"Why Gold?" and other issues with fixed currency
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I think this depends on your definition of inflation. But I won't debate that, I think we've been over this plenty before.
Josh Davis
Always looking for blackjack. Or maybe White Frank. One of the two.Happy not to discuss, but QE is Not Inflation.
------------------------------------ I will never again mention that I was the poster of the One Millionth Lounge Post, nor that it was complete drivel. Dalek Dave
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There is still orogeny occuring, and that is causing loss of land, and anyway that airport is sinking! (Not to mention all that subduction in the Pacific rim.)
------------------------------------ I will never again mention that I was the poster of the One Millionth Lounge Post, nor that it was complete drivel. Dalek Dave
:)
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels) -
It seems every debate we have tends to return to fixed vs. fiat currency, so let's try to have a civilized (aka non-CSS) discussion about that... (Note that I'm not advocating fixed currency - I'm just trying to better understand it, and to see if it's actually still feasible in the Internet age) First of all, Why gold and silver?
Why, in this age of complete connectivity, does it need to be based on metal? All of the arguments I've heard are that these have the perception of value. But then, so do diamonds. So does platinum. Hell, coal has value, plutonium has a lot of value, clean water has value... You understand what I'm getting at here. In the old days, gold and silver were great mediums of exchange, because no matter where you were, everyone knew that gold was worth something. Nowadays, if we wanted to adopt a fixed currency, we could just come right out and say "There are X dollars in circulation. This will no longer be increased, and we're modifying the laws to ensure that." (Speaking of dollar amounts, not physical currency). That would be just as effective, unless you think the government is going to cheat. Second, What about destruction of currency?
Let's assume, for the moment, that we're using gold/silver-backed currency. Now, regardless of what's behind it, we're not going to be carrying around hunks of gold and silver. The population is just never going to accept that they have to carry coins around for everything, now that we're all accustomed to easy-to-carry paper currency. Not to mention, we use a lot of electronic currency to make it even more portable. So what happens when that currency is lost? What happens when you accidentally throw your wallet in the washing machine? What happens when a declining balance card gets wiped out? The money is now gone, but the gold/silver backing it still exists somewhere. We can't just modify the exchange rate, because we're operating on fixed currency where $1 represents X ounces of gold (Obviously X is a small fraction in this case). We can't print more currency to replace the loss, because the treasury doesn't know for sure that the money isn't still out there. There are plenty more issues, but let's start with these... Note: CSS, I don't give a flying #%*& about the tired old "Dollar has lost X% of its value since 1913 wahhh wahhh socialist fascist tyrant eugenicist" argument. We're not talking about whether fixed is better or worse than fiat, so just stuff it. If you have something toA very good question, just hope the Back Room doesn't collapse from the increase in common sense. A number of years ago the Japanese market was back by proprity values so when property values collapsed as business moved abroad things snowballed. Japan still hasn't recovered. There isn't a simple answer these days so I guess we need a good mix of more complex ones.
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A very good question, just hope the Back Room doesn't collapse from the increase in common sense. A number of years ago the Japanese market was back by proprity values so when property values collapsed as business moved abroad things snowballed. Japan still hasn't recovered. There isn't a simple answer these days so I guess we need a good mix of more complex ones.
Join the cool kids - Come fold with us[^]
Yep, I'm trying to get some actual responses from the Libs, but so far they're mostly avoiding the issue and latching onto fixed vs fiat again.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels) -
Weak analogy, Josh. Why does it have to be metal? If the Fed's ability to adjust the money supply was completely removed, that would effectively give us a fixed amount of currency.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels)I've already described why it has to be metal. It's an inherent unit of measure. It won't be destroyed, and can not be created by man. It's elemental (gold is an element, silver, copper, NOT steel, so do not use steel...),it's as far broken down as it can go. It's a medium of exchange (we all agree here.) It can not be inflated by the government, therefore you can't be stolen from. Taxes, according to a guy like me, are defacto theft. Inflation is the worst tax (when talking in terms of the Austrian), because it will eventually seep into the system (whether quickly through people's whims of the day or eventual price adjustment, which is the Keynesian view of inflation). It can not be deflated, meaning it can't be destroyed. Wheat can be destroyed. Paper can be destroyed. Elemental metal can not just burn or get wet and lose its value. Even if you were to eat it, you'll crap it out later, or when you decay in death, it'll still retain its worth (a little gross, but true nonetheless.)
