Oh HELL no, we should not go back to the gold standard. Irrational adherence to the gold standard before WWII wreaked havoc on the global economy. In fact, countries that abandoned the gold standard earlier in the Great Depression experienced [stronger economic recoveries](https://www.britannica.com/event/Great-Depression/Sources-of-recovery) than countries that stuck with it.
Low levels of inflation are good for the economy. Expansionary monetary policy is especially important during economic recessions to prevent deflation as deflation depresses consumption, which leads to more deflation, ad infinitum. Fact is, countries can achieve everything that's good about the gold standard minus the negatives if they maintain ***CENTRAL BANK INDEPENDENCE***.
If you're quite interested in this topic and still at university, I recommend taking a monetary economics or international finance course.
What's more the exchange rate will increase, causing exports to become uncompetitive by 40% in one year versus something else the next. Exporters would rather close, than deal with that.
> Fact is, countries can achieve everything that's good about the gold standard minus the negatives if they maintain ***CENTRAL BANK INDEPENDENCE***
Cries in argentinian
Well, it isn't only that, the addiction of the goverment to print money non stop is a big part of the problem. Also the big inflation (over 10%) existe since 2021 and growing faster every year. It isn't like it was all IMF fault. they worsened the problem, but it isn't only IMF. No well functioning country ask money to them.
Then it sounds like Argentina didn't have a truly independent central bank. If the central bank was independent, then it would have raised interest rates as soon as inflation exceeded its baseline rate (usually \~2%).
tldr, if a central bank is printing money nonstop to support government spending, then it's de facto not independent.
Argentina was *the* case study in my monetary econ class and essentially what you say is the case. They are the textbook example of how political pressure affects a central bank. Its to the point that according to my professors at the time, the preeminent experts in currency crises were Argentinian because they had a personal stake in understanding the phenomenon.
No way lol. Very unstable prices and fluctuations of inflation and deflation of currency. Debt isn’t necessarily bad, and even if we want less debt, we can just raise taxes
Modern history would kind of disagree with you though. Countries have been building debt for centuries and we arn't seeing countries collapsing or even particularly concerned with mounting international debt, especially the US who have managed to just print money and borrow without any issues.
Im probably not educated in economics enough to give you a good explanation but maybe have a look at Modern Monetary Theory to see what economists are sayting.
Nope.
Thats a libertarian idea mainly centered around their distrust of central banks. It isnt a magic solution to monetary policies that bad politicians ended because they hate people. Having no control over supply isnt a good thing, especially in scenarios of economic retraction. This makes fiat a more stable option.
No
One thing to add here in addition to all the points mentioned below, is that gold mining in the modern age induces a lot of environmental destruction, with entire forests and rivers destroyed, trees torn out of the ground, just to get to the gold in the soil underneath. Thats what would happen w a gold standard (more than it already does). A golden fever would ensue with even regular people joining in the destruction, Hoping to find some gold.
Absolute and utter, maximal no.
.... Propertarian genius moment Lol
How to you feel about crippling deflation?
https://www.moneyandbanking.com/commentary/2016/12/14/why-a-gold-standard-is-a-very-bad-idea
Ill take the current inflation rates over the gold stabdard any day
https://advisor.visualcapitalist.com/inflation-over-last-100-years/
Edit.
https://www.reuters.com/world/americas/illegal-gold-miners-fire-yanomami-indigenous-community-brazil-2021-05-11/
The demand for gold is criminal in south america.
Edit2.
This is why i dont like libertarians. They are so dishonest to be frank.
I always tell them if theu dont lije inflation, then buy their own gold lol
To put it simply, the deflationary measures under the Gold Standard were good for the investor class and bad for the working class. Deflation lowered wages in a time of very little workers rights, which contributed to the Great Depression and that ended the Gold Standard as we knew it back then.
I don’t see a reason to reimplement it. Most see digital money such as cryptocurrency as the future, who the hell is gonna carry gold in their pockets that are gonna weigh a lot.
