I have heard there is not enough gold available to serve as the money supply. Either the price of gold would have to go way up to accommodate the existing money supply, or prices would have to drop sharply in a disruptive way, as the value of most assets was destroyed. Is this true?
If you wanted a full classical gold standard the gold price would have to be revalued overnight to something like $40,000 USD per ounce and this would be an instantaneous transfer of wealth to those who own the gold. But there is no easy solution to the current mess we are in.
Sounds right, billions of people go to work every day and must be paid as their work has value, If gold was used as money, the supply of the metal would have to flow like crude oil, countries with rich deposits would overnight acquire undeserved power over others, winning a position they haven't really earned.
www.businessinsider.com
Countries remained unchanged, went from poverty to prosperity, or the other way, all the while having fiat systems.
The anti-fiat guys (mostly goldbugs in years past and Bitcoin maxis today) are very much like hardcore anti-gun activists. People want to ban guns because they think guns themselves are inherently dangerous and cause crime and murder, ignoring the fact that a gun is an inanimate object that can do nothing without a human operator. Similarly, fiat currency and fractional reserve banking are themselves just tools wielded by humans. They are inherently amoral constructs, and can be used wisely or abused, just like a gun, which can be used for murder, or to defend and save the life of an innocent person.
The idea that money is created as debt seems strange until you make the connection that debt simply represents the human labor required to repay it. Further, the debt created money is destroyed when it is repaid. Fiat, in essence then, is simply currency backed by productive labor. And given that productive labor is the basis for economic growth and human prosperity (as opposed to the hoarding of gold or Bitcoin) the substantial practical benefits of fiat should be immediately clear. It is not for nothing that no country in the world today chooses to operate its economy on the gold (or Bitcoin) standard.
Again, all things fall into this realm, some things have certain properties that make it more "useful" for particular aspects of life.
Proving again that nothing has intrinsic value - it's a nonsense term. I've already described this reality 3x on the forum.
Fiat is a technology and a tool, yes. The most saleable good (money), which you can trade for anything, is NOT amoral if some people can earn it by doing nothing, create it out of thin air, etc. If I have to explain that, we're just going to waste time going back and forth and I'm not interested. It's self evident that it's immoral.
It's backed by decree (its name) or faith if you like. It obviously "can work" but that's not what we're talking about. I can live without air conditioning, I can live in a grass hut, etc. Pointing out that something can be used tells us nothing when there are other, better alternatives. That's my main point here: other money can be used that is actually fair, and doesn't steal your labor by definition over time (the whole point, so the government can keep its shenanigans up). Are there tradeoffs to this? It's the world, so yes, always.
You seem very hung up on this "fairness" argument against fiat. But if you're arguing for a Bitcoin standard, how about the unfairness of the fact that most Bitcoin has already been mined and the vast majority of it is in the hands of whales? How is it fair that 99.9% of the Earth's population should be subjected to the financial domination of Bitcoin whales? Not to mention future generations who weren't even born when Bitcoin first started, and who therefore didn't even have a chance to buy any while it was relatively cheap. This is essentially inviting a new form of feudalism and rendering most of the population serfs under Bitcoin lords. You are, at best, trading one set of masters for another. Add in the fact that this financial domination would in theory be global, eclipsing all national economic policy and sovereignty, and it becomes obvious that the entire idea is insane and unworkable.
This is a very valid point and something I agree with. But this mostly comes down to the fact that we have bad actors in control of the financial system. And these same bad actors would inevitably gain power and take control of any theoretical financial system, and manipulate and exploit it for their benefit. We had a gold standard once, and guess what? It was not some sort of economic panacea by any means. Plus, it was exploited through the issuance of paper fiat and fractional reserve banking. A Bitcoin standard would end up the exact same way -- with "paper Bitcoin" fractionally backed by actual Bitcoin that could be inflated without limit. Combine this with Bitcoin's other massive flaws and there is zero reasonable argument for any sort of Bitcoin monetary standard. The entire idea is nothing more than the delusion and greed of zealous Bitcoin maxis.
Fiat is already concentrated mostly in the hands of a few so in that sense not that much different to Bitcoin. Human civilisation tends to follow power laws. In USA the top 100 billionaires are worth around $3.8 trillion combined. The bottom half of the population has a combined wealth of $4.2 trillion.
