27 July 2011

Meatless Friday Wednesday: Gold Edition

I am not an economist, nor an expert on the subject.  But I found this off-topic video interesting, and offer it to you, if you wish to watch it.  If not, skip.


Anonymous said...

The gold standard is a product of the Enlightenment and contrary to this video did not produce stability. The nineteenth century was a century of one bank crisis after another. The system was incredibly difficult to maintain and some authors say it was one of the causes of WWI.
Good money comes from virtuous people not metal. St. Thomas Aquinas says as much in his works. He did not believe value of money is found in the intrinsic value of gold or metal but from the issuing authority.

dulac90 said...

Perhaps the trouble started with the idea of currency instead of money. As banks (and governments) issued paper against gold, the temptation was to let more certificates circulate than there was gold to back. If everyone wants to be paid at once...you have a problem.

Rachel said...

That video has an interesting argument, that there'd be less war if we were on the gold standard. I'm not sure I buy it, because humanity has always had wasteful, tragic wars.

Agellius said...

It was interesting. But I'm not sure I agree either. It seems to me that like paper money, gold too has value because people agree that it does. It's not inherently valuable, except as adornment, and maybe for use in electronic components or dental fillings.

And it can't be true that the same amount of gold has always bought the same amount of goods, because the price of goods is affected by such things as shortages and surpluses.

Anonymous said...

"discipline and restraint that America needs" YES INDEED!!!!!

I'm sick and tired of seeing enormously fat people at Walmart and Target. Enough already.

Oh and if you want to dump the federal reserve and cut the troops in half,the ELECT RON PAUL!!! He's really the only Catholic option out there.

Anonymous said...

“Congress consistently brings the Government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the Federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility – two things that set us apart from much of the world.” — President Ronald Reagan, September 26, 1987

Bsdouglass said...

As an economist and money nerd, I would recommend that all who are interested in the money issue read John Mueller's book Redeeming Economics. His neo-Scholastic view of the money problem is quite sound and sadly unknown by most.

The problem is not so much the backing of money as the fact that we have a monopoly currency which also happens to be the world's reserve currency. If you had currencies in competition, people would figure out who the scammers are and drop their worthless cash quickly.

Also, he points out that the usual "gold was unstable" argument is not true in the experience of the US Dollar. There were other things which actually caused the problems...plus some people play creative with what "stable" means.

First thing that needs doing is local currencies that are not tied directly to the USD...which of course is nearly impossible to do legally.