We moved away from gold backed currency a long time ago for a reason.
Going back to it seems like a terrible idea. It's a way for these countries to try to regain economic dominance without actually doing anything.
Going back to it seems like a terrible idea. It's a way for these countries to try to regain economic dominance without actually doing anything.
So going back seems like an excellent idea.
And then all that material has to be graded, sorted, crushed, sieved, processed to extract fines.
Until there is a more valid replacement to skirt around economic restrictions, Bitcoin, with its volatility, energy concerns, and especially first-mover advantage, will stick around.
So exactly like it was under the gold standard?
While there may be a reason to change back to a gold standard, trying to claim it was more egalitarian is certainly a take.
Does it?... After watching savings being decimated by inflation, with the seemingly unending money-printing (the solution to Covid, Ukraine, whatever the next crisis is), a lot of people are probably wishing they'd invested in gold.
And deflation is far more destructive than inflation.
* https://www.nber.org/papers/w18706
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667789
* https://www.pwlcapital.com/will-gold-save-the-day/
See also The Golden Constant: The English and American Experience, 1560-1976 by Roy William Jastram:
* https://www.goodreads.com/book/show/3267510-the-golden-const...
* PDF: http://csinvesting.org/wp-content/uploads/2016/02/RoyJastram...
to be able to print more money to fund wars and all (which is actually how central banks emerged om the frist place btw)
gåing back to gold standard is a great idea imo
Like in the 1930s when the sooner a country abandoned the gold standard the sooner its economy started to recover from the Great Depression?
This collective "we" hides individual people making decisions on behalf of others btw
Sounds like a pyramid scheme and highly unethical. I'd prefer my money to be backed by literally any proxy item rather than by the enslavement of our children.
The current system artificially rewards centralization and in doing so, makes markets anti-competitive and monopolistic as it creates an asymmetric playing field whereby the participants who are closer to the money printer always have the upper hand over their competitors regardless of other factors. It's the Cantillon effect.
The other thing which is problematic about the current system is that because the currency is constantly losing value to inflation, governments are essentially forced to invest people's pensions into the stock market which distorts the markets in favour of certain large companies... If currency held its value, governments could just keep pensions in the form of currency and would not be compelled to interfere with the markets. Governments should not get to decide how to invest citizens' money.
A deflationary currency is good. It rewards people a little bit for staying out of the market. If you get rich, congrats, you've made it, now you have an incentive to step aside, cash out and let someone else have a go. Today, the incentive is to keep reinvesting your money even if you don't feel particularly strongly about any investment.
Today, many people invest simply because they don't want to hold cash which loses value over time. People who don't have a vision for how to improve things should not be involved in the markets at all. There should be an incentive for such people to stay out of the markets. That's what a deflationary currency would do. There needs to be a bench on the side where rich people can sit down and catch their breath before making their next investment.
A deflationary currency only incentivizes the rich to stop working and stop participating in the markets... Which is fine IMO. They're rich, they don't need to work anymore. The best thing they can do is step aside and let someone else have a chance. Their massive capital, when put to work, would mostly serve to monopolize markets anyway... And it's a net negative for everyone.
There is a false belief that rich people are so essential that the economy would collapse without them... But if you look at history, you would see that educated poor people have repeatedly been able to pull themselves out of poverty... I.e. economic 'miracles' (e.g. Germany after WW2, Japan, South Korea...).
People should get rich and retire. There are always going to be plenty of younger motivated people with fresh perspectives to take their place.
To get rich you need capital. But that is hard to get in a deflationary economy - the supply is finite, the rich have only a small incentive to invest since they get wealthier just by sitting on it risk-free.
As a result, getting access to capital would be very expensive with high interest rates. That applies to mundane things like mortgages as well - good luck getting a 30-year mortgage, you're destined to rent forever. Poor would stay poor, rich would get richer.
Believe me, it's nearly impossible to get capital in an inflationary economy so I don't understand this point. At least in a deflationary economy, it's equally difficult for everyone. In an inflationary economy, proximity to the source of inflation confers an advantage for some (Cantillon effect) so it's unequal and unfair.
When you spend money, down the line, you ask poor people to work for you. It's not necessarily good by itself
BTW. this is not a judgement - there has been no political system that I know of that has had any sustained presence in history that hasn't used this mechanism to sustain itself.
You talk as if people will be carrying gold bars around for payment, it doesnt work that way. As long as joe nobody can go to the bank and redeem his gold then there will be trust in the financial institution securing it.
We moved away from gold in order to finance world war 1 and 2.