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Author | Topic: The Giant Pool Of Money. Implications | |||||||||||||||||||||||
crashfrog Member (Idle past 1489 days) Posts: 19762 From: Silver Spring, MD Joined: |
People didn't rush out to California because they could mint coins. No, they thought they could sell the gold to people who would coin it. The California gold rush certainly wasn't driven by gold's industrial value. It was driven by gold's value as currency - as something widely considered valuable.
And of course essentially no 'regular folks' in the US uses gold coins for anything other than collecting and hoarding. You cannot spend gold igots. That's what I'm getting at. People who hoard gold hoard it not because of its industrial demand, but because of its monetary demand. Buz thinks that gold is a hedge against fiat currency. But gold is also a fiat currency. Nobody hoards gold because they think that when the dollar crashes, people will pay big for something to make false teeth out of.
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NoNukes Inactive Member |
That's what I'm getting at. People who hoard gold hoard it not because of its industrial demand, but because of its monetary demand. Gold is only different from other metals because it has a high value/ounce ratio (without being radioactive and fissile I guess) and because it is not too scarce. But essentially nobody uses gold as money anymore. As for the idea that gold was sought after because people wanted to make coins out of it, that just doesn't match the history in the US. During the gold rush, initially gold did not need to be coined. It was only coined because trading gold dust was impractical and that took place well into the gold rush. It certainly was not the impetus for people bum rushing California in 1849. Edited by NoNukes, : No reason given.
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xongsmith Member Posts: 2587 From: massachusetts US Joined: Member Rating: 6.5 |
Following this thread, so not really replying to NoNukes, but also not qualified to be a general reply.....
Gold has proven to be a very correct substance to use in the construction of space vehicles because of it's elemental properties. However, Crashfrog is correct to say it is essentially an arbitrary system of money. Do you want to stop inflation? Define money by what people do. The so called bread basket system:X number of loaves of bread, considered a staple, Z number of eggs, W of milk, etc. In there is toilet paper, window shades, internet access, furniture of a basic stripped down nature, TV, appliances, price of a home, all this stuff garnered together to make a comfortable middle class living for a family, modified over the years as different technologies come into the forefront. Who needs a hula hoop now? But an iPhone? Some yes, some no. Average it in. Base the dollar on what people do. Edited by xongsmith, : b e is be- xongsmith, 5.7d
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crashfrog Member (Idle past 1489 days) Posts: 19762 From: Silver Spring, MD Joined: |
Base the dollar on what people do. What makes you think its not, already? That's why we have a fiat currency. The value of a dollar is the value of all the things you can buy with dollars, which basically does average it out. And why on Earth would we want to stop inflation? Inflation is a good thing. In part, inflation is how we make sure there's enough dollars to go around as the American population grows. Inflation drives investment. Inflation is a good thing!
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xongsmith Member Posts: 2587 From: massachusetts US Joined: Member Rating: 6.5 |
One of the most ridiculous forms of value is the value of stupid rarity, like the upside-down airplane stamp or an original copy of the first Rogers Hornsby baseball card.
Gold is rare. Value based on rarity is stupid. There was a Mowgli story about this called the King's Anka. Let's get away from all of this distracting stuff and move on to the things that actually help humanity- xongsmith, 5.7d
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xongsmith Member Posts: 2587 From: massachusetts US Joined: Member Rating: 6.5 |
Crashfrog hits me with:
And why on Earth would we want to stop inflation? Inflation is a good thing. In part, inflation is how we make sure there's enough dollars to go around as the American population grows. Inflation drives investment. Inflation is a good thing! Inflation amongst the citizenry seems to them like their money is going down the drain. It would be better to avoid it when you can. A cow is a cow. Your little investment argument seems to support the most vicious & egregious components of this country, like the stock market. What's worse than a lawyer? A stockbroker. Stockbrokers do ABSOLUTELY NOTHING OF REAL VALUE for this country, ABSOLUTELY NOTHING OF REAL VALUE for you and YET, YET, they get paid BIG BUCKS for it. Bankers, investors, it's all SHITE. They should all DIE. Inflation or deflation are both bad in the eyes of the citizen. You piss off your citizenry, you got a bloody revolution and lots of humans die. People want things to be the same when possible. This is how it works. By basing the dollar on the bread basket as described, BARTERING continues as normal!!!!! Free markets work! The big Ripoffs get squelched. The USA needs George Bailey so bad, because we are still lurching down the road to Potterville. We see this movie everytime around late December and still it's lessons are ignored.- xongsmith, 5.7d
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crashfrog Member (Idle past 1489 days) Posts: 19762 From: Silver Spring, MD Joined: |
Inflation amongst the citizenry seems to them like their money is going down the drain. The "citzenry" doesn't have any money, for the most part, but what's in their pockets. They have assets that earn a positive return (like bank accounts or stocks), debts that inflation effectively shrinks, and the future value of their labor which will increase in price as inflation proceeds. Inflation is a great thing for the citizenry, at manageable levels, because it deleverages them out of debt and increases the price they can command for their labor and goods. The people who care about inflation are the people who hold enormous sums of money. Scrooge McDuck cares about inflation; the citizenry are afraid of it for all the wrong reasons. Because they think of themselves as owning mostly money, when in fact, they own mostly assets, labor, and debt.
