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Author Topic: Why Bitcoin Is Not Gold  (Read 4688 times)
netrin
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December 17, 2011, 05:13:37 AM
 #41

Thanks Lonelyminer, I've had more than too little of the Christmas Gløgg to fully appreciate your post. But I suspect you put me in my place. Thanks for the education.

Greenlandic tupilak. Hand carved, traditional cursed bone figures. Sorry, polar bear, walrus and human remains not available for export.
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StewartJ
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December 18, 2011, 06:54:23 PM
 #42

Have you ever wondered why gold have been and ceased to be money so many times in history? Many talk about returning to gold, but if gold was that much better than fiat money, then why has fiat money recurrently replaced it? The supporters of Bitcoin would say centralization is to blame, since it allows the manipulation of the monetary system in favor of the wealthy. However, since most gold monetary systems were also centralized, how could centralization explain fiat monetary systems, especially debt-based ones? Clearly, centralization is not enough to explain our current monetary system.


Gold wasn't lost as money because of "centralization."  It was lost as money because governments desire the ability to debase the national currency for deficit spending.

Upon a gold standard, the ability of governments to spend beyond their taxable means is limited. Upon a fiat standard, the ability of governments to spend beyond their taxable means is far less limited, for they can merely print some portion of the deficit (and the public, taught in government schools their whole lives, never learns about the insidious inflation tax they endure).

Put simply - the gold standard tends to be abandoned by governments because it restricts their ability to spend. It limits their power, so they find ways and excuses to get rid of it.

Your explanation is right to the point.
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December 18, 2011, 07:01:17 PM
 #43


Peter Schiff has a beautiful analogy regarding the difference between a PM-backed currency and fiat money:

If you had a dime in 1935, you would be pleased to know that it had 90% silver content. And in 1935 a dime could buy you a gallon of gas

Today, that same 1935 dime with its current silver value, can STILL buy you a gallon of gas. Yes, that 1935 dime is worth $3, because once upon a time we actually backed the value of coins and dollars. That 1935 dime retained its value against inflation for 75 years. Many thanks to FDR and the U.S. Mint for knowing back in the day what money was suppose to be.

On the other hand, a 2011 dime which is based on fiat currency might buy you 5 drops of gas.

Since 1965, all our coinage has had it's silver content removed, and our dollar currency has the promissory backing of gold removed since 1971. The worth of our money today is quickly declining as we print more and more paper money to bail out failing banks and failing nations.

I find bitcoins a refreshing alternative with a lot of potential, and physical silver a good investment hedge.
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December 19, 2011, 01:58:06 AM
 #44


Peter Schiff has a beautiful analogy regarding the difference between a PM-backed currency and fiat money:

If you had a dime in 1935, you would be pleased to know that it had 90% silver content. And in 1935 a dime could buy you a gallon of gas

Today, that same 1935 dime with its current silver value, can STILL buy you a gallon of gas. Yes, that 1935 dime is worth $3, because once upon a time we actually backed the value of coins and dollars. That 1935 dime retained its value against inflation for 75 years. Many thanks to FDR and the U.S. Mint for knowing back in the day what money was suppose to be.

On the other hand, a 2011 dime which is based on fiat currency might buy you 5 drops of gas.

Since 1965, all our coinage has had it's silver content removed, and our dollar currency has the promissory backing of gold removed since 1971. The worth of our money today is quickly declining as we print more and more paper money to bail out failing banks and failing nations.

I find bitcoins a refreshing alternative with a lot of potential, and physical silver a good investment hedge.

Is this a Peter Schiff quote or are you paraphrasing? If it's a quote, where does it end?


The part about the 1935 dime versus a dime today, is more less paraphrased from a video clip on Schiffs web site, EuroPac.
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