Explain this to me like I'm in kindergarten: Why have people who want to return to the gold standard been demonized in mainstream quarters for as long as I can remember as being batshit crazy?
I'm not an economist or even terribly competent at math. But the gold standard always seemed like a reasonable idea to me.
The folks who push back on the idea of commodity backing are the same folks who want the government in control of the currency. It is well known that commodity backing prevents the government from having free rein over the currency.
Their only redeeming characteristics are 1) they are issued (ostensibly; who the hell knows what the hell is going on behind his back) by private sector entities, and thus are market regulated by competition (ostensibly; who the hell can know, these days, when a market is corrupted by crony-capitalism or other forms of secret State capture), and 2) they are ostensibly backed by something of value, but this is part of their opaque-ness, also.
As Frederick Douglass noted, civil society depends on three (and only three) boxes. In order, they are the ballot box, the jury box, and the cartridge box. Most will agree that the past few years have shown that we have gone beyond the first two boxes...almost no one believes that either is honest or unbiased. Only one box left.
We all know the people who will be in charge of the prisons. It will be the same who were shouting to the roof tops that the unvaccinated needed to go to concentration camps. Unless they’ve died from the vaxx already.
Yes, there will *always* be (human nature, eh?) private sector actors that seek rent.
But in a democracy, it is the general public, in its apparent (human nature again, I guess?) complacency, that allows crony-capitalism by allowing the *overgrowth* of public power, i.e. the size/scope of the State.
We are supposed to vote for *less* of that which endangers our *individual* (i.e. *private* sector) prosperity, and we don't.
The un-avoidable moral hazard of indoctrination into anti-Capitalism by public-sector entities must be a significant factor. How many educators, to whom the impressionable youth will look for social philosophy/wisdom, vote for *less* gov't?
I'm an economist and... honestly I don't think there is a good argument. The main one I have seen is that is sort of justified is that we would see constant deflation, and deflation is worse than inflation. I don't really accept that deflation is necessarily worse, rather just a problem in different ways.
The bad arguments I have seen usually revolve around the ability of the government to perform monetary policy to respond to crisis. Which... yea I am not really too impressed with their ability to do that without a gold or other commodity standard.
I think the overall problem is that no one in government wants to have their hands tied in terms of being able to run the money printers as they see fit, so all mainstream (read: want to be in the government) economists say what they need to to support that.
The idea that Americans would starve themselves waiting for cheaper bread tomorrow is counteracted by the fact that Americans rush out to get the newest phone, even though it will be 50% the price in a year.
As you said, deflation has its own problems, but inflation eventually drives the currency to zero.
Yea, I have never understood all the doom saying about deflation. The biggest problem is that if deflation is high enough and the time between purchasing raw materials and selling finished goods is long enough one can get stuck where goods sell for less than their production costs. That's a big "if" however, especially considering how slowly prices tend to adjust to moderate rates of inflation. Likewise, employees would get paid a little less over time, but then merit increases etc would slow that down, and it isn't as though people don't get used to such things.
I personally think fears of deflation are horribly inflated.
Inflation favors debtors, and nobody is in debt as much as the US government. We aren't going to pay off the debt -- we're going to inflate it away. We won't cut Social Security -- it's just that the dollars you get won't buy you anything.
What's really weird is that at some point (1930's if I recall) they made optional commodity denominations for contracts illegal. Used to be one could write a contract like "You will pay 1,000$, or 300 bushels of wheat, or 200 lbs of steel" or whatever, but then they stopped being enforceable. That solved all the relevant monetary worries, as you could write it so that the parties had to agree on what to pay. Inflation went crazy? Decide on a commodity.
Social Security is inflation scaled, although not terribly closely I notice. That one is tricky though, for the same reason politicians are loathe to cut benefits or raise the age to receive them. Such a terrible, terrible idea for a policy.
Yes, the difference between the official CPI-granted SS raises and actual increase in cost of living will be large enough to drive your new RV through because you can't afford a house anymore.
So, again to the point I always seem to get to in these discussions:
Ben Franklin was spot on when he said it was up to *us*, the People, to "keep" our republic, i.e. to vote *for* a SMALL public sector, so that we could go on "self"-governing, as is our right, imso.
