Sunday, 21 January 2018

Golden Rule for Streetights

Joining the Euro, not joining the Euro, the Euro being evil personified, the value of sterling against the Dollar or the Euro. I really don't know what people have against a currency union. We all used a common currency for millennia - gold and silver. How the hell did we manage for so long and so well in a global (or near as dammit, except for the odd cowrie shell and wampum belt) currency union?

If we were to switch back to gold and silver then we'd have to engage in honest trade with another party that already has some gold in their possession. People wouldn’t be able to just sit there and push a button to create new money based on vapourware and 'confidence' and Forex traders wouldn't be able to create a run on country's currency.

It would discourage inflation and government budget deficits and debt, which can't exceed the supply of gold. Governments, however, would no longer be able to reduce the money supply by raising interest rates in times of inflation. Nor could it increase the money supply by lowering rates in times of recession. In fact, this is why many advocate a return to the gold standard - it would enforce fiscal discipline, balance the budget and limit government intervention - as Greece learned to its cost. Several states in the USA already use gold for a number of transactions.

The weirdest thing happened as I was driving into the village for my Sunday paper - as I drove along one street, five streetlights went out in succession just as I drove past. Another did it on my return. It was like something out of The Omen...

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