At 01:27 AM 11/20/01 +0200, Sampo Syreeni wrote:
On Mon, 19 Nov 2001 georgemw@speakeasy.net wrote:
It's amazing how many people assert this, even though it's clearly wrong. A gold standard does NOT mean that the amount of currency in circulation equals the amount of gold in the vaults, it means that the currency is exchangeable for gold at a fixed rate. Obviously, there can be more gold in the vaults than you need to actually exchange every dollar for the correct amount of gold. Less obviously, there can be less.
Of course, the system also exposes the currency to fluctuations in world wide supply of gold. It's not sane policy to tie one's unit of currency to any particular good -- think about what it would mean if the chosen good was unrefined oil, a particular crop or electrical power. One'll get the picture fairly soon.
Yes, but what this thread has ignored is that gold (and other densely precious things) were valued *in and of themselves* and so using them as money was not symbolic. You traded your goat for a goat's worth of gold; if trust evaporated overnight the gold is still worth something. Similarly with barrels of oil. If you discover a lot of it under your topsoil, you get wealth because the substance itself has utility.
It's not really sane to opt for a tie-in to the supply of a particular currency, either -- that's actually even worse, since the people printing the bills can cause fluctuations in the exchange rate even easier than they could if they were just digging up precious metals up from the crust.
Hence, private, floating currency, which, again, is old news on the list.
Clearly stated.
On Monday, November 19, 2001, at 05:03 PM, David Honig wrote:
Yes, but what this thread has ignored is that gold (and other densely precious things) were valued *in and of themselves* and so using them as money was not symbolic. You traded your goat for a goat's worth of gold; if trust evaporated overnight the gold is still worth something.
Not really. It was still a matter of belief that that gold coin, or gold nugget, would be worth something. "In and of itself" is a very vague and intangible concept. --Tim May "As my father told me long ago, the objective is not to convince someone with your arguments but to provide the arguments with which he later convinces himself." -- David Friedman
On 19 Nov 2001, at 17:40, Tim May wrote:
On Monday, November 19, 2001, at 05:03 PM, David Honig wrote:
Yes, but what this thread has ignored is that gold (and other densely precious things) were valued *in and of themselves* and so using them as money was not symbolic. You traded your goat for a goat's worth of gold; if trust evaporated overnight the gold is still worth something.
Not really. It was still a matter of belief that that gold coin, or gold nugget, would be worth something.
"In and of itself" is a very vague and intangible concept.
--Tim May
I understand your point, you can't eat gold, it won't keep you warm and dry in a storm, it really is mostly only good for you in that other people will also give you stuff for it BUT I think the other side is pretty clear also. Gold isn't like, say, the good will of the king, which becomes wortheless as soon as there's a new king. I suspect that it never ocurred to most people during gold standard days that gold could in principle become wothless (although alchemists understood perfectly well that being able to turn lead into gold is only the key to riches if you alone posess the secret). Anyway, there are very good reasons why gold is better than anything else as a basis of currency. I expect most of you have read this before, I've posted this before elsewhere, appy polly logies for the redundancy, but for those who maybe think choice of gold as a standard, here's why gold is good: 1) Gold is money dense (a small volume of gold is worth a lot). This is very important if you have to keep currency reserves. 2) Gold does not rust or decay. Again, very important if you have to keep reserves. 3) Gold is uniform. Diamonds are all different, oil comes in a plethora of types and grades. Tobacco was used as money in the early days of the american colonies, with the (easily predictable) result that people smokes the good stuff and used the crappiest stuff they could find to pay their debts. Nothing could be purer than pure gold. 4) Gold is elemental. It's much more plausible that somebody will come up with an economic way to synthesize, say, diamonds than gold. 5) Gold makes women sleep with you. I don't know why they like it, but they do. George
"As my father told me long ago, the objective is not to convince someone with your arguments but to provide the arguments with which he later convinces himself." -- David Friedman
At 07:03 PM 11/19/01 -0800, georgemw@speakeasy.net wrote:
On 19 Nov 2001, at 17:40, Tim May wrote:
On Monday, November 19, 2001, at 05:03 PM, David Honig wrote:
Yes, but what this thread has ignored is that gold (and other densely precious things) were valued *in and of themselves* and so using them as money was not symbolic. You traded your goat for a goat's worth of gold; if trust evaporated overnight the gold is still worth something.
Not really. It was still a matter of belief that that gold coin, or gold nugget, would be worth something.
"In and of itself" is a very vague and intangible concept.
--Tim May
I understand your point, you can't eat gold, it won't keep you warm and dry in a storm, it really is mostly only good for you in that other people will also give you stuff for it BUT I think the other side is pretty clear also. Gold isn't like, say, the good will of the king, which becomes wortheless as soon as there's a new king. I suspect that it never ocurred to most people during gold standard days that gold could in principle become wothless (although alchemists understood perfectly well that being able to turn lead into gold is only the key to riches if you alone posess the secret).
Anyway, there are very good reasons why gold is better than anything else as a basis of currency.
BTW, I wasn't arguing it is "better" nowadays; I'd think the kilowatt-hour (aka joules) would be more useful today. I was thinking about how the use of inert metals (etc) arose historically. At first the 'trust' was minimal and it was a 1:1 trade for the more portable gold.
2) Gold does not rust or decay. Again, very important if you have to keep reserves.
Also why it was available to cavemen, and why it was shiny, which was attractive.
