Fucktards :bleeding:
http://www.latimes.com/business/la-fi-gold-standard-20110603,0,7873473.story
QuotePushing for a return to the gold standard
The idea to make the precious metal legal tender has gained currency in more than a dozen state capitals, aided by Tea Party support and other efforts to rein in federal power. Economists say the plan would be disastrous.
By Nathaniel Popper, Los Angeles Times
June 3, 2011
Mike Pitts is no economist, but that hasn't kept the retired small-town cop from taking a prominent role in a quixotic campaign to push the U.S. monetary system back to another century.
Pitts, a South Carolina statehouse representative, introduced a bill in April that would make gold and silver coins legal tender in the state. Similar efforts are underway in more than a dozen state capitals, fueled by Tea Party support and antipathy toward the federal government.
The ultimate goal is to return the nation to the gold standard, in which every dollar would be backed by a fixed amount of the precious metal. Economists of all stripes say the plan would be ruinous, but that view is of scant concern to Pitts.
"Quite frankly, I think that economists from universities are thinking within the confines of their own little world," Pitts said. "They don't deal with the real issues."
Proponents of the laws believe that returning America to the gold standard would force the government to live within its means, curtailing runaway spending and inflation.
Lately, the idea has been gaining currency — and not just among the Tea Party activists who have been pushing the gold standard as part of wider efforts to rein in federal power.
In Utah, gold and silver coins minted by the U.S. government have been considered legal tender since last month under a law that Gov. Gary Herbert promoted Thursday with a ceremonial signing. The law also exempts purchases of the coins from state sales tax and creates a tax credit to partially reimburse state residents who must pay federal capital gains tax on profits from holding gold.
The movement's supporters recognize that no one is going to be buying groceries with a $50 gold eagle coin, which contains some $1,500 worth of gold, but they say it will send a message.
"The centerpiece of U.S. monetary policy for the last hundred years has been the constantly depreciating dollar," said Larry Hilton, a businessman credited with first proposing the law enacted in Utah. "Sometimes, just as a citizen, you have to stand up and say this is a problem."
As befits a movement protesting the federal government, the gold push is decentralized. A Montana measure, voted down by a narrow 52-to-48 margin in March, would have forced all wholesalers to pay tobacco taxes in gold — in electronic transactions backed by bullion held at depositories.
One of the most ambitious proposals, introduced in Georgia, would require the state to accept only gold and silver for all payments, including taxes, and to use the metals exclusively to pay all of the state's debts. That measure has not made it out of committee.
The various bills have frequently been promoted at Tea Party rallies, which have given activists from different states a chance to link up.
"The rise of the Tea Party has helped," said Edwin Vieira, a constitutional lawyer who has been promoting the issue for years. "They see the present monetary system is unhinged."
Most of the action is at the state level, but the gold-standard rush has extended to Washington. Rep. Ron Paul (R-Texas), a presidential candidate in 2008 and possibly 2012, and a longtime proponent of abolishing the Federal Reserve, has proposed exempting gold from the federal tax on capital gains, which would make it easier to use as a currency.
The proposals by Pitts and others can't change the U.S. monetary system, which is the jurisdiction of the federal government. The state laws are intended instead to create an infrastructure to allow gold and silver to be used as an alternative currency — a setup that would come in handy in the event of economic catastrophe that leaves the dollar without value.
Though the movement may be largely symbolic at this point, observers say the activity underscores the animosity toward the federal government in some corners.
"The impulse for moving to some kind of metallic money comes from the strong sense right now of distrust and anxiety about the financial system and the government's stability," said Perry Mehrling, an economics professor and historian of monetary policy at Barnard College in New York.
The United States and most of the rest of the world operated on a full gold standard until the Great Depression. Economists generally agree that the policy helped cause the depression and earlier severe downturns by limiting the amount of money the government could create, constraining its ability to stimulate the economy.
Scholars say moving to a gold standard now would be likely to slow the economy's already meager growth.
"At some point someone may be crazy enough to try it, but they won't stay with it anymore than they did in the past," said Allan Meltzer, a Carnegie Mellon University economics professor and a critic of the Fed's current monetary policy.
Given the lack of support from mainstream economists, activists have turned a few texts written by outsiders into their bibles, such as "Pieces of Eight," an out-of-print book by Vieira.
They have also begun to take steps on their own. In Utah, a businessman is setting up a private gold and silver depository that would issue debit cards and allow customers to pay willing merchants in units of precious metal.
