To: mishedlo who wrote (53756 ) 2/13/2006 5:13:30 PM From: gpowell Respond to From Heinz...there have been incidences in the past when large gold discoveries led to some monetary upheaval, e.g. in 17th century Spain. still, when one looks at the US quasi gold standard of the 19th century, most economic upheavals were clearly the result of some sort of state intervention….. …and yet, economic growth was faster than during the fiat regime ..and the aggregate level of prices stayed stable over the entire century. in modern times, the world's stock of gold grows at about 2% p.a. as Fekete explains, there is no limit to the marginal utility of gold - just because you own say 10 gold coins, your desire to own an 11th isn't less than your desire to own a 10th was back when you owned not to mention, the State finds it impossible to take on ever more debt. and yes, it's true that fractional reserves banking was a feature of some of the 19th century financial crises. nevertheless, most of those crises were met with a laissez faire approach, and they didn't last long as a result. The first US economic crisis that the State tried to combat with interventionism was the Great Depression. it became such a disaster precisely BECAUSE the state and the monetary authorities intervened.
