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I doubt if anything made changed since the era of gold, just sizes of economies went up dramatically, more common people are banked, and there are more option t

I doubt if anything made changed since the era of gold, just sizes of economies went up dramatically, more common people are banked, and there are more option to do bank run against. Gold [https://goldprice.org/charts/history/gold_6_month_o_usd_x.png https://goldprice.org/charts/history/gold_6_month_o_usd_x.pn...] is of course one of them, but costs of many other liquid commodities have shot up counterintuitively this time as well. There is nothing "magical" that has happened to banks when they switched to fiat money.

JumpCrisscross 6y ago
> There is nothing "magical" that has happened to banks when they switched to fiat money Of course there is. Deposit guarantees are enabled. That and the central bank’s credible power to influence money supply and borrowing costs as well as act as an unconstrained lender of last resort. There is a lot of scholarship, originally from the turn of the last century but perennially refreshed, on the inherent failure modes of fixed-supply money systems amidst a growing, industrialising or industrialised economy. Fixed-supply assets are good. Fixed-supply currencies cease, quickly, to be currencies.
- baybal2 6y ago
  > Of course there is. Deposit guarantees are enabled. That and the central bank’s credible power to influence money supply and borrowing costs as well as act as an unconstrained lender of last resort. So it was at the time when the king could've simply set the gold rate for the currency, and do the very same thing with borrowing, and lending on behalf of the state. Just before, it was much more likely led to more angry people with pitchforks than today.
  - JumpCrisscross 6y ago
    > So it was at the time when the king could've simply set the gold rate for the currency, and do the very same thing with borrowing, and lending on behalf of the state No. The de facto currency was estimated mass of precious metal. The king could default, of course. But that is selective; inflation is not. Re-basing happened, but just as with money printing, it is tracked and accounted for and, in extreme cases, fled from. Equating modern monetarism with gold-standard economics betrays, fortunately, a terrific opportunity to learn from works that have been peer reviewed, in many cases, for over a century.

JumpCrisscross 6y ago

> There is nothing "magical" that has happened to banks when they switched to fiat money Of course there is. Deposit guarantees are enabled. That and the central bank’s credible power to influence money supply and borrowing costs as well as act as an unconstrained lender of last resort. There is a lot of scholarship, originally from the turn of the last century but perennially refreshed, on the inherent failure modes of fixed-supply money systems amidst a growing, industrialising or industrialised economy. Fixed-supply assets are good. Fixed-supply currencies cease, quickly, to be currencies.

baybal2 6y ago
> Of course there is. Deposit guarantees are enabled. That and the central bank’s credible power to influence money supply and borrowing costs as well as act as an unconstrained lender of last resort. So it was at the time when the king could've simply set the gold rate for the currency, and do the very same thing with borrowing, and lending on behalf of the state. Just before, it was much more likely led to more angry people with pitchforks than today.
- JumpCrisscross 6y ago
  > So it was at the time when the king could've simply set the gold rate for the currency, and do the very same thing with borrowing, and lending on behalf of the state No. The de facto currency was estimated mass of precious metal. The king could default, of course. But that is selective; inflation is not. Re-basing happened, but just as with money printing, it is tracked and accounted for and, in extreme cases, fled from. Equating modern monetarism with gold-standard economics betrays, fortunately, a terrific opportunity to learn from works that have been peer reviewed, in many cases, for over a century.