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noamnums
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The Persistence of the Bizarre

- Nathan Lewis - New World Economics

Is he? He just suggests to link the amount of money to the price of gold: if the price of gold goes too far up, the amount of money has to be reduced, making money scarce and expensive, forcing the price of gold to go down again; if the price of gold goes too far down, the amount of money has to be increased, making money more abundant and cheap, forcing the price of gold to go up again. This way the supply of money is made dependent on the price of gold, but it doesn't necessarily mean that there's a fixed ratio between the amount of gold and the amount of money. It means that the price of gold will fluctuate in a limited bandwidth (without extreme ups and downs). Reminds me of Jackson's linkage as described by Fekete in 'Causes and Consequences of the Kondratiev Long-Wave Cycle'.

Commented 4913 days ago

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Beginning of the headline : There's a notion out there that, to establish a gold standard, you take the existing monetary base, divide it by the amount of gold the government has in storage, and then you end up with a price of gold. This is so idiotic that for a long time I figured I'd just leave it alone. Do these people also think that babies are delivered by storks? And yet, it is a testament to the extremely poor state of affairs these days that these sorts of arguments exist, and indeed have been around for decades apparently without anyone to call BS on them... Read More

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