This may be a stupid question for some, but I am having a hard time grasping how wealth is created and destroyed when you have a fix amount of a commodity. Can the total value of assets increase?
Wealth isn’t measured by a decrease or increase in the volume of money, but in the decrease or increase in the volume of commodities that are being traded for money (money serves the purpose of being a common unit of exchange).
what are some good books about the gold standard
What Has Government Done to Our Money? by Murray N. Rothbard
Wealth is usefull things one has, such as food, laptops, land, and so forth. If you make a big pile of all the useful things in a country, that is the wealth of the country. By this definition, obviously, paper money, or any kind of money, doesn’t increase the wealth of a nation or an individual.
So how does money fit into the scheme of things? It is an opportunity to exchange the money for a thing. As such it is a potential to get wealth from someone if they wish to trade it for money.
OK, lets say on Sunday there are a trillion dollars in the USA, and on Monday the govt prints more and there are two trillion. Has anyone gotten wealthier because there is more paper in the world? Of course not. So why does the govt bother to do it? Very simple, to trick people into giving the govt more things in exchange for the paper it has.
Now since there is only a limited supply of things, and the govt has taken so many things with all the new money they printed, there is less to go round for everyone else. This expresses itself by the price of things going higher, which is inflation.
If the law of the land was that only gold or silver was money, then there would forever be a limit to how much new money the govt could create. Its easy to make more and more paper money, and very difficult to make more and more gold coins, since there is only so much gold in the world [much less than there is paper].This law would not create new wealth [=things], but it would PROTECT the existing wealth from being taken away by the govt flashing a fat wallet thick with new money they printed and gobbling everything up, leaving very little for the rest of us.
“but I am having a hard time grasping how wealth is created and destroyed when you have a fix amount of a commodity.”
is a ‘fix’ amount a typo? or are you trying to not make sense?
i have never heard of wealth being destroyed when having a fixed amount of a commodity (as money?)
if you mean fixed amounts of commodities on the earth itself…i guess price and technology take care of that.
if copper begins to get prohibitivly high in proice another metal or fiber optic may begin to take its palce and actually carry more data with less overall material and labor…increasing wealth while the copper and fiber optic elements are probobly a fixed amount on the earth.
but i am not exactly sure what you mean.