More Gold Standard Debunking

Ambrose Evans-Pritchard:

As Paul Krugman says, Europe has replicated the worst features of interwar Gold with monetary union. EMU is a D-mark peg instead of a dollar peg. No matter. The mechanism of debt-deflation torture for entire societies is much the same.
You could say that human folly and wickedness debauched the beautiful Gold Standard in the interwar years, but to concede that is to concede the argument. It is to admit that gold does not in fact prevent politicians running amok. It is just another monetary Maginot Line.
Ah yes, but what about 19th century gold, the heyday of the global trade boom that ended in 1914?
It certainly worked better. Governments were smaller. The welfare expectations of democracy were lower, and a number of key countries were not democratic at all. It is was easier for the Bank of England to run a pure global system in concert with a handful of like-minded central banks.
But it did not lead to better growth or even to stable prices. The peak to trough oscillations in prices (inflation to deflation) were arguably greater.

Just like supply-side economics, the gold standard doesn't work.  History proves the case in each, but the true believers continue to believe.  At times, it would be nice if there was a rapture to remove the true believers from this flying rock.