Could somebody explain to me why a gold standard is unfeasable?

First off, if you're going to use Friedman to buttress your argument, you really need to point out that he was in favor of a gold standard back in the 60's, but has since changed his mind. Claiming that he currently supports it is disingenuous at best.

As others have pointed out, the US gold supply isn't enough even at @1700/ounce to totally back the money supply. That means you either have to devalue the dollar, or contract the economy (and by a percentage larger than what happened during the Great Depression).

Beyond that, there's another problem that I've yet to see addressed...

If we went back to the gold standard, the only way to increase the money supply (and therefore grow the economy) is by increasing the amount of gold we, as a country, have in our reserves.

Buying gold on the international market won't really help--since we'd have to pay for that gold with gold backed dollars, as soon as those dollars leave the US, they're no longer part of the US economy, but the gold that backs them has to be kept "in reserve" in case the people who own the dollars want to convert them back to gold. So for every dollar of gold you buy internationally, you pull an existing dollar of gold out of the pool that backs the money supply. It's a zero sum game.

So, we can only increase the money supply through US gold production. Even with a generous estimate of gold production, that would allow the gold supply (and the economy) to grow at less than 0.5% per year.

However, the US population grows by 1.7% per year, so the economy has to grow that much just to "tread water" on a per capita basis.

Given that the money supply would grow slower than the population, how exactly does this lead to prosperity?

You say that a lack of support for a gold standard is due to a lack of understanding. So please, show me the math for how that would word. No rhetoric about "intrinsic value"--I want to see the math. Because unless the math works, it's all just flowery talk.

BTW, having the value of a dollar fluctuate is against gold_not_ a gold standard. A gold standard is where a dollar is worth a fixed amount of gold.

No, I don't think I'm smarter than Nobel Prize winners, but I DO believe that even YOU will grasp how stupid a return to the "Gold Standard" would be after I explain it to you in VERY simple language;

Under the gold standard, each US dollar in the world would be "worth" the same fraction it is of "total dollars" in actual, physical gold....(There are ~165,000 tonnes of gold in the world, and 10.9 trillion US dollars in circulation, worldwide, so instead of trading on the free market, each ounce of gold would suddenly be "worth"

There are 32,150 ounces in a tonne, so there are 5,304,750,000 ounces of gold in the world

There are $10,900,000,000,000 dollars circulating, so each ounce of gold would instantly be valued at $2,054...

(So far so good, right?)

Except that the US only owns about 60% of the gold in the world, meaning that whoever holds the OTHER 40% would suddenly have the power to "manipulate" the value of the US dollar by adding or removing gold from the market....not good!

But WORSE....there would be a fixed, finite number of "dollars available per human", so unless you instituted INSTANT global population control, every time a new human was born the value of the gold would INCREASE (because the average amount "per person", however unevenly the wealth was distributed) would go DOWN, making each dollar MORE valuable, and causing your employer to have to LOWER your wages each week just to keep pace with the population!

NOW do you understand why all nations went to "fiat" currency?

If we owned ALL the gold in the world, it might be workable for ten or fifteen years, but then everyone would be so rich they'd quit working!

This Ron Paul speech lists a number of reasons, all of them wrong:

1. The Federal Reserve destabilizes the economy with its "boom and bust" monetary policy. This is hard to square with the fact that the longer the Federal Reserve has been in existance, the more stable the economy has been. Dr. Paul's words strongly imply that he believes that there was no business cycle in the 19th century, which is untrue; as best we can tell, recessions were much longer and deeper before America had a central bank.

2. Americans don't save because they're afraid inflation will erode their savings. This is daft. Moderate inflationary expectations are built into the interest rates that banks offer. After thirty years of stable monetary policy, a good portion of the population doesn't even remember high inflation, and the ones that do are mostly retired and spending down their savings. Americans don't save because . . . well, have you tried the Wii? It's awesome.

3. American exporters are whipsawed by our fluctuating currency. Unless Dr. Paul has plans to put the entire world back on the gold standard--which I mote would require the kind of powerful international organization he's so suspicious of, or invasion--our currency will still fluctuate relative to others if we're on the gold standard. Every time the price of gold changes in another country, American exporters will either be helped or hurt by a change in the relative prices of their goods. The gold standard will shelter exporters from currency fluctuations only in their trade with other countries on the gold standard. There are no other countries on the gold standard.

