Historically, why did countries switch away from using a gold standard for their currency?

Gold standard is almost as much of a meme as our current system once economies start getting big enough/seriously competing on the international stage. We really need a better system to quantify the value of things, my suggestion would be the energy spent producing them.

it creates deflation because there is only so much gold you can have. Imagine having a group of people hoarding all the gold to themselves and not letting anyone else get their hands on it. They can decide the value of currency. With fiat currencies, the government decides the value of each unit of currency.
Bitcoin is the future because you don't need to use whole units
>fiat currency is bad
Only when there is usury afoot.
>trying to get yourself out of a hole by digging

How is that not just an updated version of the LTV? Should two identical seams of coal be valued differently because one is easier to get at than the other?

The problem with gold is that it has deflationary tendencies when people hoard it.

If that is not a bad thing, then cite at least one example of where an economy grew or recovered due to deflation.

>in debt for $10
>print a $10 bill and pay the debt

wow, so hard.

because the gold is heavy to carry so they use paper

Every economy that has ever recovered after hyperinflation, was due to deflation.

Also, infinite growth isnt sustainable. There can be plenty of growth on a gold standard. The entire industrial revolution happened on a gold standard. And the post ww2 boom.

With a fiat currency the best you can hope for is to be lucky enough to make most of your money during a bubble, and then have the fake money you made tied up into real tangible assets like real estate, collectibles, or shares in a company that produces real tangible value such as petroleum or technology. So that when the bubble inevitably pops you won't be completely hung out to dry.

Actually there were many economic crises during the industrial revolution mostly due to deflation.

One of the reasons Wizard of Oz was written was to suggest we move to a silver standard because gold standard was too hard on the farmers.

>my suggestion would be the energy spent producing them.

That's literally marxism, and its retarded.

Why wont you allow me to decide for myself what's something is worth to me? Why do you get decide it for me?

Yes this is why the US still has so much debt. They could just print it away, but the fucking printer broke and the guy who can fix it wont be around till next thursday.

The thing that most people overlook is that the US has the world's largest military and world's largest prison system.

By which it makes the US dollar valuable through foreign policy (invading nations who stop using the dollar like Iraq) and put its own citizens in jail when they don't pay their taxes in US dollars.

System works.

What? Energy can be measured in units. I mean you do pay some money towards your parents electric bill don't you?

t. Austrocuck

I don't see how either of those statements has any relation whatsoever to what we are discussing.

Valuating things based on the energy spend to produce them is literally what Marx proposed, and it makes no sense. Like the other user said, why should a piece of coal be worth more to me than another identical piece of coal just because it took you more energy to get it?

The market should be allowed to correct itself. Austrians and gold standard proponents don't claim that their economic model would result in perfect stability. In fact its instability is one the selling points.

Because Libertarianism is a masturbatory fantasy of people who never grew out of their teens

But market failures are a proven fact?

Unless you are advocating ancap, then there is no way a government can not exist in a vacuum.

Also you are being unrealistic.

Economic actors are irrational and dumb. They cause bubbles. Not government interference.

So let's say you had an Austrian government.

A bubble and crash happens, which it will.

Then the Austrian government says "We will do nothing, it will fix itself."

And you know what, they will get replaced during the next election because no politician ever got elected by saying they will do nothing to fix the economy.

So unless you are advocating an Austrian dictatorship, then Austrian democracies never work long term.

Secondly, let's say you do have a long term stable Austrian government.

Howe are you going to prevent all the other countries in the world from market interference.

Its a fucking global economy.

Howe are you (a pleb on Veeky Forums) going to get China to stop devaluing its currency and dumping on the US markets.

"Oh but USA will do so much better because its Austrian and Chinese will act in their own self interest!"

Chinese self interest is its own domestic markets which it will gladly buy USA companies who aren't protected by the US government.

In the end the US Government won't lift a finger to prevent the Chinese from just printing money and buying all the US Companies.

Because that is what is going to happen if we go Austrian.

Also, who the fuck would ever go Austrian. Even Trump is pro-government intervention.

Hillary? Hah.

Please never post in that format again.

And if China is printing so much money, it will become valueless, and no company would sell its shares in exchange for money with no value.

And I'm not saying we will ever see an austrian government. You're right, people like free gibsmedat, I'm saying it would be better if people weren't allowed to redistribute wealth via voting. It worked in a time when there was no welfare.

Also, bubbles driven by economic actors would be mitigated in an austrian economy, because people are more cautious in volatile economies. And government absolutely does cause bubbles. In fact our most recent bubble, (if you're american) was caused by the government subsidizing risk in the housing market.

Has an Austrian economy ever been actually tried?

If not, why not?

If it has, why aren't they using it now?

because the amount of money you had was tied to how much shiny metal you could dig out of the earth.

>Historically, why did countries switch away from using a gold standard for their currency?

The Great Depression.

Not enough gold in the world.
By 19th century administration tech was advanced enough that you could have reliable currency without resorting to rare metals.

>marx invented the LTV

Yes. If gas is 10 cents cheaper on the other side of the country would you not consider the oppourtunity cost of travelling to get the gas?

Abolish currency

>limited resource...
>in economy based on infinite growth.
No resource pool based currency can compete with a fiat currency, so as soon as one major economy switched, everyone else had to do the same, and there ain't no going back from that.

The US, at least, had to keep some gold reserves as part of the agreement of maintaining world reserve currency status, even after their currency was almost entirely disconnected from said gold - but the US wasn't even doing that, and everyone knew it, so pretty soon, Nixon had to setup federal land reserves, kill the last vestiges of Bretton Woods, and eliminate the gold standard entirely, while simultaneously giving birth to the petro-dollar (and running off with France's gold reserves).

Gas on the other side of the country and gas on my side of the country are not identical products to me.

What part of my post did you infer this from?

>laments deflation, limited quanity and hoarding;
>immediately proposes bitcoin;
Bitcoin is ten times worse int hat regard.

Found the brainwashed austrian school cultist

Found the brainwashed Keynesian cultist.

Gold is for our purposes infinitely divisible.

>b-but muh evil Keynesians

top kek
Virtually all economists accept fiat currency, not just Keynesians.

The neoclassical synthesis remains dominant, the Austrian school belongs in the dustbin of history, along with other pseudoscientific trash.

I have a question: IF the gold standard is actually that bad, then why is Alan Greenspan saying he basically worked on a de facto gold standard and that the gold standard will probably need to come back again?
Or did I read his recent statements after Brexit wrong?

It's primarily anti-Fed nutjobs quoting him out of context.

Though, the gold standard would work fine, with some tweaking, if there was only one world currency and one unified world economy and market, rather than so many competing ones.

...but if you think you hate the Fed...

Japan 2002-2007.

These graphs are always so biased.

Show me a 1900-1940 graph instead.

this

Because carrying gold bars is though as fuck.

In all seriousness, it has to do with hoarding all that ammount in one secure place.

There is a finite amount of gold but you can keep building up bs numbers for non existent conecpts