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Gold is actually really good at transferring and measuring value. Think about what a "good" measure of value would be have. It needs to last over time, not corr

Gold is actually really good at transferring and measuring value. Think about what a "good" measure of value would be have. It needs to last over time, not corrode or dissolve to the forces. It needs to be distributable, Divisible.. to be ubiquitous. Hard to create/refine, hard to find, so supply can't easily be inflated. It doesn't matter what the object that is being used for exchange of value or holding value, that's why you can trade and barter random objects. But if you condensate down the properties that make a GOOD money, then gold is more than just a shiny metal. "The amount of value in the world is increasing so you want to exchange medium to grow with it.." we find more gold every day, so there is an easing already happening naturally. And even if there wasn't, imagine having an exchange currency that literally never inflated... that's GOOD. We have been hoodwinked into thinking that we need inflation to keep up with goods and services, literal stockholm syndrome taught by the FED.

RealityVoid 6mo ago
> And even if there wasn't, imagine having an exchange currency that literally never inflated... that's GOOD. I fundamentally disagree. Value comes from building stuff not from hoarding. I maintain my intense dislike for gold. And I grant that it had the property of having most people on this earth consider it the peak of value. Sure common belief is a useful property. But I disagree that it's a positive outcome or that there couldn't be many many other variations except gold.
- bartvk 6mo ago
  Your dislike aside, is it part of your investment portfolio? If not, what did you replace it with?
SR2Z 6mo ago
Hold on - you say "we find more gold every day" and then go on to suggest that the money supply doesn't actually need to keep up with economic growth? If we had the technology to maintain 0% inflation, we would do that. We can't, and rather than risk deflation we instead target low positive inflation. This is because deflation leads to nightmare spirals where people start stuffing money into their mattresses instead of investing in useful things because holding has risk-free guaranteed returns that the unpredictable real world can't match. The amount of gold being mined is not sufficient to keep up with economic growth and gold is therefore inherently deflationary. It's not a good way to store value, because a coin that's going to double in value over two years or whatever is obviously not a stable store of value. You can argue about corrosion resistance or whatever other physical properties gold might have, but unless the civilization collapses you will find just as much luck storing your wealth in the database of a major bank. Needless to say, designing a civilization around the idea that it could collapse at any moment is unnecessary and expensive.
- zahlman 6mo ago
  > If we had the technology to maintain 0% inflation, we would do that. We can't, and rather than risk deflation we instead target low positive inflation. I don't think this is quite right. My understanding is that a low positive inflation would be targeted anyway, because it stimulates the velocity of money; i.e. there's a downside to hoarding, since you need to beat inflation to come out on top. So people will be willing to invest to at least some extent in risk assets, or to buy things now rather than later. Which, yes, makes inflationary spirals possible, but they've proven less damaging. The inflation numbers seen in regimes that actually collapsed as a result are absolutely dizzying; whereas the deflation seen in the Great Depression was... significant, but not nearly comparable.
  - SR2Z 6mo ago
    The main advantage to keeping inflation as low as possible but positive is also that it makes interest rates cheaper. Individuals are incentivized to spend when there's inflation, but banks have a harder time writing loans because the interest rate on the loan is the product of inflation and the bank's desired ROI. Low interest rates are a good thing because they allow people to explore new ideas and new businesses - the entire modern tech industry would not exist without ZIRP because the scale of investments has only gone up as technology has advanced.
    - autoexec 6mo ago
      > Individuals are incentivized to spend when there's inflation That's not what's happening currently. Inflation has driven up prices to the point where people can't afford to spend. They're forced to cut back on spending just to keep a roof over their head and food on the table. Inflation promises that things are cheaper now than they ever will be, but that just means that anything you can't afford you either have to go without or take an even bigger hit to your wallet after trying to save money at a rate faster than prices are increasing. That sort of thing leads to less spending. Credit cards were the solution for many Americans for a very long time, but that was never sustainable and now the US has record amounts of household debt and homelessness. Deflation makes things more affordable and so people buy more. Yes, they could horde all their wealth, but you can't eat money and it isn't much fun. When times are good why would anyone bother going without when they can easily get what they want today. Consumerism is strong enough to keep people buying things. Decreasing prices gives consumers confidence that they can make risky purchases and investments.
habinero 6mo ago
> that's why you can trade and barter random objects...imagine having an exchange currency that literally never inflated... that's GOOD. We have been hoodwinked into thinking that we need inflation to keep up with goods and services, literal stockholm syndrome Gahhh. Stop taking your economics advice from bitcoin bros and goldbug weirdos. They don't know how anything works and don't want to learn. It's like taking legal advice from sovereign citizens. It's not even that difficult to understand why it's a terrible idea! High inflation is bad, sure. Deflation is an economic nuke. You know those people who spent like a whole bitcoin buying pizza way back when? "If I'd just held onto it, I'd have $HUGE_NUMBER now". Yeah. If your money goes up in value, you have a huge incentive to stockpile it and not buy pizza. It's not just Dominos that loses out. All of the people and suppliers that go into pizza do, too. You need people to spend and lend to have liquidity and money flow. > we find more gold every day, so there is an easing already happening naturally That's not how that works. You're tying your entire country's economic growth to the production output of a single mining industry. Gold is not distributed evenly across the globe, either. And yeah, we did all that in the past, and it caused deflation, which caused numerous financial panics [0], broke the British economy [1] and after two world wars, the US ended up with like 70% of the world's gold [2]. [0] https://www.federalreservehistory.org/essays/banking-panics-of-the-gilded-age https://www.federalreservehistory.org/essays/banking-panics-... [1] https://en.wikipedia.org/wiki/Financial_crisis_of_1914 https://en.wikipedia.org/wiki/Financial_crisis_of_1914 [2] https://www.imf.org/external/np/exr/center/mm/eng/mm_dr_01.htm https://www.imf.org/external/np/exr/center/mm/eng/mm_dr_01.h... -- TL;DR: Tying your entire country's economic growth to the production output of a single mining industry is stupid and we don't do it for very good reasons. Everything is a conspiracy if you don't know how anything works.
- tw04 6mo ago
  I do find it rather ironic that economists can pretty much universally agree on this concept. And yet when you point out the very existence of the billionaire class inherently causes the exact same issue you're suddenly a communits. How is it good for an economy to have a small subset of individuals hoarding wealth through property, artwork, and offshore bank accounts - not spending it in the economy from which they extracted it? "Job creators" is a farse, the subset who you can point to who ACTUALLY create(d) jobs a-la Page and Brin have long since stepped away from that job creation and have joined the ranks of: number go up.