Josh Davis
Always looking for blackjack. Or maybe White Frank. One of the two. -
There's not enough gold or silver, so that's why economies these days are based on how much your country con produce, it's way more complicated, but lets keep it simple. If we were using gold which country would be the richest? the one that has the biggest reserves and is able to dig it out, but what happens with countries with little gold? do they deserve to be poor because they can't have enough? according to wikipedia, South Africa is the largest producer of gold, Spain and France produce none or very little. More questions come if we use gold, if we only have 10,000 dollars/pesos/euros/ worth of gold, how can we increase the wealth of a nation or person if we are limited to the amount of gold in hand?, what happens when more people starts working and there's not enough gold to pay them for their work?, because you right now have only 10,000 available, how to distribute those 10,000? over the time you will produce more gold, but will it be enough to support your demands? what happens with all the uses gold has besides currency? if your production is limited on how much gold is available to purchase your goods, will it matter if you produce 1 or 100,000 pieces of your product? How can you compete if your sales are limited to how much can be purchased that month/day with the available gold? you produce products worth 1,000,000 gold dollars, that means you will have to wait 100 months/days to produce again?, and that's IF you are able to sell them in 100 months/days What about credit? isn't giving credit something that will destroy the gold dollars? how can you support 10,000 gold dollars in credit plus your 10,000 gold dollars if you only have 10,000 available? Economies won't work that way these days
I want to die like my grandfather- asleep, not like the passengers in his car, screaming!
:thumbsup: I was going to write something similar. You’re absolutely right; the fixed currency will not be able to catch up with the growing economy, hence a huge deflation and inevitable economical collapse.
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My point is I'm not trying to debate fiat versus fixed. I'm trying to debate the need for metal-backing under a fixed-rate currency. Fiat has nothing to do with this.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels)If this is true, then you're talking about certificates? like silver certificates? I'm down with that. It's fixed. The only problem is that eventually, we'd become the creditor nation of the world again, and this was the breakdown of the Bretton Woods system.
Josh Davis
Always looking for blackjack. Or maybe White Frank. One of the two. -
Yep, I'm trying to get some actual responses from the Libs, but so far they're mostly avoiding the issue and latching onto fixed vs fiat again.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels)I didn't realize that you were asking about backing up the currency with gold/silver. Because it sounded like you were asking about using water/grain/paper or something directly.
Josh Davis
Always looking for blackjack. Or maybe White Frank. One of the two. -
Richard A. Abbott wrote:
Where possible, or feasible, the face value of this "something" should be exchangeable for gold or silver
But why? Why gold or silver? Why those particular metals? "Because that's how it was a hundred years ago" isn't a good argument, because the world has changed a great deal in the last century. Why does it have to be based on something physical? As long as everyone agrees on its value, it doesn't need metal behind it. If the US changed its policy from "The money supply will be adjusted to regulate the economy" to "The money supply is now 100% constant", wouldn't that have the same effect?
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels)Ian Shlasko wrote:
"Because that's how it was a hundred years ago"
Great traditions that have stood the test of time are hard to give up. But when we give them up, they can fall either quickly or slowly. This being dependent upon their managed demise.
Ian Shlasko wrote:
Why does it have to be based on something physical?
It doesn't. But whatever value it attracts has to be of inherent value. Regulating the value attached to such a "something" requires intervention by some centralised authority otherwise the value of this "something" will mean different things to different people and this something can wildly vary. Defining something as 100% constant is dependent on who or what this constant is. If a constant does not change, how can the variability of the value of goods and labour change. All peoples whether they are individual wage earners or companies wish to acquire more of that something. And as the change in such requirements, so the something becomes that much more scarce so the 100% constant in many ways is a meaningless value. To retain that 100% constant in that scenario would require deflationary pressures to counter the effect of changing prices and changing workers earnings.
