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Hmm, you may want to compare the total amount of known gold to the potential new gold brought in by miners. You may find that new gold accounts for a fantastic

Hmm, you may want to compare the total amount of known gold to the potential new gold brought in by miners. You may find that new gold accounts for a fantastically small percentage of the total. Compare this, on the other hand, with paper. How easy is it to double the money supply or more in a very short period. There simply is no way to underestimate the stability you get with a gold standard. Please refer to the money supply stability during the period of the gold standard in the US - history speaks for itself. http://en.wikipedia.org/wiki/Gold_standard http://en.wikipedia.org/wiki/Gold_standard

Retric 17y ago
Less than one percent of the gold on the earth has been mined. However: The total amount of gold that has ever been mined has been estimated at around 142,000 tonnes.[12] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. This is less than the value of circulating money in the U.S. alone, where more than $8.3 trillion is in circulation or in deposit (M2).[13] Therefore, a return to the gold standard, if also combined with a mandated end to fractional reserve banking, would result in a significant increase in the current value of gold, which may limit its use in current applications.
- gibsonf1 17y ago
  You are avoiding the issue of how difficult it is to dig up gold vs. print money. At $1000/ounce, that is a pretty big incentive to dig for gold now, so why aren't people dumping it on the market? Do you know of any examples of hyper-inflation with a gold standard? If we return to a gold standard, the value of a dollar would change from the current situation, and then hold steady. How is this a problem? Does it make sense to value current dollars in gold equivalent now as a premise for an argument on the "value" of the money supply? This sounds like a non-sequitor to me. The gold standard removes the most pernicious and powerful way for the government to take our money, inflation. It is happening now at a rate faster than ever in US history. http://bloomberg.com/apps/news?pid=20601087&sid=aIeLg1djbBps&refer=home http://bloomberg.com/apps/news?pid=20601087&sid=aIeLg1dj...
  - Xichekolas 17y ago
    And you are avoiding the issue that the Gold Standard removes a lot of flexibility in monetary policy, and buys you zero protection from manipulation. There are numerous points in history that the US Gold-backed currency was manipulated. During WWI, it was suspended twice. In fact, gold standards are regularly and habitually suspended in times of war. (Ideally, once reinstated, a deflationary postwar period would counter the inflationary period during the war, but there is no rule saying the standard must be reinstated at the same notational value, so this is wishful thinking.) During the depression, the Gold Reserve Act reset the value of gold from $20.67/oz to $35/oz, effectively devaluing the dollar against every other gold-backed currency (inflation), and, to quote wikipedia "the higher price increased the conversion of gold into dollars, allowing the U.S. to effectively corner the world gold market". So the government can still manipulate the value of it's currency at will, simply by changing the redeemable value of it's notes. This is on top of the possible manipulation by private parties (mining companies) and other governments (nationalized mining companies) that I have already pointed out.
    - gibsonf1 17y ago
      I think the point of the gold standard is to remove flexibility in Government monetary policy. The government should not be able to reduce the value of your wealth, or do you think they should?
      - Xichekolas 17y ago
        Money is a medium of exchange. So no, I don't think they should be able to arbitrarily reduce your wealth, but hopefully cash doesn't comprise more than a tiny fraction of your wealth. If inflation truly scares you, don't keep a significant portion of cash on hand. Go take it all and buy gold/houses/land/businesses/securities. If hyperinflation truly happens, we can both laugh all the way to the bank (most of my 'wealth' is likewise in some kind of asset). If it doesn't happen, you'll probably still have made some decent investments.

Retric 17y ago

Less than one percent of the gold on the earth has been mined. However: The total amount of gold that has ever been mined has been estimated at around 142,000 tonnes.[12] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. This is less than the value of circulating money in the U.S. alone, where more than $8.3 trillion is in circulation or in deposit (M2).[13] Therefore, a return to the gold standard, if also combined with a mandated end to fractional reserve banking, would result in a significant increase in the current value of gold, which may limit its use in current applications.

gibsonf1 17y ago
You are avoiding the issue of how difficult it is to dig up gold vs. print money. At $1000/ounce, that is a pretty big incentive to dig for gold now, so why aren't people dumping it on the market? Do you know of any examples of hyper-inflation with a gold standard? If we return to a gold standard, the value of a dollar would change from the current situation, and then hold steady. How is this a problem? Does it make sense to value current dollars in gold equivalent now as a premise for an argument on the "value" of the money supply? This sounds like a non-sequitor to me. The gold standard removes the most pernicious and powerful way for the government to take our money, inflation. It is happening now at a rate faster than ever in US history. http://bloomberg.com/apps/news?pid=20601087&sid=aIeLg1djbBps&refer=home http://bloomberg.com/apps/news?pid=20601087&sid=aIeLg1dj...
- Xichekolas 17y ago
  And you are avoiding the issue that the Gold Standard removes a lot of flexibility in monetary policy, and buys you zero protection from manipulation. There are numerous points in history that the US Gold-backed currency was manipulated. During WWI, it was suspended twice. In fact, gold standards are regularly and habitually suspended in times of war. (Ideally, once reinstated, a deflationary postwar period would counter the inflationary period during the war, but there is no rule saying the standard must be reinstated at the same notational value, so this is wishful thinking.) During the depression, the Gold Reserve Act reset the value of gold from $20.67/oz to $35/oz, effectively devaluing the dollar against every other gold-backed currency (inflation), and, to quote wikipedia "the higher price increased the conversion of gold into dollars, allowing the U.S. to effectively corner the world gold market". So the government can still manipulate the value of it's currency at will, simply by changing the redeemable value of it's notes. This is on top of the possible manipulation by private parties (mining companies) and other governments (nationalized mining companies) that I have already pointed out.
  - gibsonf1 17y ago
    I think the point of the gold standard is to remove flexibility in Government monetary policy. The government should not be able to reduce the value of your wealth, or do you think they should?
    - Xichekolas 17y ago
      Money is a medium of exchange. So no, I don't think they should be able to arbitrarily reduce your wealth, but hopefully cash doesn't comprise more than a tiny fraction of your wealth. If inflation truly scares you, don't keep a significant portion of cash on hand. Go take it all and buy gold/houses/land/businesses/securities. If hyperinflation truly happens, we can both laugh all the way to the bank (most of my 'wealth' is likewise in some kind of asset). If it doesn't happen, you'll probably still have made some decent investments.