RealityVoid 6mo ago

> And even if there wasn't, imagine having an exchange currency that literally never inflated... that's GOOD. I fundamentally disagree. Value comes from building stuff not from hoarding. I maintain my intense dislike for gold. And I grant that it had the property of having most people on this earth consider it the peak of value. Sure common belief is a useful property. But I disagree that it's a positive outcome or that there couldn't be many many other variations except gold.

bartvk 6mo ago
Your dislike aside, is it part of your investment portfolio? If not, what did you replace it with?

SR2Z 6mo ago

Hold on - you say "we find more gold every day" and then go on to suggest that the money supply doesn't actually need to keep up with economic growth? If we had the technology to maintain 0% inflation, we would do that. We can't, and rather than risk deflation we instead target low positive inflation. This is because deflation leads to nightmare spirals where people start stuffing money into their mattresses instead of investing in useful things because holding has risk-free guaranteed returns that the unpredictable real world can't match. The amount of gold being mined is not sufficient to keep up with economic growth and gold is therefore inherently deflationary. It's not a good way to store value, because a coin that's going to double in value over two years or whatever is obviously not a stable store of value. You can argue about corrosion resistance or whatever other physical properties gold might have, but unless the civilization collapses you will find just as much luck storing your wealth in the database of a major bank. Needless to say, designing a civilization around the idea that it could collapse at any moment is unnecessary and expensive.

