous treatment it has received from the ECB would have been a patient of the IMF more than two years ago. We have been given ample funds and time to address our problems. Unfortunately our gov't is still in the wink, nod, nudge mode fixated on local issues and pandering to the voters. Sts Patrick, Brigid, holy water, rosaries, visits to Knock, Lourdes, Fatima are now as in the past pillars of certainty we can resort to as we wait for the IMF axe to fall. The passivity and fatalism that pervades the public mood must be reassuring to the politicians.

Sacksian

Two very straightforward articles on why the gold standard is a bad idea:

The Gold Bug Variations by Paul Krugman in Slate Magazine (1996)

http://www.slate.com/id/1912/

There's gold in them thar standards! by Megan McArdle in the Atlantic (2007)

http://www.theatlantic.com/business/archive/2007/09/there-apos-s-gold-in-them-thar-standards/1858/

Time Magazine

profitius wrote: »

I don't know about you folks but I'm buying gold and silver for long term investment and security.;)

From Project Syndicate (via Greg Mankiw):

Ken Rogoff wrote:

[D]espite gold’s heightened allure in the wake of an extraordinary run-up in its price, it remains a very risky bet for most of us.

Of course, such considerations might have little influence on prices. What was true for the alchemists of yore remains true today: gold and reason are often difficult to reconcile.

Lockstep

yesboyicecream wrote: »

Two very straightforward articles on why the gold standard is a bad idea:

The Gold Bug Variations by Paul Krugman in Slate Magazine (1996)

http://www.slate.com/id/1912/

Beat me to it.
Read that a few years ago when I was pondering the Gold Standard question. Found it very helpful.

Justin Collery

I'll lay my cards on the table before I contradict myself.

My default position is that those who propose the gold standard are equivalent to those that say all fiat ccy's will eventually collapse, they are crack pots.

However...here is a paper from Alan Greenspan in 1966 called Gold and Ecoomic freedom

http://www.constitution.org/mon/greenspan_gold.htm

His points have some merit, I'll summarise:

Having gold stops excess credit in the economy, something of interest in Ireland
Having gold stops governments running excessive deficits, again something of interest in Ireland
Having gold serves as a protector of wealth, without it governments can inflate that wealth away. Something that should worry those is the UK, US and Japan

To extrapolate from his paper, not having the gold standard allows for excessive credit through the system. This can create the appearance of a better functioning system, but sooner or later that money has to be paid back. Better have a slowly growing economy than a boom bust economy.

To further extrapolate, he points out that the only reason gold is valuable is because it is held to be so, you might was well pick grain, monkeys, anything, gold just happens to be the one that most agree with.

Now move this to the 21st century. Gold was used because it was portable. It could just be information stored on a computer. If everybody accepted me as the central bank, I could write 1 billion Bank of Justo' IOU's. I could declare that I will never again write another IOU, and so these become a perpetual store of wealth. So long as everybody always accepted them, there would be no difference between Bank of Justo' and gold. There is the difference of course, history, and, even through I don't fully believe, there is some argument for gold backed currencies.

pablo_escobar

Time Magazine wrote: »

On a more general point, I really like Warren Buffet's take on gold:

I really enjoyed Buffetts take on the financial relationship with US and the rest of the world when asked the question:

"The sovereign wealth funds, these guys have come out of nowhere. When you made these comments earlier, we were talking about the strength and the weakness of the dollar. Are sovereign wealth funds a bad thing necessarily?"

Buffett responded

"They're inevitable. we [ the united states one ] are creating the sovereign wealth fund.

We ship 2 billion today to the rest of the world, it has to go into stocks or bonds or direct investment in the US or something.

But we are forcing investment in the United States by our consumption pattern.

So, when we... If we run a negative trade balance with China of 250 billion this year, they're gonna have 250 billion of US somethings.

They're picking equities now and in the end, it's kind of interesting you know.

They produce the 250 billion net of goods, people work hard over there, they work extra hours to send us shoes and send us a lot of things you see in the store and we send them little pieces of paper

<some laughter from news anchor>

They're not as excited about getting those pieces of paper but we aught to expect them to do with those pieces of paper whatever's the most intelligent, that's what we would do.

So, sovereign wealth funds are simply the result of a large trade deficit here, a large current account deficit and they're going to get larger and larger and larger.

We may hope they buy government bonds instead of buying equities but they should have the right to make that choice"

The Federal Reserve buying government bonds is a sign the US economy is well on the road to recovery.

Let the good times roll... :pac:

profitius

pablo_escobar wrote: »

I really enjoyed Buffetts take on the financial relationship with US and the rest of the world when asked the question:

"The sovereign wealth funds, these guys have come out of nowhere. When you made these comments earlier, we were talking about the strength and the weakness of the dollar. Are sovereign wealth funds a bad thing necessarily?"

Buffett responded

"They're inevitable. we [ the united states one ] are creating the sovereign wealth fund.

We ship 2 billion today to the rest of the world, it has to go into stocks or bonds or direct investment in the US or something.

But we are forcing investment in the United States by our consumption pattern.

