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Small disclaimer: I haven't seen these videos yet, but given the reaction of the OP. I assume it is the same old "America needs gold-backed currency or else money has no value" or "money equals debt not labour" speech, so this is more of a comment on that. Given how often discussion of bitcoins comes up here, I'm sure most people are already aware of and comfortable with the idea that currency is a shared fiction, which only has value due to the belief that it has value. Granted, gold and silver do have valuable properties (electrical conductance and biocidality, respectively, among other thing), their value as means of making the trade of goods have uniform and granular parts (rather than trading based on specific items someone wants) is just a socially agreed upon arbitration. It's a useful arbitration, since someone may have something you want, and you don't have something they want. Without currency, this is intractable, but by giving them currency in exchange for their goods means you get what you want, and they get a promise that they can acquire what they want once they find the one who has it. Since trades can be deferred thusly, it makes everything much more convenient.
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"The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry." - Wikipedia Gold was the plastic of the ancient world. It was malleable, did not corrode or degrade, kept it's shape, was easy to work. It also required a fairly high degree of industry and infrastructure to produce and supply was limited. It was pretty too. This makes it perfect for currency. Other things used as currency include beads, cowrie shells, turqoise, rice, barley, copper, iron and rum. What beads, cowrie shells, turqoise and gold all have in common is that they are completely useless. They are valuable only for their attractiveness, rarity and and resistance to degredation, until the industrial age and their use in electrical appliances. Ironically it's very hard to use this strong, corrosion resistant conductor in electrical applications because its price is so massively over-inflated by jewelry and investment. Tell me, realistically now, is mining gold useful economic activity? Does it do or produce anything of material value to people? Worse, is sitting on and trading huge stores of the useless stuff useful economic activity? Is it worthwhile to keep a reserve of it sitting in a giant bank vault to ensure you can back all your money? It's not even really that aesthetically pleasing or of much artistic value either until you make something from it, and you can as easily use any other material for that. We'd be much better off not using it for these things at all to free up it's useful economic use in industrial applications. Water, Food, Energy, Coal, Oil, Iron, Rice, Barley, Wheat, Copper, Rum. I'd support any currency backed by such useful economic goods as these. Gold though? We're better off returning to the Cowrie Shell standard. The only reason Gold survives as this tradable commodity and investment is the same agreed upon value that makes all money worth something, or indeed the same thing that makes antiques, paintings, sculptures or any fine art and even Dolce and Gabbana handbags made in China for 1/100th of their final price. Gold just has the advantage that a LOT of people agree on it's value. But so does the Mona Lisa, and the US dollar... (I have not watched the videos).
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2 lengthy comments, but none of you watched the videos...
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We've heard this rhetoric before, thus our quick responses. I am a little curious if he discusses inflation controls and whether price indexing accounts for increases in prices of luxury goods like technology compared to increases in food prices. That seems like a more overriding concern than what device you pretend to be the arbiter of value.
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You cannot "refute" thousand years of history. Gold is a currency and always will. As you can read on the internet: "fiat currencies do not float, they sink at variable rates"
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quote:
You cannot "refute" thousand years of history.
Gold is a currency and always will. |
staggeringly incorrect, let me try to disprove this without stopping to think hypothesis: a cheap method of producing gold from seawater and electricity is discovered and proliferated. The value of gold plummets and it ceases to be useful for backing currency as its value enters freefall as availability balloons effect: gold will no longer be used as a currency
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The problem with the current monetary system is not that it is a shared fiction. It is that it is not balanced. These entities called Banks are not limited in how much money they are allowed to "prescribe" to people in loans, and then by trading those loans with each other. The fact that a loan you take today will be worth the bank its current value plus interest some years later means that you will have to add value to the system. If you fail, and the bank takes your house, they only get the value of the house, not necessarily the interest. When enough deals similar to this fail, the system crashes. If we got rid of interest OR allowed regular people to act as banks to each other OR set hard limits on banks' ability to use the future value of a loan in trading OR based the system on something that actually gains value over time, There would be less of a rollercoaster.
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quote:
Small disclaimer: I haven't seen these videos yet, but given the reaction of the OP. |
quote:
We've heard this rhetoric before, thus our quick responses |
Maybe you have something interesting to say, but when read together, these 2 sentences show that it is about your rhetoric...
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"a cheap method of producing gold from seawater and electricity is discovered and proliferated. The value of gold plummets and it ceases to be useful for backing currency as its value enters freefall as availability balloons" @Ivory, yes this is true. Then maybe the "always" was too much in my post. Well, I will stick to my gun and wait for your call telling me the new method is ready. Incidentally, you admit that currently, gold has an intrinsic value, unlike fiat money.
