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What Is A Gold Standard?
Given our earlier discussion of Nobel winner Sargent's comments on Greece and the gold standard, and the ongoing melt-up in asset markets due to the 'limitless money-printing' of central banks around the world, we thought it worth a look at what a gold standard is (and is not). Before 1974, U.S. dollars were backed by gold. This meant that the federal government could not print more money than it could redeem for gold. While this constrained the federal government, it also provided citizens with a relatively stable purchasing power for goods and services. Today's paper currency has no intrinsic value.
It is not based on the value of gold or anything else. Under a gold standard, inflation was really limited. With floating value, or fiat, currency, however, some countries have seen inflation reach extremely high levels—sometimes enough to lead to economic collapse. Gold standards have historically provided more stable currencies with lower inflation than fiat currency. Professor Larry White asks, should the United States return to a gold standard?
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A nice video, but I am still with FOFOA. Let a thousand currencies compete!
I TAKE SILVER OVER GOLD... that is why,
SILVER BEARS: You Have Been Warnedhttp://srsroccoreport.com/silver-bears-you-have-been-warned/silver-bears...
Very interesting movie came out in 1978 called SILVER BEARS starring Michael Caine about a silver scam. Nothing has changed today.
The very meaning of Gold Standard, standard for whom? By whom? Standards mean control and centralization. Usually by those who have a monopoly on force, control and coercion. If any currency is best, that means it can compete on it's own merits and shouldn't take someone pointing a gun or a missle at you for it to work.
gold THE standard amongst central bankers. Best liars know the real truth.
Couple months we'll all be talking true digital synthetics. I'm estimating that it should take a week and a half to cut 98% of the people over in a selected synthetic crypto currencies. Then we let all the debt in right after and the people become wealthy again. Debt is priced in to fractions of fractions of the gross sum. Governments can breath again (social security can be phased out properly, people can get paid), business get out of a liquidity trap and like community groups can finally have other source options to fund themselves without the directionless blather of the central banks.
With gold and silver right now, it won't move with their garbage fiat acting as wallpaper, walls and buttresses for their soon to be limited and short career options. So the question is which rope do they want?
PM's properly priced?
...or...
The entire currency rebooted without them and the world ignoring them into oblivion?
protip: this might be a trick question. LOL!
one thing to remember, though-
the real 'currency' that needs to be restored is FAITH (as in full faith n credit)
crypto currencies may have some advantages over gold. But they arent as widespread in use and are too new on the scene for the average person or main street shop trader to put their FAITH in
Gold and silver might make the oligarchy yawn, but it is a system they know will restore faith - ergo, confidence
They don't have a plan for that. The men that schemed it all are all dead and there was never a back out scenario. These are the type of people that didn't give a fiddler fuck about their own families and only thought of themselves. All of them dumb as a bag of rocks. Now all these fools are sitting their soon sore asses in chairs wondering about something their own bloodline poisoned them with. The unsolvable math problem of fiat currency which is as infinite as their corruption and baffling nonsense.
Then again, we could all just wait until their own guards murder them because the pay they are given doesn't buy bread...there's always a good 2:1 placer option on that per month going forward rounding eventually to 1:1. History is not kind to kings that don't pay and there's been so many. This time though, it is the first time they have never felt the pain of being 'king'.
If they were actual royals. Someone might want to check the paper work on the bunch of them just to make sure they haven't got some freeloading bum in the chair with fancy family marketing. Past three hundred years, all sorts of paper work gets shuffled around, never know how a message is passed over the telephone game of life. People are only who they say they are, because a piece of paper says they are.
That should illustrate the value of paper properly to them.
<jazz hands>
LOL! :-D
The only reason fiat survives in the modern world economy is because commerce has become remote and virtual. Gold is fine for face-to-face transactions, but not for 95% of the long-distance transactions in an advanced economy.
Cryptocurrency is the revolution in money for the 21st century. It will restore sound money, rein in governments and banksters, encourage credit for production, discourage credit for consumption, restore trade imbalances, allow capitalism to work instead of the faux crony capitalism.
Anyone who does not like the current financial system has to seriously consider what could improve upon it.
I can still get gold with my dollars.
Nothing ever changes.
Rome, Washington, no difference.
Crypto currency is just a technologically advanced certificate.
The idea is as old as civilization. Nothing new there.
>a technologically advanced certificate.
That no one can print out of thin air, or charge interest on. Both by the complexity and the financial suicide that would come from charging interest to the lender.
A gold standard money system is a fiat currency system where the central planners promise not to create more paper money than the gold that they have 'backing' the paper. Doesn't work.
Gold money and silver money are quite another. Gold and silver money were chosen by the markets and have thousands of years of successful history but they are hated by central planners because they can't be centrally planned.
The market will choose in the end when all of the other government hyjinks have ended. I'd bet on gold and silver although there is no shortage of government hyjinks (next ObamaCoin?), so it may take awhile.
Have you ever read anything about world economic history leading up to WWI? It would appear not, or that you did not get the message...
Hey, own gold and silver, but it's days as an interanational currency are over...
scrotal torque brigade leader has arrived
The banking panic of 1907 (and other bank panics) occurred because the banks in NY had lent out many times the money that had been deposited with them.
JP Morgan then started a panic by spreading rumors about the Knickerbocker Bank and depositors started to withdraw their funds there and at other banks causing the crisis.
The issue there was fractional reserve banking (fraud) by the banks lending out money that should have been held for their depositors - nothing to do with gold money.
JP Morgan, by the way, picked up the assets of Knickerbocker for pennies on the dollar.
Why can't I charge interest on Bitcoin if I lend it to you?
Ridiculous.
"Gold is fine for face-to-face transactions, but not for 95% of the long-distance transactions in an advanced economy."
This is complete nonsense. A gold standard was never a limitation on international transaction distance or volume. Gold is used for settlements only. It doesn't require physical transfer to complete transactions.
During the era of the ZERO-inflation gold standard, the reserve currency was the British Pound Sterling and world trade grew to a level not again attained until after the end of world wars (and thus the international gold standard) in the mid-50's. It's also why Britain lost the privilege of the GBP as the reserve currency. Going bankrupt fighting wars is contrary to the interests of the nation -- a fact well understood by the Swiss and others who have sane governments.
A gold standard does NOT limit velocity of transactions or geographic location. All it does is make wars so damn expensive that governments can actually go broke whether they "win" or "loose" -- which is precisely why governments want fiat to transfer costs of their stupid military adventures by inflation to the people.
Remind us of what PM supplies were doing in the 19th century while all this was going on...
How much silver did GB loot from China as a result of the Opium war?
How much trade was going on between great powers compared to the trade that existed with their respective colonies?
What were the flows of capital vis a vis those colonies...
What were the typical manufacturing tariffs in place at the time?
The devil is truly in the details, is it not?
torquing......
More like avoiding the question on your part...
You are aware that gold reserves tripled in the late 19th century, are you?
Do you think that will replay out agains?
Fiat currency issued by government inflates surely and routinely rather than only rarely and episodically, as has gold.
While gold (silver, too) has declined in purchasing power during past periods of bonanza mining, the value of gold in exchange has never fallen to zero in thousands of years. No fiat currency has failed to go there eventually -- usually in less than a century.
The big difference, of course, is that gold in hand is no one else's liability. Not a problem, of course, if you trust financial responsibility of government.
Trolololo...
Seriously...
I have no reference to point to, but a chart was recently published showing the above-ground supply of gold (what we're discussing) and world population have been pretty much in constant balance for a couple of hundred years. Which is to say, the number of available ounces per living human being has not much changed over time.
