So little gold so many people

[bolil]

I've a question regarding Dr. Paul's economic position. A gold standard would serve as a very effective regulator as regards inflation. Yet, with only so much gold/silver in our reserves how would we make financial "room" for our progeny? I am only 1/4 through iEnd the Fed but would like to see further dialogue regarding this. Thanks!

[Revolution9]

We have military bases over top of the richest gold find and silver find in history as well as have capped all kinds of gold and silver and mineral mines. No sense bringing out the countries wealth to have the cabal abscond with it like they did Fort Knox and West Point.

Rev9

[Original_Intent]

bolil, in such a setting, if gold and silver were money, there would be less and less per person - meaning it would continually rise in value as people created and sold goods and services. Prices would drop as the laws of suppy and demand (more scarce money per person chasing increasing amounts of goods) This would encourage savings - build up of capital - REAL capital...it would be great.

[kah13176]

In the words of Ludwig von Mises, it doesn't matter how large or small your monetary base is, so long as it remains constant.

A small monetary base just means that each unit is worth more.

[ctiger2]

Yet, with only so much gold/silver in our reserves how would we make financial "room" for our progeny?

Gold and Silver would make financial room on their own via the market by their prices moving higher and higher. There's plenty of Gold, it's just a matter of price. If Gold was $20/oz there wouldn't be enough. If Gold was $20,000/oz there'd be plenty, maybe even too much.

[bolil]

Thanks, this is what my mind needed to fill in that blank and it does make sense. As more people enter the system, the relative value of the gold (-amt of gold/+persons = more value/oz of gold - Demand for a finite supply?) increases and thus makes "financial" room for our progeny. So each ounce of gold would essentially provide concrete backing for a larger and larger amount of money. Will continue reading free market literature. Thanks be to the four of you for squaring this away for me, does it seem I have the fundamental here?. +rep

[ctiger2]

Thanks, this is what my mind needed to fill in that blank and it does make sense. As more people enter the system, the relative value of the gold (-amt of gold/+persons = more value/oz of gold - Demand for a finite supply?) increases and thus makes "financial" room for our progeny. So each ounce of gold would essentially provide concrete backing for a larger and larger amount of money. Will continue reading free market literature. Thanks be to the four of you for squaring this away for me, does it seem I have the fundamental here?. +rep

Also remember that the supply of Gold increases annually at roughly 2% which roughly coincides with population growth. Now, this won't last forever, but then the free market would just adjust the Gold price up/down to accommodate for increase/decrease of Gold supply and increase/decrease of population.

[Bern]

http://www.ronpaulforums.com/showthread.php?280804-quot-The-Gold-Standard-is-gonna-cause-deflation-and-ruin-the-economy!-quot&p=3127425&viewfull=1#post3127425

[Jingles]

In the words of Ludwig von Mises, it doesn't matter how large or small your monetary base is, so long as it remains constant.

A small monetary base just means that each unit is worth more.

THIS!

"It doesn't matter what the supply of money is." - Murray Rothbard

Its all about purchasing power.

[bolil]

I didn't come out bashing the gold standard because, instinctually, I knew I was missing a key point in my thought process. Turns out it was an embarassingly evident point I was missing. I blame years of indoctrination in the public schools. lol. Thanks again.

[ctiger2]

I didn't come out bashing the gold standard.

Please remember that Ron Paul is for a Free Market Gold Coin Standard. That is a Gold Standard that is NOT in the Govt's control. You want private non-centralized banks/Mints to be issuing the Silver/Gold coins and paper notes that are redeemable with Silver/Gold.

[bolil]

Disregard

[The Gold Standard]

People have the wrong idea about economic growth and money anymore, which is why it will be next to impossible to get on a strict gold standard that Austrians describe.

Growth of the economy should be a described as an increase in purchasing power and quality of life, not a number growing like GDP or GNP. With your money supply limited by gold, if there is no inflation of money, economic growth is marked by price deflation, as prices tend to fall in a truly free market. Falling prices accomplish the same thing that an increase in money does.

For example, if our GDP is $14 trillion, and next year it is still $14 trillion, but prices have fallen, then buying power and quality of life have increased just as if the GDP grew to $15 trillion and prices remained the same.

The economy and money supply can also grow through obtaining more gold and also running a trade surplus, but if for whatever reason you can't get more gold, the economy can still grow until prices reach zero.

[Seraphim]

Yeah exactly.

A market standard for money and "The Gold Standard" are not the same at all.

A gold standard where gold has a fixed value set by the GOVT is no better then what we have now (barely better anyway).

A market standard for money always includes gold in some respect or another - generally as the center anchor for value and availability of credit.


Please remember that Ron Paul is for a Free Market Gold Coin Standard. That is a Gold Standard that is NOT in the Govt's control. You want private non-centralized banks/Mints to be issuing the Silver/Gold coins and paper notes that are redeemable with Silver/Gold.