So, when we... If we run a negative trade balance with China of 250 billion this year, they're gonna have 250 billion of US somethings.

They're picking equities now and in the end, it's kind of interesting you know.

They produce the 250 billion net of goods, people work hard over there, they work extra hours to send us shoes and send us a lot of things you see in the store and we send them little pieces of paper

<some laughter from news anchor>

They're not as excited about getting those pieces of paper but we aught to expect them to do with those pieces of paper whatever's the most intelligent, that's what we would do.

So, sovereign wealth funds are simply the result of a large trade deficit here, a large current account deficit and they're going to get larger and larger and larger.

We may hope they buy government bonds instead of buying equities but they should have the right to make that choice"

The Federal Reserve buying government bonds is a sign the US economy is well on the road to recovery.

Let the good times roll... :pac:

And what are the Chinese and other foreign countries doing with the money? They're buying up the USA bit by bit. The Dollar is de-valuing and peoples savings are worth less.

US jobs are lost to China but at least Buffett is making plenty of money out of it while the poor people get poorer.

Justin Collery

pablo_escobar wrote: »

The Federal Reserve buying government bonds is a sign the US economy is well on the road to recovery.

Can anybody decode that line for me? Why would the Fed buying government bonds be a sign of recovery? It's QE, an extraordinary measure. They day they stop buying the bonds in the day recovery starts, or did I miss something in economics 101 (as I type, I'm wondering as to the timing of Buffets comments)

pablo_escobar

Buffett made the comment in an interview around march 2009, he knows the dollar is worthless but arrogantly assumes developing countries like China will keep accepting them.

I was being sarcastic about recovery in US.
The truth is, there will not be any recovery for along time, nobody gets a free lunch forever.

Many people in the western world (EU/US) don't seem to realise that for the best part of 100 years or more, they've been living off the fat of developing countries like those in asia, south america and africa, exchanging valuable raw materials for "pieces of paper"

Developing countries are finally realising that they've been conned the whole time and will eventually stop accepting "pieces of paper" for transactions.

The FED buying US bonds is the beginning of the end.. it was inevitable.
Try spending money you don't have yourselves and see where it gets you.

Time Magazine

pablo_escobar wrote: »

Many people in the western world (EU/US) don't seem to realise that for the best part of 100 years or more, they've been living off the fat of developing countries like those in asia, south america and africa, exchanging valuable raw materials for "pieces of paper"

http://tinyurl.com/24wqqay

pablo_escobar

Here's a decent article by Professor Michael Hudson which actually has some relevance in the real world.

U.S. “Quantitative Easing” is Fracturing the Global Economy

On the one hand you have hard working, productive countries with large sources of raw materials, running trade surpluses...and then you have countries living on borrowed money.

Hasschu

Empires decline slowly, it took the British Empire almost fifty years from WW1 when the rot set in to the late 1960s. America has been in relative decline since 1945, some would say early 1950s. The military cost of maintaining empire over long periods of time is what leads to failure. Empires become obsessed with military might and will never willingly reduce military costs. This leaves either a domestic major crisis or a foreign disaster as precipitating events to enable a turn around. America can continue on its present course for at least another twenty years. My guess is that it will break up in much the same way that the USSR did in 1989. Hopefully they will do this without replaying the civil war. The next super power will be China with Brazil becoming the major power in the Americas. Will Germany or Russia be the major power in Europe or will the EU become the dominant player, Germany or Russia alone will be no match for China which leads me to believe that the EU will be the tent that shelters Europe.

Time Magazine

Hasschu wrote: »

America has been in relative decline since 1945

I stopped reading here.

More on topic, the president of the World Bank (who, btw, is a political appointee) has suggested the world's leading nations adopt a gold standard.

Brad DeLong calls him The Stupidest Man Alive. Lol.

andrew

Time Magazine wrote: »

I stopped reading here.

More on topic, the president of the World Bank (who, btw, is a political appointee) has suggested the world's leading nations adopt a gold standard.

Brad DeLong calls him The Stupidest Man Alive. Lol.

I thought he just said that gold should be taken into account when looking at the expectations people have. Surely someone at his level would be actually so silly to suggest a return to the gold standard proper.

pablo_escobar

andrew wrote:

I thought he just said that gold should be taken into account when looking at the expectations people have. Surely someone at his level would be actually so silly to suggest a return to the gold standard proper.

And it will be taken into account.

The US dollar is worth about as much as toilet paper in the long term, why would it continue being the reserve currency any longer?

The debt incurred by US with their imperialistic ambitions will never be paid back!

China is the world's largest creditor nation.
US is the biggest debtor nation.

China runs a trade surplus.
US runs a trade, military and account deficit.

US dollar is just a ponzi scheme..

Time Magazine

andrew wrote: »

I thought he just said that gold should be taken into account when looking at the expectations people have. Surely someone at his level would be actually so silly to suggest a return to the gold standard proper.

I was talking about this with two of my lunch buddies today. I'm fortunate enough (or unfortunate, depending on how you see it) that these people used to work in the Federal Reserve and the World Bank. Neither of them seemed surprised that Zoellick would say something stupid.