In South Carolina, Pitts said he personally has not had enough money to buy gold. But he said he didn't doubt that the nation is heading toward a situation in which the dollar will be worthless and people will be forced to trade in whatever retains its value.
"I think it will be worse than anything this country has ever seen before," Pitts said. "If you lost the ability to use currency and were simply using a barter system nationally you would have to look at gold and silver."
[email protected]
Copyright © 2011, Los Angeles Times
I've generally been skeptical of the gold standard, but maybe with this runaway 2% hyperinflation we're experiencing drastic measures are called for.
Why would you look at gold or silver? Why would anyone be interested in a barter system? It'd be fun for these people to enjoy the crushing poverty that would result from their stance though.
Quote from: jimmy olsen on June 04, 2011, 07:13:39 PM
Fucktards :bleeding:
The movement's supporters recognize that no one is going to be buying groceries with a $50 gold eagle coin, which contains some $1,500 worth of gold, but they say it will send a message.
See, this is why we have a post office. You can send messages with out destroying the economy.
Quote"The centerpiece of U.S. monetary policy for the last hundred years has been the constantly depreciating dollar," said Larry Hilton, a businessman credited with first proposing the law enacted in Utah. "Sometimes, just as a citizen, you have to stand up and say this is a problem."
In related news, it's only a problem when Democrats are in the White House. When a devalued dollar is a Republican administration's official policy, it's Morning in America(tm).
Quote from: jimmy olsen on June 04, 2011, 07:13:39 PM
Quote
Pushing for a return to the gold standard
Mike Pitts is no economist, but that hasn't kept the retired small-town cop from taking a prominent role in a quixotic campaign to push the U.S. monetary system back to another century.
Hmm...
Quote
Pushing for a return to the leech standard
Mike Pitts is no surgeon, but that hasn't kept the retired small-town cop from taking a prominent role in a quixotic campaign to push the U.S. healthcare system back to another century.
Quote
Pushing for a return to the horse standard
Mike Pitts is no traffic engineer, but that hasn't kept the retired small-town cop from taking a prominent role in a quixotic campaign to push the U.S. transportation system back to another century.
Quote
Pushing for a return to the cave standard
Mike Pitts is no realtor, but that hasn't kept the retired small-town cop from taking a prominent role in a quixotic campaign to push U.S. housing back to another millennium.
I hope Obama makes ownership of gold illegal.
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
It's decorative and it doesn't oxidize.
Quote from: Neil on June 04, 2011, 09:22:15 PM
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
It's decorative and it doesn't oxidize.
Yeah, but nobody says we ought to move to a graphite standard.
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
It's pretty. :contract:
Quote from: jimmy olsen on June 04, 2011, 09:25:49 PM
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
It's pretty. :contract:
How gay.
Quote from: CountDeMoney on June 04, 2011, 07:53:01 PM
Quote"The centerpiece of U.S. monetary policy for the last hundred years has been the constantly depreciating dollar," said Larry Hilton, a businessman credited with first proposing the law enacted in Utah. "Sometimes, just as a citizen, you have to stand up and say this is a problem."
In related news, it's only a problem when Democrats are in the White House. When a devalued dollar is a Republican administration's official policy, it's Morning in America(tm).
I've heard conservatives claim that Obama increase the debt "10 fold"!
Quote from: Ideologue on June 04, 2011, 09:23:08 PM
Quote from: Neil on June 04, 2011, 09:22:15 PM
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
It's decorative and it doesn't oxidize.
Yeah, but nobody says we ought to move to a graphite standard.
No, they aren't. But it's important to remember that these guys aren't exactly critical thinkers.
Quote from: Ideologue on June 04, 2011, 09:23:08 PM
Quote from: Neil on June 04, 2011, 09:22:15 PM
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
It's decorative and it doesn't oxidize.
Yeah, but nobody says we ought to move to a graphite standard.
What happened to Aluminum?
Gold is useful for a unit of exchance precisely because it is useless and rare. If we needed it for something else it would make a pretty shitty currency and likewise if it was common people would spend their time hoarding it instead of working. So it was perfect back in more primitive times.
But it makes no sense in a modern economy.
Quote from: Razgovory on June 04, 2011, 09:52:15 PM
Quote from: Ideologue on June 04, 2011, 09:23:08 PM
Quote from: Neil on June 04, 2011, 09:22:15 PM
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
It's decorative and it doesn't oxidize.
Yeah, but nobody says we ought to move to a graphite standard.
What happened to Aluminum?
I changed it. Aluminium passivates, and therefore resists corrosion, but I believe doesn't remain in one piece over geological timeframes. Graphite will under standard conditions, I think, because of its extremely low reaction rates.
