One reason gold standard is a disaster

[RGacky3]

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Deflation, its obvious, but Sam explains it very clearly.

When the value of money goes up and up, people will not want to spend money, thus money does'nt move, people get fired, and money concentrates more and more.

The whole poing of people wanting a gold standard is that it has some mystical "real value," but when you look at the actual economics of it, its a disasterous idea that limits growth and infact contracts it.

Hell I'd go so far as to say the ancient eygptrian/sumarian system of sheckels of grain is a better system, because it least it grows with the economy.

So it would be smarter to go to a grain based currency than a gold, but both are silly.

[citizen of industry]

I think Japan used to have a rice-based system. I'm so confused about currency. What's it based on now, the US dollar? If that's what it is internationally how 'bout the US? Does the US base it's currency on it's currency?:confused:

[RGacky3]

The US does'nt base its currency on anything other than the full faith and confidence in the US government, basically its just whatever the Fed thinks is the appropriate amount of money to be in the system. It does'nt need to be based on anything, its just a unit of trade.

[danyboy27]

in the early 1900s the gold standard caused a shitload of troubles. The banks used to have a pretty good scheme; they decided to stop restocking their gold reserves in order to create an artificial scarcity of the money. Interest rates hiked and the farmers and poor landowner had to get a loan to pay for the other loan. At the end, the bank was able to get so much land on the back of those folks, it was just creazy.