A Beautiful Mind Indeed
John Nash, who won the 1994 Nobel Prize in economics, praised the gold standard in a recent talk at Fordham. Here's an excerpt from the news report:
Nash said that various interest groups that subscribe to Keynesian, or short-term, economic theories have sold the public on the notion that inflation is acceptable or that "bad money is better than good money." Such a notion, he said, led to the dangerous proliferation of bad mortgage loans--loans made on the gamble that house values would continue to rise and eventually turn a profit.
"A fixed-rate 30-year mortgage would be reasonable under the gold standard," Nash said. "Now, there are variable rates, and adjustables, and convertibles, and it is very complicated" for homeowners to figure out what they are getting into. In fact, Nash said, nobody really knows the depth of the financial crisis.
Comments (9)
Brooke
I'm all for the gold standard, but I'd rather not stand with people who say there is a "need for a new international regulatory system more in tune with today’s global economy. “The entire financial sector has to be regulated, but those regulations cannot be specific,” Salvatore said. “Money is fungible. You have to be comprehensive, but general.”"
Published: December 14, 2008 10:45 PM
Craig
Brooke,
Eh, in Nash's defense, the article was short, and the basic standards of decency probably prevented him from speaking out against his colleague.
That, and there's no guarantee he even knew Salvatore was there.
Published: December 15, 2008 12:06 AM
atrickpay
Sorry Lew, I agree with Gary North who said:
And:
Published: December 15, 2008 12:18 AM
ehmoran
I've got a strange feeling and belief that central banks around the World are preparing for a controlled Crash and Burn through hyperinflation then reassurance of a Global Currency; i.e.; Germany 1924.
Also a good way to Clear and/or Balance Debt/Credit along with reducing counterfeit and illegally-obtained currencies?
Published: December 15, 2008 12:42 AM
Jason
"I've got a strange feeling and belief that central banks around the World are preparing for a controlled Crash and Burn through hyperinflation then reassurance of a Global Currency; i.e.; Germany 1924."
They may be attempting to do this, but the fact is once the dollar is finished they will find it extremely difficult to institute a world paper currency not backed by anything, if not impossible. The most they may try to do, is to institute a global paper currency that is backed by gold, thus constructing the global institutions they need. Then inflating from there. Creating as much cash as they see fit. This has to be one of the most devious plans I have ever thought of. It will get conservative aproval because of the gold standard and the liberal with the creation of world government.
This is the logical end game for the fiat money standard. After that fails, then we are in a world of shi*.
I wonder if people will wake up to the distructive nature of the state, local or global before they really destroy civilization?
Published: December 15, 2008 2:15 AM
Fephisto
Opponents would say, "Yeah, and Nash is clinically insane."
Published: December 15, 2008 6:41 AM
J Cortez
Fephisto said: Opponents would say, "Yeah, and Nash is clinically insane."
And I would say back: "Yeah, and he invented game theory, which you neo-classical opponents to gold use in overabundance."
Published: December 15, 2008 10:02 AM
Lester Hunt
I see in Wikipedia that the nature and role of money is one of the themes of Nash's later work (ie., after regaining his sanity) and that he has noted similarities between his views on these issues and those of Hayek.
Published: December 15, 2008 7:58 PM
P.M.Lawrence
J Cortez writes, 'And I would say back: "Yeah, and he invented game theory..."'.
No, he didn't, he just used it. If any one person invented it, it was Von Neumann (although others before and after independently worked in a related way, he was the one to separate the area off)..
Published: December 16, 2008 2:06 AM