I have been reading the rants of Mr. (Jamie) Fagan for a while now and have generally been able to ignore the simplistic arguments that he propounds. His latest pronouncements on the Gold Standard and “fiat” currency is too much misinformation, ignorance and false facts to ignore and, what the heck, I must have too much time on my hands in my semi-retirement.
While I am not an economist like everyone, I have access to information that easily refutes many of Mr. Fagan’s ramblings.
The United States did have many period of high inflation prior to 1913, including 20.65% in 1880, 8.07% in 1982, 7.78% in 1893, 16.86% in 1900, 10.74 in 1910 and many other years in the 2 to 4% range. I could find records back only to 1872. Deflation appears to be a greater threat to the economy than inflation. We have had may depressions most occurring in the 1800s, culminating in the worst being the great depression of the 1930s when deflation at its height was in the 7 to 10% range.
The dollar is backed by the “full faith and credit” of the United States. Evidently the world views the United States as extremely credit worthy, as the dollar is currently very strong as compared to other currencies.
For my part, I would rather have the dollar backed by the credit worthiness of the United States than something so volatile as gold with little intrinsic value.
Mr. Fagan completely disregards Economics 101 and the law of supply and demand.
I would bet that supply and demand have much more to do with the cost of hamburger today than the inflationary policies of the Federal Reserve.
Using Ron Paul, an obstetrician, as an expert on economics, instead of Ben Bernanke, seems the height of folly.
In the future I would ask readers of Mr. Fagan to use some of their common sense in analyzing his “truths.”
The problem, as Mr. Fagan makes clear, is that common sense is not so common.
— Stan Sargent