Worthwhile Possible GOP nominees

[Beet]

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This is a fair point, but I would respond that having nothing backing our currency whatsoever is equally if not more problematic. Right now we're basically just coasting on the presumption of interdependence as well as the perceived stability of the dollar, but if the G20 or OPEC are any indication there's no guarantees that will be the case forever. I'd also point to the massive devaluation of the dollar during the '70s as indicative of the rashness of Nixon's decision to completely end the gold standard.

Depends on what you mean by the "perceived stability of the dollar". If what you're referring to is the possibility of a currency crisis, I would say this is more of a long term threat and going onto a currency commodity standard would potentially create as many problems as it would solve. Also, what most hard money advocates usually want is really credible government commitment to monetary consistency and restraint. But a hard peg is no more invulnerable to caprices of government change than a floating currency. Just look at what happened to Argentina's hard currency board of the 1990s, or the gold standards of the past. These pegs are just as flimsy as the governments and conditions backing them. Meanwhile, as Volcker demonstrated in 1982, central banks can pursue tight monetary policy without having a currency peg. Ironically, had the Fed been under the control of Congress or the Presidency in 1982, as Ron Paul and some of his supporters seem to want, Volcker's intervention may never have happened. Magic bullet? I think not.

Also, the massive devaluation of the dollar during the '70s was as much a testament to the artificially inflated price the dollar commanded in the '60s under Bretton Woods as anything else. Bretton Woods worked well enough for its time, but it was also essentially a massive ticking time bomb. Had Nixon not abandoned it, not only the United States but the whole world would have been forced into sharply contractionary economic policies, and after the consequences of this, the dollar would have lost its (pegged) reserve currency status anyway.

You believe in free markets; which is more free- a floating currency whose value is determined on the open market, or a government-induced price peg?

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Certainly bubbles distort prices and encourage malinvestment ... although you have to define price distortion, and therein lies the 'Lucas critique'.

[Beet]

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LMAO, are you serious? China right now could singlehandedly crash our wonderful fiat currency at the drop of the hat.

And this proves the superiority of a commodity currency how?

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Any currency issued by any human entity is only going to be as trustworthy as that entity. If you only trust gold, then only transact in gold. Don't own any currency at all. Don't own any notes of any kind. Own only gold.

[Beet]

Any currency issued by any human entity is only going to be as trustworthy as that entity. If you only trust gold, then only transact in gold. Don't own any currency at all. Don't own any notes of any kind. Own only gold.

Even assuming people had the resources (or motivation) to do so, what do you think would happen if significant percentage of the population reverted to hard currency? The government would declare an emergency almost immediately and confiscate it.

Who cares what a "significant percentage of the population" does? Libertas says he trusts gold more than the dollar in his pocket, with a strong implication that he doesn't trust the dollar in his pocket very much. To which my question is, why does he carry that dollar if he doesn't trust it?

Of course it was a bit of a rhetorical question. On a mass, scale actually transacting in gold, or even gold and commodities, is impractical; one can't lug a pound of coal or a liter of natural gas to pay for one's groceries every week. One needs paper and plastic. But all paper and plastic is issued by some human entity. And no human entity is infalliable... in fact, they are all subject to pretty much the same fallibilities: human fallibilities.