[justshutupandtakeit]

A silver standard has the same disabilities as a gold standard and bimetallism has several other problems as well that make it as unreliable and impractical as a gold standard.

The only way the purchasing power can increase is through deflation or increased productivity. The former screws debtors and enriches creditors producing class warfare difficulties. The latter can only occur through technological change which is not constant.

Only after the Civil War did we see an growing economy and deflation when the U.S. reduced the MS by retiring Greenbacks issued during the war. Normally periods of deflation are periods of depression/recession not growth so increased MS almost always produces growth.

Purchasing power is inversely related to price increases.

Your objection is historically wrong.

[discostu]

Hmmm... maybe I should come back to the gold bug threads, you're good to have around.

[OK]

So you are saying that there was no growth in the US from 1789 until 1900? That is different from what I thought. The dollar was worth the same amount of gold in 1900 as in 1789. I think prosperity and freedom were the result there.

The British Empire was built on a solid gold British Pound for 250 years. It started to decline after they severed the Pound from gold.

I wish you would read "Gold Wars" by Ferdinand Lips.

[Deuce]

Your objection is historically wrong.

No, my observation is historically untested. My point is a theoretical one: if you have a fixed money supply, progress will be reflected in lower prices. Borrowers will pay a very low basic interest rate + a credit risk premium to lenders. Lenders could choose to be save and receive "natural interest" as the money rises in value. Therefore, borrowers have to pay for the use of money and will only do so when they can use the money productively.