The only limitation on the ready supply of gold is the willingness to pay the cost of mining it. If shortage causes it's value to rise relative to other goods, that creates incentive to mine more. Simple as that. (Improvement in technology tends to gradually lower cost of recovery even though average yield per ton tends to decline.)
This likely explains why actual (rather than theoretical) operation of the gold standard for over a hundred years revealed a very slight inclination to price deflation, offering empirical evidence that a gold standard places no restrictions on trade. Just what you would expect since gold does not have to be physically handed from person to person in physical coin for every transaction under the gold standard. The use of real bills as short-term commercial paper also vastly diminishes demand for physical gold.
The looting of silver from China had no relationship to or impact on the operation of the gold standard. It was a result of market manipulation by the USG, which paid an artificially high price for silver to favor Nevada mining companies. That sucked silver out of China like a Hoover. Not to say the opium trade did not extract its own fair share, as well.
Tariffs have no effect on the monetary regime, nor vice versa, though they can certainly affect trade volumes between countries for some goods. A currency regime may fall in doubt and be refused for trade with other countries, but that's essentially impossibile under a gold standard. Central banks and national treasuries have always counted gold as a monetary asset. They still do.
As to tariffs high or low, there is no evidence showing demand for tea has been particularly stimulated at any time in the US vs. other countries owing to the fact it has never been taxed by the USG. Tariffs as a percentage of cost of goods are often overwhelmed by various middleman markups as they make their way into the market. And every dollar taxed by duties is a dollar which need not be taxed in other ways. Either way, the government will get its due.
The devil is in the red herrings, more like.
Here's what a gold standard means to me. Each month it is standard - regardless of price - to buy a wee bit of gold, just like I've been doing since the early 80's.
I could go with that...
Yup, nothing has changed....including the price of silver. 1978: $20. 2013: $20.
Keep waiting for the SHTF...you might be waiting a while. LOL
few years ago it took an orchestrated epic takedown just as silver was about to blow the lid off of $50/ozt.
The FRN's days are numbered. Foreigners are choking on the inflation exported abroad, and it is not real demand for USD. It's enforced at gunpoint via the pax americana. Just like the Marshall Plan was pure corporate welfare, as though trade cannot happen without the USD. These peoples' govts debase their currency to prop up the USD, but the malinvestments and outrage will be real payback.
The keynesian economist will try to tell you that the Americans play a key role in the global economy by consuming, and that is about as nonsensical a thing as I have ever heard. As if these other people in other nations can't consume their own productivity.
Gallon of gas in '78 was 63 cents
Today close to 3 depending. Shall we talk about food too? Other stuff? Nice you can cherry pick the $20 figure tho lol.
How is that math working for you now, troll?
Gosh. I've been hearing this for 30 years. Nothing has ever happened to fix this and yet we keep repeating it like a broken record.
Average price of gold in 1978 was $208 per oz, taking your $0.63 gives a ratio of 330:1....
Currently national gas is ~$3.25, gold is $1270, ratio is 390:1....
It is all about what your metals buy. What exactly is your point?
Nice job cherry picking data, it looks fun, I wanna try. Price of silver when we stopped using it in money- 1.29 and oz. price of gold, 35 or so per oz. The shit hitting the fan is not required for silver and gold to continue to appreciate against the dollar and every other fiat currency. Nice try though. Try not to be so obvious trolling on the future
Some of Rothbard's writings are informative and thought-provoking with regards to gold standards:
https://mises.org/rothbard/genuine.pdf
https://mises.org/rothbard/100percent.pdf
https://mises.org/books/whathasgovernmentdone.pdf
Good of gold:
- Hard to counterfit
- Hard to pull out of the ground, its a Giffen good so there is a natural tendance to buy what exists vs. make more of it (which is an exercise in high-impact risk and long payoff times).
- Easy to dilute or hide. Inert.
- Universal thanks to the jewelery demand for Gold and vanity trade.
Bad of gold:
- Tough to transport, when Crude Oil is beating you for logistics costs and insurance--- you got a minor problem. Not that this is new news.
- Easy to be rendered 'inert' in the event of radioactive event or limited access. Go ask Scotia Mottica how their bugout plan worked at ground zero. Not even the guards who were paid to guard it in the event of a Day Zero bothered to stick around. US Collapse ? forget about seeing that gold again or claiming insurance on your stash unless you can carry it all inside your coat lining.
- Easy to confiscate, unless you have a bailout plan or your own small country/estate good luck lugging 60KG of gold . Take a guess where the phrase 'uncle moneybags' came from in the 1800's. It was not Walt Disney who came up with the idea of stalking merchants and survivalists on the free range.
- Asset valuation: Unless everyone is being honest with their inflation and gold reserves so an investor can calculate the supply & "demand" for gold, the best you can hope for is the non-core rate of inflation + speculator appreciation. Reflexive and dependant on that whole "new mines" problem.
- Gold speculation is good and fun, but market liquidity is captured by a limited offer's when you get to large trading lots. Want to buy a farm in the neo-American future with some gold ? What is your personal script of gold worth to a farmer. Agency risk will be amusing when you will need to lug the gold with you to the farmstead and/or take the seller to visit your vault. Gold convoys and transportation was one of the most Risky and much desired reasons why vaults and Gold script (aka FRN) was invented. Go ask 2 guys named Wells & Fargo. They and the Brinks guys made some funny arbritrage on this problem.
- Gold script only works when you have gold to trade. The 5 points above limited the idea of script being launched before Lincon got his wood teeth. Gold standard is in theory a great idea but it assumes nobody will 'leave the peg'. It also assumes people will be responsible and not double book their script. Neither of the two ideas have ever worked in history and is one of the reasons Jackson rejected fiat monitoring in the first place.Why get involved in another boondoggle when you have bigger problems like a British invasion to occupy your oak desk ?
A gold standard implicitly assumes there will be a day, someday down the road when the gold standard is repealed.... again, for another quick legacy building exercise. Nobody ever actually wants to give up their gold. The many attempts at script both before and the Napoleaon note experiment proved this. Given the dissapointing track record of bond vigalantes from 1700 to 1840, the whole monitor idea of a gold standard was discredited. No monitor of script quality (a CB and the anti-money laundering task) lead to little confidence in equity and risky loans centered around that script.
Central bank independence was supposed to prevent the gold standard vs. largesee conflict from happening because there would have been enough Quality Assets around the world that the CB's board of govenors could cockblock the Treasury by simply refusing to purchase the ever worthless scripts and go buy Pounds/Francs or Rubles instead.
Go on, have a laugh on that last point.
Restarting gold standard will mean the cycle will reset back to 1700's confidence. Great up until you realize that resetting the system has not been a smashing success for the gini coefficent in Argentina or Russia, all 3 times.
No one lugs anyhing anywhere. The only lugging will be if you go to cash in your silver and gold certificates. This is the 21st century, we will do it all electronically. And we will audit bank reserves.
What is a BitCoin Standard?
Bitcoin is it's own standard. One exchanges bitcoin directly (at whatever fraction is required) without a paper claim conversion. It is like using gold directly (without a government printed paper conversion claim). Nice thing is $1 million of Bitcoin in my pocket weighs the same a a few bucks and I can transfer Bitcoin from London to New York without loading it on a ship.
Great response.
A gold standard prevents inflation like marriage prevents cheating - it doesn't.
when you cheat when married, it is adultery. When you cheat on a friend with benefits, it is ok.
when you inflate during gold standard, people will notice and ask for gold conversion. When you inflate in fiat system, it is ok.
It is in the principle and is matters whole lot in a society.
"when you inflate during gold standard, people will notice and ask for gold conversion."
No, they won't. We have tons of historical examples where governments got away with it.