Besides, if the shit hits the fan to the point of economic armageddon, as the gold-standard types are afraid of, the new currencies will be shotguns and canned goods.
Also I think Aluminum was regarded as very valuable in the 19th century, I think that's why they capped the Washington Monument with an aluminum pyramid.
Quote from: Tonitrus on June 04, 2011, 10:27:29 PM
Besides, if the shit hits the fan to the point of economic armageddon, as the gold-standard types are afraid of, the new currencies will be shotguns and canned goods.
If the shit hits the fan what money will be whatever the government wants it to be. A major disaster will mean more government, not less.
Quote from: Razgovory on June 04, 2011, 10:28:46 PM
Also I think Aluminum was regarded as very valuable in the 19th century, I think that's why they capped the Washington Monument with an aluminum pyramid.
You are correct sir.
Quote from: Razgovory on June 04, 2011, 10:30:34 PM
Quote from: Tonitrus on June 04, 2011, 10:27:29 PM
Besides, if the shit hits the fan to the point of economic armageddon, as the gold-standard types are afraid of, the new currencies will be shotguns and canned goods.
If the shit hits the fan what money will be whatever the government wants it to be. A major disaster will mean more government, not less.
I'd rather not to go around having to break up food riots. :(
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fdvdmedia.ign.com%2Fdvd%2Fimage%2Farticle%2F999%2F999563%2Fthe-running-man-special-edition-20090629053741894-000.jpg&hash=866dc0bce8d69320fbddfaab63b30bbae5bd8429)
Quote from: Razgovory on June 04, 2011, 10:28:46 PM
Also I think Aluminum was regarded as very valuable in the 19th century, I think that's why they capped the Washington Monument with an aluminum pyramid.
Used to be very hard to process. Not so much anymore, but a very large percentage of the worlds power supply is used to make it now.
Quote from: Valmy on June 04, 2011, 10:11:08 PM
Gold is useful for a unit of exchance precisely because it is useless and rare. If we needed it for something else it would make a pretty shitty currency and likewise if it was common people would spend their time hoarding it instead of working. So it was perfect back in more primitive times.
Don't forget shiny.
Quote from: Admiral Yi on June 04, 2011, 07:21:15 PM
I've generally been skeptical of the gold standard, but maybe with this runaway 2% hyperinflation we're experiencing drastic measures are called for.
:XD:
Quote from: Tonitrus on June 04, 2011, 10:36:26 PM
Quote from: Razgovory on June 04, 2011, 10:30:34 PM
Quote from: Tonitrus on June 04, 2011, 10:27:29 PM
Besides, if the shit hits the fan to the point of economic armageddon, as the gold-standard types are afraid of, the new currencies will be shotguns and canned goods.
If the shit hits the fan what money will be whatever the government wants it to be. A major disaster will mean more government, not less.
I'd rather not to go around having to break up food riots. :(
You ever see the movie "Threads"? That's what a breakdown of society would be like.
Quote from: Razgovory on June 04, 2011, 11:55:55 PM
Quote from: Tonitrus on June 04, 2011, 10:36:26 PM
Quote from: Razgovory on June 04, 2011, 10:30:34 PM
Quote from: Tonitrus on June 04, 2011, 10:27:29 PM
Besides, if the shit hits the fan to the point of economic armageddon, as the gold-standard types are afraid of, the new currencies will be shotguns and canned goods.
If the shit hits the fan what money will be whatever the government wants it to be. A major disaster will mean more government, not less.
I'd rather not to go around having to break up food riots. :(
You ever see the movie "Threads"? That's what a breakdown of society would be like.
We'd turn English. :(
Quote from: Razgovory on June 04, 2011, 10:28:46 PM
Also I think Aluminum was regarded as very valuable in the 19th century, I think that's why they capped the Washington Monument with an aluminum pyramid.
At the time that was the largest single block of Aluminum in the world.
hmm.. that would have been a good question for the history quiz thread...
http://en.wikipedia.org/wiki/Aluminium
Quote from: Ideologue on June 04, 2011, 09:23:08 PM
Quote from: Neil on June 04, 2011, 09:22:15 PM
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
It's decorative and it doesn't oxidize.
Yeah, but nobody says we ought to move to a graphite standard.
That's a great idea! He with the most Blackwing pencils wins.
Quote from: Slargos on June 05, 2011, 06:27:16 AM
http://en.wikipedia.org/wiki/Aluminium
I remember reading it in GURPS: Steampunk. :Embarrass:
Quote from: Ed Anger on June 05, 2011, 06:19:03 AM
We'd turn English. :(
I kept thinking during the film, Jesus Christ, the love interest is ugly. And that's before the radiation.
