Wednesday, January 28, 2009

 

When Money Was Literally Backed By Gold

Ah, wouldn't you feel more comfortable investing in a country that issued these? (HT2 MoneyGirl)




Comments:
If Only, Bob, if only. Now we're just going to debt spend $3,000 per American for a "stimulus". Yikes.
 
I'm still really confused why so many people at mises.org like gold so much, especially when the government forces it on us with its currency monopoly.

The other day, I voluntarily accepted some market-originated money as payment. Instead of selling an unneeded Christmas gift on eBay, I returned it for store credit, which is effectively a currency issued by its retailer. Frankly, I'm glad they didn't give me an ounce of gold instead.
 
Grant
Throughout history Gold has been the primary market-originated currency. I, personally, am in favor of any market-originated/market-controlled currency. Whatever the free market chooses is good to me.

However if the state maintains it's monopoly on the currency, the best thing would be to have a hard money. A hard money would prevent the monopolists from inflating the currency in theory. Of course in practice throughout history, when there has been hard money from the state, the monopolists have stretched the link between gold and the currency through shrinking the coins, adding other metals, and having only partial reserves.

The best thing would be entirely market controlled currency, but as long as government maintains it's monopoly on on the currency the best we can do is hold them to a hard money standard.
 
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