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Fox
Joined: 04 Mar 2009
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 Posted: Sat Oct 16, 2010 8:14 pm Post subject: |
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| recessiontime wrote: |
| Fox, you can call it whatever you want - legal tender, government paper it's still paper and it is abundant and calling it something else does not change this fact. |
I don't call it legal tender, that's just what it's called. It's distinctively different from "mere paper."
| recessiontime wrote: |
| You've mentioned the biggest problem with fiat currency that "legal tender can be as scarce as the government wants it to be." This is why it's scarcity is artificial and not real because at any moment they can just print more out. |
Artificial scarcity is still scarcity, and plenty of things that are scarce are artificially scarce.
| recessiontime wrote: |
| They cannot do the same with precious metals at the moment as it is absurdly expensive to do so, all the government can do is abandon it and turn to something that is a lot more maladaptive. |
And that's exactly why I don't think precious metal standards are effective: the government just finds a pretense to abandon it when they want to.
| recessiontime wrote: |
| I feel like we are going in circles over this value issue. The knowledge of the Qu'ran is not valuable to you or I as it has no real world application ... |
If there were plentiful roaming assassins who killed you for failing pop quizzes on Islam like you propose, then Islamic knowledge very much would have real world application. The difference between you and me on this issue is this: I'm just talking about what people do value or would value in certain scenarios. You're talking about what you think people should value and why. If someone wants something, it's scarcity matters to them regardless of whether its artificially scarce or naturally scarce, and regardless of why they want it.
| recessiontime wrote: |
But in the context of a madman pointing a gun to you it has situational or artificial value at best and this is only in this extreme context.My point is that artificially imposing value on something does not work as eventually the laymen come to realization that there is a discrepancy in the attributed value and get fed up with it.
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Artificially imposing value on fiat currency works just fine as long as you manage it well. People in general simply don't care about any of this. What they care about is getting a pay check for their work that they can trade for a reasonable amount of goods and services. If fiat currency can provide that for them (and we've agreed it can so long as a government handles it in a disciplined fahsion), they'll never "get fed up with it."
| recessiontime wrote: |
| So what now, separation of state and economy like Ayn Rand advocates? Sounds terrific. |
No thanks, I'd rather have a thriving middle class and a lower class whose life is made bearable and who is granted opportunity to improve their lot via social programs. Wealth naturally trickles upwards, redistribution is required. |
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Fox
Joined: 04 Mar 2009
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| Posted: Sat Oct 16, 2010 8:15 pm Post subject: |
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| recessiontime wrote: |
| Fox, you can call it whatever you want - legal tender, government paper it's still paper and it is abundant and calling it something else does not change this fact. |
I don't call it legal tender, that's just what it's called. It's distinctively different from "mere paper."
| recessiontime wrote: |
| You've mentioned the biggest problem with fiat currency that "legal tender can be as scarce as the government wants it to be." This is why it's scarcity is artificial and not real because at any moment they can just print more out. |
Artificial scarcity is still scarcity, and plenty of things that are scarce are artificially scarce.
| recessiontime wrote: |
| They cannot do the same with precious metals at the moment as it is absurdly expensive to do so, all the government can do is abandon it and turn to something that is a lot more maladaptive. |
And that's exactly why I don't think precious metal standards are effective: the government just finds a pretense to abandon it when they want to.
| recessiontime wrote: |
| I feel like we are going in circles over this value issue. The knowledge of the Qu'ran is not valuable to you or I as it has no real world application ... |
If there were plentiful roaming assassins who killed you for failing pop quizzes on Islam like you propose, then Islamic knowledge very much would have real world application. The difference between you and me on this issue is this: I'm just talking about what people do value or would value in certain scenarios. You're talking about what you think people should value and why. If someone wants something, it's scarcity matters to them regardless of whether its artificially scarce or naturally scarce, and regardless of why they want it.
| recessiontime wrote: |
But in the context of a madman pointing a gun to you it has situational or artificial value at best and this is only in this extreme context.My point is that artificially imposing value on something does not work as eventually the laymen come to realization that there is a discrepancy in the attributed value and get fed up with it.
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Artificially imposing value on fiat currency works just fine as long as you manage it well. People in general simply don't care about any of this. What they care about is getting a pay check for their work that they can trade for a reasonable amount of goods and services. If fiat currency can provide that for them (and we've agreed it can so long as a government handles it in a disciplined fahsion), they'll never "get fed up with it."
| recessiontime wrote: |
| So what now, separation of state and economy like Ayn Rand advocates? Sounds terrific. |
No thanks, I'd rather have a thriving middle class and a lower class whose life is made bearable and who is granted opportunity to improve their lot via social programs. Wealth naturally trickles upwards, redistribution is required. |
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austrian123
Joined: 15 Oct 2010
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| Posted: Mon Oct 18, 2010 11:04 am Post subject: |
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I've read this posting with interest. This is my first post on Dave's, so please bear with me. I converted 85% of my US dollars to gold because
Gold and Silver are money which retains its intrinsic value. And with the FED printing loads of paper money, it just seemed like a no brainer. My average is about $1000 per ounce and considering today's price of gold, I'm pretty happy about it.
Money is defined as being/having:
Durability
Portability
Divisibility
Uniformity
Limited Supply
Acceptability
a Medium of Exchange
a Unit of Account
a Store of Value
Gold and silver meet all the above criteria. Check out the link below. It provides a powerful demonstration of how Indonesia's fiat currency has depreciated considerably against the gold and silver dinar. Powerful.
http://www.youtube.com/watch?v=qs9_dZK_fnw
Even South Korea is starting to recognize the value of gold as their holdings of US Bonds are are tanking in value.
http://www.mineweb.com/mineweb/view/mineweb/en/page103855?oid=113158&sn=Detail&pid=103855
gold has appreciated against all currencies....gold is money!
http://goldmoney.com/commentary/gold-climbs-again-eight-years-in-a-row.html |
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