Another Gold Standard Rebuttal

Gary Gibson surprises us all (not!) that in gold, the price of gas is falling.

My comment:

Somehow we forget the problems the world economies experienced trying to grow with the value of money tied to a scarce natural resource. I have read from gold supporters that there must have been a conspiracy to defraud the world as the major global economies of the world went off the gold standard. That is not the case.

Tying money’s value to gold is a notion that does not support free market mechanics. It depends on fixed exchange rates which are untenable in a growing world economy.

If you like gold, buy it! It is a great hedge against inflation it seems. So is land. Buy it too! Buy silver! Just leave the money alone. The world’s move towards free-floating exchange rates were part of the global free-market economic progress. Money is to facilitate commerce first, let the market decide what it is worth, we do not need to legislate its value.

One comment

  1. The conspiracy thinking happens when the value of a dollar does not equal a dollar of everything else. Insecurity is rampant and then, the fallback, crazy as it seems to us, is gold. And I agree with you, buy gold if you love it or any other commodity, if you need it to sleep at night. I sleep fine as long as all currencies are floating. I am not sleeping fine with China’s shenanegins and buying gold will not help me, And the irony is, China is buying up gold hand over fist. My horror and conspiracy issues came up when Communist and Fascist countries were permitted into capitalist and free markets and then they set their own values to their currencies. There are no free market mechanics when that happens.

    I agree with you on currency all the way. Currency is a quasi-contract and quasi-commodity, hence, it needs it’s own market. It adds speed to the deal and those of us who love business, we love that. But it demands an even playing field. We get up; our markets open; and we are off! Not…we get up; China messes with the yuah; the markets open and we are all screwed. Picture yourself at the horse races. The trumpet calls and the gates open and China’s horse is galloping at a leisurely clip around the track. Why? They know there will be no race that day. All the other horses (countries) and jockeys are stumbling, crippled, falling into each other…trying to determine currency values.

    What does put a smile on my face when I go to sleep at night, is knowing that the tons of gold China has purchased will not help them one bit when the failure of the yuah arrives. What is that day? The day our US debts are paid in full to them.

    The good news! China makes beautiful jewelry.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s