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It seems every debate we have tends to return to fixed vs. fiat currency, so let's try to have a civilized (aka non-CSS) discussion about that... (Note that I'm not advocating fixed currency - I'm just trying to better understand it, and to see if it's actually still feasible in the Internet age) First of all, Why gold and silver?
Why, in this age of complete connectivity, does it need to be based on metal? All of the arguments I've heard are that these have the perception of value. But then, so do diamonds. So does platinum. Hell, coal has value, plutonium has a lot of value, clean water has value... You understand what I'm getting at here. In the old days, gold and silver were great mediums of exchange, because no matter where you were, everyone knew that gold was worth something. Nowadays, if we wanted to adopt a fixed currency, we could just come right out and say "There are X dollars in circulation. This will no longer be increased, and we're modifying the laws to ensure that." (Speaking of dollar amounts, not physical currency). That would be just as effective, unless you think the government is going to cheat. Second, What about destruction of currency?
Let's assume, for the moment, that we're using gold/silver-backed currency. Now, regardless of what's behind it, we're not going to be carrying around hunks of gold and silver. The population is just never going to accept that they have to carry coins around for everything, now that we're all accustomed to easy-to-carry paper currency. Not to mention, we use a lot of electronic currency to make it even more portable. So what happens when that currency is lost? What happens when you accidentally throw your wallet in the washing machine? What happens when a declining balance card gets wiped out? The money is now gone, but the gold/silver backing it still exists somewhere. We can't just modify the exchange rate, because we're operating on fixed currency where $1 represents X ounces of gold (Obviously X is a small fraction in this case). We can't print more currency to replace the loss, because the treasury doesn't know for sure that the money isn't still out there. There are plenty more issues, but let's start with these... Note: CSS, I don't give a flying #%*& about the tired old "Dollar has lost X% of its value since 1913 wahhh wahhh socialist fascist tyrant eugenicist" argument. We're not talking about whether fixed is better or worse than fiat, so just stuff it. If you have something toIan Shlasko wrote:
Why, in this age of complete connectivity, does it need to be based on metal? All of the arguments I've heard are that these have the perception of value. But then, so do diamonds. So does platinum. Hell, coal has value, plutonium has a lot of value, clean water has value... You understand what I'm getting at here.
Gold and silver is in limited supply and requires a bit of work to mine, which keeps inflation in check. Diamonds are too abundant and can't be used in decimal denominations. As population increases and the economy grows, gold and silver increase in value. The increase in value makes it even more profitable to mine, so tedious mining procedures and new mining technologies that might have been too expensive to be profitable become profitable.
Ian Shlasko wrote:
"There are X dollars in circulation. This will no longer be increased, and we're modifying the laws to ensure that." (Speaking of dollar amounts, not physical currency). That would be just as effective, unless you think the government is going to cheat.
The problem with this is that the government will always debase the currency. History proves it. The only way to keep government currency manipulation in check is to use something real like gold and silver.
Ian Shlasko wrote:
Let's assume, for the moment, that we're using gold/silver-backed currency. Now, regardless of what's behind it, we're not going to be carrying around hunks of gold and silver. The population is just never going to accept that they have to carry coins around for everything, now that we're all accustomed to easy-to-carry paper currency. Not to mention, we use a lot of electronic currency to make it even more portable.
There is no reason why checks, and debit/credit cards can't be used with a gold and silver currency. Also, people typically have some change in their pockets, since gold and silver is so valuable, a couple ounces of silver coin would be around 50 bucks in today's dollar. A cellphone weighs more than that. Gold is even more valuable.
Ian Shlasko wrote:
So what happens when that currency is lost?
When the coin is lost, it is out of circulation. When currency is out of circulation, the value of that lost coin is transferred to all of the other coins in circulation.
