NationStates Jolt Archive

For those of you that know what the gold standard is, are you for or against it? I personally support having something backing paper currency aside from faith in the government, but that’s just me and I support gold or silver in backing this. What about you?

P.S. If you are in support of the gold standard (or at least something to back currency), check this thread out by yours truly: http://forums2.jolt.co.uk/showthread.php?p=7811966#post7811966

I am 100% for the gold standard.

I don't give a damn about gold, so I don't see the point of a gold standard. Now a beer standard on the other hand....

The gold standard would be an interesting alternative to paper money . . . I'm still toying around with the idea before I make a final decision

the gold standard keeps many miners around here employed

What about a highly complicated bartering system? My nation uses the Aril, it's backed by nothing. A bartering system might be an optionin the future.

The Gold Standard is okay in and of itself.

But why gold? Pretty boring, really. Why not base it on something equally rare but considerably more interesting. Like opium?

the gold standard keeps many miners around here employed

And where would this be? Who uses the gold standard anymore?

Well yeah, gold is boring, but it's pretty looking anyways. Is opium all that rare though? I thought it was a fairly common substance making it unusable as money

And where would this be? Who uses the gold standard anymore?


Lots of gold mines on Northern Ontario

No, it is far too restrictive and in the long run damaging...imagine if we had to run an actual war (costs in the trillions) on the gold standard. Wouldn't happen, and if it did...it would destroy the economy. Say nothing of what happens during depressions when gold gets pulled out of the economy by horders, massive deflation...

(Odd that you support the Gold Standard Roach Busters, considering that's one of the main reasons why we have a central bank today)

No, it is far too restrictive and in the long run damaging...imagine if we had to run an actual war (costs in the trillions) on the gold standard. Wouldn't happen, and if it did...it would destroy the economy.

Maybe that should tell you something about why we shouldn't fight wars unless they're absolutely necessary.

Maybe that should tell you something about why we shouldn't fight wars unless they're absolutely necessary.
You're still going to end up fighting them, and I really don't see how one can fund a war (especially now) on a gold standard without seriously destroying their economy.

Maybe there are certain times where one can suspend the gold standard (a necessary war being one of them), but I really hate the idea of having fiat money that has no value aside from being a green (or blue or whatever other color) piece of paper

heh its better than paper money.one has intristic value,guess which.

Maybe there are certain times where one can suspend the gold standard (a necessary war being one of them), but I really hate the idea of having fiat money that has no value aside from being a green (or blue or whatever other color) piece of paper
It has the entire US standing behind it, and the Government has a reason to keep inflation down, chiefly among them that goverments that preside over periods of hyperinflation don't tend to last for very long.

Besides, what about in a depression, when people start to horde money and the Government can't issue more to try and restart the economy (you can't have a functioning economy if people are just sitting on gold and refusing to spend it)? In some cases, inflation is a good thing.

Um.. maybe I missed something, but I thought we were off the gold standard by the end of the Second World War?
Didn't the gold standard play a major part in the Great Depression? And if I remember correctly, the way most countries got out of the depression was by going off the gold standard. In fact, Russia was never affected by the depression because it dropped the gold standard in like 1919.
Come to think of it.. the other way nations got out of the Great Depression was because of the second world war... it brought their industry into play (Specificly thinking the US).


But still, havn;t we been off the gold standard 50 or more years?

Technically we've been off it since 1971 when Nixon closed the gold window, but you could also say we've been off more than 50 years (what we had in the 60s n 70s wasn't what most people call a "real" gold standard).

And CSW, I'll leave that question up to someone else, I'm really to tired to think about big questions like that :confused:

Um.. maybe I missed something, but I thought we were off the gold standard by the end of the Second World War?
Didn't the gold standard play a major part in the Great Depression? And if I remember correctly, the way most countries got out of the depression was by going off the gold standard. In fact, Russia was never affected by the depression because it dropped the gold standard in like 1919.
Come to think of it.. the other way nations got out of the Great Depression was because of the second world war... it brought their industry into play (Specificly thinking the US).


