7 ms·

How is gold more real than debt? To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an o

How is gold more real than debt? To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an organization). Gold has no inherent value at all apart from some minor uses of relatively small amounts in the economy. Except by agreement, which debt also has. An example for debt-based I once read somewhere was a kid writing an IOU for garden work. As long as the debt is not paid - i.e. the kid does the work and the IOU is destroyed - that piece of paper circulates through the neighborhood. It has real value (actual work). This example also illustrates what's wrong with calling for all debts to be repaid, which makes sense for the individual but not for the economy (like so many or maybe even most suggestions around money and power, where things that work very well for someone make no sense if applied to everybody, the difference between "works for anyone" and "works for everyone").

runeks 7y ago
You can’t separate debt from money because debt is money owed. And there’s clearly a difference between having something and being owed something.
- RobertoG 7y ago
  You can have a money debt but you can have all other kind of debts, so, debt is the most general concept.
- nosianu 7y ago
  It is not quite clear to me how your reply is meant to be interpreted, given what I wrote...(?) Did you perchance click the wrong "reply" link?
- kiliantics 7y ago
  money is also "money owed" -- you don't know today that the money you have in your account will be able to buy the same amount of stuff tomorrow, it's also a completely faith-based system
chii 7y ago
It is easier for somebody to have more faith in gold than in someone's promise to pay back a debt (using work or a commodity). Especially in dealings between sovereign entities.
- nosianu 7y ago
  So you basically ignore my comment, where I said something about just that, and write an auto-triggered response, got it. Did I just write to some customer service hotline?
  - AnimalMuppet 7y ago
    Where in your comment did you say anything about that? And personal attacks are against HN guidelines.
throwaway_gold 7y ago
>Gold has no inherent value at all apart from some minor uses of relatively small amounts in the economy. I've never understood this argument that gold has no inherent value or no use in economy. First, lets acknowledge you couldn't even make your comment/post from any computer/smart phone on the market that doesn't use gold. That is gold is a great conductor of electricity, maybe not the best conductor, but when combine with its anti-corrosive properties it is the industry standard. Every single computer/smart phones is manufactured with gold, anyway you cut it, that isn't a small part of the economy. In addition to being a good conductor gold has anti-microbial and anti-bacterial, and anti-corrosive properties. This gives gold inherent value, especially in antiquity, put your food/wine in a amphora made of gold and made of pottery and see which expires first. Finally, gold isn't made through natural processes on Earth, that we know of, it is made in Stars and so what we have on Earth is what we got, that limited supply, makes it inherently valuable as a medium of exchange. Sure we can also go back to using seashells as a medium of exchange, but the Earth will continue printing money. finally, the anti-corrosive and ease of smelting/crafting Gold also gives it a certain value.
- nwah1 7y ago
  Gold is a useful metal, yes. Its use as a money standard is arbitrary. A wiser commodity standard for currency would be a basket of non-scarce commodities that historically do not fluctuate much in price. But commodity standards in general are not preferred by governments. You could even make an argument that forgoing fiat currency is a national security risk. Countries which use fiat money can conduct warfare more efficiently. And in peacetime they can conduct counter-cyclical monetary policy. These key advantages make fiat the obvious choice for governments.
  - throwaway_gold 7y ago
    >Its use as a money standard is arbitrary. But it is not. Gold is finite which is important for a currency. Gold is one of the easier metals to work with/coin, which is important, at least historically. And Gold is non-corrosive, which again is important in coinage. Sure these unique characteristics may not seem important now that most fiat is digital, but we are talking about a system of money going back thousands of years. It has withstood the test of time, not because its arbitrary, but because gold will last thousands of years, something no digital or paper/cotton based bank note can claim. Plus you can counterfeit all paper/cotton based bank notes, to date no one has successfully reproduced Gold.
tim333 7y ago
>>Gold has no inherent value... Jewellery. 2200 tons last year. Was popular 3000 years ago (https://en.wikipedia.org/wiki/Mask_of_Tutankhamun https://en.wikipedia.org/wiki/Mask_of_Tutankhamun) and will probably be in 3000 more. Try getting the wife a plastic wedding ring if you think it has no value. I daresay that's different from saying it's any good as money.
- rags2riches 7y ago
  How popular would gold jewelry be if gold was inexpensive?
  - throwaway_gold 7y ago
    Very, if you like high quality items. Unlike plastics and most other metals, Gold is easy to work with (i.e. non-brittle, low melting point, easy to mold/cast, it is conductive so its easy to plate other metals) and it is non-corrosive. Therefore, gold jewelry is historically a finer end product that can be made with less skill and the result lasts longer. To a lesser degree of importance for jewelry, but still a prized property for wearable items, gold is antibacterial and anti-fungal. Sure people may collectively decide the market price of gold, but people never collectively decided the properties of gold were valuable, those properties are inherently valued by people and Gold happens to have them. Silver has these same qualities, hence why both Silver and Gold are historically used for jewelry in the first place. People didn't start making jewelry out of Gold and Silver because Gold and Silver was "valuable", rather Gold and Silver were used to make jewelry because of their ideal properties for jewelry, and its the properties of these metals that make gold/silver valuable.
    - rags2riches 7y ago
      So when I can get a big fat gold ring for a quarter next to the bubble gum machines at the gas station, you think it will still be good for an engagement or to commemorate 25 years of service because it is so very non-brittle, conductive and easy to melt, mold and cast?
nybble41 7y ago
> To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an organization). You're assuming that the debt is backed by labor and involves a commitment to perform some specific service. Such promises are generally considered unenforceable as the capacity for future labor is inalienable, at least in societies which don't permit slavery or indentured servitude. At best you may be able to claim some property in compensation if the service is not performed. How is an indirect claim on someone else's gold or other property "far superior" to actually possessing it yourself? Sure you save a bit on the cost of storage, but in exchange you add the potential for non-payment. > An example for debt-based I once read somewhere was a kid writing an IOU for garden work. As long as the debt is not paid - i.e. the kid does the work and the IOU is destroyed - that piece of paper circulates through the neighborhood. It has real value (actual work). And if the kid proves unable or unwilling to do the work, what becomes of the value of the IOU? Repayment is not the only event that can take an IOU out of circulation. Better to have a claim on, or better yet possession of, a valued and marketable commodity than a mere promise of future services from a specific human being who could die, become disabled, or simply choose to dispute or repudiate the terms of the IOU.
- nosianu 7y ago
  > You're assuming... You are assuming absolutes. The universe does not have any guarantees. I'm being relative. In relative terms debt-based currency is more than you get from something far more arbitrary, like gold. Of course, here the argument depends on how fixed and static you see the basis of the mass-psychology based "value" of gold. If humans stop cooperating, the very basis of human society, you've got bigger issues than a currency standard. If they only stop valuing gold there is no problem at all really, except of course for those who relied on it somehow magically remaining "valuable" (based purely on psychological reasons).
  - nybble41 7y ago
    I am not assuming any absolutes. Gold just currently happens to be a marketable commodity with a long history of stability—far more so than promises of labor. Obviously that could change. If you don't care for gold, substitute any other marketable commodity. Gold could lose all value if everyone, including the owner, stopped demanding it, including for industrial use and jewelry. There is no precedent for such an event but it is indeed a possibility. A promise of labor, on the other hand, can lose all value if just one particular person chooses to renege on the agreement or is rendered unable to fulfill the IOU. That sort of thing happens all the time.

