When gold becomes an inefficient means for conducting indirect transactions, another medium will arise, spontaneously, to relieve the pressure.
"...fixed supply or change the size of the money supply over time..."
Competition in any economic good provides the benefits of ample supply, best quality and low price.
As money obeys the same economic laws as any other economic good, and reacts the same way to these economic laws, competition in money would provide ample supply, best quality and low price.
This is why a discussion on whether going back to a gold standard is actually frivolous, and gold standards are defended by those with pre-elementary understanding of economics.
It should not be done - monopolizing money AGAIN by government decree only repeats the error - even if the monopoly is with gold. We have had gold standards and they all have been debased.
Instead, let the market determine its own money -whatever it is- freely, and the benefits of that means of choice - the free market, will be very powerfully rewarded to the people (but not so much to the elite).
Last edited by Black Flag; 03-30-2012 at 08:07 AM.
A market with private, competing currencies is guaranteed not to have a money supply of fixed size, as it will change in size, likely with a trend of growth over time in reaction to market demand.
In other words, exactly what I've been saying the entire thread.
Further, such a trend of growth is neither likely nor unlikely - it cannot be determined if there is a indication of any dominate direction- but it can be said it will fluctuate - it will go up and down on the supply/demand of it by the economy.
You couldn't say that there would be any trend -say- for iPhone v.4 to always go up ... it will go up initially, and then fade eventually.
There is no reason why money would be different - and equally, there is no reason why money might not act differently.
Last edited by Black Flag; 03-30-2012 at 12:45 PM.
It is important to know what gold really is - and it isn't money.
Gold represents the level of trust the people have with their rulers.
If they do not trust their rulers, they do not trust their rulers money, gold rises in price.
If they do trust their rulers, they trust the rulers money, gold goes down in price.
Gold is the thermometer of the people's trust in government.