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Not always. The US technically defaulted on its debts when we dumped the gold standard. Luckily for us, we were still the biggest global super power so we wer

Not always. The US technically defaulted on its debts when we dumped the gold standard. Luckily for us, we were still the biggest global super power so we were able to tell everyone to just suck it. For reference, there's an estimated $7 Trillion in gold in the world and the US is now $19 Trillion in debt.

rootusrootus 10y ago
And the upside is that the economy is much larger than it could ever have been while stuck on gold.
- throwanem 10y ago
  Will it stay that way? What happens if it doesn't?
  - jacobush 10y ago
    - SHALL WE PLAY A GAME? - Love to. How about Global Thermonuclear War? - WOULDN'T YOU PREFER A GOOD GAME OF CHESS? - Later. Let's play global thermonuclear war.
- Consultant32452 10y ago
  I'm sure it matters, but not as much as a surface analysis would lead you to believe. If we had to hoard a bunch of gold to back up the size of our economy, and further demanded our trade counterparts do the same, then the price of gold would've risen and our ownership proportion of the total sum of gold would've matched our proportional global wealth. I don't have a strong opinion on asset backed currencies, but most of the things armchair economists say about it seem pretty irrational.
  - selectodude 10y ago
    There's more people in the country, so there's proportionally more dollars + a little more as an incentive to spend your money. If dollars gained value faster than economic growth (which you just effectiveally capped at the amount of gold your country possesses) nobody would ever spend it. I know I wouldn't.
    - Consultant32452 10y ago
      I'm not sure the current system which actively discourages thrift while enslaving our entire population to life-long debt is objectively better.
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cgio 10y ago
Why would you tie an economy's capacity with the limited supply of a good? These trillions of debt (could) have created equivalent value in infrastructure, education, military power etc. The fact that the gold equivalent of what amounts to a whole economy does not exist is not an indication that the value is not there in the economy.
- Consultant32452 10y ago
  I didn't make any value statements on whether or not I think an asset backed currency is preferable. I just pointed out that the US defaulted on its debt when we told the world we weren't going to pay them back what we promised.
  - hueving 10y ago
    "we"? The US abandoned the gold standard in the 1930s. The "we" that promised anything is long dead and has nothing to do with the "we" (US citizens) now. A citizen today is no more accountable for actions taken that long ago than for actions taken 4000 years ago.
    - Consultant32452 10y ago
      Nixon was the one that put the nail in the coffin of the gold standard and defaulted on our debt. I don't see how it makes a difference how old our debt is if we're still paying the interest on it.

rootusrootus 10y ago

And the upside is that the economy is much larger than it could ever have been while stuck on gold.

throwanem 10y ago
Will it stay that way? What happens if it doesn't?
- jacobush 10y ago
  - SHALL WE PLAY A GAME? - Love to. How about Global Thermonuclear War? - WOULDN'T YOU PREFER A GOOD GAME OF CHESS? - Later. Let's play global thermonuclear war.
Consultant32452 10y ago
I'm sure it matters, but not as much as a surface analysis would lead you to believe. If we had to hoard a bunch of gold to back up the size of our economy, and further demanded our trade counterparts do the same, then the price of gold would've risen and our ownership proportion of the total sum of gold would've matched our proportional global wealth. I don't have a strong opinion on asset backed currencies, but most of the things armchair economists say about it seem pretty irrational.
- selectodude 10y ago
  There's more people in the country, so there's proportionally more dollars + a little more as an incentive to spend your money. If dollars gained value faster than economic growth (which you just effectiveally capped at the amount of gold your country possesses) nobody would ever spend it. I know I wouldn't.
  - Consultant32452 10y ago
    I'm not sure the current system which actively discourages thrift while enslaving our entire population to life-long debt is objectively better.
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- deleted 10y ago
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cgio 10y ago

Why would you tie an economy's capacity with the limited supply of a good? These trillions of debt (could) have created equivalent value in infrastructure, education, military power etc. The fact that the gold equivalent of what amounts to a whole economy does not exist is not an indication that the value is not there in the economy.

Consultant32452 10y ago
I didn't make any value statements on whether or not I think an asset backed currency is preferable. I just pointed out that the US defaulted on its debt when we told the world we weren't going to pay them back what we promised.
- hueving 10y ago
  "we"? The US abandoned the gold standard in the 1930s. The "we" that promised anything is long dead and has nothing to do with the "we" (US citizens) now. A citizen today is no more accountable for actions taken that long ago than for actions taken 4000 years ago.
  - Consultant32452 10y ago
    Nixon was the one that put the nail in the coffin of the gold standard and defaulted on our debt. I don't see how it makes a difference how old our debt is if we're still paying the interest on it.