Re: Explain to an idiot the benefits of going back to the Gold standar
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but my point is you are saying gold standard the money would undergo deflation (same money supply, increasing economy), I'm just saying that gold mining would be an inflationary effect, and the greater the amount of intrinsic deflation, the more profit there would be in gold mining(inflation.).
so it seems to me the free market would find the balance there.
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You're dealing with a gigantic economy which operates on a scale that would have been unimaginable as recently as a century ago, which directly impacts 300 million people and currently has an M0 of 700 billion/M2 of 7 trillion. When proposing to switch it to a metal the total sum of whose mined deposits on the planet - not just in the US, mind you - total $2.5 trillion or so, you're going to have to do way better than "well, the free market will come up with more gold mines".
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b) in your scenario gold would have to be increased in value, not decreased in value.
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The only way to physically do what you're proposing is to decrease the value of gold, period.
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