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Isn't it ironic that the state as an enforcer of property rights is also a violator of property rights? Why do you need fiat currencies? Gold has been around a

by laut 17y ago

Isn't it ironic that the state as an enforcer of property rights is also a violator of property rights? Why do you need fiat currencies? Gold has been around as a currency for longer than fiat currencies backed by nothing.

philwelch 17y ago
"Isn't it ironic that the state as an enforcer of property rights is also a violator of property rights?" Indeed. I don't see any hope for having a non-state enforcer that's anywhere near as effective though, since there would also be a lot of non-state Robin Hoods running around getting into gun battles with any non-state enforcers. "Why do you need fiat currencies? Gold has been around as a currency for longer than fiat currencies backed by nothing." Gold was backed by fiat just as much as paper money. The fact that it's useful for noncorrosive electrical conductors and dental work had nothing to do with its suitability as a currency--it's just as arbitrary as cloth-paper renderings of dead presidents. It is, however, rather difficult to control. This has benefits and drawbacks. Going back to a gold standard would (in the case of a big country) price gold out of the market for any other purpose. In the case of a small country, anyone could screw you over by selling gold reserves (but even big countries would be vulnerable to this). There are also impacts on lending and other business activities that mean that, in a competitive climate, a deflationary currency would have problems competing.
Retric 17y ago
There is not even close to enough Gold in the world to back every currency on a global scale. Simple calculation value of the entire world's goods vs. all the worlds Gold vs. value of all the worlds currency in circulation. Trying to use gold on a large economy would create significant economic harm as the rest of the world stayed the way they where.

by laut 17y ago

philwelch 17y ago

"Isn't it ironic that the state as an enforcer of property rights is also a violator of property rights?" Indeed. I don't see any hope for having a non-state enforcer that's anywhere near as effective though, since there would also be a lot of non-state Robin Hoods running around getting into gun battles with any non-state enforcers. "Why do you need fiat currencies? Gold has been around as a currency for longer than fiat currencies backed by nothing." Gold was backed by fiat just as much as paper money. The fact that it's useful for noncorrosive electrical conductors and dental work had nothing to do with its suitability as a currency--it's just as arbitrary as cloth-paper renderings of dead presidents. It is, however, rather difficult to control. This has benefits and drawbacks. Going back to a gold standard would (in the case of a big country) price gold out of the market for any other purpose. In the case of a small country, anyone could screw you over by selling gold reserves (but even big countries would be vulnerable to this). There are also impacts on lending and other business activities that mean that, in a competitive climate, a deflationary currency would have problems competing.

Retric 17y ago

There is not even close to enough Gold in the world to back every currency on a global scale. Simple calculation value of the entire world's goods vs. all the worlds Gold vs. value of all the worlds currency in circulation. Trying to use gold on a large economy would create significant economic harm as the rest of the world stayed the way they where.