The great Austrian economist, von Mises, wrote that true money had to survive the regression test. Put simply, it must be established whether or not money had value before it was used as money; otherwise it is only a money-substitute which ultimately depends for its value on confidence. So we need to ask ourselves two questions: what value did gold have before it was used as money, and what value did modern currencies have before they were used as money?
The answer to the first question is clear. Anyone who has seen the Alfred jewel in the Ashmolean Museum in Oxford (over 1,000 years old), the Snettisham torc in the British Museum (over 2,000 years old), or Tutankhamen’s gold mask in the Cairo Museum (over 3,000 years old), regard these fabulous items with astonishment. They are simply priceless, being desirable beyond reckoning. There is therefore no doubt that gold, the major element in all these objects, survives von Mises’s regression test. Furthermore the Aztecs and Incas in the New World, completely isolated from Eurasian values, held the same human view.
Paper currencies do not survive this test. They started as money-substitutes for gold or silver and over time lost all their convertibility. As a result they now depend for their value on confidence alone.GoldMoney
Why gold is money
Alasdair Macleod
"The regression test." ROFL
Alasdair Macleod is a bog standard Austrian simpleton. He often writes articles on this Austrian site, which I keep an eye on:
ReplyDeletehttp://www.cobdencentre.org/
For more articles by him click on his name in the list of authors on the left hand column. Personally I’ve got better things to do:-)
People can value sex, drugs, big houses, gold etc. You cannot deny that restricting supply of the thing that government accepts for taxes can cause unemployment and idle resources. Once the unemployment and idle resources in economy are present, then It is really stupid to demand higher net taxes. That is exactly what Austrians advocate.
ReplyDelete"... regard these fabulous items with astonishment. They are simply priceless, being desirable beyond reckoning." Alasdair Macleod [bold added]
ReplyDeleteThey will gird themselves with sackcloth and shuddering will overwhelm them; and shame will be on all faces and baldness on all their heads. They will fling their silver into the streets and their gold will become an abhorrent thing; their silver and their gold will not be able to deliver them in the day of the wrath of the Lord. They cannot satisfy their appetite nor can they fill their stomachs, for their iniquity has become an occasion of stumbling.
They transformed the beauty of His ornaments into pride, and they made the images of their abominations and their detestable things with it; therefore I will make it an abhorrent thing to them. Ezekiel 7:18-20 New American Standard Bible (NASB)
Fulfilled by the Babylonian Captivity.
F.,
ReplyDeleteDon't forget about the 'golden hemorrhoids' in Samuel... that is a good one too!
rsp,
"Once the unemployment and idle resources in economy are present, then It is really stupid to demand higher net taxes. That is exactly what Austrians advocate."
ReplyDeletemoney4nothingchicks4free - Huh? Can you refer me to an Austrian / Libertarian economist who thinks that raising taxes is the the right prescription for what ails the economy?
This piece seems to endorse views that are exactly the opposite of reality.
ReplyDeleteThere are all kinds of goods have value for their possessors either for final consumption or for use in some productive process. There are also goods that have value for possessors for the purpose of exchange. Some goods have both kinds of value.
Artifacts like works of art can have one or the other or both kinds of value. If I am a blind art dealer, for example, a Vermeer painting has no value for me as a consumable, but it has value for me as something I can exchange for other things. If I am a connoisseur, then the painting has both kinds of value: I can either exchange it or consume it by hanging it up and gazing at it.
The kinds of things that we want to use as money are things that have only or primarily exchange value for their possessors. If something also has consumption value or productive value, it makes for a crappy form of money - because then the quantity of the good in question would fluctuate unpredictably depending on whether the people who possess it decide to start consuming some of it or investing it in production. You wouldn't want to use beef jerky as money, because when times got tough, people would start eating it up and cause a deflationary spiral!
Gold certainly can be money; anything can be money. But its occasional function and value as money has nothing to do with other forms of value it might or might not possess. Certainly the use of gold to create magnificent works of art has nothing to do with its function as money, any more than the possible uses of canvas and paint to create magnificent works of art turns those things into money. You certainly could use bits of canvas as money; but that has nothing to do with whether any art works are made out of canvas.
The best kind of money, indeed, would be something that is otherwise completely lacking in non-exchange value for consumption or production. That would assure that its circulation would be unaffected by changes in the non-exchange use of the good.
Austrians seem utterly perplexed or terrified by the fact that people are willing to accept certain kinds of intrinsically useless things in exchange for valuable goods and services. But that's the whole point of money! Maybe what terrifies them is that the exchange value of little scraps of paper and little bits of metal depends on the existence and persistence of social conventions. Since Austrians are anti-social hysterics and paranoids with cravings for isolated self-sufficiency, they hate and fear such social facts, and resent their social dependency.
The best kind of money, indeed, would be something that is otherwise completely lacking in non-exchange value for consumption or production. Dan Kervick
ReplyDeleteCredit, fiat, and common stock have that property but unlike credit creation, unless it is totally private (else "equal protection under the law" is violated), fiat (if de facto as well as de jure legal tender for government debts ONLY) and common stock are ETHICAL money forms.
Also fiat and common stock allow the accumulation of at least nominal aggregate EQUITY since neither necessarily have a finite lifetime. OTOH, credit money must not only be repaid, it must be repaid with interest that does not necessarily even exist in aggregate without additional borrowing.
"If something also has consumption value or productive value, it makes for a crappy form of money - because then the quantity of the good in question would fluctuate unpredictably depending on whether the people who possess it decide to start consuming some of it or investing it in production."
ReplyDeleteReminds me of some currencies I know of that can have wide fluctuations from time to time.
"Austrians seem utterly perplexed or terrified by the fact that people are willing to accept certain kinds of intrinsically useless things in exchange for valuable goods and services."
No.... Austrians are terrified of the man at the door with the big gun.
"Since Austrians are anti-social hysterics and paranoids with cravings for isolated self-sufficiency, they hate and fear such social facts, and resent their social dependency."
Wow Dan! Feel better now? Good thing I had my anti-psychotic meds today or I might go on a rampage..... and I'm only part-time Austrian.... actually German but that's close enough for government work. ;-) All seriousness aside Dan, that broad brush smear of a whole class of people almost strikes me as a tad politically incorrect. Not very civil and conducive to public discourse, if you get my drift.
