Posted on 10/22/2014 7:23:19 AM PDT by blam
Google ....dark fiber.....:o)
No. Gold IS money - but at the moment it is overshadowed by fiat money: bad money. Remember Gresham's Law. I introduced this to you further up the thread.
Governments use fiat because they can. They can increase the supply of fiat by pressing a button, and use it to buy goods and services. They use fiat because - although it is not money - others are still willing to accept it as if it were.
However: all unbacked fiat currencies eventually revert to their true value: which is zero. There was a time when the Zimbabwean dollar and the Weimar mark were accepted in payment for goods and services - but that is no longer true. In the same way a time is coming when the Federal Reserve Note will no longer be accepted for payment.
Long before that happens: Gold's monetary status - and the very concept of what money is - will be normalized.
The post-apocalyptic chicken farm isn't going to be able to use just anything as a medium of exchange. I posted the monetary traits of Gold up-thread. These traits (fungibility, durability, store of value, rarity and so on) are not optional: manure isn't durable, it isn't rare and its also somewhat toxic.
The Midwife and the Engineer will not accept (literally!) any old crap as payment for their services. Even if they were willing to drive to their next job with half a ton of literal crap in their car - they need to buy replacement morphine, replacement tools and consumables. And the people they are buying from have no use for manure. They literally won't take any crap.
The rest of your post is a reply to another FReeper.
But then Gold (in a post Fiat world) will have too high a buying power to be used for common over-the-counter purchases. It's more likely to be used to buy real-estate: and for that the small extra cost of running the full gamut of assay tests is perfectly feasible.
I use a postapocalyptic example as a way of portraying the fundamental value of money: however I don't actually expect this to occur. What we will actually have is a world like today (with internet and electricity) but without fiat.
In such a world we could use cards to digitally transfer ownership of Gold and Silver stored in daily-audited vaults from customer to vendor. We could also use standardized silver coins that get run through commercially-available coin checkers just as vendors have counterfeit note detectors in shops today.
“No. Gold IS money” Oh, I forgot, on the eighth day God said gold is money.
Again you don’t understand money. BY DEFINITION money is a CIRCULATING medium of exchange. Gold is not circulating as any official medium of exchange. So it is no more money than my underwear, which is also not officially circulating as a medium of exchange.
“These traits (fungibility, durability, store of value, rarity and so on) are not optional”
That is patently and demonstrably false. Salt was used as money. see http://encyclopedia-of-money.blogspot.com/2011/10/salt-currency.html
A little bit of rain on the salt and you will see it is not durable. The only actual requirement of something to be money is the argreement between people to use it as a medium of exchange. Therefore bitcoins are money. They may or may not be a stable money supply, but they ARE an agreed upon medium of exchange. Since they are not officially sanctioned by any government as currency, it sort of puts it into a quasi money state, but that is where gold is as well.
“all unbacked fiat currencies eventually revert to their true value”
The term fiat currency is a misnomer. Fiat simply means decreed. In other words, officially sanctioned. When the constitution said “No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts” then gold and silver both became fiat currencies because they were officially decreed as currency. However that has since been rejected, so that now they are not officially money at all.
ANYTHING can be used as money. Not all things are convenient to use as money.
Don’t get me wrong. I think our economic system is a catastrophic problem. But that problem is not that we don’t use the element gold as a basis for currency, any more than the cause is that we don’t use any of the other 78 stable elements as currency. The problem of our inflationary boom and bust economic system is one of usury, a violation of God’s law. It is that simple. Any usury based economy claims value from nothing.
For example I’ll use your fiat currency of gold. Let’s say the government mints 1 trillion gold coins. For the sake of argument, let’s say they do that amount because it is the exact true valuation of everything in America. Now they loan them into circulation at a miniscule interest rate requiring only 1 trillion and 1 million to be paid back. They have just demanded more payment than the entire value of everything in America. Therefore the ONLY choice is to coin more gold and loan it into existence, which then further exacerbates the problem. The only reason this charade can last as long as it does, is because people have children and they begin to produce things as well. The economy therefore grows. But the usury still enslaves everyone to the lender, or as scripture puts it “the borrower is servant to the lender”.
No matter what you reply, I am not likely to participate further in this. I have given you actual dictionary definitions for money, and fiat, both of which are grossly misused, especially by gold bugs. I have also given you the cause of economic slavery as specified by God himself. You may not like actual definitions or even God, but I don’t care to divert this thread further if you cannot recognize the difference between an element and a currency.
Meanwhile more to the thread, I agree with the other comment about chemicals and communication. I ran out of time yesterday, but there are a number of chemicals which would be very good to have a supply of if you can store them safely. The ability to make colloidal silver is good too. A very small amount of silver will give you an almost endless supply of disinfecting liquid. A generator and some fuel is good, but fuels could easily become unavailable VERY quickly. A solar system with backup parts could supply you all the energy you want for 30 to 40 years. More backups could extend that to the degree you are willing to spend the money. 10 backup systems = 300-400 years of energy. Further that energy may be a saleable commodity. People may pay you to charge their batteries or come to you to be able to run some power equipment once fuel becomes unavailable.
Primarily however, I think the tools and expertise to produce needed good or services is the most valuable thing whether you are in a strong economy or a post apocalyptic one. But if they are power tools you will need power.
Chicken guano isn't money. This is because it doesn't possess all of the necessary attributes of money
Your underwear isn't money. This is because it doesn't possess all of the necessary attributes of money.
Gold and Silver ARE money. They possess all the necessary attributes of money. Indeed, they are referred to as monetary metals.
The only reason why Gold and Silver are not commonly used in exchange is precisely because they are good money - and by Gresham's Law the presence of bad money (Fiat currency) drives out good money.
Your definition that something must be currently used as money in order to possess the attributes of money is simply false.
Part of the definition of true Money is that it retains value - and so obeys Gresham's Law. The fact that Gold and Silver are reserved in the presence of Government-mandated false money is another sign that they are true money.
It is certainly possible for something that isn't money to be used as a medium of exchange. Company scrip, cowrie shells, the Federal Reserve Note and so on.
However these media always eventually fail - precisely because they do not possess all the prerequisites of money.
Anyone who routinely accepts cowrie shells, company scrip, Zimbabwe dollars and so forth in exchange for their goods and services eventually discovers that they have lost purchasing power by the exchange.
Fiat currency gains its temporary status as a medium of exchange by an act of Fiat - by decree of Government.
Your example of minting a trillion gold coins is flawed from the outset. If we were to put a face value on Gold/Silver coins we mustn't be surprised when the system crashes.
We can use digital vault transfers: and so let the free market determine the price of Gold and Silver.
Or if we must have the Government issue coins, we can use the Hugo Salinas-Price model (a silver coin issued by the monetary authority with no engraved monetary value). This allows the purchasing power of the coins to stay in step with the currency supply, including all credit.
Hope this was helpful.
While Noah Webster who new 28 languages defined money as “any other material ...use a medium of trade...Gold and silver, being ... the most convenient metals for coin or money .”, we are happy to have your learned self redefine 200 years of English language for us, such that money and fiat have new meanings. Thank you so much.
Don’t feel bad. Webster often defines words without digging deeply into the specifics. This is because dictionaries are not text books.
For instance (to take a random example) Webster defines ‘flotation’ without mentioning either surface tension or the Archimedes principle.
This is not because the staff at Webster are incompetent: it’s because dictionaries aren’t designed to give you a deep understanding of the subject matter. They’re really for looking up words that you don’t know.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.