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We moved away from gold backed currency a long time ago for a reason. Going back to it seems like a terrible idea. It's a way for these countries to try to reg

We moved away from gold backed currency a long time ago for a reason. Going back to it seems like a terrible idea. It's a way for these countries to try to regain economic dominance without actually doing anything.

taminka 3y ago
> We moved away from gold backed currency a long time ago for a reason to be able to print more money to fund wars and all (which is actually how central banks emerged om the frist place btw) gåing back to gold standard is a great idea imo
- throw0101c 3y ago
  > to be able to print more money to fund wars and all (which is actually how central banks emerged om the frist place btw) Like in the 1930s when the sooner a country abandoned the gold standard the sooner its economy started to recover from the Great Depression?
ttoinou 3y ago
What reason and why would you believe this reason was rightly justified ? This collective "we" hides individual people making decisions on behalf of others btw
- sgt101 3y ago
  Constraining the economy based on one proxy item isn't sensible. The current system is backed by the USA's future likely ability to extract revenue from tax payers and anyone else that it gets the idea of extracting money from.
  - jongjong 3y ago
    How is it desirable that the USD is backed by the extraction/exploitation of future tax payers? Sounds like a pyramid scheme and highly unethical. I'd prefer my money to be backed by literally any proxy item rather than by the enslavement of our children. The current system artificially rewards centralization and in doing so, makes markets anti-competitive and monopolistic as it creates an asymmetric playing field whereby the participants who are closer to the money printer always have the upper hand over their competitors regardless of other factors. It's the Cantillon effect.
    - The_Colonel 3y ago
      But is the gold (bitcoin/whatever) standard truly better? It's necessarily deflationary (in the long term, assuming continuous economic growth) which rewards just holding it. Rich people get richer, poor get poorer.
      - jongjong 3y ago
        To some extent, yes, but because the quantity of Bitcoin is limited, at least it cannot compound ad-infinitum into the hands of the rich as is the case with fiat. The other thing which is problematic about the current system is that because the currency is constantly losing value to inflation, governments are essentially forced to invest people's pensions into the stock market which distorts the markets in favour of certain large companies... If currency held its value, governments could just keep pensions in the form of currency and would not be compelled to interfere with the markets. Governments should not get to decide how to invest citizens' money. A deflationary currency is good. It rewards people a little bit for staying out of the market. If you get rich, congrats, you've made it, now you have an incentive to step aside, cash out and let someone else have a go. Today, the incentive is to keep reinvesting your money even if you don't feel particularly strongly about any investment. Today, many people invest simply because they don't want to hold cash which loses value over time. People who don't have a vision for how to improve things should not be involved in the markets at all. There should be an incentive for such people to stay out of the markets. That's what a deflationary currency would do. There needs to be a bench on the side where rich people can sit down and catch their breath before making their next investment.
        neffo 3y ago
        What do you think happens when the profit incentive over any length of time is to neither spend nor invest and simply hold cash? It doesn't end well for that currency or the associated economy.
        jongjong 3y ago
        I don't believe that. The poor will always have an incentive to work hard to get rich. The poor will always keep the economy running. It would be easier for people to succeed (and more motivating) if they didn't have to compete against the massive capital of incumbents. A deflationary currency only incentivizes the rich to stop working and stop participating in the markets... Which is fine IMO. They're rich, they don't need to work anymore. The best thing they can do is step aside and let someone else have a chance. Their massive capital, when put to work, would mostly serve to monopolize markets anyway... And it's a net negative for everyone. There is a false belief that rich people are so essential that the economy would collapse without them... But if you look at history, you would see that educated poor people have repeatedly been able to pull themselves out of poverty... I.e. economic 'miracles' (e.g. Germany after WW2, Japan, South Korea...). People should get rich and retire. There are always going to be plenty of younger motivated people with fresh perspectives to take their place.
- sgt101 3y ago
  Btw, there it's nothing stopping anyone from using gold or proxy's for gold apart from the threat of extreme poverty.
  - ttoinou 3y ago
    You don't seem aware of how the US imposes its money on the rest of the world
    - sgt101 3y ago
      Do you mean "the use of military force"? That is my model.... BTW. this is not a judgement - there has been no political system that I know of that has had any sustained presence in history that hasn't used this mechanism to sustain itself.
bluescrn 3y ago
> Going back to it seems like a terrible idea. Does it?... After watching savings being decimated by inflation, with the seemingly unending money-printing (the solution to Covid, Ukraine, whatever the next crisis is), a lot of people are probably wishing they'd invested in gold.
- unixhero 3y ago
  The only way to mitigating is to have a large mortgage
- LatteLazy 3y ago
  em... You realise the exact same thing happens with gold when the price falls right? All time highs for gold prices and falling inflation might not be the best time to buy in...
- neffo 3y ago
  And a personal investment in gold is in no way equivalent to fixing the exchange value of your currency to it. If you think gold standards prevent manipulation of currencies, well the 1920s would like to have a word with you please. And deflation is far more destructive than inflation.
- throw0101c 3y ago
  Gold does not help deal with unexpected inflation: * https://www.nber.org/papers/w18706 https://www.nber.org/papers/w18706 * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789 * https://www.pwlcapital.com/will-gold-save-the-day/ https://www.pwlcapital.com/will-gold-save-the-day/ See also The Golden Constant: The English and American Experience, 1560-1976 by Roy William Jastram: * https://www.goodreads.com/book/show/3267510-the-golden-constant https://www.goodreads.com/book/show/3267510-the-golden-const... * PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram-TheGoldenConstant.pdf http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
jongjong 3y ago
Yes, there was a reason; unconstrained currency printing benefited politicians and a small number of well connected elites at the expense of essentially everyone else. So going back seems like an excellent idea.
- nostrfanboi 3y ago
  Bitcoin is like gold, but without the heavy lifting. It's finite, secure, and not controlled by any elite. Why dig in the past when we can mine the future?
  - bluGill 3y ago
    Bitcoin needs too much power to run mining nodes.
    - hoseja 3y ago
      Yup, the PoW for gold was done in supernovae so now we don't have to bother with it.
      - friend_and_foe 3y ago
        It takes enormous resources to dig gold out of the ground.
        defrost 3y ago
        Open pits 3.5 kilometres long x 1.5 kilometres wide x 600 metres deep don't dig themselves. And then all that material has to be graded, sorted, crushed, sieved, processed to extract fines. https://www.superpit.com.au/ https://www.superpit.com.au/ https://en.wikipedia.org/wiki/Super_Pit_gold_mine https://en.wikipedia.org/wiki/Super_Pit_gold_mine
        bluGill 3y ago
        Which is what keeps the value of gold fairly stable long term despite the natural inflation caused by digging more.
resuresu 3y ago
It worked just fine until the government confiscated the peoples gold and issued them pieces of paper with a lien attached to each note. You talk as if people will be carrying gold bars around for payment, it doesnt work that way. As long as joe nobody can go to the bank and redeem his gold then there will be trust in the financial institution securing it.
friend_and_foe 3y ago
It wasn't "a long time ago", it was in stages over the past 100 years. Given that the US dollar has lost 95% of it's purchasing power since 1970, and the whole host of other problems with nationally mandated currency (such as the coincidence of wants problem in international trade, a problem money was invented to solve) I'd say it looks to be a short lived experiment. Gold has been the standard for more than two thousand years until this little experiment. We moved away from gold in order to finance world war 1 and 2.

