Roubini: Here's Why a Gold Standard Won't Work

NO BODY HAS SPOKEN ABOUT A GOLD STANDARD. HE DOES NOT UNDERSTAND. EVEN THE GREAT HAVE a hard time understand the role of gold.

What I anticipate, and have written about in the manner of gold's return is NOT a gold standard.

Jim

A fixed gold standard cannot and will not prevent the next crisis. The inevitable cycle between debt destruction and creation requires periodic adjustment of the gold price. I have referred to these adjustments as steps in the price over time. These adjustments are impossible when the price of gold is fixed. Jim correctly suggests that gold, tied to a measure of global liquidity, must be flexible over time to adapt to cycle of debt illustrated below.

Cyle of Debt

A gold standard would just make business cycles more extreme, according to co-founder and chairman of Roubini Global Economics, Nouriel Roubini.

Source: cnbc.com