Governments Lie. They Cheat. They Steal.

Monday, December 27, 2010
By Paul Martin

How to Defend the Free Market Gold Coin Standard: Stop Defending the Government Counterfeits

by Gary North
LewRockwell.com

This was posted on one of my site’s discussion forums on the night before Christmas:

Gold based economies more volatile than central bank fiat based money economies??

Roubini: On a return to the Gold standard

“When you had a traditional gold standard, boom and bust with severe swings in economic activity were the norm – really big ones. It was only once we moved to fiat money that central banks were able to smooth the business cycle, and make it less volatile, as we did during the financial economic crisis.” ~ Nov 2010

Where do they get these ideas? Or rather where did I get the idea the boom and busts would be smaller in a gold based society? I know I have heard this multiple times.

But they did have bank panics in the 1800s. So maybe they are right?

My bet is that the booms and busts will occur in a gold based economy but they will not be so big and wild or last as long as in a fiat money based economy.

The person who posted this is well meaning. He senses that Roubini is wrong, but he is not sure exactly why. He is typical of the overwhelming minority of those who think that a gold standard would be a good idea. He means well, but, as they say, he doesn’t get it.

The Rest…HERE

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