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> why you don’t back your currency on things like gold How did the West learn this lesson? https://history.state.gov/milestones/1969-1976/nixon-shock https://

> why you don’t back your currency on things like gold How did the West learn this lesson? https://history.state.gov/milestones/1969-1976/nixon-shock https://history.state.gov/milestones/1969-1976/nixon-shock > We must create more and better jobs; we must stop the rise in the cost of living; we must protect the dollar from the attacks of international money speculators.” To achieve the first two goals, he proposed tax cuts and a 90-day freeze on prices and wages; to achieve the third, Nixon directed the suspension of the dollar’s convertibility into gold. Particularly > we must protect the dollar from the attacks of international money speculators In this case the "speculators" speculated that the US didn't have the gold it said it did to back the dollars it had been printing. Protecting the dollar meant we will no longer trade the dollar for gold to protect it, but why would it need protecting if we had the gold to exchange? Sounds to me like gold as a standard wasn't the issue, but printing of dollars without backing.

jcranmer 4y ago
I can think of a single case in history where policymakers decided to reverse (as you put it) "printing of dollars without backing" in favor of maintaining a peg to the gold standard (or equivalent), and probably over a dozen cases where it was the gold standard that was lost. While I can understand why something like the gold standard serving as a fiscal straitjacket could find appeal, I can't understand why people ignore the repeated demonstrations of its ineffectiveness in that role.
- reedjosh 4y ago
  > and probably over a dozen cases where it was the gold standard that was lost. This doesn't prove that the gold standard was bad for the people. Governments grow until they collapse. That growth eventually is constrained by the inability to print gold. This is particularly obvious if you consider that dropping gold and silver from currency is near the first thing to happen when war starts. Inflation is a hidden tax. Governments use it to continue their largess beyond what would be possible with direct taxation. > I can think of a single case in history where policymakers decided to reverse Everyone knows politicians are liars and cheats. Why would the actions of politicians or those appointed by them be a signal of virtue or correctness?
- tastyfreeze 4y ago
  Gold standard serving as a fiscal straitjacket is precisely why it has be removed by governments time and time again. Removing a gold standard benefits the government and those in power and is a detriment to the people and the value of their labor. Not having a gold standard removes the physical requirement for government to behave with fiscal responsibility. The number of times that gold standards have been ended isn't proof that gold standards don't work. It is proof that people in power will remove obstacles in the way of achieving their agenda. People in power are still people. People cannot be trusted to be responsible with massive amounts of money when there is no personal penalty for being fiscally irresponsible.
  - sneak 4y ago
    Your last paragraph is so simple and plainly correct, and yet people will argue endlessly against it.
  - psychlops 4y ago
    I visited the Statue of Liberty a few weeks ago and noticed a quaint bit of history. The Liberty Bond. Bonds issued with the Statue of Liberty on them in an attempt to get funding to enter war! Talk about a straitjacket! Now we (Americans) don't have such a silly constraint and launch all the wars we want. No need to even call them a war or to ask for permission. Or even notify the public that one is being launched. Funding is already secured.
endisneigh 4y ago
> Sounds to me like gold as a standard wasn't the issue, but printing of dollars without backing. True, that’s why the United States basically declined economically after going off gold and printing as much as they’d like.

jcranmer 4y ago

I can think of a single case in history where policymakers decided to reverse (as you put it) "printing of dollars without backing" in favor of maintaining a peg to the gold standard (or equivalent), and probably over a dozen cases where it was the gold standard that was lost. While I can understand why something like the gold standard serving as a fiscal straitjacket could find appeal, I can't understand why people ignore the repeated demonstrations of its ineffectiveness in that role.

reedjosh 4y ago
> and probably over a dozen cases where it was the gold standard that was lost. This doesn't prove that the gold standard was bad for the people. Governments grow until they collapse. That growth eventually is constrained by the inability to print gold. This is particularly obvious if you consider that dropping gold and silver from currency is near the first thing to happen when war starts. Inflation is a hidden tax. Governments use it to continue their largess beyond what would be possible with direct taxation. > I can think of a single case in history where policymakers decided to reverse Everyone knows politicians are liars and cheats. Why would the actions of politicians or those appointed by them be a signal of virtue or correctness?
tastyfreeze 4y ago
Gold standard serving as a fiscal straitjacket is precisely why it has be removed by governments time and time again. Removing a gold standard benefits the government and those in power and is a detriment to the people and the value of their labor. Not having a gold standard removes the physical requirement for government to behave with fiscal responsibility. The number of times that gold standards have been ended isn't proof that gold standards don't work. It is proof that people in power will remove obstacles in the way of achieving their agenda. People in power are still people. People cannot be trusted to be responsible with massive amounts of money when there is no personal penalty for being fiscally irresponsible.
- sneak 4y ago
  Your last paragraph is so simple and plainly correct, and yet people will argue endlessly against it.
- psychlops 4y ago
  I visited the Statue of Liberty a few weeks ago and noticed a quaint bit of history. The Liberty Bond. Bonds issued with the Statue of Liberty on them in an attempt to get funding to enter war! Talk about a straitjacket! Now we (Americans) don't have such a silly constraint and launch all the wars we want. No need to even call them a war or to ask for permission. Or even notify the public that one is being launched. Funding is already secured.

endisneigh 4y ago

> Sounds to me like gold as a standard wasn't the issue, but printing of dollars without backing. True, that’s why the United States basically declined economically after going off gold and printing as much as they’d like.