Friday, December 31, 2010

Gold Hater of the Year

This year's Gold Hater of the Year Award goes to Nouriel Roubini. For comments like this:
When you had a traditional gold standard, boom and bust with severe swings in economic activity were the norm—really big ones. It was only once we moved to fiat money that central banks were able to smooth the business cycle, and make it less volatile, as we did during the financial economic crisis.

There are many fundamental problems with any variant of a gold standard A fixed exchange regime, even if it is not a gold standard… that world just doesn't work. Because in that world, monetary policy by definition instead of being countercyclical becomes procyclical.
In his book, Crisis Economics, Roubini says some nice things about Austrian economics, but he really needs to understand what the business cycle is all about. Start here, Nouriel.

For his belief in fiat money, Roubini will receive as his award Ten Million (2008) Zimbabwe dollars:

1 comment:

  1. Oh come on, Karl had this on lockdown! Well there goes my next paycheck...