Comment by kaibee
4 days ago
> On a long timescale gold is way more stable than the dollar.
This is a nonsense claim. How many flat screen TVs could you buy for a pound of gold over a 'long time scale'? Cancer treatments? Acres of land in midwest? Hours of a normal person's time? The fact of the matter is that you cannot actually store labor or time for later, so the amount of stuff you can get your gold is gonna vary wrt the broader economy. Economic reality on the ground is what actually determines the 'value' of your gold. And look, if you want some asset that you're pretty sure you could still trade for bread after the apocalypse or whatever, gold isn't the worst choice. And its deflationary, as the amount of gold isn't increasing at pace with the productivity of the global economy. And people like to hoard it when the future becomes less certain, because of the aforementioned 'tradeable for bread after the apocalypse', so I guess its an okay speculative hedge?
Non-responsive paragraph.
You've attacked what could interchangeably be dollar or gold asking what it might buy or store, failing to recognize I was measuring relative stability rather than absolute stability.
The dollar has lost over 95% of its value since inception of the federal reserve (at which time dollars nature changed significantly) in 1913 against some imperfect measures of CPI. That gives you a 20x difference over time, downward. Gold has not perform nearly that bad at price stability.
We could go back further than that when the dollar was a lot more stable... but at that time dollar was backed by gold and there wasn't (mostly) a central bank nor gold possession bans that let them mess with the price quite in the same way they did later.
The US always had really weird and restrictive financial regulations. Right from when the country got started.
Look to Canada for a much stabler system that didn't have banking crisis all the time. See eg https://archive.is/v13TM
Classical liberals are akin to communists in that when the practical application of their ideas fail, it's obviously because it was only a corrupted version that ended up being really put in practice. “It wasn't really Communism” and “It wasn't deregulated enough”.
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