The Keynesian economists claim that gold standard systems have historically caused “booms and busts.” Recently, I asserted that no major economic event was caused by a currency of stable value. The purpose of a gold standard system is to provide a currency of stable value – as stable as can be achieved in our imperfect world – and, for the most part, it achieved this goal over a period of centuries.
Did “booms and busts” take place during times when a gold standard system was in use? Of course. These were caused for all manner of reasons, none of which include a currency that was stable in value.
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