Wednesday, June 25, 2014

America Needs The Gold Standard More Than Ever

Keith Weiner writes:
The godfather of modern economics, John Maynard Keynes, dismissed the concept of gold as money—the gold standard—as a “barbarous relic.” Another economics titan, Nobel Prize-winner Milton Friedman, conceded that gold is good in theory, but opposed gold in practice, arguing that a return to a gold standard is “neither desirable nor feasible.”

Both Keynes on the left and Friedman on the right got it really, horribly wrong.

The gold standard is neither barbaric nor impractical, and it is more urgently needed every day. This is because the standard of paper money is failing. It has set in motion an accelerating series of crises, each worse than the previous. The nation cannot continue to borrow to infinity, nor can the U.S. endure zero interest much longer. 
Very true! I detail all the failures of the Fed in The Fed Flunks: My Speech at the New York Federal Reserve Bank. Murray Rothbard details the theoretical problems causing the business cycle in Austrian School Business Cycle Theory.


  1. Since interest is basically a discount in time preference AND a manifestation of capital accrual, ZIRP is just "eating seed corn" and will lead to a much poorer future unless we encourage radical decentralization of government boundaries and powers, returning ALL power to the hyper local level.

    Ask a thousand people in NYC, or SF, or LVegas if they would prefer to be an independent city-state, and a few dozen will choose decentralization. Once it hits 120, 160 per thousand the central government will quickly become irrelevant.

  2. The last thing we need is a government gold standard.

    1. Absolutely! Let's avoid something that retains its value in return for government promises backed by unlimited fiat currency.

      Yeah, that's a fine plan, Cosmo. Got any other pearls of wisdom to share?

  3. If I bring in a card that has 289 kilo of aluminum, and I buy a shirt from you for 11.572 kilo, and you immediately (it's built in at the POS) convert it to silver...why not prohibit the government form having ANY control of the money.