Let's take our country back!
Gold and silver is expensive, difficult to mine, finite and prone to counterfitting. I know it's incredibly unfashionable in this day and age but give me fractionally-reserved-debtbasefiatmoney instead! Why would we want to labour hard for our money when it can be created for peanuts at the flick of a pen? It doesn't make much sense, not to me anyway. Furthermore if the economy became too productive we would inevitably have to devalue to recalibrate the relationship between our total stock of gold/silver and GDP. A finite stock of metal cannot service the monetary needs of a growing indefinitely. These are some of my thoughts on the isssue.Keep up the good work btw. You don't tend to get many comments but I for one read all your blogs.
Hi Chefdave,It's the "creating money at the stroke of a pen" which I find objectionable. Money gets its value from its scarcity. When someone creates more they devalue the money that already exists. This is offset by GDP growth as you mentioned. If the economy grows by 2% then 2% more money can be created without loss of value (experienced as price inflation.)However history shows us that governments generally create far too much money and money losses its value.Yes, if we pick gold and silver as money then there is mining effort but at least there is guaranteed scarcity.
There's something almost primeval about gold and silver (in a good way!) and personally I made a few quid by trading a small number PM coins after reading too much HPC. Gold and silver has been good to me. But as a modern monetary system I don't believe it stacks up mainly because of the drawbacks I previously mentioned. I agree that the money supply is used and abused all too often: by unscrupulous governments keen to bribe voters with borrowed cash and by 'investors' seeking to make a quick buck out of property, but these are problems that can be tackled without reorganising the entire money supply imo. A simple land value tax would stop a lot of these problems dead in their tracks, no metal required, but LVT also requires an ideological commitment that isn't traditionally part of the left or right so it isn't often posited as a solution.
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