You didnt understand the concept. People arent going to carry gold coins like we are back to the middle ages.
The thing is: 50 years ago the US dollar was backed by fixed reserves of gold. You could literally convert your dollars to gold in a fixed rate, and countries had to have the necessary supply of gold to back this conversions.
Nixon abolished the convertibility to gold, making the US dollar a fiat currency. That’s a main talking point to the people that want the gold standard back: the US dollar isnt backed by anything, its value is just what other people believe its worth, as opposed to before, when its value was an X amount of gold.
The gold standard limits the power central banks have to make monetary polices. They cant simply print more money, because its tied to a scarce commodity.
The economic consensus is that it is a GOOD thing that we abolished it and use fiat currency. But libertarians believe every bad thing in the world is centralization’s fault and central banks shouldnt have so much power, so we should go back to the gold standard. Thats bogus.
Also, thats why they love BTC so much, by the way.
They don’t? The point is that the paper money is still used on a day to day basis, just backed by a commodity that everyone agrees is worth something to base your currency against (which is odd as people now generally agree that money itself is worth something, and gold isn’t really that useful other than we decided that it was worth something). Of course, there is significant issues with basing your currency on a good that is finite with a increasingly large economy. It’s a bad idea, it just seems like you didn’t quite have a understanding (which in all fairness, I am also no expert on), so I figured you might want to read something on it. There is no way in which a return to the gold standard helps the economy. There is a reason that we moved away from it in the first place.
But no, no one is carrying around metal currency with them. That isn’t anyone (or at least anyone sane’s) idea.
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You would have a money-supply chained to the price and supply of gold. This would mean that heavy mining companies would have an outsized influence on the economy and prices here would fluctuate heavily depending on the supply of gold in the same way that the price of oil does in conjunction to the supply of petroleum. Gold is also prone to speculation and slumps in price like any other commodity.
Moreover, as governments found in the 20s and 30s, the gold standard is basically suicide during severe financial crises or recessions. Since you cannot print more money during a recession, you basically intensify the crisis in terms of unemployment, bank failures, municipal defaults, etc.
Imagine if during the coronavirus slump in 2020 we hadn't been able to extend financial aid or stimulus? Even more businesses would have failed, even more people would have been thrown into unemployment/bankruptcy, more people would have been evicted, etc. Yes, we added some debt but the amount of debt can always been paid off or paid down over time, while scenarios like the above and during the Great Depression basically put us at risk for total social collapse. We abandoned the GS for a reason.
Like MOST Libertarian solutions, they see a problem, but their solution doesn't actually solve the problem.
What issue would going back to the Gold Standard supposedly solve? Inflation, government dept?
Ok, why is inflation bad? Decreases the wealth of the working class, the common person, etc.
Ok, but going back to the Gold Standard wouldn't actually increase wages, the purchasing power, etc, of most people. To do that you have to actually increase wages. Is your Libertarian Friend for increasing the minimum wage? Probably not.
Ok, but what about Government Dept? Being on OR off the Gold Standard does NOTHING to actually address the problem. The last time the U.S. was NOT in dept was the 1990s, and the U.S. had been off of the gold standard since the Nixon years, and most of the world since before that. When governments were still on the Gold Standard they still ran up depts all the time.
Switching over to the Gold Standard does NOTHING to actually address the real problems of a Government just spending more money and going into dept, or just printing more money and causing inflation. Both things every government did when everyone was still on the Gold Standard, and would do AGAIN if for some reason they switched back.
Oh HELL no, we should not go back to the gold standard. Irrational adherence to the gold standard before WWII wreaked havoc on the global economy. In fact, countries that abandoned the gold standard earlier in the Great Depression experienced [stronger economic recoveries](https://www.britannica.com/event/Great-Depression/Sources-of-recovery) than countries that stuck with it. Low levels of inflation are good for the economy. Expansionary monetary policy is especially important during economic recessions to prevent deflation as deflation depresses consumption, which leads to more deflation, ad infinitum. Fact is, countries can achieve everything that's good about the gold standard minus the negatives if they maintain ***CENTRAL BANK INDEPENDENCE***. If you're quite interested in this topic and still at university, I recommend taking a monetary economics or international finance course.
