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I used to think Gold, but fundamentally I've come to believe that debt is probably the better choice as it promotes growth. Paraphrasing Neal Stephenson debt b
by pelle 18y ago
I used to think Gold, but fundamentally I've come to believe that debt is probably the better choice as it promotes growth.
Paraphrasing Neal Stephenson debt based currencies are backed by the ingenuity of the people, which is always growing and improving. Asset backed currency such as gold are backed by a finite amount of gold.
Where gold still has it's value is in it's transparency. No one controls gold, but with say the USD or EUR corruptable entities known as governments can either print more money or take more loans devaluing the currencies. The history is littered with cases of this happening. I'm personally pretty bullish on the dollar, but who knows.
Another problem is that they have government enforced monopolies, which kills competition on the local level.
Just look at the current attacks by the US DOJ on e-gold and on the http://www.libertydollar.org/ld/legal/raidalert_11_27_2007.htm http://www.libertydollar.org/ld/legal/raidalert_11_27_2007.h... .
- Prrometheus 18y ago>Asset backed currency such as gold are backed by a finite amount of gold. Currency units are somewhat arbitrary. If you don't believe that the market needs a central technician for it to run properly (I don't, but I'm in the minority), then I'm pretty sure a modern economy could be run on currency backed by almost any commodity. What most people fear and distrust about fiat currency is putting one legal monopoly in charge of such an important part of the economy. It's too much power. A gold-backed currency takes that power out of the hands of any one man. I advocate that we should use whatever currency the market chooses. I want the market to have the legal rights to make that choice. Historically this was the case until legal currency monopolies were created to fund wars.
- deleted 18y ago[deleted]
- lupin_sansei 18y agoI agree. Society would be much better (fairer, wealthier, more peaceful) if there was a separation of economy and state.
- byrneseyeview 18y agoThe problem with picking just one asset with which to back your currency is that you have two options: a) pick something your country is a net producer of, knowing that producers will create more than the industrial demand to accommodate savings (this is the case with gold). b) pick something you're a net consumer of, so saving more money hurts consumption (if some people are right and oil is being used as a proxy currency to hedge against the dollar, this is happening now). I don't know what the solution is -- I see nothing wrong with highly liquid index funds, against which someone can write checks denominated in whatever unit they choose. But a deregulated market would probably out-innovate me pretty fast.
- abcde 18y agoI wouldn't agree with "debt based currencies are backed by the ingenuity of the people". Debt based currencies are backed by the trustworthiness of the debt issuing entity. It doesn't matter how ingenious Americans are as long as the Fed prints money to fund the welfare and warfare state.