> Gold is just such a weird special-case thing in economics that it seems very hard to draw interesting conclusions about anything else when you're opening up the discussion with using gold as a benchmark.
Especially since the gold standard did nothing to help in stabilizing currencies:
even over the long-term, per Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976:
> Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning.
Especially since the gold standard did nothing to help in stabilizing currencies:
* https://archive.ph/FWKcL / https://www.theatlantic.com/business/archive/2012/08/why-the...
Is not an hedge against inflation:
* https://www.nber.org/papers/w18706
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789
even over the long-term, per Roy Jastram's The Golden Constant: The English and American Experience 1560 to 1976:
> Andre Sharon, head of the international research department at Drexel Burnham, Inc., notes, “the value of gold essentially derives from its capacity to preserve real capital and purchasing power.”† I select this particular quotation because of the prestige of the organization and the position of the spokesman, but statements in this vein can be found in great numbers. They can be traced back for generations and in many countries. How can this proposition so contrary to statistical fact become so widely believed and quoted? Possibly because gold has preserved capital in cataclysmic cases it is easy to infer that it can be trusted to do the same in less severe circumstances. To extrapolate from gold’s protection in singular catastrophes to its use as a strategy against cyclical infation is an example of faulty inductive reasoning.
* PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
* Via: https://www.pwlcapital.com/will-gold-save-the-day/
Having a fixed currency base can turn economic downturns much worse, as happen in the Great Depression:
* http://www.nber.org/chapters/c11482
With countries only starting to recover once they left it:
* https://delong.typepad.com/delong_long_form/2013/10/the-grea...