The Crypto Winter

Sampo Syreeni decoy at iki.fi
Mon Nov 19 15:27:49 PST 2001


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.

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.

Sampo Syreeni, aka decoy - mailto:decoy at iki.fi, tel:+358-50-5756111
student/math+cs/helsinki university, http://www.iki.fi/~decoy/front
openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2





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