Gold doesn't do shit.
And that is why statists around the world have never sought, and in no way continue to seek, to restrict or prohibit its ownership and function as a means of exchange and savings.
(/sarc)
Thanks for the laugh though, troll.
1902 gold= $20/oz = two bedroom apartment for one month
2013 gold = 1300/oz = two bedroom apartment for one month
case closed
True. But by the same token... there was also a time when salt was worth as much as gold, and aluminum was worth more.
Point is, no substance or commodity (even gold) is immune from the forces of economics: scarcity, utility, supply, demand, manipulation.
Smart, informed and honest people will realize and admit that. Those who aren't, won't. Nor will agents, shills or most pro-PM sites.
Plan and allocate/diversify accordingly: some PM? Sure, but don't go nuts. Unless you already are.
no substance or commodity (even gold) is immune from the forces of economics: scarcity, utility, supply, demand, manipulation.
We're into the statistical long-run RE gold supplies/scarcity. Gold will remain a good store of value for use as money.
When the Conquistadores did their thing in the New World, Europe experienced high inflation because of the influx of all the newly plundered metals, true. But that is as nothing compared with the routine hyperinflationary blowouts every fiat currency has suffered, typically within 50 years of its unchaining from a commodity. And we're highly unlikely to uncover similarly large deposits of gold now.
After the creation of the Federal Reserve, the US experienced inflation because a central bank allows commercial banks to massively expand the money supply, despite the USD's ostensible tethering to gold... though it should be noted, there was no inflation in the US while it adhered to the Gold Standard, which ended in 1914. The massive expansion of the US money supply happened after that, and during the bastardised Gold Exchange Standard.
You think gold is easily manipulated? TPTB look like they're running out of physical, the cornerstone of their manipulations. What proportion of bitcoins remain unmined? According to this:
https://en.bitcoin.it/wiki/File:Total_bitcoins_over_time_graph.png
maybe 40%... Wait until the NSA expends a few percent of its computing power to discover the remaining unmined bitcoins, and then dumps shedloads of them on Mt Gox during thinly traded periods.
The network adjusts for changes in hash power so that the amount of coins mined follows your linked graph within tolerance levels.
If I'm interpreting your statement correctly, you're saying that even if our dear leaders devoted all the NSA's (putative) quantum computing to mining the remaining bitcoins, there is something intrinsic to the BTC algorithm that prevents them mining them faster than a pre-specified rate?
That is a stupid argument that doesn't mean shit.
I don't give a shit whether your marriage does anything for you, or if you are single or divorced.
I don't want the government to have a say in my own marriage and free gold is the monetary equivalent of that.
Fuck Nixon
We sure gotta be in it for the long game.
The enemy is strong and will stop at nothing.
+1, though the enemy is not so strong as most people think.
it is dying a slow and painful death, using every dirty trick it can to prop itself up, using up every vestige of faith and credit and good will earned in the past.
a dying empire is extremely dangerous, especially one with nukes; strong? no. dangerous? yes!
He did keep me from dying in Vietnam.
"Before 1974, U.S. dollars were backed by gold. This meant that the federal government could not print more money than it could redeem for gold."
Around 25% of the monetary base was backed by US gold reserves before the gold window was closed ... or in other words, it was 75% fiat.
Just like most currency has been since the invention of gold certificates and fractional reserves.
No, the removal of silver from coin in 1971 was the last physical link to gold, after that , it was all fiat gold or bust.
I'm surprised you haven't burned Aug.15, 1971 and parts of Nixon's speech to memory.
http://goldnews.bullionvault.com/US_gold_reserves_01120092
Quit cherry picking numbers (at best), and at worst, making shit up...
Look at the history of gold reserves, steadily dwindling and when Nixon saw oil imports rocketing as here
http://en.wikipedia.org/wiki/File:US_Crude_Oil_Production_and_Imports.svg
He called no mas....
Should the US return to a gold standard?
No..
Next question...
Maybe.
Next!
Over.
Should government be separated from the issuance and creation of money?
Yes ....
Next question (with an obvious answer).
The US only issues coin.
They're more like Tokens, given that they've taken silver and copper* out of coins.
* If we ignore the few percent of Cu in Pennies, to keep the coppery color, and thus con the DFS (Dumb... Sheep).
no need for gold standard, but why not a system that ties existing gold stocks to levels of debt issuance and/or money supply?
price of gold gets marked up big time and stays that way.
for x % increase/decrease in one, there is a proportional increase/decrease in the other.
the monetary system is going to change at some point, and this is what jim sinclair has basically called for as the only way to save the usa from becoming the next zimbabwe...
i guess the fundamental question is: does the system want to save the usa (and its dollar)?
if you do not know about the gold standard will be finding out about it soon.
you can do it the easy way or the hard way.
The lack of a gold standard is just one of many standards missing in America today.
Education standards, food standards, political standards, human standards........and so on are but a few of the standards that have slipped in the same direction as the paper dollar.
You forgot moral standards. That is the foundation of society's other standards.
When there is a constant 'evolution' of right and wrong, and and evolving methodology of interpreting historic documents (like the 10 Commandments, U.S. constitution, etc.), then you have a situation where it's simply "every man for himself".
When people moral standards overboard or choose to make up their own, then all other standards go as well.
Actually, they DO have standards and morals. They're just not YOUR (sheep/socialist/Christian) standards or morals. And their god/God is not your God.
"To give up all illusions and pretenses is the beginning to Wisdom". Accept it, embrace it, and set yourself free.
" Actually, they DO have standards and morals. They're just not YOUR (sheep/socialist/Christian) standards or morals. And their god/God is not your God. "
That's probably, more or less, what a 19th century Native American could have said about american society at that time .
gold standard does not equal gold
The US Constitution says gold and silver.
If you have a "gold standard" then they will just print too much "really sincere gold promise notes."
The real question is: WHAT IS A BANK TELLER?
...Soon enough, Bullets gonna be the New Currency Standard, because they stopped makin'em in Amurika....and MIC / Fema have all the ready made ones stockpiled today.
Ammo is everywhere. There was a period where it was hard to get but not anymore.
http://www.cheaperthandirt.com/product/AMM-297
if ammo is the currency, then america is already at 'hyperinflation'
if you wanna reduce the 'M2' of bullets then fire at will
goldbugs
paperbugs
iBugs.
What is a gold standard?
It is simply that which raving statists and the desperate defenders of the rotten and corrupt financial and monetary status-quo are increasingly driven into a rabid frenzy to attack, misrepresent and malign.
What is a gold standard?
It's one proven check on statism. Only fiat money can enable a warfare/welfare state.
only way to keep the politicians a little bit honest is to have a bi metallic standard. Corupution both Corp and Political is the only winner in a Fiat system.
i'm bi-metallic curious.
though, there is no hope of keeping politicians honest; those who gain power will always seek to increase their power, with rare exceptions.
better to put an end to the notion of the state and let the free market decide what currencies it wishes to use, free from state coercion.
we are free men, we do not need the state and its agression towards us; we can pave our own roads, mint our own currencies, run our own lives.
Using tax income to fix the exchange rate between gold and silver is BATSHIT INSANE. It never worked in the past, it will work even less well in the present where silver reserves are relatively lower due to the heavy industrial use.
In Fekete's' gold standard gold and silver don't exchange at a fixed ratio.
If they are floating then whichever one you pay taxes with is the standard and money and the other just another commodity.
The funny thing is that fiat currency looses value over time whereas toilet paper becomes more expensive.
It's not just fiat that is the problem, it is also the fractional system of banking that exacerbates the problem greatly.
The problem of fiat currency is that sooner or later everybody succumbs to the temptation to print print print.
