Posted: Fri Feb 11, 2011 8:16 pm
Farnhamia wrote:The Merchant Republics wrote:Am I not mistaken that 1880-1895ish we were on a Bimettalic currency?
Really it doesn't matter to me, I'd say the mere fact that humanity was on the gold standard since the dawn of markets and that fiat currency historically has quickly failed is enough to say something, Modern markets keep the fiat only because of the constant increase of wealth matching the rise of inflation.
But in 1900 we went onto just gold. Like I said to Mercator, what about all the ups and downs after then?
Gold isn't perfect. It doesn't stop the business cycle, just move it towards a better status quo and enables faster economic growth in the boom times.
However the recessions on gold were quite light and usually kept along with relatively long periods of economic stability, most of them were momentary panics caused not by monetary infractions but significant market changes and disasters.