If old Ben were here today, would he say we had already failed?
As I recall, possibly erroneously, the first few presidents had a staff of like 20 people, that they paid for themselves. If I am correct then, yes, I suspect the the founders would look at the modern federal government aghast at its sheer size. I doubt that the idea of government spending being ~40%+ of GDP (or whatever term they would use for the total production of a country) would be seen as a possibility, possibly harder to believe than putting people on the moon for them. I am reminded that after the first few years of the federal income tax existing people were shocked at how much money it raised, and it was a teeny tiny percent in those days.
Of course, the country was a lot smaller then, and it is natural that a super-power would have a large federal gov't., but yeah. 40%? That's way too much freedom-usurping, wealth-destroying, always-war-mongering, and ever-self-expanding, public power.
I think the founders *were* far-sighted. I just think they they didn't realize what a good (i.e. lasting) job they did, that their social system would be so successful as to allow a bequeathed (and grown ignorant, by and large) People to *afford* such an overgrown public sector.
The founders, I'm sure, would have thought that the People would haver rebelled by now.
Beyond already failed. We’re being perp marched to our own gallows. The most well armed populace in history, being raped by a few disgusting individuals .
The only argument against the gold standard (but it is a good one ) is that it needs to be digitized in order to function in a digital economy. This means someone would have to be in charge of minting digital coins. This leaves us in the same place as having to trust a group of people not to counterfeit the money which historically never happens . If there a way to open source this process then it would work. But since no one who talk about bringing back a gold standard seems to ask this question I'm on team bitcoin. Of course that has the problem of scaling but at least its people are asking how to do that. Either way what we got now is receipe for poverty
And on gold ... "gold failed as a global reserve currency because there isn’t enough of it to go around. Inevitably shortages result forcing something to change."
"Mainstream quarters" is another way of saying those who benefit from free money, and would suffer under a gold standard. By suffer, I mean have to play fair.
Their Marxist, our Marxist, what’s the diff? And their election is in 25. The weather is nicer, the people really friendly, fishing is great, surf spectacular, it’s much cheaper, and the food and tequila are out of this world.
Hopefully, we avoid the wrong kind of fight, iykwim...
Iow, what (imo) you look forward to is the reckoning, the..."adjustment" of the timeline back towards ever-increasing individual freedom/agency/precedence in the structure of society(-ies), no matter how bloody that reckoning is.
All I express here is a wish i know you share, that *Classical* Liberalism return as our loadstar.
i'm not sure i see the relevance of the observation.
1. i think free market systems are not actually a bad system but quite a good one, certainly the best of which i know as they render the consumer sovereign.
2. free market systems do not require a governmental monopoly on money. one could (and i certainly would) argue that such a monopoly is actually the opposite of a free market
I would argue the monetary policy that the Feds have created allows the free market system to work as well as it does. No one has a monopoly on wealth. All the feds does is create a system that allow people immediate liquidity to create and use wealth as they see fit. Look at it as a way to keep score.
Capitalism is terrible, but their is nothing else better. Milton Friedman talks about this in his book Monetary policy of the US. Im not saying the fed hasn't made mistakes. I just dont.know that anyone has a better system than the one currently in place. Returning to the gold standard would be a huge mistake.
Agreed. It *would* be difficult to return to a gold standard, yes, but only because of the (inevitable?) accumulation of fiat currency debt.
It *will* correct one day, as it must. That's the problem of getting away from point A (today's trjectory) which doesn't solve the first as-yet-humanly-unsolved problem, how to get to point B (true Capitalism).
Its the part of the Constitutional "collar" that is most missing: an effective check on the spending, not so much of we-the-producer's-wealth, but of that which doesn't even exist yet - our progeny's wealth.
Which kinda makes them slaves before they even have to start providing for themselves.
