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Buddha_basic

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#1 Buddha_basic

Member since 2002 • 546 Posts

[QUOTE="Buddha_basic"][QUOTE="lilburtonboy748"]Yup. Why wouldn't it grow? That's just the medium of exchange, it isn't what makes the economy run. Production of goods and services is how an economy grows. Money is just an easy way to trade those goods and services. It's just a medium of exchange, not wealth.lilburtonboy748

But that doesnt solve anything. The value of that paper money is now dependent on the production of gold which doesnt cater to the growth of an economy. Its prone to fluctuate drastically.

No it isn't. The paper money IS the gold. Same thing. It doesn't change. The value of gold can be changed depending on the amount of gold available. But the paper money is irrelevant. If there is less gold, the each unit of gold is worth more, and vice versa.

But money supply is restricted by teh supply of gold. Otherwise you are continually changing the value of the money you have in your pocket to meet the amount of gold at hand. And once again what happenes when people watn to turn in their paper money for the actual gold?

16 years ago

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#2 Buddha_basic

Member since 2002 • 546 Posts

[QUOTE="Buddha_basic"][QUOTE="lilburtonboy748"]Of course. It would be 100% reserve banking though. A business (bank) would get enough funding to make a loan or two and charge interest. They would keep doing this and eventually become a successful business after awhile. The difference is that they wouldn't be borrowing other people's money. They would have all deposits in reserves.lilburtonboy748

The fed reserve holds about 200 billion worth in gold. You think this is enough to sustain our economy and continue to grow?

Yup. Why wouldn't it grow? That's just the medium of exchange, it isn't what makes the economy run. Production of goods and services is how an economy grows. Money is just an easy way to trade those goods and services. It's just a medium of exchange, not wealth.

But that doesnt solve anything. The value of that paper money is now dependent on the production of gold which doesnt cater to the growth of an economy. Its prone to fluctuate drastically.

16 years ago

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#3 Buddha_basic

Member since 2002 • 546 Posts

[QUOTE="Buddha_basic"][QUOTE="lilburtonboy748"]Money which is fully backed by gold. And prices have to fall. Money should just be the a unit of weight. The Dollar should be 1/20 of an oz. of gold, or something around there. It would never need to change.lilburtonboy748

How is that giong to work? Would you sill be able to lend?

Of course. It would be 100% reserve banking though. A business (bank) would get enough funding to make a loan or two and charge interest. They would keep doing this and eventually become a successful business after awhile. The difference is that they wouldn't be borrowing other people's money. They would have all deposits in reserves.

The fed reserve holds about 200 billion worth in gold. You think this is enough to sustain our economy and continue to grow?

16 years ago

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#4 Buddha_basic

Member since 2002 • 546 Posts

[QUOTE="duxup"]I don't see any problems that will be solved by that right now.lilburtonboy748

That's too bad, considering this mess is a result of fiat money. A gold standard means that the interest rates cannot be manipulated, which is the reason for the mess we are in. Also, there would never been inflation, which contributes to this problem. People are trying to get rid of their fiat money because it is losing its value so fast, so they are over-consuming to get rid of it. Thees problems would never arise with a gold standard. And The business cycle would not exist, which means no future depressions.

The gold standard would create a depression in itself if everyone decided to redeem their paper money for gold because the money supply would collapse.

16 years ago

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#5 Buddha_basic

Member since 2002 • 546 Posts

[QUOTE="Buddha_basic"]So you want everyone to carry gold in their pockets? Or you want money to be backed by gold. In which case there isnt enouh gold to support this at current gold prices.lilburtonboy748

Money which is fully backed by gold. And prices have to fall. Money should just be the a unit of weight. The Dollar should be 1/20 of an oz. of gold, or something around there. It would never need to change.

How is that going to work? Would you still be able to lend?

16 years ago

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#6 Buddha_basic

Member since 2002 • 546 Posts

So you want everyone to carry gold in their pockets? Or you want money to be backed by gold. In which case there isnt enough gold to support this at current gold prices.

16 years ago

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#7 Buddha_basic

Member since 2002 • 546 Posts

Obviously, I think we should, as long as it is accompanied by full reserve banking. It's the only way to avoid inflation, inflationary spirals, and it eliminiates the business cycle which means no depressions. Sounds good to me.lilburtonboy748

I dont think a gold standard can support our current economy with room for growth...so no.

16 years ago

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