runeks 7y ago

You can’t separate debt from money because debt is money owed. And there’s clearly a difference between having something and being owed something.

RobertoG 7y ago
You can have a money debt but you can have all other kind of debts, so, debt is the most general concept.
nosianu 7y ago
It is not quite clear to me how your reply is meant to be interpreted, given what I wrote...(?) Did you perchance click the wrong "reply" link?
kiliantics 7y ago
money is also "money owed" -- you don't know today that the money you have in your account will be able to buy the same amount of stuff tomorrow, it's also a completely faith-based system

chii 7y ago

It is easier for somebody to have more faith in gold than in someone's promise to pay back a debt (using work or a commodity). Especially in dealings between sovereign entities.

nosianu 7y ago
So you basically ignore my comment, where I said something about just that, and write an auto-triggered response, got it. Did I just write to some customer service hotline?
- AnimalMuppet 7y ago
  Where in your comment did you say anything about that? And personal attacks are against HN guidelines.

throwaway_gold 7y ago

>Gold has no inherent value at all apart from some minor uses of relatively small amounts in the economy. I've never understood this argument that gold has no inherent value or no use in economy. First, lets acknowledge you couldn't even make your comment/post from any computer/smart phone on the market that doesn't use gold. That is gold is a great conductor of electricity, maybe not the best conductor, but when combine with its anti-corrosive properties it is the industry standard. Every single computer/smart phones is manufactured with gold, anyway you cut it, that isn't a small part of the economy. In addition to being a good conductor gold has anti-microbial and anti-bacterial, and anti-corrosive properties. This gives gold inherent value, especially in antiquity, put your food/wine in a amphora made of gold and made of pottery and see which expires first. Finally, gold isn't made through natural processes on Earth, that we know of, it is made in Stars and so what we have on Earth is what we got, that limited supply, makes it inherently valuable as a medium of exchange. Sure we can also go back to using seashells as a medium of exchange, but the Earth will continue printing money. finally, the anti-corrosive and ease of smelting/crafting Gold also gives it a certain value.

