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It matters not what the money is backed by - what matters is who controls the quantity of it in circulation.
That is where it's value come from, gold backed money is technically no better than air because gold is so maliable it can be stretched to cover as much money as we pretty much want.
When gold was used in the past they used alot of gold in the currency, this meant more and more needed to be constantly dug up causing a constant short supply
I am a major Ron Paul fan, but in this case ROn needs to look a little deeper and see the reason why gold worked in the past.
All AMerica really needs is a currency issued by the government, and wow look at that no national debt because the government has to pay off a private corporation - but then ofcorse all the politicans investments would also be gone..
THINK ABOUT THIS FOR A SEC: The government issues the currency, they spend the currency on the country, this is turn creates jobs and passes the money on to the people - The government owes nobody anything, the people have money.
Private corporation lends money to the government
Originally posted by mileysubet
Well I would assume (I am no financial genius) that the most devastating downfall would be the fact that we don't have enough gold to back or current dollar value in the reserve....
Fiatmoney is not the problem.
Gold or the gold standard will not prevent a bubble in the housing market, nor in other investments.
We allowed them to grow to big to fail, and now they suck us dry, because we had to bail them out.
A goldstandard cannot and will not prevent this, but good regulation does.
Originally posted by Misoir
reply to post by saabacura
Actually no he has not, what Paul has said is that the Federal Reserve through the use of interest rate maneuvering is able to cause the boom and bust cycle, as does all Austrian School Economists, because it fosters an environment of debt and mal-investment which would otherwise not be made. Through these mal-investments the results are obvious; you create bubbles which must then burst. By extending periods of low interest rates, rather than allow the market set the rates, you create the systemic threats to the economic structure.
The thrust of the Austrian theory of the business cycle is that credit inflation distorts this process, by making it appear that more means exist for current production than are actually sustainable (at least in some renditions; see Hülsmann  for a "non-standard" exposition of ABCT). Since this is in fact an illusion (printing claims to property ["inflation"] is not the same thing as actually having property; see Hoppe et al. ), the endeavors of entrepreneurs to create a structure of production not reflecting actual consumer time preferences (as manifested in available savings for the purchase of producer goods) must end in failure.
I have provided you so far with 4 links, 1 which will help you understand a transfer to the gold standard and 2 which explain the Austrian Business Cycle. Since you have obviously failed to read even the ones on the business cycle and instead intentionally perpetuate this misinformation based upon a lack of clarity and understanding of the issues at hand, which I have attempted to help you resolve, no longer will I waste my time here and would encourage others not to as well.
Originally posted by saabacura
With gold standard, money value never changes.
Originally posted by Miraj
reply to post by saabacura
While I am generally a huge fan of Ron Paul..
I cannot agree with an outdated concept such as a gold standard.. The way our economy works now, it simply would not function IMO.
Originally posted by camaro68ss
I dont buy the " we dont have enough gold to back" argument. Why cant you make $100 bill = 1 grain of gold or 1/2 grain of gold. there, done