Well, it was a depression, but it was a great depression.
I’m torn between being upset that I set myself up so perfectly for that line without realizing it, or impressed at your sense of humor. But I think I’m leaning impressed–especially given your speed. 
If you are serious in that you think the US starts wars to get themselves out of financial crises, then you really need to read a bit more.
Your suggestions of a better solution/institution?
What we are going through now is nothing compared to what our grandparents went through. I mean things are going to get worse but so far by looking around the streets you would never guess how bad our economy is.
I do read a lot and if you do the research you will see the difference between WW1 and WW2 and our latest wars. If you want to call them that.
So, that’s a good thing, right? If the fiat-money system shields us from the worst, so much the better for fiat money.
That’s an incorrect expectation of what fiat money can realistically do.
In an academic ideal, you’d have impartial, purely objective robots (not human politicians or bankers) gradually increasing the money supply to exactly match population growth and GDP increases. If you didn’t increase the money supply, the prices of various products would decrease over time. There would be more products than money in circulation. This in itself ISN’T A BAD THING THEORETICALLY, but humans with their psychological defects believe something is “wrong” when then happens (even if the mathematics proves otherwise.) A flexible money supply is a mathematical tool to compensate for our feeble brains’ ability to relate one commodity (such as milk or bread) vs another commodity (such as printed money or gold coins).
That’s the laboratory version of what fiat money is for.
But… we don’t execute the mathematical ideal of fiat money. Fiat money has taken on a life of its own and what we (and every country’s central bank) has done is look for money supply to DRIVE and MOTIVATE the innovative productivity instead of being the result of it (see 1st paragraph.) It is this 2nd abusive usage of fiat money manipulation which has led to speculative bubbles and crashes.
So we have a conundrum, we really can’t go back to a gold standard because of defects in our human brains to rationalize price decreases as perfectly normal. However, the intellectual tool to “compensate” for our inability to handle supply-demand ratios leads to inevitable abuse.
As far as previous cites showing slowing “velocity” of money or resistance of lenders to loan, you have to be aware that there are 2 interpretations.
#1: if you believe in the “magic” of fiat money: you want to print more money to encourage spending, which leads to economic recovery
#2: if you believe innovation and productivity drives a stable money supply: it means that investors (banks, venture capitalists, etc) have been burned by losses and new and prudent investments have not revealed themselves yet
IMO, history has shown that #1 has been tried repeatedly and doesn’t work.
If the country is not being productive, or competitive, a fiat currency manipulation can’t shield us from that. You have to differentiate between the academic ideal of fiat money vs today’s aggressive monetary inflation.
Wait, we’re going through aggressive inflation right now? I must have missed it.
“today’s” was a figure of speech for “modern times” in the context of comparing gold-standard vs fiat money.
Also, “monetary inflation” was about inflating the actual money supply, not about resultant price indicators.
Could you give a cite for this claim? In a deflationary economy, it makes sense to delay purchases because the goods will cost less the longer you wait. That is common sense. It also makes less sense to borrow, since you will be repaying with more expensive money in the future. Lending makes perfect sense, but in a deflationary economy interest rates will be driven down, and your money might be more productive in a mattress than in a risky loan (they all are) for little return. That is not a result of a psychological defect either. As the recent credit crunch indicated, borrowing is essential for the health of the economy. I don’t see how discouraging investment could be a good thing.
I feel obliged to point out that not even all fundamentalists believe this, and certainly not all Christians do.
Which is why King Tut was buried with a solid gold death mask, 3000 years ago?
OK, OK,…I’m wrong. Clearly they disregarded gold as an object of value, since they stuffed it in a hole in the ground next to a mummy and walked away…
#1 is and has been used for well over a century by central banks throughout the world and it works just fine. That’s why they do it! Every central bank has a version of the FOMC who buy and sell (normally) bonds to increase or decrease liquidity in the system/change short-term interest rates. It’s basically the most effective policy lever they have to either pump up or slow down the economy. There are instances in history like Japan where it hasn’t and isn’t working and right now with every advanced economy in a liquidity trap and looking increasingly Japanese every day normal monetary policy has little or no traction the way it normally does. But once we manage to get out of the global liquidity trap central banks mucking about with the amount of money in the system will go back to being the number one monetary policy tool.
And I say I can make things cold through the touch of my hand like “Iceman” in the X-Men comics. Strangely, my beer’s not getting any colder.