Monetary standards

[David S]

It's an interesting idea, but I'm aware of no evidence supporting it.

I would pursue a zero-inflation target with fiat money.

 When we were on a gold or silver standard inflation did not occur over long periods of time. It only occurred briefly, mainly during wartime  and after the war prices would come back down. Since we abandoned the gold standard zero-inflation is one thing we have not achieved. Inflation has been chronic.

In 1966, before he joined the enemy, Alan Greenspan wrote an article in defense of gold. http://www.321gold.com/fed/greenspan/1966.html  The last two paragraphs kind of sum it up:

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

[David S]

Following is a quote by Thomas Jefferson.

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around [the banks], will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
http://www.usiap.org/Legacy/Quotes/ThomasJefferson.html

Isn't that exactly what happened. Less than 20 years after the Fed was born the country had been through all of that and was in the worst depression in its history, and the people, at least many of them, were "homeless on the continent their fathers conquered."

[David S]

Isn't that exactly what happened. Less than 20 years after the Fed was born the country had been through all of that and was in the worst depression in its history, and the people, at least many of them, were "homeless on the continent their fathers conquered."

But since then, with the Fed still in existence, America recovered from the depression and has been through numerous periods of relatively solid economic growth... how does that fit into the picture?

The dollar has lost 95% of its value since the fed came into existence, we had several recessions, and the S&L failures  cost the taxpayers about $.5 trillion. Because the Fed makes it easy for the federal government to spend more than it takes in, the national debt is now over $8 trillion. Aside from all of that the Fed is fine.