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There are many topics in the videos: - the problem with fiat money and what it enables (such as QE, bond markets) - what the de facto reserve currency is, and the shift we can expect to see in the future (such as oil traded in yuan) - the (supposed) solution to these in the form of gold On gold as a "perfect" solution, the fact that it may be possible to produce more (sea extraction) using technology show that there are problem with it, yet, having to invest energy to harvest gold makes it very different than pushing a quantitative easing button. Also, gold and silver are not the only precious metals out there. These just have an history in being used as money for various reasons. quote:
Gold though? We're better off returning to the Cowrie Shell standard. |
Misguided. A basic property of any currency or money is that it can't be counterfeit and that it is easy to identify. Cowrie Shell wtf... i'm sure you can find a chinese producer that will produce bazillion of good looking shells. We made a number of improvements in industrial processes over the years... back then, they couldn't make fake shells. But now, we still can't produce gold, platinum or iridium (yes we can counterfeit gold bars... but we cant produce gold, and we do not destroy gold by assessing if its titanium, yet it has a cost). EDIT: not titanium, tungsten-filled gold bars...
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quote:
These entities called Banks are not limited in how much money they are allowed to "prescribe" to people in loans, and then by trading those loans with each other. |
They are limited by regulation. https://en.wikipedia.org/wiki/Basel_IIIBut nothing prevents them from abusing it. And even if they remain within the limits, its shaky... and the banks are the major beneficiary of such a system anyway, not the public.
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Omigod the words used. "Voodoo! Guise! Hocus pocus! Honk!" I've watched the first video,   [V]sheep. Why are you doing this to me? It's not like I didn't already know that money was a bad thing.
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While Gold may not be so valuable anymore (as in tangible value). Silver is extremely valuable, being used in many industries. Silver in arguably in the same league as oil, when it comes to value. Gold and silver are different from traditional currencies, in that they have value in themselves (ie. tangible value). Where as currencies simply have value in that everyone else is sharing the same dream and will accept these currencies. Currencies fall eventually apart. We know this as fact. Regardless, of what "academics" or "visionaries" say, whether they like it or not, we are still on a gold standard. Our fiat currency is not linked to gold in any way, but nations and central banks still amass large quantities. The plutocracy still deals in assets. They're not going to throw generational wealth into some speculative currencies. They want a real store of value that they can control and pass onto future generations. Gold and silver will not be money forever. They will be especially useless as stores of value if humans venture further into the solar system and begin extracting resources (of which gold and silver will be abundant and result in an inflationary collapse). Cryptocurrencies could prove to be a solution, but this is an early area. Bitcoin is not gold 2.0. It's simply a currency. Bitcoin would need to survive a few hundred years to be deemed as the store of value that real tangible assets, such as gold have proved to be. I don't think I need to say anything about the current fiat system. Industrial Uses: https://en.wikipedia.org/wiki/SilverDisclaimer: I have watch all four episodes and hold silver, gold, ltc, btc, stocks, etc.
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Cowries were used from China (The character for money is a stylized Cowrie, 貝), India, to as far as Western Africa and was legal tender there up until the 19th century. It more widely spread than the use of gold as currency, local shells being used in the pre-colonial Americas and Australia as currency. To you shells are 'WTF', but they are natural resource like gold, they cannot be 'counterfieted' (The alternative would be what, plastic? The same value as plastic gold). Gold won this war because Europe and its Empires won, and Gold was the agreed upon currency in Europe. The Aztecs used mostly Cacao beans as currency, gold was used for household items and ornamentation. The Inca, in so far as they used currency, used shells, not gold. China used Cowries for 1,000-2,000 years before progressing to copper coins in 210 BC, up until the introduction of the yuan in the 19th century. They only used gold in the 1900's. The most important property of a currency is that everyone agrees to use it. Agreed upon values can be obscene, as in the fine art market, when an artist sells a work for a lot of money other people will buy their work for more money because they know there is a market for it, most art trading is investment, even if the art is shit and nobody likes it. Agreed upon value is a real thing, because if other people want it, it's valuable, even if they only want it because it is valuable. What you have to understand is that just like a piece of paper with some words on it, gold DOESN'T DO ANYTHING. It's harder to produce than the paper money, destroys more of the environment, is unequally distributed between countries: a country can get rich just off gold while doing nothing else worthwhile. It's useless! It isn't worthwhile economic activity. Oil, Coal, Wood, Water, Iron, these things all contribute to economic activity. Gold is a giant wasteful sink of useless effort to acquire or hold on to. Go invest in a farm and grow some cacao beans, that's your reserve right there. At least it does something in the mean-time. The problem with making something worthwhile your currency? What happens to gold happens to it too. Because you have only 10% of it being used in useful economic activity. If coal is currency we need to carry around coal and have huge reserves of coal to back up our currency and it's sitting there being useless, like gold is. I mean to be fair though gold does have a use. Jewelry. So, beads as currency then? Digging giant holes in the ground to dig up gold and put it in vaults is a waste of human labour and should not be rewarded.
