Remember what happened to some countries recently that couldn’t inflate their currencies?
Three is more money in circulation than all the gold ever mined in all of human history. Sure, let’s go on the gold standard…
Makes buying a car or house a bit more difficult too.
Again, you are basing the gold value on the US dollar. Having a base standard currency can’t be compared to a floating inflationary fiat currency.
They had to become more fiscally responsible ?
They had one less tool in there tool box to address circumstances. And their people and economies suffered for it.
You’re really arguing against your own self interest if you’re all in on gold and worried about inflation. If there’s inflation- you’re richer!
Random, not particularly useful, shiny metal is in no way more “objective” than random, intricately printed piece of durable paper. Both gold and paper currency derive their value exclusively from an arbitrary social agreement that they are valuable as a means of exchange.
Think of it this way - would you rather wash up on an uninhabited island with $3 million in dollar bills, with four gold bars (roughly equivalent at current prices), or with a shovel, a gun, and a sack of potatoes?
I work hard, I save $100. The government prints more money and inflation occurs. My $100 can purchase less in the future because of this. How am I richer?
Government fiddling with their toolbox is the reason they got in that position in the first place.
Meh. Looking at listings online, these are being traded more as collector items, with condition affecting price and no real relevance of denomination (5 goldback notes ain’t necessarily worth as much as five 1 goldback notes). These are, at best, novelties and curiosities.
Not even vaguely inflation-proof. Back when the country was on the gold standard it made currency easy to manipulate and subject to the vagaries of gold rushes. And gold is like any other commodity. Its prices fluctuates.
Gods there are so many people here who have never taken basic economics.
Yup. I miss scientific literacy more than I miss macroeconomic literacy, but there’s no reason we can’t have both.
Entropy is inflationary.
You work hard and make something useful. You decide not to use it, but to save it and put it away. Unless you periodically put in more work to maintain it, it will start going to crap (becoming less useful). Inflation.
Sure - you say you work hard
But you’ve put your money in gold - which you’re saying isn’t effected by inflation- so you’re fine. Or you put it in stock or your house or an interest bearing account- which protect against inflation.
It’s also true that inflation doesn’t just come from governments printing money. It’s not the main reason inflation occurs. It occurs because of increased demand in the economy.
Dollars are issued by the the US government…
Zero inflation is bad because it encourages storing money in unproductive assets like a mattress. Some inflation is a spur to put economic assets to work.
Good is not a stable store of value any more than bottle caps or sea shells or large stone wheels.
Our standard of living has increased since going off the gold standard. Since ultimately it is that which is the important thing for our currency to achieve then I would say that fiat currency has proven its superiority over gold.
Let’s say I work hard and for my labours I am rewarded with 10 g of gold. With 1 gram, I can buy 100 pounds of potatoes. A year from now, my 1 gram of gold only gets me 90 pounds of potatoes. What happened to the other 10 pounds of potatoes?! Maybe it was potato blight, making potatoes scarce. Whatever the case, I am now able to get less with the same amount of gold. It’s as if my gold has lost some of its worth.
Clearly, this means we need a potato-based currency. Even if it loses its value, you can still eat it.
Just ask the Spanish after the conquest of South America
Could Goldbacks, the world’s first local, spendable, voluntary currency made of physical gold, be the alt-tender answer?
Nooooo? (Is this a trick question?)
Yeah, the assertion is obviously wrong. If changes in gold prices were merely due to inflation, they’d correspond neatly with the curves in the inflation chart for that same period. They don’t, because gold prices respond to a lot of different things and often fluctuate more in response to fears about (future, imagined) inflation than inflation itself.
" it was maybe the first time in my life I actually wanted to hold onto my money rather than spend it. "
Nice illustration of Grasham’s law that “bad money drives out good”