In response to how the gold standard works.
I take more from the anarcho-fucktards than from the socialists and from the creationists combined. Needless to say, I'm very pissed...
Here's where it begins...I'm the guy getting wacked by Laughing Man for those wondering. The original thread: http://mises.org/Community/forums/t/410.aspx?PageIndex=2 (near the bottom)
So you tell me, is he correct, or am I correct:
Me: "gfitzy123: 'we don't have enough gold in the world to back every dollar'
It doesn't work that way.
How much gold is there?
How many dollars are there?
Divide and keep it that way. Use that ratio to define the dollar in terms of gold, and only create more money as more gold comes into either the government's treasury/mint, or the open market (depending on whether it's the government or the free market that has the power to coin money)."
Laughing Man: "'malgratloprekindle: Divide and keep it that way. Use that ratio to define the dollar in terms of gold, and only create more money as more gold comes into either the government's treasury/mint, or the open market (depending on whether it's the government or the free market that has the power to coin money).'
So you want to enact monetarist style inflation with a set percentage? I understand it may be difficult to conceptualize that a monetary supply need not expand because the point is to increase its purchasing power, not its overall abundance."
Me: "Laughing Man: '"malgratloprekindle:
Divide and keep it that way. Use that ratio to define the dollar in terms of gold, and only create more money as more gold comes into either the government's treasury/mint, or the open market (depending on whether it's the government or the free market that has the power to coin money)."
So you want to enact monetarist style inflation with a set percentage? I understand it may be difficult to conceptualize that a monetary supply need not expand because the point is to increase its purchasing power, not its overall abundance.'
WTF!?!?!
Where did I say I wanted constant inflation? This is how new money is made via a gold or commodity standard. This has NOTHING to do with Monetarism, or inflation at a set percentage. When more gold comes in (it's very scarce last time I checked), you use it to coin more money. There would be no set %age, and the money supply would be mostly constant, save for the few times it becomes more profitable to mine for new gold...I'm aware that the point of money is to increase or maintain it's value. Don't put words in my mouth. It's bad enough I have to take shit from Harry Felkner and the other more dogmatic anarchists."
Laughing Man: "'malgratloprekindle:
Where the hell did I say that? This is how money is made via a gold standard. This has NOTHING to do with Monetarism, or inflation at a set percentage.
malgratloprekindle:
Use that ratio to define the dollar in terms of gold, and only create more money as more gold comes into either the government's treasury/mint'
The goal of the gold standard is not to make more dollar bills."
Me: "Laughing Man:
'malgratloprekindle:
"Where the hell did I say that? This is how money is made via a gold standard. This has NOTHING to do with Monetarism, or inflation at a set percentage.
malgratloprekindle:
Use that ratio to define the dollar in terms of gold, and only create more money as more gold comes into either the government's treasury/mint"
The goal of the gold standard is not to make more dollar bills.'
I'm aware of that. Again, stop putting twisting my points and strawmanning me. I never said a SET percent. I just said when new gold is found it's used to create new money.
That's how free market commodity backed money works: you only can coin new money when you have more commodity to back it up. I feel like I'm dealing with socialists and creationists...same strawmanning, dogmatic thinking."
Laughing Man: "'malgratloprekindle:
I never said a SET percent. I just said when new gold is found it's used to create new money.'
And the supply of goods usually goes up by 3% a year. I'm speculating but I wouldn't be surprised if gold does the same. Therefore with new gold, according to you comes new money. Therefore the production of dollars will raise to production of gold. Percent of dollars increased by percent of gold.
'malgratloprekindle:
That's how free market commodity backed money works: you only can coin new money when you have more commodity to back it up.'
The point of having a commodity backed money is actually because it is more difficult to produce. Simply raising the money supply in terms of the increase in the supply of goods is not going to make goods cheaper which is the natural course of the free market. You want increases in the purchasing power of money, namely a high per unit value, which one cannot achieve if they are constantly printing dollars in relation to the unit.
'malgratloprekindle:
I feel like I'm dealing with socialists and creationists...same strawmanning, dogmatic thinking.'
Self-victimization is all the rage these days isn't it?" (Laughing Man: Burn in hell. No I didn't actually tell him that for those wondering)
Me: "People don't HAVE to trade their gold in for dollars, even if the supply increases.
'Laughing Man:
And the supply of goods usually goes up by 3% a year. I'm speculating but I wouldn't be surprised if gold does the same. Therefore with new gold, according to you comes new money. Therefore the production of dollars will raise to production of gold. Percent of dollars increased by percent of gold.'
