Originally Posted by
Zippyjuan
No monetary system has ever been able to avoid bubbles and recessions.
That is untrue. The Byzantine empire endured 900 years of essentially perfect economic stability WRT the gold money. It was not until they began debasing the coin that trouble began.
Zipp-0, the lessons of history are clear, relative simple, and easily understood. There is not great magic there at all. Currency inflation can be avoided with no effort of thought, but rather only of the will to remain on the path. Commodity inflation is a whole other issue, that being dependent on supply and demand and in some cases beyond the control of men. You may have the latter confused as the former - a common enough error.
Firstly, one should quote wikipedia with endless caveats. The editorial bents of the articles in political and economic terms tends strongly to the progressive, despite the somewhat transparent efforts to couch opinions in language not too blatantly biased.
That said, the article's list begins with this, RE the Panic of 1785:
"The causes of the crisis lay in the over expansion and debts incurred after the victory at Yorktown, a postwar deflation, competition in the manufacturing sector from Britain, and lack of adequate credit and a sound currency."
As to currency, the statement as given actually torpedoes your argument with conspicuous violence, and conversely supporting the opposite position with equal faith and vigor. No sound currency == no money. That, in case you have not twigged that part yet, is a major problem.
WRT "[in]adequate" credit, that bespeaks a matter of opinion, pure and simple. It is inadequate when there is not enough to get done what one wishes. One can ALWAYS cry "inadequate credit". It is a bull$#@! term that has meaning ONLY in very specifically constructed context. For tribal people in grass skirts, there is almost never any such thing as "inadequate credit". For people who want too much, too quickly, there is never enough. To cite a lack of credit as precipitating a money panic speaks nothing of money per sé, but rather of the artificial human circumstance at play. Inadequate credit speaks only to that artifice and the (likely) morbid greed that drives its existence.
How about the Copper Panic of 1789:
"Loss of confidence in copper coins due to debasement and counterfeiting"
Gold standard? The
Great Recession occurred under a gold standard.
We had a gold standard in 2007? Might pay to read your own article.
We had competing currencies during the Free Banking Era with over 30,000 different currencies issued by individual banks which collapsed over confusion and forgery.
Your reasoning is really loused up in all this. You are attempting to imply that it is being claimed that a gold standard will prevent the deleterious effects of chicanery and other human misdeeds. Nobody in their right mind will claim this. A proper money prevents certain types of problems, the main being currency inflation. There is no way for an inanimate object to change the hearts of men. Crookery has to be addressed in other ways and there is really nothing to be done about speculation, save to decouple speculative ventures from those stable. Beyond what can be reasonably done, onus rests with investors to become sufficiently knowledgeable. Caveat emptor and all that.
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