BoE: ‘Dramatically More Currency Crises Under Fiat System Than Under Gold Standard

October 10, 2012 By 6 Comments

The Bank of England has released a study comparing fiat currency systems to gold standards and shockingly discovers that sound monetary systems are inherently more stable and produce less economic crises than monetary systems based on inherently worthless fiat debt notes.

The real shock is that one of the big 3 western central banks would allow such findings to be made public.

Full BOE study below:h/t ZH:

Fs Paper13


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Comments

  1. Avatar of 59LesPaul 59LesPaul says:
    October 10, 2012 at 11:50 AM

    Marc Faber stated a while ago that the boom up to 2007 was the first time in history that we had a bull market in every asset class at the same time. This was clearly due to the easy money policies of the central banks and excessive global credit creation. We are now sitting on the largest credit/debt bubble in history. This debt will have to be purged either by inflating it away or having some sort of debt jubilee before the system can repair itself. The debt has to be removed from the global  financial system before a return to a gold standard and sound money can be contemplated.
    The global financial system then may not experience such rapid growth under a gold standard but at least it would be stable and sustainable.

    • Avatar of Sumkid Sumkid says:
      October 12, 2012 at 7:18 PM

      I don’t think that we are going to be able to pay off the debts because debts = all fiat currencies. If we remove all fiat currencies from circulations, there would be still more debts left because it has interests. That’s why the national debts are always growing.

  2. Avatar of I save silver I save silver says:
    October 10, 2012 at 12:23 PM

    I have done a google for this paper and it is present on the boe website url http://www.bankofengland.co.uk/publications/Documents/fsr/fs_paper13.pdf

  3. Avatar of PatFields PatFields says:
    October 10, 2012 at 7:44 PM

    In 1776, Adam Smith explained all this to the BOE (et al), to little avail. Like Whirling Dervishes, bankers will spend generation after generation in transfixed enchantment.

  4. Avatar of MaryB MaryB says:
    October 10, 2012 at 10:24 PM

    Like we didn’t know this already? History has shown it several times.

  5. Avatar of Sumkid Sumkid says:
    October 12, 2012 at 7:03 PM

    I’m sure that even if the Bank of England discovered that with sound money, there’s more stability and less crisis compare to fiat currencies, they still won’t adopt it since it will limit the uses of their unlimited currency printing machine. There won’t be any gold standards soon.

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