Ask yourself Veeky Forums which side is more reasonable?

Put this into perspective of corruption.

gold price per ounce in 1933 - ~$32 an ounce.
35 ounces in kilogram means it's about $1100 per kilogram of gold in 1933.

One example of gold being confiscated is around 160 kilograms which works out to be about $180,992 in 1933 monies.

Adjusted for inflation to todays standard works out to be about $3,267,872.73.

America is built on economics my hole.

Because people place a clue on it, people, not the fucking government? People want to buy gold therefore it has value, people are forced to use money, therefore it has value.

The same thing, right?

>rare minerals mined on earth have no value
>but plants formed into notes do
Right.

Austrian economics is just as much of a joke as Marxian economics.

t. economist

same thing with money

How is inflation required to keep people out of poverty? I get the argument that it encourages investment in land and capital (since the value of those things tends to adjust with inflation) but I don't get this argument.

Not at all, they are both made from minerals yes.

Gold is much more valuable due to it's restricted quantity and the nature required to access it. I mean, less quantity = higher price.

Basic fucking economics. But of course, leave it to you to believe a plant which is easily farmed is as valuable in an economics sense as something which needs to be mined, and forged.

>from minerals yes.
Wrong word, resources.

>Gold is much more valuable due to it's restricted quantity and the nature required to access it. I mean, less quantity = higher price.
so is money

>wrong word
Not at all, there's minerals in that plant going into the note
Gold is a mineral

Diamonds are much more valuable than gold per kilogram. Why not use diamonds as currency?

all wrong

gold, silver and platinum group metals (remember there's numerous other precious metals more valuable than gold fuckwads) are a store of wealth because of their sheer inertness. fiat currency has to be floated on the open market with the backing of a central authority like the federal reserve.

>inb4 noble gas

not convenient to store and far too easy to lose

diamonds are used as currency you retard

en.wikipedia.org/wiki/Blood_diamond

Feasibly, if the capital injections were made to enter into the poorer areas of America, these would be the areas receiving an increase in purchasing power, but eventually, especially in poorer areas, you're going to see an equalized value for everyone no matter what, in a shorter time span than, say, entrepreneurial subsidies like in another one of Obama's initiatives. Technically speaking, if it has to be done, it has to be, but it is advised against as economic policy because what happens is the monetary unit loses its value as the additional amount of it assigned to poorer areas gets used and utilized by other segments of the population.

>sheer inertness
Actually this one question is up for some debate. What gives a monetary unit value? Ricardo would say its utility, rarity, and (because rare)cost of production. Von Mises would say simply just the utility.

what happens when a central body hoardes all the gold

so are cigarettes

That's what was starting to happen at the beginning of the 20th century due to the gold-exchange standard. Then the world bank existed and holds all the country's gold reserves and they all have IMF certificates and trade them around for the excess of a surplus/deficit on cleared transactions.

what's the point then

Kek.
en.wikipedia.org/wiki/De_Beers#Diamond_monopoly

no country uses cigarettes as official currency

who said anything about a country?

lmao the gold standard would fucking destroy the economy

If Gold standard is so great why do hardly any nations use it?

Because they understand it.

See? Perfect. You have a supply limited by one company rather than have an untrustworthy Fed printing money all the time. goldbugs btfo

Goldbugs are literally the creationists of the economics world. Best load your entire savings into TransPacific too you fucking retards.

Gee, I fucking wonder?

>Foreigners also had gold confiscated, and were forced to accept paper money for their gold. The Uebersee Finanz-Korporation, a Swiss banking company, had $1,250,000 in gold coins for business use. The Uebersee Finanz-Korporation entrusted the gold to an American firm for safekeeping. The Swiss were shocked to find that their gold was confiscated. The Swiss made appeals, but those appeals were denied. The Swiss were entitled to paper money – but not their gold. The Swiss company lost 40% of their gold's value if they tried to buy the same amount of gold with the paper money they received in exchange for their confiscated gold.
> The Swiss company lost 40% of their gold's value if they tried to buy the same amount of gold with the paper money they received in exchange for their confiscated gold.
> The Swiss company lost 40% of their gold's value if they tried to buy the same amount of gold with the paper money they received in exchange for their confiscated gold.

America is built and run by simple swindlers.

