Why on earth did we ever move away from the gold standard?

dumb

>its another jewish conspiracy/edgy anarchist thread

>our banknotes
You do know that your banknotes are printed by the federal reserve and not by the us government, right?

There is simply not enough gold in the world to cover the quantity of currency presently in existence.
To put it another way, even if the US were somehow able to purchase the world's entire gold stocks (in itself an impossible proposition) there would still be nowhere near enough gold to cover the total value of dollars in existence. It is estimated that the total amount of gold that has been mined in the world is equal to about 142,000 metric tons.
Assuming a price of $50,000 per kilogram (corresponding to around $1550 per troy ounce), that equals about $7.1 trillion: not enough to cover all circulating money and deposits in the United States, let alone the entire world. A return to the gold standard would require a massive devaluation of the US dollar, precisely the scenario that many gold bugs feel that the gold standard would prevent.

The (((state))).

The debasement of the Roman coins was more to do with inflation than removing the gold standard. This devalued the currency instead of moving it to a shitty rickety system.
I did not. I'm not American. Down with (((central banks))).

someone in politics took the 'money doesn't grow on trees' speech from his dad too seriously and set out to prove a point

If the jews would stop conspiring and subverting, we wouldn't need these threads.

you can't print gold out of thin air you know

You try running a welfare warfare state, keeping shylock paid, and actually making your cattle work for you without some creative accounting, and then not getting in any big wars or the entire world ends.
Not possible to do all these things at once. So creative accounting is the lesser of the above evils. Can't do creative accounting on gold standard.

Inflation is another form of tax
Should be called savings tax

>barter is cool but kinda inefficient
>How about we use something universal so we don't have to barter?
>cool, let's use this shiny rock
>cool
money is born
>this money is cool but it's kinda fucked I gotta carry it around at all times
>let's employ someone who keeps our money safe
banking is born
>I don't wanna go to the bank to get my gold, can I just give you my gold receipt?
>cool
paper money is born
>the goyim are paying eachother not in gold but in gold receipts
>why don't we print some receipts and trade them goods with the goyim?
counterfeit money is born
>Schmekelstein those goyim you gave those fake notes came to collect the gold
>fuck this isn't going as planned
>as long as we aren't a monopoly the goyim can just reclaim their gold and fuck us out of our scheme
state: you are like little baby
state: watch this
>monopolizes minting of gold coins
>standardises state gold receipts
>makes gold receipts unclaimable
>starts printing gold receipts out the ass
that's about it

Didnt jew see that coming?

Who allows the federal reserve to have a monopoly on money printing?

The gold standard, for those that don't know, means that each dollar you have can be exchanged for a specific amount of gold. So, instead of having to carry around gold bars, we can carry dollars bills around, and those dollar bills represent a fixed amount of gold.
Some people like the gold standard because it means the money is actually worth something inherently (it's worth so many ounces of gold), and it means that the government can't mess with the money supply on a whim.
The reason it's actually bad is because the government can't mess with the money supply. The supply becomes tied to some shiny metal. Now, if you have a society with 100 people, and 1,000 dollars (each person having 10 dollars), then this is fine. But in 20 years, those people will have children that will grow up and be part of the economy. But there's still 1,000 dollars, only for 150 people now. That means each dollar is worth more, which is called deflation.
So why is deflation bad? Because then nobody will take loans. A loan works because you think you can eventually pay off the loan, but in a deflationary economy, each payment becomes worth more and more. So, while your payment might be $100 each month, the first month that $100 could buy 100 apples, but the next month it buys 200 apples, and the next it buys 300 - so you're paying more each month instead of the same amount.
The other issue, which is less of a problem, is that inflation can't be controlled either. If the money supply is tied to gold, and then a lot of gold is found somewhere, then the money is worth less because, well, gold isn't so rare anymore. This happened to Spain in the 1500s and 1600s, when they plundered the Americas for gold, but caused runaway inflation. This is the opposite problem as above - nobody will make loans because the money will be worthless when the final payment is made.
Turns out that the right amount of inflation or deflation for a growing economy is close to 3%.

Where’s the lie, (((friend)))?