Newsflash: Anytime you use your Credit Card, YOU have created new fiat.
The gold standard is what the BIS uses to settle all debts, but it isn't good enough for the general population.
This discussion should be viewed through the lens that BANKS are accumulating gold and silver in certain parts of the world and that COUNTRIES do exchange commodities like oil for GOLD. This isn't some pie in the sky bullshit, OIL is being purchased for GOLD. People trust this exchange.
I do not like electric money. I will not bash Bitcoin, but I will bet you all of my lake bottom property that some of the best minds in the NSA and CIA are/have devised a way to corrupt the system.
Isn't it funny, and more than a little ironic, how the best of anything is still today called "the gold standard" of its kind?
Although I suspect that our dear ZH gold-basher Flakmeister would never make such a mistake ....
I think it's funny (and more than a little ironic) that ZeroHedgers want a return to the gold standard when the gold standard didn't do shit to stop the government from going off it.
A gold standard prevents inflation like marriage prevents cheating - it doesn't.
Which is probably why most Zerohedgers do NOT want to 'return' to some partial or quasi-gold standard administered by government or some other central authority, but actually want to see the complete separation of money and state, and to have individuals within the free market, and NOT some government bureaucrat or sociopathic central banker (but I repeat myself), decide for themselves what is and is not money.
"Hey guys, what's that metal that central banks have thousands of metric tons of? Gold? Let's make that money! That way the central banks can have a head start!"
Brilliant.
I see you are suffering from terminal cranial-rectal impaction.
World central banks hold less than 15% of the world's accumulated gold stock --- and even THAT is assuming that one accepts their stated reserves at face value, and assuming that many (Western) central banks have not surreptitiously leased the bulk of their gold bullion out into the market, as many (such as GATA) have long claimed and for which they have provided much evidence.
Uh huh. And the rest of it is thinly plated on jewelry and inside iPods. Great. What a useful money.
Also, I hear horses are a really useful mode of transport.
You gold-bashing trolls are a dime a dozen, and not worth even that much, even in the much-depreciated fiat currency of today.
If you displayed any semblance of honesty or good faith here, I would suggest you try learning a little financial and monetary history, about which you clearly know nothing. But "cast not pearls before swine" ....
I've read nearly every free book on Mises.org and that includes several books by Murray Rothbard.
I used to be a gold bug.
Then I realized what a lame money gold actually is. When libertarians whine for a return to the gold standard, it's like whining for a return to the Constitution. It's fanciful. It's ridiculous. Governments always break their promises. Always.
Gold is a bad money compared to Bitcoin.
I do not believe you for a moment. Your dishonesty is palpable and self-evident.
If you did in fact read what you claim to have read, you certainly failed spectactularly to absorb any of the wisdom or historical lessons contained therein.
Look at my posting history on ZeroHedge. I've been around here for a long time. I'm an Anarcho-capitalist.
Math-based currency is simply better than metal currency, for a handful of reasons. And we're seeing that every day - every time a new retailer announces they're accepting Bitcoin for payment. Tens of thousands across the world. More every day.
I don't see retailers tripping over themselves to accept silver and gold for payment.
SpykerSpeed
You're a liar. You've read all the von Mises stuff - good for you. There's an old saying: The devil himself can quote the scripture.
Nobody wants a "gold standard." Anything "managed" by the government is bad. I want the freedom to deal in whatever me and my counterparty agree on.
You don't see retailers tripping over themselves to accept gold, hmm, I wonder if it has anything to do with legal tender laws, you crapweasel? They made it illegal to choose your own currency. And when the tax bill arrives you must pay in Federal Reserve Notes.
Oh but you knew that, because you um, "read all the stuff at vonMises."
SpykerSpeed
Why not let Bitcoin compete fairly against other currencies?
It appears you are falling to the sin of the status quo (i.e. "you're either with us or the terrorists").
I would think a multitude of currencies would add resilience to the system. Something to be embraced. Anti-fragile.
Why not let Bitcoin compete fairly against other currencies?
It does. Gold not so much.
I don't think you see the bigger picture.
Every bank in existence today is in bed with government because it had to seek government permission to come into being, then continue to jump thru gov hoops. Present day banks are cut from a certain mold so don't expect any significant variations to crop up. Especially something that threatens the status quo,
Our money at one time was an asset with no counterparty risk (e.g. PM coin).
In time that got diluted to paper note supposedly backed (at first, the odds were high that it was indeed fully backed, later that degraded).
Finally, our legal tender (talking U.S. based here...but essentially same for other countries) our legal tender became a note (I.O.U.) backed by faith??? . In what? .... bankers/banking & the sanctity of government. LOL.
All this happened with government involvement precisely because the bankers bought off government. Man, go read thru history. Pick any time frame, research the details. Senator/Congressman/MP so&so introducted this bill or amemdent to bill so as to include some taxpayer shearing into law. And oh, senator so&so just happens to be associated with big bank xyz in a questionable fashion. Happens again and again and again.
They gained monopolies. They got protection from competition.
See the underlying common denominator?
Government was bought off by a privileged few.
Government laws (and even deadly force) were/are used to maintain the injustice.
Gold Standards can be perverted. Bitcoin can easily get legislated out of viability, or the intelligence agencies/Exchange Stabilization Fund could easily disrupt it.
We don't have free enterprise, not even close. That doesn't mean we can't have it. However that would entail a reset of the status quo, and to maintain any reforms, a citizenry more educated and on top of the activities of their legislators.
There's a melt down/reset coming. All parties will scramble to prevail.
All I'll saying is that we all simply acknowledge upfront that historically government is nothing but the trigger of a gun that all seek to command so as to turn on to others.
Depowering government is analogous to removing the bullet from the gun.
Yes, of course, unlike bitcoin which is based on the math, gold is based on imaginary rules out of this world.
Your arguments are laughable.
Disc.: I own PMs and some bitcoin
Akak,
don't lie,.. I am not a gold basher, I have always advocated gold and silver as an asset class...
I am merely pointing out it is impossible to have an international gold standard where flows of oil dwarf the stock of gold....
A very different proposition...
BTW, knock off the bull shit ad homs and slurs... I have been extremely courteous with you. I expect the same in return, Unless you want to change the rules of engagement... Your call...
Flak, your blatant dishonesty utterly disgusts me.
You have done NOTHING in any thread touching on the subject of gold in this forum but endlessly badmouth, misrepresent, and yes, BASH it, all while of course pretending to "favor gold as an asset class" --- the same weasel words used by malicious pro-fiat shills such as Jon Nadler to belittle, obfuscate, ignore and deny gold's historic and inherent role as MONEY. It is any discussion of the moneyness of gold (and silver) which is the kryptonite to you pro-fiat, pro-status-quo lackies, and which drives you into a rabid frenzy whenever addressed directly. You will go to any lengths to sideskirt that issue.
And for the record, you have done precisely nothing to "prove" that any kind of gold standard is "impossible" today. The only thing that you have thereby proved is your own ignorance of financial and monetary history, as by your same disingenuous "logic" a gold standard was NEVER possible, due to the supposed 'imbalances' in world trade and in critical commodities.
The vehemence and effort that you pour into attacking gold and its owners and advocates, and into attacking and distorting gold's historic and inherent role as money, are extremely revealing, and go far in demonstrating not only where your true loyalties and sympathies lie --- with the corrupt status-quo and the criminal powers that be.
I dub thee Don Quixote of Hedge for your propensity to tilt at wind mills...
And your debating skills are fucking pathetic...
You are correct in one respect, Flak --- trying to defend the truth in the face of your blizzard of deceitful distortions and outright lies can indeed feel like tilting at windmills.
Amen, he blows donkeys.