"money4nothingchicks4free - Huh? Can you refer me to an Austrian / Libertarian economist who thinks that raising taxes is the the right prescription for what ails the economy?"
ReplyDeleteI said net taxes, if you think balanced budget is right thing to do then you are demanding higher net taxes (government spending-taxes)in times of deficit. Of course you recommend doing It selectively. When It is time to tax the rich, you say there is no incentives for the rich to create jobs. When it's time to tax the middle class you say there is no other way, government has run out of money. this is exactly what Bob Roddis does calling It funny money and all that. He keeps his mouth shut charging his clients funny money though.
money4nothingchicks4free - Chill... take a happy pill. Life is too short to be miserable. Besides, you're getting your knickers all in a twist assuming you know what I believe in and what I advocate. I may be part time Austrian, but I'm also part time MMT and part time Supply Side. Very schizophrenic of me I reckon, but there it is.
ReplyDeleteThat said, not really sure what you mean by net taxes, but all I can say is that I am 110% in Warren Mosler's camp when he says that for the size government we have, we are grossly over taxed.
However, something that makes me optimistic about the whole IRS scandal, is that it raises the odds of having meaningful tax reform. Personally, I favor an across the board 10% flat tax on all sources of income.
This includes 10% tax on earned income which would eliminate virtually all itemized deductions and instead offer a generous standard deduction such that a family of four with annual income of $50K would be exempt and would only pay the 10% rate on each dollar of earned income over above $50K.
Beyond that, interest income, dividends, capital gains, estate tax, corporate tax and social security tax would also go to a simple 10% flat rate. In the case of the social security tax, 5% would be paid by the employee, 5% would be paid by the employer and the income ceiling that the tax applies to would be eliminated. If you do the math, you will find that regardless how much income one earns and from whatever sources, the maximum effective tax rate would never go any higher than 18.75%.
Simple enough for a 12 year old to figure out on a 3X5 index card. Moreover, even though it's called a "Flat Tax", the generous standard deduction and elimination of the income ceiling on the Social Security payroll tax makes it quite progressive which theoretically should garner potential political support from the Left.
Reminds me of some currencies I know of that can have wide fluctuations from time to time. The Rombach Report
ReplyDeleteGood point! And the reason is the government-backed credit cartels since they dilute then concentrate the value of their respective reserve currencies.
Unless MMT is merely a means to allow the banking cartel to steal more smoothly, then the MMT crowd must eventually choose between that cartel and the ability of the monetary sovereign to manage its own fiat.
Dan,
ReplyDeleteIt looks like what happens is with some like this guy, this, let's call it "delight" or fascination, gets out of control and for them, they somehow become like "subject" to these metals...
There is the quote from Isaiah about the Medes who were about to be routing the Babylonians "in silver they are not accounting, in gold they are not delighting..."
And then Paul wrote about "fondness for silver" (philargurion) which is often mis-translated into English as "love of money"...
These metals, or perhaps what is really behind them (spiritually), just seem to have certain power over many of the weaker among us...
So we have our own God-given human authority to, under law, issue/operate/regulate our own monetary system as an economic tool, which YOU can see and I can see... many others can too...
a system which can work, and work well as long as we have leadership that understands this authority (which of course is lacking for now...but that can change..),
but these "metal-lovers" as I term them (cant think of a better description for now...) these people constantly seek to undermine and subvert this authority...
seeking to turn it back over to these metals which we were under for looks like almost 2,000 years leading up to the events of the 20th century where we somehow got out from under the metals via the FDR and Nixon actions...
The key thing here looks like boils down to authority, can we humans as a group obtain a consistent view of our own human authority? (and hopefully where it comes from?)
I think those are accurate views of those 'symptoms' you can see there that these people exhibit.. and that is probably a good word there you come up with ie 'symptoms', but also symptoms are really not what is causal with people who exhibit them...
How or can we ever get these people to be able to understand just and righteous authority and where it comes from? Or are they beyond redemption and we have to just continue to fight it out with them for control?
I would say that as we are finally not under the metals anymore we are actually winning for now... but much more 'warring' to go...
rsp,
"That is exactly what Austrians advocate."
ReplyDeleteWrong. You don't have the slightest clue what Austrians "advocate."
"Austrians seem utterly perplexed or terrified by the fact that people are willing to accept certain kinds of intrinsically useless things in exchange for valuable goods and services."
Wrong. Austrians just ask that the market determine the unit of exchange, rather than have the government declare what it is and assume monopoly power over its printing and distribution, and then willfully manipulate its value to achieve its own sadistic desires.
"but these "metal-lovers" as I term them (cant think of a better description for now...) these people constantly seek to undermine and subvert this authority..."
ReplyDeleteYou don't have a clue what you're talking about. Gold/silver have held value and been used as a medium of exchange in EVERY CORNER OF THE WORLD for THOUSANDS OF YEARS whereas EVERY SINGLE fiat currency that has ever been conceived on this Earth has ended up a failure.
whereas EVERY SINGLE fiat currency that has ever been conceived on this Earth has ended up a failure. Mule Rider
ReplyDeleteYou're correct if failure means only lasting 826 years as English Tally Sticks did.
"You're correct if failure means only lasting 826 years as English Tally Sticks did."
ReplyDeleteThe lengthy run of the English Tally Stick as a medium of exchange can be attributed to features that most Austrians/Libertarians would approve of...
http://www.xat.org/xat/moneyhistory.html
"The tally stick system worked really well for 726 years. It was the most successful form of currency in recent history and the British Empire was actually built under the Tally Stick system, but how is it that most of us are not aware of its existence?
Perhaps the fact that in 1694 the Bank of England at its formation attacked the Tally Stick System gives us a clue as to why most of us have never heard of them. They realised it was money outside the power of the money changers, (the very thing King Henry had intended).
What better way to eliminate the vital faith people had in this rival currency than to pretend it simply never existed and not discuss it. That seems to be what happened when the first shareholder's in the Bank of England bought their original shares with notched pieces of wood and retired the system. You heard correctly, they bought shares. The Bank of England was set up as a privately owned bank through investors buying shares. Even the Banks resent nationalisation is not what it at first may appear, as its independent resources unceasingly multiply and dividends continue to be produced for its shareholder's."
Mule rider the USD,GBP etc etc failed have they?
ReplyDelete"Mule rider the USD,GBP etc etc failed have they?"
ReplyDeleteThe USD is set up precisely as all those prior fiat currencies were, and they failed, so why should we think we're special?
