Saturday, January 2, 2016
A Gold-Plated but Flimsy Excuse
Muhammad Rasheed -
Muhammad Rasheed - The highlighted downside seems to be suggesting that people aren't more likely to hoard the fiat Federal Reserve money, and yet, isn't the 99%'s complaint that the 1% are hoarding the bulk of the world's wealth and why the concept of "trickle down" economics is a myth?
If the downside is something we experience anyway under a system that continuously devalues the dollar (and keeps us in a perpetual warring state), then how come we can't fight for a system that returns the dollar’s value so that what we make can buy more?
Jeremy Travis - So then if paper fiat currency was supposed to NOT be hoarded like gold, but it is still hoarded like gold, then why not have it be backed by gold since it is no less likely to be hoarded as compared to gold AND it's value will not depreciate over time?
Is that your argument?
Muhammad Rasheed - Sure, since that was "the" downside the author cited, other than the weight.
Jeremy Travis - If money is tied to a finite resource like gold how will it expand as the economy expands because the population expands?
Muhammad Rasheed - Define the economy 'expanding' in that context?
The sole benefit to being on the debt/credit fiat system is to fund the war machine. When tied to a finite resource, it forces govs to be more fiscally responsible, and not too quick to dive into war.
Jeremy Travis - "Define the economy 'expanding' in that context?"
Pres. Nixon took the US off of the gold standard in 1971. As of 1970, the US Census showed the nation's population being 203.3million. As of 2010, the US Census showed the nation's population being 308.7million. That's a little over 50% increase in people in the nation. Granted, not all of that number of people is a part of the economy, but assuming the number of people in the economy rose by 50% as well in 40 years, what money would those extra people be using if the gold we have is finite? Would we have to acquire 50% more gold in 40 years in order to keep up? Or does gold lose value based on their being more people in the nation using it?
Muhammad Rasheed - Gold would go up in value because of the demand for it in the markets. The gold-backed USD would purchase more for less, and cents would be able to do what dollars do now. It would just be the opposite of the current over-printing, devaluing trend.
Jeremy Travis - So then more people in the population would make the gold standard a better model for currency?
Muhammad Rasheed - I don't see why it would be an issue. Naturally we wouldn't have to be under the same restrictions that ISIS/ISIL are under, so we can continue to use paper and electronic notes to represent the gold in the stores.
Wondering Knight - Yeah you are on to something. I was listening to the audio version of Supply Shock. It talk about how the endless pursuit of growth posits a false world of endless resources. I don't know if returning to gold is the answer but yeah chasing economic growth is really about creating empires of imaginary wealth, without giving real value to an economy, as well as so much environmental destruction.
See Also: Defense of the Gold Standard & the Discovery of Freedom, pt 1 of 7