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submitted 6 months ago by return2ozma@lemmy.world to c/news@lemmy.world
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[-] buddascrayon@lemmy.world 12 points 6 months ago

I find people who make this "argument" very silly. The gold standard is unsustainable. The amount of cash in circulation will always outstrip the amount of gold in whatever vault it been tied to. Fiat money is always an economic inevitability for a growing state.

[-] 3volver@lemmy.world 4 points 6 months ago

The amount of cash in circulation will always outstrip the amount of gold in whatever vault it been tied to.

That's... the entire fucking point. They printed away our futures, now we suffer.

[-] UnderpantsWeevil@lemmy.world 3 points 6 months ago

They printed away our futures

If the amount of potatoes we produce every year goes up and the amount of currency we print every year goes up but the amount of gold we have in our vault stays fixed, the real economy doesn't care. You're trading dollars for potatoes and potatoes for dollars. The gold is irrelevant.

But if potatoes go up and currency stays fixed, you have too few dollars chasing too many goods. This deflates the cost of the potato and discourages the next crop. Smaller crops mean food shortages. And food shortages impact social stability. So now you've got riots from a food shortage that was created entirely because you didn't print enough currency to buy up all the potatoes.

[-] 3volver@lemmy.world -1 points 6 months ago

Riots from a food shortage because potatoes became too cheap? Funny speculative statement. What about riots because everything is too expensive?

[-] UnderpantsWeevil@lemmy.world 0 points 6 months ago* (last edited 6 months ago)

Riots from a food shortage because potatoes became too cheap?

Riots because people stop growing potatoes and start growing bitcoins, in order to chase the highest possible ROI.

What about riots because everything is too expensive?

You're looking at debt without looking at revenues.

Far worse to owe $10 when you make $10/year than $10M when you make $10M/year. Particularly when I the value of the asset I've purchased is rising faster than the debt-rate. Owning a $100M house on a $10M note is an incredibly deal. Public Debt in service of GDP growth is simply investment. And the ROI on that debt has been incredibly good.

[-] HasturInYellow@lemmy.world 3 points 6 months ago

That's only true when you are dealing with the infinite growth of capitalism. Nations and empires have used the gold standard for thousands of years. It only became "impossible" when we tried to inflate the value of economies into the stratosphere to enrich the aristocrats of society.

[-] UnderpantsWeevil@lemmy.world 5 points 6 months ago* (last edited 6 months ago)

Nations and empires have used the gold standard for thousands of years.

Crack open David Graeber's "Debt: The First 5000 Years". He's an anthropologist who spent his career investigating this theory, and he found it wanting. Hardly the first, but probably a more fun read than Thomas Piketty or Milton Friedman or Adam Smith. Nations and empires didn't use gold specie until fairly recently in human history. Most of human civilization revolved around different types of credit and debt, typically enumerated in volume of agricultural produce.

Wheat/corn/rice, fish, olive oil, and salt were the most common standards of exchange. Gold was ornamental, but far too little of it existed to circulate as common currency or even reserve currency. It wasn't until the colonial era and the mass exploitation of Africa, East Asia, and the Americas that European Banks had a large enough surplus gold reserve to treat it as coinage.

So you're talking at best hundreds of years, and even then only within the handful of European powers capable of plundering the gold reserves of foreign nations on a global scale. And even that only got these countries from the 15th to the 18th century before the system started breaking down.

[-] HasturInYellow@lemmy.world 2 points 6 months ago

Ok. Fair. Let me correct myself: money was based on material goods and not rich peoples feefees about the economy.

[-] UnderpantsWeevil@lemmy.world 0 points 6 months ago

Definitely closer to the market. Although one major form of historical debt is taxation, and that's traditionally been subject to how rich people feel about the economy.

[-] Eximius@lemmy.world 3 points 6 months ago

The government runs out of money... so it drops the gold standard to "to invigorate the economy"... by taking away value from those that hold cash... which is always the lower class. Higher classes hold assets that dont inflate away.

[-] UnderpantsWeevil@lemmy.world 5 points 6 months ago* (last edited 6 months ago)

The problem with this argument is that it neglects the consequence of specie entering and existing the market.

The California and Alaska Gold Rushes did more to devalue the money supply than anything Nixon tried. The Spanish economy of the 1700s imploded in the face of the gold glut it imported from the Incas and Aztecs.

A gold standard doesn't stabilize the money supply. It simply deflects the question of what that money supply should be onto the private commodity market for gold. But volatility in the gold supply does happen, particularly during times of economic turmoil. And a pegged currency encourages private arbitrage, which increases the frequency of these sharp shifts in gold availability.

And that's not even getting into what happens when you've got a private speculative asset independent of gold - maybe we call it real estate or company stock or cryptocurrency - that siphons off investment dollars one minute and floods the market with currency/commodity-hungry panic sellers the next. Even if you've got a stable gold/currency ratio, these aren't the only two variables in your economic model.

No amount of gold changes the number of potatoes the Irish have to eat.

[-] NotMyOldRedditName@lemmy.world 2 points 6 months ago* (last edited 6 months ago)

Holding cash makes it sound like it only impacts those who have cash savings, but it takes value away from the work you do as you get paid in cash and those wages never keep up to inflation from the printing machine. So they "invigorate" the economy by devaluing your work.

this post was submitted on 20 May 2024
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