RickRussellTX

A Million Bucks Ain't What It Used to Be

"f the US was to have today the rate of exchange for a dollar that you historically suggest, we would need 726 billion ounces of gold per year; 15 trillion dollars at 4.84 oz/100 dollars."

Whatever you may think about the gold standard, I think you missed the point of the article. He's trying to make the point that the gold standard was a way to set the value of a dollar -- we wouldn't need to produce 15 trillion dollars today, since the dollar would be more valuable in real terms if it was calibrated to something.

The problem (and I'm no economist, just me thinking on these matters) is that any commodity you choose to use as a dollar index is going to introduce strange unintended consequences. If you set the dollar rate at $1.00 = 10 kilowatt hours, what happens when companies can't buy supplies at a cost that will meet that pricing goal? They close up shop and stop producing electricity until Congress sets a new threshold?