What we need is not necessarily a gold standard, but rather a “de facto” gold standard where the fed keeps the price of gold within a tight range. That way there’s plenty of liquidity for growth, and excess liquidity during recessions is “sopped up” so that it can’t cause inflation. What’s interesting is that the Fed’s policy now doesn’t allow for growth. Because even during growth surges, such as the first internet boom, they cut off the liquidity supply. They crash boom cycles, and prolong downturns as well as adding inflation on top of them.
I wrote the above as a comment to a Facebook post by Steve Forbes. Here is his FB post:
“Reading book on the gold standard by the noted economist, Mark Skousen. Skousen is also the founder of Freedom Fest, a great gathering of libertarian and conservative thinkers.”
It got me to thinking of how destructive the Fed is, and how it’s philosophy or mandate, simply will not allow for economic growth. Also, it got me to thinking again about how it’s ideas, such as adding liquidity to an economy somehow stimulates growth, or that growth itself somehow creates inflation, are the economic equivalent of Science still saying that the Sun orbits the Earth. I don’t know how they get away with it, nor how the media and politicians get away with espousing as fact, ideas that are not only not true, but the exact opposite of what they state.
The end result is suffering. Suffering for most of us, and a huge amount of unearned, unworked for, or risked for wealth, for the few of the establishment, those who hold positions or are friends with those who hold power.