No, because people don't HAVE to trade their gold in for dollars.
'Laughing Man:
The point of having a commodity backed money is actually because it is more difficult to produce. Simply raising the money supply in terms of the increase in the supply of goods is not going to make goods cheaper which is the natural course of the free market. You want increases in the purchasing power of money, namely a high per unit value, which one cannot achieve if they are constantly printing dollars in relation to the unit.'
That's kinda where I'm getting at...
'Laughing Man:
Self-victimization is all the rage these days isn't it?'
It's not self-victimization when it's a reaction to something real, asshole."
Laughing Man: " 'malgratloprekindle:
People don't HAVE to trade their gold in for dollars, even if the supply increases.'
Then Gresham's law will drive out the bad money and you can keep printing ridiculous paper without learning and bettering your practices. I like to develop institutions which will actually be sustained, but who knows that might actually just be some kind of odd subjective preference I have."
Me: "No, you can't.
Because new money can ONLY be coined with more commodity to back it up.
What's so hard to grasp about this?"
Laughing Man: " 'malgratloprekindle:
No, because people don't HAVE to trade their gold in for dollars.'
Then you start something that is already doomed to fail since you knowingly inflate a currency in accordance to the gold supply while other worthwild currencies achieve purchasing power.
'malgratloprekindle:
That's kinda where I'm getting at...'
No you are saying that the dollar supply should coincide with the gold supply. I am saying that the dollar supply should be at a fixed state
'malgratloprekindle:
Stop strawmanning me, and I'll stop complaining about it. Goes for the rest of the anarcho-dogmatists here.'
This isn't a strawman. This is the refutation of idiocy. (Again, fuck him)
'malgratloprekindle:
Because new money can ONLY be coined with more commodity to back it up.'
And only the prices will increase. You've never heard of the 'Angel of Gabriel' model. If you double the money supply, it will only double the prices. The natural course of free market capitalism is a decrease in prices, not an equilibrum like the monetarists champion.
http://mises.org/multimedia/mp3/rothbard/R2-16m.mp3
For your benefit."
Glad he finally provided a source...sheesh. Never mind what I stated about the gold standard can be found in ANY basic economics text...
I digress, is he correct, that the supply of commodity should always be kept constant in a gold standard or it will fail? I'm glad he at least provided something, but I'd like to know how he explains the period of prosperity in the U.S. after the Civil War, until about 1900, on a gold standard that did very much what I talked of, and is even touted by the Mises Institute as historical evidence for commodity money's success and soundness.
The market will set it at equilibrium. Gold is a check on the value of the dollar in this system. No one has to do anything except let it work.
OK, so just to double check, does this mean that what he says is BS (I'm still a bit enraged atm)? What about the laws he talks about (e.g. Gresham's law, Angel of Gabriel. I've never heard of them, or know what they mean, but I wonder if they mean anything important)?
Also, thanks for the critiques. For one reason or another, the Anarchists cause me more grief than the creationists, apologists, Fundamentalists, socialists and neocons combined.
Yes. Fixing the supply of money is the same as fixing the supply of any other commodity. Its value must be allowed to fluctuate with market forces.
Right, in other words, the supply of money must be able to change (more gold in open market for more money, or more gold hoarded for less money) to allow the value of the dollar (and the gold for that matter) to fluctuate with market forces.
I wouldn't mind wondering where he gets the idea that: The supply of goods increases by 3% each year under a gold standard (it's more than that, last time I checked), and that the gold supply would increase by that amount each year (interesting he provided no source...)
I also just looked up Greshem's Law. It's irrelavent as far as I can tell. If the gold supply anchors the money supply in the ways mentioned above, (people can go from gold to dollars at will), then the equilibrium will meet and the "bad" money will be out of circulation as the demand for the better money, be it gold, or dollars, or another better commodity (although I don't see this happening as people naturally tend towards gold because of its beauty, scarcity, etc) increases.
An interesting reply to Anarchist Cain's comment:
Laughing Man: "And only the prices will increase. You've never heard of the 'Angel of Gabriel' model. If you double the money supply, it will only double the prices. The natural course of free market capitalism is a decrease in prices, not an equilibrum like the monetarists champion."