Put it this way, you and a group of friends all go to the race track one Saturday afternoon and, instead of filling up your vehicles with 87-octane gasoline, you all fill them up with moonshine, or 100% ethanol. One by one your friends take off around the track to see how far they can make it. One guy makes it just 2 miles. Another makes it 30. And another makes it just 10. Seems to depend on the make/model of the vehicle and the style of driving, but regardless, every single vehicle's engine - we'll say there were a dozen to run the trial before you - flames out long before its full tank is exhausted. So now you hop in your Chevy Equinoz and you're ready to take a stab at it. You get 10 miles in with seemingly no problems. The next five are pretty smooth but you're beginning to hear a murmur in the engine. There's definitive sputtering in the next 5 miles, but you're 20 miles in and still going. No other vehicle made it past 30 miles, and here you are at 20, still running but clearly sputtering. What makes you think you'll be able to squeeze the full use out of that entire tank?
Keynesians and MMTers have to be the world's worst at making the fallacy, "If it hasn't happened yet, it can't/won't happen." Krugman oozes with that BS, and you don't have to look fare to see it everywhere else among his like-minded kin.
Put it this way they haven't failed have they? Your statement of "fact" wasn't accurate. As to what will happen in future is open to speculation including what will happen to gold with asteroid mining etc.
ReplyDelete"Put it this way they haven't failed have they? Your statement of "fact" wasn't accurate. As to what will happen in future is open to speculation including what will happen to gold with asteroid mining etc."
ReplyDeleteYes, regarding the USD, it was speculation. But my speculation is based on facts/evidence/logic and yours on ignorance. My speculative position on the matter is akin to me saying the sun will rise again in the East tomorrow, June 6th, 2013. Yours is akin to saying it will finally rise in the West. What logical reason is there to have faith and believe the USD won't fail other than the fact it hasn't failed yet?
8:34 am
ReplyDelete"No.... Austrians are terrified of the man at the door with the big gun."
9:03 am
" Chill... take a happy pill. Life is too short to be miserable."
Mule Rider, you're right. I was blaming Austrians as a group for the weird gold bug obsessions of Ron Paul and the other gold bug sub-sect of Austrians. Austrian economics in general has no trouble recognizing to possibility of a purely conventional medium of exchange.
ReplyDeleteMule Rider ... Which countries today use gold as money? How long have they been doing so?
ReplyDeleteI gave a guy a five dollar bill this morning to buy some stuff at a convenience store priced at $3.59 and accepted in return for my fiver a dollar bill and some change along with the stuff.
ReplyDeleteWhy did the guy accept the five? why dis I accept the one and change? Because almost everybody else accepts them. That's life in a functioning society.
There was no man with the gun at a door.
You guys with your monetary system obsessions are freaking lunatics, cranky fanatics and disturbed paranoids. Get over it.
"They realised it was money outside the power of the money changers, (the very thing King Henry had intended)." http://www.xat.org/xat/moneyhistory.html via Mule Rider
ReplyDeleteThanks for that!
Inexpensive fiat is the ONLY ethical money form for government debts else some private party (e.g. gold owners) is free-riding on the taxation ability and power of government.
That said, fiat should not be de jure or de facto legal tender for private debts though it could certainly be VOLUNTARILY used for those, if so desired by both parties to a transaction.
This comment has been removed by the author.
ReplyDelete"The man at the door with a gun" is just a metaphor for law enforcement. If you break the law by refusing to pay what you owe, then "the man at the door with a gun" (policeman) will take you to court, where you will be tried by a jury and then sentenced by a judge in accordance with the law.
ReplyDeleteAustrians just ask that the market determine the unit of exchange, rather than have the government declare what it is and assume monopoly power over its printing and distribution, and then willfully manipulate its value to achieve its own sadistic desires.
ReplyDeleteIN the US at least, everyone is free to exchange what they wish for what they wish. You just have to exchange something for govt's money to pay your taxes.
There's a reason that people generally use the govt's money for exchange. It's called transaction cost. The medium with the least transaction cost will predominate. Risk is a transaction cost that people take into account. Nothing has replaced govt money and nothing is likely to, due to transaction cost.
There's a reason that people generally use the govt's money for exchange. It's called transaction cost. Tom Hickey
ReplyDelete1) You're conflating credit creation by the government-backed credit cartel with fiat. How can any honest money form compete with that?
2) Potential private money forms such as common stock are subject to the capital gains tax which is measured in fiat. But that means that a fall in the value of fiat registers as a capital gain in a potential private money form!
Tally sticks were just a way of recording economic transactions, and sometimes making IOUs and collecting on them. There is nothing prohibiting people from making such IOUs even today, whether you make them out of sticks or something else.
ReplyDelete"The man at the door with a gun" is just a metaphor for law enforcement. If you break the law by refusing to pay what you owe, then "the man at the door with a gun" (policeman) will take you to court, where you will be tried by a jury and then sentenced by a judge in accordance with the law.
ReplyDeletey - FYI... I like Warren Mosler a lot, but I think it's really unfortunate that he keeps using that metaphor of the man with the big gun at the door.... which in my mind is the IRS with all it's tyranny. I can't see how this metaphor helps MMT. It's not even clear to me that a tax driven currency explains everything that MMT says it does. There were big deficits in the 1980s in part because of the Reagan tax cuts and the economy boomed as 18 million new jobs were created. Nevertheless, the dollar was VERY STRONG -- Think Plaza Accord. Why? I think because the lower tax burden created more demand for the currency because more entrepreneurs were willing to take risk. In other words, the demand for dollars more than offset the extra supply created by the tax cuts.
In the US, as I suspect in most other developed countries too, ALL gain from exchange must be accounted for and reported to the tax authority accurately in the value of the govt's unit of account, including barter exchange.
ReplyDeleteThis applies to both the federal govt and state govts in the US, and they check through their undercover investigative divisions. Of course, govts capture only a small portion of tax avoidance, but tax avoidance is no sure thing.
Mule,
ReplyDeletethey didnt "fail" the societies that stopped using state currencies were taken over by your type of zealous "metal lovers" and we just seemingly stopped using the state currencies... Greece and Rome used state currencies for Centuries with no problems... seemed to have gotten a lot done...
Just like right now, the current USD system that Warren explains about at the Columbia debate is working fine... why change now?
Metal love? Some strange infatuation with metals? a fetish?