How does a vendor selling anything not get jailed and arrested for using crypto in a world with no dollars? Crypto may be the answer but not if the comrades in charge criminalize the use of it
Rolling the dice: From the early 1970s through the mid 1990s I invested heavily in Art Fair Futures. It worked like this: In early winter when we were starting to get spent out after taxes were paid and things like home fuel costs were paid, we had to jury (send slides of our work and pay jury fees) for next Spring, Summer and Autumn art fairs and trade shows. We had to jury for more than we could actually do because we wouldn't always get accepted for everything. Then, for those were accepted in, we had to pay the show fees. Meanwhile we were in production of our work for those shows and hopefully had stock piled enough raw materials for the first months of production until we actually had a show to sell at. Weather was always a crap shoot for outdoor shows. Dem was da days!
“It’s a proof-of-stake coin that has no supply cap and a variable emission rate. Stakers have to deposit their coins to receive new emission supply and the coin lockups are often several years. Sometimes new coins can be airdropped at the behest of the developers but usually the airdrops go directly to insiders who then dump them into additional risky yield-farming protocols. Since these coins are digital, they’re just sort of created out of nowhere.
As gato often says, I'm just a kitten. I actually don't understand why gold, which has no intrinsic value, should be the commodity. Gold is only as valuable as what people are willing to pay for it? I think of art or wine, for example. Am I just being stupid and simple minded? I don't mind if someone takes on the task to teach me. As they say, TIA
gold's value is predominantly rooted in tradition. it was used as money, so people use it as money. silver too though it devalued so greatly that it fell out of favor as supply rose.
it has modest value as a metal used in jewelry or electronics, but mostly it seems like a sort of long duration cowrie shell whose value as currency is mostly rooted in practice, not any intrinsic fact. it did, however, have the effect of preventing currency debasement when used as a backing for circulating notes because you could not issue notes not backed by gold and gold was limited, but lots of things could have been used for such a purpose.
Gold’s intrinsic value comes from industrial applications and the fact that it has no third party or duration risk. Agriculture commodities must be consumed or they go bad. Gold doesn’t tarnish or decay.
Thanks. I know gold has industrial applications, but I don't think it has any more than other metals. I know I could be wrong. This is what bing tells me. "Overall, industrial applications account for approximately 12% of total gold demand. While gold’s use in technology is relatively low compared to other precious metals, its unique properties continue to make it indispensable in various industrial processes."
12% isn't much, but indispensable is something. Of course there are other indispensable materials.
I think industrial usage has gone down because the price of Gold has probably increased relative to other metals. It’s value dense and it accounts for changes in currency supply over long periods of time. 300 ounces buys a house in 1900. 300 ounces buys a house in 2022. Is there a faith element to it? Sure maybe a little. But IMHO less faith is required to give Gold value than fiat. One is a natural element, the other is a mental construct.
In the real nitty-gritty of importing and exporting gold’s virtues of not taking up a lot of space compared to its value and being readily accepted in trade for just about anything anywhere squeezed it to the top. You were glad to come into port with your load of amphorae of olive oil sealed with waxed leather skins and receive gold that you could fit in your pocket or sew into your robe and sail home and it won’t rot/rust on the way home or while you are getting your next load ready to try it again. It’s not a fetish it just has worked best mechanically, I would surmise. That said, listening to Michael Saylor make his case that Bitcoin is perfect money, improving even on gold, I found very helpful. Also the interview on Kitco between Michelle Mikori, Carbone, and Solloway recently was helpful to take in.
Why gold has risen to the top as human's idea of "money" isn't completely rational. It's just that it meets all the recognized criteria - durable, fungible, divisible, portable, scarce but not super rare, have an intrinsic use but not too useful (industrial is one but so is jewelry).
Aristotle was one of the first to try to understand the nature of money, which has above all be a reliable store of wealth. This is different than currency, which is an abstraction that derives it's purpose from being backed by money.
Diamonds work but aren't easy enough to use, for example to split into precise spendable money, and derive too much value from being faceted. Silver is a little too common and useful, thus volatile. Wood, stones, seashells are too common and easy to counterfeit. Platinum had promise but it's also too useful in catalytic converters. Same with oil, very useful and hard to use.
Point is no one said "Gold it is then." but also no one had to decide, because it just worked.
