That’s not what that proves lol, but it does prove that the gold standard does not work and is not sustainable.
You should probably read up a little bit on history, the facts disagree with you. The US government had to use regulations and policies to influence the supply of gold: grants for gold mining, setting the reserve rates, hoarding gold to keep out of circulation. Until the gold standard dropped, there was even a limit on the amount of gold one could legally own. On top of this, other gold producing nations had the power to directly influence US monetary value and undermine US sovereignty.
Throw in implications and challenges of being a global reserve currency (Triffin dilemma), and you end up having a really bad time with an unhealthy economy.
Foolish people that don’t know history want to pretend that the gold standard magically creates some kind of natural currency free of “government meddling”, but the reality is that even more meddling and government control was required under the gold standard than compared to fiat currency.
That’s not what that proves lol, but it does prove that the gold standard does not work and is not sustainable.
If the economy grew at the rate of mining pre1976 and had no relationship post1976 then your hypothesis would be proven. Data shows this is false.
Yes the FED wanted full control over the US money supply, which is impossible under the gold standard. This desire was unrelated to inflation or deflation.
Myth. Deflation is just negative inflation, and that’s been fine.
It’s a fact.
Yep, that’s a major problem. The total pool of currency needs to be able to grow with the economy. Take a first year econ course before speaking
It’s a myth.
Go on, back up that statement with references from your first year econ course notes.
Under your model, how was the economy able to grow before 1976?
Gold can be mined.
Ah. So the rate of gold extraction exactly matches the expansion of the economy.
Oh, it doesn’t.
Try again.
Hurray! You’ve correctly identified the problem! Congratulations.
So we agree you’ve proved your statement that “The total pool of currency needs to be able to grow with the economy” is false?
Excellent. Glad I could help.
That’s not what that proves lol, but it does prove that the gold standard does not work and is not sustainable.
You should probably read up a little bit on history, the facts disagree with you. The US government had to use regulations and policies to influence the supply of gold: grants for gold mining, setting the reserve rates, hoarding gold to keep out of circulation. Until the gold standard dropped, there was even a limit on the amount of gold one could legally own. On top of this, other gold producing nations had the power to directly influence US monetary value and undermine US sovereignty.
Throw in implications and challenges of being a global reserve currency (Triffin dilemma), and you end up having a really bad time with an unhealthy economy.
Foolish people that don’t know history want to pretend that the gold standard magically creates some kind of natural currency free of “government meddling”, but the reality is that even more meddling and government control was required under the gold standard than compared to fiat currency.
If the economy grew at the rate of mining pre1976 and had no relationship post1976 then your hypothesis would be proven. Data shows this is false.
Yes the FED wanted full control over the US money supply, which is impossible under the gold standard. This desire was unrelated to inflation or deflation.