Threads makes you want to root for the nuclear weapons.
Quote from: Ed Anger on June 05, 2011, 06:10:46 PM
Threads makes you want to root for the nuclear weapons.
I think the guy who was suppose the marry the girl lucked out getting nuked.
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fimg695.imageshack.us%2Fimg695%2F4131%2Fthreadslead.jpg&hash=19d4f38c100a31c8802cacc56b19e89b1e705bbf) (http://imageshack.us/photo/my-images/695/threadslead.jpg/)
Uploaded with ImageShack.us (http://imageshack.us)
Only could find a small photo. I don't think that's a picture of after the Nukes. I think that's just the way 1980's Britain looked normally. But, God! that chick has as all the sexual charisma of Kathy Bates
She's not a porker like Bates.
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
Gold has an extremely low storage cost, as it doesn't burn, rust, mix with other elements, etc.
The goods with the lowest storage cost will always be the currency. There is an island society in which huge rocks are the currency, even though no one can move the rocks. The rocks don't cost anything to store and stay the same forever, so serve as a good currency.
I bet there's an economic law that predicts what will become money. In Africa they used big bits of iron as a medium of exchange. No idea why. You would think making currency out of something that can be used to make useful tool (or weapons), would not be ideal.
Quote from: Razgovory on June 05, 2011, 07:32:26 PM
I bet there's an economic law that predicts what will become money. In Africa they used big bits of iron as a medium of exchange. No idea why. You would think making currency out of something that can be used to make useful tool (or weapons), would not be ideal.
Tell that to people in prison or post war Germany. It makes a lot more sense to me to use something as a currency that has an intrinsic value.
Quote from: Admiral Yi on June 05, 2011, 07:38:34 PM
Quote from: Razgovory on June 05, 2011, 07:32:26 PM
I bet there's an economic law that predicts what will become money. In Africa they used big bits of iron as a medium of exchange. No idea why. You would think making currency out of something that can be used to make useful tool (or weapons), would not be ideal.
Tell that to people in prison or post war Germany. It makes a lot more sense to me to use something as a currency that has an intrinsic value.
It may be that I'm confusing currency, and a medium of exchange. Though generally I think you wouldn't want a situation where you wouldn't want to use a useful metal (like Iron) as a tool because of it's value as a currency.
Quote from: Admiral Yi on June 05, 2011, 07:38:34 PM
Quote from: Razgovory on June 05, 2011, 07:32:26 PM
I bet there's an economic law that predicts what will become money. In Africa they used big bits of iron as a medium of exchange. No idea why. You would think making currency out of something that can be used to make useful tool (or weapons), would not be ideal.
Tell that to people in prison or post war Germany. It makes a lot more sense to me to use something as a currency that has an intrinsic value.
That increases storage costs, because while stored you are forgoing the value of using the tool or whatever.
That doesn't mean that the currency has to be lack intrinsic value, just that competitors have to have higher storage costs either as direct costs or opportunity costs.
Quote from: Razgovory on June 05, 2011, 07:56:44 PM
It may be that I'm confusing currency, and a medium of exchange. Though generally I think you wouldn't want a situation where you wouldn't want to use a useful metal (like Iron) as a tool because of it's value as a currency.
If you're talking about a fiat currency then you don't want everyone consuming your money and taking it out of circulation. I was talking about non-fiat currency. With fiat currency you take whatever the ruler says is currency in payment or you go to jail. The trick with non-fiat currency is to make everyone except it as such.
Quote from: Admiral Yi on June 05, 2011, 07:38:34 PM
Quote from: Razgovory on June 05, 2011, 07:32:26 PM
I bet there's an economic law that predicts what will become money. In Africa they used big bits of iron as a medium of exchange. No idea why. You would think making currency out of something that can be used to make useful tool (or weapons), would not be ideal.
Tell that to people in prison or post war Germany. It makes a lot more sense to me to use something as a currency that has an intrinsic value.
Well, these are pathological systems developed by people who are already used to the concept of currency (and the neat value equivalency system it entails) but you could really argue that the prison thing is simply a variant of a barter system.
Quote from: Admiral Yi on June 05, 2011, 08:33:22 PM
Quote from: Razgovory on June 05, 2011, 07:56:44 PM
It may be that I'm confusing currency, and a medium of exchange. Though generally I think you wouldn't want a situation where you wouldn't want to use a useful metal (like Iron) as a tool because of it's value as a currency.
