Better than Gold? Theoretically Ideal Monetary Standards

[Ecolibertarian]

On this site, even those of us who don't wholeheartedly embrace some implementation of a gold standard are somewhat familiar with the arguments advanced in favor of gold as money, as a unit of value, as a bulwark against inflation and hidden taxation, etc. Historically, even those who have agreed that pure fiat monetary regimes are unacceptable have differed on specific policies when it comes to sound money (bimetallic standards, for example). Is gold an ideal store of value? Or could we imagine a better substance on which to build a currency regime? I'd like to see what criteria people would set for an ideal non-fiat system. Here's what I've come up with so far:

1. Durable;
2. Limited in natural supply, all natural reserves discovered, and impossible to produce artificially;
3. Following on (2), widely perceived as valuable or even essential for reasons not dependent on the current state of technology (other than the technology to theoretically create it, which per (2) should be impossible;
4. Distinguishable from other substances;
5. Easily transported, yet difficult to confiscate.

Would anyone else disagree with or add anything to the above? I'm wondering whether cryptocurrencies are not superior to gold.

[CaptUSA]

You have durability, portability, limited supply, inherit value, and uniformity, but you're missing divisibility. Acceptability is another, but I think you have that.

[acptulsa]

I still like Ron Paul's idea--competing currencies. Those with real world merit will be accepted widely, and anything can be used between consenting adults. No throwing people in jail for doing business in any efficient yet harmless way, and an end to the Petrodollar Wars.

We don't need no stinking gold standard, or any other standard. Let the market pick the winners, because when that happens people are using what works best, and their lives are improved to that degree.

Why should people listen to our opinions of what would work best? Let us all try them all and see.

[kfarnan]

In many ways CC is better than precious metal. The planet isn't being raped for everything it has. Divisibility, portable, security; for now nothing else can come close.

[H. E. Panqui]

I still like Ron Paul's idea--competing currencies. Those with real world merit will be accepted widely, and anything can be used between consenting adults.



(....just a few questions for ludwig monetary theorists...what unit(s) will 'the government' use to 'do business?' collect taxes, etc.. ...in what unit(s) will government employees, soldiers, etc., be paid?...what unit(s) will be 'acceptable' in courts at law?..for damages when there is no contract, etc.?...

...those of you who are pure, perfect 'anarchists' can make such ludwig theoretical 'competing currencies' statements...those who aren't are doing the ludwig shuffle....again...get real...

[Bossobass]

I believe gold and silver to be just 2 important resources. If I had any say, the US currency would be backed by all of its valuable resources. America has a couple trillions of tons of coal (50% of the world's known reserves), vast timber (17 billion cu ft/year), gold (8,000 tons, minimum and the 4th highest producer with 240 metric tons/year), silver, oil (on and offshore reserves of 1.2 trillion barrels), natural gas (6th in the world with 272 trillion ft^3) water (3rd in the world by total renewable water resources), iron ore (3.5 billion metric tons, 5th in the world), copper (world's 3rd highest producer), rare earth metals (2nd to China) etc.

In this age of super computers, such a system of currency backed by a basket of resources would be a snap and something I've thought about since the 90s after learning the debt based currency FRN scam.

[presence]

Elimination of legal tender laws. Elimination of state printing presses. Whatever dollars in circulation stay in circulation until they melt away.

From there, private individuals can mint competing currencies out of whatever they wish to mint from... be it gold, silver, copper, proprietary paper or plastic, etc.

Along side these "competing currencies"; crypto currency, and other extraterritorial state fiats would still exist.

[presence]

(....just a few questions for ludwig monetary theorists...what unit(s) will 'the government' use to 'do business?' collect taxes, etc.. ...in what unit(s) will government employees, soldiers, etc., be paid?...what unit(s) will be 'acceptable' in courts at law?..for damages when there is no contract, etc.?...

...those of you who are pure, perfect 'anarchists' can make such ludwig theoretical 'competing currencies' statements...those who aren't are doing the ludwig shuffle....again...get real...

suddenly when .gov can't print and tax their way out of their promises... they'll need to make less promises

such a pity

[H. E. Panqui]

suddenly when .gov can't print and tax their way out of their promises... they'll need to make less promises

such a pity

(...agreed about them making 'less promise$'...but 'gov.' doesn't 'print'...'the government' issues bonds (promises to pay)...the banksters 'create deposits' and acquire the bonds...the gov. then acts as 'tax collector' for the banksters as they get their bond interest, etc. ad nauseam, for nothing....

...i don't blame folks for being complete monetary ignoramuses...it's been going on for age$...

..to me thi$ issue is the 'dividing line'...monetary realists vs. the all-time undefeated home team world champions:...the monetary ignoramuses...and it's been an ugly ugly game for the EXTREMELY undermanned monetary realists....

[Zippyjuan]

Too tight of a money supply can squeeze and limit your economic growth. But it also true that too much money is not good for an economy as well.

