After thinking about that question, my central reason for being pro gold backed dollar must be my loss of faith in the systems and methods of the Fed. Devaluation is just an outcome of a system that relies too heavily on human judgment. One act of poor judgment could spread the loss of faith beyond a few people like me. which is whats happening now...
The guideposts being used at the Fed are not well known or understood. The Fed has tons of data but decisions aren't based on a model, formula, or some other construct. They can't be. They admits it. Flexibility is an absolute must. It's all about making judgments. The Fed can't be confined to any model or formula. This makes for a faith-based system and a faith-based dollar.
The Fed pushes and pulls the economy by expanding/contracting money and credit. They are in the driver's seat. And the car (our economy) keeps swerving across the white line in waves that take us from shoulder to shoulder. We haven't fallen off the road and into the ditch, yet.
I'd rather put the economy back into the driver's seat. It seems that a dollar partially backed by gold would help put the economy back in charge of its destiny. The Fed would change or even be abolished. Good judgment about monetary situations would still be required, but sound money would provide a guidepost to the decision-making process about money and credit.
I believe a gold-backed dollar will be more stable. It will allay fears of foreign disinvestment, smooth out the economic swings, and trim the balance sheet by helping to eliminate debt.
The Fed cannot see that it is the cause -- and a subsequent reactionary to its own causes -- of boom/bust, deflation/inflation, recession/expansion, employment/unemployment, etc.
In summary, my rants aren't about the artifacts and outcomes of having/not having gold in a dollar. They are about changing the system to save us from a future that perpetuates cyclical extremes. A better system can result in artifacts and outcomes less stressful to the economy. That's the role for gold. I may not have it right. It's a tough subject to tackle.
regards
doug
The guideposts being used at the Fed are not well known or understood. The Fed has tons of data but decisions aren't based on a model, formula, or some other construct. They can't be. They admits it. Flexibility is an absolute must. It's all about making judgments. The Fed can't be confined to any model or formula. This makes for a faith-based system and a faith-based dollar.
The Fed pushes and pulls the economy by expanding/contracting money and credit. They are in the driver's seat. And the car (our economy) keeps swerving across the white line in waves that take us from shoulder to shoulder. We haven't fallen off the road and into the ditch, yet.
I'd rather put the economy back into the driver's seat. It seems that a dollar partially backed by gold would help put the economy back in charge of its destiny. The Fed would change or even be abolished. Good judgment about monetary situations would still be required, but sound money would provide a guidepost to the decision-making process about money and credit.
I believe a gold-backed dollar will be more stable. It will allay fears of foreign disinvestment, smooth out the economic swings, and trim the balance sheet by helping to eliminate debt.
The Fed cannot see that it is the cause -- and a subsequent reactionary to its own causes -- of boom/bust, deflation/inflation, recession/expansion, employment/unemployment, etc.
In summary, my rants aren't about the artifacts and outcomes of having/not having gold in a dollar. They are about changing the system to save us from a future that perpetuates cyclical extremes. A better system can result in artifacts and outcomes less stressful to the economy. That's the role for gold. I may not have it right. It's a tough subject to tackle.
regards
doug
