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0 pointsKenji9y ago0 comments

"The past 150 years has shown across hundreds of countries that the current solution is vastly better than the boom and bust cycles previous, and has also demonstrated the benefit of fiat over commodity (like gold)."

Uh, no. Quite the contrary. Since the abolition of the gold standard, our economies were prone to fluctuations like they haven't been in decades. Because then the (central) banks can meddle with the quantity of our money to their liking.

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ChrisLomont9y ago

List of recessions in the US [1]. Tell me when they were longer and more frequent - before or after central banking.

The Great Moderation [2], a period of such low economic volatility that even economists find it amazing. Did this happen before or after the gold standard was removed?

IGM poll of around 100 of the top economists in the US the following [3] "If the US replaced its discretionary monetary policy regime with a gold standard, defining a "dollar" as a specific number of ounces of gold, the price-stability and employment outcomes would be better for the average American."

Every single one either disagreed or strongly disagreed. 100%. Not a single dissenter.

Want to really see what a gold standard would have done over the past few decades? Here [4] is gold prices for the past 100 years.

The price was 220 in 1970, 2000 in 1980, 369 in 2000, 1600 in 2010, and now has dropped to 1200, with a lot of intermediate fluctuations. It's all over the map. These fluctuations are far larger than any business cycle or inflation over the same time period.

If gold were the standard (i.e., the fixed value), then, since the dollar has fairly small fluctuations and more important quite stable predictability, this graph is what living costs would have done as the rest of value fluctuated this wildly.

Simply put, gold is vastly more volatile than almost any economy, and certainly more volatile than the US economy. The gold standard is terrible.

Finally, here [5] is a paper that follows the gold standard across 24 countries around the Great Depression, and pretty conclusive shows a strong divergence in economic health (employment, wages, growth) between those countries on the gold standard and those off it. Such effects, seen at the time, pretty much killed the gold standard as the deflationary effects became clear.

Now, present your fluctuation metric before and after a gold standard and demonstrate your claimed increase. It simply is wrong. These multiple methods conclusively show it.

[1] https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...

[2] https://en.wikipedia.org/wiki/Great_Moderation

[3] http://www.igmchicago.org/igm-economic-experts-panel/poll-re...

[4] http://www.macrotrends.net/1333/historical-gold-prices-100-y...

[5] http://www.nber.org/chapters/c11482.pdf

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