Home > Miscellaneous Musings > Krugman descends deeper into the darkness

Krugman descends deeper into the darkness

We all know Krugman is an insane zealot-socialist paper-pushing psycho.  But he extends his madness even further into the darkness of Hell with this piece:

So Robert Zoellick wants us to return to return to a modified gold standard. Brad DeLong pronounces him the stupidest man alive; that’s much too kind.

I mean, look at our current situation. On one side, we’re witnessing a steady slide toward lower inflation, tracking almost perfectly Japan’s slide toward corrosive deflation…

On the other, we have sharply rising gold prices, reflecting some combination of Chinese demand and Glenn Beck.

So put this together: doesn’t this strongly suggest that we’d be facing very strong deflationary pressure if we had been on a gold standard? Yes, gold demand is endogenous – it might be lower if you knew that the Fed and the ECB were securely bound by golden fetters. On the other hand, there would be a lot more demand for gold reserves.

The question I’d ask is, what problem does Zoellick think gold would solve?

The descent into a Dark Age of economics continues.

The gold price is going up because of some combination of Chinese demand and Glenn Beck?  What about the $500 billion in newly ‘minted’ confetti-toilet-paper dollars the Fed has just spat out of the system?  That doesn’t have anything to do with it, does it?

A monopoly fiat paper dollar is no match for a form of money used for 4500 years that the producers choose voluntary to accept as money in exchange for their precious labor.

If prostitutes in Pompeii near Mt Vesuvius in AD 79 were only willing to accept gold and silver for their services and laughed at exchanging their services for toilet paper, why were they wrong then and Krugman is right now?

We will find that the merchants, prostitutes and farmers of yore were much, much smarter than the government bureaucrats, corrupt banksters and shysters like Krugman are today…

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