Monday, February 7, 2005

ON GOLD AND GROWTH

During periods of very fast growth, the Gold Standard can be a drag on the world economy and cause deflation. As during 1873-1893 and 1921-1931.

Once off Gold however you have to tailor the money supply to fit the economic realities...



Paper money is fine as long as it's in sync with growth.....

In the 1990's Greenspan kept the "punch bowl" filled to over flowing, Ok fine...... but then came the bubble, the glut and the crash.

Yet. the punch bowl was still keep full....and even more "punch" was added....

Which proves that Greenspan can't hold his liquor! And probably explains why his latest speech was all mumbo-jumbo!