Thursday, June 17, 2010

Debt, asset bubbles, and fiat currency versus gold

I am still somewhat bemused by the resurgence of Keynesian thinking in recent years. I am still convinced that much of the action taken during the financial crisis was wrong and the state could have been a far more intelligent actor than it was. Likewise, I distrust those who claim that the only answer is a return to the gold standard; I cannot see the value in something that cannot be eaten, worn, lived in, or burnt. But this Buttonwood post makes a convincing argument that the globe is still working through the aftershocks of the collapse of the gold standard and the Bretton Woods system in the 70s.

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