[pvn]

This topic came up on a mailing list I'm on, which is populated by people who are generally pretty smart. The topic of course wandered over to pros and cons of a gold standard in general, when this exchange came up:

[ QUOTE ]
>Something else to consider that the gold-backers must have an answer
>for: there is a finite amount of gold, and my bet is that its current
>value is drastically less than that of the global economy.

Another problem related to this is the 'value' of a countries economy. The UK for instance gathered a lot more gold and silver to it long ago than the US which is much younger. If we are stuck with the 'gold' standard then UK's value would always be greater than US and UK citizens would retain stronger buying power despite inflation because their 'gold' backed value would almost always be greater than a US citizen with the same relative amount of wealth. They have more gold per citizen so each citizen benefits from that. Of course no one in the US would be able to purchase US goods so their economy would collapse.

[/ QUOTE ]

The standard "zomg we'll run out of money" thing, which I addressed, but this follow-up left me completely flabbergasted. I asked the poster to elaborate and explain wtf he meant, but I haven't heard back yet. Anyone have any idea what he's talking about here? It seems he's trying to equate savings with production, on an aggregate scale (big fallacy there), and on top of that I think he's way off on his estimates of how much bullion the UK has in the first place (didn't they basically drain the treasury during WWII?).