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Grrr... Austrian economics. The ultimate value of a currency has never been shiny metal, even when we were on the gold standard. The value of a currency is that
by sdurkin 18y ago
Grrr... Austrian economics. The ultimate value of a currency has never been shiny metal, even when we were on the gold standard. The value of a currency is that it allows you to invest in companies in a particular country. That is, if you think there are a lot of companies in the US that are going to return high profits, you need to exchange your money for the USD.
This line is laughable: "It is easiest to define "real value" as the price in gold." Why is this any more valid than the price in silver, corn, wheat, dollars, yen, or cocoa puffs?
- unrealwh 18y agoyou've missed the point of the gold standard entirely. people don't advocate gold because they like shiny things. people advocate gold because it is a generally accepted numismatic metal for which the supply is finite and dependable, and there is a long history of validating and assaying gold as a measure of trade. you could just as easily substitute any other metal or fixed-quantity commodity like wheat or corn (although cocoa puffs are a product of manufacture so they would make a poor choice). the point is that the securing asset not be something that can be created at will, as in the case of a fiat currency. all fiat currencies have failed given enough time. gold has yet to fail once at being a decent store of value over 3k years.
- ConradHex 18y agoIs it because the supply of gold is, in theory, somewhat stable?
- sdurkin 18y agoIt is, but not only is that not true in practice, its irrelevant. Gold is an industrial good, just like anything else. Its price fluctuates for a variety of reasons, including simple changes in taste.