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    Saktoth, I'll temporarily play your game if you think this is all about gold... quote:
To you shells are 'WTF', but they are natural resource like gold, they cannot be 'counterfieted' (The alternative would be what, plastic? The same value as plastic gold). |
You are mixing up 2 concepts... counterfeiting and synthesizing. You can counterfeit *anything*, but you can not synthesize everything. So yes, plastic, some polymer or epoxy, anything cheap and good looking enough to fool the receiver... that's the point of counterfeiting, that it is cheaper than the original! Plastic gold? Try harder... seriously. Can gold (as an element) be counterfeit? I doubt it. Can you synthesize gold? Of course not. Can a gold coin/bar be counterfeit? yes! quote:
So, beads as currency then? |
Are beads fungible? Is there an agreed upon market price for a bead? Is a small bead the same price as a larger one? Does a defect affect the price of a bead? Is a bead divisible? How much is a bead worth, and what do you do if you want to buy for a tenth of a bead worth of something? quote:
It's harder to produce than the paper money, destroys more of the environment, is unequally distributed between countries: a country can get rich just off gold while doing nothing else worthwhile |
That's the whole point of gold in this context. That a central bank can not decide to spontaneously create more out of thin air, and so, dilute what you already own, in comparison with the total amount of the thing (gold) in existence. quote:
Digging giant holes in the ground to dig up gold and put it in vaults is a waste of human labour and should not be rewarded. |
"I, Saktoth, declare that gold owners/miners should not rewarded". Sure. IMO that's as a naive as saying "bitcoin mining doesn't serve any purpose" (though for other reasons). You are speaking as if the whole human activity was centered around efficiency as a specie. You can't control what other do... and if they believe that gold is a worthy possession, go tell them that they are wasting their time and that they should just get shells or beads. Paper currencies are about trust. You trust that someone will honor the face value of the bill, and in the longer term, you are confident that there will not be hyperinflation. Now, you may believe that I'm a gold proponent because I dispute what you said about it. I just recognize why people seem to like gold as a "store of value"... and your criticism of gold fails as much as your proposed alternatives (cowrie shells). I suspect that you still haven't watched the videos, because you fail to address the important point, which what the current problems are with the dollar, not the gold solution. China is not far from where you are... don't you see something coming? Go tell them that cowrie shells is the way to go, or that they should just continue to get more dollar bonds because its more efficient than gold. They will laugh at you... The world may have been dollar-centric during your whole life so maybe you can not even conceive that this could change, due to a shift in power and due to monetary policies. Good luck with your beads or your cowrie shells.
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"The most important property of a currency is that everyone agrees to use it" Maybe this is the most important, but if this is the only property, then the currency will have a great deal of problems (as the first video in the series says). "China used Cowries for 1,000-2,000 years before progressing to copper coins in 210 BC, up until the introduction of the yuan in the 19th century. They only used gold in the 1900's." You are missing silver from the history of China. The Chinese word for "bank" can literally be translated into "Silver House". I'll play on your last sentence a little :P "Using highly fluctuating currencies and putting it in asset bubbles, so people go mad building houses is a waste of human labour and should not be rewarded." "Using easily expandable currencies and putting it in welfare recipients, so they can go buy useless shit from Walmart is a waste of human labour and should not be rewarded." etc... Gold mining is important to function of gold as money, more so than even Bitcoin mining. The cost of mining goes up with inflation and down with deflation. Mining takes real resources and labour to produce. The scarcity of gold (on earth) means that you cannot have massive fluctuations of the asset. Furthermore, mining puts a limit on consumption and makes the consumerist lifestyle nearly impossible (providing that standard is upheld). I can see where you're coming from though. Gold and silver are not perfect. They have a multitude of problems. One being that they can be hoarded and have liquidity destroyed. This is usually done through charging interest on loans (hence why many peoples banned interest). That being said, it is hard to find a new monetary basis that can replace gold and silver. I do not believe we should throw away 3000 years of history. Other generations have played around with currencies and got burned (ie. the French, before the French Revolution). There will have to be something in the future to replace gold and silver, especially if humans venture into space. However, now is not the time.
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Does watching the videos make me ineligible for commenting on the thread?
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Can you synthesize gold? Of course not. |
Not yet.* sheep, you are confusing as hell. All of a sudden you sound like the value of gold was not based purely on trust.
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