Too little gold? Nonsense!

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HoldGold's picture
Status: Member (Offline)
Joined: Apr 24 2008
Posts: 13
Too little gold? Nonsense!

There is too little gold to serve as money only at the current absurdly low price. If the price of gold were commensurate with the amount of fiat dollars floating around (for example, $32,000 per ounce), then there would be enough to "back" each dollar one-for-one. If government could manage going forward to print at a rate no greater than the annual increase in the gold supply from new sources then the money in circulation would be just as adequate as it is now, and the dollar could be stable (at the newly recognized depreciated exchange rate) with gold, the currency par excellence. It doesn't pay interest? A stable currency doesn't pay interest. Interest and dividends are compensation for taking risks, putting money to work. Interestingly, as there was no control over the amount to be printed, (just like our fiat dollar) assignats became the catalyst for food riots during the French revolution. Coincidence?

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