taminka 3y ago

> We moved away from gold backed currency a long time ago for a reason to be able to print more money to fund wars and all (which is actually how central banks emerged om the frist place btw) gåing back to gold standard is a great idea imo

throw0101c 3y ago
> to be able to print more money to fund wars and all (which is actually how central banks emerged om the frist place btw) Like in the 1930s when the sooner a country abandoned the gold standard the sooner its economy started to recover from the Great Depression?

ttoinou 3y ago

What reason and why would you believe this reason was rightly justified ? This collective "we" hides individual people making decisions on behalf of others btw

sgt101 3y ago
Constraining the economy based on one proxy item isn't sensible. The current system is backed by the USA's future likely ability to extract revenue from tax payers and anyone else that it gets the idea of extracting money from.
- jongjong 3y ago
  How is it desirable that the USD is backed by the extraction/exploitation of future tax payers? Sounds like a pyramid scheme and highly unethical. I'd prefer my money to be backed by literally any proxy item rather than by the enslavement of our children. The current system artificially rewards centralization and in doing so, makes markets anti-competitive and monopolistic as it creates an asymmetric playing field whereby the participants who are closer to the money printer always have the upper hand over their competitors regardless of other factors. It's the Cantillon effect.
  - The_Colonel 3y ago
    But is the gold (bitcoin/whatever) standard truly better? It's necessarily deflationary (in the long term, assuming continuous economic growth) which rewards just holding it. Rich people get richer, poor get poorer.
    - jongjong 3y ago
      To some extent, yes, but because the quantity of Bitcoin is limited, at least it cannot compound ad-infinitum into the hands of the rich as is the case with fiat. The other thing which is problematic about the current system is that because the currency is constantly losing value to inflation, governments are essentially forced to invest people's pensions into the stock market which distorts the markets in favour of certain large companies... If currency held its value, governments could just keep pensions in the form of currency and would not be compelled to interfere with the markets. Governments should not get to decide how to invest citizens' money. A deflationary currency is good. It rewards people a little bit for staying out of the market. If you get rich, congrats, you've made it, now you have an incentive to step aside, cash out and let someone else have a go. Today, the incentive is to keep reinvesting your money even if you don't feel particularly strongly about any investment. Today, many people invest simply because they don't want to hold cash which loses value over time. People who don't have a vision for how to improve things should not be involved in the markets at all. There should be an incentive for such people to stay out of the markets. That's what a deflationary currency would do. There needs to be a bench on the side where rich people can sit down and catch their breath before making their next investment.
      - neffo 3y ago
        What do you think happens when the profit incentive over any length of time is to neither spend nor invest and simply hold cash? It doesn't end well for that currency or the associated economy.
        jongjong 3y ago
        I don't believe that. The poor will always have an incentive to work hard to get rich. The poor will always keep the economy running. It would be easier for people to succeed (and more motivating) if they didn't have to compete against the massive capital of incumbents. A deflationary currency only incentivizes the rich to stop working and stop participating in the markets... Which is fine IMO. They're rich, they don't need to work anymore. The best thing they can do is step aside and let someone else have a chance. Their massive capital, when put to work, would mostly serve to monopolize markets anyway... And it's a net negative for everyone. There is a false belief that rich people are so essential that the economy would collapse without them... But if you look at history, you would see that educated poor people have repeatedly been able to pull themselves out of poverty... I.e. economic 'miracles' (e.g. Germany after WW2, Japan, South Korea...). People should get rich and retire. There are always going to be plenty of younger motivated people with fresh perspectives to take their place.
sgt101 3y ago
Btw, there it's nothing stopping anyone from using gold or proxy's for gold apart from the threat of extreme poverty.
- ttoinou 3y ago
  You don't seem aware of how the US imposes its money on the rest of the world
  - sgt101 3y ago
    Do you mean "the use of military force"? That is my model.... BTW. this is not a judgement - there has been no political system that I know of that has had any sustained presence in history that hasn't used this mechanism to sustain itself.

