
I don’t pretend to be an expert on macroeconomic policy and I certainly am not an expert of the gold standard, so take this post with a grain of salt or a fleck of gold dust.
The gold standard meant that each paper dollar was backed by dollar of gold held in Fort Knox, or some other federal gold reserve facility. The standard also kept the government budget in check, say gold standard bearers.
In case you haven’t notice, we’re running a bit of a deficit.
The logical conclusion would be to go back on the gold standard and the economic crisis will go away. Again, not an expert here, but this idea just doesn’t jibe. First, historically speaking, there were lots of economic panics while we were on the gold standard. Take the Great Depression. Please.
Secondly, like oil reliance, gold reliance can cause problems, too. Any disruption or threat of disruption to the gold supply can cause the economy to unhinge.
Third, the economy is no longer based on gold. I suppose at one time, especially in the west, gold was a precious commodity. At one time, economies were based on coconuts and ox hides. Should we go back to the coconut standard or the ox hide standard? Now, it’s fair to say that a few pounds of silicon are capable of producing far more value than a couple pounds of gold.
I believe the real economy is based on information and innovation today and there’s no way to equate that value with a lump of metal.
The gold standard is just an excuse for financial responsibility. And this blame goes all around: financial irresponsibility on the part of the citizens and businesses who look at government handouts as some type of bottomless piggy bank and fiscal irresponsibility on the part of our government and its agencies.
Going back to the way things were done in the past isn’t change. Let’s move from the gold standard to the bold standard.
Accelerating Technology, Business Strategy, Dreams Come True, Great Books, Internet, Investing, Money, Online Investing AI, Success, US Economy
budget, deficit, depression, dollar, gold, gold standard, information, Money, past, recession, US Economy, wealth