(PS: my postcount is BooB.)

graw

Time Magazine wrote: »

Zoellick would say something stupid.

I guess bookstores will be putting in more orders for Atlas Shrugged

http://www.cato-at-liberty.org/what-caused-atlas-shrugged-sales-to-soar/

silverharp

graw wrote: »

I guess bookstores will be putting in more orders for Atlas Shrugged

http://www.cato-at-liberty.org/what-caused-atlas-shrugged-sales-to-soar/

very good , its an interesting public poll that more people are really unhappy with what the central banks are doing. Are you disapointed that the public are uneasy?

you've got to love central bankers, they couldnt get rid of their gold fast enough in the early 2000's and now they want it considered as part of a new monetary regime. bless!

Anonymous1987

Zoellick tried to clarify his comments today, he claimed that international monetary system is moving away from the dollar as as the primary reserve currency to one where the euro, yen and renminbi would be reserve currencies with flexible exchange rates. He described gold as a reference point (by this I think he means a hedge against uncertainty) for these currencies since growth prospects are poor in most of the reserve currency economies excluding the renminbi which does not float freely. He suggests that the G20 should note the price of gold as a need for pro growth policies, structural reform and free trade.

http://www.ft.com/cms/s/0/54a44c3e-ec7c-11df-ac70-00144feab49a.html#axzz14s5e2bno

If you read the Zoellick FT article carefully then you got the idea but almost immediately afterwards the FT released an article titled "Zoellick seeks gold standard debate" while he didn't even mention the gold standard in his original article.

Économiste Monétaire

pablo_escobar wrote: »

And it will be taken into account.

The US dollar is worth about as much as toilet paper in the long term, why would it continue being the reserve currency any longer?

The debt incurred by US with their imperialistic ambitions will never be paid back!

China is the world's largest creditor nation.
US is the biggest debtor nation.

China runs a trade surplus.
US runs a trade, military and account deficit.

US dollar is just a ponzi scheme..

Less of the histrionics, it adds nothing to the discussion.

Slippers 2

Bill Mitchell on Zoellick, a gold standard and fixed exchange rate systems in general:

The World Bank boss Robert Zoellick claims that we should all return to the Gold Standard to restore economic stability in the World economy. He is crazy. Sorry! The G-20 meeting in Seoul this week will obviously be concentrating on side issues such as the impact of the latest US quantitative easing plans on world inflation and the international currency system which many commentators are now claiming is in turmoil. Zoellick’s proposal will be added to the agenda which will reinforce what a waste of time these meetings are turning out to be. Zoellick’s call for a gold standard is just another one of these conservative smokescreens that attempt to solve the problem by denying it. They are all just expressions of obsessive and moribund fear of fiscal policy and the erroneous allegation that budget deficits cause inflation. So we will get a G-20 communiqué in a few days calling for more international cooperation in trade and currency settings and more fiscal consolidation and the need for on-going discussions about the creation of a new international reserve currency (perhaps a gold standard). But all these words will be in spite of the real policy agenda that is required – more public spending. What will they come up with next?


In a recent Op-ed (November 8, 2010) – The G20 must look beyond Bretton Woods – Zoellick said among other things that:

… the G20 should … build a co-operative monetary system that reflects emerging economic conditions. This new system is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi that moves towards internationalisation and then an open capital account.

The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.

Why would a return to the Gold Standard be crazy?

Remember as you read on to keep reminding yourself of the obvious – a sovereign nation with a flexible exchange rate can also use fiscal policy to maximise domestic outcomes if they desire notwithstanding external constraints (and domestic constraints like lack of food!).

Zoellick’s proposal is just one of a long line of proposals that get oxygen because governments are scared to use the tools that they already have and which work best when there is an floating exchange rate.

Continued: http://bilbo.economicoutlook.net/blog/?p=12262

Anonymous1987

Slippers 2 wrote: »

Bill Mitchell on Zoellick, a gold standard and fixed exchange rate systems in general:

I still maintain that he did not make the argument for a gold standard rather he argues against a currency war and describes a move away from the dollar to multiple reserve currencies.

Since gold is used by investors as a hedging instrument against uncertainty Zoellick argues the G20 should keep an eye on the price of gold as a yardstick of the heath of the global economy. This is not the same as a return to the gold standard.

Slippers 2

If Mitchell misinterpreted Zoellick his post remains handy for debunking the gold standard suggestion.

Anonymous1987

Slippers 2 wrote: »

If Mitchell misinterpreted Zoellick his post remains handy for debunking the gold standard suggestion.

Fair enough

FISMA

Hasschu wrote: »

Gold fluctuates too much to be a good investment.

Looks fine to me.

andrew

FISMA wrote: »

Looks fine to me.

A longer term inflation adjusted chart looks like this:

Not very stable if you're going to base a currency on it.

silverharp

andrew wrote: »

A longer term inflation adjusted chart looks like this:

Not very stable if you're going to base a currency on it.

hmmmm , that is also an inverse chart of the $ , think about it