Issue: Economic: Monetary Policy: Need a Gold Standard?

[gravesdav]

Most countries don't have a gold standard. If we switched to one now wouldn't that be a disaster? And what Ron Paul wants to do, legalizing gold and silver, isn't that already legal.
What if we just didn't print excess money. Abolish the Fed, and have the Congress control the amount of printed money only to replace destroyed money. I know the Constitution says only Gold and Silver are legal tender, but how can we go back to that with the price of Gold so high. How about a Constitutional amendment just prohibiting printing excess money. There's no hard backing now, and even though the dollar is inflating it is still worth something.
Maybe I'm approaching this wrong, I never took a class in economics(even if I did it probally wouldn't help). But I'd like some thoughts on this.

[Mesogen]

This is the Money Masters solution.

I don't know what's best.

But you could go to a gold standard only if you abolished or greatly restricted fractional reserve banking.

You could peg an oz of gold to $600 or something and then by fiat make the new dollar worth $10 old dollars, and now the peg is $60/oz. All other exchange rates would also be adjusted of course.

Other countries wouldn't go for it, though. Not at all.

But I'm just talking out of my ass here.

[Man from La Mancha]

People use fiat but countries also use gold. Ron suggested both and may the better one win in a free market.

.

[Bradley in DC]

Not quite sure where to start here.

No other country has a gold stardard today, but several countries have "dollarized" or have currency boards which operate largely the same way with market-determined interest rates (which is the important part). Those countries adopting the free market approach have done well with it overall.


Most countries don't have a gold standard. If we switched to one now wouldn't that be a disaster? And what Ron Paul wants to do, legalizing gold and silver, isn't that already legal.
What if we just didn't print excess money. Abolish the Fed, and have the Congress control the amount of printed money only to replace destroyed money. I know the Constitution says only Gold and Silver are legal tender, but how can we go back to that with the price of Gold so high. How about a Constitutional amendment just prohibiting printing excess money. There's no hard backing now, and even though the dollar is inflating it is still worth something.
Maybe I'm approaching this wrong, I never took a class in economics(even if I did it probally wouldn't help). But I'd like some thoughts on this.

The goals of the Money Masters are not our goals (and they get a lot of facts wrong too). A gold-backed free banking system could have fractional reserve banking--the Scottish example is the most prominent (this is what was in effect when Adam Smith was writing his Wealth of Nations).


This is the Money Masters solution.

I don't know what's best.

But you could go to a gold standard only if you abolished or greatly restricted fractional reserve banking.

Yes, but there are also government actions undermining that free market such as Lincoln era taxes on competing currency issue, etc.


People use fiat but countries also use gold. Ron suggested both and may the better one win in a free market.