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File: 39 KB, 445x300, gold_standard.jpg [View same] [iqdb] [saucenao] [google]
305045 No.305045 [Reply] [Original] [archived.moe]

How would the US economy be affected if our treasury reintroduced the gold standard?

>> No.305053

It would collapse.

>> No.305056

How and why?

>> No.305063

National debt combined with problems inherent to commodity backing.
Complicated. Explanations are readily available online.

>> No.305069

There literally isn't enough gold to do that, at least at present exchange rates
Either the dollar would plummet in value, or gold would skyrocket

>> No.305075

economic boom, though many unnecessary government departments will have to shut down and many lower level government employees will lose their jobs all at once, but they will quickly be re-employed in the private sector

>> No.305079

>There literally
I wish the children would leave 4chan.

>> No.305083
File: 670 KB, 1200x1200, middle fingers to all the haters.png [View same] [iqdb] [saucenao] [google]


>> No.305085


This. Adopting a gold standard for a modern economy is a atrocious idea, and it's only make slightly less atrocious by swapping out gold for a basket of commodities like some others are calling for.

Essentially, a commodity-based economy is procyclical in nature, meaning monetary policy is very loose (cheap money, low rates) during booms and bubbles, and very tight (expensive money, high rate) during recessions, which mean that expansions are higher and more likely to form dangerous bubbles, and recessions are longer and deeper, destroying more wealth and skills.

Needless to say, that isn't a good thing.

I can't believe libertarians actually believe this.

>> No.305092


He's actually completely correct though.

Short of seizing all gold, where does the federal government get all this gold to even make the gold standard possible?

>> No.305094


This is correct.
But you have to understand economics to get this point, most pp on /biz/ won't.

>> No.305102

what is wrong with using literally in that context?

>> No.305106

It wouldn't collapse, but expect decades of depression.

>> No.305108

>decades of depression
sounds like a collapse to me

>> No.305116

It's unecessary but that guy is just veing a dick anyway

>> No.305117

>what is wrong with using literally in that context?

he's trying to force a meme, ignore it

>> No.305118


price of gold is not stable enough to peg a currency to. This isn't the 1800's people can easily manipulate gold prices today.

>> No.305121

>Since you can buy/sell this stuff, it's not good, people can manipulate it
>So let's just use notes that says "monay" and the amount on them, that's much better!

>> No.305125


It is better sens that way only the government can manipulate them.

>> No.305127

>only the government can manipulate them
That's not exactly true, but it's difficult for anyone else to significantly manipulate it by themselves

>> No.305129

How can you manipulate a currency?

>> No.305130

>How can you manipulate a currency?

forex basically does it every day.
and forex is rigged.

>> No.305136

Suppose I take a $1 bill out of my wallet and light it on fire, reducing it to a small pile of ash
I have just removed a dollar from the money supply
This, technically speaking, increases the value of every other dollar out there, but since there's a LOT of currency in circulation, the amount is very very small

The main way of influencing is by currency exchange, as noted above

>> No.305147

How does forex manipulate it though? Why would you "buy" a dollar with rubles or any other currency?

>> No.305175

>Why would you "buy" a dollar with rubles or any other currency?

Same reason you would buy stocks, to sell them and make a profit. Since the value of currencies change over time and have uncertainty you have arbitrage opportunities.

This buying and selling, amongst other things, also effects the 'value' of a currency. Just like how buying and selling a stock can affect its price.

>> No.305223

Hrm... I went to see how many nations use the gold standard on wikipedia...

>>As of 2013 no country used a gold standard as the basis of its monetary system, although some hold substantial gold reserves.

So apparently gold standard is so great not a single country uses it.

I suppose the same about true anarcho-capitalism.

I mean, please show me a successful industrialized nation that has little or no government interference in the economy and has no welfare programs.

One is all you need.

>> No.305531

but America isn't other countries

We're the largest economy in the world.

>> No.305534

...and we don't use the gold standard.

>> No.305538
File: 39 KB, 391x565, rothbard.jpg [View same] [iqdb] [saucenao] [google]


>I believe governments are altruistic institutions that put "the greater good" above the narrow interests of those who run them.

Oh boy.

>> No.305541

>posting Rothbard
Oh boy, here we go.

>> No.305545

noob here

Wouldn't it cause massive price correction? The value of everything would go down?

>> No.305547

So, the only way to keep going is to adopt an unlimited money policy? If you don't have enough you just create more?

>> No.306091

but deflation never happens? how could a dollar gain value

>> No.306094

it would be a great thing, OP

>monetary policy is very loose (cheap money, low rates) during booms and bubbles, and very tight (expensive money, high rate) during recessions
> which mean that expansions are higher and more likely to form dangerous bubbles, and recessions are longer and deeper, destroying more wealth and skills.
no. the opposite is true.

>> No.306095

By losing less value than other currencies

>> No.306105

The aim of the gold standard is to basically prevent inflation and ensure that money has a relatively consistent value. The same thing could be achieved with fiat money, if central banks and Treasuries kept the money supply and availability to credit relatively tight. Of course, the reason why they pursue the opposite policies is the same reason that the gold standard is not going to be coming back any time soon.

>> No.306146

Somalia :>

>> No.306149

It would fix everything because you wouldn't get the volatility you see with fiat. Might make it harder to get a loan, but it would definitely stabilize things.

>> No.306156

>you wouldn't get the volatility you see with fiat.


Get ready for the George Soros of the world to crash the currency.

Gold is inversely related to economic performance, so its value tends to go up in recessions, which means that no sane person will sell gold to the Reserve because it will most likely be above parity. It will be made a whole lot worse because Jews will buy gold at the margin and wait for the parity to increase.

The Fed will see soaring interest rates because it will be unable to make money in a recession and eventually will be forced to revalue the currency at a higher parity.

>> No.306177

>volatility you see with fiat

Kek. Volatility has a precise meaning- the tendency of a numerairé to fluctuate unpredictably. It does not mean the tendency to deprecate in value.

I'll give you a puzzle: between gold and fiat money, which one experiences slow and predictable deprecation at a rate of 2-3% p.a., and which one experiences large and wildly random swings in value with no long-run drift in either direction relative to other goods and services in the real economy?

>> No.306207
File: 22 KB, 297x335, estimation.png [View same] [iqdb] [saucenao] [google]

I think I have a better example of volatility

>> No.307687

>fund NASA
>mine asteroids
>find asteroid the size of Texas made of gold
>price of gold becomes a penny a pound

>> No.307732

> fund NASA

There's your first problem

>> No.307741

Why not just make Steel the commodity then you minge

>> No.307750


Anybody that doesn't drink the Austrian kool-aid understands why that's a horrible idea

>> No.307765
File: 120 KB, 500x500, bFwLUWS.jpg.gif [View same] [iqdb] [saucenao] [google]

Or perhaps a basket of resources?

>> No.308877

>Austrian kool-aid
>the Frankfurt school isn't all smoke and mirrors
Please explain to this simple-minded Austrian why the standard of living has plummeted and wealth has been extremely concentrated since we have gone off the gold standard?

>> No.308885

> quality of life has gotten worse since 1913 or 1971 depending on how you view it

I want what you're smoking

>> No.308904

the federal reserve would have to halt all printing indefinitely and there would be a bank run on Fort Knox

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