Of having a gold standard, as opposed to a gold-exchange standard or fiat currency. First of all, it allows for the issuance of credit currency by the central banking authority, which is much more stable than fiat currency. Also, the fiduciary media circulated by institutions is much more stable when matched by a gold standard. But the financial institutions don't seem to like a possible deflation of the currency due to the variable costs of two currencies so it's inimical to public policy to adopt anything other than fiat currency.

Kek, this literally did not happen with gold though? There was no corporation ever throughout the history of mankind who was able to illegally monopolise gold? On a global scale?

>oy vey the goyim took our gold it was anudda shoah

Great argument. It's just a coincidence that America confiscated everyones gold on their land and they now have the largest quantity of gold in the world, just confidence, right?

but the gold standard obviously turns into a gold exchange standard

but zero hedge told me fort Knox is empty and the russians and Chinese have all the gold now

I take a rather conservative position on the gold-standard, but please explain why backing our money with some variable commodity like Bitcoin for instance, wouldn't have a stabilizing effect on the money?

>it allows for the issuance of credit currency
Oh, so it allows people to fuck themselves over and support a broken system.

>nothing makes more nothing so it's stable
Right.

Ok.

>amount of goods and services increases
>amount of gold doesn't
>people who have gold become richer
>people who invested their money become poorer

or alternatively

>massive, profitable new gold mine found
>????????
>hyperinflation

Fiat currency gives a level of stability and control that you simply can't find in any commodity market.

kek beat me to it

Not really. The gold standard has gold actually changing owners for large transactions, and also feasibly being called upon by the holders of the notes.

The gold-exchange standard matches variations in the exchange value of the commodity being exchanged with gold, as opposed to the currency and uses the equivalent amount of gold in the currency to clear the exchange so no gold at all is every going to change hands, and it eventually flows into the reserves of the country whose notes are held in the redemption funds of major financial institutions.

I might not have even been talking about gold in that post. What about cryptocurrencies? Isn't that stabilizing in the same way?

because the goverment overnight turns into a regime and your country gets democratically liberated.

>The gold standard has gold actually changing owners for large transactions, and also feasibly being called upon by the holders of the notes.
why?

also, that reasoning is faulty. Gold has a stabilizing effect on currency, bar none. Once we've gone over to full fiat, the inflation went rampant.

Because that's how it works. Read a book.

Not an argument.

You have the same problem.

You can't make more of it when you want to, and more of it can get made when you don't want it to.

If you look at the value of non-shithole-country currencies, and then compare it to the value of basically any commodity on the market, the currency will be more stable.

This is because you can actively adjust the supply of fiat currency to deal with different market conditions.

People shit over fiat currency because you have Zimbabwe tier nigras (such as Germans) printing loads of money to pay for things, but if you have a government that can actually execute policy, having that free hand is priceless.

We're not having one. You're asking me to explain how a system works.

But you can distribute more of the fiduciary media when you want to, so what is the difference?

Why can't you?

>commodities are stable

t. doesn't invest

The difference being that you can, say, double the money supply over two years to deal with a recession, or buy a shitload of bonds to combat inflation.

There is no artificial limit, and nobody other than the treasury can tamper with the supply.

That shit's nice.

Because the corporations and governments need to have solvency under the gold standard. Their reserve ratio requirements impute they carry a certain amount of gold relative to their liabilities.

People may call upon gold for their notes for various personal reasons, but not many would unless it's a bank run.

Desu, the US Dollar is back by the world's most important things.

Nuclear weapons, the world's largest military, and the world's largest prison system*

These three factors force the world to respect the value of the US dollar. Its why its better than the Euro or various other nations with better fiscal policy.

*into which you will go if you do not value the US dollar and pay your taxes in USD instead of bartering with gold with the IRS.

>"Haha, look at how stupid my strawman is!"

So what's the point then?

Using a matched standard, having two acceptable forms of currency, like gold and the U.S. dollar would have a stabilizing effect on the U.S. dollar no matter how variable the gold is.
How is there a limit with a gold standard?

Exactly what I've just said. Read the previous posts.

Economics is a joke

so u sayin'
*inhales pure strain gold to ward off the reptilian mind control rays*
gold is worthless?

I'm not following.

Why have money? Why don't they just use gold?

>no more gold
>can't issue more currency without either abandoning the standard or debasing the currency relative to gold

Becuase the fiduciary media(credit, fiat, or commodity money) is what is being issued by the central banking authority. Theoretically, gold could be exchanging hands, under some form of a commodity money like under the mercantilistic system of Adam Smith. But, when people talk about the gold standard these days they usually mean that paper credit or fiat currency would change hands, which could be called upon for gold if necessary.