Thanks. Something from elementary school history rattles around in my brain. I may have the actors wrong, but was it Webster running for president who said he would not be hung on a cross of - what - gold or silver? The US was trying to get off or on the gold standard.
Now I'm digging. McKinley put the US on the gold standard. During the civil war the US went to specie money. Another rabbit hole to go down.
Until there’s a viable alternative I’ll keep plowing my dollars into the market!
And don’t start with the Chinese or the BRICS coming up with an alternative… it’s like the crackhead at the corner trading cigarettes with the pimps…. Good for them!
Explain this to me like I'm in kindergarten: Why have people who want to return to the gold standard been demonized in mainstream quarters for as long as I can remember as being batshit crazy?
I'm not an economist or even terribly competent at math. But the gold standard always seemed like a reasonable idea to me.
The folks who push back on the idea of commodity backing are the same folks who want the government in control of the currency. It is well known that commodity backing prevents the government from having free rein over the currency.
Exactly. Tokenizing assets is just a mental intermediary so the plebs don't know that fiat currency is not "money"...it's a financial weapon.
Tokens *are* fiat currency.
Their only redeeming characteristics are 1) they are issued (ostensibly; who the hell knows what the hell is going on behind his back) by private sector entities, and thus are market regulated by competition (ostensibly; who the hell can know, these days, when a market is corrupted by crony-capitalism or other forms of secret State capture), and 2) they are ostensibly backed by something of value, but this is part of their opaque-ness, also.
Yeah exactly. That's what I'm saying.
That's exactly how it's designed...so the dollar is continually worth less until it's finally worthless.
Then they confiscate assets...because you really don't own them if they're backed by fiat
Then the shooting begins?
Yeah for anyone left who hasn't already shot themselves.
As Frederick Douglass noted, civil society depends on three (and only three) boxes. In order, they are the ballot box, the jury box, and the cartridge box. Most will agree that the past few years have shown that we have gone beyond the first two boxes...almost no one believes that either is honest or unbiased. Only one box left.
Easy, now, M. Robbie.
The way to defeat the bear might not be to poke the bear.
This is an explanation I can understand.
Because the printers need the public to go along with the scam -- same reason the covid skeptics were painted as batshit crazy.
The same printers will spit out deeds that reclaim assets people thought they owned.
It'll be the biggest "tax" in the history of mankind.
"Oh hey we just need your gold it's no problem though you will be able to get back your gold at a further date."
**At a further date**
"Actually you can't get the gold anymore but don't worry the dollar will be worth as much tomorrow as it is today......."
Lol. So true.
Bring it on imo. I'd rather be 52 when this shit goes down than 72.
Hey! I resemble that remark. I just turned 73.
Happy birthday Swabbie!
That's why you're so damn wise!...;)
Happy birthday!
100%
Then there's 82. Maybe that isn't so bad. A few years past the sell-by date.
You're 82?!...no way!
Hopefully, you'll have many 72-year-old-friends (when the shit goes down) with you.
Nah, you'll be a helluva lot smarter at 72. Remember 32? I don't know, 52 is MUCH smarter than 32.
Yeah I'm just talking about the financial recovery...my wife is 9 years younger...so I'd prefer her and my children didn't have to take it on alone.
But I agree with you for sure!
What gold are you talking about? Oh, that gold. Sorry, it fell off my boat in deep water.
Luckily, it's being protected by my guns that fell in last week! :)
Yeah, just seems we're having a lot of boating accidents lately.
Wasn't this done with gold in the 1930s? Or was that just straight up grand larceny by big bro?
But don't worry they called it "nationalisation"....not confiscation.
Yup or spend 10 years in prison.
We all know the people who will be in charge of the prisons. It will be the same who were shouting to the roof tops that the unvaccinated needed to go to concentration camps. Unless they’ve died from the vaxx already.
Oh goodness you're right.
Arggh
Exactly.
*Very* prescient comment.
*Another* reason I like you, Ryan!
Yeah, sure it's yours, now come and collect it (Followed by a wicked grin and the clack-clack of a charging handle).
What has been the view of titans of industry etc. etc.? I am really interested in untangling this nasty little web.
