Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Mark Bartlett who wrote (6520)	6/17/1999 5:05:00 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 81996

<<All of these events occurred under the gold standard.>> Can you imagine how much worse it would have been if they were not! Mark, Actually, I can. The worst one-day collapse of the stock market occurred in 1987. Immediately afterward, the Fed reserve cut interest rates and added liquidity to the monetary system. Under the gold standard, such "easy money" policies would be inherently contrary to having a gold standard. That, I and history suggests, is what is really wrong about gold. Under a gold standard, when things got out of hand in 1929, that collapse created a circumstance where some one half of all US banks collapsed in the panic that ensued. Thus, gold didn't really provide the confidence that it was supposed to provide since depositors were unable to immediately convert to dollars to gold and fulfill the demand note concept of immediate convertibility. However, in 1987, the Fed took significant action which many hard money conservatives construed as inflationary and counter-productive to economic health. But the result was that two years later, the US had emerged from a moderate recession and set the stage for the bull market of the '90s. An evironment that was conducive to economic growth, not constrictive anti-growth, pro-currency policies. So yes Mark... I can imagine. And that is why I find this illusion that people hold about gold as nothing less than fascinating. It's fine it people choose to hold gold as some apocalyptic portfolio hedge. But to consider reinstituting a gold standard is sheer insanity. Financial credibility should be based upon the political and economic soundness of a nation and its economic and financial policies, not upon how much of a shiny metal they hold. That just seems like common sense, don't you think?? Regards, Ron