Bitcoin Forum

"Modern" economy is different from 30's and 40's economy due to drastically increased speed and globalization. Gold production could ALMOST keep up with economic expansion in the 30's without causing too much deflation. I don't think that is the case now (considering The Wizard of Oz, it doesn't seem like it was back then, either).
Inflation "forces" the economy to move. Businesses rush to continue to invest, expand, and create ways of turning their value-losing cash into more cash in order to outpace inflation. Customers rush to buy goods and services, or to invest in businesses, to make sure their money does not lose value either. Deflation would mean people would have an incentive to hold on to their cash and watch it grow, rather than spend it. Deflation also runs the risk of self-feeding stagnation: people hold onto their money instead of buying things, economy slows and available cash declines, cash increases in value even more, people have even more incentive to hold onto their cash instead of grow it, and on and on (until we have a cash bubble, like the tulip mania in Netherlands). Both runaway inflation and runaway deflation are bad, but I believe low 2% to 3% inflation is better and safer than 2% to 3% deflation, and has a way lower risk for making things go really bad.
Also, why specifically "gold" for a standard? Why not silver, platinum, or tulips? I don't believe gold can increase in quantity rapidly enough to keep up with our economic expansion, so it would lead to severe deflation. Fiat currency allows us to more or less control inflationary and deflationary forces (start or stop the printers, so to speak). We can't control the amount of gold in mines. Also since we are globalized, and can easily buy other types of commodities or currencies, why even a "standard?" If you are worried about USD, you can buy precious metal ETFs, stocks, or even Euros/Yen. As I see it, due to much more globalized economy, extremely fast speed of transactions, and with way fewer barriers, we already have a somewhat free market for currency, one that competes against other forms of currency and valuables. The only barrier left is free immigration: we can't easily escape taxes by moving to another country.
-- Rassah  (3 years ago)

Regarding the main point, gold; the reason gold standard really bothers me is because I feel it would be way too similar to last year's oil spike: people hoard it, driving the cost of it up artificially. At least oil is renewable; gold is not quite as much. If gold were the currency standard, people hoarding gold would make its value go up. Food would cost less and less gold comparatively. That's deflation. Should the bubble pop, or another type of currency enter the market, the gold, having almost no utility value, would crash, and food would cost more and more gold. Inflation. We would essentially be in a perpetual cycle, driven by people not smart enough to realize what they're doing. Am I incorrect in understanding this? Also, our economy, and our population, has expanded exponentially in the last few decades. With a limited supply of gold, we would have less and less gold per person. Scarcity would again lead to deflation (price of money/gold going up). Even with banks using low reserve rates and re-loaning the money, I can't see something like gold growing fast enough to support this, can you?

“If you're not a liberal at twenty you have no heart, if you're not a conservative at forty you have no brain.”

i think you made some good points. Gold really isnt a great money from a technical standpoint. it would likely be deflationary and this would likely lead to hording which would hamper economic growth.

Gold has a historical record of increasing supply roughly equal to population growth. There have been some blips, but roughly speaking, gold has held it's value pretty steady since well before that long-haired hippy started preaching against the moneylenders on the temple steps.

Is THAT why long-term investment in gold yields something like 3% return?

Is that inflation adjusted? ;)

Apparently.. yes.
"Since 1900 to 2011 bullion made real returns of only 1.3% a year..."
Real returns - returns adjusted for changes in prices due to inflation or other external effects

A ray - slim though it might be - of hope for some of this forum's participants, then...  :)

Makes me curious what you used to believe.  :)

A brief summary:
I've wandered all over the political spectrum, from "rebellious" anarchism (the teenaged, unfocused, fuck the system type) to card-carrying democrat (voted for Clinton both times), to Ron Paul Republican, to minarchist libertarian, and finally, to AnCap.

I was under the impression you were not from US

A brief summary:
I've wandered all over the political spectrum, from "rebellious" anarchism (the teenaged, unfocused, fuck the system type) to card-carrying democrat (voted for Clinton both times), to Ron Paul Republican, to minarchist libertarian, and finally, to AnCap.

Have you ever heard of someone who used to consider themselves a free market anarchist but has since moved on? I find it interesting and perhaps telling that it is easy to find someone who used to consider themselves a communist or used to consider themselves a republican but i have never yet met someone who used to be a market anarchist.

I believe there's one person I've met (on here, of course) who claims to have turned away from libertarianism before reaching free market anarchist (recoiled from personal responsibility, I think), but one you go AnCap, you don't go back. ;)

Ron Paul Republican

Republican? You do realise he got booed at one of the Republican GOP right? That was when he said to not go to war with Iran.

https://www.youtube.com/watch?v=pfBKKh0C2eo

I'm not opposed to the idea of it... but nobody's been able to sell it to me yet. But I'm not really that far off of it.

Maybe the person gives enough of a damn to vote...

Once you see the irrationality, the violence and the hostility in statists, it is impossible to unsee it.  This is exactly why one does not return from an cap.

I imagine abolitionists also could not stop seeing the Negro as a human being, once they did.

Ditto for anyone who was a Christian/Muslim who turns atheist. You can't can't *force* yourself to believe in Santa Claus