Pretty sure they were the ones behind the creation of the Fed in the first place. Control the money and you control everything.
I'm going to take slight issue here.
Yes, there will *always* be (human nature, eh?) private sector actors that seek rent.
But in a democracy, it is the general public, in its apparent (human nature again, I guess?) complacency, that allows crony-capitalism by allowing the *overgrowth* of public power, i.e. the size/scope of the State.
We are supposed to vote for *less* of that which endangers our *individual* (i.e. *private* sector) prosperity, and we don't.
Why is that?
Government runs school?
The un-avoidable moral hazard of indoctrination into anti-Capitalism by public-sector entities must be a significant factor. How many educators, to whom the impressionable youth will look for social philosophy/wisdom, vote for *less* gov't?
cartelisation - the Big Club you're not in.
I'm an economist and... honestly I don't think there is a good argument. The main one I have seen is that is sort of justified is that we would see constant deflation, and deflation is worse than inflation. I don't really accept that deflation is necessarily worse, rather just a problem in different ways.
The bad arguments I have seen usually revolve around the ability of the government to perform monetary policy to respond to crisis. Which... yea I am not really too impressed with their ability to do that without a gold or other commodity standard.
I think the overall problem is that no one in government wants to have their hands tied in terms of being able to run the money printers as they see fit, so all mainstream (read: want to be in the government) economists say what they need to to support that.
The idea that Americans would starve themselves waiting for cheaper bread tomorrow is counteracted by the fact that Americans rush out to get the newest phone, even though it will be 50% the price in a year.
As you said, deflation has its own problems, but inflation eventually drives the currency to zero.
Yea, I have never understood all the doom saying about deflation. The biggest problem is that if deflation is high enough and the time between purchasing raw materials and selling finished goods is long enough one can get stuck where goods sell for less than their production costs. That's a big "if" however, especially considering how slowly prices tend to adjust to moderate rates of inflation. Likewise, employees would get paid a little less over time, but then merit increases etc would slow that down, and it isn't as though people don't get used to such things.
I personally think fears of deflation are horribly inflated.
Inflation favors debtors, and nobody is in debt as much as the US government. We aren't going to pay off the debt -- we're going to inflate it away. We won't cut Social Security -- it's just that the dollars you get won't buy you anything.
What's really weird is that at some point (1930's if I recall) they made optional commodity denominations for contracts illegal. Used to be one could write a contract like "You will pay 1,000$, or 300 bushels of wheat, or 200 lbs of steel" or whatever, but then they stopped being enforceable. That solved all the relevant monetary worries, as you could write it so that the parties had to agree on what to pay. Inflation went crazy? Decide on a commodity.
Social Security is inflation scaled, although not terribly closely I notice. That one is tricky though, for the same reason politicians are loathe to cut benefits or raise the age to receive them. Such a terrible, terrible idea for a policy.
Yes, the difference between the official CPI-granted SS raises and actual increase in cost of living will be large enough to drive your new RV through because you can't afford a house anymore.
It sure seems sad to dream of being a bureaucrat.
lol
Right, exactly.
So, again to the point I always seem to get to in these discussions:
Ben Franklin was spot on when he said it was up to *us*, the People, to "keep" our republic, i.e. to vote *for* a SMALL public sector, so that we could go on "self"-governing, as is our right, imso.
If old Ben were here today, would he say we had already failed?
As I recall, possibly erroneously, the first few presidents had a staff of like 20 people, that they paid for themselves. If I am correct then, yes, I suspect the the founders would look at the modern federal government aghast at its sheer size. I doubt that the idea of government spending being ~40%+ of GDP (or whatever term they would use for the total production of a country) would be seen as a possibility, possibly harder to believe than putting people on the moon for them. I am reminded that after the first few years of the federal income tax existing people were shocked at how much money it raised, and it was a teeny tiny percent in those days.
Yep.
Of course, the country was a lot smaller then, and it is natural that a super-power would have a large federal gov't., but yeah. 40%? That's way too much freedom-usurping, wealth-destroying, always-war-mongering, and ever-self-expanding, public power.