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I've already described why it has to be metal. It's an inherent unit of measure. It won't be destroyed, and can not be created by man. It's elemental (gold is an element, silver, copper, NOT steel, so do not use steel...),it's as far broken down as it can go. It's a medium of exchange (we all agree here.) It can not be inflated by the government, therefore you can't be stolen from. Taxes, according to a guy like me, are defacto theft. Inflation is the worst tax (when talking in terms of the Austrian), because it will eventually seep into the system (whether quickly through people's whims of the day or eventual price adjustment, which is the Keynesian view of inflation). It can not be deflated, meaning it can't be destroyed. Wheat can be destroyed. Paper can be destroyed. Elemental metal can not just burn or get wet and lose its value. Even if you were to eat it, you'll crap it out later, or when you decay in death, it'll still retain its worth (a little gross, but true nonetheless.)
Josh Davis
Always looking for blackjack. Or maybe White Frank. One of the two.But like I said in the original post... Transporting metal back and forth in this age of global markets is no longer economical. Hence, we use electronic and paper representations. So what makes it more valuable than just declaring that our currency is now fixed, and that the government no longer has the power to increase or decrease the money supply? Let's go down your list...
josda1000 wrote:
It's a medium of exchange
So is the current dollar.
josda1000 wrote:
It can not be inflated by the government, therefore you can't be stolen from.
If we declare it fixed and deny the government the power to adjust its supply (No quantitative easing, no printing non-existent money - Printing money would involve deducting that amount from the treasury's electronic account), then this holds true.
josda1000 wrote:
It can not be deflated, meaning it can't be destroyed
This is an issue, but as soon as you use representative currency instead of carrying around hunks of gold and mailing them every time you want to pay your phone bill, then the representation can be destroyed.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels) -
If this is true, then you're talking about certificates? like silver certificates? I'm down with that. It's fixed. The only problem is that eventually, we'd become the creditor nation of the world again, and this was the breakdown of the Bretton Woods system.
Josh Davis
Always looking for blackjack. Or maybe White Frank. One of the two.The point of the thread is that if we all suddenly decided "Ok, we're going to switch to some form of fixed currency," then how do we deal with these issues? As in, if we ARE going to use fixed currency, why does it have to be based on gold/silver? And how do we deal with the currency (Whether it's valued in itself or representative of metal) being destroyed? I described these issues in detail in the original post of this thread.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels) -
I didn't realize that you were asking about backing up the currency with gold/silver. Because it sounded like you were asking about using water/grain/paper or something directly.
Josh Davis
Always looking for blackjack. Or maybe White Frank. One of the two.Maybe the original post could have been a little clearer... But then, given past threads in this forum, every debate is assumed to be about fiat currency :)
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels) -
Happy not to discuss, but QE is Not Inflation.
------------------------------------ I will never again mention that I was the poster of the One Millionth Lounge Post, nor that it was complete drivel. Dalek Dave
Dalek Dave wrote:
Happy not to discuss, but QE is Not Inflation.
Yes it does mean inflation, if the newly created currency ever goes into circulation.
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Ian Shlasko wrote:
Why, in this age of complete connectivity, does it need to be based on metal? All of the arguments I've heard are that these have the perception of value. But then, so do diamonds. So does platinum. Hell, coal has value, plutonium has a lot of value, clean water has value... You understand what I'm getting at here.
Gold and silver is in limited supply and requires a bit of work to mine, which keeps inflation in check. Diamonds are too abundant and can't be used in decimal denominations. As population increases and the economy grows, gold and silver increase in value. The increase in value makes it even more profitable to mine, so tedious mining procedures and new mining technologies that might have been too expensive to be profitable become profitable.
Ian Shlasko wrote:
"There are X dollars in circulation. This will no longer be increased, and we're modifying the laws to ensure that." (Speaking of dollar amounts, not physical currency). That would be just as effective, unless you think the government is going to cheat.
The problem with this is that the government will always debase the currency. History proves it. The only way to keep government currency manipulation in check is to use something real like gold and silver.
Ian Shlasko wrote:
Let's assume, for the moment, that we're using gold/silver-backed currency. Now, regardless of what's behind it, we're not going to be carrying around hunks of gold and silver. The population is just never going to accept that they have to carry coins around for everything, now that we're all accustomed to easy-to-carry paper currency. Not to mention, we use a lot of electronic currency to make it even more portable.