But still, havn;t we been off the gold standard 50 or more years?
Sort of. The Gold standard was pretty much dead after WWII, but the Bretton Woods system kept it alive in a fashion with fixed exchange rates. I believe Nixon (or LBJ) took us off of it, but I'm not sure.

All these answers about the gold standard being "an alternative to paper money" suggest that people don't have a clue what's being discussed.

The argument of floating vs. tied currency is not one I care to enter with just my 3 courses of university economics and a bit of the same in high shcool. There are lots of positive and negatives sides to each. Personally, though, I feel that the gold standard and the Bretton Woods system probably collapsed for a reason.

Eh, being Canadian, I'm pretty sure Canada was off the gold standard just before the second world war. I may be mistaken though.

In either case, I like the current system more. Espically since the Canadian dollar is going up!

Why is gold valuable? It's shiny and well, gold like. Why can't a piece of asphalt be just as valuable?

I'm against the gold standard - free floating currency is the way to go.

It's a terrible idea. I will prove this to you by taking you in my time machine back to 1880's America so you can experience it.

http://en.wikipedia.org/wiki/Gold_standard

Should answer most questions.

The US was taken off the Gold standard in 1971 by Nixon. At that time the US had a artificially fixed rate of 35 dollars an ounce of Gold when the real price was about $150 an ounce. At the time it was illegal to buy and sell gold bullion.

Basically the change came because of US debt. We did not have the reserves to cover it. So Nixon took us off the Gold Standard and devalued the US dollar. That was one crazy assed economic ride, and it was all down hill. Everyone we had screwed over by devaluing our currency did tit for tat moves over the next decade in a long economic war of currency devaluation.

Double digit inflation was the American companion for most of the 70s. Do any of you old timers remember the packets of dehydrated soy meat substitute they used to sell for fifty cents? How about the Christmas of 74 when all the retailers slashed their prices on everything by 80% just before Christmas because no one in the country was buying anything.

Do you remember what the most popular show on TV was? "The Waltons". A show about a family struggling through the Great Depression. Americans found it strangely comforting.

Why is gold valuable? It's shiny and well, gold like. Why can't a piece of asphalt be just as valuable?
Good question. See, that's why the gold standard could be catastrophic for an economy. I see no reason to pursue mercantile policies with fixed amounts of wealth. It is simply way to much of a market risk. Stick with currencies that have been proven to work, such as PAPER MONEY.

Double digit inflation was the American companion for most of the 70s.
That was because of the Arab oil embargoes of 1973 and 1978. When the price of oil skyrocketed, people just couldn't buy anything and the economy took a nosedive.

Why is gold valuable? It's shiny and well, gold like. Why can't a piece of asphalt be just as valuable?

Demand and supply.

There's asphalt everywhere, not with gold. And people don't want asphalt in their houses or wear asphalt.

Demand and supply.

There's asphalt everywhere, not with gold. And people don't want asphalt in their houses or wear asphalt.

More to it than that. It is used for many purposes, has high density, is resistant to corrosion, is uniform, and is easily divisibile.

The US was taken off the Gold standard in 1971 by Nixon.

The full gold internatioanal standard really only lasted from 1871-1933, and died with the London Conference. Bretton-Woods was a partial gold standard.

This comes from a .sig I saw somewhere, I don't remember where exactly...

"All currency is now backed with depleted uranium"

Well that's one kind of metallic standard ;)

Unfortunately tungsten (W) is now much more common in ammunition, at least in Western armies. Which would give China, the world's largest supplier of tungsten, an unhealthily large advantage were such a standard used...

No, it is far too restrictive and in the long run damaging...imagine if we had to run an actual war (costs in the trillions) on the gold standard. Wouldn't happen, and if it did...it would destroy the economy. Say nothing of what happens during depressions when gold gets pulled out of the economy by horders, massive deflation...
Where did you learn this?