I dont understand you people... Are you on the "human team" or not?
Why do you not trust your fellow human beings with these economic decisions that are all made out in the open under law?
We cant do anything unless we dig up gold first? Why? We can just keep track of things fine today on computer systems... we dont have to count little metal coins anymore...
why do we have to yoke all of our economic decisions to our ability to happen upon mass measures of certain metals from Column 11 of the periodic table of the the elements?
Is this a good idea? I dont think so...
We can get a lot more done by using our state currency systems which are operated on our modern information systems....
I just dont understand you people....
rsp,
Rombach, Warren's argument is that fiat money has basic value because people need it to pay taxes. If people want to accumulate more than they need for that purpose, then the net supply will have to increase if that desire is to accomodated. That's called a 'budget deficit'.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteMatt,
ReplyDeleteMethinks, at best, you've got your cause-and-effect confused, and quite possibly you're engaging in a bit of revisionist history. When the fiat currency "failed," it wasn't just because everything was hunky-dory and all the people inexplicably tried to get away from it and became "metal lovers." The problem was a loss of faith in the monetary system because of the State's unchecked and reckless ability to control (namely expand) the monetary base.
Which leads me to my second point. We don't HAVE to "dig up gold first." This is a straw man. It's not necessary to have a gold (or other precious metal)-backed currency. The only requisite is that what IS used by reliable, stable, predictable, and safe. Tying currency to the supply of a previous metal, though, has historically been one of the few checks on that power and reasonably provide those assurances I cited above, but it wouldn't be "necessary" per se if we had an informed populace who understood what the central banks were doing by manipulating the currency and destroying the value of the USD.
"I just dont understand you people...."
ReplyDeleteThat's probably because you've never had an original thought in your life. You were one of the happy/content ones to lap up all the BS and propaganda that was shoved down your throat from Kindergarten through college - never questioning a thing along the way - and now your crippled mental faculties fully represent the failure of that process.
"Why do you not trust your fellow human beings with these economic decisions that are all made out in the open under law?"
ReplyDeleteWhat planet do you live on? The members of Congress and our Executive Branch, in full incestuous collusion with central bankers (and other corporatist pigs who are members of favored political classes, i.e. special interests), openly FLOUT the law.
In the US, as I suspect in most other developed countries too, ALL gain from exchange must be accounted for and reported to the tax authority accurately in the value of the govt's unit of account, including barter exchange. Tom Hickey
ReplyDeleteYes, but the gains should be real gains, not artifacts of government money mismanagement. So the capital gains tax, if we retain it, must be replaced with a real capital gains tax. But that opens a can of worms since measuring price inflation is to a significant degree subjective and subject to gaming.
OTOH, the income and other taxes is no problem for a purely private currency (assuming the monetary sovereign does not UNDER-spend relative to taxation) since, for example, if one's income tax is 20%, he would take 20% of his income in all the private currencies he had used and buy fiat with them to send to the taxman. So if the monetary sovereign OVER-spent relative to taxation then its fiat would be CHEAPER to purchase on the open market and thus the real tax burden would be lower.
And if one wants to minimize the potential for government monetary mismanagement, then obviously one would oppose government privileges for the banking cartel to preclude any damage they might do to the value of fiat.
ReplyDeleteMule,
ReplyDeletegold/silver/metals (Column 11 metals)
Have been the norm for centuries, like the last 2,000 years... its only in the last few decades that we are on to state currencies again...
"original idea": YOU'RE the conformist in this scenario....
rsp,
If only I read "The Daily Load of Paulshit" more often. Then I would know the TRUTH.
ReplyDeleteMule,
ReplyDeleteHow about we try the current USD system with leadership that actually knows what is really going on?
The President says "We're out of money!" and the last leading runner up says "We're borrowing from the Chinese!"
What say let's get some leadership in there that knows what is really going on and see what happens..
rsp,
"The problem was a loss of faith in the monetary system because of the State's unchecked and reckless ability to control (namely expand) the monetary base."
ReplyDeleteBloody hell got one here havent we lol
""original idea": YOU'RE the conformist in this scenario...."
ReplyDeleteAu contraire...
How about we finally have a monetary system that ISN'T manipulated by the government/central bank? We've been dealing with government manipulation and coercion for millennia. That's where the problem lies. Stop with the naïve BS about "getting people in there who know what they're doing/talking about." Restore freedom and end tyranny. That's all it takes.
Fiat hasn't failed, it has existed longer than gold or silver as currency a matter of fact. The concept itself has never failed and has been dominant most of the time, even on 'gold standard' times is has been dominating, just like any sort of credit form. Because these are built on human institutions and relationships.
ReplyDeleteIs your obsession with a static world of 'wild west romanticism' that makes you think it has failed. Just like wealth isn't static, or societies aren't static, or progress isn't static, neither can be nations and currencies or laws for the matter. Nations come and go, and never ever has been the downfall of the currency what has made these come and go, only simpletons would believe that because they have causality backwards.
Also, only a damn fool thinks commodity money can't be controlled and power exercised and extorted from it's usage and it's the solution to any of these issues. Or maybe they are just to invested into the shiny to think clearly.
"If only I read "The Daily Load of Paulshit" more often. Then I would know the TRUTH."
ReplyDeleteI'm guessing you prefer to keep lapping up your daily dose of NormanShit. I can only imagine just how full of "TRUTH" you were back in 2005-06 when you were smugly dismissing critics of the housing bubble and arrogantly predicting a 10$ per annum rise in home prices for the foreseeable future.
It amazes me how consistently and relentlessly guys like Norman and his ilk have been wrong about nearly everything (and that's not a throwaway line; you can find numerous videos of his idiotic and errant diatribes all over the web), but despite the demonstrable/provable evidence, you guys are still as smug as ever and trying to claim the moral high ground.
Ignacio,
ReplyDeleteNice to see you're at least honest with your brutal and barbaric totalitarianism. While vehemently opposed to them, I can at least appreciate a principled man who admits he is anti-freedom and pro-coercion.
"What say let's get some leadership in there that knows what is really going on and see what happens.."
ReplyDeleteActually I agree with you in a twisted, Machiavellian sort of way. I kinda wish the Keynesian/MMTer crowd would get their wish one day, gain full control, and just go ape-shit with their destructive ideas. And when it inevitably hits the fan and almost completely blows the doors off of civilized society, and everyone - I mean EVERYONE, even the most illiterate, idiotic among us - can see what a ruinous fraud your cultish little religion is, then maybe we can try each and every one of you for treason, war crimes, etc. and put you in front of a firing squad, never to be heard from again.