If you're talking about a fiat currency then you don't want everyone consuming your money and taking it out of circulation. I was talking about non-fiat currency. With fiat currency you take whatever the ruler says is currency in payment or you go to jail. The trick with non-fiat currency is to make everyone except it as such.
When does it stop being a currency and becomes barter, in your scenario?
Anyway, I'd argue that "consumable currency" is not only bad for the currency system itself (as others pointed out, you can't easily increase or decrease the amount of currency in circulation, and people will consume the currency thus leading to unpredictable deflation bouts) but also the flipside of this being the chilling effect the reduced consumption of the good being the currency (due to people hoarding) will have on the economy.
For example, petrol or aluminium as the currency would be rather disastrous.
Quote from: Martinus on June 06, 2011, 01:28:39 AM
When does it stop being a currency and becomes barter, in your scenario?
When people trade goods and services for other goods and services.
Quote from: Admiral Yi on June 06, 2011, 01:50:20 AM
Quote from: Martinus on June 06, 2011, 01:28:39 AM
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.
Quote from: Martinus on June 06, 2011, 02:43:07 AM
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.
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.
Quote from: grumbler on June 05, 2011, 07:09:15 PM
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.
Quote from: The Minsky Moment on June 06, 2011, 09:05:53 AM
Quote from: grumbler on June 05, 2011, 07:09:15 PM
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?
Quote from: grumbler on June 06, 2011, 12:25:01 PMDon'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.
Quote from: grumbler on June 06, 2011, 12:25:01 PM
Quote from: The Minsky Moment on June 06, 2011, 09:05:53 AM
Quote from: grumbler on June 05, 2011, 07:09:15 PM
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.
Quote from: Slargos on June 06, 2011, 12:35:50 PM
Quote from: grumbler on June 06, 2011, 12:25:01 PM
Quote from: The Minsky Moment on June 06, 2011, 09:05:53 AM
Quote from: grumbler on June 05, 2011, 07:09:15 PM
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.
Quote from: mongers on June 06, 2011, 01:03:49 PM
Quote from: Slargos on June 06, 2011, 12:35:50 PM
Quote from: grumbler on June 06, 2011, 12:25:01 PM
Quote from: The Minsky Moment on June 06, 2011, 09:05:53 AM
Quote from: grumbler on June 05, 2011, 07:09:15 PM
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.
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).
Quote from: grumbler on June 06, 2011, 12:25:01 PM
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.
Quote from: Jacob on June 06, 2011, 12:27:49 PM
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).
QuoteThe question was about why gold had historically been used as a currency.
Dragons.
Quote from: alfred russel on June 06, 2011, 01:25:47 PM
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.
Quote from: Jacob on June 06, 2011, 12:27:49 PM
Quote from: grumbler on June 06, 2011, 12:25:01 PMDon'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.
Quote from: Ed Anger on June 06, 2011, 05:01:32 PM
QuoteThe question was about why gold had historically been used as a currency.
Dragons.
Dragons explain why gold is rare, not why it is used as a currency.
Quote from: grumbler on June 06, 2011, 04:59:35 PM
Quote from: Jacob on June 06, 2011, 12:27:49 PM
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).
Probably, because it was already valuable prior to the invention of money. It was rare and used in jewelry and ceremonial object giving it value, but wasn't used for practical things like plowshares or swords. It could be worked fairly easily as well (as opposed to say, Lapis lazuli which can't be melted down) Making it a coin just standardized the trading of ingots. Same thing with with silver. As a coin you didn't have to argue about weight and purity since this was standardized and it's value was promised by the government.
Quote from: grumbler on June 06, 2011, 05:09:50 PM
Quote from: alfred russel on June 06, 2011, 01:25:47 PM
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.
Unless of course you happen to be unlucky enough that a Jew has created a pig and wheat brokerage and backed by armed thugs takes half the value of every transaction, leaving you with only a quarter-pig's worth of wheat once you've finished trading.
WTF is wrong with you?
I ask myself that question every day. :sleep:
Quote from: jimmy olsen on June 07, 2011, 04:48:02 AM
WTF is wrong with you?
He's boring, that's what. I'm not sure where he got the idea of a European who hates Jews would be unique, but seems to be under that impression.
Quote from: Razgovory on June 07, 2011, 05:27:47 AM
Quote from: jimmy olsen on June 07, 2011, 04:48:02 AM
WTF is wrong with you?
He's boring, that's what. I'm not sure where he got the idea of a European who hates Jews would be unique, but seems to be under that impression.
