Very interesting, but… sticking to gold convertibility would have yielded an unknowable alternative set of outcomes. Simply pricing everything in gold doesn’t get you back to “the gold standard.” I suspect capex would have been a lot slower and same for “progress”… and who’s to say if that would have been good or bad.
I would like to commend Mr. Rubino for making such an easy-to-understand explanation of the effects of inflation on our economy and fiat currency. I have attempted to do so in a number of Substack posts, but his version is far easier to understand. Every American should read what he has written.
In other words, going off the gold standard stopped real economic growth.
And that makes intuitive sense because the only reason why the gold window “had” to be closed is because of uneconomic “investments” (defined to be investments no rational, private, free market investor would make) in the form of “broken window” spending on wars and redistribution transfer payments.
That gives one a good idea of what a sound-money world would look like. Basically nothing could be done that couldn’t or wouldn’t be paid for in real time.
Want to go to war? Okay, here’s your annual tax increase assessment starting immediately. And if you borrow the increases you’ll pay increasingly higher interest rates.
Want the government to do that screamin’ “good idea” to help society our the economy, that no one wants to pay for? Okay, we’ll set up an automatic payroll deduction plan for your convenience.
The Fed could no longer be the lender of last resort, and the government couldn’t be the spender of last resort.
By extension, everything would be different, and presumably better.
Thanks to the fact that the Mideastern oil producers don't have a clue about economics - rather than conserve their depleting resource and thus maintaining stable purchasing power for their petroleum exports they have pumped "all-out" for most of the last 50 years to support a profligate lifestyle for their ruling families. Its only thanks to the ever-decreasing real cost of energy that the "West" hasn't been in a visible Depression for at least since the collapse of the "Dot-Com' Bubble. We have however been in an "invisible" one - masked by a monumental increase in debt.
Excellent article. As a follow-on, can we explore the relationship between Hamiltonian economics / the American system of political economy and the greatest periods of US economic prosperity?
This Keynesian-Austrian stuff is a false dichotomy intended to distract from true and broadly experienced wealth generation.
Great article, John, I hope more eyes with ayes can view it!
Your book The Money Bubble with James Turk is a favorite.
Perhaps you could do (or have done already?) an article on who has the gold that supposedly once was in Fort Knox (Chinese?) and why it has never been audited and the amount of gold objectively verified?
I am not against it but it isn't going to happen anytime soon no matter what happens in the financial world. So, I think I'll concentrate on how to navigate the world of fiat money and keep myself upright the best that I can. Those of us who are attentive to such matters will fare better than those who are stuck on full time party mode.
Very interesting, but… sticking to gold convertibility would have yielded an unknowable alternative set of outcomes. Simply pricing everything in gold doesn’t get you back to “the gold standard.” I suspect capex would have been a lot slower and same for “progress”… and who’s to say if that would have been good or bad.
I don’t disagree with it.
BUT now chart the wages of the average against gold.
And I guess that’s why it was the desire of the foxes to shed the shackles of restraint.
I would like to commend Mr. Rubino for making such an easy-to-understand explanation of the effects of inflation on our economy and fiat currency. I have attempted to do so in a number of Substack posts, but his version is far easier to understand. Every American should read what he has written.
In other words, going off the gold standard stopped real economic growth.
And that makes intuitive sense because the only reason why the gold window “had” to be closed is because of uneconomic “investments” (defined to be investments no rational, private, free market investor would make) in the form of “broken window” spending on wars and redistribution transfer payments.
That gives one a good idea of what a sound-money world would look like. Basically nothing could be done that couldn’t or wouldn’t be paid for in real time.
Want to go to war? Okay, here’s your annual tax increase assessment starting immediately. And if you borrow the increases you’ll pay increasingly higher interest rates.
Want the government to do that screamin’ “good idea” to help society our the economy, that no one wants to pay for? Okay, we’ll set up an automatic payroll deduction plan for your convenience.
The Fed could no longer be the lender of last resort, and the government couldn’t be the spender of last resort.
By extension, everything would be different, and presumably better.
Thanks to the fact that the Mideastern oil producers don't have a clue about economics - rather than conserve their depleting resource and thus maintaining stable purchasing power for their petroleum exports they have pumped "all-out" for most of the last 50 years to support a profligate lifestyle for their ruling families. Its only thanks to the ever-decreasing real cost of energy that the "West" hasn't been in a visible Depression for at least since the collapse of the "Dot-Com' Bubble. We have however been in an "invisible" one - masked by a monumental increase in debt.
Excellent John. Yep. A silver quarter is $5.34 as of now. So one can actually buy a gallon of gas. Oil actually went down in price.
Excellent article. As a follow-on, can we explore the relationship between Hamiltonian economics / the American system of political economy and the greatest periods of US economic prosperity?
This Keynesian-Austrian stuff is a false dichotomy intended to distract from true and broadly experienced wealth generation.
John, fantastic write-up! It would be helpful to provide context for how the graph figures are calculated. But the content is excellent! Thank you
Re: the U.S. economy:
"All That Glitters Is Not Gold, It's Funny Money"
Great article, John, I hope more eyes with ayes can view it!
Your book The Money Bubble with James Turk is a favorite.
Perhaps you could do (or have done already?) an article on who has the gold that supposedly once was in Fort Knox (Chinese?) and why it has never been audited and the amount of gold objectively verified?
Get free, stay free.
I am not against it but it isn't going to happen anytime soon no matter what happens in the financial world. So, I think I'll concentrate on how to navigate the world of fiat money and keep myself upright the best that I can. Those of us who are attentive to such matters will fare better than those who are stuck on full time party mode.