Gold standard thought

A lot of libertarians are adamant that we go back to the gold standard so our money is “worth something”.

Except… all that does is tie our money’s value to something else with an arbitrary value assigned to it. It’s not like God slapped a price tag on gold.

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7 responses to “Gold standard thought

  1. Pingback: Tweets that mention Gold standard thought | Hanlon's Razor -- Topsy.com

  2. The issue isn't so much the arbitrary value of gold as much as its scarcity compared to plain paper. If you back money with a metal, it puts a limit on how much money you can print. This limit prevents us from simply creating more money when we need it and thus reigns in inflation. Of course, changing to the gold standard isn't going to stop banks from creating money that did not exist before either. If they want currency reform, it has to come hand in hand with bank reform.

    • Well sure, but that only works with a fixed value of gold. If our amount of money is tied to a metal that is decided in value in terms of the very currency that it is backing, well that's circular to the extreme. Not to mention that now our monetary value is on a rather unstable two-way system.

      It only puts a limit on how much money you can print as long as the value of gold isn't manipulated. Good luck with THAT.

  3. The issue isn't so much the arbitrary value of gold as much as its scarcity compared to plain paper. If you back money with a metal, it puts a limit on how much money you can print. This limit prevents us from simply creating more money when we need it and thus reigns in inflation. Of course, changing to the gold standard isn't going to stop banks from creating money that did not exist before either. If they want currency reform, it has to come hand in hand with bank reform.

    • Well sure, but that only works with a fixed value of gold. If our amount of money is tied to a metal that is decided in value in terms of the very currency that it is backing, well that's circular to the extreme. Not to mention that now our monetary value is on a rather unstable two-way system.

      It only puts a limit on how much money you can print as long as the value of gold isn't manipulated. Good luck with THAT.

  4. Well if you would like to define the value of gold in terms of acres of arable or livestock we could certainly do it. Really what this whole debate reveals is that we haven't moved very far from the barter system. If that is the case, then value is relative to the individual. What I think 20 acres is worth might be different than your conception just as our value of one dollar might be quite different. But lets face it, policy makers have a pathological need for a universal standard.

  5. Well if you would like to define the value of gold in terms of acres of arable or livestock we could certainly do it. Really what this whole debate reveals is that we haven't moved very far from the barter system. If that is the case, then value is relative to the individual. What I think 20 acres is worth might be different than your conception just as our value of one dollar might be quite different. But lets face it, policy makers have a pathological need for a universal standard.

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