Swammerdami
Squadron Leader
We should avoid constructing "straw men" but sometimes there seems to be little choice.
Money is quite convenient in a complex economy so with the Federal Reserve dismantled surely some other form of money will take its place. Have we still not heard from any Libertarian what that new money is likely to be?
Do we just dynamite the U.S. Bureau of Engraving and Printing and the Federal Reserve branches and see what happens next?
Whatever the instruction or amusement value of these anecdotes, the gold standard obviously came with severe problems.
(1) Inflation could be caused by a major gold discovery anywhere in the world. (Britain's retail price index rose over 16% from 1852 to 1855. Was this caused by the '49er Rush in California?)
(2) The LACK of new gold discoveries could cause deflation. Does it seem good to leave an important economic parameter, the inflation/deflation rate, to the happenstance of mining discoveries?
(3) Changes to the ratio between silver and gold values would impact countries on a bimetallic standard. W.J. Bryan's famous "Cross of Gold" rants were less about coinage than that Bryan's farming constituents wanted inflation rather than the deflation Republican bankers were enjoying.
(4) Especially important with the economy growing much faster than the gold supply was simply the availability of gold to repay gold promises. IIRC, the Panic of 1893, perhaps the biggest U.S. financial crisis prior to the Great Depression, abated literally when a ship carrying gold from London (or Rotterdam?) was sighted in New York Harbor.
But let's not argue against a possible straw-manned return to the gold standard in this Libertarians are Crazy thread. Our resident expert has not yet chimed in with what he expects to replace the FedRes Benjamins we're used to.
@ Jason — Do you have an answer yet? Gold? Bitcoins? Beanie Babies? The brilliant Free Market will automatically and magically figure this out?
Money is quite convenient in a complex economy so with the Federal Reserve dismantled surely some other form of money will take its place. Have we still not heard from any Libertarian what that new money is likely to be?
Do we just dynamite the U.S. Bureau of Engraving and Printing and the Federal Reserve branches and see what happens next?