>Gold standard would stop inflation from going crazy you guys!
Furthermore, this calculation () only applies to the US. If all the world's other countries were simultaneously trying to do the same thing then this problem would be exacerbated. In addition, if the US were to follow the policy of buying the world's gold as outlined above then a large number of the actual dollars would have ended up overseas and the US would have the metal. Presumably, the US would then have to create more dollars for internal use, which would hardly be a counter-inflationary policy.
In addition, gold has gained several industrial uses in the last century, particularly the tech industry and some medical uses, as well as traditional uses in jewelry. The ensuing hyper-deflation of a return to the gold standard would devastate the jewelry industry (no one but the filthy rich is going to pay tens of thousands of dollars for a 14k gold wedding band, never mind 24k) and the tech industry as the extensive use of gold interconnects in chip packaging would send component prices through the roof.

Because of fucjing burgers, 1971
Burgers frauded the whole world
The burger govt even frauded their own people by forcing them to give up their gold for dollars, then after people's gold was taken at 35$ an ounce
Burger govt the frauds said you can buy gold back but 75$ an ounce PMSLLLLLLLLLLLL
DO YOUR OWN RESEARCH. This is why burgers are bottom sellers, too much fluoride in their water

>But there's still 1,000 dollars
Because no new gold is ever produced. As evidenced by your picture here: which slows only runaway deflation, and no inflation at all pre 1971.

>The other issue, which is less of a problem, is that inflation can't be controlled either.
So deflation AND inflation are a problem. jeez what a world it must have been. All that inflation and deflation everywhere.

>But there's still 1,000 dollars
Nope, gold is scarce so its value would go up. Deflation won't be as violent was you thinkk.

>muh inflation is good for economy
Tell that to my country, 50% inflation in the last 5 years. Keynesianism is just like Marxism; works in theory only.

>as you think
Derped. Autofixed.

Nice points user.
But what are we going to do about all that fucking debt.

There's only so much gold to go around and that placed a limit on much the economy can grow. It also encouraged hoarding. The solution was to make the currency inflationary.

If your economy is ready for investment, but technically has no credit because of a lack of gold or other non-fiat commodities to collateralize new money spent into existence you're choking the economy off and risk the burst of the monetary bubble which will lead to the severest of all debt deflations.

So, what you're doing is you just create an temporal scarce but de facto unlimited supply of financial instruments which will be used as the money in your and other economies based on the credit that people as private banks assure to each other in the credit and debt system that is provided by your central bank.

The gold standard is based on the crazy libertarian idea, that money must have an underlying "real" value, e.g. using cigarettes as media of exchange.

...hmm...

Like it or not but the modern economy IS based on digging in earth. Oil, gas, metalls, minerals, crops it all comes from digging in earth.

>crazy idea that money should have some underlying value
Madness!

This coming from someone who wants to use imaginary game tokens as currency, mined with computer work as ‘labor’ becuz it uses a lot of electricity

To clarify this argument has one glaring mistake. At first glance it seems solid. As more people want the gold the price will go up, which will encourage other to keep the gold. However, the other side of this argument is also valid: As the price of gold goes up, people who hold gold will be inclined to spend their gold as they can now buy more with the same amount of gold.

If only one side of the logic were to hold, then BTC would go up indefinitely, as there is not enough BTC for everyone, and everyone wanting BTC will drive the price up. The truth is BTC tanked because a lot of people were happy with the return on their investment and decided to sell.

Inflation is just a way for the state to move wealth from your savings to its own pockets. The state then hires economists to spin all kinds of arguments for why their stealing of your savings is supposed to be good for you in the end.

Nixon destroyed everything

Yet again, far "above" we find the solution to our "problem."
dailymail.co.uk/sciencetech/article-2147404/Found-The-single-asteroid-thats-worth-60-billion-years-financial-output-entire-WORLD.html

Well, give me any alternative that has worked for longer periods of time. The cap of the amount of bitcoins will be it's demise, as proven by history again and again. All money that is credit and credit only is sustainable forever.

