ladajo wrote:More or less, yes.
Taking Gold away from the people.
The addition of new gold to above ground stocks has been remarkably stable at around 2 - 2.5% per annum over the long term.
It is one of the prime reasons why gold has been superior as money over the millenia. It is found and mined at a low, constant rate, relative to existing stocks.
The BS argument about there not being enough to go around is false because it ignores the divisibility of gold (another reason it is superior as money), it can be beaten into wafers on the order of angstroms thick. Additionally, the actual gold does not have to be in circulation but any number of electronic or paper representations of it can circulate (as long as you trust the redeeming authority).
An old measure, 1 grain of gold is 1/480th of oz, (about $3.10 at current prices).
169,000 tons of gold is 2.4 e12 grains, (2.4 trillion) Is that enough grains for ya?
We can even go to 1/10 of a grain and get 24 trillion units to circulate ... as you see it is not the total quantity of your monetary medium but it's divisibility that makes it feasible. Reason being value is a human perception that is infinitely flexible, ask Goldman Sachs if you do not believe me.
Central bank controlled fiat paper money is an old, bad idea because the central planning agency required to administer it has all the failure modes of any centralised system, as the communists can tell you. Distributed networks are more robust to corruption, incompetence and encourage competition not cronyism. Fiat central bank model is dying, we are just unlucky enough to have to live through the aftermath. But where there is crisis there is opportunity, be nimble.
It is one of the prime reasons why gold has been superior as money over the millenia. It is found and mined at a low, constant rate, relative to existing stocks.
The BS argument about there not being enough to go around is false because it ignores the divisibility of gold (another reason it is superior as money), it can be beaten into wafers on the order of angstroms thick. Additionally, the actual gold does not have to be in circulation but any number of electronic or paper representations of it can circulate (as long as you trust the redeeming authority).
An old measure, 1 grain of gold is 1/480th of oz, (about $3.10 at current prices).
169,000 tons of gold is 2.4 e12 grains, (2.4 trillion) Is that enough grains for ya?
We can even go to 1/10 of a grain and get 24 trillion units to circulate ... as you see it is not the total quantity of your monetary medium but it's divisibility that makes it feasible. Reason being value is a human perception that is infinitely flexible, ask Goldman Sachs if you do not believe me.
Central bank controlled fiat paper money is an old, bad idea because the central planning agency required to administer it has all the failure modes of any centralised system, as the communists can tell you. Distributed networks are more robust to corruption, incompetence and encourage competition not cronyism. Fiat central bank model is dying, we are just unlucky enough to have to live through the aftermath. But where there is crisis there is opportunity, be nimble.
So are you proposing that we stick a bit of angstrom thick gold on a bit of paper and circulate it as $$$?
Granted there is about $5 Trillion in cash estimated to be in circulation these days, we may be on to something. But what if value of the global economy grows, and we need more "money" in circulation? Does the rate of gold addition 2-3% match global economic growth?
Maybe it would be easier just to circulate bits of paper without gold on them?
Granted there is about $5 Trillion in cash estimated to be in circulation these days, we may be on to something. But what if value of the global economy grows, and we need more "money" in circulation? Does the rate of gold addition 2-3% match global economic growth?
Maybe it would be easier just to circulate bits of paper without gold on them?
It isn't necessary for the currency to physically carry gold. But the currency being redeemable for gold, or other physical commodity, enforces a fiscal discipline on the issuing authority.
Another form of currency is the coupons and certificates issued by retail establishments redeemable for a specific item or quantity of goods. While only the issuing party is obliged to accept these coupons, others could as well take them in payment, trusting in the good name of the issuing party to back the face value.
Another form of currency is the coupons and certificates issued by retail establishments redeemable for a specific item or quantity of goods. While only the issuing party is obliged to accept these coupons, others could as well take them in payment, trusting in the good name of the issuing party to back the face value.
OK, just for fun, what would happen to the world economy if it was suddenly discovered how to make any element on the periodic table. Including gold. Tons of the stuff. All you would need is some sort of matter or even energy. Turn on your big machine (purchased at Walmart for 2% of your annual after tax income), dial up what you want and out comes anything you want. As much as you want. Any time you want. Just for fun.
But the currency being redeemable for gold, or other physical commodity, enforces a specific fiscal policy on the issuing authority.hanelyp wrote:It isn't necessary for the currency to physically carry gold. But the currency being redeemable for gold, or other physical commodity, enforces a fiscal discipline on the issuing authority.
Another form of currency is the coupons and certificates issued by retail establishments redeemable for a specific item or quantity of goods. While only the issuing party is obliged to accept these coupons, others could as well take them in payment, trusting in the good name of the issuing party to back the face value.
There, fixed that for ya
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