Today the Fed is 100 years old

Originally posted by no1marauder
It is a strange idea to tie your nation's level of economic activity to how much of an essentially useless metal can be pulled out of the ground.

Gold has many uses. http://geology.com/minerals/gold/uses-of-gold.shtml

Originally posted by dryhump
Gold has many uses. http://geology.com/minerals/gold/uses-of-gold.shtml

The article says its "primary use" is in jewelry and its second most use is as a financial reserve. All other uses put together are trivial.

Essentially it has no serious intrinsic value.

Originally posted by no1marauder
The article says its "primary use" is in jewelry and its second most use is as a financial reserve. All other uses put together are trivial.

Essentially it has no serious intrinsic value.

The issue is constraint. When on the gold standard they were restrained from spending too much. Now nothing restrains them.

Originally posted by whodey
The issue is constraint. When on the gold standard they were restrained from spending too much. Now nothing restrains them.

The issue is that the prior system was completely illogical and artificial. Tying the currency to a metal makes no sense. Arbitrarily restraining the growth of currency in times of growth is senseless and destructive to the economy.

I wish I could find the link, but in a prior discussion I posted economic growth statistics which showed that growth since the Fed was created was about double in real terms annually then in the 100 years before. And economic depressions, though present, occurred far less often. The Fed has done a decent job though I wouldn't mind economic policy being more in the hands of our elected representatives than in elitist bankers.

I have a thread coming about the Fed. I decided not to start it around Christmas and save it for the cold dead winter. Democrat, republican - it doesn't matter.

Originally posted by whodey
The issue is constraint. When on the gold standard they were restrained from spending too much. Now nothing restrains them.

The restriction is not on "spending", but on the amount of currency available. Dropping the gold standard allowed the Fed to control the money supply, which means they can control inflation. The rate of inflation has not gone above 4% since 1991, but I'm sure your blogs will tell you those statistics are all lies.