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If it's bright and shiny, some people will be attracted to it. This, in fact, is how tin-foil hats got started.
After our equestrian adventures as a small child, my grandfather would always engage in discourse with me about how much trouble gold and silver were to house and store. He would say that gold was for the kings, silver for the lords, and crumbs were for the plebs. We had more than a modest collection of gold around our palatial estates. Plates and our drinking devices were all gold. Some of our utensils were gold, some were silver. Fixtures were also adorned with gold and silver. The trouble with all of our gold and silver was that we had to employ a few servants just to keep them bright and shiny. I still employ a few personal assistants to do the same bidding for the ornamental value of gold and silver, but it really is a bother to have to be forced to employ someone else to check behind them to make sure they are polishing all of our gold and silver correctly.
LOL. You probably shouldn't preach history when you clearly haven't studied it yourself. During a century in which the U.S. confiscated a continent's worth of natural resources (including gold), underwent an industrial revolution and benefited from a limitless supply of cheap immigrant labor living in abject poverty and working in lethal conditions, the country suffered devastating crashes in 1819, 1837, 1857, 1873 and 1893. We're talking about bank closures, farm foreclosures, total market collapses in everything from food to real estate to stocks. It was a time of violent strikes, riots, poorhouses and workhouses that amounted to indentured servitude.
That was your Golden Age. I'll grant you it was a wonderful time to be a Carnegie, Morgan or Vanderbilt.
It's eerie how much this reminds me of discussions with Marxists in my university days. Crackpots of all stripes are immune to reason and evidence.
When the US was on the gold standard, economic panics/depressions happened frequently: 1797, 1807, 1815-1821, 1837, 1857, 1873, 1893, 1907, 1921, 1929-1941. Some of them were fairly short and others much more long lasting, but all them were far more severe than anything that the US has suffered since, including the 2008 recession.
Now, the gold standard wasn't necessarily the cause of all these economic woes, but the deflationary nature of the gold standard made recovery harder to achieve, especially during the early years of the Great Depression (it was no accident that one of FDR's earliest moves was to take the US off the gold standard), and this list surely proves that the gold standard is NOT any kind of protection against economic disaster as proponents claim.
The last two recessions you brought up were 1921 and 1929-1941. In 1921, nothing was done with respect to gold. The debt was liquidated, and the recession ended in about a year and a half. Then we had, guess what, the Roaring Twenties. In the second depression, FDR outlawed the private ownership of gold and massively increased gov't spending (after Hoover massively increased it). And we had, guess what, the Great Depression. Do you see how your logic makes no sense? During WWII, we were still in a depression in that output went up, but the average person was not better off as everything was rationed and the increased production was largely used in war. The Depression only ended after gov't cut spending by ~60%.
Look at GDP growth in the post Civil War era. People like to bring up that times were bad. Of course, it was the 1800's, people's standard of living was bad everywhere compared to now. People had to work a lot more and in worse conditions because capital was miniscule compared to now. But the standard of living increase from 1865 to ~1900 was bigger than any other 35 year period in history. Oh, and that was with the dreaded deflation.
Someone brought up how the gold standard wouldn't work with our national debt. We wouldn't have nearly that much national debt with a gold standard. The gov't couldn't afford it because they couldn't print money like they've been able to since Nixon took us off the gold standard.
I'm not even in support of a gold standard, I support free banking. But what I don't understand is how people can support a person with strong ties to investment bankers having the power to control the money supply, which is half of nearly all transactions. That's craziness.
Look at GDP growth in the post Civil War era. People like to bring up that times were bad. Of course, it was the 1800's, people's standard of living was bad everywhere compared to now. People had to work a lot more and in worse conditions because capital was miniscule compared to now. But the standard of living increase from 1865 to ~1900 was bigger than any other 35 year period in history. Oh, and that was with the dreaded deflation.
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You don't suppose that might be because we were still a developing nation with vast unexploited natural resources?
You don't suppose that might be because we were still a developing nation with vast unexploited natural resources?
There's still unexploited natural resources. Look what's happening in North Dakota and West Texas. The only reason people are able to actually get that oil now is because this country has accumulated the capital to extract it. And people's standard of living in those areas are going way up.
The standard of living went up because of new inventions and procedures which made people more productive. This made the price of many goods cheaper so that more people could afford them. It was good whenever crop prices fell due to the tractor and the combine (though those came a bit later). It was good whenever more people could travel across the country because transportation became so much cheaper.
The way for a country's standard of living to go up is to be more productive. That can certainly be seen in China's boom the last 35 years or so. And the way to be more productive is to produce and accumulate capital, and that certainly occurred in the gold standard post Civil War era.
It is a lot easier to be more productive when you are starting at the bottom! Most of the low hanging fruit re: natural resources are already exploited. Less bang for the buck.
The only argument I can think of against the gold standard is that there is not enough gold to go around to form a monetary system. Roughly 10 billion ounces of gold exist and the population of the world is approximately 7 billion.
So, 1 1/3 ounces for each person. That's going to limit how much exchanging of goods and services can be done.
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