Bernanke explains why gold is not money.

[tvbcof]

Can someone explain to me what Ron Paul's point was?  

I just looked up some definitions of money, and "generally accepted medium of financial exchange" seems to be a key part of the definitions.

All sides agree that gold has value, and stable value at that.  But is it money?  
Will the grocery store or car dealer generally accept a chunk of gold as payment for goods?

If I owned a grocery store or car dealership, I would be very upset if my salesmen didn't accept payment in Gold. It has always held its value better than toilet paper poo poo money. That is reason enough to take it over fiat.

You would probably get a kick out of this:

  http://www.youtube.com/watch?v=Ef0VG1WEP10

even if it proves Ben's point...among other things.

I actually side with Ben on this one.  All current legally supported monetary systems are, I would argue, debt based (which gold...and bitcoin...are not.)  I don't think it means a whole lot, and I expect it is just a matter of time before things shift in this respect.  Perhaps not a lot of time.

[jtimon]

Long-term, gold is more deserving of the term "money" than anything else mankind has ever used.

As JP Morgan said, "Gold is money, and nothing else."

In fact he said "Gold is money, everything else is credit".
But I think that gold has also a component of credit. Gold is money only because people accept it as such. If nobody accepted gold as money, the credit component would evaporate and gold would be only an industrial commodity.

The US Dollar is but another experiment in fiat paper currencies... and only about 35 years old, since it was delinked from gold in the early 70's. The US Dollar as a money has declined in value steadily since it was created. Gold as money has maintained its purchasing power throughout thousands of years. I know which one I trust more.

Very clever observation. The dollar as it is today only has about 35 years old. The old dollars were gold certificates.
The US defaulted back then.

[deuxmill]

I guess, distilled down to a single question, how do we assess the value of BTC as if it were completely decoupled from any other currency? Or can we even? Are we just seeing a raw, uncluttered effect common to all currencies, with the effects magnified by other variables in the BitCoin system?

Sure you can. How do people asses Labor, how do people asses Drugs , How do people asses ideas? You can asses them in whatever currency you want BTC , USD , Both, and to whatever value you want. The exchange value only matters if you need/want too exchange the BTC for USD or USD for BTC. It represents one simple thing : What value of USD/PLN/EUR someone was willing to give away for one BTC and vice-versa .

If you need USD for resources you can always speculate and asses the BTC at higher values and ask less BTC for a certain product/service , or more , depends on how you asses them.  And then all that matters is how the customers will asses your product. If your assessment and your customer's assessment are close then the customer will buy.


But right now the BTC economy is quite small and it is mostly based on the exchange value because most of the BTC economy is composed of mostly traders which buy with dollars and add a small commission and then convert that value to BTC . If there were more producers and service providers assessing their products in BTC then the economy will move from one based on the exchange value (couplet to other currency) to one based on the assessment of BTC/PRODUCT and BTC/SERVICE.

[malditonuke]

from beverly hills ninja:
http://www.youtube.com/watch?v=REjzRk3clNM  (sorry, couldn't find the english version)


translation:
Haru: I would like to rent one of your lodgings, is the cost great?

Desk Manager: Compared to what? A hut and a rice patty? Sir, we are a five star hotel, with 600 rooms, booked 6 months in advance.

Haru: I have money.

Desk Manager: I'm sure you do, but unfortunately, we don't take Wompum.

Haru: Do you perhaps - take Gold?
[pours out about 15 pieces of gold]

Desk Manager: [rings bell] Front!
Desk Manager: Perhaps I shall send Dom Perignon to your room?

Haru: I prefer to be alone tonight, perhaps later I will meet your friend Don.

[libertyzeal]

Offload it for what?  Cash?  If you have to take your money to a special store to exchange it for cash, it's hardly money.

This argument is nothing but semantic masturbation.

1)  I don't see any popularity/circulation criteria in the definition of money.  It seems like people are holding up some weakly defined concept and calling it "money" and applying it like a badge of honor upon certain mediums while using it as a club to smash other mediums, within the context of their own narrow idealogical definitions.

2) If you want to play that game, there are 348 merchants in the DFW area alone ( http://www.opencurrency.com/directory/marketplace/regmerch3.php?rid=135 ) that accept AOCS rounds (gold/silver/copper) in exchange for goods and services.

3) From a historical perspective, if you find "money" in a box that's been buried for 200 years, and have to take it to a special store to exchange for cash (ie, a collector of historic memorabilia), it's hardly money.

[jtimon]

Offload it for what?  Cash?  If you have to take your money to a special store to exchange it for cash, it's hardly money.

Many people use it for direct exchange.

Gadaffi proposed it for international trades between African countries. Maybe Libya would sell its oil only for gold later. International and central bankers don't like that. Saddam announced that that Irak was going to accept euros instead of dollars before the war.

[Melbustus]

Let's bet back to the whole point of this thread, which was to note that Bernake got pwned. Which was hilarious.

[TheGer]

Gold is worth the same amount it always was.  It's the values of Fiat Currencies that change(like the USD).  Values of USD goes down, price of Gold goes up.

You could get a nice suit in the 50's for an ounce of gold(lets say $40-50).  Same holds now, you can get a nice suit for an ounce of Gold(about $1600).