:mad:
My offer of free beer is rescinded. GOOD DAY, Sir.
[Besides, I don't hate
all jews, just some of them]
I do not drink.
Well you probably should.
Quote from: jimmy olsen on June 07, 2011, 04:48:02 AM
WTF is wrong with you?
TSS - tired schtick syndrome. His schtick really belongs in the hospital bed next to Neil's.
Quote from: Razgovory on June 07, 2011, 05:27:47 AM
I'm not sure where he got the idea of a European who hates Jews would be unique, but seems to be under that impression.
:lol: Wondertwin powers activate! Form of...a stereotype!
Quote from: grumbler on June 07, 2011, 06:24:54 AM
Quote from: jimmy olsen on June 07, 2011, 04:48:02 AM
WTF is wrong with you?
TSS - tired schtick syndrome. His schtick really belongs in the hospital bed next to Neil's.
I think we should make it a policy that posters must reinvent themselves every couple years.
Quote from: Peter Wiggin on June 07, 2011, 06:44:13 AM
Quote from: grumbler on June 07, 2011, 06:24:54 AM
Quote from: jimmy olsen on June 07, 2011, 04:48:02 AM
WTF is wrong with you?
TSS - tired schtick syndrome. His schtick really belongs in the hospital bed next to Neil's.
I think we should make it a policy that posters must reinvent themselves every couple years.
no
Quote from: grumbler on June 07, 2011, 06:24:54 AM
Quote from: jimmy olsen on June 07, 2011, 04:48:02 AM
WTF is wrong with you?
TSS - tired schtick syndrome. His schtick really belongs in the hospital bed next to Neil's.
I don't recall him having it very long, it's just not very good.
Quote from: grumbler on June 06, 2011, 05:09:50 PM
Quote from: alfred russel on June 06, 2011, 01:25:47 PM
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.
I'm not sure you understood the point I was trying to make--your argument doesn't relate to what I was saying.
Quote from: alfred russel on June 07, 2011, 07:58:04 AM
I'm not sure you understood the point I was trying to make--your argument doesn't relate to what I was saying.
It relates to what you wrote, though not, perhaps, to what you thought you wrote.
The demand for gold has not been "largely driven by the convention that gold is a store of value." Gold was a store of value for many reasons, convention being only fairly recent. So Ide's point is not correct: gold is not really just as much fiat currency as paper.
Quote from: Slargos on June 07, 2011, 01:26:06 AM
Unless of course you happen to be unlucky enough that a Jew has created a pig and wheat brokerage and backed by armed thugs takes half the value of every transaction, leaving you with only a quarter-pig's worth of wheat once you've finished trading.
I am not familiar with this caste of Jewish pig merchants you refer to. I sense a problem with the concept.
Quote from: The Minsky Moment on June 07, 2011, 10:16:13 AM
Quote from: Slargos on June 07, 2011, 01:26:06 AM
Unless of course you happen to be unlucky enough that a Jew has created a pig and wheat brokerage and backed by armed thugs takes half the value of every transaction, leaving you with only a quarter-pig's worth of wheat once you've finished trading.
I am not familiar with this caste of Jewish pig merchants you refer to. I sense a problem with the concept.
:lol:
As if Jews would ever have a problem making a profit off pigs [or indeed anything, such as baby blood or souls] Surely you jest. :hmm:
Quote from: grumbler on June 07, 2011, 08:56:59 AM
The demand for gold has not been "largely driven by the convention that gold is a store of value." Gold was a store of value for many reasons, convention being only fairly recent.
I don't understand. Would you say this statement is accurate (your quote, with my changes noted):
The demand for gold has is not been "largely driven by the convention that gold is a store of value." Gold was a store of value for many reasons, convention being only fairly recent.
Quote from: Slargos on June 07, 2011, 10:18:59 AM
As if Jews would ever have a problem making a profit off pigs [or indeed anything, such as baby blood or souls] Surely you jest. :hmm:
The profit and brokerage parts of your story are plausible, the armed thugs and the coerced transaction are not.
Quote from: Admiral Yi on June 07, 2011, 02:13:34 PM
Quote from: Slargos on June 07, 2011, 10:18:59 AM
As if Jews would ever have a problem making a profit off pigs [or indeed anything, such as baby blood or souls] Surely you jest. :hmm:
The profit and brokerage parts of your story are plausible, the armed thugs and the coerced transaction are not.
Well. Perhaps I exaggerate. It's people's own damn fault of they allow themselves to be extorted by the Jews. They don't need thugs since they are protected by equally usurious laws.