Why don't you go fuck yourself if you can't be civil...
Still haven't explained to me how and interanational gold standard will function given the flows of oil dwarf the stock of gold without crashing the world economy by 50%....
You've had it explained to you. Over, and over, and over, and over. Go back and read all those other threads, fiatfluffer.
You really don't get it...
No one is debating the virtues of gold as a local MOE...
The only fucking way is works at an international level is if nets flows roughly balance out... Currently, the unbalanced flow of commodities dwarfs the value of gold, unless you somehow by fiat make it more valuable relative to the commodities. And who the fuck is going to accept anyone telling them how much gold they must accept for their commodity, given the historical ratios of prices measured in gold. Why would anyone give their stuff at a discount? Except at gun point...
Do you understand what "by fiat" means? It is not clear that you do...
Finally, you are telling me that the system should just be crashed to make an international gold standard?
----------
Do you finally fucking well get it now?
There are lot more implications to using objects of intrisic value for money than simply economics. It also SUBSTANTIALLY determines the legal rights of the parties. A promise to pay is not the same as payment.
The switch to unbacked paper money was so that no one could own anything purchased with it.
Every chart you care to look at shows massive debt and speculative excess starting in 1972-'73 after Nixon killed the Gold Standard, which coincided with the offshoring of production and career employment.
PONZI!!!
Hard to change to gold standard when you've replaced most of your gold with gold certificates.
As soon as someone mentions "Gold Standard", pin them down to define what they mean by Gold Standard.
The fact is, there have been multiple so called Gold Standards.
In a nutshell, they all involved government/money power perversion to a certain degree. In the last few hundred years there hasn't been an unadulterated Gold Standard.
Note how even world insider,well spoken Jim Rickards DOES NOT advocate Golds free flotation against national fiat currencies, i.e. ... a non currency pegged "Gold Standard".
And let's not confuse Gold Standard and the issue of fractional reserve banking and the (government sanctioned) license for banks to lend money-credit into existence and to collect compound interest on it. And also allow debtors to gain tax exemptions on interest payments. What kind of world is it such that government policy subsides going into debt at the expense of the prudent savers who are aware of the pitfalls involved with immediate gratification.
All this is an ancillary issue that is perhaps even bigger. It's all something that needs to be drug into the forefront of society and discussed exhaustively.
Gold Standard has huge inter country ramifications. An international Gold Standard could be introduced to settle account balance between nations even apart from the pressing issue of internal currency and national central bank. I don't see commentators addressing this in its entirety.
Just as a disclaimer: my personal slant on things is to get government out of money and credit entirely. Why? ... because of almost certain government corruption.
Recently I've been doing some researching about the past. It seems even in the so called heyday of "free banking' in the U.S (roughly 1840-60 timeframe), it wasn't so. Even then a prospective bank had to apply for a government charter to operate. That entailed buying government bonds. NO NO fucking NO!
As soon as government applies stipulations it all becomes perverted.
GET GOVERNMENT OUT OF BANKING. 100%.
What do I mean when I say 100%?
I mean a 10 year girl is free to open a lemonade stand/bank (and issue currency) without any sort of interference.
P.S. I am not unsympathetic to the "social credit" types out there.
I would advise them to start local and show proof of concept.
If that actually flies in the real world then, sure .... bring it on. Locally first, then regional, then state, then national.
Just don't think you have carte blache to reach into my pocket so as to finance it obamacare style.
people can become corrupted. people design processes/rules.
government and banking = systems that organize people in accordance with processes/rules.
what system do you propose that exists without interference of people, processes, and rules which cannot become corrupted?
there is none so far that i can think of.
the fundamental question here is what is the optimal structure and scope for de-concentrating risk and its negative impact it can have when a particular system component fails?
I've come to the conclusion that a gold standard will not work, so the only thing needed is free gold (and possibly silver). That is the metals are to be freely traded, cash for ounce, and no paper future shananigans, hyper-leveraged unbacked COMEX contracts or anything like that. Any such contracts would need to be FULLY BACKED by metal. THEN the marked will very quickly determine what gold is really worth. That's all there is to it. It's that simple, and it's coming. The forces in the physical precious metals market will eventually force this to happen.
> Any such contracts would need to be FULLY BACKED by metal.
Everyone except you, the regulator, would have to work by the rules.
Excellent plan!
What backs gold?
God
a) the properites of true and honest money. gold is money. it's a currency (get that, and you'll see the light). b) 5000 years of history, and c) the main point (relating to a) it needs no backing. it just is, with no counterparty risk, no debt, money in its purest form.
Some argue that the gold standard is impractical for modern commerce, due to the limited supply of gold. In the days of Adam Smith, commerce was transacted using "Real Bills" of trade. This is the practical application of a "gold standard," with gold used as the ultimate liquidator of credit. The noble Professor Antal Fekete with the Hungarian camp of the Austrian School is the formost authority, explaining perhaps the most important thing we need to know, how to transact business in a free enterprise economic system under the stability of a gold standard, if we can ever shake free of tyranny and reinstate it:
http://www.professorfekete.com/articles%5CAEFRealBillsRevisitedPositionP...
Adam Smith in his Wealth of Nations worked out the foundations of a second type of credit that is based, not on savings, but on consumption. Later this theory was pejoratively called “Real Bills Doctrine.” What makes real bills real is that they represent real goods and real services in greatest demand without which society would stop functioning in a matter of months, if not weeks or days. Examples are bread, seasonal clothes, fuel in winter; the services of the miller and the baker; the spinner and the weaver, etc. Seasonal goods will be removed from the market by the consumer during the next 91-day period, before the turn of seasons changes supply and demand.
A real bill, as its name suggests, is just a notice of payment due that typically the wholesale merchant sends to the retail merchant along with his shipment of goods demanded most urgently by the consumers. It is useful to think of the bill as a security in the process of “maturing into the gold coin” that the consumer will expend when he buys the underlying good. The value of the real bill, unlike that of most securities, is increasing day-after-day till maturity, which is at most 91 days away. By that time the goods itemized on the bill will have been sold to the ultimate gold-paying consumer and disbursement of the proceeds is in progress. The face value of the bill is the amount to be paid upon maturity. It is a grave error to think that the bill represents a loan transaction. The wholesaler is not lending and the retailer is not borrowing. The credit is an inseparable part of the transaction, as confirmed by centuries and centuries of merchant custom. The quoted price is never ever cash: it is “91 days net”. The goods are more valuable and more liquid in the hands of the retailer than in the hands of the wholesaler by virtue of the former’s greater proximity to the gold coin. (Edited for brevity)
A "Gold Standard" is an utterly obsolete notion, trotted out by those who indulge in fairy tale resolutions for runaway political problems, which are automatically getting worse, faster, at an exponential rate!
I previously commented on these articles:
http://www.zerohedge.com/news/2012-09-26/gold-standard-possible
Is A Gold Standard Possible?
http://www.zerohedge.com/news/2012-10-09/guest-post-why-gold-standard-alone-not-enough
Why A Gold Standard, Alone, Is Not Enough
http://www.zerohedge.com/news/2012-10-10/gold-standard-vs-bretton-woods-vs-fiat-standard
BoE Finds Gold Standard Leads To Less Crises Than Fiat Regime
http://www.zerohedge.com/contributed/2012-12-13/why-gold-standard-can-return-world-global-economic-prosperity
Why the Gold Standard Can Return the World to Global Economic Prosperity
http://www.zerohedge.com/news/2012-12-21/guest-post-unadulterated-gold-standard-part-3
The Unadulterated Gold Standard Part 3
http://www.zerohedge.com/news/2013-05-06/what-gold-standard
What Is A Gold Standard?
http://www.zerohedge.com/news/2013-11-16/nobel-winner-dares-go-there-no-...