zahlman 6mo ago
> If we had the technology to maintain 0% inflation, we would do that. We can't, and rather than risk deflation we instead target low positive inflation. I don't think this is quite right. My understanding is that a low positive inflation would be targeted anyway, because it stimulates the velocity of money; i.e. there's a downside to hoarding, since you need to beat inflation to come out on top. So people will be willing to invest to at least some extent in risk assets, or to buy things now rather than later. Which, yes, makes inflationary spirals possible, but they've proven less damaging. The inflation numbers seen in regimes that actually collapsed as a result are absolutely dizzying; whereas the deflation seen in the Great Depression was... significant, but not nearly comparable.
- SR2Z 6mo ago
  The main advantage to keeping inflation as low as possible but positive is also that it makes interest rates cheaper. Individuals are incentivized to spend when there's inflation, but banks have a harder time writing loans because the interest rate on the loan is the product of inflation and the bank's desired ROI. Low interest rates are a good thing because they allow people to explore new ideas and new businesses - the entire modern tech industry would not exist without ZIRP because the scale of investments has only gone up as technology has advanced.
  - autoexec 6mo ago
    > Individuals are incentivized to spend when there's inflation That's not what's happening currently. Inflation has driven up prices to the point where people can't afford to spend. They're forced to cut back on spending just to keep a roof over their head and food on the table. Inflation promises that things are cheaper now than they ever will be, but that just means that anything you can't afford you either have to go without or take an even bigger hit to your wallet after trying to save money at a rate faster than prices are increasing. That sort of thing leads to less spending. Credit cards were the solution for many Americans for a very long time, but that was never sustainable and now the US has record amounts of household debt and homelessness. Deflation makes things more affordable and so people buy more. Yes, they could horde all their wealth, but you can't eat money and it isn't much fun. When times are good why would anyone bother going without when they can easily get what they want today. Consumerism is strong enough to keep people buying things. Decreasing prices gives consumers confidence that they can make risky purchases and investments.

habinero 6mo ago

> that's why you can trade and barter random objects...imagine having an exchange currency that literally never inflated... that's GOOD. We have been hoodwinked into thinking that we need inflation to keep up with goods and services, literal stockholm syndrome Gahhh. Stop taking your economics advice from bitcoin bros and goldbug weirdos. They don't know how anything works and don't want to learn. It's like taking legal advice from sovereign citizens. It's not even that difficult to understand why it's a terrible idea! High inflation is bad, sure. Deflation is an economic nuke. You know those people who spent like a whole bitcoin buying pizza way back when? "If I'd just held onto it, I'd have $HUGE_NUMBER now". Yeah. If your money goes up in value, you have a huge incentive to stockpile it and not buy pizza. It's not just Dominos that loses out. All of the people and suppliers that go into pizza do, too. You need people to spend and lend to have liquidity and money flow. > we find more gold every day, so there is an easing already happening naturally That's not how that works. You're tying your entire country's economic growth to the production output of a single mining industry. Gold is not distributed evenly across the globe, either. And yeah, we did all that in the past, and it caused deflation, which caused numerous financial panics [0], broke the British economy [1] and after two world wars, the US ended up with like 70% of the world's gold [2]. [0] https://www.federalreservehistory.org/essays/banking-panics-of-the-gilded-age https://www.federalreservehistory.org/essays/banking-panics-... [1] https://en.wikipedia.org/wiki/Financial_crisis_of_1914 https://en.wikipedia.org/wiki/Financial_crisis_of_1914 [2] https://www.imf.org/external/np/exr/center/mm/eng/mm_dr_01.htm https://www.imf.org/external/np/exr/center/mm/eng/mm_dr_01.h... -- TL;DR: Tying your entire country's economic growth to the production output of a single mining industry is stupid and we don't do it for very good reasons. Everything is a conspiracy if you don't know how anything works.

tw04 6mo ago
I do find it rather ironic that economists can pretty much universally agree on this concept. And yet when you point out the very existence of the billionaire class inherently causes the exact same issue you're suddenly a communits. How is it good for an economy to have a small subset of individuals hoarding wealth through property, artwork, and offshore bank accounts - not spending it in the economy from which they extracted it? "Job creators" is a farse, the subset who you can point to who ACTUALLY create(d) jobs a-la Page and Brin have long since stepped away from that job creation and have joined the ranks of: number go up.