I saw this on an anti-Ron Paul site today. Some marxist said if America goes back to the gold standard it would either have to buy up all the gold on earth or it would have to find a way to take money out of circulation in order for the amount of money to equal the amount of gold. Is this true?
As Ludwig von Mises said, it doesn't matter how much there is gold. If there would be only one ounce of gold in whole US, it is possible to tie dollar to that ounce. Gold would just be a little more valuable than now.
Flaw is in the word "equal". In what sense can the amount of money equal the amount of gold?
2 plus 2 can equal 4 because they are both numbers. Apples cannot equal oranges because they are two different things. They do however both have weight, so that the weight of a certain amount of apples can equal the weight of a certain amount of oranges. But what is being measured when we try to equalize the "amount" of money to the "amount" of gold? That they have the same weight? The same volume?
Maybe they mean the following: If we take all the dollars in existence, they add up to some number, say 50,000,000,000,000 . If we add up all the gold in possesion of the US govt, it adds up to a certain weight, say 1,000,000,000. Then for the govt to be able to exchange all the dollars in the world for gold, they can only do it if an ounce of gold will be exchanged for 50,000 dollars. But this is a mere mathematical fact, and can always be done. No need to take money out of circulation.
Maybe they mean that the price of gold will rise drastically. What of it?
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It's easy to refute an argument if you first misrepresent it. William Keizer
They probably mean that if we went back to the previous gold standard of a dollar = 1/20 oz. There are more dollars floating around now and at that rate it might add up to more gold than there is in existence.
So technically, that person is right, but they have no idea what people actually mean when they advocate a gold standard.
they said we would have an unfair fun advantage
OP has never read a word from Rothbard on the issue.
What do you mean i don't care how your day was?!