Jonathan M. F. Catalán: "There is a misconception here, that should be cleared. Equilibrium between supply and demand is always something that the market works for. That's not in question when it comes to price deflation. As Jesús Huerta de Soto explains in his book, Money, Bank Credit and Economic Cycles, demand for present goods decrease with an increase in savings. The demand curve shifts to the left: there is a new equilibrium point. And then, when savings decrease and entrepreneurs begin to manufacture the lower-order good supply increases: the supply curve shifts to the right, causing a new equilibrium point."
Glad SOMEONE else (besides Shane, etc) realizes that not all created money, whether in a gold standard (whether he wants to admit it or not, money can, and IS created under a commodity standard: Gold is very scarce: You can't just magically make or dig out more like you can print money: $3.5 for every $100 of gold compared to less than one penny for each $100 dollars bill of fiat money, if I'm not mistaken) or in fiat goes to spending to increase prices.
I was also annoyed at how he kept saying that, "You believe money can be created under a gold standard, therefore, you approve of inflation. You approve of inflation at a fixed percent, just like the monetarists!" (Anarchist Cain, if you're reading this, still waiting for those figures of the supply of gold in each country or world ALWAYS increasing at the same rate as the supply of goods/services; and/or that the supply of goods/services (GDP) would increase at a rate of 3% per year under a commodity standard currency ;P)
I wonder if he remembers that Monetarists, unlike Austrians (hell, or even people who want commodity money period), say we need a federal reserve, yet I think we shouldn't have a central bank of ANY kind. Or that they don't care for commodity backed money (which, unlike fiat, doesn't have any bonds on its production).
And while I DO believe that no growing/shrinking of the money supply (inflation = deflation = zero percent) is ideal, last time I checked, it's not feasible. I mean, I wonder how he would prevent the supply of gold (remember gold IS money under the gold standard) from growing...Is he going to make it illegal to mine for gold? Good luck there. Even if laws are emerged in this Anarcho-Capitalists society that says people can't mine for gold, if what happens with victimless crime laws (e.g. the war on drugs) are any indicator, it would just drive the gold mining/trade business underground, something likely to make the situation far worse than if the money supply was allowed to fluctuate with demand.
At least without a central bank and with commodity backed money, the power to grow the money supply (which I highly doubt would be as fast as he claims it would be), or shrink it for that matter, would be decentralized and therefore hard, if not impossible to abuse if made into a free market. So realistically there would be tiny bits of inflation as well as deflation (money supply increases and money supply decreases respectively), but, if the value of the dollar/gold in terms of purchasing power under the gold standard (hell, even the mixed metal standard of the USA during the late 1800s) is any indicator, he's full of shit. I wonder where he gets the figures for my plan that, "if we do that, prices will rise". Uh huh. Go smoke another one bro.
I checked the thread again and found this bit:
Laughing Man: "And the supply of goods usually goes up by 3% a year. I'm speculating but I wouldn't be surprised if gold does the same. Therefore with new gold, according to you comes new money. Therefore the production of dollars will raise to production of gold. Percent of dollars increased by percent of gold."
Stolz25: "Why are you concerned with the creation of the dollars? The wealth has already been created when the gold was mined, whether you make the dollars or not.
Laughing Man: "Wealth is created from investment. Not merely because of the existence of gold. Dollars represent a medium of exchange meant to reflect the purchasing power of gold [ or at least it use to ] thus merely increasing dollars in accordance with increase in the gold supply is not creating wealth."
Now obviously they were quoting each other with each post but I digress.
I do agree with AC this time, almost. Wealth isn't created from investment, it's created via production of goods/services (something that is spurred from investment) and their efficient allocation via mutually beneficial exchange arising from voluntary mutual consenting transactions. But I do see what he's getting at. The point isn't to increase wealth by increasing the money supply (I don't recall ever saying that...whether he admits it or not, he's fucking strawmanning me), but to allow the money supply to change with supply and demand. Money != wealth, I know that. I've been there and done that. Granted, gold does have some value/use outside its primary use of money. Electronics comes to mind, and I'd bet there are other applications for gold as well.
Yes, wealth is created from the exchange; investment provides the capital that makes the exchange possible.
The thing to remember about the gold (or any commodity) standard is that the creation of new money represents an expenditure of resources: you have to go dig up the gold, process it, have it assayed, etc. It's a lot more involved than turning on a printing press. So the money represents the amount of capital it would take to achieve that.
Right!
Ah! Very interesting Shane! I forgot about that. Kinda reminds me of how new technology has made drilling for oil far more efficient. There was even thread about it on Mises that went into this in dept: https://mises.org/Community/forums/t/6293.aspx?PageIndex=4 (check out page three too! I put some more interesting stuff there as well). Also I found this: http://mises.org/story/1717 Haven't read it yet, but it looks interesting.