4. Fiat money inflation benefits those shadowy figures who receive access to artificially inflated money before the inflationary effects kick in. Those shadowy figures being the bankers who loaned it to you so that you could buy your house. At any rate, this would only be true if we were talking about unexpected inflation. Expected inflation is already built into asset prices. The US economy does not have significant unexpected inflation.

5. Fiat money inflation "also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state". This is an extraordinarily primitive view of the money supply. The Federal government is not Caesar cutting his denarii with lead. The revenues from seignorage on 2% inflation are trivial. The Federal government gets the money for the "welfare-warfare" state just where it says it does: by taxing the bejeesus out of your wages.

6. Congress does not have constitutional authority to delegate its power "the authority to coin money and regulate the value of the currency". Hmm. Okay, but I'm pretty sure none of our legislators are qualified to operate a printing press, much less the annealing ovens and upsetting mills needed to mint coins.

7. Congress "should only permit currency backed by stable commodities such as silver and gold". Commodities, almost by definition, are not stable. The price of gold looks as if it used to be stable, because the dollar was fixed relative to an ounce of gold. This does not mean that its value relative to other economic goods was unchanged. You could fix your currency to the price of a bushel of wheat, and suddenly "wheat bugs" would be claiming that wheat is the only reliable, stable commodity in the world whose price never changes. That wouldn't stop fluctuating wheat supplies from whipsawing your economy back and forth. To be sure, the supply of gold changes more slowly than the supply of wheat. But demand for it is not so fixed.

The reasoning behind getting rid of the gold standard was because all of the american notes used in europe after wwII were being cashed in for gold, and shipping out the supply of gold to europe-nixon ended this. Now its solely faith in the us government to ensure the value of the dollar. I do not trust this, or the government. It allows the government to simply print money, without any reprocussions from doing such. It allows government to increase debt limits, and print more fake money. There is nothing good that comes out of the Fed system unless of course you're the government and want to make some fake monopoly money.

Because a gold standard - paper money that must be redeemable for actual gold - means you can't print any more money than you have of the hard stuff.

We want the economy to grow, right? That means more goods and services produced next year than this. But now suppose we can't find or produce any more gold, so the money supply has to remain constant. How will we pay for the added goods and services? We'll be short of money. Which means the producers will eventually say, 'The hell with it' - and stop producing more. And so the economy won't grow after all.

When trading with global partners, X country would be forced to sell their currency in exchange for gold and then buy US dollars with it, or at least that is the basic idea. It has highly volatile market prices, so it does not necessarily hold it's value over time as some would have you believe. Also, with most transactions taking place electronically nowadays, how to you transact with gold?

The total amount of gold mined throughout history is valued at 10 trillion dollars, not even enough to cover our debt.

So the gold standard means ... what? We value the dollar at 35 to tjhe ounce of gold we hold in Ft Knox? Great. no credit for you. pony ujp the $30,000 in cash for that new car. $200,000 cash for the house. Debit cards maybe, no more credit cards.

The immediate crash of the economy. Smart people are not immune from being wed to STUPID ideas. Even Alan Greenspan admitted that.

"Something the gold standard could and DID avoid???"

That is BLATANTLY FALSE.

During EVERY SINGLE depression the U.S. has ever experienced.... it was on the gold standard. Every single time.

EDIT: No one said the gold standard CAUSED the Great Depression genius. What I said is that YOU ARE WRONG.... BECAUSE IT OBVIOUSLY DID NOT PREVENT the Great Depression... or ANY prior depression.

You have the economic understanding of an 8 year old.

For your sake.... I hope you are under the age of 12.

No one can, because it is not unfeasible. The sole purpose of switching to fiat currency and away from commodity standards was to enable the government to expropriate the nation's wealth by diluting it with more and more paper. Basically, to enable "stimulus". There has never been and never will be a government stimulus without huge, hidden costs to currency viability and market stability.