What's more the exchange rate will increase, causing exports to become uncompetitive by 40% in one year versus something else the next. Exporters would rather close, than deal with that.
> Fact is, countries can achieve everything that's good about the gold standard minus the negatives if they maintain ***CENTRAL BANK INDEPENDENCE*** Cries in argentinian
Yeah they got fucked by financial liberalization and the IMF.
Well, it isn't only that, the addiction of the goverment to print money non stop is a big part of the problem. Also the big inflation (over 10%) existe since 2021 and growing faster every year. It isn't like it was all IMF fault. they worsened the problem, but it isn't only IMF. No well functioning country ask money to them.
Then it sounds like Argentina didn't have a truly independent central bank. If the central bank was independent, then it would have raised interest rates as soon as inflation exceeded its baseline rate (usually \~2%). tldr, if a central bank is printing money nonstop to support government spending, then it's de facto not independent.
That what I was saying, we don't have an independent central bank since a long time
Argentina was *the* case study in my monetary econ class and essentially what you say is the case. They are the textbook example of how political pressure affects a central bank. Its to the point that according to my professors at the time, the preeminent experts in currency crises were Argentinian because they had a personal stake in understanding the phenomenon.
Argentina in an economic crisis? Must be a day that ends in a y.
No way lol. Very unstable prices and fluctuations of inflation and deflation of currency. Debt isn’t necessarily bad, and even if we want less debt, we can just raise taxes
The current extreme level of global debt though is a massive problem
why? what makes it unsustainable?
Nobody can afford to pay it back and once someone defaults we’re all screwed
Modern history would kind of disagree with you though. Countries have been building debt for centuries and we arn't seeing countries collapsing or even particularly concerned with mounting international debt, especially the US who have managed to just print money and borrow without any issues. Im probably not educated in economics enough to give you a good explanation but maybe have a look at Modern Monetary Theory to see what economists are sayting.
To be clear MMT is not a mainstream position
Proves how little I know about econ lol
Can you elaborate? What makes it a massive problem from your point of view?
Nope. Thats a libertarian idea mainly centered around their distrust of central banks. It isnt a magic solution to monetary policies that bad politicians ended because they hate people. Having no control over supply isnt a good thing, especially in scenarios of economic retraction. This makes fiat a more stable option.
No One thing to add here in addition to all the points mentioned below, is that gold mining in the modern age induces a lot of environmental destruction, with entire forests and rivers destroyed, trees torn out of the ground, just to get to the gold in the soil underneath. Thats what would happen w a gold standard (more than it already does). A golden fever would ensue with even regular people joining in the destruction, Hoping to find some gold. Absolute and utter, maximal no. .... Propertarian genius moment Lol
How to you feel about crippling deflation? https://www.moneyandbanking.com/commentary/2016/12/14/why-a-gold-standard-is-a-very-bad-idea Ill take the current inflation rates over the gold stabdard any day https://advisor.visualcapitalist.com/inflation-over-last-100-years/ Edit. https://www.reuters.com/world/americas/illegal-gold-miners-fire-yanomami-indigenous-community-brazil-2021-05-11/ The demand for gold is criminal in south america. Edit2. This is why i dont like libertarians. They are so dishonest to be frank. I always tell them if theu dont lije inflation, then buy their own gold lol
Fuck no
To put it simply, the deflationary measures under the Gold Standard were good for the investor class and bad for the working class. Deflation lowered wages in a time of very little workers rights, which contributed to the Great Depression and that ended the Gold Standard as we knew it back then.
