Is a gold standard feasable in a globalized world?

A Free-Market Monetary System

Explained by a Nobel Laureate. Enjoy.

 

take away that trust and that particular fiat currency goes to zero eventually....and dont kid yourself......just because the US dollar did not loose that trust yet dont mean it wont eventually.......all fiat currencies are vulnerable to that loss in tust......too bad you just dont understand that!

 

Lol, the value that gold would represent as a currency is no different than a fiat currency. The underlying factor is productivity. You can bring gold to Zimbabwe and they won't be any more productive. You can bring gold to Mexico and they won't all of a sudden be an economic powerhouse. It has nothing to do with your currency. It is all about your productivity. The currency is simply a way to represent your productive capacity. Gold has no special value to it whatsoever that makes it any more valuable as a medium of exchange than some worthless piece of paper.

 

So you can't even explain it in your own words? You say "what this country needs is multiple currencies" and you can't even tell people why? Embarrassing!

 

I already did, but you weren't satisfied with my explanation so I provided you with a more detailed explanation by a revered economist.

Do you want an explanation or not? If you do, here is a detailed one by a Nobel Laureate.

If that's not enough for you, then here is an entire book on the subject.

There you go, pal. That's what you asked for. Go read them.

 

Is a globalized world feasible?

 

No you didn't

You aren't intelligent enough to explain it yourself?

 

I explained that supply and demand would determine virtually everything, which is an accurate characterization of a free market monetary system. You felt that explanation to be inadequate, so I provided you with two detailed expositions by the Nobel Laureate who popularized the theory. If you're not going to read them, then why do you keep asking for an explanation?

I've already explained it, you simply rejected my explanation. Here is a better explanation, and another.

If that doesn't satisfy your request, then nothing will.

 

you do realize that the only reason the US has the reserve currency was because they had most of the world's gold reserves right? And its that reserve status that has allowed the US to do such foolish things and get away with it as the central banks of the globe come to its rescue...what part of that dont you understand?

 

The paper said nothing more then what we have heard a million times. That the gold standard places a constraint on the Government. But it doesn't, it never has and never will. Commodity backed currencies systems don't fail because the Government they fail because they are infeasible. Every society in the history of mankind has manipulated the gold standard because sticking to it would destroy the economy.

Can you please explain mathematically how a multiple currency system would work. How would we determine our GDP, how would we determine what the currency can buy? There is a supply and demand for foreign currency because you know what you can buy in those foreign lands. How does just free floating currencies in America make us better off?

You haven't explained it. You have not used any mathematical, accounting, or logical reasoning behind your words. It is just pure words. The economy does not work through words. The reason why Austrian crap isn't taught in school is there is no facts, math, or empirical evidence behind it. It is just a bunch of philosophers that hate their lives and are bored.

 

No it's not. The US has the reserve currency because we have the most productive capacity in the entire world. We are the largest consumer, the largest producer, we have the most innovation, technology, the highest education, the most advanced military, science, etc. It has absolutely nothing to do with how much gold we have. Stop lying!!

 

Currency is not merely an abstraction. It is a market commodity. It is a creation of the market, not of the state. It comes into being naturally, as the most tradeable commodity in the market.

Typically--though not always--this has been precious metals, which have a number of qualities that make the especially tradeable and especially fit for use as a medium of exchange. Units of gold (or silver) are relatively durable, fungible, portable, difficult to counterfeit, have a high value-to-unit ratio, and have a relatively stable value compared to other commodities. This is why they tend to outcompete other commodities in the market for that purpose. They are simply better at performing that function than other commodities.

No one is suggesting that gold or any other money should be forced down everyone's throat. What we're suggesting is that you let the market decide, as it did long ago. If you insist on trading using little pieces of paper with numbers written on it, which a monopolistic cabal of bankers can print out at will, you are free to do so, though it's crazy to me. But other people shouldn't be forced to use it. Most people, in a free market, would come to use gold or some other commodity with similar qualities that make it particularly efficient as a medium of exchange.

 

where the heck did you pick up that nonsence from? The Bretton Woods agreement was that the US would be the reserve currency because it would be backed by gold......any central bank can exchange its dollars for an ounce of gold......35 dollars gave you an ounce of gold.....had the US not promised this, do you really think the central banks of the world would of ever accepted the US dollar over gold?

 

Because we were the largest producer in the world. It had nothing to do with how much gold we had. Oh my god. Why do you have this crazy infatuation with gold. Gold really is a stupid piece of metal. It does not produce anything. This is absolutely insane.

 

Absolutely wrong. Currency is a medium of exchange. It's purpose is to represent your country's or a certain segments productivity. It has nothing to do with the private sector digging it up out of the ground. There is no reason a country should limit themselves because of how much effing metal they find in the ground. Wholly cow, are you guys from the 1800s?

