Why not Gold?

[Coburn In 2012]

What are the arguments against returning to the gold standard?  Very few conservatives really support it but some do.  And the Constitution Party, which I agree with on lots of social issues, seems to support it. 

Why is it a bad idea?  I really would like to learn more about this issue.  Do you have any web pages your can reccommend about it?

[ag]

The right question is not "why not gold", but "why not some arbitrary commodity?"  You could implement the same with or without the help of the yellow metal, but why would you want to?
Fixed exchange rates (among participating countries) with monetary supply not merely exogenous (that would have been the objective), but subject to fully exogenous shocks.

And, in any case, it is not like it would resolve the commitment problem: when going got tough the gold standard countries in the past would always be tempted to suspend convertibility. What you'd be trying to resolve w/ the gold standard is the gov't propensity to inflate itself out of trouble - it would be a major problem for US or European currency only in the same sort of circumstances under which it would suspend the gold standard anyway.

[k-onmmunist]

Gold is a good idea to prevent excessive inflation and inflationary booms.

[Associate Justice PiT]

Gold is a good idea to prevent excessive inflation and inflationary booms.

     It definitely has its merits. The main problem with it though is that gold is too rare, so that backing our money with gold would cause a huge economic retraction. Still, I think we should definitely look into backing our money with something.

[Southern Senator North Carolina Yankee]

What are the arguments against returning to the gold standard?  Very few conservatives really support it but some do.  And the Constitution Party, which I agree with on lots of social issues, seems to support it. 

Why is it a bad idea?  I really would like to learn more about this issue.  Do you have any web pages your can reccommend about it?

It would basically have the same effect now as the Feds decisions in 1929 and 1930(decrease the money supply) which contributed to all the bank failures in 1931-1933. Its funny but we have done the exact opposite this time.  They cut the money supply by 50% we have almost doubled it.

[muon2]

Here's my answer from last December:

The issue of gold supply would need to be addressed before considering a return. The standard worked when the major economic powers controlled the supply and the growth in available gold matched the needed expansion of the global economy. I would think that a 21st century version would use some larger basket of commodities if there was a return to hard currency.

[phk]

The right question is not "why not gold", but "why not some arbitrary commodity?" 

[JSojourner]

Gold is a good idea to prevent excessive inflation and inflationary booms.

     It definitely has its merits. The main problem with it though is that gold is too rare, so that backing our money with gold would cause a huge economic retraction. Still, I think we should definitely look into backing our money with something.

I vote for Virginia ham.

[minionofmidas]

A basket of different commodities works far better.

[Bacon King]

Gold is a good idea to prevent excessive inflation and inflationary booms.

You're right, the price of gold is so stable!

Oh wait.

[Associate Justice PiT]

Gold is a good idea to prevent excessive inflation and inflationary booms.

     It definitely has its merits. The main problem with it though is that gold is too rare, so that backing our money with gold would cause a huge economic retraction. Still, I think we should definitely look into backing our money with something.

I vote for Virginia ham.

     In Economics class last week someone made a comment where they referred to money expiring. That prompted me to make a joke about money made from ham.