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Tuesday, February 12, 2013

Why Gold?

Most people who wished to return to a commodity standard talk about gold. But why?

"We have become so accustomed to regarding gold as the natural monetary metal that we have forgotten that silver was a far more important monetary metal than gold for centuries, losing first place only after the 1870s." -- Milton Friedman, Money Mischief, p. 122

And when gold did replace silver, it was due to legislative action, in both the UK and the US. Contra the Richter Report and many other goldbugs, gold became money because the government chose it as money. (Not to say that no market society ever chose gold as money, only that the era of the gold standard was created almost entirely by fiat.)

It would be more historically justified to advocate a return to the silver standard if you want the commodity that markets picked.

1 comment:

  1. Gene, have you heard about the Ron Paul story where he's trying to get the ronpaul.com domain name back? At first, I thought he was really going to the UN and being this hypocrite, like The Amazing Atheist pointed out in his latest video, but then I saw this video from Ron Paul Flix which allegedly clears up the misconceptions behind what's going on.

    http://www.youtube.com/watch?v=bjJ9eb87yt0&lc

    http://www.youtube.com/watch?&v=fAwgSWzQFwQ

    Based on what happened with the Ron Paul newsletters, I have a feeling that Amazing Atheist may have the more correct version of the story, although it's still very confusing. Lew Rockwell's site, of course, dogmatically defends him.

    On the subject on a gold or silver standard, I'm not really sure where I stand on it, but I don't see exactly how it would automatically make us better off.

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