I think the founders *were* far-sighted. I just think they they didn't realize what a good (i.e. lasting) job they did, that their social system would be so successful as to allow a bequeathed (and grown ignorant, by and large) People to *afford* such an overgrown public sector.
The founders, I'm sure, would have thought that the People would haver rebelled by now.
Beyond already failed. We’re being perp marched to our own gallows. The most well armed populace in history, being raped by a few disgusting individuals .
Do you perceive no signs at all of a change for the good, M. devoalan?
The only argument against the gold standard (but it is a good one ) is that it needs to be digitized in order to function in a digital economy. This means someone would have to be in charge of minting digital coins. This leaves us in the same place as having to trust a group of people not to counterfeit the money which historically never happens . If there a way to open source this process then it would work. But since no one who talk about bringing back a gold standard seems to ask this question I'm on team bitcoin. Of course that has the problem of scaling but at least its people are asking how to do that. Either way what we got now is receipe for poverty
Ecxellent, foundational question, SCA.
"...or even terribly competent at math."
It's not mathematics that is required here. It is logic and reason, which you have (imo) in droves, which is what led you to ask in the first place.
Because the pre-WW1 gold coin standard put a hard limit on government spending. There are vested interests dead set against any such limits...
Spot on. Exactly this
I always think "it should be silver" when this comes up. https://www.wikiwand.com/en/Free_silver
https://bankingjournal.aba.com/2020/03/how-pierpont-morgan-saved-the-gold-standard/
And on gold ... "gold failed as a global reserve currency because there isn’t enough of it to go around. Inevitably shortages result forcing something to change."
https://www.globalresearch.ca/the-rise-and-fall-of-the-international-gold-standard/13559
If it were less scarce it would be less valuable.
if it were less scarce, it couldn't be captured. Silver is plentiful. That's why they had to eliminate it as an option.
Food for thought on Gold
https://open.substack.com/pub/chemtrails/p/is-investing-in-gold-a-psyop?utm_source=share&utm_medium=android&r=1k8fsn
"Mainstream quarters" is another way of saying those who benefit from free money, and would suffer under a gold standard. By suffer, I mean have to play fair.
Another way of looking at it is that the mainstream doesn't tend to think for itself.
Those behind the MS does a lot of thinking, that's how they came to control the MS.
Your’re not still trading away your pre-1964 dimes for nickels are ya?—(asking for a friend.)
How did you install spyware in my home?
😂
My diamond hands are in HODL mode. The US dollar is going to come back up any day now; I’m sure of it!
To the moon!
i will HODL this fiat to zero!!!
:D
Oh yeah, well, when hyper-inflation takes off, I'm going to be a millionaire!
I know; and you’ll be able to buy your lifelong dream of a………..loaf of bread!
worse still, probably not!
Dang. I've been on the wet gravel standard for years, and thanks to you guys, I think I now understand why I'm still poor.
I have a fistful of ten trillion dollar Zimbabwe $ bills. You should see my tax rate!
Can you swim?
(The Southern border beckons...)
Don’t need to. Texas will secede. We’re just keeping it a secret that when we do, we’ll rejoin Mexico. Even AMLO is better than Joe.
I hope I move there in time!
But not to join the Mexican Marxist...
Their Marxist, our Marxist, what’s the diff? And their election is in 25. The weather is nicer, the people really friendly, fishing is great, surf spectacular, it’s much cheaper, and the food and tequila are out of this world.
Dang, EZ.
Are you in sales?
We will all be bills Joe can wealth tax us to death.
Geez Louise “billionaires so”
You'll still need more...
We’ll be trillionaires!
I'm training my son to seek quadrillions, myself.
I feel like such a failure. Always behind the (inflationary) curve.
Good one.
Sometimes I think I'd be a lot happier if I were economically ignorant.
But, then I'd probably vote Democrat...
They are backed by the “full faith and credit “ of the US government 😬
Ha! ...Which has lost all of its own!!
Time to buy bitcoin and gold.
No wonder they are at strong highs.
Hopefully, they are at strong lows!
The bubble burst will be spectacular to behold.
Painful, oh god yes.
But spectacular.
A galactic beautiful disaster. I actually can't wait to witness it.