Because they were unsophisticated. Gold and precious metals were the easiest methods to use as a medium of exchange. It wasn't because people wanted gold because it made them food and made them shelter. They wanted gold for the exact same reason people want USD. Gold is an effing piece of metal. Nothing more, nothing less. It does not represent value, it does not represent human capacity for production, it represents absolutely nothing... except for rappers teeth.

There is no market for medium of exchanges within a country. You can not value a medium of exchange with out knowing what you can get with it. And you can't know what you can get with it, unless you know what was created with it. There is no such thing as a market for medium of exchanges withing a segment. It is infeasible and would lead to nothing but manipulation, confusion, and eventually people would say ef this, let's have a single currency to represent all our hard labor and production.

 

You're still envisioning money from a state-based perspective, as something the "country" (i.e. the state) creates for the state's purposes. Not at all. Money exists prior to the state. It comes into being naturally, in the marketplace. Isolated tribal communities and even prison communities develop their own money. Whatever is the most tradeable commodity becomes the money without any intervention from the state.

Only later does the state monopolize it. I'm not in favor of a state-enforced "gold standard" or any standard. I'm in favor of free market money.

Right, it was and is the most easily tradeable commodity. Therefore it became the money and probably would again in a free market. If paper makes better money, it would outcompete gold in a free market. But if you think paper money needs to be imposed through force, that only discredits your position that it make better money.

It's not infeasible for society, rather than the state, develop standards naturally, voluntarily, and organically. Voluntary, private society developed standards of language, etiquette, law, and measurement all prior to the state monopolizing things. I think gold and perhaps silver would quickly outcompete most other alternatives as money because they make the most effective money.

 

that doesn't begin to make sense. you would just use smaller amounts of gold to represent economic transactions. theoretically ANY amount of gold would work

Oh, I didn't realize that the world was in a state of economic prosperity right now. Maybe the chaos we're experiencing right now is due to a debt crisis which is entirely fueled by the inherent failures of fiat currency. Brainwashed much?

 

Eliminate legal tender laws and you'll see gold and silver being used as money again as the Federal Reserve Note continues to become more and more worthless. It's no "infatuation", it would be free market forces at work. There is no substance mankind knows of which better provides for the proper function of currency than gold does. If you don't realize this, you don't understand the basic principles of money.

 

So you think that the ability to access the sum of human knowledge at your fingertips is a bad thing? Sorry dude, we don't live in the dark ages. It's time to grow up and act like a mature adult and face the fact that people aren't going to be shielded from the truth any longer by government, media and Keynesians like you.

 

Bingo. The state's only function in the matter of money ought to be to ensure that the money is honest, so that private contracts between individuals are enforced properly. (This is in the Constitution).

 

Umm yes, America is the largest economy in the history of mankind. So based on your assumption there should be some economy out there that is better than us because they have gold as their currency?

Explain to me why not a single developed country in the entire world has gold as their currency?

Your guys lack of understanding of basic economic concepts is mind boggling.

 

Lol, says the guy who wants gold to be our currency. Embarrassing!!

 

In order for this statement to have any kind of relevent meaning, you have to first prove that America being the largest economy in the world can be attributed to the lack of a gold standard, which is not the case at all. We're the largest economy in the world because of the free market (or rather, what remenents of the free market are allowed to seep through).... NOT because of fiat currency.

Besides, being the largest economy in the world means absolutely nothing. We could have the largest economy in the world in terms of GDP, but have 50 billion people in our borders. We would have the lowest GDP/person rates in the entire world and everyone would be poor. But we'd still have the largest economy. So your entire point is completely moot becuase your understanding of economics is elementary.

Legal tender laws.

 

But we have the highest per capita GDP for any country remotely our size. We have more billionaires than the next 9 countries combined. We have an individual state that has a GDP in the top 10 of largest GDP's in the world. We have more millionaires than the next 5 countries combined. We consume more than any other nation in the world. For China to have a per capita GDP equivalent to ours they would have to increase their GDP by $40 trillion.

There is not one economic indicator that does not place the United States of America as the world hegemon and the largest and most robust economy in the history of mankind. The majority of the growth has happened in the last century. During the last century we have progressed from the gold standard, to a quasi-fiat standard, to a full fledged fiat standard, growing exponentially larger.

So you are right, fiat money didn't create our wealth. But it represents our wealth in a way that gold never could. Which is why just about every developed nation in the world followed in our footsteps. Europe even tried to group all it's countries together to compete with the US. So the burden of proof is on you, to tell us why we would be better off on the gold standard. And since you guys don't understand math or economics, it will be very hard for you to convince anyone with even Econ 101 experience, that the gold standard is beneficial to the country.

 

I didn't say I want gold to be our currency. I said that gold would be our currency if the free market took over. It doesn't HAVE to be gold, it's that it WILL be gold because its inherent properties are what make it the best known substance to be used as money. But I want the free market to decide what should be our currency. I don't want a state enforced gold standard because something better may come along indeed to be used as currency in the future. We (humans) just haven't found it yet.

Once again you still don't understand what money is. So you resort to putting words in my mouth because you think it makes your argument stronger. Strawman tactic.