Gold Standard Movement Growing

[Martinus]

When does it stop being a currency and becomes barter, in your scenario?

When people trade goods and services for other goods and services.

Well, a cigarette is a "good" so why do you say it's a "currency" in prison? I know it is a colloquial term, but it just fits your definition of a barter.

[Admiral Yi]

Well, a cigarette is a "good" so why do you say it's a "currency" in prison? I know it is a colloquial term, but it just fits your definition of a barter.

In a barter system ALL goods and services get traded for ALL OTHER goods and services.  In post war Germany you could theoretically have traded one fuck for a bag of coal, but you didn't.  You traded the fuck for a pack of smokes first, then traded the smokes for the bag of coal.  That made it a de facto currency.

[Razgovory]

I think that might be more a medium of exchange then a currency.  Most Barter systems didn't rely on trade of any one thing for any one thing else.  Before currency they would trade in grain or copper ingots, however neither could really be called a currency.

[The Minsky Moment]

Gold has an extremely low storage cost, as it doesn't burn, rust, mix with other elements, etc.

relative to copper sure, but in an absolute sense, it is a PITA to transport and store.

[grumbler]

Gold has an extremely low storage cost, as it doesn't burn, rust, mix with other elements, etc.

relative to copper sure, but in an absolute sense, it is a PITA to transport and store.

Don't understand.  How is $4000 worth of gold more difficult to transport and store than, say, $4000 worth of feathers?

[Jacob]

Don't understand.  How is $4000 worth of gold more difficult to transport and store than, say, $4000 worth of feathers?

I think the pain is relative to fiat currencies. Compared electronic credits and paper currency, gold is inconvenient.

I expect it's only compared to other commodity backed currencies that gold shines, so to speak.

[Slargos]

Gold has an extremely low storage cost, as it doesn't burn, rust, mix with other elements, etc.

relative to copper sure, but in an absolute sense, it is a PITA to transport and store.

Don't understand.  How is $4000 worth of gold more difficult to transport and store than, say, $4000 worth of feathers?

Or $4000 worth of compressed air. Now that is a doozie.

[mongers]

Gold has an extremely low storage cost, as it doesn't burn, rust, mix with other elements, etc.

relative to copper sure, but in an absolute sense, it is a PITA to transport and store.

Don't understand.  How is $4000 worth of gold more difficult to transport and store than, say, $4000 worth of feathers?

Probably around 1000 cubic metres worth.

Or $4000 worth of compressed air. Now that is a doozie.

[Habbaku]

Gold has an extremely low storage cost, as it doesn't burn, rust, mix with other elements, etc.

relative to copper sure, but in an absolute sense, it is a PITA to transport and store.

Don't understand.  How is $4000 worth of gold more difficult to transport and store than, say, $4000 worth of feathers?

Probably around 1000 cubic metres worth.

Or $4000 worth of compressed air. Now that is a doozie.

[alfred russel]

I think Ide's point is correct and revolves around the ability of anything to be a store fo value. The supply of gold is limited, but the demand is largely driven by the convention that gold is a store of value. That convention could erode to the point the price of gold collapses.

A paper fiat currency has to rely on the government to limit supply, and ultimately has similar demand side problems (though the state can protect the demand side by requiring the currency's use).

[The Minsky Moment]

Don't understand.  How is $4000 worth of gold more difficult to transport and store than, say, $4000 worth of feathers?

I agree that feathers would be a very poor choice for a monetary base, even worse than gold.

I stand by my statement, however.

[grumbler]

I think the pain is relative to fiat currencies. Compared electronic credits and paper currency, gold is inconvenient.

I expect it's only compared to other commodity backed currencies that gold shines, so to speak.

Yes, of course.  Gold is too rare to serve as an actual currency.  The question was about why gold had historically been used as a currency.  It has long since been replaced by fiat currencies, but was not itself a fiat currency (which was the issue I was addressing).

[Ed Anger]

The question was about why gold had historically been used as a currency.

Dragons.

[grumbler]

I think Ide's point is correct and revolves around the ability of anything to be a store fo value. The supply of gold is limited, but the demand is largely driven by the convention that gold is a store of value. That convention could erode to the point the price of gold collapses.

I disagree.  Gold has been used as a reserve of value since long before there were fiat currencies.  The introduction of fiat paper currencies was necessary to economic growth, because there simply wasn't enough gold (and silver) to serve the currency needs of early modern societies. 

If you take a pig to market and want to trade it for wheat, but nobody has wheat that day, it is better to go home with a pig's worth of gold and silver than a pig's worth of beats or even a pig's worth of pig - though not as good as a pig's worth of greenbacks.

[Martinus]

Don't understand.  How is $4000 worth of gold more difficult to transport and store than, say, $4000 worth of feathers?

I think the pain is relative to fiat currencies. Compared electronic credits and paper currency, gold is inconvenient.

I expect it's only compared to other commodity backed currencies that gold shines, so to speak.

Gold is a commodity, but as I already said, it is not an essential commodity, which makes it amenable to being a currency without having exponentially ill effects on the economy.