that is false, obviously you are neglecting economics, because gold is far more stable than dollars.What do you mean by "fake" dollars? You can take the USD from 1920 and you'll get the same results. Because it is in REAL terms. See this for more: http://en.wikipedia.org/wiki/Real_versus_nominal_value_(economics)
And even if you make the fallacious argument that the dollar is fake, that very graph I posted also shows the value of gold vs. a commodity index (the red line in the graph)- more commodities, which you agree have value. Even there, you see the tremendous change in value of gold.
And it is not me that does not understand econ or is neglecting it. The value of gold simply HAS changed in the last 100 years and forever dating back to the beginning of time. It does not matter what school you talk to, any economist will admit that- even the Austrian school in which many support commodity backed currency.
On a side note, if you think the dollars in your wallet are so fake, useless, and worthless, feel free to give them to me
Gold is volatile- it is much more subject to market forces and speculation. That graph that I posted shows it. There is also a limited amount. Dollars can be controlled via a central bank. More importantly, do you have any data, research, or even opinion by a notable economist that supports your theory? With all due respect, I expected a civil conversation with you based on our interactions in the past, but you keep suggesting that I am "neglecting economics" which I take as an offense since I am trying to be objective here. I think given the economic theories that are popular today, I am the one that is paying attention to econ more anyway. But again, please enlighten me if you think you are still right by giving me some proof other than just repeating your argument ad nauseum. And please save the insulting comments.
That simply isn't true. QE 1 and QE 2 have left us with still below 2% inflation. And what is fake? Maybe I think some random shiny gold metal is fake. You are making a subjective argument in an arena that allows for objective analysis.
Well we were on a gold standard then, so I don't know why that is relevant to my argument.
Sorry that I offended you.
by fake i mean artificial, being that a bank is nessasary to establis value. But gold is far more universal. Nerly all cultures on this planet value gold, only several value dollars. Go to japan and see if they want dollars or gold, they will take the gold. It doesn't matter what you think about gold everybody else will value it unless welth is not something people want. I will take all of your fake shiny metal. Not sure what QE 1 and QE2 is but i don't think that matters. The fact that things cost more dollars and less gol kind of proves my point. Why has the dollar changed so much over the years, why does milk cost 4 dollars a gallon, VS 1.29 when i was a boy. But it would equal out to the same if we used gold. Actually you would get more milk now for the same gold than in the 60s. Why do we keep raising the minimum wadge, it certianly didnt need to be raised if inflation is only 2%. it should still be 2.50 maybe 3.00. But the buying power of the dollar has deminished when gold has increased. True money is easier to exchange than gold but that is all.
We actually went off of the gold standard, it had to do with too much money in to few pockets. He illegalized gold because he created a new system of money, where each dollar didnt represent gold a fixed amount of gold but they could fraction it out. Leading to the system we have today. My point is that if the treasury decided to make an anouncement that the dollar wasn't worth anything, it would be true, not only would merchants in the state not take them, forign nations certianly wouldn't but if they did the same thing with gold, we would just laugh and use it on the forgin market.
You don't need an expert, but you need facts. You need studies, you need research. You have provided none. And the market has already shown it values USD. Wall St., the banks, and heck even you (assuming you buy and sell things with dollars and work for dollars) value it.
Actually it does. They were treasury purchases by the Federal Reserve that expanded the money supply by about 2 trillion (they bought treasuries with USD that they made). And yet, inflation is below 2%. Of course the explanation is that velocity has been low. But that is proof that your simple claim is false.
Gold has not been stable. It has gone up and down. To prove it, again go to the graph I linked to you earlier. X ounces of gold at the last date in that graph would have bought you about 3 times the amount it would have bought you in 2002 (assuming milk prices are constant) but only about 1/2 of what it would have bought you circa 1980.
Yea... that's not true. You skipped Bretton Woods and all that all together.
They'd never do it. Even if they did, it would still have value probably. Oh and the Fed, not the Treasury controls the currency.
That is true for EVERYTHING. Including gold. Look up the subjective theory of value.
I agree that it is subject to supply and demand, I disagree that supplu changes, because there is no way to produce gold, it has to be mined, it is a resorce, therefor limited supply. Until we can mine it on another planet or create it in the lab, there is as much gold now as there ever will be and ever has been, that is a fact.vclax, are you just going to ignore everything I typed above and repeat your argument ad nauseum? I can say the sky is purple a billion times, but that won't mean the sky becomes purple.
Maybe thinking about it from these questions will give you another take on it:
1) Do you think gold is subject to supply and demand? And do you agree that the supply and moreso the demand changes over time? If so, you agree that it is not completely stable. If you don't agree, you are ignoring the real market price changes- actual data. You are literally ignoring fact.
2) Do you think that money should be as stable as possible? If so, it makes no sense to let gold which goes up and down A LOT be money, at least not without central bank intervention.
3) Do you agree that with any item in the world some people will value it more than others? Including gold? (take a father who has $10 USD to his name and has to feed his family- he isn't going to pay it to buy gold. The gold speculator on the other hand, might. If you agree, you agree that value is subjective and that goes for ALL value whether it is gold or the USD.
Honestly, please read up on the Federal Reserve system and monetary theory because I think you are misunderstanding how things work. Your implication that the Treasury is responsible for the currency, not knowing the difference between nominal and real value, etc. suggests to me you haven't familiarized yourself with the facts, theories, and system before you started arguing against it so vehemently.
Also, central banks in no way look like they are going to be switching to gold any time soon
Actually gold is still being mined. But I agreed that the supply doesn't change much. The demand however does, clearly.
It is not a matter of cultures, it is a matter of individuals. You value things differently than I do as does any other individual. That's how it is. And clearly the vast majority of us value the USD still. We value it because of its function and because we think it has value. Same reason why we value gold. There is nothing inherently different.
My point is gold is volatile. Not really good for a currency. With the USD at least we can control the rate of inflation over the long run.
Demand matters too. That was the whole point.
How about you talk about after 1971 when the gold tie was gone? Since there the USD has inflated 225%, far below the 467.4% it should have at 2% annual inflation.
The USD doesn't have a counterfeiting problem. And you absolutely can cheat people with gold (ever hear of the old scams with metal or other element bars being put inside gold bars?)
you are being completly illogical. If TVs were currency than that point would make sence. Further more your TV would have no value if it didn't work, just like your dollar.
old scams, meaning they don't work anymore. You can't fabricate gold, you can lie about its purity, but i can prove you are lieing with a simple test. Being that man makes money, means any man can make money. Therefor it is simply copying the process that is available to anyone, with funds.
I'm really not being illogical- that is literally the argument you just made. An even better one: take your baseball card that is worth a bunch of money and melt it down and then see how much the ashes are worth. Really doesn't make sense, does it? The USD has value since it is USD- when you change it to not being USD, how can you expect it to have the same value?
Really not a "simple test". And you expect every transaction in a store or something to test the gold to make sure it is pure? You can still cheat the gold system, don't pretend you can't. And God probably didn't make gold