There is no reason why checks, and debit/credit cards can't be used with a gold and silver currency. Also, people typically have some change in their pockets, since gold and silver is so valuable, a couple ounces of silver coin would be around 50 bucks in today's dollar. A cellphone weighs more than that. Gold is even more valuable.
Ian Shlasko wrote:
So what happens when that currency is lost?
When the coin is lost, it is out of circulation. When currency is out of circulation, the value of that lost coin is transferred to all of the other coins in circulation.
CaptainSeeSharp wrote:
Gold and silver is in limited supply
If we declare that our currency is now fixed, it's a limited supply.
CaptainSeeSharp wrote:
The problem with this is that the government will always debase the currency. History proves it. The only way to keep government currency manipulation in check is to use something real like gold and silver.
Hence, you make it completely illegal and unconstitutional (through amendment) for the government to manipulate the money supply. If you're just going to assume that any system is going to be corrupted except for your favorite one, then you're not contributing to this discussion at all.
CaptainSeeSharp wrote:
There is no reason why checks, and debit/credit cards can't be used with a gold and silver currency. Also, people typically have some change in their pockets, since gold and silver is so valuable, a couple ounces of silver coin would be around 50 bucks in today's dollar. A cellphone weighs more than that. Gold is even more valuable.
A fair statement, though it would require that ALL currency was metal. We'd need a lot of different denominations of coins (To be able to reasonably carry a few bucks or a few thousand bucks), since no one wants to carry $1,000 in twenty-dollar coins.
CaptainSeeSharp wrote:
When the coin is lost, it is out of circulation. When currency is out of circulation, the value of that lost coin is transferred to all of the other coins in circulation.
In other words, we'd have a constant trickle of deflation.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels) -
Ian Shlasko wrote:
Why, in this age of complete connectivity, does it need to be based on metal? All of the arguments I've heard are that these have the perception of value. But then, so do diamonds. So does platinum. Hell, coal has value, plutonium has a lot of value, clean water has value... You understand what I'm getting at here.
Gold and silver is in limited supply and requires a bit of work to mine, which keeps inflation in check. Diamonds are too abundant and can't be used in decimal denominations. As population increases and the economy grows, gold and silver increase in value. The increase in value makes it even more profitable to mine, so tedious mining procedures and new mining technologies that might have been too expensive to be profitable become profitable.
Ian Shlasko wrote:
"There are X dollars in circulation. This will no longer be increased, and we're modifying the laws to ensure that." (Speaking of dollar amounts, not physical currency). That would be just as effective, unless you think the government is going to cheat.
The problem with this is that the government will always debase the currency. History proves it. The only way to keep government currency manipulation in check is to use something real like gold and silver.
Ian Shlasko wrote:
Let's assume, for the moment, that we're using gold/silver-backed currency. Now, regardless of what's behind it, we're not going to be carrying around hunks of gold and silver. The population is just never going to accept that they have to carry coins around for everything, now that we're all accustomed to easy-to-carry paper currency. Not to mention, we use a lot of electronic currency to make it even more portable.
There is no reason why checks, and debit/credit cards can't be used with a gold and silver currency. Also, people typically have some change in their pockets, since gold and silver is so valuable, a couple ounces of silver coin would be around 50 bucks in today's dollar. A cellphone weighs more than that. Gold is even more valuable.
Ian Shlasko wrote:
So what happens when that currency is lost?
When the coin is lost, it is out of circulation. When currency is out of circulation, the value of that lost coin is transferred to all of the other coins in circulation.
CaptainSeeSharp wrote:
Gold and silver is in limited supply and requires a bit of work to mine, which keeps inflation in check
In other words, destroy the earth to make money ? There's not enough gold out there to do this, as I've covered.
CaptainSeeSharp wrote:
As population increases and the economy grows, gold and silver increase in value
Well, that's inflation.
CaptainSeeSharp wrote:
The increase in value makes it even more profitable to mine, so tedious mining procedures and new mining technologies that might have been too expensive to be profitable become profitable.
Which is a disaster for the communities living in areas with trace amounts of gold in the ground.
CaptainSeeSharp wrote:
History proves it.
