The Crypto Winter

[Tim May]

On Monday, November 19, 2001, at 03:27 PM, Sampo Syreeni wrote:

> On Mon, 19 Nov 2001 georgemw at 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.

I'm not religious about a gold standard, but the fluctuations in world 
supply of gold are quite small. Nearly all of the gold extant in the 
world has existed for a long time in the hands of man (and governments, 
companies, churches, etc.). Even those mining technology has gotten 
better, the riches veins of ore--and most of the nuggest sitting in 
streambeds, etc.--have long been exhausted. I'm sure that 10 or 15 
minutes spent with a search engine, maybe much less, would show the 
number of tons of gold mined each year versus the total amount of gold 
already held.

> 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.

Money things are just objects with certain beliefs and expectations 
attached to them.

--Tim May
"A democracy cannot exist as a permanent form of government. It can only 
exist until the voters discover that they can vote themselves money from 
the Public Treasury. From that moment on, the majority always votes for 
the candidate promising the most benefits from the Public Treasury with 
the result that a democracy always collapses over loose fiscal policy 
always followed by dictatorship." --Alexander Fraser Tyler