Danny, > > So the ultimate result is pretty much the same. > Without extra money supply the average person would now be able to buy 10 > times more shoes for his money, because they have become cheaper. > With the extra money supply the average person now has 10 times more money > to buy these shoes which are still selling at the same price.
In the real world people MUST buy 10 times more shoes because the quality is so low to ensure ongoing consumption, because the money supply keeps growing and despite everyone earning more, somehow everyone ends up owning less and owing more. The reason for that is that we are all paying the interest on governement debts and interest on bank loans, factored into the price of everything we buy. As you pointed out, a gold standard would limit the possible amount of interest to the roughly 2% of new gold mined every year plus the relative amount of productivity gains. So, in fact I would happily deposit my gold with a bank at no interest, because I could assume that if I withdraw it in 5 years I will be able to buy more for it. At the same time the bank can loan my gold out at 2% effective interest, knowing that productivity gains and falling prices will take care of the depositors. The only people that should be unhappy about such an arrangement should be bankers, don't you think? Cheers, Robert. budget & privacy website hosting http://www.cyberica.net start a profitable online business http://www.cyberfrontier.biz budget domain registrations http://www.u2planet.com --- You are currently subscribed to e-gold-list as: [EMAIL PROTECTED] To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