That should say 10% per annum, not 10$ per annum in the comment above
ReplyDeleteWell I think the back and forth here in these comments is a manifestation of the real issue to be resolved at this juncture in the West...
ReplyDeleteKeeps looking more and more like its back to an issue between the 'civilized' and the 'barbarians'...
Even Mule here like our Bob Roddis seems to know how these systems really operate but apparently makes the choice to throw in with the barbarians anyways...
FD: I'm on "team civilized"...
rsp,
" then maybe we can try each and every one of you for treason, war crimes, etc. and put you in front of a firing squad,..."
ReplyDeleteInteresting....
How about we finally have a monetary system that ISN'T manipulated by the government/central bank? Mule Rider
ReplyDeleteInexpensive fiat is the ONLY ethical money form for government debts.
Please concede that?
Otherwise, you're seeking to replace government tyranny with private tyranny.
y: Rombach, Warren's argument is that fiat money has basic value because people need it to pay taxes. If people want to accumulate more than they need for that purpose, then the net supply will have to increase if that desire is to accomodated. That's called a 'budget deficit'.
ReplyDeleteThis is a really important point. The purpose of state money is to fund public expenditure, in a republic, iaw the appropriations process for public purpose, e.g., national defense, social order, public goods, and general welfare. The state taxes in order to create a need for the private sector to obtain its currency by exchanging private goods for the currency in private markets. In this way government acquire private resources for public use.
However, if the private sector and external sectors which to accumulate more of that currency that is needed to pay taxes, then the government must run a fiscal deficit to provide for this desire.
Of course, people could save in money created by banks but then there could be no net saving in aggregate, since money created in the private sector from debt nets to zero. Absent govt accommodation, this saving would result in demand leakage that would show up as unemployment, and while there would be net savers, there would also be net debtors. Since net debtors don't usually become net savers, over time private debt would become unsustainable.
Mosler was illustrating this with the business card model, but I think it went over a lot people's heads.
Mule rider goes from:
ReplyDelete"Nice to see you're at least honest with your brutal and barbaric totalitarianism"
to:
"maybe we can try each and every one of you for treason, war crimes, etc. and put you in front of a firing squad, never to be heard from again."
in a matter of minutes!
Evidently the members here are unable to differentiate between the barbaric and totalitarian notion that a small handful of individuals should, at their whim, control the unit of exchange that EVERYBODY uses, consequences be damned and the final just punishment recommended for those and their coercive and abusive tactics if they're ever able to fully implement said tactics, which will inevitably devastate and ruin millions of innocent lives.
ReplyDeleteJust keep telling yourself that you're a member of "team civilized." I'm sure that's not the only thing you've been clicking your heels together and saying to yourself throughout your life to convince yourself that it's true. As I said above, some people are/were too weak to overcome the K-college brainwashing/propaganda shitstorm they endured to be able to think for themselves.
"Otherwise, you're seeking to replace government tyranny with private tyranny."
ReplyDeleteI'm advocating a system where NO tyranny of ANY KIND could prevail.
If our money system was designed in Hell, it could not be more divisive, I'd bet.
ReplyDeleteThe solution was given to us by none other than Jesus Christ (God Himself) in Matthew 22:16-22 ("Render to Caesar ...") - coexisting government and private money supplies. Why? For one thing, the Temple tax could not be paid with Roman money so at least one private money was necessary according to Scripture.
So let's quit bickering about who controls a single, government-enforced monopoly money supply since that argument is vain and has been so for about 2000 years at least.
I'm advocating a system where NO tyranny of ANY KIND could prevail.
ReplyDeleteThat's what Marx thought, too. Bakunin told him he was mistaken and turned out to be right.
There is no way to neutralize power other than corresponding power and there is no social arrangement that is without power or in which power is distributed in such as way that it can never be compromised or captured.
The best humanity has been able to do is a republic in which the majority is in control but the rights of the minority are protected constitutionally. Nevertheless, the powerful have always been able to subvert the republic. All other systems are based on elite power.
This will remain so until the level of human collective consciousness matures enough to develop another system. If and when that will be cannot be predicted with any degree of assurance.
However, the models of sociologists Strauss &N Howe (The Fourth Turning) and economic historian Ravi Batra (The Downfall of Capitalism and Communism and The New Golden Age: The Coming Revolution Against Political Corruption and Economic Chaos) predict imminent change. So we will have to see the direction that it plays out if they are correct in anticipating major change.
Mule Rider,
ReplyDeleteAre you familiar with the concept of projection, wrt psychiatry? I think you might be a case study.
Cheers,
Six
Too many people here are just plain condescending and rude. The only one who is consistently civil is Tom. Even if I don't agree with Austrian economics, it's no reason to stoop to levels beneath one's self. You folks are too smart for that. I couldn't stand Bill Buckley, but at least he knew how to argue in a civil manner.
ReplyDeleteAs Hayek pointed out, knowledge is partial, and so is truth for humans, at least those who are not omniscient. Everyone has a piece of truth, mixed with error and ignorance. As Socrates pointed out millennia ago, the purpose of debate is to further the quest for truth by distinguishing knowledge from error and ignorance.This is the basis of the Western tradition stemming from ancient Greece.
ReplyDeleteThis is not a zero sum game, where one side wins and other other side loses. We all lose to the degree than anyone thinks that they have the ocean in their bucket. and doesn't engage in the spirit of debate as a quest for greater knowledge of reality and deeper logical accuity.
I quite liked Henry Ford's take on Gold,
ReplyDeletehttp://www.michaeljournal.org/appenD.htm
I'm sorry, F. Beard, but I'm trying to discuss economics here rather than the exegesis of Matthew, and I certainly don't find it appropriate or necessary to conflate the two. People don't want their choices in marriage, cohabitation, divorce, etc. dictated by Scriptural interpretation, and you can be damn sure people don't want Scripture to dictate the money supply. If you insist on going to the Bible as a justification for your position, then I'm afraid I can't take you seriously anymore on this. And I say that as a practicing Christian. Let's keep our spiritual and policy beliefs separate.
ReplyDelete"I quite liked Henry Ford's take on Gold,"
ReplyDelete"The cause of all wars is gold."
