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ShcShc11

Republicans eye return to GOLD standard..

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The gold standard has returned to mainstream US politics for the first time in 30 years, with a “gold commission” set to become part of official Republican party policy.

the efforts of libertarian congressman Ron Paul – have made the once-fringe idea of returning to gold-as-money a legitimate part of Republican debate.



Quite sad they've stooped this low in economics. B|

...and somehow unable to recognize the Euro-monetary system is in essence under a guise similar to the gold system (one of the main reasons why it is failing).


Cheers!
Shc

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Do you have any idea of the pros and cons of the gold standard?



The pro is the exact same thing as the con; it's no better or worse than any other standard because in truth it's still completely arbitrary.
quade -
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I don't think that is accurate. It's much harder to inflate the money supply with a gold standard. Actually pretty much impossible. That is one of the reasons why the Gov doesn't like it.



How is mining more gold different from printing more money?
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The only sure way to survive a canopy collision is not to have one.

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Mining doesn't generate any where near as much gold as printing generates fiat currency.

What people consider inflation ie the CPI is just a symptom of inflation of the monetary base. Consider this a 1950's quarter would buy more gasoline today then it did in 1950. Since 1933 the dollar has lost over 95% of it's purchasing power.

I am sure anyone can figure out why a 1950's quarter would hold it's value so well.

When I said impossible, I meant impossible for the Gov to just inflate like they do with fiat currency. The Gov currently doesn't own any mines, as far as I know. I could be wrong on that.

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Another interesting fact is that most of the money that is created isn't created by the Fed, and I am not referring to actual physical money. It's created by the banks loaning the money into existence. That is due to fractional reserve banking.

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I don't think that is accurate.



Nonsense. Gold is as arbitrary as anything. Let me ask you this; how much is the minimum wage, in grams of gold? How well has it kept up with the inflated price of gold or how much will it?

It's arbitrary, because you're not going to get paid in grams of gold. You'll get paid in dollars which will fluctuate against gold based on world-wide demand. In particular, weddings in India. Yes, you read me right.

So, if that's the case, then what the F, does it really have to do with anything?

Nothing really. It's arbitrary.
quade -
The World's Most Boring Skydiver

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>Nonsense. Gold is as arbitrary as anything.

No, it's not, because it is limited in amount. The government can't just transmute more lead into gold when it needs more money.



But value in the economy is not so limited. Why should you putting in a productive week at work not add any value to the economy? (I'm assuming your job has nothing to do with mining gold.)
Math tutoring available. Only $6! per hour! First lesson: Factorials!

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>Nonsense. Gold is as arbitrary as anything.

No, it's not, because it is limited in amount. The government can't just transmute more lead into gold when it needs more money.



The only real "value" of gold is it doesn't corrode. An ounce today will be an ounce a thousand years from now, but that doesn't mean it's actually "worth" anything. Humans have only in the last 6,000 or so years placed any value on the substance at all. We live without it extremely well. Just assigning a value to it is completely arbitrary.

Understand I'm not saying it's inferior to the current system, but neither is it superior.
quade -
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>Nonsense. Gold is as arbitrary as anything.

No, it's not, because it is limited in amount. The government can't just transmute more lead into gold when it needs more money.



The only real "value" of gold is it doesn't corrode. An ounce today will be an ounce a thousand years from now, but that doesn't mean it's actually "worth" anything.



Interesting read: http://www.npr.org/blogs/money/2011/02/15/131430755/a-chemist-explains-why-gold-beat-out-lithium-osmium-einsteinium
Math tutoring available. Only $6! per hour! First lesson: Factorials!

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>Nonsense. Gold is as arbitrary as anything.

No, it's not, because it is limited in amount. The government can't just transmute more lead into gold when it needs more money.



Well, it *could*, but it is a very expensive proposition.

However, about 2,500 tonnes of gold are mined each year.
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The only sure way to survive a canopy collision is not to have one.

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True, but it's not really possible for any one country to control all of the mines. Gold hold it's value very well and it was not arbitrarily decided as a store of value or money. It has unique properties that has made it consistently a better form of money then any other.

