Comment by RealityVoid
7 hours ago
Gold is silly as a measure of value. It's just a piece of shiny metal. The amount of value in the world is increasing so you want to exchange medium to grow with it else you're pulling breaks on the actual economy.
7 hours ago
Gold is silly as a measure of value. It's just a piece of shiny metal. The amount of value in the world is increasing so you want to exchange medium to grow with it else you're pulling breaks on the actual economy.
Just because a social construct is silly when you think about it doesn't make it any less real or useful.
A national border is silly as a physical reality; it is just a cartographic whim. These invisible lines, drawn by long-dead men, pretend that the lithosphere is fundamentally different on one side of a coordinate than the other.
Fiat currency is silly as a store of value; it is just a digital ledger or a piece of cotton-linen blend. Its "worth" is derived entirely from the collective hallucination that a central bank’s promise is more substantial than the paper it is printed on.
Yeah I don't get why people don't understand this- there is not enough gold to base the entire global economy on it.
That makes no sense, do you think people are talking about using gold coins instead of paper money in their wallet?
Gold is actually really good at transferring and measuring value. Think about what a "good" measure of value would be have. It needs to last over time, not corrode or dissolve to the forces. It needs to be distributable, Divisible.. to be ubiquitous. Hard to create/refine, hard to find, so supply can't easily be inflated. It doesn't matter what the object that is being used for exchange of value or holding value, that's why you can trade and barter random objects. But if you condensate down the properties that make a GOOD money, then gold is more than just a shiny metal. "The amount of value in the world is increasing so you want to exchange medium to grow with it.." we find more gold every day, so there is an easing already happening naturally. And even if there wasn't, imagine having an exchange currency that literally never inflated... that's GOOD. We have been hoodwinked into thinking that we need inflation to keep up with goods and services, literal stockholm syndrome taught by the FED.
Hold on - you say "we find more gold every day" and then go on to suggest that the money supply doesn't actually need to keep up with economic growth?
If we had the technology to maintain 0% inflation, we would do that. We can't, and rather than risk deflation we instead target low positive inflation. This is because deflation leads to nightmare spirals where people start stuffing money into their mattresses instead of investing in useful things because holding has risk-free guaranteed returns that the unpredictable real world can't match.
The amount of gold being mined is not sufficient to keep up with economic growth and gold is therefore inherently deflationary. It's not a good way to store value, because a coin that's going to double in value over two years or whatever is obviously not a stable store of value.
You can argue about corrosion resistance or whatever other physical properties gold might have, but unless the civilization collapses you will find just as much luck storing your wealth in the database of a major bank. Needless to say, designing a civilization around the idea that it could collapse at any moment is unnecessary and expensive.
> And even if there wasn't, imagine having an exchange currency that literally never inflated... that's GOOD.
I fundamentally disagree. Value comes from building stuff not from hoarding. I maintain my intense dislike for gold. And I grant that it had the property of having most people on this earth consider it the peak of value. Sure common belief is a useful property. But I disagree that it's a positive outcome or that there couldn't be many many other variations except gold.
> that's why you can trade and barter random objects...imagine having an exchange currency that literally never inflated... that's GOOD. We have been hoodwinked into thinking that we need inflation to keep up with goods and services, literal stockholm syndrome
Gahhh. Stop taking your economics advice from bitcoin bros and goldbug weirdos. They don't know how anything works and don't want to learn. It's like taking legal advice from sovereign citizens. It's not even that difficult to understand why it's a terrible idea!
High inflation is bad, sure. Deflation is an economic nuke. You know those people who spent like a whole bitcoin buying pizza way back when? "If I'd just held onto it, I'd have $HUGE_NUMBER now".
Yeah. If your money goes up in value, you have a huge incentive to stockpile it and not buy pizza. It's not just Dominos that loses out. All of the people and suppliers that go into pizza do, too. You need people to spend and lend to have liquidity and money flow.
> we find more gold every day, so there is an easing already happening naturally
That's not how that works. You're tying your entire country's economic growth to the production output of a single mining industry. Gold is not distributed evenly across the globe, either.
And yeah, we did all that in the past, and it caused deflation, which caused numerous financial panics [0], broke the British economy [1] and after two world wars, the US ended up with like 70% of the world's gold [2].
[0] https://www.federalreservehistory.org/essays/banking-panics-...
[1] https://en.wikipedia.org/wiki/Financial_crisis_of_1914
[2] https://www.imf.org/external/np/exr/center/mm/eng/mm_dr_01.h...
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TL;DR: Tying your entire country's economic growth to the production output of a single mining industry is stupid and we don't do it for very good reasons. Everything is a conspiracy if you don't know how anything works.
I do find it rather ironic that economists can pretty much universally agree on this concept. And yet when you point out the very existence of the billionaire class inherently causes the exact same issue you're suddenly a communits.
How is it good for an economy to have a small subset of individuals hoarding wealth through property, artwork, and offshore bank accounts - not spending it in the economy from which they extracted it? "Job creators" is a farse, the subset who you can point to who ACTUALLY create(d) jobs a-la Page and Brin have long since stepped away from that job creation and have joined the ranks of: number go up.
Yes, it's just a shiny piece of metal. However, it is a pure element and there is a limited amount of it, unlike pretty much anything else except maybe silver.
Otherwise this happens.
https://fred.stlouisfed.org/series/M2SL
This is the origin of the entire white collar world and all of its odd bedfellows, and it will die in our lifetime. All of our jobs will go with it, unfortunately.
Well it's also soft, bacteriostatic, and conductive.
OMG, we should totally base our economic exchanges on copper instead!