4 ms·

>Gold-backed reserve notes and even coins made of the metal(s) can still be debased Well, yes, but it's harder to play games with, which makes it more stable.

>Gold-backed reserve notes and even coins made of the metal(s) can still be debased Well, yes, but it's harder to play games with, which makes it more stable. It's similar to making the argument that while Windows is less secure than Linux, Linux also has security issues, so we should just have everybody use Windows. We have ample evidence that the caretakers of our money supply are, shall we say, less than diligent. No currency system is going to be perfect. You have to balance a lot of things, and every single one is subject to corruption and other sorts of chicanery. There is always a "what-if" scenario.

dragonwriter 3y ago
> Well, yes, but it's harder to play games with, which makes it more stable. Gold might be better at average value performance over time than fiat currencies which are actively managed for stability and a bias toward slight value decline, but its very definitely not more stable than major fiat currencies.
- tmn 3y ago
  Over enough time it is more stable than all fiat currencies. But most people don't care to consider that time scale.
  - dragonwriter 3y ago
    If you mean “the wide range in which the extremely unstable value of gold varies doesn't move very much over time, so that the value it had a 300 years ago today is likely to be repeated sometime within a 100 year window centered on today, whereas fiat currencies have a more consistent downward value trend”, that’s true, but its not value stability, or a good thing in a currency. Its not a particularly great thing in an investment asset either.
- deltarholamda 3y ago
  That's an odd assertion to make, considering the current condition of fiat currencies. Gold is more or less untethered to anything right now, other than what people think it's worth as a hedge. There is an intrinsic value in industrial applications, but that's an edge case. So you are basically valuing gold based on what you can get for it in fiat currencies, which is like using a yardstick to measure itself. Inflation after closing the gold window in the 70s has been staggering. If you have to cough up something--gold, silver, goats, something--for your currency, you can't play the sorts of games we do now with dollars.
  - dragonwriter 3y ago
    > That's an odd assertion to make, considering the current condition of fiat currencies. Its not, if you look at the actual inflation-adjusted price of gold over time. The claim that the exchange value of gold for other goods and services should be more stable than the exchange rate of fiat currencies for goods and services simply is inconsistent with the facts. > If you have to cough up something--gold, silver, goats, something--for your currency, you can't play the sorts of games we do now with dollars. Yes, its much harder to actively manage a commodity currency for price stability, which is the main “game” played with fiat currencies.
    - landemva 3y ago
      > the exchange rate of fiat currencies for goods and services simply is inconsistent with the facts. Those who did well in the birthing geo lottery of North America have a different experience than most others. Even European nations in past 25 years cancelled their currencies.
      - laurencerowe 3y ago
        EU countries who switched to the Euro did not cancel their currency. It automatically converted and you had years to convert physical currency at the bank.
        landemva 3y ago
        If you find a 25 year old buried bucket of Portuguese Escudo, US dollar, and gold, which still spends? Which was cancelled or went to zero? Europe has frequently cancelled their currencies over past 25 and 100 years. Those who were born into US dollar over past 25 or 100 years may believe fiat currency stays around, but that is a US-centric view. Maybe Austrians have a valid historical concern about cash.

dragonwriter 3y ago

> Well, yes, but it's harder to play games with, which makes it more stable. Gold might be better at average value performance over time than fiat currencies which are actively managed for stability and a bias toward slight value decline, but its very definitely not more stable than major fiat currencies.

tmn 3y ago
Over enough time it is more stable than all fiat currencies. But most people don't care to consider that time scale.
- dragonwriter 3y ago
  If you mean “the wide range in which the extremely unstable value of gold varies doesn't move very much over time, so that the value it had a 300 years ago today is likely to be repeated sometime within a 100 year window centered on today, whereas fiat currencies have a more consistent downward value trend”, that’s true, but its not value stability, or a good thing in a currency. Its not a particularly great thing in an investment asset either.
deltarholamda 3y ago
That's an odd assertion to make, considering the current condition of fiat currencies. Gold is more or less untethered to anything right now, other than what people think it's worth as a hedge. There is an intrinsic value in industrial applications, but that's an edge case. So you are basically valuing gold based on what you can get for it in fiat currencies, which is like using a yardstick to measure itself. Inflation after closing the gold window in the 70s has been staggering. If you have to cough up something--gold, silver, goats, something--for your currency, you can't play the sorts of games we do now with dollars.
- dragonwriter 3y ago
  > That's an odd assertion to make, considering the current condition of fiat currencies. Its not, if you look at the actual inflation-adjusted price of gold over time. The claim that the exchange value of gold for other goods and services should be more stable than the exchange rate of fiat currencies for goods and services simply is inconsistent with the facts. > If you have to cough up something--gold, silver, goats, something--for your currency, you can't play the sorts of games we do now with dollars. Yes, its much harder to actively manage a commodity currency for price stability, which is the main “game” played with fiat currencies.
  - landemva 3y ago
    > the exchange rate of fiat currencies for goods and services simply is inconsistent with the facts. Those who did well in the birthing geo lottery of North America have a different experience than most others. Even European nations in past 25 years cancelled their currencies.
    - laurencerowe 3y ago
      EU countries who switched to the Euro did not cancel their currency. It automatically converted and you had years to convert physical currency at the bank.
      - landemva 3y ago
        If you find a 25 year old buried bucket of Portuguese Escudo, US dollar, and gold, which still spends? Which was cancelled or went to zero? Europe has frequently cancelled their currencies over past 25 and 100 years. Those who were born into US dollar over past 25 or 100 years may believe fiat currency stays around, but that is a US-centric view. Maybe Austrians have a valid historical concern about cash.