| Author |
 Replies: 55 / Views: 4,881 |
|
|
|
Pillar of the Community
United States
2168 Posts |
Yes but would it be back in the form of $ or just a peg and backing? Who knows. Then it would have to be fixed as well (but changed when the powers that be decide to as well)
|
|
Pillar of the Community
United States
4008 Posts |
Quote:
There is no evidence that gold has a constant value. Nor does there need to be any. If I select gold as my STANDARD of value, it is defined as having a constant value with all else fluctuating in regard to gold. Virtually all measurement systems have something that is considered the standard. In weights, that could be one gram. In distance, it could be 1 meter. Etc. If you do not choose gold as your financial value standard, fine, choose something else. Now, all you need do is get a lot of people to agree with you on it. Quote:
Could an ounce of gold buy the same quality of suit at any time during the 1980s or 1990s? Probably. The 1980s and 1990s were not a time when inflation was rampant. Paul Volcker absolutely crushed inflation via setting the US short-term interest rates to 21% for a while to wring the excess liquidity out of the market and inflation along with it. For several years after that inflation was very modest. Yes, times can always be cherry picked to show this or that more or less favorably. This is true for virtually any statement that anyone can make. If we can get past that, however, we can start to see general patterns and make some conclusions based on them. Will they be absolute? Of course not. Should they be? Well, they would be more easily understood but that's probably not going to happen in the real world any time soon. It's WAY too complex for simplification of this kind. |
|
Pillar of the Community
United States
2335 Posts |
Quote:
There is no evidence that gold has a constant value. Quote:
Nor does there need to be any. If I select gold as my STANDARD of value, it is defined as having a constant value with all else fluctuating in regard to gold. Virtually all measurement systems have something that is considered the standard. In weights, that could be one gram. In distance, it could be 1 meter. Etc. If you do not choose gold as your financial value standard, fine, choose something else. Now, all you need do is get a lot of people to agree with you on it. I'm not trying to be offensive but I am going to be blunt. An item is chosen as a standard in a measuring system because it HAS a constant value. It doesn't obtain a constant value by being designated a standard. If the item designated a standard doesn't have a measureable constant value in realation to the other items in a system it's not a true standard. If you want to measure prices and/or currencies against the price of gold that's certainly your right. However, in order to be considered to have a constant value gold would have to have a measurable, constant ratio to other items within the system. To use your example, 100 centimeters always has been, & always will be, equal to a meter. Obviously the financial system is very complex. I'm not pretending to be an expert. At this point the only thing I am 100% certain of is that I know very little about anything. I'm not against PM's & think there are many good reasons to invest in them. I'm just tired of people dragging out the suit analogy because there is no credible evidence that it's true. |
|
Pillar of the Community
United States
1391 Posts |
You do realize I can change the length of a centimeter right? If gold had a constant and measurable ration to other items within the system then prices could never raise or fall. Your system wouldn't even work for the "dollar." I am no expert in this matter either, but your objection doesn't make any sense. I just can't put my finger on it though, to early in the morning.
|
|
Pillar of the Community
Canada
1502 Posts |
Quote:
It doesn't obtain a constant value by being designated a standard. But of course it does. That's what the whole financial system is based on really, or at least the reason why the US dollar is the current world reserve currency. An item is chosen as a standard in a measuring system because it not because it HAS a constant value but because a constant value is ATTRIBUTED to it bluntly |
|
Valued Member
United States
302 Posts |
Quote:
An item is chosen as a standard in a measuring system because it HAS a constant value. It doesn't obtain a constant value by being designated a standard. If the item designated a standard doesn't have a measureable constant value in realation to the other items in a system it's not a true standard. The dollar is the current standard. Once the dollar was divorced from the GOLD standard, the dollar does NOT have a constant value in relation to anything else. Therefore it is not a true standard according to what you just stated. Your argument fails. Our argument is that gold is a better standard because over time, regardless of its variations, its value always falls within certain parameters relative to other items and never becomes worthless. There is nothing to prevent fiat money (IOUs), not pegged to some standard, from eventually becoming worthless and nothing to keep fiat money variations within any parameters. |
|
Pillar of the Community
United States
2335 Posts |
The claim was made that throughout history an ounce of gold could be exchanged for a nice suit of men's clothes & therefore the value of gold was constant. I used to think that was not true, but now I have to say that the lucid arguments presented here have changed my mind. Ya'll win & I don't mind admitting when I'm wrong.
I'm man enough to say that I now believe the value of gold is constant. I stand convinced that an ounce of gold is now, always has been, & always will be directly exchangeable for a nice suit of men's clothes. Please let me know when you are shopping for your next suit....depending on the spot price of gold I may be able to hook you up.
Edited by trdhrdr007
01/06/2012 4:34 pm
|
|
Pillar of the Community
United States
4008 Posts |
There are a lot of ways of looking at things. Most of them are fairly arbitrary. Many systems begin with a set of basic assumptions. This does not mean that we all have to accept the same basic assumptions but it does get us on the same page when we do. As to suits... I never wear them. I am far more comfortable in a pair of jeans and a T-shirt or sweatshirt, depending on the season, and a good pair of boots. If I did wear a suit, though, I am sure that I could find a pretty good one for $1600.  |
|
Rest in Peace
United States
9104 Posts |
Quote:
You do realize I can change the length of a centimeter right? Orly? Quote:
If gold had a constant and measurable ration to other items within the system then prices could never raise or fall. When we were on the gold standard, inflation was close to zero from 1800-1934. |
|
Valued Member
United States
410 Posts |
Quote:
When we were on the gold standard, inflation was close to zero from 1800-1934. Really? What metric are you basing that statement on? The consumer price index goes all the way back to 1913. ftp://ftp.bls.gov/pub/special.reque...pi/cpiai.txtI notice quite a bit of inflation: 1914 - 1% 1915 - 1% 1916 - 7.9% 1917 - 17.4% 1918 - 18.0% 1919 - 14.6% 1920 - 15.6% Then comes the deflationary spiral of the depression. Edited by JSH
01/06/2012 6:26 pm
|
| |
Replies: 55 / Views: 4,881 |
First Page
Previous Page
Posted 01/05/2012 10:38 pm
