You guys are referring to Gresham's Law which is only applicable due to legal tender laws. Without legal tender laws, the "good money" wouldn't be driven out by the "bad money" (i.e. US currency).
Also, the reason the US government went completely off the gold standard in 71 was to increase deficit spending without having to pay our debts in gold or something of real value. The Fed has a policy of steady inflation, only through debt liquidation can we ever expect to pay off the huge amounts we owe. That is, we borrow 10 trillion and inflate 50% over a certain time, now we only owe 5 trillion.
End the legal tender laws, allow alternative commodity-based currencies and end the central planning of interest rates. This is the solution. It has nothing to do with gold (or Bitcoins) being a deflationary currency. It has everything to do with big corrupt government.
edit- I don't want that last sentence to color my whole statement. I'm an Austrian, not a Republican. I worked for Obama last time and will vote for him again. For a better perspective on this, check out (future Fed Chairman!) James Grant's Interest Rate Observer http://www.grantspub.com.
You guys are referring to Gresham's Law which is only applicable due to legal tender laws. Without legal tender laws, the "good money" wouldn't be driven out by the "bad money" (i.e. US currency).
Also, the reason the US government went completely off the gold standard in 71 was to increase deficit spending without having to pay our debts in gold or something of real value. The Fed has a policy of steady inflation, only through debt liquidation can we ever expect to pay off the huge amounts we owe. That is, we borrow 10 trillion and inflate 50% over a certain time, now we only owe 5 trillion.
End the legal tender laws, allow alternative commodity-based currencies and end the central planning of interest rates. This is the solution. It has nothing to do with gold (or Bitcoins) being a deflationary currency. It has everything to do with big corrupt government.
edit- I don't want that last sentence to color my whole statement. I'm an Austrian, not a Republican. I worked for Obama last time and will vote for him again. For a better perspective on this, check out (future Fed Chairman!) James Grant's Interest Rate Observer http://www.grantspub.com.