(I didn't feel like making this into a separate thread)
I've seen a thread on Mises http://mises.org/Community/forums/p/8949/229635.aspx#229635 . In this thread it seems that many Anarcho-Capitalists seem to defend Libertarianism, or even equivocate it with Anarcho-Capitalism. I understand that both go by the "non-aggression" principle, but I always thought that
Libertarianism = Constitutional Minarchal Republic, yet they'll bash, ghetto-ize and chastize minarchists to no end...
Some Anarchists have this weird tendency to conflate the belief that something is more effective at a task with the belief in existence:
I don't believe in government for the same reason I don't believe in gods; because they haven't met their burden of proof.
This is fallacious in both ways this could be interpreted. If he's talking about existence, and says that he doesn't believe in government, then what's the problem? By this logic, we already have anarchy!
In the non literal sense, it's a weak analogy. Even if the government is shown to be horrible at something, that doesn't necessarily strengthen the case for anarchy, and to try and suggest this is asinine (many anarchists, when asked how would we do this or that in an anarchy will just bitch about the government itself). It could be that Anarchic Equivalent is even worse. Because when arguing about which is more effective, you show that one is better than the other, not, one is horrible, therefore get rid of it.
For example, if two college students submit a paper and one gets a 50 (F), that doesn't mean that the other student's is automatically better, no matter how much the other student goes on about the first student's paper. It could very well be that this other student gets a 30% (F-) after all is said and done.
e.g. http://www.youtube.com/watch?v=JoUzYudmrBQ
There was an example of a video by FakeSagan, but his account was suspended.
http://www.youtube.com/user/MotionFur This guy is a better example of this burden of proof / shifting the burden tendency of Anarchists. Also, I find it odd how many Anarchists use Libertarian to mean "Anarchist" while the ones of us actually trying to make a distance are struggling to distance ourselves from that. Just like with the conspiracy theorists...
In a discussion about Anarchy semantics, I came across a rather odd discussion about how things would be different if the U.S. was an Anarcho Capitalist society:
Him: "That's impossible to know. (what things would be the same) We'd have to know the outcomes of unfettered human creativity, all of the environmental changes coming, and the disposition and preferences of every person.
I suspect our own preferences and preoccupations would dramatically change. In the west, we're living off the future, consuming debt others are obligated to pay. I think we're the ones who will have to be ready to work harder and compete for resources against a world much hungrier than us.
If most everyone from Asia decides to work a 6 day week, we'd be at a pretty big disadvantage if we didn't work 6 days. We wouldn't be able to live beyond our means so easily, borrowing under threat of a gun and political shenanigans to have our own homes or cars before we could afford them.
I suspect in a free market, which would experience more creative destruction and less stability, extending credit would be very risky business. We wouldn't accept that because you have a job and career today, you will be doing the same thing 10 years from now."
Me: "Well, I'm sure there would be a large change from our current situation, that's for sure. I just wanted him to clarify what he meant.
As for the debt to other nations, correct me if I'm wrong, but I thought what happened was: when we have a trade deficit with China, instead of just sitting on the dollars, they use them to buy bonds from our government. These bonds are debt to China, and are what are funding the war in Iraq, along with the rest of our interventionist foreign policy.
The fact that we'd be producing more would probably help offset this scarcity problem."
I don't know China's intentions and motivations; I'm neither an expert nor psychic. I can tell you what they are economically incentivized to do:
If you recall my video on the trade deficit, you'll know that our government's policy is to devalue the dollar on the foreign market to make foreign goods more expensive. China doesn't want that to happen, for obvious reasons. So their response is to create yuan out of thin air and use them to purchase dollars on the exchange market, thus increasing the dollar's value and protecting their trade with the US.
Their incentive would then be to sit on the dollars, keeping them in reserve. Buying bonds from the Treasury--or doing anything else with them--would invalidate the purpose they had in purchasing the dollars in the first place.
Is that what they're doing? I don't know. I'm not saying that's their intention, nor am I saying that they lack other intentions they may have in buying US Treasury bonds. I'm only talking about their economic incentives vis-à-vis the exchange market.
