People should understand that a fiat currency is better than any commodity based currency. But they don't.
People are idiots and have let TV windbags convince them that a gold based currency is more "real". Shiny!
People are idiots and have let TV windbags convince them that a gold based currency is more "real". Shiny!
BTW, if fiat money are so great and gold money is so inferior, why exactly the government snatched the private gold in the 30s[1]? Did they want the inferior thing so much that they had to force people to give it up because they wouldn't voluntarily exchange it for the much better thing? I imaging they were rescuing those people, that's what it was. A sacrificial act by the Feds.
Your other argument is incoherent--there's no fundamental reason to build monetary policy such that it favors individual investors over the health of the economy as a whole. In fact, if people simply hoard money rather than spending and investing it, that's generally an indicator of a poor economic system that can cause the type of deflationary spirals that caused the Great Depression in the first place.
The way that fiat currencies have pretty much displaced commodity currencies suggest that this is actually a fairly widespread realization.
Until someone discovers a mine that doubles reserves over night. Gold can be just as bad as paper with modern mining technology.
Zimbabwe kicked their inflation problem by dollarizing. Note they have plenty of gold to mine in that area.
The US dollar is still a very stable currency, whatever the libertarian alarmists claim.
2. User B lists a number of additional areas in science and technology that rely on the intrinsic properties of gold and bemoans financial system reliance on gold. Somewhat off topic and interesting discussion of fiat currencies ensues.
3. User C comments that gold is intrinsically worthless.
Great example of why I find HN so interesting and infuriating.
This is true for all materials and services.
> Gold as a concurrency is completely detached from gold as a useful commodity.
Is that your way of saying "I should not have said gold was intrinsically worthless"?
It's simply not "right" to tie the value of everything in society to the value of a specific good. Gold, like all other goods should be free to have a value that is intrinsic to its uses (of which there are many in science and engineering) and other goods should not be subject to price fluctuations due to supply and demand issues related to gold.
Obviously, people have issues with their fiat currency issuer – especially since currencies tend to be a government monopoly and lots of governments abuse that monopoly. However, that's well outside the point I was making. In any case, that's not an issue with fiat currency per se but with government monopolies on fiat currency (something that currencies like Bitcoin have set out to address).
Here's an absolutely classic piece from the austrian view point. Take a read, it might expand your narrow views even if you don't agree!
http://www.amazon.com/The-Monetary-West-Jacques-Rueff/dp/B00...
Hypothesis: Gold economies are more stable than fiat currency economies.
Expected observation: Gold economies have fewer economic crises and panics than fiat currency economies.
Actual observation: They don't.
Any recession is caused by "expanding production", the whole point of a recession is that it's a correction that happens after a boom cycle.
The list provided only shows that they also have crises -- it doesn't show how those crises measure (respective to fiat currency economies) in magnitude, frequency and consequences.