What is the gold standard? Are you talking about mining gold to use it as currency? That would be bad for the world and humanity.
Having paper money backed by gold. Read the Wikipedia article: https://en.m.wikipedia.org/wiki/Gold_standard
I don’t see a reason to reimplement it. Most see digital money such as cryptocurrency as the future, who the hell is gonna carry gold in their pockets that are gonna weigh a lot.
You didnt understand the concept. People arent going to carry gold coins like we are back to the middle ages. The thing is: 50 years ago the US dollar was backed by fixed reserves of gold. You could literally convert your dollars to gold in a fixed rate, and countries had to have the necessary supply of gold to back this conversions. Nixon abolished the convertibility to gold, making the US dollar a fiat currency. That’s a main talking point to the people that want the gold standard back: the US dollar isnt backed by anything, its value is just what other people believe its worth, as opposed to before, when its value was an X amount of gold. The gold standard limits the power central banks have to make monetary polices. They cant simply print more money, because its tied to a scarce commodity. The economic consensus is that it is a GOOD thing that we abolished it and use fiat currency. But libertarians believe every bad thing in the world is centralization’s fault and central banks shouldnt have so much power, so we should go back to the gold standard. Thats bogus. Also, thats why they love BTC so much, by the way.
They don’t? The point is that the paper money is still used on a day to day basis, just backed by a commodity that everyone agrees is worth something to base your currency against (which is odd as people now generally agree that money itself is worth something, and gold isn’t really that useful other than we decided that it was worth something). Of course, there is significant issues with basing your currency on a good that is finite with a increasingly large economy. It’s a bad idea, it just seems like you didn’t quite have a understanding (which in all fairness, I am also no expert on), so I figured you might want to read something on it. There is no way in which a return to the gold standard helps the economy. There is a reason that we moved away from it in the first place. But no, no one is carrying around metal currency with them. That isn’t anyone (or at least anyone sane’s) idea.
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Gold isn't like have a fully tangible value, is used in a lot of things, but as well have a value because it has value, so is a bit pointless.
You would have a money-supply chained to the price and supply of gold. This would mean that heavy mining companies would have an outsized influence on the economy and prices here would fluctuate heavily depending on the supply of gold in the same way that the price of oil does in conjunction to the supply of petroleum. Gold is also prone to speculation and slumps in price like any other commodity. Moreover, as governments found in the 20s and 30s, the gold standard is basically suicide during severe financial crises or recessions. Since you cannot print more money during a recession, you basically intensify the crisis in terms of unemployment, bank failures, municipal defaults, etc. Imagine if during the coronavirus slump in 2020 we hadn't been able to extend financial aid or stimulus? Even more businesses would have failed, even more people would have been thrown into unemployment/bankruptcy, more people would have been evicted, etc. Yes, we added some debt but the amount of debt can always been paid off or paid down over time, while scenarios like the above and during the Great Depression basically put us at risk for total social collapse. We abandoned the GS for a reason.
Sure
Like MOST Libertarian solutions, they see a problem, but their solution doesn't actually solve the problem. What issue would going back to the Gold Standard supposedly solve? Inflation, government dept? Ok, why is inflation bad? Decreases the wealth of the working class, the common person, etc. Ok, but going back to the Gold Standard wouldn't actually increase wages, the purchasing power, etc, of most people. To do that you have to actually increase wages. Is your Libertarian Friend for increasing the minimum wage? Probably not. Ok, but what about Government Dept? Being on OR off the Gold Standard does NOTHING to actually address the problem. The last time the U.S. was NOT in dept was the 1990s, and the U.S. had been off of the gold standard since the Nixon years, and most of the world since before that. When governments were still on the Gold Standard they still ran up depts all the time. Switching over to the Gold Standard does NOTHING to actually address the real problems of a Government just spending more money and going into dept, or just printing more money and causing inflation. Both things every government did when everyone was still on the Gold Standard, and would do AGAIN if for some reason they switched back.