Also in comparison, the M2 is currently about $10 trillion dollars now. The money supply is increasing at an insane rate.

Here is a very good speech on "What is money?" It's not nearly as simple of a topic as one might think.

http://youtu.be/vowbrq_g5NM

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True, but it's not really possible for any one country to control all of the mines. Gold hold it's value very well and it was not arbitrarily decided as a store of value or money. It has unique properties that has made it consistently a better form of money then any other.



The value attached to gold can be changed to meet Govt needs as it has in the past.
_____________________________

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No, not really. They try to control it but in the end they fail.

I really recommend watching that video that I posted. It really does a good job of showing why gold holds it's value and what money really is.

I know it's a long speech but it's well worth it and very informative.

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You have knowledge of the whole Bretton Woods process. Good. Let me check out the video and then I'll get back to you my thoughts.

Edit.

I watched the first few minutes of the video and already heard Von Mises thrown out there. Not a good sign as most economists have serious criticisms of his theories. Economists generally argue that Austrian economics lacks scientific rigor, rejects the scientific method, and rejects the use of empirical data. ect. ect. Again, let me watch all three parts. It will be a while as I am plastered off my mind right now (woohoo friday!!)
_____________________________

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Understand I'm not saying it's inferior to the current system, but neither is it superior.



Its wrong to say its "neither inferior or superior"- its nice to sound neutral but historical and present events are showing that though it can sound "ok in theory", it can be pretty catastrophic.

Whether it is with the U.K or the U.S of the 1920s or "simulations of a gold standard" such as 1934 Nazi Germany (where they had only ONE WEEK worth of FX currency reserve) or the 2008 Euro-crisis, it is not worth to sacrifice the ability to control money supply in order to stem an inflation that is not even happening ("imaginary inflation").


Cheers!
Shc

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You can let that put you off if you so wish, but that video is not specific to Austrian economics.

It's always good to look at both sides of the argument and decide for yourself. I find some of the criticisms of Austrian economics to be valid, but most are not.

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Its wrong to say its "neither inferior or superior"- its nice to sound neutral but historical and present events are showing that though it can sound "ok in theory", it can be pretty catastrophic.



It's not me attempting to sound neutral. It's me being 100% completely accurate.

Money is no longer a physical thing. It hasn't been a physical thing for many, many years. It can never return to being a physical thing. It has grown far, far beyond being a physical thing. Call it what you may, gold standard, vapor standard, bitcoins, it's all simply an electronic or paper representation of an arbitrary value.

It's all money ever has been.

As long as we all agree a dollar is a dollar it simply doesn't matter.
quade -
The World's Most Boring Skydiver

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The video so far displays no new value to the concept of money. He iterates what's basically common knowlege, which is various monies as a medium of exchange and tries to use gold as viable tool. Thing is, he takes to long to get to the point and he's just parroting the standard "gold bug" arguments. This video is salesmanship vs. supporting the gold standard so far that I have seen.

I believe the biggest problem with the discussion between the gold standard and the money we have today is the fact that both parties want to do two different things with money. Gold lovers seem to seek out storing value with a medium that provides this ability; others seeks to use money for the purpose that has been established for ancient times: a medium of exchange. That is, a short-term IOU that acts as an escrow to all products and assets are received. Two different money uses here; two different means to an end.

If you want to have an instrument that can hold value for an indefinite period of time which you can use to buy, then for all means invest in gold. But if you want an instrument for the purpose of transferring goods or services now, we got our present system. And you can still store value. You buy assets. Here's the thing: We tried to increase the dollar value to gold because it wasn't working at $20 per oz. There was not enough medium to effect the exchange of goods for the ecomomy that existed then. When you peg a currency you make the money inflexible between economies, you can halt trade cause deflation and create a slowdown in the credit flow. And if credit is slowed, you can't move money. Credit is the highway and money is the car. The car is only as useful as the highway it can drive on. It loses value(or in the case of gold, its usefulness) if you can't drive it to it's potential.

Money is for trade. It's not for holding on to. If you do it right, there is no issue with your cash losing value on you. Invest.
_____________________________

"The trouble with quotes on the internet is that you can never know if they are genuine" - Abraham Lincoln

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