Physical Gold Disconnecting From Fiat Currency (merged)

[dsula]

Do you suggest that whomever owns the printing press ( " the ultimate computer", whatever ) keep your best interests in their hearts? If so, fiat is actually much better than gold. If not, and you also happen to have some money, or participate in any kind of economic activity, then pretty much any standard is better than fiat. Gold standard, shit standard, you name it.

Not much of an answer, is it? So I guess you don't know either.

[pstarr]

Gold is an attractive, hard, rare metal with one specific important characteristic--it doesn't oxidize, rust, or form compounds naturally--that grants it a number of useful social/industrial qualities. Gold jewelery holds a shine. It's an useful coating to protect electronic welds and joints.

But the big thing is it lasts,remains the same forever. That is the prime value. You can bury gold in the dirt, and 100 years later it will still work as intended. Makes good coinage that doesn't need to be recycled often. Conservatives love it. It's like home cooking, or puttin' up, mowin' and a' tenden' Like mama. Or marriage.So it is supposedly a safe investment. good hedge against inflation and resource depletion. But as money? nah.

[dsula]

Gold is an attractive, hard, rare metal with one specific important characteristic--it doesn't oxidize, rust, or form compounds naturally--that grants it a number of useful social/industrial qualities. Gold jewelery holds a shine. It's an useful coating to protect electronic welds and joints.

But the big thing is it lasts,remains the same forever. That is the prime value. You can bury gold in the dirt, and 100 years later it will still work as intended.

So not any different from Caesar's Palace roulette chips. Also non oxidizing, shiny and can be buried for 100 of years. And a lot lighter, too.

[Pretorian]

Do you suggest that whomever owns the printing press ( " the ultimate computer", whatever ) keep your best interests in their hearts? If so, fiat is actually much better than gold. If not, and you also happen to have some money, or participate in any kind of economic activity, then pretty much any standard is better than fiat. Gold standard, shit standard, you name it.

Not much of an answer, is it? So I guess you don't know either.

Well as I said it depends on your personal position in the economy. You can dig for gold but you can't print money, that is the difference. An extra front end to service, that is the difference. But hey, you might as well enjoy the experience. What do I know.

[careinke]

Gold is an attractive, hard, rare metal with one specific important characteristic--it doesn't oxidize, rust, or form compounds naturally--that grants it a number of useful social/industrial qualities. Gold jewelery holds a shine. It's an useful coating to protect electronic welds and joints.

But the big thing is it lasts,remains the same forever. That is the prime value. You can bury gold in the dirt, and 100 years later it will still work as intended.

So not any different from Caesar's Palace roulette chips. Also non oxidizing, shiny and can be buried for 100 of years. And a lot lighter, too.

Except you can counterfeit Caesar's Palace chips. Counterfeiting an element, is a little harder.

[JohnRM]

I don't understand why gold standard is supposed to be better than fiat currency. Is there a difference between printing money vs digging out gold from your montain? In both cases you create money and both only have a value because people imply one.
Thank you.

Simplest answer; If people lose faith in the value of Gold, then it still can be used in a wide variety of applications. If people lose faith in fiat currency then it is only useful for wiping your ass. All of this is beside the fact that Gold has never lost its purchasing power while history is riddled with defunct fiat currency.

[Fishman]

Fiat money
But the big thing is it doesn't last, never remains the same , you can manipulate it, print it in infinite amounts with nothing to back it up, but faith in some government. That is the prime value to some. You can bury gold in the dirt, and 100 years later it will still work as intended and still have value. Fiat money makes good paper/plastic product that needs to be recycled often, so it can be far more controlled by a central government. Liberals love it. It's like crack cocaine. Unlike home cooking, a mama and a papa, or marriage, you know things with substance and durability. So gold, unlike fiat, it is supposedly a safe investment. good hedge against inflation and resource depletion. But as money? nah, can't be controlled or manipulated with trillions of debt, like fiat.
Thanks Pstarr for the teaching moment

[ColossalContrarian]

I don't understand why gold standard is supposed to be better than fiat currency. Is there a difference between printing money vs digging out gold from your montain? In both cases you create money and both only have a value because people imply one.
Thank you.

