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I think the only reason that a global reserve currency hasnt changed yet is that there are no sound currencies to use. USD was selected as the global reserve b

I think the only reason that a global reserve currency hasnt changed yet is that there are no sound currencies to use. USD was selected as the global reserve because it was backed by gold. We went and fucked that up. Now there are no currencies left backed by anything but promises. If there was a large enough country with gold backed money the reserve currency would have switched decades ago.

sidlls 6y ago
I have not read one single serious justification (as in, empirical) for using gold as the backing of a currency. There are many indications that, historically, the boom and bust cycles that exist naturally are exacerbated when tying the value of currency to (often easily manipulated to be artificially) scarce things like gold. The world has moved beyond tying the value of our currencies to material goods. Digital "coins" aren't any better, and the same group of fringe types who push the gold standard have taken that over as well.
- api 6y ago
  The only credible one is that it limits certain kinds of bad behavior, but that may come at a substantial cost.
- tastyfreeze 6y ago
  It doesnt have to be gold. But sound money is a necessity for a thriving economy. Gold standard prevented bad monetary policy that leads to runnaway inflation. Its not a perfect system but it stops power and greed from destroying the economy. Addition: Every historical case of a government switching to fiat currency has resulted in runnaway inflation. The reason that gold and silver are the only constitutional money is it forces the government to do the right thing. No gold standard permits those in power to manipulate the currency for whatever reason they wish. The rules should force the wrong people to do the right thing. Relying on people in power to do the "right" thing will always fail.
  - SubiculumCode 6y ago
    Inflation inflation inflation, gold proponents always want to talk about inflation, never about the steering wheel that fiat currencies provide: Steering that allows us to right the course of our economic ships. When you link to gold, you go where the wind blows you. No control. No steering. Moreover your historical argument is weak. By analogy, we should also not have government, because every society that has formed a government has failed to keep it: Every government falls, eventually, be it Rome or the Aztecs.
    - tastyfreeze 6y ago
      That steering wheel is driving us off a cliff. If the result of having a steering wheel is a loss of trust in the currency and ultimately the collapse of that currency I would rather be blown by the wind.
      - SubiculumCode 6y ago
        But it hasn't happened to our currency. The only thing that's happening to our currency right now is our political instability, which frankly is a little unsettling at the moment with all the talk of secession martial law, suspension of the Constitution, and religious fervor for Trump that we are seeing on the far right at this moment in time.
        tastyfreeze 6y ago
        Yet... 1970 $1 is equal in purchasing power to $6.71 today. There is no indication from the Fed that this is going to turn around. With the rate the Fed is pumping out dollars, runnaway inflation is a near certainty.
        SubiculumCode 6y ago
        This argument fails. Dollars are to be used, not hoarded. Modest inflation encourages use of the currency. This is good. As far as an argument from authority, I'll take the Fed than random HN commenter. In any case, inflation is well controlled, perhaps over controlled, except for certain products with very real limits to production and supply (i.e. housing).

sidlls 6y ago

I have not read one single serious justification (as in, empirical) for using gold as the backing of a currency. There are many indications that, historically, the boom and bust cycles that exist naturally are exacerbated when tying the value of currency to (often easily manipulated to be artificially) scarce things like gold. The world has moved beyond tying the value of our currencies to material goods. Digital "coins" aren't any better, and the same group of fringe types who push the gold standard have taken that over as well.

api 6y ago
The only credible one is that it limits certain kinds of bad behavior, but that may come at a substantial cost.
tastyfreeze 6y ago
It doesnt have to be gold. But sound money is a necessity for a thriving economy. Gold standard prevented bad monetary policy that leads to runnaway inflation. Its not a perfect system but it stops power and greed from destroying the economy. Addition: Every historical case of a government switching to fiat currency has resulted in runnaway inflation. The reason that gold and silver are the only constitutional money is it forces the government to do the right thing. No gold standard permits those in power to manipulate the currency for whatever reason they wish. The rules should force the wrong people to do the right thing. Relying on people in power to do the "right" thing will always fail.
- SubiculumCode 6y ago
  Inflation inflation inflation, gold proponents always want to talk about inflation, never about the steering wheel that fiat currencies provide: Steering that allows us to right the course of our economic ships. When you link to gold, you go where the wind blows you. No control. No steering. Moreover your historical argument is weak. By analogy, we should also not have government, because every society that has formed a government has failed to keep it: Every government falls, eventually, be it Rome or the Aztecs.
  - tastyfreeze 6y ago
    That steering wheel is driving us off a cliff. If the result of having a steering wheel is a loss of trust in the currency and ultimately the collapse of that currency I would rather be blown by the wind.
    - SubiculumCode 6y ago
      But it hasn't happened to our currency. The only thing that's happening to our currency right now is our political instability, which frankly is a little unsettling at the moment with all the talk of secession martial law, suspension of the Constitution, and religious fervor for Trump that we are seeing on the far right at this moment in time.
      - tastyfreeze 6y ago
        Yet... 1970 $1 is equal in purchasing power to $6.71 today. There is no indication from the Fed that this is going to turn around. With the rate the Fed is pumping out dollars, runnaway inflation is a near certainty.
        SubiculumCode 6y ago
        This argument fails. Dollars are to be used, not hoarded. Modest inflation encourages use of the currency. This is good. As far as an argument from authority, I'll take the Fed than random HN commenter. In any case, inflation is well controlled, perhaps over controlled, except for certain products with very real limits to production and supply (i.e. housing).