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> The only limits on the gold supply are technological ones Right, there's nothing special about it besides the technical limitations. But what's the alternati
by bko 4y ago
> The only limits on the gold supply are technological ones
Right, there's nothing special about it besides the technical limitations. But what's the alternative? With fiat you still have those technical limitations (someone could create indistinguishable counterfeit money and dump it on the market). But there's also the political risk. Someone can get power at the Fed and decide to double the money supply over night. In fact, this has happened time and time again with many fiat currencies so its not exactly an unfounded risk. That's why the precious metal standard is lower risk for arbitrary manipulation
- AlexandrB 4y ago> With fiat you still have those technical limitations (someone could create indistinguishable counterfeit money and dump it on the market). I think there is more than technological limitations to making this happen. Not only is counterfeiting considered a major crime by the state (who has a monopoly on violence), but the amount of "money" in circulation that has a physical representation is dwarfed by "money" that does not. Even if you doubled the physical currency in circulation you'd only increase the "monetary supply" by 10% or so. Plus there are huge logistics issues with moving that much weight/volume without getting caught. > Someone can get power at the Fed and decide to double the money supply over night. I think that if the function of government breaks down to this extent, I will have bigger problems than currency devaluation.
- bko 4y ago> I think that if the function of government breaks down to this extent, I will have bigger problems than currency devaluation. I don't know how to tell you this but... https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL