Yes.Miss_Faucie_Fishtits wrote:Yes..... which will result in global deflation and this isn't good. Lookie here.......noddy wrote:might be a dumb question, im full of dumb.
why exactly is their not enough gold ?
wont it just get more expensive when the world economy grows ?
"......It's a sort of Malthusian problem: production grows geometrically (if not exponentially) while metal supplies grow arithmetically if at all. There is no diminishing return in the mining of fiat money, no environmental depredation, no slave labor, no need to go to war to get fiat money. Fiat money has its temptations, but like most gold bugs, you don't even acknowledge that there are two pans on the gold standard scale. Metal-backed money has lots of negatives, chief among them the inability to keep up with the output gap....."
Thanks for the link.
On the other hand, I don't think that the Fed should be setting the prime lending rate, rather it should be determined by some free market price discovery mechanism.