It can be used to prove almost anything you like.
CaptainSeeSharp wrote:
When the coin is lost, it is out of circulation. When currency is out of circulation, the value of that lost coin is transferred to all of the other coins in circulation.
How does that work, they do a poll to ask everyone how much they lost ? One other thing, when real gold was used in coins, people would shave a bit of gold from the edges and then spend the coin, keeping something of real value. How do you account for or stop that ?
Christian Graus Driven to the arms of OSX by Vista. Read my blog to find out how I've worked around bugs in Microsoft tools and frameworks.
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It seems every debate we have tends to return to fixed vs. fiat currency, so let's try to have a civilized (aka non-CSS) discussion about that... (Note that I'm not advocating fixed currency - I'm just trying to better understand it, and to see if it's actually still feasible in the Internet age) First of all, Why gold and silver?
Why, in this age of complete connectivity, does it need to be based on metal? All of the arguments I've heard are that these have the perception of value. But then, so do diamonds. So does platinum. Hell, coal has value, plutonium has a lot of value, clean water has value... You understand what I'm getting at here. In the old days, gold and silver were great mediums of exchange, because no matter where you were, everyone knew that gold was worth something. Nowadays, if we wanted to adopt a fixed currency, we could just come right out and say "There are X dollars in circulation. This will no longer be increased, and we're modifying the laws to ensure that." (Speaking of dollar amounts, not physical currency). That would be just as effective, unless you think the government is going to cheat. Second, What about destruction of currency?
Let's assume, for the moment, that we're using gold/silver-backed currency. Now, regardless of what's behind it, we're not going to be carrying around hunks of gold and silver. The population is just never going to accept that they have to carry coins around for everything, now that we're all accustomed to easy-to-carry paper currency. Not to mention, we use a lot of electronic currency to make it even more portable. So what happens when that currency is lost? What happens when you accidentally throw your wallet in the washing machine? What happens when a declining balance card gets wiped out? The money is now gone, but the gold/silver backing it still exists somewhere. We can't just modify the exchange rate, because we're operating on fixed currency where $1 represents X ounces of gold (Obviously X is a small fraction in this case). We can't print more currency to replace the loss, because the treasury doesn't know for sure that the money isn't still out there. There are plenty more issues, but let's start with these... Note: CSS, I don't give a flying #%*& about the tired old "Dollar has lost X% of its value since 1913 wahhh wahhh socialist fascist tyrant eugenicist" argument. We're not talking about whether fixed is better or worse than fiat, so just stuff it. If you have something toWorking under the assumption that we're using gold/silver-backed currency... In the old days, gold/silver were only used as currency and for luxury goods. Now, they have uses in industry. Let's go with a hypothetical situation... Some research lab just developed a new form of small-scale energy production, maybe a new kind of solar cell or a more efficient battery for electric vehicles. This is something that could revolutionize its industry and push us, as a society, way ahead on the technological curve. The catch, though, is that it requires some amount of gold or silver to construct. Other than that, the materials are dirt cheap. Since gold/silver is our currency, it's hundreds of thousands of dollars per ounce (It would have to be, for our gold supply to match our currency supply) - Or regardless of the exact numbers, it's going to be much more expensive BECAUSE it's our currency. Now, instead of these solar cells - Let's use that as the example - costing next-to-nothing and paying for their initial cost via energy savings in the first year, they're now so expensive that it's not economically-viable to implement them. Alternatively, if they're still economically-viable and DO catch on, the currency begins to deflate more and more, because the gold/silver is being used in these new solar cells to bring us to the next level of energy production (Get us off oil, etc etc). We're being deflated not because of market factors, but because of technological factors. Does this fit into your ideal system?
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels) -
CaptainSeeSharp wrote:
Gold and silver is in limited supply and requires a bit of work to mine, which keeps inflation in check
In other words, destroy the earth to make money ? There's not enough gold out there to do this, as I've covered.
CaptainSeeSharp wrote:
As population increases and the economy grows, gold and silver increase in value
Well, that's inflation.
CaptainSeeSharp wrote:
The increase in value makes it even more profitable to mine, so tedious mining procedures and new mining technologies that might have been too expensive to be profitable become profitable.
