

Return of The Gold Currency - mishmax
http://online.wsj.com/article/SB10001424052748703882304575465623070689934.html

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noelchurchill
I'm in the same boat as LZW.

But let's put aside the battle of opinions of whether inflation or deflation
is more damaging for the sake of this article.

A gold currently would create equilibrium in the market for supply and demand
of goods and services. There would be a predictable quantity of money in the
system at all times and people, businesses, and investors would be able to
base their decisions on this. There would be neither rapid deflation nor
inflation, but rather the true value of the good or service would be reflected
in the price. We would only see deflation if production became more
affordable, or if demand decreased. This is healthy!

The argument that people would delay their purchases because they know it will
be more affordable in the future is bunk. There are a few goods and services
that have become consistently more affordable over time despite inflation, and
people continue to buy those things knowing full well they'll be available for
cheaper in the future. This is an easy to understand example of equilibrium
between supply and demand.

But nonetheless, did a gold standard lead to a deflationary spiral all the way
through the 1900s until 1971 when Nixon essentially declared economic
bankruptcy and took us off the gold standard? No, it didn't. Those were some
of the most prosperous times this world has ever seen. True economic
prosperity not fueled through ever greater sums of debt.

Gold is sound currency.

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lzw
Sad to see economic nonsense like "central banks have mitigated the effects of
inflation" and "paper currency can fight the tough impact of deflation".

Deflation, actually, is good for the economy because it lowers the cost of
expansion for businesses, and makes everyones savings have more purchasing
power, making everyone wealthier.

Governments, however, like to spend without regard for responsibility, and so
governments put out propaganda to try and scare us about "Deflation" as a
threat so that people ignore the fact that most productivity and many
technological advancements that we should be reaping the benefits of, are
instead, "mitigated" by inflation.

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brazzy
_Deflation, actually, is good for the economy because it lowers the cost of
expansion_

Wow, talk about economic nonsense. Deflation is far, far worse for the economy
than inflation because it lowers the incentive to put existing capital to use.

 _and makes everyones savings have more purchasing power, making everyone
wealthier._

Except those who have no savings or even debt, i.e. most people. And no,
that's not their fault and debt-slavery their justly deserved punishment
decreed by god. Inflation is pretty much the only thing that mitigates the
aggregation of all wealth in the hands of a tiny group of people.

~~~
lzw
Yes, please don't say economic nonsense. What you are giving me here is
political ideology, not economics. Your claims are easily disproven. The
period of Americas greatest economic growth, where we went from backwards
colonies to economic leader is a period of deflation! From the late 1780s to
around 1910- the dollar appreciated in purchasing power due to deflation and
we had the industrial revolution. All that extra productivity from machines
manned prices go down and gave people more money to spend, and contrary to the
claim that it prevents investment, more purchasing power means more capital to
deploy.

I have ot laugh at the absurd claim that inflation is good because people have
no savings to benefit from deflation. The reason they have no savings is that
your lot have stolen them via inflation!

