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To: justshutupandtakeit
He understood that the economic world was not a zero sum game and that limiting an economy to the gold supply would not work in America.

Hamilton would face tough sledding with those Chicago School hard-money boys (including Milton Friedman and, almost incredibly, Alan Greenspan, who once wrote a paper advocating a return to the gold standard), who delight in pointing out that periods of national and global prosperity tend to follow the delivery to market of large new bullion supplies.

Our current prosperity, in their view, owes much to the invention of heap-leaching techniques, which are sufficiently superior to older milling techniques that some small companies have actually begun to rework old mine tailings. In their view, central bankers have been able to get away with reflating the money supply precisely because of the influx of metals to the market.

943 posted on 11/23/2004 11:49:44 PM PST by lentulusgracchus ("Whatever." -- sinkspur)
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To: lentulusgracchus

I am not aware of any statement of Friedman's that we should return to the gold standard. No nation could ever stay on it anyway for very long. Nor can anyone change the fact that doing so would cripple the economy since the gold supply changes too slowly to accomodate economic growth. A less that 2% growth rate is the long term average over the last 500 yrs (including the gold Spain took from the new world) and that is too low to allow sufficient growth. A gold standard will never be seen again or even a pretense at it. And that is a good thing.

It is totally disconnected from the money supplies now and is nothing more than a pretty metal to make baubles for my lady from. Thus, there is no impact upon the growth rate of the current economy.


1,100 posted on 11/24/2004 9:39:39 AM PST by justshutupandtakeit (Public Enemy #1, the RATmedia.)
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