"It depends on your definition of failure. No nation has ever been able to sustain a currency backed by gold or silver; that's just a fact. The reasons include war (not only to attack but also defend), speculation (forced the British off the gold standard in 1931), gold and silver discoveries, and international trade. The same forces that forced every nation in history to abandon currency backed by gold or silver are still in effect today. You can read about all this here."Yes it does depend on your definition of failure.
"Now you are contradicting your expert Gary Korolev who states early in his lecture that while England was on the gold standard the many central-like banks were using fractional reserve banking to create money so the King could go to war. Okay, but to do away with fractional reserve banking means banks can't loan out depositor's money to make money, and if banks can't loan out money then they'll have to charge to store deposits. So where do people and businesses go to get loans that won't involve either leverage or fractional reserve banking? It can be done, but it makes it hard for individuals and businesses to borrow money and that slows economic growth.
You say that "politicians can't play their games of deficit spending, war..." So if a country is attacked as many were in WW2, they won't have the money to defend themselves. Of course, if such a country is defeated, then its gold backed money is worthless because the winner will take the gold reserves. Either a nation goes off the gold standard in time of war or it risks defeat in which case its money is worthless anyway. Because only the dead have seen the end of war, currency backed by gold or silver is unsustainable; it's a proven historical fact."No monetary system is without challenges. Just look at the mess we are in today with our current system. You have avoided recognizing a very important and significant point that I made again in my last post. That point being that
EVERY FIAT CURRENCY IN THE HISTORY OF THE WORLD HAS FAILED.
link:
http://www.rapidtrends.com/examples...ughout-history-could-the-us-repeat-this/ Below is an exerpt from the article:
"The history of fiat money, to put it kindly, has been one of failure. In fact, EVERY fiat currency since the Romans first began the practice in the first century has ended in devaluation and eventual collapse, of not only the currency, but of the economy that housed the fiat currency as well." Read that more than once and let it sink in. It is obvious that we (USA) are in for alot of unpleasant changes.
"While the graphs are similar in shape, one is for a commodity and one is for the money supply. It's comparing apples and oranges and trying to draw a connection that doesn't exist."With all due respect, your reasoning for discounting the similarities between the two charts is totaly without merit. If I use your logic, you couldn't even compare charts of the prices of apples vs a chart of the price of oranges. Certainly you know better. The US Monetary Base chart that I provided is a text book example of a
BUBBLE.
MacLorry -
I think we both know that we were never going to change the others mind. My motivation for joining in on this discussion was to present a different side of the arguement than the one you were promoting. I think there are many that will read our discussion and bennefit from our exchange. Having only one side of the story is seldom a good thing. We have discussed this topic to the point where I think it is of no value to continue. While we still disagree on many points, I thank you for the discussion. Best of luck with your investing strategies.