My mistake. :sleep:
Quote from: Ideologue on June 04, 2011, 09:18:28 PM
The value of gold has always struck me as absolutely bizarre. I sort of understand its value as a currency in ancient economies, but other than its lack of reactivity it's not really good for that much (except wiring and some other industrial applications). Isn't gold really just as much fiat currency as paper?
What made Gold interesting is the fact that is one of the easiest metals to mold, while at the same time is capable of resisting the effects of time.
In any Human society, there is always a group of people who rise to the top, and those eventually want some luxuries, like a statue (of themselves, if the are leaders), or something artful that shows their power, or things made in something rare. Gold is by far the best metal for that.
This means that, if you have Gold, artisans of a Human society will be interested in acquiring what you have, to use in their works to please the powerful. So you'd have something that would *always* have demand, as long as you were in a Human society. And since artisans are the guys that make everything (either they themselves do it, or they know and do things for the guy who does what you want), you could rely on it to get you what you wanted from someone.
This was for ancient times. It is no longer practical nor possible to do this in a modern society, which is why we don't use Gold anymore.
In a crisis, currency is always something that can get people who do things to do them for you. Smokes are an excellent example of that.
Quote from: alfred russel on June 07, 2011, 10:36:43 AM
I don't understand. Would you say this statement is accurate (your quote, with my changes noted):
The demand for gold has is not been "largely driven by the convention that gold is a store of value." Gold was a store of value for many reasons, convention being only fairly recent.
I don't understand what the point here is. The demand for gold is not driven largely by a "convention" that gold is a store of value. Look up convention in this context. It relates to Ide's argument that gold is a fiat currency. The reason gold is seen as a store of value is not due to some "convention" on the topic. Both the Aztecs and Spanish considered it a store of value long before they met each other.
I just want clarification before I respond. I'd rather not assume and then after a bunch of posts have some semantic difference come up.
Quote from: alfred russel on June 07, 2011, 08:51:56 PM
I just want clarification before I respond. I'd rather not assume and then after a bunch of posts have some semantic difference come up.
You have your clarification... unless you are going to try to play some kind of semantic games with "convention" or "fiat currency."
Do you believe that gold is as much a fiat currency as paper, as Ide claims (and you say you support)?
Gold has not always been a good way to store value in the past. The real purchasing power of gold had eroded consistently since Bretton Woods broke down (the current wave of gold buggerism may have reversed this, I'm not sure).
In a modern society, all the reasons that have been brought up concerning gold as a store of value break down. 200 years ago, a pigs worth of gold would be better than a pigs worth of most other things because gold does not degrade, rot, or depreciate through overprinting. But today there are many more options. I could buy rights regarding barrels of oil or another productive asset. I could buy ownership shares in a company. Both of these, along with many more options, are both more easily stored and more liquid than a bar of gold. In fact, most gold that is traded does not have someone taking possession.
Gold is just one of many commodities that you can trade, and is perhaps special in the sense that among commodities it has very limited industrial at current prices. I don't consider that a stable store of value.
What i don't get is that good prices keep going up but stock gold mining companies aren't matching the rise in prices of the product they produce.
Quote from: alfred russel on June 08, 2011, 10:31:27 AM
Gold has not always been a good way to store value in the past. The real purchasing power of gold had eroded consistently since Bretton Woods broke down (the current wave of gold buggerism may have reversed this, I'm not sure).
In a modern society, all the reasons that have been brought up concerning gold as a store of value break down. 200 years ago, a pigs worth of gold would be better than a pigs worth of most other things because gold does not degrade, rot, or depreciate through overprinting. But today there are many more options. I could buy rights regarding barrels of oil or another productive asset. I could buy ownership shares in a company. Both of these, along with many more options, are both more easily stored and more liquid than a bar of gold. In fact, most gold that is traded does not have someone taking possession.
Gold is just one of many commodities that you can trade, and is perhaps special in the sense that among commodities it has very limited industrial at current prices. I don't consider that a stable store of value.
Stricken as not relevant.
Do you believe that gold is as much a fiat currency as paper, as Ide claims (and you say you support)?
Quote from: grumbler on June 08, 2011, 10:42:37 AM
Quote from: alfred russel on June 08, 2011, 10:31:27 AM
Gold has not always been a good way to store value in the past. The real purchasing power of gold had eroded consistently since Bretton Woods broke down (the current wave of gold buggerism may have reversed this, I'm not sure).
