← Back to context

Comment by PaulDavisThe1st

16 days ago

Congrats on missing my point.

  1. old situation: currency backed by full (gold) reserve
  2. actual political decision: currency no longer backed by full reserve
  3. result: currency no longer backed by full reserve

  1. possible political decision: return to currency backed by full (gold) reserve
  2. possible political decision: currency no longer backed by full reserve
  3. result: currency no longer backed by full reserve

To whatever extent government could return a full-reserve backed currency, government can move away from that again. Thus, there's no builtin security for anyone in a return to a full reserve backed currency.

If no government in the history of the world had ever done this, then arguing for a full-reserve backed currency might have a bit more weight. But they have, and it really has done.

2 comments

PaulDavisThe1st

Reply
tastyfreeze  15 days ago

Your first point is wrong. Before 1913 gold and silver coins were the money in peoples pockets. Government produced the coins of known weight and purity. After 1913 paper bills were produced with partial reserve. The US has never had a full reserve paper currency. Step one of going to gold backed paper always comes with printing more paper than there is gold. Wanting to spend more money than they have is the reason every time a government debases its money.

Regardless, I get your point that political decisions ruined it. It is clear that government cannot be trusted to maintain a constant unit of measure that money should be. So, would you agree to an amendment to separate economy and state? Require government to produce coins of known weight and purity and that is it. If they want more money to spend they will have to extract it as taxes.