Comments on: Confusing Gold Standard and Dollar Fiat Currency with inflation? http://www.myylt.com/2009/03/01/confusing-gold-standard-and-dollar-fiat-currency-with-inflation/ Discussion of Forex Trading and Currency Trading Tue, 22 May 2012 23:57:21 +0000 http://wordpress.org/?v=2.3.3 By: nothingconstant http://www.myylt.com/2009/03/01/confusing-gold-standard-and-dollar-fiat-currency-with-inflation/#comment-11874 nothingconstant Tue, 30 Nov 1999 00:00:00 +0000 http://www.myylt.com/2009/03/01/confusing-gold-standard-and-dollar-fiat-currency-with-inflation/#comment-11874 Well.. first of all I'm unsure of your total gold number. If you look at the PDF, you will see that it's roughly 2.5 million in production in 2006. I don't think that's a cumulative number. Also, if you look at wikipedia, it says that our gold supply will most likely last 45 years. http://minerals.usgs.gov/minerals/pubs/commodity/gold/myb1-2006-gold.pdf I don't know what kind of gold counts or not. But whatever amount you are assuming, if the U.S. did go back to the gold standard, we would see massive deflation as society corrected to it. More likely, we would go to a gold fractional system. Churchill tried to go back to the gold standard after WWI. What resulted was a huge economic loss and Churchill said it was the worst thing he could have done. One of the reasons a fiat currency is preferred is that it allows the economy to grow with money supply. __ Labor Theory of Value.. touche You could apply value to anything. I mean, I could apply value to canned goods and moonshine. Actually, I'd prefer that if we went into a knock down drag out economic fall. Just because people agree to a value in something doesn' make it so. I think that crosses the line of is economics social or hard science? Though people assume rationality in humans and their perceptions, something tells me otherwise on that. Well.. first of all I'm unsure of your total gold number. If you look at the PDF, you will see that it's roughly 2.5 million in production in 2006. I don't think that's a cumulative number. Also, if you look at wikipedia, it says that our gold supply will most likely last 45 years.

http://minerals.usgs.gov/minerals/pubs/commodity/gold/myb1-2006-gold.pdf

I don't know what kind of gold counts or not.

But whatever amount you are assuming, if the U.S. did go back to the gold standard, we would see massive deflation as society corrected to it. More likely, we would go to a gold fractional system.

Churchill tried to go back to the gold standard after WWI. What resulted was a huge economic loss and Churchill said it was the worst thing he could have done.

One of the reasons a fiat currency is preferred is that it allows the economy to grow with money supply.

__
Labor Theory of Value.. touche

You could apply value to anything. I mean, I could apply value to canned goods and moonshine. Actually, I'd prefer that if we went into a knock down drag out economic fall.

Just because people agree to a value in something doesn' make it so. I think that crosses the line of is economics social or hard science? Though people assume rationality in humans and their perceptions, something tells me otherwise on that.

]]> By: axesenzon http://www.myylt.com/2009/03/01/confusing-gold-standard-and-dollar-fiat-currency-with-inflation/#comment-11875 axesenzon Tue, 30 Nov 1999 00:00:00 +0000 http://www.myylt.com/2009/03/01/confusing-gold-standard-and-dollar-fiat-currency-with-inflation/#comment-11875 I agree with ^^nothin^^, as far as your figures, they should be looked ovver again- idk where that 145k tonnes comes from... also, the thing about gold and fiat currency is that you can draw an interesting parallel. gold is worth something because people agree it is, there is little to no use for gold in any industrial sense, and making pretty jewelry is about the brunt of use there is. the dollar, all currencies nowadays really, is worth something b/c there is a market price where dollars are traded openly and people agree to it's worth. there are actually a lot of similarities between the two in that sense with a major difference being that fiat currency is easier to regulate while gold is not. thereby you don't get huge lags in the growth of an economy (generally speaking) that was so common when gold backed the currencies. Proponents of the "only gold gives value to money" are as one-sided and intellectually dishonest as Marx's labor theory of value- it's not more efficient than supply&demand and "only gold.." is disingenuous. I agree with ^^nothin^^, as far as your figures, they should be looked ovver again- idk where that 145k tonnes comes from…
also, the thing about gold and fiat currency is that you can draw an interesting parallel. gold is worth something because people agree it is, there is little to no use for gold in any industrial sense, and making pretty jewelry is about the brunt of use there is. the dollar, all currencies nowadays really, is worth something b/c there is a market price where dollars are traded openly and people agree to it's worth.
there are actually a lot of similarities between the two in that sense with a major difference being that fiat currency is easier to regulate while gold is not. thereby you don't get huge lags in the growth of an economy (generally speaking) that was so common when gold backed the currencies. Proponents of the "only gold gives value to money" are as one-sided and intellectually dishonest as Marx's labor theory of value- it's not more efficient than supply&demand and "only gold.." is disingenuous.

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