3 ms·

i'd say a pretty damn good marker is the devaluing of ones official currency. it at the very least generally led to significant regime shakeups.

dantheman 17y ago
All governments go through systematic devaluation of their currency -- every single fiat currency has gone through this process. So if the government can: 1. Get people to refer gold/silver amounts by a certain name: Deutsche Mark, Pound, Dollar etc. 2. Then they can debase the money at a later date; converts to less precious metal. 3. Then they can move to a fiat currency, move completely away from precious metal. 4. Then they can inflate to their hearts content.
- cma 17y ago
  For all the value that it derives from anything other than industrial use, gold is just the fiat currency of the collective imagination.
  - aaronblohowiak 17y ago
    The "fiat" comes from dictating the value. Physical commodities intrinsically have some value stability baked-in. A lone government would have a harder time causing inflation of a gold-backed currency than otherwise.
- william42 17y ago
  The difference between the standard systematic devaluation of modern governments and serious devaluation is that most governments tend to inflate at a rate of about 2-4% per year. This rate of inflation is considered by most economists to be benign and even helpful to a degree, because people tend to react better to inflation-triggered pay raises than deflation-triggered pay cuts, and businesses often choose to just fire bad workers instead of doing the latter, which can lead to massive spikes in unemployment. In the 70s, we had about 10-20% inflation per year. This is where we start to see people getting unhappy. Hyperinflation is defined by economists as being 50% per month, which adds up to something on the order of magnitude of a factor of 64 per year, however, when you have hyperinflation, you usually end up talking about having to add a digit to your prices at least once a month--more generally, hyperinflation is when there's so much inflation your currency is no longer considered to have any permanent value. Look at Zimbabwe and their use of scientific notation.

dantheman 17y ago

All governments go through systematic devaluation of their currency -- every single fiat currency has gone through this process. So if the government can: 1. Get people to refer gold/silver amounts by a certain name: Deutsche Mark, Pound, Dollar etc. 2. Then they can debase the money at a later date; converts to less precious metal. 3. Then they can move to a fiat currency, move completely away from precious metal. 4. Then they can inflate to their hearts content.

cma 17y ago
For all the value that it derives from anything other than industrial use, gold is just the fiat currency of the collective imagination.
- aaronblohowiak 17y ago
  The "fiat" comes from dictating the value. Physical commodities intrinsically have some value stability baked-in. A lone government would have a harder time causing inflation of a gold-backed currency than otherwise.
william42 17y ago
The difference between the standard systematic devaluation of modern governments and serious devaluation is that most governments tend to inflate at a rate of about 2-4% per year. This rate of inflation is considered by most economists to be benign and even helpful to a degree, because people tend to react better to inflation-triggered pay raises than deflation-triggered pay cuts, and businesses often choose to just fire bad workers instead of doing the latter, which can lead to massive spikes in unemployment. In the 70s, we had about 10-20% inflation per year. This is where we start to see people getting unhappy. Hyperinflation is defined by economists as being 50% per month, which adds up to something on the order of magnitude of a factor of 64 per year, however, when you have hyperinflation, you usually end up talking about having to add a digit to your prices at least once a month--more generally, hyperinflation is when there's so much inflation your currency is no longer considered to have any permanent value. Look at Zimbabwe and their use of scientific notation.