Zimbabwe which used to have the "too much money" problem now has the opposite one.

http://www.newzimbabwe.com/news-2857...less/news.aspx

[acptulsa]

(....just a few questions for ludwig monetary theorists...what unit(s) will 'the government' use to 'do business?' collect taxes, etc.. ...in what unit(s) will government employees, soldiers, etc., be paid?...what unit(s) will be 'acceptable' in courts at law?..for damages when there is no contract, etc.?...

...those of you who are pure, perfect 'anarchists' can make such ludwig theoretical 'competing currencies' statements...those who aren't are doing the ludwig shuffle....again...get real...

What difference does it make? One currency can be exchanged for another now, right? Do you think it won't be possible under this system?

I believe gold and silver to be just 2 important resources. If I had any say, the US currency would be backed by all of its valuable resources. America has a couple trillions of tons of coal (50% of the world's known reserves), vast timber (17 billion cu ft/year), gold (8,000 tons, minimum and the 4th highest producer with 240 metric tons/year), silver, oil (on and offshore reserves of 1.2 trillion barrels), natural gas (6th in the world with 272 trillion ft^3) water (3rd in the world by total renewable water resources), iron ore (3.5 billion metric tons, 5th in the world), copper (world's 3rd highest producer), rare earth metals (2nd to China) etc.

Too tight of a money supply can squeeze and limit your economic growth. But it also true that too much money is not good for an economy as well.

Two more good reasons for competing currencies. They can utilize any or all of those things of value, and they are always sufficient to keep the economy perking along without shedding value--or if they do drop in value too much, there's another thing to exchange with handy and not illegal to use.

[H. E. Panqui]

What difference does it make? One currency can be exchanged for another now, right? Do you think it won't be possible under this system?

...in 'this [stinking rotten misunderstood] system', sure, you can 'exchange one currency for the other'...BUT WHEN YOU GO TO PAY THE TAXMAN SO AS TO REMAIN IN 'YOUR' AMERICAN HOUSE AND USE 'YOUR' CAR, BUY SOME CLOTHES, TAKE YOUR SWEETHEART TO THE MOVIES AND DINNER, ETC. AD GD NAU$EAM, YOU'D BETTER HAVE ENOUGH 'DOLLARS'...OR GO WITHOUT...(NOT TRUE ABOUT ANY OF YOUR THEORETICAL 'COMPETING CURRENCIES!'...

....sorry for 'yelling'..but sheesh!..get real...quit with the ludwiggery already...

...you're like the people who say, '!we need a gold money system...get rid of your dollars and buy gold!!'...so i ask them, why you buying all the gold?...they say, essentially, 'because it will be worth a lot more dollars in the future'...well, that leads me into all kinds of fun que$tions...

[acptulsa]

...you're like the people who say, '!we need a gold money system...get rid of your dollars and buy gold!!'...so i ask them, why you buying all the gold?...they say, essentially, 'because it will be worth a lot more dollars in the future'...well, that leads me into all kinds of fun que$tions...

Like what's wrong with that...?

[DamianTV]

I'll throw something at the OP...

The threat of elimination of Cash, and thereby all Financial Privacy is close at hand. The mentioned requirements could be distorted to include purely digital currency. I would have to say two additional prerequisites, necessitated by Freedom, would have to include both Privacy and Tangibility (touchable, physical, like cash). This would also hopefully allow Competing Currencies that are not controlled by issue of the Banks, but given value by the People.

[presence]

...you're like the people who say, '!we need a gold money system...get rid of your dollars and buy gold!!'...so i ask them, why you buying all the gold?...they say, essentially, 'because it will be worth a lot more dollars in the future'...well, that leads me into all kinds of fun que$tions...

If we took my suggestion of "stop printing and allow those notes outstanding in the market" it might actually lead to a deflationary trend as decaying legacy dollars are "destroyed" over time without replacement; whereby the dollar becomes more valuable than gold.

[H. E. Panqui]

If we took my suggestion of "stop printing and allow those notes outstanding in the market" it might actually lead to a deflationary trend as decaying legacy dollars are "destroyed" over time without replacement; whereby the dollar becomes more valuable than gold.

(it seems to me, historical reality reveals 'deflation' (a decrease in the supply of money) has always been a really really bad thing for 'the little guy'..it also seems to me if you are filthy rich, 'deflation' would be freaking great!..(of course i'm willing to hear your 'theorie$' here)

..can you elaborate some historical reality as to when 'deflation' has ever been a good thing for the broad population?

...(just trying to fight through the ludwiggery, folks)

[presence]

(it seems to me, historical reality reveals 'deflation' (a decrease in the supply of money) has always been a really really bad thing for 'the little guy'..it also seems to me if you are filthy rich, 'deflation' would be freaking great!..(of course i'm willing to hear your 'theorie$' here)

..can you elaborate some historical reality as to when 'deflation' has ever been a good thing for the broad population?

the primary reason why deflation is "bad" is because loans default. undoubtedly $#@!ty loans have been made on the fiat system.

those loans SHOULD default; or there should be strong incentive for creditors to renegotiate... because there should be no lender of last resort; ala .gov

as deflation via dollars destroyed would make legacy fiat currency more valuable, and creditors would have little other options and without "last resort" there would be incentive to renegotiate. something or nothing... creditors will choose something.

so what you might see is loans repackaged under new rates and terms; perhaps also redenominated in gold terms... or some other mutually agreeable free market currency terms.

