Some fun facts you probably didn't know about the gold standard:

(1) It's heyday was the the middle ages:
(2) It was abolished by the Federal Reserve Act:
(4) Or was it just after the Civil War?
(5) Anyway, despite that gold continued to be held by the public until Ronald Reagan confiscated it:
(6) Reagan had all the confiscated gold put in Fort Knox. That's also where they keep gold from other world central banks:
(9) Fortunately the Fed has recently decided to revive it!
(10) With twitter, every day is April Fool's day!
(11) (But the opium bit is actually true.)
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More from @GeorgeSelgin

2 Apr
My first, and most complete effort to explain why a stable NGDP path is better than a stable P path is here: amazon.com/Less-Than-Zero…
Don't let the title mislead you: when I write it in the 90s I was responding to the then-popular Monetarist ideal of a stable price level. So I compared it to a policy that had NGDP grow steadily with weighted factor input. That would mean deflation roughly = -TFP growth rate.
Read 10 tweets
28 Mar
Sometimes I welcome a tweet despite heartily disagreeing with it. This one serves the very useful purpose of exemplifying just where many bitcoiners' understanding of monetary economics goes awry.
Basically, whether an asset serves *any* of the three listed "monetary" roles has NOTHING to do with its market value. I repeat: Nothing; nada, zilch, diddly-squat.
Of course, an asset has to retain or gain value over time to be a decent store of value. But an asset can achieve an arbitrarily high value yet fail to meet this requirement. That's as obvious as saying that, no matter how high it's price gets, it might yet fall.
Read 8 tweets
27 Mar
Especially in its post-1970s US revival, Austrian economics has been identified with free-market ideology. This identification explains both its popular success and its poor reception by the academy and among professional economists generally.
It also explains why self-styled "Austrian economists" are now a dime a dozen. To successfully market oneself as such among the booboisee, one need only denounce the Fed and gov't generally, and sing the praises of AU or BTC; no need to know much economics, Austrian or otherwise.
The difference between Austrians economists who have earned the right to refer to themselves as such and the rest is as great as that between qualified surgeons and peddlers of snake oil.
Read 8 tweets
26 Mar
(1) "Near zero" isn't zero; therefore (2) the question remains whether the SLR requirement with reserves exempted is or isn't sufficiently high. It isn't true, therefore, that the case for reverting to the old formula is a no-brainer. 1/2
In fact there are plenty of studies suggesting that the social or welfare costs of bank capital requirements aren't zero. See, e.g., sciencedirect.com/science/articl… and piie.com/system/files/d… (I could offer many other sources).
Finally, unless debt and equity finance are perfect substitutes for banks, more capital invested in banks means less capital invested elsewhere. This surely is a potentially relevant social cost of minimum capital requirements that's distinct from any reduction in bank lending.
Read 5 tweets
26 Mar
I heartily agree with @alexwsalter and @smithdanj1's claim that having the Fed "stabilize total dollar spending...is the best we can do when it comes to fighting recessions."

On the other hand,...
I'm taken aback by their claim that "We now know the Fed has a great deal of control over the price level, but much less over employment" and that it only "uses the 'full employment' part of its mandate to justify irresponsible behavior."
Surely, if "we" have learned anything this past decade, it's (1) that far from proving itself very capable of controlling the price level, the Fed has not even been able to achieve its inflation rate target and (2) that it has also tended to underestimate "full employment."
Read 7 tweets
17 Mar
Thread: Those urging central banks to issue digital currencies, even or especially as an alternative to privately-supplied alternatives, need to consider the risk that by doing so they will hinder future payments innovations.
They should start by asking why so many nations still rely upon grubby paper currency, when the technologies that make various digital alternatives possible--technologies almost all of which have been private sector innovations--have been around for some time.
They should consider the possibility that it's only because central banks drove commercial banks out of the business of issuing currency during the 19th and early 20th centuries, ending their ability to innovate in that field, that paper currency has persisted for so long.
Read 8 tweets

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