I'm curious as to what others think about academia's outright rejection of the gold standard as a 'barbaric relic of the passed'?

IMO, Economics as a field of study has been almost entirely corrupted in the name of maintaining the status quo. Look at who funds the research and who controls the endowments. Follow the money. It leads straight to the banking cartels.

Hard science is more difficult to corrupt. You can't argue about the mass of an electron or a chemical formula such as H2O. They are objective facts. Economics, however, is subject to political and financial influence. Theories are harder to test because there are so many variables and many competing arguments on how to interpret the data. Thus it is much easier to obfuscate and mislead.

Economics used to be called Political Economy. There was a reason for that, but it didn't suit certain interests whose conceit was to place Economics on the same level of certainty as physics or chemistry. IMO, they have failed miserably, and the evidence is now staring us in the face in the form of a banking crisis of unprecedented dimensions.

That's the short answer;)

This point is not to be taken lightly, I've learned. Keynesians and gold bugs get appear to get along like Palestinians and Israelis - there's a fierce division there.

My discussion have revealed that, while the fiat system has several well acknowledged problems, so too does the gold standard [1]. In short, the currency is not the problem (or the solution), at least that is the prevailing belief of most economists.

Most modern economists are wrong in the same sense Copernicus was wrong. That is to say, what they practice is a vast improvement over the former mercantilist system, but there are any number of phenomena that simply can't be accounted for using present accepted "theories."

Obviously, many disagree [2]; but the lack of dissenting voices in academia is not to be overlooked.

(see above on the corruption of the discipline)

[1] -

http://www.huppi.com/kangaroo/L-gold...

This guy is wrong on so many counts I don't even know where to begin.

For example:

"There has not been a single depression or bank panic in any nation anywhere in the world using Keynesian monetary policies. But during the Gilded Age of the late 19th and early 20th centuries, depressions and bank panics were common. The historical record is so strong that mainstream economists reject the gold standard almost universally."

Leaving aside the example of Northern Rock, what he refers to as The Gilded Age was actually an era of partial fiat currency. The confusion arises from the fact that while there was a gold standard in effect, banks of that era operated on a fractional reserve basis. Roughly speaking, for every $20 gold coin in the vault, there were $200 of treasury notes out on loan. Bank panics were caused by more people seeking to redeem notes than the bank could supply gold for. So the example is false, and I believe purposely misleading. Anyone who's studied banking in any detail would know the difference.

The rest of the article fails on similar points of fact.

To get at the heart of the matter, I'd recommend reading Ludwig von Mises, Hyman Minsky and Murray Rothbard's works on www.mises.org There really isn't much I can say that these guys haven't nailed already.

To counter the argument that says there isn't enough gold, google "Real Bills Doctrine."

Personally, I don't believe Austrian Economics is any more extreme than Galileo's interpretation of Copernicus, and we all know what happened to him. Much like Galileo, Von Mises et al have been suppressed by othodox economic thought which supports the status quo via the latter's near total control of the debate.

I think these arguments are familiar to most of us. It's a vast topic, but probably not suitable for the main forum. I'd be glad to follow up any points on the off-topic forum as time permits.

ebear