An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
STEPHANIE KELTON: Well, we had eight depressions on the gold standard and zero off of the gold standard. It is a system that constrains you in a way. You have a flexible system today that provides you with policy space that you simply do not have when you’re on a fixed exchange rate system, a gold standard system, when you’re adopting a currency that you don’t control like the euro – those types of monetary systems, the gold standard and the rest, they place constraints on you that limit your fiscal space. And the reason it’s important is because when you have an economic downturn, and you inevitably will – every single market economy on the planet has cycles. We have booms and we have busts, every one, independent of the type of monetary system you have. So when that bust inevitably comes, you just won’t be able to respond effectively. Which is exactly why countries went off the gold standard every time they went to war and every time there was a serious economic downturn. They all go off gold. Every time. In other words, it works until it doesn’t work.
HARRY SHEARER: Got it.
Ms. Kelton is such a monstrous liar and fraud. Well of course, governments go off gold when the elite wants war. No mention, of course, that the dislocations complained about were caused by government actions in WWI with the follow up problems caused by more interventions and a gold exchange standard, not a "gold standard" whatever that means. Prior depressions were caused by fractional reserve banking. And of course, Ron Paul is proposing competitive currencies, not a "gold standard". I know. Picky picky picky.
If you MMTers weren't busy telling lies, you wouldn't be alive.
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STEPHANIE KELTON: Well, we had eight depressions on the gold standard and zero off of the gold standard. It is a system that constrains you in a way. You have a flexible system today that provides you with policy space that you simply do not have when you’re on a fixed exchange rate system, a gold standard system, when you’re adopting a currency that you don’t control like the euro – those types of monetary systems, the gold standard and the rest, they place constraints on you that limit your fiscal space. And the reason it’s important is because when you have an economic downturn, and you inevitably will – every single market economy on the planet has cycles. We have booms and we have busts, every one, independent of the type of monetary system you have. So when that bust inevitably comes, you just won’t be able to respond effectively. Which is exactly why countries went off the gold standard every time they went to war and every time there was a serious economic downturn. They all go off gold. Every time. In other words, it works until it doesn’t work.
HARRY SHEARER: Got it.
Ms. Kelton is such a monstrous liar and fraud. Well of course, governments go off gold when the elite wants war. No mention, of course, that the dislocations complained about were caused by government actions in WWI with the follow up problems caused by more interventions and a gold exchange standard, not a "gold standard" whatever that means. Prior depressions were caused by fractional reserve banking. And of course, Ron Paul is proposing competitive currencies, not a "gold standard". I know. Picky picky picky.
If you MMTers weren't busy telling lies, you wouldn't be alive.
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