Jim Grant Calls for the Gold Standard
Jim Grant called for the gold standard during a speech at the Fed. You can read the speech on John Mauldin's website by clicking HERE. In fact, I strongly suggest you do read the speech.
You should also check our Mauldin's remarks at the end of his re-printing of Grant's speech. Especially note this comment. Mauldin is explaining why he does not favor a return to the gold standard:
...neither do I have a starry-eyed yearning for the chaos of the gold-standard period. There was a reason that hard-money men like Glass helped formed the Federal Reserve.
What exactly that "reason that hard-money men like Glass helped formed (sic) the Federal Reserve" is, Mauldin doesn't say. As for the "chaos" of the gold-standard period, that would be not only an exaggeration, but comparing it to our subsequent experience under the Federal Reserve, I'm not sure what Mauldin is complaining about. Indeed, in Grant acknowledges in his speech that the gold standard wasn't a perfect system.
(This sort of reminds me of Churchill's comment about Democracy being a "very bad" form of government - except that all the others were so much worse.)
And I would definitely not characterize Grant as "starry-eyed" in his promotion of the gold standard.
So, besides knowing that Mauldin doesn't prefer the gold standard - a point he has made many times - I'm still at a loss to understand what sort of monetary system he would suggest. And the important point here is that we need reform of the monetary system in the worst way. Without that, I don't think we'll get out of our current crisis any time soon, or in a way that most of us would want.
In any case, do yourself a favor and read Grant's speech. Focus especially on his comments about deflation. You probably have to understand a bit about history and the gold standard to fully appreciate what he says about deflation. But, even if you don't have the knowledge, you should know that the deflation he notes from 1879 - 1914 had the net effect of making the country wealthier. It did this by making the money we had worth more, that it, you could purchase more with your money over time. Contrast that with what we now have - you can purchase less with your money over time.
Then ask yourself which you'd prefer now.
If you prefer a system where you can save money and not only will your money not lose value over time, but will be able to purchase more in the future than it does now, then you're not someone who understands why we need to reform the monetary system.
You should also check our Mauldin's remarks at the end of his re-printing of Grant's speech. Especially note this comment. Mauldin is explaining why he does not favor a return to the gold standard:
...neither do I have a starry-eyed yearning for the chaos of the gold-standard period. There was a reason that hard-money men like Glass helped formed the Federal Reserve.
What exactly that "reason that hard-money men like Glass helped formed (sic) the Federal Reserve" is, Mauldin doesn't say. As for the "chaos" of the gold-standard period, that would be not only an exaggeration, but comparing it to our subsequent experience under the Federal Reserve, I'm not sure what Mauldin is complaining about. Indeed, in Grant acknowledges in his speech that the gold standard wasn't a perfect system.
(This sort of reminds me of Churchill's comment about Democracy being a "very bad" form of government - except that all the others were so much worse.)
And I would definitely not characterize Grant as "starry-eyed" in his promotion of the gold standard.
So, besides knowing that Mauldin doesn't prefer the gold standard - a point he has made many times - I'm still at a loss to understand what sort of monetary system he would suggest. And the important point here is that we need reform of the monetary system in the worst way. Without that, I don't think we'll get out of our current crisis any time soon, or in a way that most of us would want.
In any case, do yourself a favor and read Grant's speech. Focus especially on his comments about deflation. You probably have to understand a bit about history and the gold standard to fully appreciate what he says about deflation. But, even if you don't have the knowledge, you should know that the deflation he notes from 1879 - 1914 had the net effect of making the country wealthier. It did this by making the money we had worth more, that it, you could purchase more with your money over time. Contrast that with what we now have - you can purchase less with your money over time.
Then ask yourself which you'd prefer now.
If you prefer a system where you can save money and not only will your money not lose value over time, but will be able to purchase more in the future than it does now, then you're not someone who understands why we need to reform the monetary system.
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