Loading ...What if….
… we would of stayed on a 1:1 gold backed reserve currency? Less world population? Less wars? No asset bubbles?
… we would of stayed on a fractional gold backed reserve currency? Contained asset bubbles?
… we would have fiat currency? More wars? More asset bubbles? Ahh wait.. we tried this option!
Adding some usd history via the super cool “priced in gold” website… http://pricedingold.com/us-dollar/
Adding my goto chart to remind me how far off in coo coo land we are in the stock markets… now those last 3 are INSANE bubbles! 1982 was buyback’s reintroduced, and 1995 the change in fractional reserves…
There have always been asset bubbles. There has always been boom and bust. Wars have been pretty constant too.
The gold standard doesn’t fix those things.
If you need money to finance a war… but the money supply is controlled by the amount of gold in existence (in a 1:1 backed ratio), doesn’t that reduce your war chest to the countries actual savings, since they can’t “loan into existence” any additional funds? What did I miss?
“Contained asset bubbles?” Highest asset bubble of 1929 was in gold standard era.
!966 was another asset bubble which was followed by stagnation for 18 years. Resulted in gold run to highest level.
Second chart in the article shows two drops for dollar.
First was by Treasury devaluing dollar thru gold price from $20 to $35 /oz. ans the second drop came in once again US devalued and took off the gold standard. Both happened by US action. NOT the Market.
Food for thought, but there are cycles in all aspects of life, and I’d say it’s pretty much impossible to prevent financial boom/bust unless you can stop human greed.
I know by watching Mike Maloney’s series on the origins of money that human’s greed made them “shave” coins… what is equivalent to printing currency… but what if you didn’t do that? You’d get valleys and peaks… but the long term mean would eventually match up the amount of gold you could annually dig up out f the ground? Asset bubbles couldn’t exagerate like they did now.. you’d pay the piper more frequently for your human greed… and revert to a balance more frequently.. like a car tune up.
Right now I’m afraid, we are running on a 2001 Chevrolet Cavalier that has 450000 km and hasn’t had a tune up since 50k! Scary what the garagist will find!!!!