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Re: What do I think of the World Bank President's call for discussion of a new gold standard?
couple thoughts:
1) Hasn't the US dollar been effectively a petro-currency already, since 1971?
2) If you thought that a gold standard was deflationary b/c supplies of it grew slower than the underlying economy, how deflationary would an oil-backed currency be post-peak oil?
3) Maybe #1 & #2 just answered why the dollar is such a shit show since 2000?
4) Someone made the great point that you can't have a commodity that you use as a commodity?
5) The US has to deflate massive debt against something; if you deflate it against oil or food, you starve the population. If you deflate it against silver, you make electronics unaffordable. If you deflate it against gold, you make a few concentrated physical gold holders really wealthy at the expense of the debt holders, and people can hock their wedding rings to pay off their mortgages. Gold's biggest advantage continues to be that it is used for nothing practical, & that it is never used up.
couple thoughts:
1) Hasn't the US dollar been effectively a petro-currency already, since 1971?
2) If you thought that a gold standard was deflationary b/c supplies of it grew slower than the underlying economy, how deflationary would an oil-backed currency be post-peak oil?
3) Maybe #1 & #2 just answered why the dollar is such a shit show since 2000?
4) Someone made the great point that you can't have a commodity that you use as a commodity?
5) The US has to deflate massive debt against something; if you deflate it against oil or food, you starve the population. If you deflate it against silver, you make electronics unaffordable. If you deflate it against gold, you make a few concentrated physical gold holders really wealthy at the expense of the debt holders, and people can hock their wedding rings to pay off their mortgages. Gold's biggest advantage continues to be that it is used for nothing practical, & that it is never used up.
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