Of course, if there's lot of distrust in society some agent with high impact and trustworthiness like a government body could issue IOUs which could be used as the underlying "value" for the creation of monetary systems similar to the dollarization that happens or happened all over the world. The government could for example force other people into buying it's currency by putting everybody into a tax debt or the government could push people into buying it's currency by borrowing it's currency to other people in exchange for goods the government or agencies that use the governments currency supplies, e.g. US companies exporting for USD which was paid by the buyer with USD loaned out before.

>your economy
who? private investors?
If private investors want to invest but do not have the means, then the means are already in use elsewhere where they were more urgently needed. Hence the "economy is ready for investment" is false.

If private investors have the means but do not want to invest then they must believe that the means to invest are better at use at some future time in some future place. Hence the economy is not "ready for investment".

What you maybe mean is that the public sector is ready for investment. Of course the public sector does not produce and must therefore appropriate from the private sector to finance its investments. It will print some money, thereby stealing from the private savings of citizens. But the very fact that the means for investment were not available at that time and place implies that the private sector, aka the citizens being stolen from, did not want to invest in that time and place. Clearly, the private sector found another time and place more deserving of its means.

So in either of these three cases we end up worse off.

Inflation does not magically make scarce goods less scarce. It just shuffles the goods around. Changing the amount of money does not create wealth.

>crazy libertarian idea, that money must have an underlying "real" value
false. See Bitcoin.

Gold seemed to work ok for ~4500/5000 years of recorded history.

Wrong, Gold was used in the middle ages because the kings used it as a hard to forge material for their issued moneys. The oldest written knowledge of humanity is the debtors table from Mesopotamia which is roughly 5000 years old and describes that they would only borrow each other and settle every month in the unit of accounts equivalent of a months ration of barley to live from.

>who? private investors?
The countries economy, stupid. If your country has all the necessary facilities to produce output but your people lack the credit towards each other - the money - to employ each other or pay out the credit, then your private investors can try to invest as much as they can, they won't be able to because nobody will work for them, nobody will buy their facilities because they don't have the money nor can they monetize on the little amount of credit they had because there was a lack of money supply to make the economy rolling in the first place.

>shuffle goods around
Learn from it: P * Y = M * V. In order to produce Output Y for a price P you need to have Money M exchanging hands with the velocity ("shuffling around") V.

I'm not saying the government is the only body able to make this economic stimulus, but it's certainly the one that did it often.

>steal from the private sector
If you're buying my produce paying 30 days later, aren't you also on your terms, "stealing" from me? The government takes from you but gives you back later. Of course, if it is a good government.

Including your grams’ vijayjay

this is the future of fiat

Found the /pol/tard

And that was inflationary how? Also, backed by real goods.

>So why is deflation bad? Because then nobody will take loans.
This makes so much more sense than "inflation is bad because people wouldn't spend money" which everyone always repeats, thanks, I feel stupid for not having thought of it myself.

THIS

US Govt printed money and bought gold which was in the US after the war (with gold standard price).
Then after bought a lot of gold, they said "Ohhh no gold standard anymore".
Because the printed US dollars the gold price increased to high records.
US said: "Well thanks for the cheap gold, you can have it back now for the new high gold pirce faggots".

>devaluation after the fact
well yes now that several trillion has been printed

my US dollars are backed by Gasoline and a 6 pack of Budweiser

queue some retard claiming the Zimbabwe Dollar would have just as much value as USD "if they managed it right"
and some moron shilling gold

ShareBlue manginas need to get real jobs.

Electricity that comes from digging earth nonetheless.

just out of curiosity, whats your background?

I know you're a shill but BTC can be divided to the eighth decimal.

The best way to tether currency is against population. You make each dollar worth a fraction of the average hourly wage for the average american.

This way, if population grows or productivity rises, it allows you to print more money, circumventing deflation. At the same time if the reverse is true, then you can't artificially devalue everything to cause inflation.

>$1550 per troy ounce
Spotted the braindead retard. The price is determined by supply and demand. It would go up as you purchase more, such that you would never run out of gold no matter how much fiat you're using.

...