Load up on ammo and unvaxxed gametes.
Only "beautiful" if it *must* happen.
Hopefully, we avoid the wrong kind of fight, iykwim...
Iow, what (imo) you look forward to is the reckoning, the..."adjustment" of the timeline back towards ever-increasing individual freedom/agency/precedence in the structure of society(-ies), no matter how bloody that reckoning is.
All I express here is a wish i know you share, that *Classical* Liberalism return as our loadstar.
I do
Dropped a few hundy this morning!
On Pb to be clear.
IMI JHP for the win!
Much as I’d like to think it would only ever be money, must be some reason I’m buying lead.
FMJ would certainly be more cost effective for range use after all.
Nice! I couldn't tell exactly what you were "dropping" at first....
SG ammo
My numismatist better half informed this morning that it costs 3 cents to make a penny and 12 cents to make a nickel…..
Capitalism is the worst system I know of, but better than anything else. So tell me do you have a better idea?
i'm not sure i see the relevance of the observation.
1. i think free market systems are not actually a bad system but quite a good one, certainly the best of which i know as they render the consumer sovereign.
2. free market systems do not require a governmental monopoly on money. one could (and i certainly would) argue that such a monopoly is actually the opposite of a free market
I would argue the monetary policy that the Feds have created allows the free market system to work as well as it does. No one has a monopoly on wealth. All the feds does is create a system that allow people immediate liquidity to create and use wealth as they see fit. Look at it as a way to keep score.
Spot on.
May I paraphrase? (Speak up if I am mistaken!)
Iow, Capitalism is no utopia. Individuals are still free to commit crimes (like the theft of the un-freely-earned, and voting for such...).
Exactly
Capitalism is terrible, but their is nothing else better. Milton Friedman talks about this in his book Monetary policy of the US. Im not saying the fed hasn't made mistakes. I just dont.know that anyone has a better system than the one currently in place. Returning to the gold standard would be a huge mistake.
Agreed. It *would* be difficult to return to a gold standard, yes, but only because of the (inevitable?) accumulation of fiat currency debt.
It *will* correct one day, as it must. That's the problem of getting away from point A (today's trjectory) which doesn't solve the first as-yet-humanly-unsolved problem, how to get to point B (true Capitalism).
True. We also dont have a debt problem. We have a spending problem.
Absolutely!
Its the part of the Constitutional "collar" that is most missing: an effective check on the spending, not so much of we-the-producer's-wealth, but of that which doesn't even exist yet - our progeny's wealth.
Which kinda makes them slaves before they even have to start providing for themselves.
*That* is evil.
How does a vendor selling anything not get jailed and arrested for using crypto in a world with no dollars? Crypto may be the answer but not if the comrades in charge criminalize the use of it
Rolling the dice: From the early 1970s through the mid 1990s I invested heavily in Art Fair Futures. It worked like this: In early winter when we were starting to get spent out after taxes were paid and things like home fuel costs were paid, we had to jury (send slides of our work and pay jury fees) for next Spring, Summer and Autumn art fairs and trade shows. We had to jury for more than we could actually do because we wouldn't always get accepted for everything. Then, for those were accepted in, we had to pay the show fees. Meanwhile we were in production of our work for those shows and hopefully had stock piled enough raw materials for the first months of production until we actually had a show to sell at. Weather was always a crap shoot for outdoor shows. Dem was da days!
Michael Saylor just coined another brilliant phrase: "There's a name for people who use fiat currency as a store of value. We call them "poor.”
“It’s a proof-of-stake coin that has no supply cap and a variable emission rate. Stakers have to deposit their coins to receive new emission supply and the coin lockups are often several years. Sometimes new coins can be airdropped at the behest of the developers but usually the airdrops go directly to insiders who then dump them into additional risky yield-farming protocols. Since these coins are digital, they’re just sort of created out of nowhere.
