Dollar as good as gold?

[SeanEdwards]

In one of those RP youtube videos is a clip of Steve Forbes mentioning the idea of tying value of the dollar to a price range for gold. As I understand it, that system would consist of fiat dollars, but the rate of expansion of the money supply would be controlled such that gold maintained a stable price in US dollars.

It's kind of interesting idea I think. On the downside, it is still a fiat currency that doesn't hold intrinisc value. But realistically, the only currency that does have an intrinsic value is coins containing precious metal, and that type of currency presents its own problems for an economic system. Even paper money backed by precious metals on deposit entails a degree of trust in the system.

The positives of such a system are that it could help restrain government spending because it would dissallow discretionary monetary expansion. This is kind of the same thing as Milton Friedman's suggestion of replacing the Fed with a computer.

While this idea may not please the hard core gold bugs, I think it's a worthwhile idea to explore and would almost certainly be an improvement on the current politicized central banking system. What do you think?

 

[Republicae]

Happy Birthday FED (b. 12-23-1913-d. 2010)

Yes, basically that is called "Soft-Currency" and the under the "watchful" eye of the FED it was tried. The dollar was still exchageable at a given rate of redeemption, but the FED could and did expand the money supply beyond the gold reserves. I beleive the term back then was "accordion-money". Not enough restraint on the FED or the government.

 

[Tatsit]

I got an idea - support HR 2755
Turn off the damned printing presses
Back money by gold AND silver - you want just a gold currency because gold is a commodity and a commodity is to easily controlled. Add silver because it is not as rare and therefor not as much of a commodity.

Then the markets crash as we expel all the bubbles and imaginary wealth kinda like a purification process - and then stick to the gold and silver based currency.

In my opinion though - now this will be to hard for most to fathom because of how they be mentally trained but.... get rid of currency all together. Go to a moneyless system were the system is based on skills, drive, devotion and Merritt.

Everyone has natural talent that can be used for the better of all human kind. For example say your aspiration is lead a large organization such as the power company - well you have to start out at the bottom as an electrician, then foreman, supervisor etc...

Look at Star Trek the next generation and how their society works that is another good example of what I mean.

But I know, I am dreaming - to many greedy people in the world for anything like that to work.

 

[nate895]

I got an idea - support HR 2755
Turn off the damned printing presses
Back money by gold AND silver - you want just a gold currency because gold is a commodity and a commodity is to easily controlled. Add silver because it is not as rare and therefor not as much of a commodity.

Then the markets crash as we expel all the bubbles and imaginary wealth kinda like a purification process - and then stick to the gold and silver based currency.

In my opinion though - now this will be to hard for most to fathom because of how they be mentally trained but.... get rid of currency all together. Go to a moneyless system were the system is based on skills, drive, devotion and Merritt.

Everyone has natural talent that can be used for the better of all human kind. For example say your aspiration is lead a large organization such as the power company - well you have to start out at the bottom as an electrician, then foreman, supervisor etc...

Look at Star Trek the next generation and how their society works that is another good example of what I mean.

But I know, I am dreaming - to many greedy people in the world for anything like that to work.

It isn't that people are greedy, we have tried barter before, it isn't efficient. It requires a coincidence of wants, whereas in a money system, everyone wants money because money will buy anything that people are selling.