Ron is still into the gold standard. He talked about it last night. After quite a bit of discussion it seems that a lot of folk need a quick refresher on monetary thinking. Consider the modern economy. Technological improvements allow it to create more "stuff" every year. Compare the number of automobiles, stereos, computers, foodstuffs, alcoholic beverages, books, etc, etc produced in this year 2011 with the quantities produced back in say 1945. Obviously the the amount of stuff to available buy increases every year.
Consider that money is easily printed, how much money should we have in circulation today. Should we keep the amount of money fixed? Suppose there was no more money around today than there was in 1945. In that case, a fixed amount of money would be spread over more goods and services, so less money would be available to buy any one of them. Put another way, prices fall and money becomes more valuable.
Bankers love this. It means their loans get paid off with more valuable money. Borrowers (most of us) hate this. It means we have to work harder to pay off mortgages and car loans contracted in the past when money was cheaper.
Ron Paul's gold standard, means the amount of money is fixed, because the amount of gold in the world is not large, and ain't getting larger. Gold never wears out, humans have valued it and searched for it since First Dynasty Egyptian times. Most of the gold in the world has been discovered. If we make a rule that the amount of money in circulation is fixed by the amount of gold in Fort Knox, we are saying that the amount of money in circulation will never change. That's good for bankers and bad-to-terrible for the rest of us, industry, jobs, and just about everything.
Have you looked at Mitt Romney or Herman Cain?
2 comments:
Ron Paul's support for the gold standard is really bizarre. I agree with him on many points, but the gold standard is front and center on his agenda which leaves me to wonder about his decision making skills.
Ayup.
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