[PLUG-TALK] What is money? (was Fair Use, etc.)

J.A. Henshaw jeff at jhenshaw.com
Sat Mar 30 00:17:55 UTC 2002


Dylan Reinhardt wrote:

>>You are forgetting that the "tokens" as you call them,
>>are credit - not money.
>>
> 
> Quite the opposite.  I use the word "tokens" to refer to gold coins, bushels
> of wheat, and any other medium of exchange that supposedly derives its value
> from what it is made from.
> 
> Coins and bushels of wheat are tokens in that they are physically passed
> from one holder to the next, giving each holder the full possession of their
> value.
> 
> I use the term "tokens" to *specifically* denote that gold (or other material)
> based systems assume scarcity, proximity, and a relatively fixed, steady
> value for total economic output.
> 
> The difference between using gold for currency and using legal tender boils
> down to exactly one thing: who/what you trust.  If you consider legal tender
> to be valuable, it is because you have put your faith in the country that
> issues it.  As you're no doubt aware, there are many examples where a country
> has failed to live up to the level of trust required to sustain a valuable
> currency and has seen the value of their currency collapse.
> 
> But gold isn't foolproof either.  It only has value to the extent that people
> agree that it has value... and only so much value as people are inclined
> to assign it.  You're welcome to empty your bank account and convert the
> whole thing to gold... but good luck using it for anything.  I'd wager you
> could have a gold coin worth hundreds of dollars and you still wouldn't
> be able to buy a latte with it.  That's because you'd be hard pressed to
> find anyone, anywhere, who is willing (or able) to properly accept gold
> for payment of any size.
> 
> So which do you trust more?  The stability of the US economy or the persistance
> of a cultural bias to overvalue a certain soft, shiny metal?  You and I
> can probably agree that our country could be more fiscally wise... but do
> you really think we're going to become the next Germany/Mexico/Argentina
> case of runaway hyperinflation?  I doubt it.
> 
> As low a regard as I hold for much of our policy, I feel there is one power
> I can truly depend on: greed.  I highly doubt that Microsoft, McDonald's,
> Starbucks, Disney, et al have been able to transform their corporate holdings
> into dubloons.  I believe this is obvious enough given that the worldwide
> supply of gold is probably insufficient to cover MS's holdings alone.  As
> incompetently as we approach economics sometimes, there are a large number
> of very well-resourced entities who have a strong incentive to see the value
> of their holdings endure.  In this, our interests and their interests
> are well-aligned.
> 
> You point out, correctly, that hyperinflation is a risk of fiat currency.
> The other side of that coin is that staggering recession and crushing depression
> are risks (indeed, predicted outcomes) of metal-based money systems.
> 
> Some links are in order here:
> http://econ161.berkeley.edu/TCEH/Slouch_Gold8.html
> http://www.huppi.com/kangaroo/L-ausgold.htm
> http://www.huppi.com/kangaroo/L-gold.htm
> http://www.j-bradford-delong.net/Politics/whynotthegoldstandard.html
> http://www.people.virginia.edu/~ago8f/econ202/depression.html
> 
> And that's just a quick sample of available readings... two minutes on Google.
> The relationship between gold and recessionary economies is very solid:
> notice how we haven't had *any* depressions since we fully abandoned the
> gold standard?  The depression of the 1930s was only the last of several
> economic crisies wreaked by the religious devotion to gold as the measure
> of value... there were several others just in 150 years of US History leading
> up to the abandonment of gold.


We haven't?  Why is there an "Unemployed" SIG



> 
> As for wondering how you convert your bank account to gold... well, it's
> not that tough.  Start here (http://goldinfo.net) or any of 100s of other
> places.  But be forewarned: when you take a few Krugerrands to the bank
> to pay off your home/car loan, you might be surprised to learn that they
> would actually prefer a check.
> 
> Dylan
> 
> 


And you ignore the facet of the equation addressing the 
illegality of it,  the profits going to the bankers,  the 
govt being under their control due to the national debt, and 
a whole host of other problems like paying off debts with 
debts which I have breifly raised.

Oh well.







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