So basically Greenspan's argument against the gold standard is that while it is a true market, it can "stifle the economy." And he is of the opinion that it is better to control the money supply, tax the non-investing working class with inflation, and increase the economy growth rate at the risk of completely screwing up and a resulting depression.
He admits, that even though he is obviously a very intelligent man, that he doesn't know everything, and people, including the Fed are bound to eventually make a mistake. My question is, to me it seems like a good idea to, everyone once in a while take a breather, and return to a gold standard. For instance, say I'm a very good gambler, I've been a the casino for 4 hours making money. It is rational at the point to just get up from the table. You know eventually that you'll get too cocky and make a mistake and end up losing everything. However, if you quit while you are ahead, cash in your chips, and take a break, I feel it is a much smarter way to play.
Then, once we are back on the gold standard, and people following the markets get a better grasp as to how people are really feeling, they could always reinstate the Fed and go gambling again, though personally I'm of the opinion that gambling is wrong.
Plus, I think Paul's position is the best. Allow competing currencies to exist with the Fed bank notes on the market. I am pretty sure the monitoring of such a market will be a better metric to judge people's true perceptions than the current Fed system.
Just some thoughts I had.