-Henry Ford
So you prefer fiction/fantasy/an outright lie to reality? This website has to be one of the worst collections of ignoramuses on the entire internet.
Quote: "I like Warren Mosler a lot, but I think it's really unfortunate that he keeps using that metaphor of the man with the big gun at the door.... which in my mind is the IRS with all it's tyranny. I can't see how this metaphor helps MMT. It's not even clear to me that a tax driven currency explains everything that MMT says it does."
ReplyDeleteI agree that the metaphor is unfortunate because it is the imposition of a near-universal debt that explains the why fiat has value but using the man with a gun make people conflate taking the people in the room hostage under threat of arbitrary force with all government debt some of which is debt quite justly imposed rather than the kind of imposition that the analogy implies.
Mule,
ReplyDeleteYou're at best part of Christendumb.
You are being made stupid and blind; disgraced.
You are not subject to the Lord, and have no view of our human authority or where it comes from.
You are subject to whatever is the sovereignty/authority that is represented by the so-called noble metals... like a pagan barbarian enamored by shiny things, idols and other forms of chaotic behavior.
Sober up.
rsp,
People need to get this through their thick skulls:
ReplyDeleteMONEY IS NOT, & NEVER HAS BEEN, A COMMODITY!
ALL MONEY IS A TOKEN,
A DEBT/CREDIT IN TERMS OF ACCOUNTING
If the value a coins value is same as its value as bullion, why would anyone waste the time & effort to mint it in the first place.
If the mint buys bullion at market price and yet the value of finished coins remains the market price of bullion, the mint would be operating at a perpetual loss.
Why would anyone do this?
Either the mint pays less than market price, or the coin's value is greater than its metallic content.
But things brings up the issue of institutions, government & law.
Does the mint have its own gold mine?
Any discussion of markets, money & prices must include the institutional structure in which they exist.
This must include the form & structure of a societies government.
ALL human societies have some form of government.
Quote: "I like Warren Mosler a lot, but I think it's really unfortunate that he keeps using that metaphor of the man with the big gun at the door.... which in my mind is the IRS with all it's tyranny. I can't see how this metaphor helps MMT. It's not even clear to me that a tax driven currency explains everything that MMT says it does."
ReplyDeleteHe should include the Adam Smith quote about taxes being a badge of liberty.
F. Beard said...
ReplyDelete"The solution was given to us by none other than Jesus Christ (God Himself) in Matthew 22:16-22 ("Render to Caesar ...") - coexisting government and private money supplies. Why? For one thing, the Temple tax could not be paid with Roman money so at least one private money was necessary according to Scripture."
You are no longer permitted to quote scripture.
The citation you give do NOT mean what you say they do. In fact, they imply the opposite.
The Matthew passage, says nothing about private money.
The obligatory temple tax was payable in only those coins, "private money" issued by the "money changers". As the monopoly issuer of a currency money, the imposition of taxation in that currency, gave the money changers emmense power.
In other words, taxes drove the "private money".
It enabled them to charge exorbitant exchange rates, making them exceedingly wealthy.
Jesus did not, however, condone this "private money".
He opposed it.
It was this "private money" power that caused Jesus to overturn the tables of the money changers.
Nice to see you're at least honest with your brutal and barbaric totalitarianism. While vehemently opposed to them, I can at least appreciate a principled man who admits he is anti-freedom and pro-coercion.
ReplyDeleteYour "logic" leaps and nonsense amuses me. However what amuses me even more is that you believe some shiny metal can give you 'freedom' or a truer and just society when the past has proven this is false repeatedly (Ford was partially right, commodity 'money' created a lot of wars during the period).
An other grand exercise of faith leap of a nutcase goldbug. Evolve, stop chasing ghosts; we do not live in your romantic wild west wasting energies mining gold in isolated little towns frozen in time, there are better things to do out there!
"Too many people here are just plain condescending and rude. The only one who is consistently civil is Tom. Even if I don't agree with Austrian economics, it's no reason to stoop to levels beneath one's self. You folks are too smart for that. I couldn't stand Bill Buckley, but at least he knew how to argue in a civil manner."
ReplyDeleteMalmo - Thank You Sir! I have to agree with you that Tom Hickey represents the GOLD STANDARD (pun intended) of civil discourse on this blog site and a role model that some participants would do well to emulate. I am making an honest effort to be civil ( a little snarky perhaps ) and trying to maintain a sense of humor. If we descend into name calling, epithets and demonizing those we disagree with, it is a sign of intellectual sloppiness and a FAILURE TO COMMUNICATE.
Ed,
ReplyDeletePoint taken... but Tom has also had one of the greatest lines here ever: "sometimes you have to expect to see some blood on the floor of the dojo..." ;) rsp,
"The purpose of state money is to fund public expenditure, in a republic, iaw the appropriations process for public purpose, e.g., national defense, social order, public goods, and general welfare."
ReplyDeleteOK, but appropriations for public purpose have occurred under both hard and soft money regimes.
"The state taxes in order to create a need for the private sector to obtain its currency by exchanging private goods for the currency in private markets. In this way government acquire private resources for public use."
Yes, but in hard money periods like 19th century US economy not including Greenback era, the state levied taxes mostly in the form of uniform tariffs to actually raise money to fund expeditures.
"However, if the private sector and external sectors [wish] to accumulate more of that currency that is needed to pay taxes, then the government must run a fiscal deficit to provide for this desire."
Agreed.
"Of course, people could save in money created by banks but then there could be no net saving in aggregate, since money created in the private sector from debt nets to zero."
Agreed.
"Absent govt accommodation, this saving would result in demand leakage that would show up as unemployment...."
Agreed. However, all one has to do is look around to see that unemployment also happens amid government accommodation.
".... and while there would be net savers, there would also be net debtors. Since net debtors don't usually become net savers, over time private debt would become unsustainable."
Agreed. But, bubbles followed by busts seem to happen in either case because in the human condition... NOTHING EXCEEDS LIKE EXCESS. My thinking is that bubbles are more likely to occur and busts are more likely to drag out under fiat conditions, government intervention and accommodation than with hard money. The 1921 depression is a good example. It was a severe depression, but it was over quickly because the bad assets were purged rather than be propped up.
Moreover, wars are more likely to be fought without the constraints associated with hard money. In connection with this, Ron Paul gets a lot of bad ink here but the Nobel committee in Oslo really ought to take back President Obama's Peace Prize and hand it over to Ron Paul.