Quote from: MrBogosity on August 11, 2009, 11:39:58 AMI don't know China's intentions and motivations; I'm neither an expert nor psychic. I can tell you what they are economically incentivized to do:
If you recall my video on the trade deficit, you'll know that our government's policy is to devalue the dollar on the foreign market to make foreign goods more expensive. China doesn't want that to happen, for obvious reasons. So their response is to create yuan out of thin air and use them to purchase dollars on the exchange market, thus increasing the dollar's value and protecting their trade with the US.
Their incentive would then be to sit on the dollars, keeping them in reserve. Buying bonds from the Treasury--or doing anything else with them--would invalidate the purpose they had in purchasing the dollars in the first place.
Is that what they're doing? I don't know. I'm not saying that's their intention, nor am I saying that they lack other intentions they may have in buying US Treasury bonds. I'm only talking about their economic incentives vis-à-vis the exchange market.
I was mostly questioning the beginning of this video:
[yt]<object width="560" height="340"><param name="movie" value="http://www.youtube.com/v/j2H6cgS6OC0&hl=en&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/j2H6cgS6OC0&hl=en&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="560" height="340"></embed></object>[/yt] basically, it was the idea that if we were in a capitalist society we'd be far less better off, as we pay off debt to China and Asia and work/produce more, even though I thought most of that debt wasn't cosumer spending, was on government spending.
Also, I thought you said that that's what gave us our debt to China, and why Schiff is freaking over it (them buying our bonds, or us going into debt from them because of the trade deficit) in the comments of that video. I might have misunderstood though. It WOULD explain how this wouldn't happen with a gold standard, as you pointed out.
I'm just annoyed at this guy, along with Schiff freaking out over our debt to China ($3 trillion) when you add up all of our debt:
Domestic: $11 trillion
Foreign: $12 trillion
SS: $13 trillion
medicare/medicaid: $86 trillion
------------------------------
you get a total Total U.S. debt of $122 trillion
compared to our GDP of about $13.2, or about 9.24 times our GDP.
O.o
Odd...
As for the Anarchists and how they feel about Minarchists and Minarchism:
A quote from one regarding my point about the Spectrum: "The problem with minarchism, is that they are all over the spectrum. They have no idea what "enough government" is or what kind of government should be established to ensure that it does not grow "too big". They think government without consent of the governed (i.e. slavery) is OK. They think taking money from people without consent (i.e. stealing) is OK. Once you have a mindset that stealing and slavery is OK, then there is no way to control the beast." (I will give him that one; at least the point at the top; I verified that on Wikipedia. I've already stated I'm not for compulsory government...I don't know how the rest of you feel, but...yeah.)
Another quote about the idea of having government by optional with private alternatives for courts, police, defense, etc after one person said it makes me an Anarcho Capitalist: "Not really, he leaves in the option for coercion, if the majority decide that the competition is not desirable, they will cause a civil war scenario by virtue of the "National" aspect, then we are back to square one..." (Show me an example of this happening, and I'll give you that one)
And one having Minarchism be closer to Anarcho Capitalism: "I don't. Considering keeping a "monopoly on the use of violence over a given territory" are the roots of statism, and the rest of the tree will simply grow back over time, once you've cut the branches, it is inevitable. (How the States transcends it's Limits). And "Deathwish of the Anarcho-Communists" by Murray N. Rothbard. No-one owns any property, you have no right to it. No rights at all. Everyone owns everything and no-one owns anything." (Because that NEVER happens with Anarchy, right?)
Me: "I believe in a government to have courts, police and national defense and only that, and they shouldn't be monopolies (private alternatives possible and the ability to opt out of the public ones). What does that make me?"
Harry Felker* (in response to the above): "Utopian..."
*The most dogmatic Anarcho Capitalist I've ever met; with Laughing Man (formally Anarchist Cain) being the second...
Me (in response to the "monopoly of force" = government thing above by the person talking about the spectrum) : "Not a monopoly. Check the 2nd Amendment. It's supposed to be a check and balance against that." (a rebuttal Shane has used against that argument)
Harry Felker: "Check the supreme court who gave themselves the right to interpret the Constitution, and utter refusal to hear cases at whim...." (Because time doesn't matter right? If it happens once, or a few times, we automatically have nothing right?)
Any thoughts on these bits of Anarcho-wisdom?
Quote from: MrBogosity on August 11, 2009, 11:39:58 AM
I don't know China's intentions and motivations; I'm neither an expert nor psychic. I can tell you what they are economically incentivized to do:
If you recall my video on the trade deficit, you'll know that our government's policy is to devalue the dollar on the foreign market to make foreign goods more expensive. China doesn't want that to happen, for obvious reasons. So their response is to create yuan out of thin air and use them to purchase dollars on the exchange market, thus increasing the dollar's value and protecting their trade with the US.