3) Gold is uniform. Diamonds are all different, oil comes in a plethora of types and grades. Tobacco was used as money in the early days of the american colonies, with the (easily predictable) result that people smokes the good stuff and used the crappiest stuff they could find to pay their debts. Nothing could be purer than pure gold.
Isotopically pure gold :-) Watts are 'uniform'; so is an N% solution of ethanol (if you want to put your joules in your car, etc.)
4) Gold is elemental. It's much more plausible that somebody will come up with an economic way to synthesize, say, diamonds than gold.
5) Gold makes women sleep with you. I don't know why they like it, but they do.
They sleep with you because of your large cattle herd only they have accepted abstracted value and settle for gold or stocks...
"In and of itself" is a very vague and intangible concept.
--Tim May "As my father told me long ago, the objective is not to convince someone with your arguments but to provide the arguments with which he later convinces himself." -- David Friedman
Quoting Jews again, Tim? -- Julian Assange |If you want to build a ship, don't drum up people |together to collect wood or assign them tasks and proff@iq.org |work, but rather teach them to long for the endless proff@gnu.ai.mit.edu |immensity of the sea. -- Antoine de Saint Exupery
Yes, but what this thread has ignored is that gold (and other densely precious things) were valued *in and of themselves* and so using them as money was not symbolic. You traded your goat for a goat's worth of gold; if trust evaporated overnight the gold is still worth something. Similarly with barrels of oil. If you discover a lot of it under your topsoil, you get wealth because the substance itself has utility.
Gold has many industrial uses, but its value has historically commanded a higher price not primarily because of its demand for fillings or filters but for its demand as a currency, for which it is naturally suited, being easily identifyable, measurable, divisible, liquidifyable, transportable and of predictable supply. If you trade gold for goats someone else is trading goats for gold. They're almost certainly not buying fillings, but something that's useful to them as a medium of exchange. -- Julian Assange |If you want to build a ship, don't drum up people |together to collect wood or assign them tasks and proff@iq.org |work, but rather teach them to long for the endless proff@gnu.ai.mit.edu |immensity of the sea. -- Antoine de Saint Exupery
The MAIN reason (and I agree that it's work-ability is a good secondary
reason, and I like the comment about cavemen finding it 'cause its shiny)
gold is used as a medium of exchange is because it is SCARCE.
If a modern day alchemist figured out how to easily turn lead into gold, it
would become worthless (well it might still be valuable when it was made
into art objects, like clay is).
All of gold's "romance" arises from this scarcity.
I always liked the sub-plot in Scott Adams "Hitchhiker's Guide" books where
the accounts, middle managers, and "telephone sanitizers" that were sent to
earth to "prepare" for future inhabitation decided to use tree leaves for
currency, then set about to burn down all the trees "in order to control the
money supply".
-Neil
----- Original Message -----
From: "Julian Assange"
Yes, but what this thread has ignored is that gold (and other densely precious things) were valued *in and of themselves* and so using them as money was not symbolic. You traded your goat for a goat's worth of gold; if trust evaporated overnight the gold is still worth something. Similarly with barrels of oil. If you discover a lot of it under your topsoil, you get wealth because the substance itself has utility.
Gold has many industrial uses, but its value has historically commanded a higher price not primarily because of its demand for fillings or filters but for its demand as a currency, for which it is naturally suited, being easily identifyable, measurable, divisible, liquidifyable, transportable and of predictable supply.
If you trade gold for goats someone else is trading goats for gold. They're almost certainly not buying fillings, but something that's useful to them as a medium of exchange.
-- Julian Assange |If you want to build a ship, don't drum up people |together to collect wood or assign them tasks and proff@iq.org |work, but rather teach them to long for the endless proff@gnu.ai.mit.edu |immensity of the sea. -- Antoine de Saint Exupery
Neil Johnson wrote: [...]
I always liked the sub-plot in Scott Adams "Hitchhiker's Guide" books where the accounts, middle managers, and "telephone sanitizers" that were sent to earth to "prepare" for future inhabitation decided to use tree leaves for currency, then set about to burn down all the trees "in order to control the money supply".
*Scott* Adams?????????? I think you mean the late Douglas Adams. Ken Brown
Whoops ! Yes I meant Douglas Adams ( My punishment: To be damned to heck and
forced to listen to Vogon Poetry).
-Neil
----- Original Message -----
From: "Ken Brown"
Neil Johnson wrote:
[...]
I always liked the sub-plot in Scott Adams "Hitchhiker's Guide" books
the accounts, middle managers, and "telephone sanitizers" that were sent to earth to "prepare" for future inhabitation decided to use tree leaves for currency, then set about to burn down all the trees "in order to control
where the
money supply".
*Scott* Adams??????????
I think you mean the late Douglas Adams.
Ken Brown
[ Charset ISO-8859-1 unsupported, converting... ]
Whoops ! Yes I meant Douglas Adams ( My punishment: To be damned to heck and forced to listen to Vogon Poetry).
-Neil
You have certainly come to the right place for it. -- Julian Assange |If you want to build a ship, don't drum up people |together to collect wood or assign them tasks and proff@iq.org |work, but rather teach them to long for the endless proff@gnu.ai.mit.edu |immensity of the sea. -- Antoine de Saint Exupery
participants (6)
-
David Honig -
georgemw＠speakeasy.net -
Ken Brown -
Neil Johnson -
proff＠iq.org -
Tim May