I’m not convinced that a return to sound money is possible. Our government is too big, our banking system too entrenched, to ever permit a reversion to gold.
But if you are going to attempt an intellectual assault on the gold standard, you can’t just point to price instability in the 1920s. The Austrians have been here before you—and they understand the period much better. And, more importantly, the value of a gold standard does not hinge on price stability in the first place.
CNBC NetNetThe Gold Standard and the Myth of Price StabilityJohn Carney | Senior EditorJohn makes two good points here. First, politics trumps economics. One has to realize that the advocates of sound money advocate not only a return to the gold standard but also 100% gold reserves to money creation. Even it were the greatest idea ever, it's not gonna happen due to vested interests. Not only does it knock down policy space for governments, limiting their power to affect their national economies, it also adversely affects profits of the financial sector by reducing the amount of rent that can be generated.
Secondly, if you are going to argue against a position or meet objections to you position, you should deal the strongest arguments that have been advanced. That's a reasonable demand.