I'm curious as to the others that read this if they don't know the answer or this is some sort of high level understanding that yes, we've already explained multiple times, but also it still doesn't negate the fact that fiat is created out of thin air.
Again, and AS followed with this, we explained that also many times and BTC is decentralized. Sometimes I'm not sure if you just don't read what we write or honestly you can't understand the points. In writing that comes off bad but I'm truly curious.
What CZ did to Schiff at the last conference shows that physical gold even isn't all that good locally. He brought a bar and asked Peter "Is this gold"? and it made the point, which was funny.
Fiat is not concentrated in the hands of a few, assets are. The fact that assets can be denominated and measured in fiat does not make them equivalent to fiat. Bitcoin cannot simultaneously function as an asset and a currency, because the two roles are mutually exclusive: assets are held long term and appreciate in value and/or produce cash flows, currency is a medium of exchange used to facilitate commerce. Bitcoin maxis love to move the goalposts and pretend that Bitcoin has the virtues of both an asset and a currency, and the weaknesses of neither, but this is impossible.
This is completely irrelevant when discussing gold or Bitcoin as currencies, because just like gold was fractionalized in the form of promissory notes that evolved into fiat currencies, Bitcoin would be as well. The only way that Bitcoin could even conceivably succeed as a currency would be if the largest holders (Strategy, for example, or governments in the future) issued paper notes backed by Bitcoin. The idea that wide scale commerce could ever be conducted across the actual Bitcoin network (or even Lightning) is completely and utterly absurd, and literally impossible due to its inability to scale (not to mention the practical transactional difficulties).
I asked you a very simple question that you chose to ignore, so I will assume that you actually are in favor of bringing about some sort of neo-feudal economic system where Bitcoin lords rule over a world of impoverished serfs. The fact that fiat is created out of thin air is a feature and not a bug. It's the entire reason that fiat actually works as a currency and Bitcoin completely fails. Fiat being created out of a thin air (or more accurately, being loaned into existence and destroyed by repayment, aka by productive economic activity) is what allows for the money supply to expand and contract to suit the needs of the economy.
This is totally irrelevant, because as I pointed out above, large holders of Bitcoin could simply issue Bitcoin-backed notes. The decentralized nature of the network plays no role whatsoever, all that would matter is the size of the Bitcoin stash. A bigger stash of Bitcoin would allow for the issuance of more fractionalized Bitcoin paper. This is exactly what would end up happening if Bitcoin became a monetary standard, because there is no feasible way to conduct wide-scale commerce using the actual Bitcoin network.
Your condescending attitude is growing extremely tiresome. Get this through your head: no one on this forum is so stupid that they cannot comprehend what you're saying, they simply disagree with you or do not find your arguments compelling.
That's great, you keep repeating yourself and making totally irrelevant points. Maybe you're the one who isn't as smart as you think you are?
Funny gag, but not indicative of reality. Go to any jewelry store or pawn shop and offer to sell them some fake gold. Since you apparently think that everyone but yourself is borderline retarded, I'm sure you'll be in for quite a surprise when they easily identify the fake gold and send you back out the door empty handed.
This is an excellent point that ive not seen addressed by the "crypto nerds".
Pawn brokers never seem to have any issues confirming value of gold or diamonds or other metals. Hell...A simple Certificate of Analysis, or a 3rd party test with a sample would easily disprove or prove the veracity of the gold (or oil or silver or sea shells or whatever)
We are on the edge of my very limited knowledge of how money works, but the above sentence sounds a bit tautological. I think that this sentence is true even if the word debt is removed.
I understand the above about debt money being destroyed when the loan is repaid and I agree with the definitions you gave. I have no principled argument against FRB per se, meaning that any fiat money has to be created from nothing.
You do realize that we are in a post industrial financialized economy and the majority of debt being incurred is non productive. Society for the most part is taking loans to buy cars and bid up house prices and rack up credit card debt, finance government sponsored welfare, etc rather than build trains and factories, etc. Even corporate borrowing is more likely to be for share buybacks and acquiring competitors than actually expanding production. The data is very clear on this.
wtfhappenedin1971.com