You do, be refusing your patriotic duty to destroy them.
>t. domestic terrorist heading to take part in coordinated attack on financial center in Manhattan now

Godspeed epic quads, Godspeed.

Oy vey, you are very lucky with those quads or else I would've tipped the CIA too.

>trying to argue for the labor theory of value

>be me
>die in a duel

Basically this. The California gold rush was a big economic stimulus for the entire world, and it was literally just hundreds of thousands of people flooding into California because there was some metal there that they wanted to dig up and shove in a vault somewhere.

Of course, it spurred real development, but economists realized through boom and bust periods as well as the spending necessary to run wars that the gold standard was increasingly hampering their ability to have an economy that didn't have arbitrary limitations to liquidity and credit. Our current problem is the reverse of an artificial crunches below growth potential, we have debt bubbles that outstrip real development. But the right barely even seems to want to try to fix this problem by regulating bank behavior, most of them aren't even goldbugs. They just want to unleash the banks to create huge private debt bubbles and complain anything else is against the "free market" when we don't have a monetary "free market" for banking to exist in anyways.

>work OK
>most people lived in poverty

How fucking dense are people ITT? Not sticking to a gold standard allows for modern banking to actually work which allows for actual loans which allows for actual innovation and life improvement.

The ones of who got rich from the gold rush sold the picks and the shovels.

youtu.be/AkBa6H_-8TI

>this is what people actually believe
How about saving money before you spend it, rather than borrowing it? Radical concept, I know.

absolutely retarded

One proposal that I like is something which follows the same principle as a gold standard, but which uses a wide variety of materials instead of just gold.

So if you bring $10,000 to a bank you can receive an ounce of gold, 1000 bushels of wheat, a tonne of iron and 50 barrels of oil (as an example).
It wouldn't be as affected by the price of one commodity and so would be more stable as the price of each individual commodity changes with technology, new reserves being discovered etc.

I first saw it in "The Machinery Of Freedom" by David Friedman, but someone else might have come up with it first. What does Veeky Forums think?

fractional reserve banking is cancer

1 - self
physical removal of own testicals with bare hands (blood loss/ circulatory shock)
union square

you know every time you post something like this, another bystander is converted into a NAZI
google streisand effect, your reading assignment for tonight

Because people realized that money is just an economic utility that facilitates the management and trading of goods and services. It doesn't need to be backed by an underlying asset.

Are you in 5th grade?

How are you going to save up money to start a technology company?

because government's don't have your best interests in mind

Because keynesians are retarded

Wrong founding father
Dummy

>deflation always implies hyperdeflation
>loans are needed in a deflationary economy
>hyperconsumerism is the normal state of life
i love these memes
record levels of waste, pollution and environmental damage, shrinking resources all over, exploding demographics, record levels of unhappiness, exploding debt, decreasing trust in institutions, decreasing social unity, unsustainable derivatives markets
let's run faster to the edge of the cliff to escape the mountain crumbling underneath, i took one class of econ 101 so i know this as objective truth

>Why on earth did we ever move away from the gold standard?
The US is on the Petrodollar, so it's not like it really changed.

another underage retard who should leave and never return

you should probably leave Veeky Forums until you finish school

...

en.wikipedia.org/wiki/The_Great_Deflation

you guys all are retarted. if you think a totally deflationary currency can work you obvviously don't have clue of what you're talking about

For the (((New World Order))), why else.

>world population under 500 million
>one world ethnicity
>one world language
>one world religion (satanism)

Whats not to love?

how the fuck is this possible that such a massive building drops like a house of cards after some fly crashes into it like wtf burgers

US was going broke cause of Vietnam war and created way to make more money

...

that's world trade center 7 you downie. fucking children in this thread can we get mods in here for fucks sake? god biz turned to shit recently. thanks BTC!

You know that business loans still existed under the gold standard, right?

BECAUSE THE GOLD STANDARD LEAVES US ALL POOR, WITH FIAT WE CAN HAVE MORE DOLLARS AND EVERYONE HAS MOER DOLLARS AND WE ARE MORE RICHER

to destabilise several emerging economies in africa

Same reason the price of platinum is depressed atm

Alex Ham

checked

checked