RE: Re: Re: Gold

["David Shemano" <dshemano@xxxxxxxxxx>]

Jim Devine writes:

<The supply of money also fluctuates despite the efforts to anchor it to the
gold reserve.>

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Where did I say, Wanniski say, or any other person who suggests that the Fed
should operate on a gold standard suggest that the money supply should not
fluctuate?  I specifically said that the money supply will fluctuate under a
gold standard in respond to liquidity demands.  The point is that the
decision of increasing/decreasing the money supply will be made by the
market, not the idiosyncracies of the Fed governors.

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But more importantly, the reason why they set up the Fed was
that despite the gold standard (which is supposed to stabilize the
economy)

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Where did I say, Wanniski say, or any other person who suggests that the Fed
should operate on a gold standard suggest that the gold standard will
stabilize the economy?  A gold standard will stabilize the value of the
currency, which will help facilitate market transactions, but the economy
will still be subject to fiscal policy, regulatory policy, war, natural
disaster, technological change, revolution, etc.

David Shemano