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Thread: Jim Grant - Bloomberg Interview (July 18th): Gold-Standard vs. "PhD"-Standard (video)

  1. #1

    Thumbs up Jim Grant - Bloomberg Interview (July 18th): Gold-Standard vs. "PhD"-Standard (video)

    I could´nt find it here at rpf´s, so i´m posting it:
    Goldstandard vs. "PhD"-Standard
    http://www.bloomberg.com/video/72621750/



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  3. #2
    Grant's comments starting @3:00 are particularly inspiring.

    "Let's move forward to the gold standard. The current system we have regressed into is so "un-wiki" an anachronism in this digital age of collaboration.

    The gold standard is an extremely elegant and subtle system that worked through market forces rather than a system which we have today where elites on top impose a rate of money printing on the marketplace."

    Here on RPF, I have been somewhat of a devil's advocate questioning the prospect that a return to the gold standard would render the money supply inelastic and would seriously impinge liquidity (something you cannot ignore).

    However, Nathan Lewis in "Gold - once and future money", explains in a very interesting way why this does not need to be so. This, however, (naturally) hinges on the idea that a "gold standard" need not mean that every dollar in circulation needs to be backed by a fixed amount of gold reserves.

    Historically, he mentions that the pound sterling was a very stable currency despite the fact that the Bank of England held only a small percentage of gold as backing for it (even though it was redeemable for a fixed amount).

  4. #3
    Quote Originally Posted by jon_perez View Post
    Grant's comments starting @3:00 are particularly inspiring.

    "Let's move forward to the gold standard. The current system we have regressed into is so "un-wiki" an anachronism in this digital age of collaboration.

    The gold standard is an extremely elegant and subtle system that worked through market forces rather than a system which we have today where elites on top impose a rate of money printing on the marketplace."

    Here on RPF, I have been somewhat of a devil's advocate questioning the prospect that a return to the gold standard would render the money supply inelastic and would seriously impinge liquidity (something you cannot ignore).

    However, Nathan Lewis in "Gold - once and future money", explains in a very interesting way why this does not need to be so. This, however, (naturally) hinges on the idea that a "gold standard" need not mean that every dollar in circulation needs to be backed by a fixed amount of gold reserves.

    Historically, he mentions that the pound sterling was a very stable currency despite the fact that the Bank of England held only a small percentage of gold as backing for it (even though it was redeemable for a fixed amount).
    When Jim Grant talks about the Gold Standard I highly doubt that he is talking about the Gold Exchange System (not a real gold standard), but probably a non-central bank gold system. Youll have to ask him to be sure though.

    And anyone saying that the pound sterling was very stable during the centuries the BoE was in charge has a delusional problem.

    The interesting part about your post is the one about elasticity. Its very funny because central banks promised an elastic currency (ignoring if that is good or bad), and they provide for a while (the bubble times), but then everything collapses and money gets tighter than with any type of free market currency system. So central banks are not delivering what they promise (again without considering if what they promise is what we need).

    As for elasticity a free banking system provides more elasticity than its needed in the system. Central banks and other centralization of credit regulations only creates problems that lead to inevitable tightenings of the money supply.

  5. #4
    Love this guy. I wish he was interviewed more often. He has a great way of explaining things in simple terms and is easier to listen to than Schiff, especially for the average joe watching the show (nothing against Schiff.. love him, too, but he sometimes gets too aggressive then doesn't explain things as well as he could).
    "When the power of love overcomes the love of power the world will know peace."
    - Jimi Hendrix

    "If one rejects laissez faire on account of mans fallibility and moral weakness, one must for the same reason also reject every kind of government action."
    - Ludwig Von Mises, Planning for Freedom



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