bluescrn 3y ago

> Going back to it seems like a terrible idea. Does it?... After watching savings being decimated by inflation, with the seemingly unending money-printing (the solution to Covid, Ukraine, whatever the next crisis is), a lot of people are probably wishing they'd invested in gold.

unixhero 3y ago
The only way to mitigating is to have a large mortgage
LatteLazy 3y ago
em... You realise the exact same thing happens with gold when the price falls right? All time highs for gold prices and falling inflation might not be the best time to buy in...
neffo 3y ago
And a personal investment in gold is in no way equivalent to fixing the exchange value of your currency to it. If you think gold standards prevent manipulation of currencies, well the 1920s would like to have a word with you please. And deflation is far more destructive than inflation.
throw0101c 3y ago
Gold does not help deal with unexpected inflation: * https://www.nber.org/papers/w18706 https://www.nber.org/papers/w18706 * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789 * https://www.pwlcapital.com/will-gold-save-the-day/ https://www.pwlcapital.com/will-gold-save-the-day/ See also The Golden Constant: The English and American Experience, 1560-1976 by Roy William Jastram: * https://www.goodreads.com/book/show/3267510-the-golden-constant https://www.goodreads.com/book/show/3267510-the-golden-const... * PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram-TheGoldenConstant.pdf http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...

jongjong 3y ago

Yes, there was a reason; unconstrained currency printing benefited politicians and a small number of well connected elites at the expense of essentially everyone else. So going back seems like an excellent idea.

nostrfanboi 3y ago
Bitcoin is like gold, but without the heavy lifting. It's finite, secure, and not controlled by any elite. Why dig in the past when we can mine the future?
- bluGill 3y ago
  Bitcoin needs too much power to run mining nodes.
  - hoseja 3y ago
    Yup, the PoW for gold was done in supernovae so now we don't have to bother with it.
    - friend_and_foe 3y ago
      It takes enormous resources to dig gold out of the ground.
      - defrost 3y ago
        Open pits 3.5 kilometres long x 1.5 kilometres wide x 600 metres deep don't dig themselves. And then all that material has to be graded, sorted, crushed, sieved, processed to extract fines. https://www.superpit.com.au/ https://www.superpit.com.au/ https://en.wikipedia.org/wiki/Super_Pit_gold_mine https://en.wikipedia.org/wiki/Super_Pit_gold_mine
      - bluGill 3y ago
        Which is what keeps the value of gold fairly stable long term despite the natural inflation caused by digging more.

resuresu 3y ago

It worked just fine until the government confiscated the peoples gold and issued them pieces of paper with a lien attached to each note. You talk as if people will be carrying gold bars around for payment, it doesnt work that way. As long as joe nobody can go to the bank and redeem his gold then there will be trust in the financial institution securing it.

friend_and_foe 3y ago

It wasn't "a long time ago", it was in stages over the past 100 years. Given that the US dollar has lost 95% of it's purchasing power since 1970, and the whole host of other problems with nationally mandated currency (such as the coincidence of wants problem in international trade, a problem money was invented to solve) I'd say it looks to be a short lived experiment. Gold has been the standard for more than two thousand years until this little experiment. We moved away from gold in order to finance world war 1 and 2.