nwah1 7y ago
Gold is a useful metal, yes. Its use as a money standard is arbitrary. A wiser commodity standard for currency would be a basket of non-scarce commodities that historically do not fluctuate much in price. But commodity standards in general are not preferred by governments. You could even make an argument that forgoing fiat currency is a national security risk. Countries which use fiat money can conduct warfare more efficiently. And in peacetime they can conduct counter-cyclical monetary policy. These key advantages make fiat the obvious choice for governments.
- throwaway_gold 7y ago
  >Its use as a money standard is arbitrary. But it is not. Gold is finite which is important for a currency. Gold is one of the easier metals to work with/coin, which is important, at least historically. And Gold is non-corrosive, which again is important in coinage. Sure these unique characteristics may not seem important now that most fiat is digital, but we are talking about a system of money going back thousands of years. It has withstood the test of time, not because its arbitrary, but because gold will last thousands of years, something no digital or paper/cotton based bank note can claim. Plus you can counterfeit all paper/cotton based bank notes, to date no one has successfully reproduced Gold.

tim333 7y ago

>>Gold has no inherent value... Jewellery. 2200 tons last year. Was popular 3000 years ago (https://en.wikipedia.org/wiki/Mask_of_Tutankhamun https://en.wikipedia.org/wiki/Mask_of_Tutankhamun) and will probably be in 3000 more. Try getting the wife a plastic wedding ring if you think it has no value. I daresay that's different from saying it's any good as money.

rags2riches 7y ago
How popular would gold jewelry be if gold was inexpensive?
- throwaway_gold 7y ago
  Very, if you like high quality items. Unlike plastics and most other metals, Gold is easy to work with (i.e. non-brittle, low melting point, easy to mold/cast, it is conductive so its easy to plate other metals) and it is non-corrosive. Therefore, gold jewelry is historically a finer end product that can be made with less skill and the result lasts longer. To a lesser degree of importance for jewelry, but still a prized property for wearable items, gold is antibacterial and anti-fungal. Sure people may collectively decide the market price of gold, but people never collectively decided the properties of gold were valuable, those properties are inherently valued by people and Gold happens to have them. Silver has these same qualities, hence why both Silver and Gold are historically used for jewelry in the first place. People didn't start making jewelry out of Gold and Silver because Gold and Silver was "valuable", rather Gold and Silver were used to make jewelry because of their ideal properties for jewelry, and its the properties of these metals that make gold/silver valuable.
  - rags2riches 7y ago
    So when I can get a big fat gold ring for a quarter next to the bubble gum machines at the gas station, you think it will still be good for an engagement or to commemorate 25 years of service because it is so very non-brittle, conductive and easy to melt, mold and cast?

nybble41 7y ago

> To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an organization). You're assuming that the debt is backed by labor and involves a commitment to perform some specific service. Such promises are generally considered unenforceable as the capacity for future labor is inalienable, at least in societies which don't permit slavery or indentured servitude. At best you may be able to claim some property in compensation if the service is not performed. How is an indirect claim on someone else's gold or other property "far superior" to actually possessing it yourself? Sure you save a bit on the cost of storage, but in exchange you add the potential for non-payment. > An example for debt-based I once read somewhere was a kid writing an IOU for garden work. As long as the debt is not paid - i.e. the kid does the work and the IOU is destroyed - that piece of paper circulates through the neighborhood. It has real value (actual work). And if the kid proves unable or unwilling to do the work, what becomes of the value of the IOU? Repayment is not the only event that can take an IOU out of circulation. Better to have a claim on, or better yet possession of, a valued and marketable commodity than a mere promise of future services from a specific human being who could die, become disabled, or simply choose to dispute or repudiate the terms of the IOU.

nosianu 7y ago
> You're assuming... You are assuming absolutes. The universe does not have any guarantees. I'm being relative. In relative terms debt-based currency is more than you get from something far more arbitrary, like gold. Of course, here the argument depends on how fixed and static you see the basis of the mass-psychology based "value" of gold. If humans stop cooperating, the very basis of human society, you've got bigger issues than a currency standard. If they only stop valuing gold there is no problem at all really, except of course for those who relied on it somehow magically remaining "valuable" (based purely on psychological reasons).
- nybble41 7y ago
  I am not assuming any absolutes. Gold just currently happens to be a marketable commodity with a long history of stability—far more so than promises of labor. Obviously that could change. If you don't care for gold, substitute any other marketable commodity. Gold could lose all value if everyone, including the owner, stopped demanding it, including for industrial use and jewelry. There is no precedent for such an event but it is indeed a possibility. A promise of labor, on the other hand, can lose all value if just one particular person chooses to renege on the agreement or is rendered unable to fulfill the IOU. That sort of thing happens all the time.