Re: [PLUG] OT, gold price stuff

[Jon Galt <jongalt@pinn.net>]

On Fri, 26 Apr 2002, Jeff Weisberg wrote:

> the discovery of gold in California, 1848, and Johannesburg, 1896
> both caused global price instability and worldwide inflation.
> 
> in all times throughout human history that a gold standard was
> implemented, it made price of goods in relation to it more stable
> only when looked at in very long term averages, short-term (year-to-
> year) prices fluctuated dramatically.

You cite certain major events (48 years apart) that made prices fluctuate
"dramatically" for a short time.  Year-to-year price fluctuations in 
general were not so "dramatic".

Again, the real advantage of gold backed currency (or currency backed by
some physical commodity) is that the government cannot arbitrarily create
money out of thin air.

The irony of all this is that the stability of the current fiat standard
currency (USD) is caused primarily by Alan Greenspan, who is an advocate
of the gold standard!  He understands the dangers of a fiat currency, and
has been doing a surprisingly good job of keeping it stable.

Wayne
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wayne@hirewayne.com
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