Whoops! I just described the US dollar.”
https://faybomb.substack.com/p/usd-is-a-shitcoin
As gato often says, I'm just a kitten. I actually don't understand why gold, which has no intrinsic value, should be the commodity. Gold is only as valuable as what people are willing to pay for it? I think of art or wine, for example. Am I just being stupid and simple minded? I don't mind if someone takes on the task to teach me. As they say, TIA
gold's value is predominantly rooted in tradition. it was used as money, so people use it as money. silver too though it devalued so greatly that it fell out of favor as supply rose.
it has modest value as a metal used in jewelry or electronics, but mostly it seems like a sort of long duration cowrie shell whose value as currency is mostly rooted in practice, not any intrinsic fact. it did, however, have the effect of preventing currency debasement when used as a backing for circulating notes because you could not issue notes not backed by gold and gold was limited, but lots of things could have been used for such a purpose.
Thanks for the long explanation. Though I didn't know for sure, I sort of thought that. That's what prompted me to ask the question.
On a personal note, I thought about using some of my dollars to buy gold, but I wondered how I would redeem it if I needed to.
I'm wondering aloud, not specifically asking.
Gold’s intrinsic value comes from industrial applications and the fact that it has no third party or duration risk. Agriculture commodities must be consumed or they go bad. Gold doesn’t tarnish or decay.
Thanks. I know gold has industrial applications, but I don't think it has any more than other metals. I know I could be wrong. This is what bing tells me. "Overall, industrial applications account for approximately 12% of total gold demand. While gold’s use in technology is relatively low compared to other precious metals, its unique properties continue to make it indispensable in various industrial processes."
12% isn't much, but indispensable is something. Of course there are other indispensable materials.
I think industrial usage has gone down because the price of Gold has probably increased relative to other metals. It’s value dense and it accounts for changes in currency supply over long periods of time. 300 ounces buys a house in 1900. 300 ounces buys a house in 2022. Is there a faith element to it? Sure maybe a little. But IMHO less faith is required to give Gold value than fiat. One is a natural element, the other is a mental construct.
In the real nitty-gritty of importing and exporting gold’s virtues of not taking up a lot of space compared to its value and being readily accepted in trade for just about anything anywhere squeezed it to the top. You were glad to come into port with your load of amphorae of olive oil sealed with waxed leather skins and receive gold that you could fit in your pocket or sew into your robe and sail home and it won’t rot/rust on the way home or while you are getting your next load ready to try it again. It’s not a fetish it just has worked best mechanically, I would surmise. That said, listening to Michael Saylor make his case that Bitcoin is perfect money, improving even on gold, I found very helpful. Also the interview on Kitco between Michelle Mikori, Carbone, and Solloway recently was helpful to take in.
Why gold has risen to the top as human's idea of "money" isn't completely rational. It's just that it meets all the recognized criteria - durable, fungible, divisible, portable, scarce but not super rare, have an intrinsic use but not too useful (industrial is one but so is jewelry).
Aristotle was one of the first to try to understand the nature of money, which has above all be a reliable store of wealth. This is different than currency, which is an abstraction that derives it's purpose from being backed by money.
Diamonds work but aren't easy enough to use, for example to split into precise spendable money, and derive too much value from being faceted. Silver is a little too common and useful, thus volatile. Wood, stones, seashells are too common and easy to counterfeit. Platinum had promise but it's also too useful in catalytic converters. Same with oil, very useful and hard to use.
Point is no one said "Gold it is then." but also no one had to decide, because it just worked.
Thanks. Something from elementary school history rattles around in my brain. I may have the actors wrong, but was it Webster running for president who said he would not be hung on a cross of - what - gold or silver? The US was trying to get off or on the gold standard.
Now I'm digging. McKinley put the US on the gold standard. During the civil war the US went to specie money. Another rabbit hole to go down.
HA! Ain't that the truth!
ShitCoins everywhere, starting with the USD...
In the kingdom of the blind the one-eyed is king!
Until there’s a viable alternative I’ll keep plowing my dollars into the market!
And don’t start with the Chinese or the BRICS coming up with an alternative… it’s like the crackhead at the corner trading cigarettes with the pimps…. Good for them!
hey...wait...I thought this was where we got rickrolled just for the fun of it...doh! Different kind of rickrolled. : (
I think in this case we just get rolled.
Yeah. Original def.