Here's a visual representation of that statement.
Posted on 12/02/2014 7:35:53 AM PST by SeekAndFind
SWISS VOTERS overwhelmingly rejected a so-called gold standard referendum. They were right to do so. The wording of the referendum revealed a major obstacle to any return to a genuine gold standard: ignorance of what makes such a system work. The proposition was actually focused on the levels of Switzerland’s gold reserves, not on an actual return to a gold standard. But it was seen as a step in that direction.
The purpose of a gold standard is to keep a currency stable in value. Other currencies not on a gold standard may go up or down vis-à-vis the gold-linked one, depending on the particular monetary policies governing them.
But the golden currency stays fixed in value. A country need not own an ounce of gold—it could conduct its monetary policy, primarily by buying and selling securities—to make sure its currency stays fixed to gold. In the book I co-authored Money: How the Destruction of the Dollar Threatens the Global Economy—And What We Can Do About It, we discuss why gold maintains its intrinsic value better than anything else on Earth.
Linking a currency to gold is like fixing the standards for weights and measures: 12 inches in a foot, 60 minutes in an hour, 16 ounces in a pound, etc. It doesn’t restrict an economy’s money supply; a vibrant economy will have a larger money supply than a stagnant one. Both Germany and Japan during the 1950s and 1960s had rapidly growing economies—and rapidly growing money supplies—while their currencies were fixed to the gold-based Bretton Woods monetary system.
Here are two fundamental flaws in the Swiss referendum.
–Switzerland would have been barred from selling any of its gold.
(Excerpt) Read more at forbes.com ...
–Switzerland’s central bank would have been required to have at least 20% of its assets in gold, up from its current level of 7.5%. This is another arbitrary rule based on ignorance.
Later
Is it just me; or, does it seem like so many of the so-called “experts” on economics and finance are completely ignorant of how they actually are supposed to work?
NO, They are neither ignorant or stupid, and they fully understand the mathematics behind it. They simply believe they have a divine right as moneychangers to STEAL YOUR WEALTH a little at a time, say 45 ANNUALLY. Got it?
oops, 4%
Some are ignorant and confused about how laissez-faire capitalism actually works and so they support ideas like a mixed economy.Others, who are altruists, collectivists,and statists choose marxism, socialism, and keynesianism on purpose to achieve their goals of authoritarianism and totalitarianism.
Here's a visual representation of that statement.
Mr. Forbes wrote a very sketcthy article and did not back up his assertions.
He painted with a very broad brush.
Disappointing.
Well, after all, it's a magazine column, not a treatise on money.
He is correct, though.
Gold only works to stabilize money when the central bank is severely constrained to maintain a specific ratio of gold to paper currency; and when holders of the paper can freely exchange it for gold from the reserves at their local bank.
The referendum called for neither and was thus useless.
Thank you for clearing that up. Somehow I am not surprised.
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