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To: Zeev Hed who wrote (75338)	3/4/2001 10:43:22 PM
From: brightness00	Respond to of 436258

Zeev, IMHO, the apparent delima is solved if you do not use gold as currency itself (ie. not having gold coins as circulation medium), and do not specify a particular per centage gold reserve. Instead, you use interest rate adjustment to keep market participants neutral between gold and the dollar. World economy grew by leap and bounds in the 19th century under the tutelage of British Pound Sterling, which was tied to gold; and the exchequer gold reserve didn't grow much at all, and always remained a tiny fraction of the total currency floatation. Jim

To: Zeev Hed who wrote (75338)	3/5/2001 9:33:40 AM
From: yard_man	Respond to of 436258

quite the reverse -- you are 180 degrees wrong on your argument. And markets can only discipline fiat systems when there are two conditions which Don pointed out 1) Unfettered free exchange and 2) Free flow of information We have neither. I'm not advocating a gold standard. Just pointing out the fallacy in your argument. You don't even understand what price inflation is -- how can you understand basic monetary theory? You can't distinguish between falling and rising prices ... I'm done posting to you on the subject