Quote from: billyjoeallen on April 16, 2014, 01:48:22 AM

Quote from: Mervyn_Pumpkinhead on April 16, 2014, 01:19:12 AM

First, where the hell did this myth come from that it is a good thing when a currency is tied to gold.

From numerous members of the Austrian School of economics (Mises, Hayek, Rothbard, etc). Alan Greenspan was also a "goldbug" back when he was an acolyte of Ayn Rand.

The central premise is that Central Bankers cannot know how much liquidity the market needs because they don't have the ability to collect and process the information that millions of local buyers and sellers have. The natural scarcity of gold prevents them from injecting too much liquidity, which causes an unsustainable boom, which causes a bust.

Busts in fact are corrections, times where capital is transferred from incompetent managers to competent managers in order for that capital to be used in more productive ways.

In short: Central Bankers with good intentions screw things up. Central Bankers with bad intentions screw things up. The free market also screws things up, but not as badly as Central Bankers do.

I am even more liberal (in the economic sense) than the goldbugs. I think there should be no legal tender and that the free market should determine what the most liquid commodity is, and we should call that commodity "money".

Thank you for resuming my thoughts. My english is limited and i m getting frustrated. Just want to add that currency was created because gold was not practical. That never was intentions to substitute for gold. When it does, it has always fails very quick. The marker always have the last laugh