It's not very glamorous to have a bunch of 1's and 0's on a hard drive or in cyberspace however to have gold and silver jewelry is hard-coded into most people's DNA to be valuable. Simple answer for a simple question.

[OilFinder2]

The value of a currency, just like everything else, should be based on supply and demand. If demand for money happens to go up, say, 15% in one year, supply should be able to keep pace with demand. Limiting the availability of currency in those circumstances would thus harm the economy.

Also, the only way a gold standard could actually work would be to fix its value, as was done prior to the abandonment of the gold standard. If you adopt a gold standard, but do not fix the price of gold, you will simply trade volatility in the value of a currency for volatility in the price of gold. In other words, if in one year, demand for (gold-backed) money rises 15%, but supply of physical gold only rises 1%, the price of gold will simply rise 14% ... and so you will still be able to get a 15% rise in the money supply anyway. Same thing if demand for money happened to 15% fall in one year.

In other words, adopting a gold standard without fixing the price of gold will do absolutely nothing toward restraining money supply growth - which, of course, is one of the main reasons gold standard proponents cite for adoption of the standard.

Having explained that, we're left with only the possibility of adopting a gold standard - *and* - fixing the value of gold in order for the scheme to work. If someone wants to calculate how much US money is in circulation, and then divide that by the number of ounces of gold held by the US government, you will get an astronomical figure on how many dollars each once of gold will have to be worth. Then come back and tell me if you think that's realistic.

For the sake of argument, let's say that number is $400,000/ounce. At $400,000/ounce, every square yard of land which might possibly hold the faintest traces of gold will be stip mined up the kazoo. Alaska, Nevada, Brazil and huge swaths of Africa will become giant strip mines. Eventually someone will figure out a way to extract gold from seawater (which does contain trace amounts of gold). Once that happens, the world will be flooded with gold, and the price will come crashing down.

And at this point I have to ask, Why bother?

[OilFinder2]

For the sake of argument, let's say that number is $400,000/ounce. At $400,000/ounce, every square yard of land which might possibly hold the faintest traces of gold will be stip mined up the kazoo. Alaska, Nevada, Brazil and huge swaths of Africa will become giant strip mines. Eventually someone will figure out a way to extract gold from seawater (which does contain trace amounts of gold). Once that happens, the world will be flooded with gold, and the price will come crashing down.

I should add to this ...

A scenario like that would create The World's Greatest Ever Known Episode Of Malinvestment. Huge amounts of money would be diverted from producing food, cars, steel, houses, bridges, and thousands of other worthwhile endeavors and be redirected toward the mining of gold. All for the price to undergo an epic collapse in the end.

Brilliant.

[ColossalContrarian]

OilFinder2, we need another bubble, please, why not gold? and no, it's not in a bubble.

Bankers taking over Europe seem to love it!!! <see Greece>

Maybe they'll want some of mine... but it got buried somewhere... but if you know any Bankers who will pay for it rather than start a war with me, I'd be more than happy to sell it!

Otherwise it's the SGL21 for the Bankster bastards!

EDIT: here's the pic

[Thralen]

There is a limited amount of gold in the world, thereby limiting a potential gold standard currency. Fiat money (USD at least) is made of linen fiber, which is a renewable resource, never mind all the USDs that only exist as a digital series of 0s and 1s.

Now if you like inflation and losing the value of any fiat currency that you save, fiat is a wonderful option. If you prefer low to no inflation and for your currency to maintain its purchasing power then gold standard is the way to go.

I suggest googling for inflation charts that show inflation while the USA was still on the gold standard vs the conversion to total fiat dollars. You'll graphically (pun intended) see the difference in inflation between a full fiat currency and a gold standard currency.

Thralen

[pstarr]

For the sake of argument, let's say that number is $400,000/ounce. At $400,000/ounce, every square yard of land which might possibly hold the faintest traces of gold will be stip mined up the kazoo. Alaska, Nevada, Brazil and huge swaths of Africa will become giant strip mines. Eventually someone will figure out a way to extract gold from seawater (which does contain trace amounts of gold). Once that happens, the world will be flooded with gold, and the price will come crashing down.

