Title: IS GOLD MONEY? Source:
[None] URL Source:[None] Published:Jul 14, 2011 Author:Ron Paul Post Date:2011-07-14 13:07:59 by socalv8 Keywords:Paul, Ben, Good Question Views:79834 Comments:131
Money serves two purposes -- a medium of exchange and a store of value.
Gold evolved as the most widely acceptable form of money over history because of it's characteristics -- it's scarce and durable.
The pieces of paper that we pass around today are a lousy store of value because the government purposefully inflates the money supply to hand out to special interests. The only reason that they are accepted as a medium of exchange is because the government has decreed them to be so.
The pieces of paper that we pass around today are a lousy store of value because the government purposefully inflates the money supply to hand out to special interests.
The same thing happened with gold and silver based money. We saw deflation and inflationary periods with gold. In fact, just finding new gold mines would lower the value of your purse. We have had gold and silver bubbles before.
As soon as people start to 'cash' in their gold holdings the price of gold will start to fall. That's what happened to the stock market and real estate bubbles. People bought the things and as more people bought the more the price went up but as soon as the tipping point was reached for people selling the stuff back the values collapsed.
The same thing happened with gold and silver based money
Dumb ass, the only way you can increase the supply of gold is by mining it. Historically, the gold supply has increased an average of 2% a year. On the other hand, there is no limit to how much fiat money a government can create and how quickly it can create it.
This is why gold is a good store of value and fiat money is not.
This is why gold is a good store of value and fiat money is not.
As soon as anyone with significant reserves announces they are selling their gold the value drops. When the UK declared a sale of its gold in 1999 that was the fear and led to the Washington Agreement on Gold.
As soon as anyone with significant reserves announces they are selling their gold the value drops.
LMAO! That is the kind of nonsense that keeps stupid people storing the fruits of their labor in paper promises until they become poor stupid people. When I was very young a $5 gold piece would buy you a fine rifle, a silver dollar would buy you 4 to 5 gallons of gasoline. Had one kept that silver and gold until today they would still be able to use it to purchase the same items. Keeping the same money in paper would now get you, maybe, two rounds for that rifle and a quart of gas.
LMAO! That is the kind of nonsense that keeps stupid people storing the fruits of their labor in paper promises until they become poor stupid people.
LOL.
It's a safe bet to say he's never owned a gold coin...
I'm sure gobsheit has his 'savings' stored- not even in printed money, but in digital money, at the local bank. Which means it's not worth the paper it's not printed on...
Of course, this supposes that an idiot like gobsheit has enough earning potential to have any savings...
#30. To: jwpegler, Capitalist Eric, CZ82, lucysmom, mininggold, eskimo (#21)
Toothless inbred hillbillies know more about economics than you guys.
The gold standard failed. Move out of the last century. The gold standard of the 1920s prolonged the Great Depression. The gold standard limited the flexibility of central banks' monetary policy by limiting their ability to expand the money supply, and thus their ability to lower interest rates. In the US, the Federal Reserve was required by law to have 40% gold backing of its Federal Reserve demand notes, and thus, could not expand the money supply beyond what was allowed by the gold reserves held in their vaults.
That is different than investing in gold. But that is no more or less exotic than investing in orange or wheat futures. It's a commodity like any other. You will probably make more money investing in black gold aka oil.
But the "gold delusion" is part of the mental mind fuck you right wingers operate under because it is linked to this mythology of a lost golden age back when America "worked", when blacks were Jim Crow'ed and women were subservient to men and other such delusions. Your obsession with the gold standard has more to do with your mythological world view (conservatives/right wingers in America are increasingly living in a fantasy world were empirical evidence is ignored) than sound economic policy.
