Skip to Content.
Sympa Menu

homestead - Re: [Homestead] gold back currency anyone?

homestead AT lists.ibiblio.org

Subject: Homestead mailing list

List archive

Chronological Thread  
  • From: Clansgian AT wmconnect.com
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] gold back currency anyone?
  • Date: Mon, 8 Dec 2008 07:49:56 EST


> Cay: >No government in the world currently uses gold to back their currency.
>

Immaterial. Governments back currency and gold is "valued" between your two
free independent traders based on established and enforced currencies. Why
is
gold right now suddenly more valuable than it was a year ago? Is there less
gold in the world? No just the opposite, there is more gold held on
speculation now than ever before. It appears to be more valuable only
because monetary
policies have made the fiat currency less valuable. The "value" of gold is
inexorably intertwined with the value of government backed currency.

The paradigm offered by the goldniks is that in an eschatological hard time
they would be able to use the gold monetarily to obtain the goods they need
to
survive. Besides a few stories of plunder and bribery as during the Nazi
era,
are there any examples or paradigms to point to where people with a cache of
gold were able to sustain themselves for five years or more using that gold
in
absence of a government backed monetary system.

Bob, in another post of this thread, talks about showing up at a homestead
wanting to trade a gold coin for some bread. Will that be a deal? Maybe or
maybe not. Even if it is, the bearer of gold is at a distinct disadvantage.
In
hard times the hardscrabble family might join in the speculation and spare a
loaf of bread for the prospects of much greater wealth in the future. So
maybe
five or six one ounce coins for a loaf of bread.

That is:

Cay:>With gold the value is the price that another man is willing to pay
using another medium of exchange (currency, rice, chicken, whatever)
regardless of
the concept of "intrinsic value

In other words, gold is a gamble. Rice, chickens, and rum are NOT gambles.
Good times or bad, inflation or deflation, monetary system in place or not,
the rice will sustain you. The gold may be worth a ton of rice or else it
might
not be worth a cup of it. Your above comment points out the major
charateristic of gold that I would emphasize: Gold ONLY has value when you
can get two
people to agree it has value. Rice has value whether someone agrees to it or
not.

Cay:>But the rock just sitting there has no intrinsic value,

That's a red herring in the discussion. Gold in your lock box in the attic
has no value either so long as it is just sitting there.


James






Archive powered by MHonArc 2.6.24.

Top of Page