Nobel Winner Dares To Go There: "No Reason To Fear Deflation... Greece May Benefit From Gold Standard"
The gold standard used to have more of the ring of truth in it, because it was more directly connected to the law of nature known as the conservation of matter. However, the special theory of relativity has literally exploded the concept of the conservation of matter, and in the process exploded the notion that there could be a return to a useful gold standard. The only thing that made the gold standard slightly better was it was slightly closer to the laws of nature, such as that it is not possible to make something out of nothing, nor to send something to nothing. The current monetary system cut itself off from that, in order to enable the maximum runaway financial frauds. However, there is no way to correct those runaway financial frauds now by returning to the gold standard, as a return to the conservation of matter, as somehow being more sound and honest money.
What we need is a better energy system standard for money. However, when one tries to do that, one then falls into the infinite tunnels of deceits that energy systems are controlled by their most labile components, which historically have been the most dishonest and violent people, operating along their line of least action resistance, which is the human flow along the path of least morality. Attempting to have a better monetary system in a world where there is electronics and atomic power should be done in a way which is consistent with those scientific understandings. However, the profound paradoxes that arise when we attempt to do that are that we then are better able to understand how and why our current systems became based on the maximum possible deceits and frauds, and therefore, almost everything that successful economists say is some kind of cheer leading for the biggest bullies' bullshit social stories.
One will not find many cheer leading for truly better death controls, but that is actually the only way that any of the other real human problems could be resolved any better than they are now. What ACTUALLY EXISTS is a combined money/murder system, and so, it is impossible to have a better money system unless it is backed up by a better murder system. Welcome to the Bizarro Mirror World, Folks! Everything is about as proportionately backwards and distorted as it possibly could be, on level after level, where the lies are different at every one of those levels. Really, there is no way that human beings can go backwards now, and erase the advances made in science and technology, except if civilization so totally destroyed itself that those achievements were wiped out. Otherwise, the only way forwards is to continue to scientific project, by having an intellectual scientific revolution in the most basic aspects of the philosophy of science, which would be applicable to human ecology and political economy.
Reintroducing any kind of "gold standard" is way too little, too late, as well as too trivial to matter anymore. The problem is that there has been runaway triumphant fraud implemented by empires, for a very long time. Therefore, not only are almost all current debts odious, since the "money" that was lent was created out of nothing, but also most of the private property claims in the world today are also odious, due to the long history of those claims over the ownership of that private property accumulating through fundamentally fraudulent financial systems. What actually exists are competing systems of organized lies, operating organized robberies. The various gold standards in history were phases of different versions of those kinds of systems becoming dominant. However, the basic facts always stayed the same:
MONEY IS MEASUREMENT BACKED BY MURDER.
'Gold standard money' delusionally ignores that.
DEBT CONTROLS DEPEND ON DEATH CONTROLS.
After those have actually become global electronic frauds backed by atomic bombs, the REAL PROBLEMS are trillions of times worse than ever before human history, while those who propose going back to a gold standard are pathetically and ridiculously unrealistic in their attitude towards those BIGGER PROBLEMS.
ALL THOSE BIGGER PROBLEMS DO NOT DISAPPEAR MERELY BECAUSE PHYSICAL GOLD OBEYS THE CONSERVATION OF MATTER. RATHER, GOLD IS MERELY ANOTHER LEADING SYMBOL OF ALL THE REST OF THE CURRENT CONSTELLATION OF PROBLEMS.
http://www.youtube.com/watch?v=Bz-4NQ65Vxw
Peak Gold
Commodity based money does not change
that money is ultimately backed up by
murder, or the real death controls.
AS DEMONSTRATED BY THIS:
http://www.cbc.ca/player/Shows/Shows/Doc+Zone/ID/2380466502/
The Secret World of Gold
30 SECONDS INTO THAT DOCUMENTARY:
"Gold has always kept company with murder and intrigue."
http://www.telegraph.co.uk/finance/newsbysector/industry/mining/8180569/A-history-of-gold.html
A history of gold
Such a history of gold does not change the deeper problems, but only reveals them, as were summarized in the following quote:
"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance."
-- James Madison, 4th US President, (1751-1836)
In the real world, the possession of gold, and the use of gold as "money," does not escape from the deeper problems of socio/political frauds and forces. Detailed study of the history of the use of gold as money reveals that because MONEY IS MEASUREMENT BACKED BY MURDER, THEREFORE, GOLD STANDARD MONEY IS MEASUREMENT OF GOLD BACKED BY MURDER.
Great, now go convince the ECB, Russia, China, Arabs and citizens of India that Gold is bunk and their investment is a lost cause.
Get back to us on how that works out.
Essence, you missed the point! I am NOT arguing that gold is not a good investment. What I am saying is that every possible kind of asset, as private property, is based upon staking a claim, and backing that claim up with violence. The problems that we face are double pronged, with the fiat "money" now being used to buy the gold being created out of nothing as debts, so that there is about 100 times as much electronic gold as there is physical gold, while the force to back those claims up is the collective force of governments, where various countries have arsenals of weapons of mass destruction, as their means to back up their claims with violence.
I have no intention of convincing people that gold is not valuable. What I saying is the gold, as money, is NECESSARILY still measurement of gold, backed by murder. Nobody "owns" any private property, like gold, or whatever, outside of some system of public violence. There is NO such thing as "private property" other than as human claims, backed by human violence, both of which have been amplified trillions of times by technology. Therefore, we should look to the sciences that made those technologies trillions of times more powerful for guidance regarding ideas of how to deal with the deepen dilemmas of attempting to privatize the planet, by backing that privatization up with violence. Someone utterly fails to comprehend what I was saying if they think it is somehow relevant that there is a big market for gold, and that many people, in different counties, want to accumulate a bigger ownership or possession of gold.
My point is that their ownership of that gold still depends upon them being able to back up their claims with violence, and that then implicates weapons of mass destruction which are trillions of times BIGGER than anything which previously existed in human history. The basic idea of Neolithic Civilizations, as organized systems of lies, operating robberies, backed up by the ability to be more violent than anyone else, is what is at stake. The essence of that problem has been the same for several decades, since the 1960s, when there were enough weapons of mass destruction so that ALMOST NOBODY WOULD SURVIVE a real war using those weapons. THAT is what makes the idea that measurement of gold, backed by murder, is any kind of genuine solution to THAT problem BE ABSURD! (Of course, I recognize that most people find it mentally more convenient to deliberately ignore THAT, as their preferred way to continue to believe in whatever old-fashioned bullshit they still believe in.) People who propose going back to a "gold standard," as IF that was a solution, appear ridiculously unable to comprehend what it means to have electronic fiat money frauds, backed by atomic bombs, THE ACTUAL SYSTEM THAT EXISTS NOW!
I don't care that it is backed by whatever.
I earned mine and I want to have a minimal government that enforces ownership rights.
As to the rest, I don't give a shit, it's not under my control.
I take it back, going on the gold standard is probably the only way to save our sorry asses....
It would absolutely crush the world economy within 2 years, thereby dramatically reducing C02 emissions and thereby curtailing the risk of catastrophic climate change...
Toodles...
There is a latent eugenic streak underpinning segments of both the gold and environmental movements. Since over 90% of the US population is concentrated in metropolitan centers, a gold standard is a slightly different proposition to someone who already has gold and is living in the state with the lowest population density and which is already producing more oil than it consumes (ignoring refining capacity and food production).
My question is does anyone really want today's US federal government openly in the gold business?
