Greenspan debunked the gold standard?

Quote from mercure160:

... I am fairly convince that a king was much happier of his situation than the average guy even if his fridge was not as full. He could have as many chicks as he wanted :D
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Well this may philosophically resolve to a simple case of the king's eyes being bigger than his capacity to "enjoy" what is within his field of vision. :D But it does sound similar to King Midas' dilemma too.

BTW - pragmatically my personal experience is that that the "chicks" are pretty much giving it away for free to everyone these days anyway. And that just takes away all the ego satisfaction and joy and is in fact suggestive of a social bubble or over supply problem that leads to reduced value. Hmmm, maybe this is indicative of a general systemic inflation problem in everything and no amount of poking around is ever going to get it to deflate and stay down too long...

Ever get the impression that these recurring & similar patterns of problems and dissatisfaction that are seen at all levels (economic, social, etc) are intrinsic to human nature? It's going to be very sobering if we find out that we are all as rats living in a maze participating in a huge experiment. Do you suppose the task is to see how long it takes for us to catch on to the fact that we are the entertainment? I blame Adam and Eve and that damn snake...

I'm gonna find a way to bust outta here... :p

TS
 
Quote from Daal:

"Mr. GREENSPAN. Mr. Chairman, so long as you have fiat currency, which is a statutory issue, a central bank properly functioning will endeavor to, in many cases, replicate what a gold standard would itself generate.

If you take the period in the United States where the gold standard was functioning as close as you can get to its ideal, which would be from probably 1879 probably through the turn of the century, you had a number of business cycles in that period. And in many respects, they had very much the same characteristics that
we just observed in the last couple of years: the euphoria that builds up when the outlook improves and people overextend themselves and the markets shut them down.

Well, what shut down the market was the very significant rise in real, long-term interest rates in 1999, and in that regard, that is the way a gold standard would have worked. So I would submit to you that the presumption that if you have a hard currency regime, you will somehow alter human nature any more than a fiat
currency one will, I will suggest that that does not happen."

What the gold bugs make out of this?His argument is pretty interesting
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well, he just killed the sales of THIS book,

http://www.321gold.com/fed/greenspan/1966.html
 
Quote from gnome:

The best lie is one couched within a bit of truth.

Greenscam debunks any ties of currency to gold because that's what is necessary for the Fed to do its primary function... create inflation.
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Gold standard is not a full proof answer, far from it. Most of the REAL gold supply (Gold futs are pure BS) is controlled by a group of few, mining corps, central banks and Spain. It can be manipulated, similiar in the manner that DeBeers works their diamond monopoly.

Silver is supposedely a better answer, since it is far more plentiful and its supply is more fragmented.
 
Quote from Hydroblunt:

Gold standard is not a full proof answer, far from it. Most of the REAL gold supply (Gold futs are pure BS) is controlled by a group of few, mining corps, central banks and Spain. It can be manipulated, similiar in the manner that DeBeers works their diamond monopoly.

Silver is supposedely a better answer, since it is far more plentiful and its supply is more fragmented.
More...


agree with you - but it does not change the argument too much. metal is metal and makes the valuation base pretty stable.
But you can print as much paper money as you want - which is very often a bad thing when combined with human nature....
 
Quote from dhpar:

agree with you - but it does not change the argument too much. metal is metal and makes the valuation base pretty stable.
But you can print as much paper money as you want - which is very often a bad thing when combined with human nature....
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Well I am far from a supporter of fiat currency, but I have come to believe that the problem is not whether it's backed by a metal. Debasement was a very popular tool of the kings back in the day.

Fiat currency can work and has under the proper financial system. 100% reserve banking, no central bank and not government issued currency but private bank notes seem to do the trick. As long as the bank do not consolidate but stay competitive, it seems to work quite well.
 
Quote from Hydroblunt:

Well I am far from a supporter of fiat currency, but I have come to believe that the problem is not whether it's backed by a metal. Debasement was a very popular tool of the kings back in the day.

Fiat currency can work and has under the proper financial system. 100% reserve banking, no central bank and not government issued currency but private bank notes seem to do the trick. As long as the bank do not consolidate but stay competitive, it seems to work quite well.
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I loved FA Hayek - but that is 10-20 years ago when I read his works at university. I was much more libertarian at that time - but this usually evaporates as you get older (and have to feed a family).
In summary - it may be a great idea but will never happen in practice....in life when you want a better car you usually do not go directly for Bugatti Veyron if you know what I mean....
 
Quote from dhpar:

agree with you - but it does not change the argument too much. metal is metal and makes the valuation base pretty stable.
But you can print as much paper money as you want - which is very often a bad thing when combined with human nature....
More...

Actually I think that currency can be a fair proxy for metal (remember silver certificates?). I personally see little difference between Greenbacks and T-bills as an exchangeable "promise". But I think debt instruments should be the new currency. In other words, at the rate we are printing debt it may make more sense to retire greenbacks, shrink the physical bond instruments down to the size of currency bills and use those as a physical currency. :D

This way it actually pays to keep currency-debt idle on one's wallet since we get paid to "save" while it accumulates interest payments. Think about the fun in exchanging a currency debt note with it's built up equity/interest held on the currency magnetic strip for discounted merchandise that is subject to inflation and not selling (houses for example). The time value of money becomes intimately linked to the currency itself and voila we instantly encourage a national savings program all in one fell swoop. The only down side is that it might give people the idea to automatically deduct the official current inflation rate from the accrued interest...

Fun Fun Fun.

TS
 
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