There's been something of a resurgence of goldbugs since the failed primaries of Ron Paul and the rise of the Tea Party. Of course, this idea has always existed, especially in America, but the Gold Standard really is a poor--and potentially damaging notion--in terms of economic impact.

A 2012 poll showed none of the polled economists supported the idea that a return to a gold standard would result in better "price-stability and employment outcomes". In my own opinion, and that of several similarly-minded economists, the biggest problem with this is the removal of monetary authority from the government. It takes away a government's ability to fight recessions via monetary policy, and gives it to our balance of trade, gold reserves and gold mines.

In terms of advantages, one of the big ones offered to us is price stability. While removing authority over the money supply might reduce our ability to fight recessions, it makes serious swings in inflation improbable and helps induce economic stability by smoothing out the value of the currency. While it's true that long-term price stability is a virtue of the gold standard, and that significant--or even hyper--inflation are rare, it just isn't true that the gold standard induces stability in any meaningful way.

That is the sheer amount of inflationary volatility under a gold standard. Short-term fluctuations in inflation are drastic under a gold standard. The idea that pegging the currency to gold--or any other sort of metal specie-induces price stability is a sick joke.

Now that is inflation under the quantitative easing programmes. QE is essentially a form of monetary stimulus used when interest rates hit zero, and it has been decried as "hyperinflationary" by the libertarian-goldbug crowd. Look at the graph up there, and then look at the graph here. You tell me which is more inflationary--and deflationary, for that matter--than the other.

As Milton Friedman noted: inflation is, always and everywhere, a monetary phenomenon. There has never been a fiat money system, under which, the central bank has not had the power to control inflation. In addition to this, as Ben Bernanke noted, there has never been a fiat money system, under which, the central bank has not been able to control deflation.

So, yeah, if you're in favour of a gold standard. . . stop it.

tl;dr--gold standard doesn't actually stop inflation

Quote from: Lemy the Lizerd on January 19, 2015, 12:13:20 PM

Something something on a cross of gold

WJB is mah nigguh

didn't I make a thread about him a few months ago in which you called him an idiot for his science-denial antics?

I think getting rid of it and adopting the Federal Reserve was the single biggest mistake in America. But this is just one man's humble opinion.

Quote from: challengerX on January 19, 2015, 01:51:54 PM

Quote from: Karjala takaisin on January 19, 2015, 12:41:59 PM

I think getting rid of it and adopting the Federal Reserve was the single biggest mistake in America. But this is just one man's humble opinion.

I wonder how autistic you would look when a mod shows that isn't my account. Stay a piss-poor mad asshat

It's like you want to be banned again.

Le ebin maymays xd

bad psy

complicit in the derailing of my thread

when Meta insults me after already being warned, nothing.

I didn't insult you. I called you delusional because you cling to beliefs in the face of insurmountable evidence. If that's an insult, then you calling me naive and 'squirt' all the time also crosses the threshold. You can't have it both ways.

At least when I call you naive I'm being honest and not lying like you.

( Ν‘~ ΝœΚ– Ν‘Β°).

The fact that there had to be "easing" proves the system wasn't reliable.

No, it proves there was a prior tightening which necessitates the easing. It has nothing to do with any sort of inherent unreliability of fiat currency which--as I've demonstrated in the OP--is more reliable than a gold standard anyway.

The "solution" you propose doesn't work

Well it does, because it worked during the Clinton administration, it worked throughout the entirety of the Great Moderation and it has been working--although in a stunted manner--in response to the current Recession.

We're just delaying the inevitable.

Again, more fearmongering. We've talking before about how Clinton managed to control the size of the debt relative to the economy.

Sorry, but I have common sense on my side.

Unfortunately for you, however, you don't have the economics on your side.

And the economics, funnily enough, strikes me as more authoritative than your conception of common sense.