Tuesday, November 2, 2010

A Cross of Gold

This is a long read - 23 pages - but a very worthwhile one.  Edwin Vieira clarifies many ideas about money, both sound and unsound.
Astute Americans need to envision, and then to bring about, a new monetary system in which no one talks about “the price of gold”, but only of “prices in gold”.  No “price of gold” exists when a fixed weight of gold is the actual unit of money. Under those circumstances, all prices are stated in terms of gold. When a fixed weight of gold is the unit of money, “the price of gold” is a meaningless concept, or at best a tautology: namely, “the price of a unit of gold” is precisely “a unit of gold”. In that context, asking what is “the price of gold” would be as sensible as asking today what is “the price of a nominal 'one-dollar' Federal Reserve Note”.

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