Which is a disaster for the communities living in areas with trace amounts of gold in the ground.
CaptainSeeSharp wrote:
History proves it.
It can be used to prove almost anything you like.
CaptainSeeSharp wrote:
When the coin is lost, it is out of circulation. When currency is out of circulation, the value of that lost coin is transferred to all of the other coins in circulation.
How does that work, they do a poll to ask everyone how much they lost ? One other thing, when real gold was used in coins, people would shave a bit of gold from the edges and then spend the coin, keeping something of real value. How do you account for or stop that ?
Christian Graus Driven to the arms of OSX by Vista. Read my blog to find out how I've worked around bugs in Microsoft tools and frameworks.
Christian Graus wrote:
Well, that's inflation.
You mean deflation. Inflation would be an increase in supply and decrease in value.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels) -
Christian Graus wrote:
Well, that's inflation.
You mean deflation. Inflation would be an increase in supply and decrease in value.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels)Good point. I was thinking backwards, b/c gold is something you buy.
Christian Graus Driven to the arms of OSX by Vista. Read my blog to find out how I've worked around bugs in Microsoft tools and frameworks.
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CaptainSeeSharp wrote:
Gold and silver is in limited supply
If we declare that our currency is now fixed, it's a limited supply.
CaptainSeeSharp wrote:
The problem with this is that the government will always debase the currency. History proves it. The only way to keep government currency manipulation in check is to use something real like gold and silver.
Hence, you make it completely illegal and unconstitutional (through amendment) for the government to manipulate the money supply. If you're just going to assume that any system is going to be corrupted except for your favorite one, then you're not contributing to this discussion at all.
CaptainSeeSharp wrote:
There is no reason why checks, and debit/credit cards can't be used with a gold and silver currency. Also, people typically have some change in their pockets, since gold and silver is so valuable, a couple ounces of silver coin would be around 50 bucks in today's dollar. A cellphone weighs more than that. Gold is even more valuable.
A fair statement, though it would require that ALL currency was metal. We'd need a lot of different denominations of coins (To be able to reasonably carry a few bucks or a few thousand bucks), since no one wants to carry $1,000 in twenty-dollar coins.
CaptainSeeSharp wrote:
When the coin is lost, it is out of circulation. When currency is out of circulation, the value of that lost coin is transferred to all of the other coins in circulation.
In other words, we'd have a constant trickle of deflation.
Proud to have finally moved to the A-Ark. Which one are you in?
Author of the Guardians Saga (Sci-Fi/Fantasy novels)Ian Shlasko wrote:
Hence, you make it completely illegal and unconstitutional (through amendment) for the government to manipulate the money supply
That won't stop the government, as we see today, the constitution is no longer relevant. It needs to be physically difficult for anyone to manipulate the money supply.
Ian Shlasko wrote:
A fair statement, though it would require that ALL currency was metal. We'd need a lot of different denominations of coins (To be able to reasonably carry a few bucks or a few thousand bucks), since no one wants to carry $1,000 in twenty-dollar coins.
Here are possible denominations using alloys when needed. Penny (copper and silver alloy) (worth 10-20 cents) Nickle (some medal and silver alloy) (with 50 cents to a dollar) dime (pure silver) (worth 1 to 2 dollars) quarter (pure silver) (worth 2.50 to 5 dollars) half dollar (pure silver) dollar (pure silver) five dollars (some medal and gold alloy) ten dollars (22k gold 1/10 once) twenty-five dollars (22k gold 1/4 once) fifty dollars (22k gold 1/2 once) hundred dollars (22k gold 1 once) 500 dollars (24k bar 5 once) 1000 dollars (24k bar, 10 once) 5000 dollars (24k bar 50 once) 10000 dollars (24k bar 100 once)
Ian Shlasko wrote:
In other words, we'd have a constant trickle of deflation.
Not really, there are plenty of mining operations going on around the world. Also, as I said, the more valuable gold and silver becomes, the more profitable it is to mine. Mining operations that were previously too expensive to be profitable become profitable.
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