Quote Originally Posted by gugi View Post
I would like to point out that correlation is very different from causality.

Just a hypothetical scenario - suppose all exchange in the economy is converted to gold, silver, platinum and diamonds. What happens when somebody discovers a gold vein and opens a mine - does that automatically cause inflation? Or what if the natural resources become prohibitively hard to exploit further - does that put a cap on the economy, or you continue to grow it by exchanging your bread for 1/2 oz of gold instead of the 1oz from the year before.

I looked quickly over the pdfs, and find them extremely superficial. Somehow conversion to gold backed money is viewed as a cure for inflation. Just consider the hypothetical scenario above. If the federal reserve banks can currently get together to steal people's money through inflation, you would think that once they have gold backed money they will be unable to influence the availability of gold? And just don't tell me that the good government will make sure bad things won't happen.

I also think living in Utopia is great. The only problem is that it doesn't work.
True. It dosn't matter what you base your dollars on it can all be manipulated like our oil prices are now. The gold standard though can not be manipulated as to the scale we have today with oil, or faith based currency printed at will. I don't believe going back to the gold standard would work like everyone expects though.