Their incentive would then be to sit on the dollars, keeping them in reserve. Buying bonds from the Treasury--or doing anything else with them--would invalidate the purpose they had in purchasing the dollars in the first place.
Is that what they're doing? I don't know. I'm not saying that's their intention, nor am I saying that they lack other intentions they may have in buying US Treasury bonds. I'm only talking about their economic incentives vis-à-vis the exchange market.
If memory serves, I was talking about the comments you made here: http://www.youtube.com/comment_servlet?all_comments&v=M15ZSlVrPjM
This will be continued here: https://www.bogosity.tv/forum/index.php?topic=285.0 (https://www.bogosity.tv/forum/index.php?topic=285.0) where this discussion is more relavent.
Quote from: surhotchaperchlorome on September 04, 2009, 11:51:20 PM
"The problem with minarchism, is that they are all over the spectrum. They have no idea what "enough government" is or what kind of government should be established to ensure that it does not grow "too big". They think government without consent of the governed (i.e. slavery) is OK. They think taking money from people without consent (i.e. stealing) is OK. Once you have a mindset that stealing and slavery is OK, then there is no way to control the beast."
First off regarding the "slavery" deal, this guy needs to watch Shane's first lecture on the Constitution , and on the free market to see that, at least as an individual there is one Minarchist who knows damn well what "enough" government is: the amount needed to protect people from the initiation of force and fraud. Nothing more.
Not to mention how, I would imagine if he said that on one of Shane's videos, it would count agaisnt the rules, or something, because (as far as I can tell) it effectively shits all over the graves of the people who actually WERE enslaved.
But that's just me.
What do you think, Shane?
No, that's only if he accuses his opponents (or another group of people) of being slave-owners. It's a libel thing.
Well, I hate to be the stick in the mud, posting arguments, but for at least archival sake, I'll post the crap I had to put up with from Harry Felker here from this link http://mises.org/Community/forums/t/8551.aspx?PageIndex=2 (starting from the bottom going to near the end of the thread.)
Even as an Anarcho Capitalist, I still want to punch him, along with many others on that board...
Unlike the others, it isn't (just) dogma, so much as how much of a condescending, verbally abusive prick he is...
to quote Matt Dillahunty, "Oh my god, I want to shove my foot right up your condescending ass!" is pretty much how I feel about Felker.
OK, here is something that NEEDS to be said if it hasn't been already. Many people (including the dick I was debating here at the Mises Institute forums) when talking about the value of money talk only about the supply side, but always leave out the DEMAND side--something that only makes sense if the demand curve for money isn't just constant, but also completely fixed and immutable. Yet according to the Austrian school's own damn tenets, placement of both the supply and the demand curves is not fixed or constant and is very fuzzy to boot. Talk about a double standard!
Something else that bothers me about the Austrian School is that, as far as I know, there is very little talk about equilibrium of the money supply and treating it like it can never be changed EVAR! All the people I've talked to just say, "keep the supply exactly constant!" as this wanker does. But how, outside of a central coercive authority (e.g. a Federal Government with a monopoly on money), are you going to enforce that? What, outside of a violent monopoly on the money supply and the banking system is going keep people from mining gold to put into the system because something causes gold to be more valuable, OR to keep people from TAKING MONEY OUT OF THE SYSTEM should gold become less valuable for whatever reason? And really, how is people trying to keep the system in equilibrium any kind of crime as this guy makes it out to be?
Also, who decides what that arbitrary amount of gold/money/etc is to be for the base that is "not to be changed" in the first place?
The more I think about it, the more the supply of money in a free market for currencies strikes me as a Wisdom of Crowds issue. Really, how can anyone, short of an all knowing deity, know the EXACT amount of money that an economy should have?
Your reasoning makes complete sense to me.
Quote from: MrBogosity on May 30, 2011, 02:09:55 PMYour reasoning makes complete sense to me.
Thanks! :) I updated the first paragraph of my last post in this thread a bit to be more descriptive, though the main points haven't changed.
Also, I will add that he seemed to think that, in a gold standard, every atom of gold the entire world has mined & has access to is used (gleaned from his comment about gold being mined being used directly as money) as money. But as you have informed me, that's NOT how it works. In a gold standard it's only the supply of gold that the issuing body has that is used as money. This is the basics of the gold standard.
Yeah, I'm amazed at how many people have that misconception.