With what HHS is doing to both the availability and price of healthcare (your girlfriend isn't a statistically significant sample size), or what the EPA and others are doing to both energy and food in regards to availability and price. With a gold standard, gold will be very expensive and no one will be able to obtain or keep any, moreover, as FDR proved- the US government will NOT justly compensate people for for gold when they inevitably TAKE it under such a monetary standard.
If society and governments fail to develop and implement solutions, eventually both the monetary and energy conundrums will work themselves out, albeit to the satisfaction of the least number of currently living people.
if the us treasury offerred $25k per ounce of gold, what do you do?
sell or hold?
I'm too well hedged to give you an easy answer. It depends on the broader circumstances under which the offer is made. I may have gold bars, coins, paper, equity in miners, and I may be trying to get a small slice of refinery - regardless, the current portfolio is divided across three continents, and I'm diversified in the US with Au, Ag, Pb, real estate, equities and cash.
So what option will cost me the least? Currently, I might be inclined to sue for peace with the State in exchange for a portion of my physical US gold holdings. However, if the shit is hitting the fan and a failing ponzi state can't keep up the value the my US real estate- then the State is neither smart enough nor strong enough to make a serious play for my US gold. If they replace president Stompyfeet with someone who actually has the oratory, organizational and leadership skills of an Adolph Hitler, then the equation changes and I might be inclined to write off everything in the US, pull a Tina Turner with the US passport, and leave the family with instructions and a shovel for after I'm gone and the situation has improved.
The gold is replaceable, Liberty isn't (and often requires the sacrifice of Life in order to be maintained).
i didn't expect that answer, but +1 is all i can say in response.
that was priceless!
Where is Boris?
It´s all about confidence. It could be oil, corn or wheat but gold/silver is more accepted as money.
Having a partial backing of fiat currency by gold is better than nothing and could reduce QE type printing. Of course, without the right intent nothing can stop currency debasement, etc. The decision to live within one's means needs to be taken before anything else.......
Digging holes in the ground to extract gold, to then place it back into holes in the ground is not the best use of human endeavours. Especially so, now that modern technology allows mountains to be moved and toxic chemicals used to extract tiny amounts of gold.
The fact is human nature is flawed. With 7 billion people on the planet, constraining commerce to the quantity of gold available would take us back to the dark ages bubonic plague and all!
Economies follow a course, empires come and go. Ours is no different. We have allowed our politicians / financiers / industrialists to run riot. America dropping the gold standard has got us to where we are today, it's been a great time to be alive. I don't see many people choosing to live as people did 100 years ago. Anyone who thinks that there was a golden age are much deluded. The cycle must complete. It's just that there are some lucky bastards that get to spend the money first because they run the show.
On the one hand that is the whole point of money, to constrain monetary debauchery that you're prone to. To let you now shit is not free, freetard (I presume that's what ft in your nick stands for?!).
On the other, free gold doesn't constrain commence the way you think, but I won't waste my time trying to explain.
'Freetard' - OMG, I know it's supposed to apply to free software zealots, but that has got to be the best neologism for members of the FSA.
Gold sans standard.
Nothing wrong with the Gold. It's just alump of metal. It has the advantage of being nearly useless, except as a perceived scarce medium of exchange, and store of value over time.
Thus , unlike any other element or commodity, a hugh stock of it has built up over thousands of years. The stock grows exponentially, just like the knowledge base of humanity, which is pretty amazing .
The best the whole world can do is on average add one and half percent to the stock every year.
All the Geniuses at the squid, trained that gold is not money , saw the exponential blow off fractional reserve currency in 2007 and decided that the best protection was to use oil as money.
they bought every barrel they could, and tanker farms, and old tankers to store it in.
Once they bought up all the worlds storage capacity, that was it. Meanwhile consumption plummeted, and oil crashed from 150 to 30 in a matter of months.
Lesson learned. Oil isn't a good money.
and as good as the shiney lump is , the virtual stuff is even better.
Value emerges from mutual acceptance of vlue, combined with scarcity, easy divisibility, recognizable purity, divisibility, and ease of transport.
Bit coin is the new gold.
shitcoin
Please excuse the typos, I am legally blind and still honing my skills as the vision goes.
Actually, it doesn't lead to stable purchasing power as economic growth, as part of a capitalist system, requires increasing money supply.
The Honest Gold Standard
-----
Liars and thieves can create fiat, fake, fraud, fiction, fantasy, fractional-reserve scams with various kinds of connection to gold or other commodities almost as easily as the pure fiat systems that dominate today. Which makes one wonder why they object to a connection to precious metals at all. They could jigger (and lie about) the backing ratio of gold to dollars just as easily as blow smoke and mirrors out their butts with pure fiat money.
Nonetheless, the question is, what is the honest gold standard? Answer:
#1: One gram of gold is the standard unit of value against which all products are generally compared or "priced". So, for example, the "price" of one egg might be 0.005 grams of gold (200 eggs == 1 gram of gold), and the "price" of one gram of copper might be 0.008 grams of gold (125 grams of copper == 1 gram of gold).
#2: People exchange goods for goods (often one party exchanges gold for some good, but not necessarily. The importance is, no one is ever left holding something without value (like a piece of worthless fiat paper). Instead, everyone involved in transactions never gains or loses value, they exchange value for value.
#3: The honest gold standard is 100% voluntary.
-----
The point of #1 is this. Anyone can easily compute the quantity of product A to exchange for any quantity of product B by reference to the value of those two products in grams of gold. For example, in #1 we can readily see that 200 eggs has the same value as 125 grams of copper. And we can determine the exchange rate between any two products simply by dividing by their values relative to one gram of gold.
The point is, nobody is required to trade or exchange gold for products. The gold standard doesn't require anyone do anything at all. It is, in fact, simply a standard. It is the fact that everyone sets a "price" in terms of grams of gold for their goods, so anyone can compute how much of their product is worth the same as a specific quantity of another product. That's all --- the gold standard is the fact that it is "standard practice" for people to specify a value for their product relative to grams of gold. Period.
The point of #2 is very clear. By exchanging your goods for and equal value of other goods, no party is ever cheated, and no party is left holding nothing. Bankers and financial scumbags hate this, because they want to be able to create worthless pieces of paper and exchange them for goods that people must spend a lot of time, effort, skills and resources to create. But that is theft, no matter what names banksters give it, and the honest gold standard simply says "it is standard practice to exchange goods for goods so nobody is every left holding the bag, or depending on future events to pan out as promised".
The point of #3 is also very clear. Nobody is required to participate. Nobody is required to "price" their goods in terms of "grams of gold". Nobody is required to accept gold in an exchange, or exchange gold for other goods. In fact, nobody need trade gold at all. By providing the standard exchange rate versus grams of gold, it is trivial for any traders to know how much of any product they should receive for any quantity of the product they trade. So you can accept grams of silver or copper or nickel for your goods, or lumber, or crayons, or anything you want. The gold standard does not force anyone to do anything - it is simply a standard of value and standard way to exchange goods wherein nobody gets screwed. Which is why, of course, government and banksters and predators in general hate the idea.
The honest gold standard is real, honest, just, fair, simple, practical and dependable. So don't expect anyone in government or the financial industry to advocate it. They want to steal you blind, from birth to death.
Oh, and by the way, the honest gold standard has nothing whatsoever to do with government or central banks or banks or financial companies or anything "official". Everyone can set the "price" (exchange rate) of their products versus gold to any quantity of gold they wish. Of course, if they set a "price" higher than other producers of the same goods, they'll have a difficult time finding folks to trade for their goods.
