It's So Fucking Annoying

[theVOID]

(1st August 2011 07:23)Moros Synackaon Wrote:  

(1st August 2011 07:03)Tiberius Wrote:  ...I really hope you are joking. If not, I'd like to sell you some paper...

Umm, you really place value in a hunk of metal that is fairly common?

Let me ask you this; What do you believe value is? Where does it come from? Give your response to those two questions, how could gold be valued and if it could not, why not?

Quote:I'd have thought that someone in your position would've considered something more universal than piteous metallic rocks. Last I checked, IT security didn't produce gold, but valuable knowledge.

Neither did federal reserve notes.

Quote:Yep, gold is REALLY valuable. Not.

An ounce is 1615 times more valuable than a dollar, relatively speaking, that is REALLY valuable.

Quote:It's about as useful as paper money. Just a medium that people can barter for goods and services, something for idiots to hoard and smart men to invest in with.

Once it's created, sure. But the creation process changes with a gold standard, as does the ability of a government or central bank to manipulate it.

Quote:The only difference is that one is shiny and the other can be made from trees.

Whoop. De. Fucking. Doo.

You really sound as if you haven't looked at this subject a essentially at all - while I'm not an advocate of a gold standard for pragmatic reasons I can't help but point out how backwards your arguments against it are, you haven't so much as mentioned any of the credible concerns with a gold standard.

Gold is, given it's desirability is irrespective of a promise to pay, a more stable form of currency than the modern fiat style. Given it's composition it is economically non-viable to produce from constituents, given it's scarcity it places more restraint on the action of reserve banks. Paper is in contrast cheap, readily available, would require vast quantities of it to exchange for the equivalent value of most consumer goods (imagine trying to purchase a car with a value equivalent stack of paper) and given the sheer quantities involved would be impossible to manage.

Fiat currency has nothing to do with whether or not it's on paper or made up of binary in a bank's server, it has value because there is a promise that it can be exchanged for other things that people desire - the medium of exchange seeks to quantify the value of goods/services relative to their scarcity and desirability.

Don't start thinking I'm a gold buff though, I'm not, it has it's disadvantages such as wealth is created faster than gold can be mined, that's why I would rather see something along the lines of Milton Friedman's idea of a measured increase in currency pegged to the creation of wealth via some index like GDP, that way currency could be produced relative to the creation of new wealth keeping both central banks restrained from inflating the money supply, ensuring the value of savings given interest rates is constant long term.