<< The only other alternative would be that the price of gold be raised to a price level where it is divided into current money supply nad the restrictions that would follow where money supply could only grow as fast as gold is mined and stored. >>
*** Great idea! Let's do it! ***
Then Bob, you are basically saying that future monetary expanision should be dependent upon the ability of the world to find, extract, and deliver more gold to the marketplace??
I think you are given the adamant response to my comment above.
And those countries possessing the largest reserves of gold will decide which currency is utilized as the global reserve. So if we find ourselves running short of gold here in the US, we can justify a colonialist imperialism for the sake of sound money backed by that shiny metal.
You, by advocating a gold standard for currency, are now declaring that enourmous economic resources must now be diverted to the purpose of locating and mining that shiny metal so necessary for the backing of your proposed currency.
And you stated:
*** Yes, and that bolsters the argument that only 1 metal is desirable for the standard. Introducing a bimetallic standard only increases the fluctuation of money value, because now there are two mine supply fluctuations to deal with. Eventually, any bi-money standard will suffer from Gresham's Law - bad money chases out good. ***
Who are you to decide that Silver should have no value that would be in competition with gold? That's somewhat snobbish and arbitrary, isn't it?? <VBG>
I also believe that is the same analogy I made when I asked why Fiat money, backed by Gov'ts FF&C, should have to be challenged by a shiny metal mined from the ground??
Furthermore, you entirely ignore the fact that all fiat currencies throughout history have tanked in value to ZERO.
Should a gov't fiat money fail, holder's of that currency will sell it and buy currency from another gov't they consider more credible.
Should that currency also fail, they will then transfer their wealth to the next currency of strength (hopefully the Dollar).
When that fails, they will transfer to gold.
When that fails, they will transfer to actual commodities and foodstuff and "Katie bar the door".
When that fails we will lie, cheat, steal, and kill from those who have what we desire. (and don't tell me that if it was a choice between your family and someone else's we wouldn't all take care of our own first. It's human nature that goes back farther the the history of gold.)
Regards,
Ron
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