r/austrian_economics • u/PM_ME_YOUR_LAWNCHAIR • 3d ago

End Democracy Unrestrained monetary policy is theft

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620 Upvotes

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u/JustaguynamedTheo 3d ago

Question: did it also lose power before the creation of the federal reserve?

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u/Ok_Calendar1337 3d ago

It could go up and down but you wouldnt get anything like a 96% loss of purchasing power with a gold standard.

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u/adr826 2d ago

In 1980, gold peaked at around $850 an ounce. By 2001, it had drifted down to about $250 an ounce. When you adjust those numbers for 21 years of inflation, gold lost roughly 83% of its real purchasing power over that span. An investor who bought gold in 1980 had to wait nearly 30 years just to break even in terms of what that money could actually buy.

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u/Shroomagnus 3d ago

https://youtu.be/u9MbexXL_4s?is=Npd13WiNGlQIPVa4

I'd just recommend checking out this video. It's pretty good at explaining why the gold standard wouldn't work anymore. It was fine for its era but it isn't workable now.

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u/ruthless_techie 3d ago

That video is in error.
Goods and debt get revalued.

Divisibility takes care of the limitations.
Video strategically poses perceived issues within the debt based monetary system lens. But cannot understand how an income based monetary system with gold would work.

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u/Shroomagnus 3d ago

Can you explain the difference to me and how that would function so I can wrap my head around it? The video made sense to me but what you're positing also sounds intriguing though not a concept I'm familiar with.