U.S. Mint suspends sales of almost all gold and silver coins

[Anaconda]

Quote from Martinghoul:


The ability to increase/decrease money supply to counter various shocks is, in my view, valuable.

LOL, of course it's valuable. That's why elite families have worked on getting it for so long. Three US presidents have been assassinated over it.

If you actually support the monetary theory where a central authority can just mess with the money supply, then I doubt there is any purpose in debating the issue with you. If government needs to stimulate the economy, it should do so from tax surplus savings.

As for your comment on Zimbabwe, you obviously missed my point. Its currency is deemed worthless, so the people decide for themselves at the markets. That's how a medium of exchange comes about, from the people and the markets.

 

[Anaconda]

Quote from pspr:

Sorry, Anaconda. Your argument is flawed and the others are right. We cannot logically go back to a gold standard.

You're right, the current system is working just great, I can't wait for the grand finale.

Or maybe you'll be happier when an international currency controlled by a group of elite bureaucrats will be instituted. I'm sure they will have the people's best interests at heart.

 

[PragmaticIdeals]

Unforunately, neither of the arguments in this thread are convincing.

Allowing privatized banks and central banks to manipulate the money supply at whim and create asset, price and credit bubbles (and then get bailed out after doing so) is clearly non-optimal.

Likewise, a gold standard is unfeasible for plenty of reasons:

1) Inefficient to allocate resources toward digging a rock out of the ground, which would then dilute the rocks of everyone else... Imagine if scientists could create gold in a lab.

2) Secular demand factors can drive the price of gold (i.e., how badly your wife wants that new necklace)

3) It is true that, over certain time horizons, market and structural inefficiencies can cause excess inflation or unemployment and these social welfare issues can be effectively mitigated through money supply manipulation.

---

All that being said, I think the best solution would consist of:

a) A fiat monetary system,
b) Disallowing banks to create credit out of thin air and fuel inflation/asset bubbles due to the natural conflict of interest between society's wellbeing and private profit maximization.
c) Allowing a government-supervised institution to manipulate the money supply within a narrow band (i.e., no more than +/- 2-3%)

 

[Martinghoul]

Quote from Anaconda:

If government needs to stimulate the economy, it should do so from tax surplus savings.

This has been shown to be ineffective at times when it's most necessary, due to, among other factors, long lead times.

As for your comment on Zimbabwe, you obviously missed my point. Its currency is deemed worthless, so the people decide for themselves at the markets.

No, I obviously got your point, but you seem to have missed mine. People deciding in favor of the gold standard in Zimbabwe has nothing to do with the merits of the gold standard and everything to do with the screwed up politics of the country.

That's how a medium of exchange comes about, from the people and the markets.

You seem to have argued yourself into a corner here, my friend. At this point, the majority of the people and mkts of the world seem to have decided firmly against the gold standard and in favor of fiat money. Or, anticipating your comments, is this the elites deciding for the people, while in Zimbabwe it's the populace expressing its free preference?

To me, the gold standard is one of those theoretical constructs that has lots of merit on paper, but would be fatally flawed in practice, given how humanity is at the moment.

 

[Martinghoul]

Quote from PragmaticIdeals:


All that being said, I think the best solution would consist of:
a) A fiat monetary system,
b) Disallowing banks to create credit out of thin air and fuel inflation/asset bubbles due to the natural conflict of interest between society's wellbeing and private profit maximization.
c) Allowing a government-supervised institution to manipulate the money supply within a narrow band (i.e., no more than +/- 2-3%)

I would second that, except I would replace "disallowing credit creation" with "controlling credit creation".

I am a big fan of 'enlightened pragmatism'. Disallowing something basic, in my view, never works, as it's normally unenforceable and causes more damage than good. I do realize that the counterargument is that it's a 'slippery slope' and the various 'regulatory capture' issues. That's what we should be trying to address rather than issue blanket prohibitions.

 

[endsongs]

Gold was used for thousands upon thousands of years as money or to back money. It has only been the last 30 years or so that gold hasn't been used to back "money" in any form. How would you say the only 30 years of gold-free fiat "money" have gone?

 

[Anaconda]

Quote from Martinghoul:


To me, the gold standard is one of those theoretical constructs that has lots of merit on paper, but would be fatally flawed in practice, given how humanity is at the moment.

Ok this is pointless if you honestly believe that. A precious metal money standard has never existed, it's just theory.

Unbelievable.

 

[ByLoSellHi]

If things get absolutely horrendous, ammunition is worth its weight in gold.

 

[peilthetraveler]

Quote from PragmaticIdeals:

.

Likewise, a gold standard is unfeasible for plenty of reasons:

1) Inefficient to allocate resources toward digging a rock out of the ground, which would then dilute the rocks of everyone else... Imagine if scientists could create gold in a lab.

2) Secular demand factors can drive the price of gold (i.e., how badly your wife wants that new necklace)

3) It is true that, over certain time horizons, market and structural inefficiencies can cause excess inflation or unemployment and these social welfare issues can be effectively mitigated through money supply manipulation.

1) The fed creates dollars in their lab and they have been diluting our money for decades. So that argument means nothing.

2) Countries store dollars in their vaults. Same thing as your secular demands argument

3) inflation didnt really exist until we starting using currency. Sure you could point out some cases in roman times of inflation, but that was because they were diluting the money. (putting less silver in the coins). But hyperinflation never existed when people used gold/silver. Those instances of money supply manipulation you talk about are really devaluing everyones money to give an invisible tax(stealing) to people that save to pay for that unemployment and social welfare.

 

[Martinghoul]

Quote from Anaconda:

Ok this is pointless if you honestly believe that. A precious metal money standard has never existed, it's just theory.

Unbelievable.

You must have missed the 'at the moment' bit at the end of the sentence.

Many concepts, e.g. institutionalized slavery and torture, have existed in the past and were basic parts of human life for thousands of years, but, somehow, I don't see anyone calling to reinstate these things in modern society, solely because they were so widespread in the past.