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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Jim S who wrote (35827)	6/24/1999 2:00:00 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 116766

Thanks Jim, That point has primarily been my contention for demonetizing gold. There just isn't enough of it available to properly back the money necessary to finance mankind's ability to grow and increase their productivity. Limiting paper currency inventories (money supply) to an element that is rare, not regionally well distributed (some nations have more, others have less), and subject to inflation itself when major gold finds are discovered, is just no manner in which to manage global economic growth. A currency is only has sound as the nation that issues it. It should be inherent in all monetary matters, that a nation must maintain investor confidence in its economic policies and debt load. Holding currency to a gold standard really inflicts an inflexible discipline upon monetary policy, that is counter-productive to stemming economic turmoil and panics. Its requirement for "hard money" discourages or prevents actions like the Fed took last fall in lowering interest rates and drastically increasing financial liquidity. Furthermore, when the IMF or the World Bank attempts to inflict "austerity measures" upon a disrupted nation, such measures only exarcerbate the problem, stifling the very economic growth that would restore investor/consumer confidence. There are far greater priorities than just a "sound" currency by itself. A currency, backed by gold or not, is still just a method of exchange and a proxy for a barter based system. Instead of exchanging physical goods or commodities, they exchange cash. So long as they agree on the requisite value of that exchange medium, who cares whether it is one peso for one dollar, or one hundred pesos for one dollar. The key is to keep that exchange process going, not lock it up in a credit crunch. And hang in there. The basic economics of monetary policy aren't that difficult to understand. The trick is trying to tie all of the variables together in order to predict the future. Regards, Ron