The real issue about money is not whether it should be gold or not, but that it should be a commodity selected by the market that facilitates the transfer of goods and services with a lower transaction cost than direct (barter) exchange. Lots of different commodities have served as money through out history. The most recent and most common commodity historically has been gold. So, that is why today’s economist most often speak of using gold. Take any of the arguments in favor of gold as money and any other commodity could be substituted as could the word specie, provided the market, i.e., not government, selects it and controls it. The argument is that specie money is better for an economy because the money supply cannot be arbitrarily inflated like fiat, paper money controlled by the government can.
While I do not think the argument that there is not enough gold is valid, it really does not matter because what it really desired is specie money not controlled by the government.
hello, sorry for bumping this old ass thread, wanted to clear things up.
one of the reasons why the gold std is advocated around here is because fiat money can just be printed as willed by the govt and inflated in its value.
can’t the same thing be done to gold? the govt could just revalue gold or the exchange ratio and print as many dollars as they want…? right??
someone set me straight.
also, what is wrong with other metal, silver??? wasn’t silver more used historically as a medium of exchange than gold?
Yes. Which is why most of us advocate not a “Gold Standard” per se - but a free market in money. Rather than having x amount of dollars representing x amount of gold, getting government OUT of the money business which it monopolises is the idea. Let the market choose the medium of exchange. Traditionally, markets have chosen gold (and silver) - probably due to the balance of scarcity, portability, longevity and subjective beauty, but other commodities might feature too.
Private mints? Private banks? If there is demand for such a thing then there is room for entrepreneurs.
Not necessarily. It may well be convenient to have paper notes or digital money just as today, although provided by banks or institutions and backed by a commodity or combination of comodities. Who is to say? We can’t imagine the innovations produced by the market because we as individuals don’t have the imaginations of 6.5+ billion people.
Historically speaking, private mints have existed in countries, until demolished by government.
How can there be too little gold? Gold would simply have a higher price. It might take 1/1000000th of an ounce of gold to buy a house? Hows is that a problem? If there’s gold in the bank, you can be issued a receipt for that gold. Receipts can be issued that represents all matter of fractions of gold. You could put an ounce of gold in there and issue a trillion receipts.