Also incidentally, there must never be a "currency unit" like "dollar" or "peso" or "euro" or otherwise. Why? Because they may set the value of their fraudulant "currency unit" to 1 gram of gold today... then change it to 0.5 grams of gold at some later date, thereby stealing from everyone holding their "false promises". So anyone who talks about a gold standard with paper currency with prices in gold, you know you're dealing with a shyster. They'll tell you their currency is worth something... then later say "never mind" and steal you blind. There is absolutely no need for paper standins - that utterly defeats the honest gold standard, because it allows predators to arbitrarily steal you blind. Furthermore, the predators that call themselves bankers will simply do what they always do --- print up more pieces of their paper than they have gold to redeem them, thereby ripping everyone off. Happens every time.
The honest gold standard is simple and has no flaws. Whether people realize it or not, they can practice the honest gold standard today, and they should whenever they interact with other honest individuals... assuming they can find any.
The world economy is lot more complicated than your simple "village' metaphor would suggest...
Saudi Arabia and Russia combine to have a current account surplus roughly equal to 3.000 tonnes of gold a year. They represent ~35% of the net oil exports. How many tonnes of monetary gold are out there?
Do the math...
That's the point. An honest gold standard would make them LIVE the math, not just give lip service to fiat, fake, fraud, fiction, fantasy, fractional-reserve debt-based pseudo math.
The world economy is absolutely NO more complicated than my example. Why on earth should anyone accept WORTHLESS GARBAGE for the goods they had to create through investment of a lot of their time, effort, talent and resources?
Answer: They should not.
The so-called "world economy" is nothing more than the sum of all individual transactions. PERIOD.
Everything else is just scam artists (central banks and other predators-DBA-organizations) cheating people.
This comes down to just one more of the endless fraudulant "collectivism" style arguments. Like somehow, magically, the collective "world economy" is not (or must not be) just a term for "all individual exchanges of real valuable goods for other real valuable goods". Sorry, the reality is indeed simple.
Get out there, go on the road and explain to people, "I am going to crash the economy so you can have 'honest money'"...
Hilarious...
Now if you are proposing the equivalent of one sovereign entitity. then a gold standard might work. But that is a completely different debate...
BTW, no one argues the utility of gold as a MOE... It just don't work on an international scale where the flow of oil, the economic alpha asset, dwarfs gold stocks..
If oil was uniformly more distributed, then maybe it would work...
Honestann, you have to forgive Flak. She thinks the value of gold if it became monetised would stay the same as it is at present. On another thread she didn't even understand that the value of paper increases after a government mint prints it up as currency! She demanded some real-world proof!
Sadly, she's not anywhere near as intelligent as her eloquence would suggest. Arguing with her is usually a waste of time because she cannot understand why she's wrong, even when her 'arguments' have been shown to be wrong by multiple refutations made by multiple posters.
Flak used to piss me off because I thought she was a troll. I now understand what she is, and pity her; she's an idiot.
Yes, I understand. I'm not trying to win any arguments here, since the payoff for winning is almost certainly zero anyway.
I'll probably piss a lot of people off by saying this, but at this point in my life, I sorta consider the vast majority of human beings in a similar way as so-called "lower life forms" (meaning, less capable intellectually). While it does still sting a bit to realize how extraordinarily glorious the universe would be if most humans were sane and rational, I fully understand that notion is pure imagination - a fiction in fact, albeit possible in theory. So, fundamentally, "they don't matter".
What does matter, or at least might matter, are the vanishingly tiny minority of humans who could do great things if just a couple more pieces of the puzzle (understanding of reality) fell into place. I suspect that those of us who frequent ZH and attempt to point out those crucial pieces are only aiming at those few who have a chance to "get it" and "potentially do something great with it". That's true of me, anyway. Everyone else is irrelevant to me.
I even ask myself the crucial question sometimes. If I had not recognized the problem at age 4 (believing what humans say, rather than observe, investigate, grapple, think, and infer for myself), or I had not made the firm decision to be honest with myself, and never accept anything as knowledge (or even real) without performing my own due diligence, would I be like them?
I mean, would I read the messages that I and other wise folks post, and not be willing or able to learn or benefit from it? How can I be sure? Maybe an individual has to make some kind of "honesty decision" at a young age, or they literally screw up the wiring of their neural net so badly that they cannot ever become honest or sane again. Since I can't know for sure, I have to at least accept the possibility exists. Certainly we see very few examples of completely dishonest, close-minded, statist morons turn into honest, active-minded, diligent, insightful, enthusiastic liberty advocates (or investigators of any topic whatsoever).
Perhaps examples exist. I dunno. Perhaps some people were never dishonest with themselves at all (which is the crucial part), but just pretended to agree with the morons around them, and thereby save enough of their brain to retain some independence. Perhaps. All questions, all theories. I'm an expert in consciousness, but not how physical organic brains implement consciousness, so I have no way to be sure.
But it is strange for those of us with active, enthusiastic minds! Hell, I'd love to visit thousands of radically unique planets and asteroids and comets or other strange places in this universe. I am not afraid of "different", I love it. So probably everyone who also feels like I do has to marvel at the overwhelming fear that people have for the most infinitesimally tiny changes in the current status quo. I mean, they're even terrified of NON-slavery, which sorta almost existed in fairly recent times, and terrified of NON-fiat money, which did exist not long ago. Stunning how people are so overwhelmingly terrified of anything the least bit different, even when all the evidence indicates it was better before when that difference actually existed. Amazing!
Which makes me wonder if another part of what saved my brain was my love for astronomy as a very young kid. What it did was make the entire universe the context for my every thought. In other words, how could a little variety scare me when the universe was chock full of variety in many ways (yet absent any variety in other ways, as becomes obvious when we learn spectra of the entire universe shows the entire universe is composed of the same atoms and molecules as right here at home).
So, yeah. Sad. You know, someone should write a book about earth, or an earth-like planet with human-like creatures... except where almost everyone was an honest, ethical, enthusiastic, forward-looking realist. When we look at earth history, we see that just a few people for short spurts of time make such enormous differences (many of which are improvements, at least until the predators get hold of them). So just imagine a planet full of the kind of creatures that humans can be. Or could be, if they hadn't allowed their brains to be destroyed by their elders and peers when they were very young.
You two clearly want to be alone...
Toodles....
Too many words.
It is trivial to properly manage a Medium of Exchange (MOE). One knows the MOE is properly managed when DEFAULTs = INTEREST collections. This guarantees zero INFLATION.
Money is "a promise to complete a trade". Trading promises are made out of thin air. The key is seeing that they are delivered upon and when they are not, mitigating with interest collections so the marketplace is not affected.
It's not rocket science.
FREE GOLD from fraudulent no-gold paper gold, and you'll have gold-backed fiat paper money, which THEN has all of the above suggested properties, due to it's "honest" convertability in gold.
Could it happen in America? Some states are getting ready:
Gold Standard In America By 2014! US States Don't Trust Fiat Money!
http://sufiy.blogspot.co.uk/2013/07/gold-standard-in-america-by-2014-us....
Every time articles like this come up, I have to repeat myself. A gold "standard" is just another scam where the government rigs the prices. We don't want a standard; we want the freedom to use whatever we want as money, which is not controlled or manipulated by the government. If the government wants to issue paper crap that can be exchanged for real money, like gold, fine. But we do not want another "standard" where the government declares 1 oz of gold = $32....
Any one can create a properly managed Medium of Exchange (MOE). All it takes is freely certifying all trading promises (money is "a promise to complete a trade"); recovering the certificates on delivery; and monitoring for defaults and recovering them with interest collections. This "guarantees" that inflation of the MOE itself will always be zero everywhere by the relation: INFLATION = DEFAULT - INTEREST.
No MOE can beat this form of management. It's as good as it can get.