What's wrong with the gold standard?

what's wrong with the gold standard?

It implies trade and therefore private property

There's really nothing special about gold. It's just another commodity. The gold standard doesn't even work within capitalism.

Its unneccecary and places unneccecary demand on gold, a commodity much better used in industry for electronics. It diverts labour into searching for gold disproportionately to the neccecity of society. It causes problems for the government if new sources of gold are discovered, and you give up control over your currency by linking it to something that can be manipulated in scarcity by external factors. Overall, its inefficient and gives you less control.

It prevents nations with a net deficit of gold from using money creation to stimulate economic activity, and thus requires austerity measures to be imposed when a capitalist crisis inevitably occurs and results in an economic depression. This leads to suffering, unrest and disquiet, and possibly war as well.

The fact that labor is the source of value.

it is absurdly arbitrary. fetishism, plain and simple. gold does not reflect labour value

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But nobody takes the LTV seriously anymore except for fucking Marxist economists.

eh, ok?

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Except for the marxists economists you conveniently forget of course.

Thanks fam

He's injured

The largest and most glaring problem in returning to the gold standard is that there is simply not enough gold in the world to cover the quantity of currency presently in existence. To put it another way, even if the US were somehow able to purchase the world's entire gold stocks (in itself an impossible proposition) there would still be nowhere near enough gold to cover the total value of dollars in existence. It is estimated that the total amount of gold that has been mined in the world is equal to about 142,000 metric tons. Assuming a price of $50,000 per kilogram (corresponding to around $1550 per troy ounce), that equals about $7.1 trillion: not enough to cover all circulating money and deposits in the United States, let alone the entire world. A return to the gold standard would require a massive devaluation of the US dollar, precisely the scenario that many gold bugs feel that the gold standard would prevent.

Furthermore, this calculation only applies to the US. If all the world's other countries were simultaneously trying to do the same thing then this problem would be exacerbated. In addition, if the US were to follow the policy of buying the world's gold as outlined above then a large number of the actual dollars would have ended up overseas and the US would have the metal. Presumably, the US would then have to create more dollars for internal use, which would hardly be a counter-inflationary policy.

In addition, gold has gained several industrial uses in the last century, particularly the tech industry and some medical uses, as well as traditional uses in jewelry. The ensuing hyper-deflation of a return to the gold standard would devastate the jewelry industry (no one but the filthy rich is going to pay tens of thousands of dollars for a 14k gold wedding band, never mind 24k) and the tech industry as the extensive use of gold interconnects in chip packaging would send component prices through the roof.

Also, the government may choose to leave the gold standard as soon as it implements one. This is evidenced by the history of the gold standard itself, in which it was suspended many times for various reasons. Therefore, the gold standard does nothing to rein in the government. Gold is intrinsically worthless, it only has value because we assigned it to be; that now belongs to paper currency.

/liberty/ btfo

is than a NVA Wojak?

Marxist economists don't understand economics, that's why they're Marxists.

Most "people who study economics" haven't looked into Marxism ''at all'.

Thanks porky. Capitalism works best, right? Praise Friedman.

It got removed so they could spread the income gap.

If you re-introduce it now, you will solidify this gap.

let me rephrase it.

To widen or close the income gap, the money needs to be liberated from all the real wealth. The reason the gold standard isn't reintroduced, is because porkys think they can milk us way more. Once the trend goes to the other direction, said porkys will be the very first, who will scream for the gold standard. And get it.

*need to be liberated from all the real value

Have a picture

Deflationary currencies tend to be rougher on a lot of different industries, because they encourage people to hoard their money, rather than spending it and pushing it through the local economy. Also, they're like an extra interest on any loan that gets given out, so any industry that relies on taking debt for a certain time (which is most industry) will be hit hard by a Gold Standard.

That graph seems a little misleading tbh. The early 1970's saw several big crises which mostly harmed the US working class' incomes, and ended with the consolidation of neoliberalism, preventing that income from growing again.

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It's not bad as much as it is meaningless. It's one of those empty talking points that lolberts like to parrot to avoid ever contemplating their own beliefs.

Correlation therefore causation? you can do better than that.

Is this the new ebin way to disprove proofs now?

You haven't proven anything. You've shown that two things happened at around the same time, and claim that one must have therefore caused the other. It's an invalid argument.

Two effects happened at the same time, because they arose from the same cause.

And your shitty graph proves that how?

You have done nothing to demonstrate that such is the case, merely presented a sourceless graph and not even tried to explain how it pertains to the subject. Kindly learn how to present an argument or stop posting.

I already made an argument. See above

Sources is the NPR, which they in turn got from the World Top Incomes Database.

FDR ended the gold standard in 1933. Nixon merely got rid of the last vestiges of it in 1971.

If income inequality was caused by the loss of the gold standard, as you seem to claim, you'd see it start in 1933 and merely accelerate in 1971. This doesn't happen. In fact, income inequality doesn't even really start ramping up until later that decade, implying that there was a different cause.

That cause being the elimination of the historical labor shortage in the United States, causing wages to no longer rise with productivity. The fact that Nixon abolished the last remnants of the gold standard (which had already been dismantled by FDR) around the same time period is purely coincidental.

People like to jerk off about the gold standard but the only real difference is that you can either choose to have your currency's value fluctuate by pure chance or because a handful of powerful bankers will it so.

Hello newfriend, I see you have yet to understand greentexting. You see, there are, primarily, four reasons to green text.

So when you say
It comes off as if you believe that people who study economic do take LTV seriously.

This is an excellent explanation, thank you for putting the time into this post user.

Gold Standard is a sane practice, alongside the likes of other items being used for their value. For example, you can also use the likes of sea shells, as they'll always be in a limited supply, you can put supply limits on cattle, supply limits on fish. Everything has an inherent value, gold just happens to be shiny.