constitution amendment to limit inflation?

[JosephTheLibertarian]

How about a constitution amendment to limit inflation to 3%? This may limit the government, no?

[plopolp]

It's in the constitution already that there must be a gold standard, and with such, inflation does not exist. Except through physically mining new gold which always has been done at a steady rate, about 2% per year last 50 years. The amount of new gold would be determined by supply and demand on a free market, so that "inflation" has nothing to do with banks creating new money as they do today, in violation of the constitution.

If anything, the amendment from 1913 which created the FED, should be abolished.

[JosephTheLibertarian]

It's in the constitution already that there must be a gold standard, and with such, inflation does not exist. Except through physically mining new gold which always has been done at a steady rate, about 2% per year last 50 years. The amount of new gold would be determined by supply and demand on a free market, so that "inflation" has nothing to do with banks creating new money as they do today, in violation of the constitution.

If anything, the amendment from 1913 which created the FED, should be abolished.

no.. I meant it in just a political way.. would something like that be viable in A constitution? not ours, I knoq what ours already reads ;)

[fsk]

Historically, every form of government that started with sound money defaulted eventually.

[Rich333]

It's in the constitution already that there must be a gold standard, and with such, inflation does not exist.
The Constitution doesn't say which metal or metals should be used. Personally I'd prefer it if the government just got out of the money business altogether and let the market handle it; the gov't always screws it up, often on purpose.


Except through physically mining new gold which always has been done at a steady rate, about 2% per year last 50 years. The amount of new gold would be determined by supply and demand on a free market, so that "inflation" has nothing to do with banks creating new money as they do today, in violation of the constitution.
Silver is a much better standard for modern times. We mine proportionately less of it than we do gold, so the value is more stable, and it's easier to use for small denominations. For larger denominations, full-reserve silver certificates should work just fine.


If anything, the amendment from 1913 which created the FED, should be abolished.
Certainly. I just hope the financial schemers don't successfully use it as an opportunity to return us to a bimetallic standard like we had throughout much of the 1800s; that was a complete disaster, and sort of paved the way for modern central banking by weakening confidence in commodity-backed currency. In bimetallic standards, the exchange rate between the two metals is artificially fixed by the government, and because real market values are always changing, one metal becomes overvalued and the other undervalued. The undervalued currency leaves circulation as people exchange it for the overvalued currency. For a while you couldn't find any large denomination gold coins in this country, only small denomination silver coins. At one point the government actually set a 1:1 exchange rate for foreign silver coins that were lighter than our own, so for a time the only coins in circulation in the US were foreign silver coins.

You can see a similar phenomenon in Canada right now, now that the Canadian dollar is worth more than the US dollar. The old exchange rates are still fixed on a great many products (you've probably seen things like books marked with two prices, one for Canadian dollars and the other for US dollars), so Canadian dollars have started to flow out of Canada and into the US, while US dollars have been headed northwards, because the Canadian dollars are currently being undervalued. In this case it should only be temporary, because the printed prices on new products will likely reflect the new exchange rate; in a bimetallist system however it's the government which maintains the irrational exchange rate, so the outflow of the more valuable currency doesn't stop until it's all gone.

[plopolp]

I just hope the financial schemers don't successfully use it as an opportunity to return us to a bimetallic standard like we had throughout much of the 1800s; that was a complete disaster,
Well, not "complete" disaster. I think that the moderate problems before 1913 were caused by fractional banking rather than by the bimetallism. But you're completely right that the government should not regulate the relative price between two goods such as gold and silver. It's a very stupid idea, actually!

And I've seen Ron Paul say that he would not reintroduce the bi-metalism. He speaks of a gold standard not as something to "go back to" but as something to go forward to.

The best way would be to let the market decide. If silver has its advantages, then it would be prefered. All talk about gold has to do with it having been prefered by the markets historically, even if silver also always has been there too. On a free market we wold probably get both as independent currencies, as well as maybe a purely electronic "paper" currency promised to be kept at constant quantity by the (private) issuer. Who knows?

[Omnis]

I think constitutional amendment to explicitly ban bankers from ever gaining control through the fed or monopolizing a money supply again.