Gold Standard?

Is the gold standard a good or bad thing? Would it work in our modern world? Why or why not?

Bad and no. It arbitrarily limits the money supply and opens up arbitrage opportunities.

There's many different forms of Gold standard and as a result, your comment is too shallow to broadly generalize it as bad without expanding your reasoning.

>arbitrarily
I don't think that word means what you think it means. How does it limit the money supply? You can print as much paper as you want under a Gold standard. You just have to devalue it against the price of Gold. Of course, continued debasement will have consequences.

A Gold standard could work today OP, just not at the current price.

What would be the "ideal price"? Would like a parallel system (where money acts as like a token) be best?

instead of a gold standard, there should be a bitcoin standard

Competing currencies are better.

Just imagine if you were given the choice to use Euro, USD, Bitcoin, Gold, cocoa seeds, etc...

The BTC/ETH standard? Wouldn't it basically be the same as long as the number of coins created is capped in some form or another?

It would depend on what percentage of your paper money supply you wanted backed by Gold. For example, I think a 40% backing would require $10,000/Ounce if my memory serves me.

It's ok, definitely better than fiat as we can see. Even Alan Greenspan admitted it recently.

The U.S Dollar is the "World Reserve Currency", and with that comes a hegemony and preeminence in the global economy, but the USD itself is backed by nothing but debt. Eventually it becomes too much baggage and we see nations increasingly seeking to detach from it by having their own currency backed by gold or a commodities basket. But when they do, it threatens the dominance of the USD, as was the case in Libya with Gaddafi and his Gold Dinar. The Dinar was a sounder money than the USD and it was threatening the Dollars hegemony regionally in Africa and to an extent in Europe.

The powers that be don't want that to happen.

There's a reason that every nation that detaches from with a gold standard ends up getting """"liberated"""".

I think a commodities basket would be best though. Gold, oil, other shit.

yeah diversification is probably a good idea you could probably mix it with like silver and stuff

If Jim Rickards is to be believed then we're heading towards a Special Drawing Rights reserve currency made up of a basket of currencies with the Dollar diminished and a greater weight on the Yuan. Individual citizens wouldn't used SDR's because they're only issued to central banks so you'd continue using your local currency but the International monetary system is using SDR's. The problem with this is, that once confidence in the Dollar evaporates, you're simply trading one fiat for another.

Then again, Russia and especially China are buying up a shit ton of Gold year on year and loads of countries have started repatriating their hold reserves. There's also moves between the BRICS nations, particularly China/Russia + Iran to put mechanisms in place to bypass the Dollar's use entirely. So I think in the future, Gold will definitely have a role in some capacity.

Yeah, the USD is on rocky ground, and there's only so many times you can play the "let's find a pretext for war with country X because they don't want to play our game of geopolitical Monopoly anymore".


>Then again, Russia and especially China are buying up a shit ton of Gold year on year and loads of countries have started repatriating their hold reserves

I've seen it for a while now, and apparently they're getting ready for some heavy shit. There's a lot of power that could soon be shifted from West to East, and when Gold spikes during the next recession/depression, Russia and China could find themselves in much better positions.

Russia, China, Iran...all bypassing the Dollar, and all on the hit-list. The world is getting tired of this shit.

Silver too, but also rare Earth minerals would be good to have. Too bad China has almost exclusive claim to them.

It's not strictly better than fiat as long as the government isn't allowed to print money on-demand.
It has serious disadvantages like limiting growth of the money supply and the risk of sudden and uncontrollable inflation if there's a sudden increase to the supply of gold.

I don't think it's a bad thing, but I'm not convinced it's actually superior to fiat.

>my ponzi scheme has never been tried before
also china has a huge interest in bitcoin and is not likely to let it fly

>It's not strictly better than fiat as long as the government isn't allowed to print money on-demand.

Printing money inevitably leads to printing money on demand. Human nature is generally more tailored to short-term incentives than long term, downstream incentives.

Hyper-inflation leading to worthlessness is built into the Fiat/Central Banking system. Baked into the cake.

The gold standard alone isn't the best (like I said earlier, I'd prefer a commodities basket) but it is absolutely superior to fiat.

>Printing money inevitably leads to printing money on demand.
That's why monetary policy is usually controlled by the central bank, which is largely independent from the rest of the government.

>That's why monetary policy is usually controlled by the central bank, which is largely independent from the rest of the government.

How does that prevent inflation or make for good policy?

Central Banks are, in practice, just their own shadow government. An excellent way to enslave an entire nation with debt.

A free market can make its own bubbles and crashes and recover from them accordingly. This practice of re-inflating bubbles only prolongs misery and subsidizes bad business practice and usury.

Gold standard is better than fiat currency, but comes with its own set of problems. The supply of gold does not necessarily increase at the same rate as wealth, which encourages hoarding more often than not. A basket of commodities, as a couple of anons have pointed out, is even better. But the truth is that we have to allow for competing currencies, instead of forcing everyone to use x or y currency, no matter how well-backed (or not) it is.

>largely independent
There's the understatement of the century. Here in the US the Federal Reserve is a private corporation with secret stockholders.

free market doesn't exist and literally cannot exist. What are you, 13?

Quads smashing it. The problem is state interference, market rigging and manipulation (recently; BoE/Barclays with LIBOR rates, Deutsche Bank with Silver Spot manipulation) The list is frankly endless.
Next issue is privatized profits but socialized losses. The banks (and businesses for that matter) should have collapsed. They were insolvent and we should have let them fail. This would have cleared out the bad actors and debt and we could have rebuilt on a sounder footing. Of course, this would have potentially wiped out the global financial and by extention international monetary system. But that is what the market forces were dictating. Instead, central banks and sovereign nations stepped in to stop the bubble bursting.

So yes, whilst I agree free maket ideology is fine in theory, practical and empirical reality would suggest otherwise.

a while ago I heard something about a company that lets you buy gold, they'd store it for you and provide you with a debit card or something that you could use to directly transfer your gold as if it were dollars, anyone know what they were called?
seems like my google-fu isn't quite up to snuff

The gold standard shouldn't even be a question. The real question is why we even need government-sponsored currencies at all any more.

they came about to finance war

And we have a lot of war mongers in positions of power

thats even worse than gold

there should be no government designated standard

let people make their own currencies in the free market and let those compete

It is an EXTREMELY bad thing. It stops money from serving us and forces us to serve money instead.

The gold standard doesn't prevent hyperinflation.
The gold standard CAUSES hyperinflation when the country runs out of gold.

Most people believe the meme that printing money causes hyperinflation, and with the gold standard (or any other system of fixed exchange rates) that's true. But with fiat currency, printing money only causes competitive devaluation.

no hypetinflation is caused by loss of confidence in a currency.