The gold standard is a lovely idea in theory.
In practice it would put the amount of monetary expansion at the utter mercy of new gold strikes, and whether someone develops an inexpensive way of transmuting lead to gold or of extracting gold from seawater.
Unfriendly governments, such as Rissia, controlling gold supplies would be put in the present position of OPEC, able to damage our economy by releasing gold, or not.
In the absence of sufficient gold being mined to keep up with economic expansion, we would get deflation, which is at least as damaging as inflation.
The value can drop 10-15% in a week. How the hell would a MFG know how to price his goods? Many products have over a year of lead time and a rather small unit product margin.
Ron Paul is a raving lunatic.
Here’s a thread to some of the history of gold standard banking.
It was an awful mess. Unworkable IMHO. Its why no one earth is on a gold standard.
In other words, nuts. Just like RP.
http://www.freerepublic.com/focus/f-news/2689034/posts?page=1
Minor deflation that would quickly come into equilibrium with economic activity. Economic trouble comes from booms and busts and booms are normally triggered by increased inflationary expectations. A steady inflation would not be bad, just like steady deflation but the former is much more difficult than the latter.
It doesn’t HAVE to be gold, or silver, or any precious metal. It could be crude oil, diamonds, or uranium, or even wheat, or refined 87 octane gasoline, etc. The objective is to tie the value of money to SOMETHING...to shackle the Fed.gov in restraits so that it cannot play games with the money supply and create arbitrary inflation.