The irony of that is kind of painfully amusing, since a combination gold & silver standard was first suggested by people who were pro-inflation, because inflation makes paying back debt easier for the debtors (because you owe the same amount of $$ on paper, but the [x many dollars] you pay back are worth less than they were when you borrowed them). Because silver, unlike gold, was de facto fiat currency in the 19th century (i.e. a silver dollar in the 1880/90s was not actually a dollar's worth of silver if you melted it down, because things like the Comstock silver strike had pushed down the value of silver. It = a dollar because the US government said it did.)
no one seems to to have stopped and wondered where we'll get all those precious metals to back up the greenback
I'm pretty sure there literally isn't enough gold on the planet to back up all the money currently in circulation around the globe and move the international economy back to a gold standard. The global economy is too big for that.
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Date: 2010-07-21 03:28 pm (UTC)The irony of that is kind of painfully amusing, since a combination gold & silver standard was first suggested by people who were pro-inflation, because inflation makes paying back debt easier for the debtors (because you owe the same amount of $$ on paper, but the [x many dollars] you pay back are worth less than they were when you borrowed them). Because silver, unlike gold, was de facto fiat currency in the 19th century (i.e. a silver dollar in the 1880/90s was not actually a dollar's worth of silver if you melted it down, because things like the Comstock silver strike had pushed down the value of silver. It = a dollar because the US government said it did.)
no one seems to to have stopped and wondered where we'll get all those precious metals to back up the greenback
I'm pretty sure there literally isn't enough gold on the planet to back up all the money currently in circulation around the globe and move the international economy back to a gold standard. The global economy is too big for that.