The GOP likes to prattle about repealing Obamacare, but they didn't do it when they had the chance. They knew such a repeal would cause chaos. They pretend they want to repeal Obamacare just to stir up QAnon and their other mentally-deficient constituents but they are smart enough to not actually do it.
Similarly, Senators Rand Paul and Ted Cruz, and in 2016 even Von Clownstick himself, have come out in support of a gold standard. But with Stupidism becoming more and more powerful a force in the U.S. even Republicans are backing away from a disastrous return to a gold standard. With QAnon now so powerful that lunatic agenda might become reality, Paul and Cruz have toned down their screeds. Even these cretins are smart enough to realize a gold standard is untenable today. Earlier in the thread I asked Jason and the other Ilkists how money would work when the FedRes is dissolved; they were smart enough not to attempt an answer!
But now our own George S calls for a return to the gold standard.
Here is a defense of the gold standard in 2015 from The Country's Stupidest and most lie-filled major magazine. (As with
N.Y. Times, the paywall of
Stupidest Magazine can possibly be defeated just by disabling Javascript.) It would be a useless exercise in Whack-a-Mole to refute this ignorant article point by point, but here is a crux:
From 1775 to 1900, the U.S. money supply (technically known as “base money”) increased by 163 times, from $12 million to $1,954 million. During this time, the total aboveground gold supply increased by about 3.4x due to mining production.
163 is not the same as 3.4.
Gold-defined money in no way limits the supply of the measure that is money as much as it ensures as much as possible that the measure that is money will maintain its value in terms of something known for stability. As Lewis keeps pointing out, if market actors find a commodity that exhibits even greater stability than gold, he’ll migrate to said commodity.
Nonsense. During the heyday of precious-metal money, money actually WAS gold or silver. If I owed you £1000 and you demanded payment I'd fill a large chest with gold or silver coins or bullion and have it delivered to you. When paper money came into use, it held its value,
if at all, because it could be redeemed into precious metal on demand. Consider the Panic of 1837:
The Panic of 1837 was a financial crisis in the United States that touched off a major depression, which lasted until the mid-1840s. Profits, prices, and wages went down, westward expansion was stalled, unemployment went up, and pessimism abounded.
The panic had both domestic and foreign origins. Speculative lending practices in the West, a sharp decline in cotton prices, a collapsing land bubble, international specie flows, and restrictive lending policies in Britain were all factors.[1][2] The lack of a central bank to regulate fiscal matters, which President Andrew Jackson had ensured by not extending the charter of the Second Bank of the United States, was also key. This ailing economy of early 1837 led investors to panic a bank run ensued giving the crisis its name. The run came to a head on May 10, 1837, when banks in New York City ran out of gold and silver. They suspended specie payments and would no longer redeem commercial paper in specie at full face value.[3] A significant economic collapse followed. Despite a brief recovery in 1838, the recession persisted for approximately seven years. Nearly half of all banks failed, businesses closed, prices declined, and there was mass unemployment. From 1837 to 1844 deflation in wages and prices was widespread.[4] The lack of deposit insurance deepened the Panic. By 1850 the economy was booming again, a result of increased specie flows from the California Gold Rush.
It sure sounds to me like that paper money didn't work very well without a strong central bank.
Simply put, there isn't enough gold to support the world economy unless PAPER is accepted as a substitute. Today the U.S. Paper Dollar is King. (Whines about the 2% average annual inflation display great ignorance.) By definition, return to a gold standard means that such paper can be redeemed for gold. Nixon did not take the world off the gold standard because he was some sort of hyper-modern monetarist.
He did it simply because the U.S. Treasury was quickly running out of the gold needed to redeem paper dollars.
Money is a fascinating topic which most otherwise-intelligent people get wrong. Many don't even realize that
money is created by private banks; and that the money FedRes creates is created with essentially the same mechanics as money created by private banks.
I've tried to explain money in other threads but get tired of the Whack-a-Mole.
If anyone thinks I erred in my earlier discussions, or failed to answer a question, please inform me.
Let me nitpick a bit.
When I was young and all it was pegged to $40/oz of gold. So a $5 gold coin had 1/8 of an ounce exactly regulating/regularizing the value of both gold and the coin.
How old are you, George? Are you a 90 year-old who remembers holding a coin at age 1? The last gold coin minted for general circulation by the U.S. was minted
before 1934, was pegged to $20.67/oz; and in 1934 it became illegal for U.S. citizens to own gold coins.
From the historical desk: The original U.S. Dollar was designed to have the same value (and shape?) as a Spanish Silver Peso (Piece of Eight); and were used alongside such Spanish money until the 1830's. (The average physical Piece-of-Eight circulating in the states was used to set the weight, so I think a freshly-minted Spanish peso had very slightly more silver than a freshly-minted U.S. Dollar.) The gold-to-silver price ratio was fixed by Congress at 15:1, implying a gold price of $19.39/ounce.
In 1835 the gold price was changed to $20.67, reflecting a new gold-to-silver price ratio of 16:1. The price was fixed at $35 in 1934, then (but only for certain accounting) $38 in 1972 and $42.22 in 1973. The FedRes's gold is still shown on the books as worth $42.22/oz.