Let's keep our spiritual and policy beliefs separate. Mule Rider
ReplyDeleteThat's not possible for an obedient Christian:
He has told you, O man, what is good;
And what does the Lord require of you
But to do justice,
to love kindness,
And to walk humbly with your God? Micah 6:8
And government policy has a huge amount to do with justice.
As for being taken seriously, that's why I quote Scripture since I believe most people, whether they admit it or not, do take Scripture seriously UNLESS, of course, they are never exposed to it.
"You are subject to whatever is the sovereignty/authority that is represented by the so-called noble metals... like a pagan barbarian enamored by shiny things, idols and other forms of chaotic behavior."
ReplyDeletePerhaps your reading comprehension is a bit off so I'll say this again. I have no particular love or angst towards precious metals. Full disclosure, I don't own any paper OR physical gold/silver/platinum, although I have a few shares of a mining company just as part of diversified portfolio. Also, I am NOT advocating a return to a gold or silver standard. Thus your comments towards me are borne out of pure idiocy and inaccuracy.
"An other grand exercise of faith leap of a nutcase goldbug."
ReplyDeleteYeah, except as I explained to Matt Franko, I don't own ANY gold in ANY form and am not advocating a return to the gold standard. So do you prefer to just keep spouting falsehoods and further diminish your already limited amount of credibility?
The Matthew passage, says nothing about private money. Vilhelmo
ReplyDeleteThe Temple Tax was voluntarily paid so the money used to pay it cannot be said to be tax-driven, despite the name.
Well, a tax-driven money could be used for voluntarily purposes, but in the case of the Temple Tax the coins used "were not always used in everyday commerce, but were the only coins accepted by the temple." from http://www.forumancientcoins.com/catalog/roman-and-greek-coins.asp?vpar=828
ReplyDeleteI'll stick with the Temple Tax coins being a private currency.
You lost all credibility when you started to make claims about freedom and fiat currency as if they were connected, and presenting fiat currency as something put there by the devil and a cabal exploiting all us rest of human morons besides the illuminated that can see the light.
ReplyDeleteAnd you may not own gold, but your apologetic of abandoning the current system for 'something else' and curiously you give false data about the stability of commodity-"backed" money.
You give money-things too much importance, and are apparently unable to accept reality for what it is: societies fail (have failed, fail, and will fail most probably), get over it, and ofc when societies fail currencies fail with them (the causality goes that way). Abuse and privilege from money-changers exist regardless of the monetary system, we can try to fix that or we can ignore it, but it's not gonna change just because you change the 'monetary system'.
And in plenty of places in this world there are no legal tender laws, there are no obligations to use this or that, and this does not change shit regarding social stability, progress, wealth or 'freedom' (this is the magic word you say when you run out of ideas regarding monetary discussions).
Here are you ---> here is one tree ---> here is the forest.
Thanks for the laugh. I've really enjoyed watching you open your mouth and expose what a sad and pathetic little man you are. Much appreciated.
ReplyDeleteF. Beard said...
ReplyDelete"The Temple Tax was voluntarily paid so the money used to pay it cannot be said to be tax-driven, despite the name."
The tax was not voluntary. Every Israelite past the age of twenty was obligated to pay a half shekel into the sacred treasury.
Furthermore, the money used to pay tax, what you call "private money", wasn't private at all. It was created by the authority, enshrined in law, as a monopoly.
Just another example of how taxes drive money.
Nowhere is there an example of coins issued by private individuals.
Can you give me an example of a "private money"?
Mule Rider said...
ReplyDelete"Thanks for the laugh. I've really enjoyed watching you open your mouth and expose what a sad and pathetic little man you are. Much appreciated."
What made you laugh the most?
And yes, I am a sad, pathetic, medium-sized, man.
OK, I should have said "The Temple Tax was not enforced by government so the money used to pay it cannot be said to be tax-driven, despite the name."
ReplyDeleteWhich is still not totally correct since other, government-enforced taxes, might have driven the value of the Temple coinage.
Nowhere is there an example of coins issued by private individuals. Vilhelmo
Why not? Fiat is tax-driven but private coins could be redeemable for subway rides, for example.
Can you give me an example of a "private money"? Vilhelmo
My favorite is common stock but store coupons, futures contracts, and movie tickets, if transferable, could serve as private money. So could purely private credit.
F. Beard said...
ReplyDelete"My favorite is common stock but store coupons, futures contracts, and movie tickets, if transferable, could serve as private money. So could purely private credit."
None of these are an example of money. The unit in which your examples are denominated, on the other hand, is money.
Money is the unit of account in which debts are denominated.
F. Beard said...
ReplyDelete"OK, I should have said "The Temple Tax was not enforced by government so the money used to pay it cannot be said to be tax-driven, despite the name.""
But it was enforced by government, as it was obligatory.
Perhaps, but the Temple Tax need not have been enforced by government for the Temple Tax money to have value since it was a religious obligation.
ReplyDeleteMoney is the unit of account in which debts are denominated. Vilhelmo
ReplyDeleteFiat will always be needed for that purpose so what you're really saying is only fiat can be money!
But apart from the unit account function, common stock, for example, can clearly serve as private money.
F. Beard said...
ReplyDelete"what you're really saying is only fiat can be money!"
That is exactly what I am saying.
Then let's just call private money "private money" and call fiat "money" or "fiat" or "the unit of account."
ReplyDeleteAnd since a "unit of account" in the form of fiat will always exist then clearly a "private money" does not itself have to be a "unit of account."
F. Beard said...
ReplyDelete"Then let's just call private money "private money" and call fiat "money" or "fiat" or "the unit of account."
And since a "unit of account" in the form of fiat will always exist then clearly a "private money" does not itself have to be a "unit of account.""
That's the problem, I don't know what "private money" is.
None of the examples you gave were of "private money"
You need to define and give examples of what you mean.
Common stock can be spent to buy assets and redeemed for the goods and services produced by those assets. So there is a source and a drain. Sounds like money to me, apart from the unit of account function. And note, btw, that there is no necessary debt since common stock can be spent into existence.
ReplyDelete@Vilhelmo,
ReplyDeleteSorry, my comment was directed at Ignacio, not you.
F. Beard said...
ReplyDelete"Common stock can be spent to buy assets and redeemed for the goods and services produced by those assets. So there is a source and a drain."