Stockbrokers do ABSOLUTELY NOTHING OF REAL VALUE for this country, ABSOLUTELY NOTHING OF REAL VALUE for you and YET, YET, they get paid BIG BUCKS for it. I have absolutely no argument with you on that. Most financial transactions are just taking money with the right hand and handing it off with the left (with a nice little piece kept in the middle.) But I'm not talking about stock brokers, I'm talking about making capital investments in businesses. That's actually a good thing - it reduces the barriers to competition, to starting new businesses, because an entrepreneur doesn't have to already be independently wealthy to start a business. He can get a loan, sell shares, and have others invest in his business. Finance makes that possible. It also makes an enormous amount of grift possible, I don't deny that. But don't miss the forest for a few of the rotten trees.
The USA needs George Bailey so bad, because we are still lurching down the road to Potterville. Well, right, but remember what George Bailey actually was - a banker. He ran a credit union. He took money with his left hand and handed it off with his right, so that old lady what's-her-name could have an appreciating asset in which to invest her money and grow it above inflation, and the Italian family could take out a mortgage to buy a home. That's what finance makes possible. Are the lessons ignored? More Americans than ever are choosing to bank with local credit unions. I think people are starting to take that movie to heart more than ever. But try not to forget that It's A Wonderful Life, at its heart, is about a man who is a hero because he sells collateralized debt obligations based on subprime mortgages. Edited by crashfrog, : No reason given.
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Dr Adequate Member (Idle past 306 days) Posts: 16113 Joined: |
We're arguing a matter of degrees, "little" vs "great." The point was that the metals have little intrinsic value for coinage aside from scarcity; sure, they're ductile and resistant to tarnish but so are titanium and aluminum and zinc. Although it should be noted that if you wanted to mint an aluminum coin with the same value as a one-ounce gold coin, it would weigh three-quarters of a tonne.
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Phat Member Posts: 18310 From: Denver,Colorado USA Joined: Member Rating: 1.1 |
jar writes: Where are they still used to back currency? Here is one such suggestion by the president of the World Bank.
quote: World Bank chief calls for new gold standard Personally I'm not sure its a good idea, since China owns so much gold. We certainly don't want to help the competition, but since we are in debt, we have little choice.
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jar Member (Idle past 416 days) Posts: 34026 From: Texas!! Joined: |
Read it again. It says that gold is used as an asset.
So can petroleum or corn or ... What is the problem if China has lots of gold?Anyone so limited that they can only spell a word one way is severely handicapped!
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Phat Member Posts: 18310 From: Denver,Colorado USA Joined: Member Rating: 1.1 |
Since the dollar is the only currency that can be printed and hyper inflated, it gives the US consumers an edge. If China and the rest agree to back a new system, whether using gold or not, the US consumers will suffer a drop in our already embattled standard of living.
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jar Member (Idle past 416 days) Posts: 34026 From: Texas!! Joined: |
Huh?
I'm sorry but that makes no sense. Where do the products in your stores come from? When Safeway buys the inventory isn't the payment subject to the exchange rate? Why is the US dollar the only currency that can be printed and hyper inflated?Anyone so limited that they can only spell a word one way is severely handicapped!
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Phat Member Posts: 18310 From: Denver,Colorado USA Joined: Member Rating: 1.1 |
quote: That was Conservative Truth.orgI can probably find two or three other confirmations that the dollar is unofficially used as the exchange medium. Edited by Phat, : No reason given.
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jar Member (Idle past 416 days) Posts: 34026 From: Texas!! Joined: |
Did you notice what your quoted, for example "This also means that most commodities are priced in dollars and that commodities trading done in other currencies requires a conversion to dollars."
Trading is done by conversion based on the then current exchange rate. Do you understand what that means?Anyone so limited that they can only spell a word one way is severely handicapped!
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Buzsaw Inactive Member |
xongsmith writes: One of the most ridiculous forms of value is the value of stupid rarity, like the upside-down airplane stamp or an original copy of the first Rogers Hornsby baseball card.Gold is rare. Value based on rarity is stupid. There was a Mowgli story about this called the King's Anka. Let's get away from all of this distracting stuff and move on to the things that actually help humanity Two things: there are no more items like upside down stamps available and throughout recorded history, the beauty, scarcity and durability of precious metals have rendered them desireable by all civilized cultures. BUZSAW B 4 U 2 C Y BUZ SAW. The Immeasurable Present Eternally Extends the Infinite Past And Infinitely Consumes The Eternal Future.
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