Friday, February 8, 2013

Why Central Bankers Don't like Gold Standard?


Gold as money. Why not?
Central bankers recognize the harm of counterfeiting. So they make bills/monies with security features with a hope that no rogue parties can counterfeit it.

Gold cannot be counterfeited but central bankers refuse to use it. Instead they use paper bills. They justify it by reasoning that market liquidity can't be provided by scarce supply of gold. Gold is, for them, cumbersome to economic growth . Only bills can. Sounds logical is it not?

But wait. If the reason of security features in bills is to thwart counterfeiters, how exactly they suppose to sustain market liquidity using the same bills? The only answer is to make more of those bills! What? Sounds like a counterfeiting, doesn't it? A legalized counterfeiting.

The real reason bankers don't want gold is not actually liquidity problems but gold is impossible to counterfeit. Scumbags, aren't they?
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