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To: Califreak
I don’t know much about this at all, but shouldn’t we have stuck with the gold standard in the first place? Didn’t it all go down hill after the gold standard was jettisoned?

Bretton Woods ended in disaster. There wasn't enough gold to redeem all the dollars at the gold window at the stated conversion rate. What matters is good monetary management. Backing money with gold, or silver, or whatever doesn't guaranty good monetary management, but it does add inefficiency, and a false sense of security.

26 posted on 03/30/2009 2:12:09 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Moonman62

I’m not sold on either a domestic or international gold standard, but I do have an important quibble with your statement...

Bretton Woods ended in disaster because the US wanted to inflate. The combination of Vietnam and Great Society spending in the 1960s cost the US lots of gold. Nixon did not want to face the music, so he postponed the pain by the combination of canceling gold convertability and setting up a system where ongoing US trade deficits would allow the unbacked dollar to become the new international reserve. At that point, we were (relatively) free(er) to pursue the inflation of the 1970s.

The problem is that it is not a perpetually sustainable system. Eventual change is required, and crises tend to bring on those changes.


30 posted on 03/30/2009 2:21:13 PM PDT by sanchmo
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To: Moonman62

>Backing money with gold, or silver, or whatever doesn’t guaranty good monetary management, but it does add inefficiency, and a false sense of security.<

I don’t know how much more inefficient it might or might not be, but I have wondered about it bringing a false sense of security.

I have to agree with you on good monetary management. Without that, no standard will work.


33 posted on 03/30/2009 3:08:33 PM PDT by Califreak (111th Congress: Destroying America With Reckless Abandon)
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