[the Federal Reserve Note] has the entire US standing behind it, and the Government has a reason to keep inflation down, chiefly among them that goverments that preside over periods of hyperinflation don't tend to last for very long.
History shows your trust in government to be foolish.


Besides, what about in a depression, when people start to horde money and the Government can't issue more to try and restart the economy (you can't have a functioning economy if people are just sitting on gold and refusing to spend it)? In some cases, inflation is a good thing.
Total nonsense. If people have money they're not spending, that's called savings. No matter how much people might like to save money, they still have needs to be met. It's those needs that fuel an economy, not the damn money supply. Screwing with the money unfairly punishes some and rewards others.

When you say 'hording', I assume you're talking about that phoenomenon that occurs when bank note holders have the audacity to demand their gold deposits all at once.

When you say 'hording', I assume you're talking about that phoenomenon that occurs when bank note holders have the audacity to demand their gold deposits all at once.It's got nothing to do with audacity, it's got a whole lot to do with the (rational) fear that the government doesn't actually have enough gold to continue to guarantee the value of money, and that deflation might happen in the near future. If the gold standard actually works the way it should, this would be no biggie for the government, as it must always have enough gold at hand to cover the value of all paper money issued by said government.

It just happens governments don't really bother to maintain enough gold for that, so when the trust of the consumers in the government's gold supply falters, the government is screwed.

You're right, though, that it's demand (and supply, and everything goes along with those things) that fuels an economy, not the money supply. Increase the money supply, and you're mostly just speeding up inflation. In the case of your average depression, the only really effective methods for the government are those which motivate people to consume more or simply having the government consume more (fiscal policy). Either that, or just counting on the consumers to figure out for themselves -- and we all know how well the average consumer takes the long term big picture into account.

History shows your trust in government to be foolish.Then I'm sure you'll have no trouble pointing out several examples of hyperinflation from the past 60 years in developed Western market economies.

Hmm, do I support paper money backed by faith in the government it represents, but has no intrinsic value, or do I support paper money backed by a soft yellow metal that isn't good for much of anything beyond ornamentation and which also has no intrinsic value?

Tough one.

This is as pointless as asking if we should go back to using bank issued currency and Spanish Doubloons. Not only will paper never again be backed by specie, but we are actually moving in the opposite direction. Within your children's lifetime paper too will be eliminated in favor of little bits of light on a computer screen (we are already more than half way there). People will be paid in credits (we will probably still call them dollars) and will pay bills, make purchases, and earn income by debiting or crediting accounts through plastic cards or optical scanners.

The entire concept of currency is an artificial construct. The Aztecs used chocolate beans, some Native Americans used deer skins (a "buck"), and ancient Romans sometimes used salt (the Latin word for which is "salarius" from which we get our "salary"). Even our word "capital," as in "capitalism," comes from the same root word as "cattle," which was an ancient European standard of wealth. Our society is taking that artificial concept to its logical conclusion and doing away with the physical object that stands in for the concept of labor and value.

Welcome to the future.

By the way, I don't think it is going to be a nice shiny future. More of an Orwellian future.

It's got nothing to do with audacity, it's got a whole lot to do with the (rational) fear that the government doesn't actually have enough gold to continue to guarantee the value of money, and that deflation might happen in the near future. If the gold standard actually works the way it should, this would be no biggie for the government, as it must always have enough gold at hand to cover the value of all paper money issued by said government.
That was sarcasm on my part. Of course, if you deposit gold in a bank for safe keeping, you have every right to demand all of it at any time.

I don't actually support the gold standard. I think gold makes great money, but the gold standard was originally a way to keep silver out of the dollar-backing buisness. I'd prefer to go back to how things were before the gold standard. Actually, I'd really like to see the government get out of the money buisness all together. I suppose I can tolerate Uncle Sam enforcing reasonable banking standards and minting coins, but I not entirely sure that's even necessary.

I like my money being backed by something or else you'd just printing Monopoly money in effect. The Gold Standard was practical for it's time but in the modern environment it's not going to work any more.

PS - Paper/plastic notes are ok, but Gold and Silver coinage is more my type of money!