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It's a solved problem - the gold standard. The only thing that makes the current situation tenable is being able to print money. Put simply, the government do

It's a solved problem - the gold standard. The only thing that makes the current situation tenable is being able to print money. Put simply, the government doesn't actually view it as a problem. If you have an unlimited credit card you never have to repay, that's not a problem for you but for everyone else. Bit of an unfortunate omission from the US constitution really. That's the only way they'd have kept it - otherwise the moment you get any "economic crisis" they'd just "suspend" it again.

owlstuffing 3y ago
Right. . . however the problems with fiat currency are unavoidable and end in collapse. Considering the petrodollar, its time is near. Oil is quickly becoming a negotiable commodity between nations. Following the current trajectory, the USD will lose its global hegemony in 5-10 years. War will expedite that pace.
LargeTomato 3y ago
Which gold standard? There are many. Is everything backed by gold? So no loans, debt, or bonds? This is deflationary because the total value of stuff grows but the monetary base stays the same. Is there a fiat currency backed by gold? How will you avoid the monetary base growing larger than the total quantity of gold in the world? How is this functionally different from today?
- jalapenos 3y ago
  The following one: simply remove the fiat, and let the market take over again. I.e. the same way commerce was carried out everywhere for approximately forever. It's presumed a gold standard would return in that scenario, but could be something else. I assume this is how it'll end up naturally though. No one will end up willing to take the other country's currency in cross border trade, so that's where hard currency will return.
  - LargeTomato 3y ago
    >I.e. the same way commerce was carried out everywhere for approximately forever. No! That's not true :) as long as there has been debt there has been fiat. There has been debt since the beginning of commerce. So your system is going to have the same issues. You're "assuming" quite a lot for someone who really shouldn't be assuming anything.
  - panick21_ 3y ago
    Non of that has anything to do with government debt. The gold standard, has never limited government spending. During the classical goal standard plenty of government had debt, plenty of governments went bust.
    - jalapenos 3y ago
      Well I mean this is the internet, where no comment is so absurd as to avoid confidently being made. But I'll bite. So tell me: if an entity has to be able to repay its debt in gold, which it has limited stocks of, and can't get more without difficulty, how does that not limit their spending compared to if they can print bits of paper to repay their debt?
      - panick21_ 3y ago
        Its simply if you think about it, because a country can just decide not to pay back the debt. Just as they can just print money. So a country like the US can simply build up a huge amount of debt, that it could pay back in theory, and then simply decide not to do it because its easier. Both are a way to fuck over the people you owe money to.
  - ProjectArcturis 3y ago
    >simply remove the fiat, and let the market take over again. You should look into what the US financial system was like before the Civil War. It was wild. The government issued gold coins. But most people's day-to-day currency was paper money issued by individual banks. Each bank issued its own notes, with their own design. In theory they were redeemable for gold, but in that era of low/no bank regulation, banks often failed, leaving the currency worthless. People issued books detailing the design of each of the banknotes and estimates of the solvency of each bank. Counterfeits were a huge problem. Of course, news traveled more slowly in those days, so the further you got from an issuing bank, the less anyone could trust the notes. If you tried to spend your home bank's notes out of state, you'd get pennies on the dollar. Seems like an incredibly inefficient system to go back to. And one which still wouldn't stop the federal government from borrowing.
panick21_ 3y ago
Nonsense. The Gold Standard in no way prevents somebody (anybody) from taking on to much debt and going bust. > The only thing that makes the current situation tenable is being able to print money. That is factually wrong. The current situation isn't untenable from a financial standpoint. But over the medium term it would require hard choices.

owlstuffing 3y ago

Right. . . however the problems with fiat currency are unavoidable and end in collapse. Considering the petrodollar, its time is near. Oil is quickly becoming a negotiable commodity between nations. Following the current trajectory, the USD will lose its global hegemony in 5-10 years. War will expedite that pace.

LargeTomato 3y ago

Which gold standard? There are many. Is everything backed by gold? So no loans, debt, or bonds? This is deflationary because the total value of stuff grows but the monetary base stays the same. Is there a fiat currency backed by gold? How will you avoid the monetary base growing larger than the total quantity of gold in the world? How is this functionally different from today?

jalapenos 3y ago
The following one: simply remove the fiat, and let the market take over again. I.e. the same way commerce was carried out everywhere for approximately forever. It's presumed a gold standard would return in that scenario, but could be something else. I assume this is how it'll end up naturally though. No one will end up willing to take the other country's currency in cross border trade, so that's where hard currency will return.
- LargeTomato 3y ago
  >I.e. the same way commerce was carried out everywhere for approximately forever. No! That's not true :) as long as there has been debt there has been fiat. There has been debt since the beginning of commerce. So your system is going to have the same issues. You're "assuming" quite a lot for someone who really shouldn't be assuming anything.
- panick21_ 3y ago
  Non of that has anything to do with government debt. The gold standard, has never limited government spending. During the classical goal standard plenty of government had debt, plenty of governments went bust.
  - jalapenos 3y ago
    Well I mean this is the internet, where no comment is so absurd as to avoid confidently being made. But I'll bite. So tell me: if an entity has to be able to repay its debt in gold, which it has limited stocks of, and can't get more without difficulty, how does that not limit their spending compared to if they can print bits of paper to repay their debt?
    - panick21_ 3y ago
      Its simply if you think about it, because a country can just decide not to pay back the debt. Just as they can just print money. So a country like the US can simply build up a huge amount of debt, that it could pay back in theory, and then simply decide not to do it because its easier. Both are a way to fuck over the people you owe money to.
- ProjectArcturis 3y ago
  >simply remove the fiat, and let the market take over again. You should look into what the US financial system was like before the Civil War. It was wild. The government issued gold coins. But most people's day-to-day currency was paper money issued by individual banks. Each bank issued its own notes, with their own design. In theory they were redeemable for gold, but in that era of low/no bank regulation, banks often failed, leaving the currency worthless. People issued books detailing the design of each of the banknotes and estimates of the solvency of each bank. Counterfeits were a huge problem. Of course, news traveled more slowly in those days, so the further you got from an issuing bank, the less anyone could trust the notes. If you tried to spend your home bank's notes out of state, you'd get pennies on the dollar. Seems like an incredibly inefficient system to go back to. And one which still wouldn't stop the federal government from borrowing.

panick21_ 3y ago

Nonsense. The Gold Standard in no way prevents somebody (anybody) from taking on to much debt and going bust. > The only thing that makes the current situation tenable is being able to print money. That is factually wrong. The current situation isn't untenable from a financial standpoint. But over the medium term it would require hard choices.