In all my reading... the Austrians have always alluded to 6-12 months of pain before balance can be restored via market forces; and a large part of that painful period is loan defaults and refinancing.

[erowe1]

inherit value

Neither any cryptocurrencies nor any commodities have inherent value. Value is inherently subjective.

[CaptUSA]

Neither any cryptocurrencies nor any commodities have inherent value. Value is inherently subjective.

Cryptocurrenices do not have inherit value, but commodities do. By the very definition, it means that commodities can be used for a purpose other than just a means of exchange.

Cryptocurrencies are basically bank notes that operate similar to fiat, but there is no government decree. I'd argue that they are superior to fiat, but they still do not meet all the criteria of "sound money".

[presence]

Cryptocurrenices do not have inherit value, but commodities do.

Nothing has "inherent value"; value is subjective to your ability to unload your junk on someone else. It doesn't matter if that junk is gold or crypto, or a used car with a rusted chassis... its still valueless junk until you sell it.

Valuation is instantaneous and fleeting.

The subjective theory of value is a theory of value which advances the idea that the value of a good is not determined by any inherent property of the good, nor by the amount of labor necessary to produce the good, but instead value is determined by the importance an acting individual places on a good for the achievement of his desired ends.

[]

in the Austrian school of economics, prices are not meant to be a quantification of marginal value. On the contrary, a buyer will only buy a good if he subjectively values the good more than the price he has to pay for it, and this subjective profit will tend to diminish with each unit of good the buyer decides to buy.

https://en.wikipedia.org/wiki/Subjec...heory_of_value

[PierzStyx]

I still like Ron Paul's idea--competing currencies. Those with real world merit will be accepted widely, and anything can be used between consenting adults.



(....just a few questions for ludwig monetary theorists...what unit(s) will 'the government' use to 'do business?' collect taxes, etc.. ...in what unit(s) will government employees, soldiers, etc., be paid?...what unit(s) will be 'acceptable' in courts at law?..for damages when there is no contract, etc.?...

...those of you who are pure, perfect 'anarchists' can make such ludwig theoretical 'competing currencies' statements...those who aren't are doing the ludwig shuffle....again...get real...

1. Competing currencies doesn't mean the government can't have its own currency, just that it can't compel anyone to use it it alone.

2. The US government got along quite well with competing currencies for the first 1/3-1/2 of its existence. It would do so again.

[PierzStyx]

Nothing has "inherent value"; value is subjective to your ability to unload your junk on someone else. It doesn't matter if that junk is gold or crypto, or a used car with a rusted chassis... its still valueless junk until you sell it.

Valuation is instantaneous and fleeting.



https://en.wikipedia.org/wiki/Subjec...heory_of_value

Technically true. But gold has historically been a default that everyone across the world has placed value in, even when starving people have been willing to trade food for gold. It is as close to having inherent value as anything can have it.

[erowe1]

By the very definition, it means that commodities can be used for a purpose other than just a means of exchange.

That is not what the definition of value is.

[presence]

It is as close to having inherent value as anything can have it.

If you take two men that meet in the desert, one has water and the other has gold... you'll find the "inherent value" proposition to be much weaker. That is, the tendency to price gouge given extreme circumstances destroys the notion of "inherent value"; value is subjective to party desire, relative to circumstance, and fleeting from the last known transaction; never inherent.

[kfarnan]

Cryptocurrencies are basically bank notes that operate similar to fiat, but there is no government decree. I'd argue that they are superior to fiat, but they still do not meet all the criteria of "sound money".

Bank notes operate nothing like CC. They're exactly opposite.

[H. E. Panqui]

..as one wag put it, ...'alas, it seems only when all the trees have been cut down, all the soil ruined with industrial agriculture and chemicals, all the waters polluted, all the air unsafe to breathe...only then will the gd fool republicrat ludwiggers discover you cannot eat money...

[otherone]

suddenly when .gov can't print and tax their way out of their promises... they'll need to make less promises

such a pity

All the slimy little creatures will be flopping about the muck in the bottom of the drained swamp, suffocating in the sunlight.

[presence]

..as one wag put it, ...'alas, it seems only when all the trees have been cut down, all the soil ruined with industrial agriculture and chemicals, all the waters polluted, all the air unsafe to breathe...only then will the gd fool republicrat ludwiggers discover you cannot eat money...

yes it would be much better for all if only politically connected socialists obtain permits for such wanton destruction, at least then nobody can be sued

[kfarnan]

..as one wag put it, ...'alas, it seems only when all the trees have been cut down, all the soil ruined with industrial agriculture and chemicals, all the waters polluted, all the air unsafe to breathe...only then will the gd fool republicrat ludwiggers discover you cannot eat money...

Yes, go back to bartering livestock and nuts. Lol

[erowe1]

..can you elaborate some historical reality as to when 'deflation' has ever been a good thing for the broad population?

https://en.wikipedia.org/wiki/The_Great_Deflation