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Is gold issued by governments?
by ewams 13y ago
Is gold issued by governments?
- snowwrestler 13y agoNo, and it failed as a currency.
- tzm 13y agoYou are wrong. It didn't fail. It evolved into a more efficient currency model.
- adamnemecek 13y agoBut did it fail because it was not issued by the gov't? Or due to other factors?
- nobodyshere 13y agoIt did not fail as a currency to the point that in most countries you can't legally pay in gold. That should ring a bell. Also lots of countries try to keep as much gold as they can to back their exchange rates.
- ye 13y agoIt's mostly used as a "currency" storage, supposedly protected from inflation (which isn't really true, it gets mined at something like 2,500 tons per year).
- kamjam 13y agoI don't think gold failed as a currency, I could pretty much go anywhere in the world with a bar of gold and exchange it for currency to buy whatever I want. It is still a universal currency, although not an everyday currency.
- jljljl 13y agoExchanging gold for currency doesn't make it a currency. Gold is an asset. If you brought your gold to different people, they might all quote you different amounts, based on how easily the merchant or exchanger could convert the gold into their own currency.
- kamjam 13y agoSame goes for anything you actually buy with currency also.
- swswsw 13y agoBut silver was successfully used as a currency for a long time in history of certain countries.
- Tycho 13y agoIt 'failed' as a currency (after centuries) because nation-states with central banks found it disadvantageous for their overall economies. That doesn't mean the currency itself failed, just means it was abandoned by those seeking to implement monetary policy. It would be like saying P2P networking failed because vendors prefer the iTunes model.
- sergiosgc 13y agoDid it? Or was it Bretton-Woods that failed? If I remember my History, Nixon decoupled the USD from gold to regain the ability to devalue the dollar, as a tool for dealing with the huge debt accrued during the Vietnam war. It wasn't a gold-currency world, it was a world of gold-backed US dollar. It makes a huge difference. While the advantages of being a reserve currency superceded the disadvantages of not having monetary control, Bretton-Woods stood. Once the tables turned, the US ended the gold backing. Bretton Woods stood for close to 40yrs. The current system has about the same age and much as Bretton Woods is failing because the US abused its position as reserve currency to wage war financed by debt. History does repeat itself, in slightly different color tones...
- enraged_camel 13y ago>>Did it? Or was it Bretton-Woods that failed? If I remember my History, Nixon decoupled the USD from gold to regain the ability to devalue the dollar, as a tool for dealing with the huge debt accrued during the Vietnam war. The point is that it failed as a currency as soon as it lost the government's backing.
- praxeologist 13y agoThe gov't has outlawed gold and silver as currency in favor of its fiatbux. If my friend and I like eating Skittles then some bully come slaps us around if we eat them, that isn't failure of us liking Skittles.
- enraged_camel 13y agoNo, the government came and said you can't use gold or silver to trade Skittles, because neither material is a convenient medium of exchange (which is unarguably correct).
- praxeologist 13y agoFiat money has been around not even 200 years while various commodities used in coins worked fine for much longer. Oh but to you it isn't convenient somehow and this is "unarguably correct", lol whatever, spoken like a true state apologist I guess. Go on believing your own alternate history where the force and fraud of government are pretended away.
- jpadkins 13y agoThen why do central banks still hold tons of gold?
- 21echoes 13y agoyes, most gold-backed currencies were issued by governments and contained a significant fiduciary element (aka, one gold coin was worth more than its weight in gold).