And at this point I have to ask, Why bother?

Only in your demented mind. Gold's inflated value depends on an intact social contract where aesthetic demands or technologic/industrial applications exist. If gold's relative value was to increase that dramatically it would suggest excessive social pertubations which would preclude the valuation. So, as usual, you are blathering through a nether orifice. surprised?

[OilFinder2]

pstarr, if the US went back to a gold standard, what price do you think gold would have to be in order to maintain the standard?

I hope you're not going to tell us it'll be $35/ounce.

[pstarr]

pstarr, if the US went back to a gold standard, what price do you think gold would have to be in order to maintain the standard?

I hope you're not going to tell us it'll be $35/ounce.

jeezus crhist man. how in the h@ll did you ever conflate my snarky-@ss comment to you with goldbuggery?

read. comprehend. then speak.

[OilFinder2]

You said ...

For the sake of argument, let's say that number is $400,000/ounce. At $400,000/ounce, every square yard of land which might possibly hold the faintest traces of gold will be stip mined up the kazoo. Alaska, Nevada, Brazil and huge swaths of Africa will become giant strip mines. Eventually someone will figure out a way to extract gold from seawater (which does contain trace amounts of gold). Once that happens, the world will be flooded with gold, and the price will come crashing down.

And at this point I have to ask, Why bother?

Only in your demented mind. Gold's inflated value depends on an intact social contract where aesthetic demands or technologic/industrial applications exist. If gold's relative value was to increase that dramatically it would suggest excessive social pertubations which would preclude the valuation. So, as usual, you are blathering through a nether orifice. surprised?

If I understood the bolded part correctly, you're telling me a situation in which gold would rise to such astronomical prices would either be impossible, or if it were possible, it would be unsustainable and short-lived.

In which case you actually agreed with me, though you didn't realize it.

Having explained that, we're left with only the possibility of adopting a gold standard - *and* - fixing the value of gold in order for the scheme to work. If someone wants to calculate how much US money is in circulation, and then divide that by the number of ounces of gold held by the US government, you will get an astronomical figure on how many dollars each once of gold will have to be worth. Then come back and tell me if you think that's realistic.

[pstarr]

okay. we agree. get over it.

[bratticus]

I don't understand why gold standard is supposed to be better than fiat currency. Is there a difference between printing money vs digging out gold from your montain [sic]? In both cases you create money and both only have a value because people imply one.
Thank you.

Fiat money can be produced at any rate. Gold can not be produced at an arbitrary rate.

The total amount of fiat money is an unbounded quantity. The total amount of gold is a fixed amount.

[Mesuge]

Some clues from the 'left-wing' Olduvai staircase tract which just fell apart, people swarming into the remaining 'right-wing' downsloaping part.

-gold as preserv of status/wealth of TPTB (banksters, .gov, nobility, church)
-silver for merchants and the ever shortening service class
-barter and old potatoes for the rest, i.e. 95-99% -ers class

The horrible thing about gold is the grandioze enviro destruction during mining, I guess there is a 2000s french documentary about some jungle mining outpost in South America, the detruction is just depicted, well by single word "complete" in all aspects human and natural. Now add Russia, South America, China etc..

Another freaky tidbit about gold, especially now, as it tends to float more between the vaults, each oz is a microcosm of its owner's history. Look at 'your' gold in hand, and try to look into and listen to that old mirror. Chances are you 'own' part of someone tooth from the WWII era, some Roman bloody loot of ancient ME, plus bit of melted sacrificial sculpture from Aztecs or Inkas, .. everything poured there into a single piece. It's like a teardrop of concentrated -Karma

Well, it's understood that this might be also the perverse reason, why so many people in fact 'dig' the whole gold mantra in fact on some deeperlevel anyway.

Perhaps the Olduvai wet slope will push us ultimatively beyond this civilization crap, i.e. before ~10-15k BC timestamp mark, voila no problemo as metals not massively horded anymore.

[dsula]

I thank OF2 and Mesuge for the only answers that made some sense. Answers to simple questions are not always as simple.