A drain on what? Goods & services?
F. Beard said...
"And note, btw, that there is no necessary debt since common stock can be spent into existence"
On the contrary, common stock is indeed a form of debt/credit, a claim on wealth.
To the holder it is an asset, to the issuer, a liability.
The rules of accounting still apply.
Debits must equal credits.
So while common stock is a form of credit, fulfilling some of the functions of money, it is not itself money
.
ALL money is debt/credit but not all debt/credit is money.
Mule Rider said...
ReplyDelete" @Vilhelmo,
Sorry, my comment was directed at Ignacio, not you."
You are too kind.
Thanks.
Non-the-less much of it was true!
:)
A drain on what? Goods & services? Vilhelmo
ReplyDeleteA drain on the common stock in exchange for goods and services the company produces. Common stock would be spent into existence (the source) and exchanged out of existence for goods and services (the drain).
On the contrary, common stock is indeed a form of debt/credit, a claim on wealth. Vilhelmo
Common stock is Equity. There is no claim unless the company is dissolved.
To the holder it is an asset, to the issuer, a liability. Vilhelmo
The common stock holders are listed under Equity, not Liabilities.
So while common stock is a form of credit, Vilhelmo
Common stock is Equity. It is a claim on what remains when the company is dissolved (E = A - L). But until then, I see no necessary claims on a common stock company.
fulfilling some of the functions of money, it is not itself money Vilhelmo
Except for the unit of account function, which must be performed by fiat anyway (since taxes are paid in fiat), why not?
" ... otherwise it is only a money-substitute which ultimately depends for its value on confidence."
ReplyDeleteFiat only requires "confidence":
1) that failure to pay taxes will be punished
AND ADDITIONALLY
2) that failure to repay the government-backed counterfeiting cartel, the banks, will be punished with loss of collateral.
So much for "regression theory."
Equity is a claim, a form of debt. Vilhelmo
ReplyDeleteNo. Equity is what remains from Assets - Debts (Liabilities). Common stock are "shares" in that Equity that are normally non-redeemable since some capital (e.g. a milk cow) cannot be split up without destroying it and because the purpose of a common stock company is to consolidate capital, not dissipate it.
Thanks for the debate!
Iron sharpens iron, so one man sharpens another. Proverbs 27:17
F. Beard said...
ReplyDelete"No. Equity is what remains from Assets - Debts (Liabilities)."
Wrong.
Assets = CLAIMS
Claims are broken down as owner's equity & liabilities.
But both are claims, obligations, ie: debts.
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. from http://en.wikipedia.org/wiki/Asset
ReplyDeleteDefinition of 'Asset'
1. A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit. from http://www.investopedia.com/terms/a/asset.asp
I see no reference to "claims"; instead I see reference to ownership or control.
Beard said...
ReplyDelete"In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. from http://en.wikipedia.org/wiki/Asset
Definition of 'Asset'
1. A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit. from http://www.investopedia.com/terms/a/asset.asp
I see no reference to "claims"; instead I see reference to ownership or control."
WTF?
You can't be this stupid.
I never said an asset was a claim. How you got this idea, I cannot imagine.
Rather, Assets = Claims (Equity & Liabilities).
Stocks are a claim on the assets of the issuer.
I have never heard of stocks being used as a medium of exchange but this could be a result of ignorance.
Can you give me an example.
I never said an asset was a claim. How you got this idea, I cannot imagine. Vilhelmo
ReplyDeleteOK, my mistake. I misunderstood "Assets = CLAIMS)" to mean "Assets are claims." Sorry.
Stocks are a claim on the assets of the issuer. Vilhelmo
More precisely, they are a claim to the Equity of the issuer. That's why common stock holders are last in line when a company is liquidated - after all the Liabilities are paid off.
I have never heard of stocks being used as a medium of exchange but this could be a result of ignorance. Vilhelmo
Well, they are not broadly used as such because the so-called "creditworthy" are allowed to borrow new purchasing into existence thereby diluting, at least temporarily, existing purchasing power.
So why "share" when one can legally steal or at best "borrow" without permission or adequate compensation the purchasing power of the entire population?
Can you give me an example. Vilhelmo
Perhaps there are none of historical significance or they've been forgotten or suppressed.
But that's not surprising to me. Slavery was not abolished in the West till the 19th century and women could not vote till the 20th.
Matt Franko said...
ReplyDelete"Don't forget about the 'golden hemorrhoids' in Samuel... that is a good one too!"
So Pete Peterson really IS a social proctologist! :(
@ F. Beard
ReplyDeleteIf common stock was used as money how would one value it?
Common stocks are indeed a liability in the company's balance sheet.
They are a form of debt, as are all financial assets.
If common stock was used as money how would one value it? Vilhelmo
ReplyDeleteEvery common stock money of significance would have a free market exchange rate with fiat.
Common stocks are indeed a liability in the company's balance sheet. Vilhelmo
No. The common stock owners would have to be listed under "Equity" since they are co-owners of the company.
They are a form of debt, as are all financial assets. Vilhelmo
The indoctrination is deep indeed. How does one owe something to oneself?
I remember reading about this in my Economics class last summer. Gold has intrinsic value which can be passed down. It's also very heavy and hard to carry around, thus the modern day banks came into being. I understand "paper-money" has no worth if the trust behind it collapses, but hopefully that won't happen. I don't want to go back to the barter system or haul around a bunch of precious medals. http://www.hjbltd.com/ancientcoins/cncc.asp?inventorygroup=cc
ReplyDeleteF. Beard said...
ReplyDelete"No. The common stock owners would have to be listed under "Equity" since they are co-owners of the company."
What?
If your saying that stocks are listed as "Equity" then I agree.
What I'm saying is that Equity is a liability of a business.
Equity is what a business owes to its owner(s).
F. Beard said...
"How does one owe something to oneself?"
Are you serious?
You're confusing the business entity with its owners.
Sam Gibson said...
ReplyDelete"Gold has intrinsic value which can be passed down.
So does every other commodity/Real Asset
Sam Gibson said...
"It's also very heavy and hard to carry around,"
Which is why, along with its high value, gold could not have been a medium of exchange for everyday transactions.
Sam Gibson said...
"I understand "paper-money" has no worth if the trust behind it collapses, but hopefully that won't happen."
Money has value because of taxes.
Trust has nothing to do with it.