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Why does the method of mining mean that a currency should not be accepted? Gold serves as a currency yet the methods of mining have changed drastically in the
by fleitz 14y ago
Why does the method of mining mean that a currency should not be accepted?
Gold serves as a currency yet the methods of mining have changed drastically in the last 1,000 years.
- dualogy 14y ago> Gold serves as a currency Not for the last 80 years it hasn't..
- wintersFright 14y agoActually 39 years. The USD was a token for gold until Nixon shock.
- dualogy 14y agoYeah but that I define as "monetary metal for Central Bank settlements" gold, not "day-to-day normal-people transactional currency". Was it still "money" / monetary after 33? Certainly, until '71 (42 years ago, not 39). But "currency" (circulating to facilitate/lubricate individual micro rather than macro exchange&trade)? Hardly ;) Also not "legal tender" -- as in, for courts enforcing contract liabilities or tax payments. TL;DR: only outside the US, only to Central Banks.
- wintersFright 14y agoInteresting point. Wouldn't an individual Frenchman see a USD as a token for metal until the shock? And until the shock, national currencies circulated at a fixed exchange with the USD - thereby his own currency was effectively gold backed? At a national level, yes the Central Banks settled in gold, but that was after the micro transactions bubbled up to be settled from the commercial banks and then eventually cleared at the Central Bank level (Talking on the edges of my understanding here - just trying to see if the reality for an individual level was the currency was gold backed until 71).
- dualogy 14y ago> And until the shock, national currencies circulated at a fixed exchange with the USD - thereby his own currency was effectively gold backed? Yes, "effectively gold-backed" until the first guy came along to openly demand an actual physical (rather than "potential") exchange of USD reserves for real ounces, in size, from the US. Bam, Nixon shock. Essentially "caused" by one "individual Frenchman" (de Gaulle) testing whether the system can in fact, in size and in physical actuality consistently deliver what it promised to the world.
- anigbrowl 14y agoGold fell out of widespread use as a currency after the mining became industrialized. Nobody wants to play in a rigged game.
- fleitz 14y agoTell me more about how gold fell out of use as currency because mining became industrialized. http://en.wikipedia.org/wiki/Bretton_Woods_system http://en.wikipedia.org/wiki/Bretton_Woods_system http://en.wikipedia.org/wiki/Executive_Order_6102 http://en.wikipedia.org/wiki/Executive_Order_6102 I'm not a gold bug and I see many problems with using gold as a currency, namely that the amount of currency in circulation should depend on how much stuff we can dig out of the ground. (In the case of BTC something about how many times a SHA-256 hash can be calculated.) The idea that gold fell out of use as currency because of industrialization is either a completely new discovery in economics, or completely wrong. I'm pretty sure it's the latter.
- deleted 14y ago[deleted]
- anigbrowl 14y agoI don't think the Bretton woods system counts. That's between countries, I'm talking about everyday preference for gold by individuals. I suppose I should have said specie instead.