4 ms·

I agree. There is no way any major economy will switch back to the gold standard unless there is some highly unlikely earth shattering event.

david927 5y ago
Like a major economy defaulting
- AnimalMuppet 5y ago
  A major economy defaulting is possible (I put no limits on the ability of Congress to bungle things). But why do you think that the response would be going back to the gold standard? (Even if you think that's the answer, why do you think Congress will think it's the answer?)
  - david927 5y ago
    Because the economies are interlinked and so a major economy defaulting starts a domino process where almost all debt goes into default. The currency of any country is legal note that says that country will pay that. What happens when the country can't? And other countries are in a similar situation? Let's say that you're wealthy and bought three houses for three families and they all owe you that money. You don't want a bunch of paper in return, you want to get the value back that you invested. How? If all currencies have lost their value, where will you turn? You'll want something that can't be printed. This essay talks about it in more detail: https://blankpoole.com https://blankpoole.com
    - AnimalMuppet 5y ago
      So? If someone can't pay me, it doesn't matter how much I want my value back, I'm not going to get it. That's what happens with bad investments - you lose your money. And if a country can't pay me in fiat currency, how in the world are they going to be able to pay me in gold?
      - david927 5y ago
        The assets don't disappear. Gold doesn't disappear. People will still want to trade. They'll have assets and want different assets. Barter stinks. Countries will have surplus grain but want, say, tech. They can use a stable currency, say the Swiss Franc. Or they can use a scarce resource with a historical use as a currency, like gold. And defaulting doesn't mean you get off, scott free. When you default and go bankrupt, there's an effort to recoup losses. Germany was encumbered with huge debt from World War One and went into full hyperinflation and eventually paid it off... in 2010. Please, read that essay. It's fascinating and talks about things much better than I can.
        AnimalMuppet 5y ago
        I was done after the third paragraph: > One is that Federal Reserve stopped reporting money supply after hitting $28 trillion, signaling that the US Dollar is defaulting. It may be signalling that the dollar is inflating. That it's depreciating. But defaulting? How does a currency default? What would that even mean? Nope. Done.
  - dragonwriter 5y ago
    > A major economy defaulting is possible (I put no limits on the ability of Congress to bungle things) Arguably, even maximal Congressional bungling (at least, absent positive action to force a default, which doesn't seem politically possible) won't make a default necessary, as there are several no-default courses possible without Cobgressional action (“mint the coin”, ignore debt limit due to conflict with mandated fiscal actions, ignore debt limit as unconstitutional)

david927 5y ago

Like a major economy defaulting

AnimalMuppet 5y ago
A major economy defaulting is possible (I put no limits on the ability of Congress to bungle things). But why do you think that the response would be going back to the gold standard? (Even if you think that's the answer, why do you think Congress will think it's the answer?)
- david927 5y ago
  Because the economies are interlinked and so a major economy defaulting starts a domino process where almost all debt goes into default. The currency of any country is legal note that says that country will pay that. What happens when the country can't? And other countries are in a similar situation? Let's say that you're wealthy and bought three houses for three families and they all owe you that money. You don't want a bunch of paper in return, you want to get the value back that you invested. How? If all currencies have lost their value, where will you turn? You'll want something that can't be printed. This essay talks about it in more detail: https://blankpoole.com https://blankpoole.com
  - AnimalMuppet 5y ago
    So? If someone can't pay me, it doesn't matter how much I want my value back, I'm not going to get it. That's what happens with bad investments - you lose your money. And if a country can't pay me in fiat currency, how in the world are they going to be able to pay me in gold?
    - david927 5y ago
      The assets don't disappear. Gold doesn't disappear. People will still want to trade. They'll have assets and want different assets. Barter stinks. Countries will have surplus grain but want, say, tech. They can use a stable currency, say the Swiss Franc. Or they can use a scarce resource with a historical use as a currency, like gold. And defaulting doesn't mean you get off, scott free. When you default and go bankrupt, there's an effort to recoup losses. Germany was encumbered with huge debt from World War One and went into full hyperinflation and eventually paid it off... in 2010. Please, read that essay. It's fascinating and talks about things much better than I can.
      - AnimalMuppet 5y ago
        I was done after the third paragraph: > One is that Federal Reserve stopped reporting money supply after hitting $28 trillion, signaling that the US Dollar is defaulting. It may be signalling that the dollar is inflating. That it's depreciating. But defaulting? How does a currency default? What would that even mean? Nope. Done.
- dragonwriter 5y ago
  > A major economy defaulting is possible (I put no limits on the ability of Congress to bungle things) Arguably, even maximal Congressional bungling (at least, absent positive action to force a default, which doesn't seem politically possible) won't make a default necessary, as there are several no-default courses possible without Cobgressional action (“mint the coin”, ignore debt limit due to conflict with mandated fiscal actions, ignore debt limit as unconstitutional)