So what's the point of the gold then?

Do you know that limit is just such a ridiculous limitation? It's almost a healthy one because the expansion of fiduciary media to such a large amount that it would cause a bank run is horrible economic policy.

You are absolutely retarded. Read this post

But the gold standard turns into a gold exchange standard.

It's an unnecessary limitation when fiat currency works just fine.

>but muh inflation

which is intentional monetary policy on the part of the treasury.

Now it's my turn to ask the questions. How so?

It's a simple conversion, instead of backing the contractual agreements in gold, they back it in the commodity matched by gold. Instead of issuing fiduciary media exchangeable for gold, they issue fiduciary media comparable to gold. That doesn't necessarily have to happen though.

Right, but ceaseless inflation isn't a good thing at all.

Again, I'm not necessarily advocating anything here, I just think that central banking tendency to issue ridiculous amounts of fiduciary media increasingly over time to handle economic busts which are inevitable because of the increasing amounts of capital injections into segments of the population is unhealthy economic policy. I would argue the fiat currency is infinitely better than the gold-exchange standard but the idea of having a variable commodity matched and exchangeable for the fiduciary media issued like Bitcoin, for instance, should have some theoretical feasibility. The Chinese government and America hoard Bitcoin for this very reason.

So you're saying the gold standard has never been tried?

>but ceaseless inflation isn't a good thing at all

First of all, that isn't a necessary condition for fiat currency to exist. It's a choice that the Treasury makes.

Secondly, it forces people to invest or spend their money, which causes goods and services to be produced.

It has. And remains in some countries, which didn't switch over to the gold-exchange.

It causes the monetary unit to be devalued constantly in the eyes of the non-entrepreneurs/pecuniary class who aren't getting hit by the subsidies first.

Farmers get fucked.

Where? Raqua?

I'm just saying it isn't the eventual destination for the gold standard necessarily.

>It causes the monetary unit to be devalued constantly

How?

>mfw goldbugs still haven't provided a justification for the gold standard itt

Why have any form of standard? Abolishing legal tender is the correct free market position. That way if you want to use gold or silver, you're free to, and if you wish to use worthless government paper, you can do that to.

fee.org/articles/abolish-legal-tender/

psssst...the dollar is backed by oil

>mfw it's literally Ron Paul and his supporters that want the gold standard while today's economists of all different leanings agree it's a bad idea

You guys are like the climate deniers or the creationists of monetary policy.

>gold standard
>denying yourself one of the primary tools of currency control for no reason

The only problem with the gold standard is that in a recesssion you cant print more money without mining gold first.

Not all stimulus is bad. For instance having stimulus where you get your money back (I know it's unlikely but theoritically) is fine. Banks do this all the time;when well regulated, they do fine.

>We're broke so let's spend as much money as possible to get our selves out of it
>No future repercussions will come

>a recession is the same as being broke

This is precisely why only land owners should be allowed to vote.

That's a lie and you know it.

Keynesian economics is more well rounded, however it is often twisted by politicians as an excuse to borrow, spend and keep rates low excessively. We need criticism from other schools of thought to help determine whether the goverment really is increasing aggregate demand or just creating a bubble.

>keynes vs austrians.png
You need a decent economy to support social welfare and reduce poverty. Bubble and bust debtconomics doesn't accomplish this as can be observed in many countries like Greece, Argentina and Venezuela. Just because a politician supports a good cause doesn't necessarily mean they genuinely care about it, it is often better to support a party that has a sound plan rather than one promising free ice cream.

>The only problem with the gold standard is that in a recession you cant print more money without mining gold first.
I don't know if this ratio is as pronounced as you think it is. Gold production will always be there, and to be honest fractional reserves makes it possible to proliferate a very high amount of fiduciary media before anyone starts to get worried about the solvency of the institution.

Nice unbiased image there op

>keep rates low excessively.
keynesian economics are about targetting full employment instead of targetting inflation
if you don't target inflation inflation rises and requires you to increase interest rates.
the 1970s was an extreme example of keynesian economics.
since the backlash (orchestrated by investors and creditors) we've targetted inflation and arrived to a point now where on a global scale there's hardly any inflation despite pumping 13tn of quantitative easing and other measures.

The right side sounds better
Fuck inflation