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Originally Posted by bb4_96
I don't really know much about gold standard and whatnot. Unless your an econ major it doesn't seem to get hit very hard in economics class. But it seems to me that if there is a limited supply of gold wouldn't there be a limited supply of wealth? If the economy grows where does the new capital come from? As the population grows where does then new populous' money come from? It isn't the california gold rush anymore. We aren't procuring gold at the same rate as then. I'm ignorant on this topic so any light shed is appreciated.
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You are pretty much dead-on. There would be little venture capital, and it would be nearly impossible to respond to changing financial systems. There was a constant boom-bust cycle before we switched from the gold standard. There still are periods of recession and always will be, but they don't reach the lows that they did previously. Fiat currency has a way of leveling out the spikes in the graph.