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"What about the gold standard? Well, it didn’t really work." Saying the gold standard didn't work after central banks printed far more than their gold reserves
by stevedekorte 9y ago
"What about the gold standard?
Well, it didn’t really work."
Saying the gold standard didn't work after central banks printed far more than their gold reserves (i.e. effectively went off the gold standard) is like saying vaccinations don't work after people stop getting vaccinated and start getting sick again. It would be more correct to say that parties responsible for maintaining the gold standard (the central banks) failed and therefore "don't really work".
- jganetsk 9y agoThe gold standard doesn't work because it's deflationary. The Eurozone effectively functions as a gold standard. And now we are re-learning why the gold standard is bad when we look at the impact austerity has had on the Greek financial crisis.
- UncleEntity 9y agoThere's nothing inherently bad about deflation, the US economy was basically deflationary for the whole of the 19th century and did just fine. I would explain how the opposite is not true but people a lot more knowledgeable on the subject have written volumes.
- deleted 9y ago[deleted]
- faint_coder 9y agoIf you say so, you don't know anything about macroeconomics, and John Maynard Keynes' thrift paradox. Money MUST BE printed, because players that use it (people and businesses) _GROW_ over time! Did you heard that Facebook ALONE in 2014 generated almost $400,000,000,000.00 in economic activity? How that would haven been possible if we had the same USD volume supply of 1930? How derivatives, futures contracts, options contracts, options writing would be possible with a fixed USD volume at 1930's levels?! What you say is absurd, for modern economies. Please, read some more books on those topics. Thank you.
- hndamien 9y agoThe gold standard wasn't infinitely divisible.