gut;1839609 wrote:"Greenspan also had some colorful comments at the conference on gold, including this gem: "The gold standard is not possible in a welfare state."
Try again. Last I checked pretty much every major economy has significant social welfare/entitlements....so, like I said, it's not remotely a practical idea.
I'm not suggesting that it's practical with all other elements remaining the same. In fact, I suggested as much. My exact words:
"When it comes to a return to a commodity-backed standard, I think it's a moot discussion. The toothpaste is out of the tube, and I think trying to amass a singular commodity in reserve would be difficult to impossible. Beyond this, it doesn't fix the deficit problem as it exists today. Returning to it with the current views on spending at the federal level could leave us looking like pre-2000 Russia ... which did have a fixed currency, as I recall reading."
We're at a point in which several other parts of our federal budgeting, spending, etc. would have to change in order for a commodity-backed currency to be feasible, and I can't see them being reigned in to that degree.
gut;1839609 wrote:And the same guy who gave us the dot.com bubble and housing bubble is in the minority of of economists fearing hyperinflation when most other economists are trying to figure out how to deal with deflation.
Long-term, it doesn't appear as though deflation is as consistent a problem, or at least that hasn't appeared to be the case over the last few decades. In short spurts, sure, but even still, you're talking about correction through arbitrary manipulation of interest rates which can have been an indirect cause of the need to do so in the first place.
Again, I'm not suggesting it's functional at this point. The toothpaste is out of the tube.
gut;1839609 wrote:Here's another good quote:
"What emerges is a powerful figure conflicted between the practical manager charged with operating within the current fiat monetary system and the philosopher-academic with a "nostalgia," as he puts it, for the days of the gold standard."
A quote about an exchange between Greenspan years ago and Ron Paul? When Paul himself asked Greenspan whether or not he still believed his own writings from his "Gold and Economic Freedom" days, he affirmed as much.
Forgive me for saying, but I don't think such a third-party quote really does much except outline an onlooker's thoughts ... not address the views of the actual people within the discussion, or at least not to as reliable a degree.
gut;1839609 wrote:There was a Univ. of Chicago economic forum a few years ago - 40 out of 40 top economists thought the gold standard was a bad idea. That's 100%, by the way....although only 1/3 merely disagreed with the idea (the rest strongly disagreed).
They oppose it in a vacuum? Under current circumstances? Was there a prior conversation or a preface? Who were they, and by what means do we determine them as forty of the "top" economists?
Beyond this, 40 is hardly a notable sample size.
And finally, asking financial minds this amounts to asking whether or not they believe in the responsibility required to make use of the flexibility of a non-backed currency without falling into the dangers of it, it's not hard to imagine them answering in the affirmative. They acknowledge the ethics and discipline for doing so.
Under our current circumstances, I don't advocate for a gold standard to be implemented with all other things remaining the same. As I stated before, we'd end up seeing something similar to pre-2000 Russia.
But as a principle itself, having something to anchor the value of your currency and something to which you can appeal objectively as the value for the note provides stability, regardless of whether or not it lets you do everything you want to do at the federal level.
