The supply of gold (money) should be set by the free market as well. Why would industry, in the long term, produce more output than the market can sustain?
Exactly! We should limit our GDP growth to the growth of the supply of a pretty yellow metal. What could go wrong?
The artificial housing boom was partially a result of artificially low interest rates, which allowed many without real resources to purchase homes on credit.
And we both know there were no booms or busts while we were on the gold standard, right?
“Exactly! We should limit our GDP growth to the growth of the supply of a pretty yellow metal. What could go wrong? “
The growth of supply of gold money in the long run should be sufficient to meet the needs of a market economy. Have you ever heard of a gold mining operation? Are you just being obtuse?
“And we both know there were no booms or busts while we were on the gold standard, right?”
The depression of 1920-1921 lasted for about 18 months without a socialist fiat currency and socialist government intervention, both of which you seem to favor. A free market “boom” or “bust” is always preferable to hyperinflationary depression followed by deflationary depression, induced by massive malinvestment and resulting in the destruction of the wealth of the productive class AND the currency itself.