In a modern society, all the reasons that have been brought up concerning gold as a store of value break down. 200 years ago, a pigs worth of gold would be better than a pigs worth of most other things because gold does not degrade, rot, or depreciate through overprinting. But today there are many more options. I could buy rights regarding barrels of oil or another productive asset. I could buy ownership shares in a company. Both of these, along with many more options, are both more easily stored and more liquid than a bar of gold. In fact, most gold that is traded does not have someone taking possession.
Gold is just one of many commodities that you can trade, and is perhaps special in the sense that among commodities it has very limited industrial at current prices. I don't consider that a stable store of value.
Stricken as not relevant.
Do you believe that gold is as much a fiat currency as paper, as Ide claims (and you say you support)?
By definition gold isn't fiat currency (obviously). What Ide was driving at was that neither gold nor USD have an intrinsic value that guarantees the item is going to hold its purchasing power.
Quote from: HVC on June 08, 2011, 10:34:40 AM
What i don't get is that good prices keep going up but stock gold mining companies aren't matching the rise in prices of the product they produce.
I suspect this has to do with the fact that as the price rises mining companies pursue digs that are ever more expensive to extract.
Quote from: HVC on June 08, 2011, 10:34:40 AM
What i don't get is that good prices keep going up but stock gold mining companies aren't matching the rise in prices of the product they produce.
There is an article in
the Economist this week on that very subject. It mentions the following factors:
1: Increasing costs of production (easily accessed reserves are depleted, rising fuel costs), presumably meaning that profits doesn't keep up with price.
2: Big mining corps turning to acquisitions and mergers to build reserves, meaning less actual mining and exploration.
3: Investing in mining carries risk in addition to that of commodity prices (political instability, failed mergers, disappointing yields from expensive developments etc).
4: Gold bugs are betting on the price of gold going up, mining companies don't always do that often hedging for the sake of stability. In addition, mining companies pursue non-gold extraction as well (such as copper) making them less attractive for investors purely focused on gold.
... sounds reasonable enough to me :)
Quote from: alfred russel on June 08, 2011, 10:53:06 AM
By definition gold isn't fiat currency (obviously). What Ide was driving at was that neither gold nor USD have an intrinsic value that guarantees the item is going to hold its purchasing power.
No one was arguing that either gold or the USD had "an intrinsic value that guarantees the item is going to hold its purchasing power." In fact, anyone who argued that
anything had "an intrinsic value that
guarantees the item is going to hold its purchasing power" would rightfully have been hooted off the thread, so I suspect that this is a red herring.
So, you agree with me now that Ide was wrong in his assertion that gold is "really just as much fiat currency as paper." On that note, I think our discussion can end.
Well I was a little confused regarding what we were discussing. I thought this was about more than just whether gold is a fiat currency like dollars, with you bringing up the Aztecs and Spanish.
Interestingly, the Aztecs used chocolate as a currency (more accurately, cacao beans) - not gold. :D
Quote from: Peter Wiggin on June 07, 2011, 06:44:13 AM
Quote from: grumbler on June 07, 2011, 06:24:54 AM
Quote from: jimmy olsen on June 07, 2011, 04:48:02 AM
WTF is wrong with you?
TSS - tired schtick syndrome. His schtick really belongs in the hospital bed next to Neil's.
I think we should make it a policy that posters must reinvent themselves every couple years.
Do we really need a Cher-Madonna rule?
Quote from: Valmy on June 04, 2011, 10:11:08 PM
Gold is useful for a unit of exchance precisely because it is useless and rare. If we needed it for something else it would make a pretty shitty currency and likewise if it was common people would spend their time hoarding it instead of working. So it was perfect back in more primitive times.
But it makes no sense in a modern economy.
Gold is not useless at all. It is widely used in electronics, for example.
I say Mexico should go back to a chocolate currency.
Either that, or cocaine.
Quote from: Malthus on June 08, 2011, 03:15:03 PM
I say Mexico should go back to a chocolate currency.
Either that, or cocaine.
Too easy to debase cocaine.
Quote from: Iormlund on June 08, 2011, 03:09:06 PM
Gold is not useless at all. It is widely used in electronics, for example.
Industrial demand is much less than supply. At current prices only heavy speculative interest can support gold prices.
Quote from: The Minsky Moment on June 08, 2011, 03:16:21 PM
Quote from: Iormlund on June 08, 2011, 03:09:06 PM
Gold is not useless at all. It is widely used in electronics, for example.
Industrial demand is much less than supply. At current prices only heavy speculative interest can support gold prices.
I don't see how that contradicts anything I said. The fact that gold is being used despite high prices driven by other factors only supports how useful it can be in many applications.