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Comment by likpok | Hacker News Reader

Indeed. This is the point that gold-standard people don't seem to get. Gold is just as arbitrary as anything else. More so, even, because it is absolutely /useless/ in any aspect except as a valuable. It's too soft to do anything with. Furthermore, it has issues with being a finite supply that is occasionally moved around (no control over the monetary supply).

Steel. Now /that's/ what we should back our money with. Everybody needs steel. At least until carbon nanotubes get popular...

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Another thing is control.

Having a gold standard means that gold mining companies can manipulate your currency. Suddenly find a huge new vein? Inflation! Go for a decade without any new discoveries? Deflation!

Ask someone who supports a gold-backed currency if they would be willing to back their currency with oil, and they look at you like you are crazy... as they should. But it's no more crazy than gold. Oil producing countries just have a more visible bad rap, so the problem with that particular commodity is more obvious.

I'd rather be in control of my own money supply thank you very much. Why you would want to leave it up to fate and potentially hostile entities is beyond me.

That's not true tho'; it's resistance to corrosion makes gold industrially valuable.

Currencies should be backed by something pretty fundamental. Eventually it has to be the Joule.

High entropy joules are 'intrinsically' worthless and easy to come by.

It is actually its finite amounts that make it valuable. Anything that can be produced at will not hold up as a currency.

But we do create more of it (or dig it out of the ground and refine it, as it were), there's simply a practically finite rate at which we can grow the gold supply.

So the value of gold should in fact deflate over time, as we produce more and more of it.

No, we don't. No matter how you look at this, gold is not "created". Cold is extracted from gold mines, the only thing humans can do it try to find, but they simply can not create it.

Key here is that the total amount of gold on this planet is finite - not the production or extraction rate - making it truly valuable. Same thing applies to other natural resources such as oil, natural gas and diamonds.

Wait, you can grow diamonds in a laboratory.

But Carbon is finite, too. (And on the same note, Dollars are finite, too. We have to store the bits somewhere.)

>We have to store the bits somewhere.

+1 for the fine, fine irony. Intended or otherwise as it might have been.

>but they simply can not create it.

I seem to remember reading that that's not the case anymore. As in, we actually can make gold through transmutation. The amount of energy required to do so is bigger than the "value" of the resultant gold tough.

No, we mine it. We may discover more of it. But in ground reserve quantities are generally factored into the price of the stock of gold mining companies. So it is rather finite, and the more we explore and mine, the less likely we would be to discover more of it. Until someone invents the Philosopher's Stone.

Actually it's the demand that makes it valuable. (And the demand stems from everyone agreeing that it is valuable.)

There is a finite amount of uranium on earth too, but the only reason it's considered valuable is because there is demand for nuclear applications.

Only a little over 10% of gold is used for industrial applications. Without the demand provided by people agreeing that gold has value as a currency, the price of gold would plummet. The high value of gold is self-fulfilling... it's based on people's faith that everyone else thinks it is valuable.

Actually, the real bottom line is work transfer, which can be measured in energy. Energy can produce material goods. If I give you 1MJ in exchange for work, you could do something with it.

  The only law money needs to follow is conservation, which energy fits. OTOH, the US government does screw around with the conservation law a lot, but it does apply to normal people.

Energy comes in a lot of grades. Low-entropy energy is useful (e.g. electricity). High-entropy energy is useless (e.g. the oceans at their normal temperature).

http://news.ycombinator.com/item?id=424877 http://news.ycombinator.com/item?id=426142

12 points by demallien 20 days ago | link

Hey! Put some carriage returns in there! You're screwing up the page rendering...

I know this is off-topic, but every time I see a post like this, I feel like I'm back on /. during the 90's, why does this site feel the need to make the page wider than screen whenever pre-formatted text has long lines. (Other sites solve this by inserting scroll bars or forcing line wraps, but not this one.)

Depends on your browser. From what I remember, the pre's do properly size and have scrollbars in FF2, but not in FF3. The problem has to do with td cells expanding to fit their content I think.

There is a GM script that fixes this in FF3: http://userscripts.org/scripts/show/25039

Fix the bug!

Sorry about that guys!

Thanks for telling me how to not do that in the future. In this case, for some reason the edit button has disappeared... possibly because it was posted a while ago.

Well you can carry around gold chips which have a lot of value. A gold coin is worth quiet a bit. Can't say the same for a steel coin. Have to carry around a lot more silver (in volume) to get the same value.

I suggest Germanium. (ducks)

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