http://www.nolanchart.com/article5273.html

The left should love a gold standard because it would lead to less war because nation-states couldn’t afford to buy as many weapons or pay for armed forces.

Mark Nestmann
LL.M. international tax law, Vienna University of Economics and Business Administration (2005)
President, The Nestmann Group, Ltd.

Wealth Preservation Solutions
2303 N. 44th St. #14-1025
Phoenix, AZ 85008 USA
Tel. / fax (USA): +1 (602) 604-1524
E-mail: assetpro@nestmann.com
Web: http://www.nestmann.com

1. Economic stagnation: It is true that there is a fairly limited supply of gold. However, with our digital technologies, we can monetize anything else as well: Silver, copper, nickel, uranium (if you’re prepared to deal with that radiation thing).. any durable commodity. Then, no more money supply issue. If you need more currency, just create it. We talk about digital gold here because it’s the biggest and most important type of digital currency, but others could also do quite well. There are no inherent limits.

2. International isolation: I don’t think so. You can just change any other currency for gold at the end of the day. Really not much different than it is now. Not many people (or states) will turn down gold. I suppose there could be sensitive feelings over the rates, but life is always sloppy.

3. Lending limitations, and 4. Anemic Investment: See #1 above.

The author’s concerns are real, and we should consider them, but I don’t think they are too much of a problem.

And, to repeat what I briefly mentioned above: We’re not promising perfection, only improvement. Better than the current mess is more than enough. Perfection doesn’t exist in a highly complex system.

IMHO.

The author fails to note how digital currencies can INFINITELY divide gold, so that even the poorest of the poor can benefit from them. And that’s only the start of my critique….he also needs to read some history of international trade between the Civil War and WW1. Somehow, a miracle happened for the USA BEFORE we made the 1913 mistake Jefferson warned us against. Even though the government wasn’t honest administering what was called “the gold standard,” or banking, for that matter, even BEFORE the Federal Reserve was invented. http://www.theonion.com/content/node/88670
Finally, if I can reply with an Onion URL (people were actually PAYING a bit ago to have T-bills with NO interest in a misnamed “flight to safety”!) I’ve automatically won the argument unless the other side can find something funnier about my argument. IMO.

And sadly, there’s very little that’s funny about inflation, as http://www.atimes.com/atimes/Global_Economy/JJ23Dj01.html
the Guru says much better than I ever could.

This right here is utter bullshit: “One of the most serious deficiencies of a gold-backed currency is that it doesn’t expand with an expanding economy; this causes ECONOMIC STAGNATION and severely restrains GROWTH.”

>>There is *no need* for a money supply to “grow” in order to “match” the “size” of the “economy.” Voodoo bullshit….and this here:

“This may also be true, but what it doesn’t do is make more currency AVAILABLE so that MORE PEOPLE can have some of it. ”

>>*That’s* a problem with the current fiat system. Banks lend new money into existence and there isn’t enough money to pay back all the loans with interest so debt must continually increase…this is also bullshit:

“money that is saved can’t also be loaned without the loss of its use by the person who has saved it.”

>>that’s just dumb. When you save money (gold), you can buy a certificate of deposit from a bank. The bank lends the money. Now, I don’t care if someone wants to use fiat versus gold. I *only* care that the individual using fiat GETS OUT OF MY FACE and lets me use gold. If people want to use real bills of exchange, gold contracts, etc. … then let them. This is silly:

“Because there must always be a strict ratio of gold to currency, it doesn’t matter if you have 10,000 people in the economy or 10 million people, you still have the same limit on the amount of money in the economy unless more gold is obtained.”

>>again, that is not a problem. Just because you add a few million people, doesn’t mean that you suddenly issue a bunch of new “money” and _give_ it to all those new people. People obtain money by acquiring it in honest trade and production. And yes, under the gold standard money *did* appreciate in value slightly every year, buying more goods and services next year than this year. I’ve seen the CPI graph going way back. It happened. That reflected *productivity gains*. Which means, savers *benefited* from the productivity in the market. Simply by virtue of saving, they would “earn” a slight increase in purchasing power each year because they were standing on the shoulders of giants.

You might say that would make people lazy about investing. No. People want to earn a return on their savings. So they invest it. Buy a CD so a bank can lend it out. Or buy a stock paying a dividend .. in gold. BUT, if a saver wanted to avoid risk and merely *keep* what he had earned, he could do that to buy just throwing it in the vault. That is all good. This guy is one of those dreary economic academic pseudo-scientific people without any commitment to or understanding of the basic moral principle of free and voluntary exchange between individuals.

WTF does the “size” of the “economy” even mean anyway? I spend $100 at a store. They spend it with a supplier the same day. They spend it again…someone else spends it…So it gets spent 10 times in one day, for a total of $1000. So wow, we have $1000 worth of economic activity, but “only” $100 in circulation! What*ever* will we do? I guess we’d better print up another $900! otherwise we will stagnate economically!!!!

You were correct on the point in the conclusion of your rant…which by the way just might make people dumber for having read it…”It may be true that a fixed, HARD CURRENCY system provides stable prices, savings that maintain their value, and even yields wealth where products not investments are exchanged…” You’re right, it IS TRUE!!!

-Donktastic