mmissinglink said:
Thanks for clarifying your comments.
We agree on at least one point...that fiat currency has no intrinsic value. Further, I assert that neither notes, coinage, nor currency has intrinsic value. Where we disagree strongly is that while somehow you believe that gold has intrinsic value (but what you describe as examples of intrinsic value is anything but) I know that it has none. It has intrinsic properties or characteristics (which make it desirable by some) but this is very different than having intrinsic value. VALUE is ALWAYS what the individual subjectively places on an object, commodity, or asset. Value has to be extrinsic by definition when it comes to these inanimate objects / items. So intrinsic value is an oxymoron when it comes to gold or fiat currency. Gold had no value (intrinsic or otherwise) before some humans placed a value on it 4 or 5 thousand years ago. It always had properties in spite of the fact that humans weren't even around to discover what those properties are.
A misconception that you seem to hold is that because something is rare or scarce, that this makes it valuable or that it attains intrinsic value because of this. This is utterly untrue. I could create a list of things that are rare or even one-of-a-kind that virtually no one in the world would place high value on and this list would be much, much, much, much longer than any list you could create of less scarce or rare things that have greater value to many or most people. It would be very easy for me to do this. There may be some things that are scarce or rare that are greatly valued by many people, but rarity or scarcity alone are not at all requisites for high (or even low for that matter) valuation.
Intrinsic value means to have value without individuals placing value on something. Gold has no value but that which groups of people in societies place on it. By definition, gold has ONLY extrinsic value. Sentient individuals, people and animals, have intrinsic value. These individuals need no extrinsic judgement or valuation to have value unto themselves. Fiat currency, gold, osmium-184, polonium, erbium, or the most sophisticated rocket ship have no intrinsic value...the value is derived by what individuals or groups of similar-minded people place on it.
The myth that is sadly perpetrated by the investment industry that gold has intrinsic value is troubling because it confuses many people, even some otherwise intelligent people.
Other points of disagreement we have other than gold is not money is that you believe that it's bad that today gold isn't a recognized currency. I don't see it as particularly bad. Having gold as a currency will NOT resolve the problems we have today caused by our addictions to debt. Whether we install gold as a competing currency or not, human behavior will not change significantly because of that I'm sorry to inform you.
Additional points where we are in agreement are: 1) money or currency is not the bottom line...it's what the money allows us to access or buy 2) our country's current fiscal policies are corrupt and dangerous
I would vote for you if your policies are those that I think would be best for people I believe deserve to have their concerns addressed first but would not repress anyone's fundamental interests (ie., to not be treated as property, etc).
Good day to you!
Good day to you too, and thank you for a great discussion!
In my reading above, your main point appears to be that you believe gold has no intrinsic value, and you don't believe that the use of gold as money would solve the current financial issues the world is facing.
Let me address both points.
"Gold has no intrinsic value": I wonder whether we might be on slightly different pages of a playbook in the definition of our terms... please allow me to clarify. By "intrinsic value", I mean a level of importance that an object or item has in and of itself in it's own right simply by existing, where "importance" can be expressed/explained as (but not limited to) desirability, attraction, necessity, useability and so forth. In almost all cases where something has an "intrinsic value", this, and the level of that value, is determined by man himself, and can be influenced by (but not limited to) culture, race, religion, geography, upbringing, tradition and so forth.
To give an example: A can of salmon may have a high value to you - you may like salmon, perhaps cannot get it often due to where you live, and thus, you place a high value on this item. To me, it has little value - I can easily obtain as much as I want, and also, happen to dislike salmon. Yes, that's not a fantastic example, but I hope it serves to clarify my points above.
You argue that gold has no intrinsic value - however, I would suggest it does... not only on the basis of scarcity and desirability, but also useability. Mankind often uses gold in the plating of contacts for electronic equipment, and whilst the amount used in each device is extremely small, the fact remains that the gold used must be won from the ground before it can be applied in this regard, and the effort required to do so dictates a relatively high value, because it is relatively rare, and takes a considerable amount of effort to obtain.
"Gold as money solves no problems": With all respect, I feel here we are actually fairly clear in what we discuss, and I cannot agree with your statement.
One of the main reasons the world is in the place it is in is because of debt, on this point that you make, I am in wholehearted agreement. You state that having gold as money would not eradicate our issues of being addicted to debt - but I would argue that it will. The *only* reason that we are where we are today is that each and every dollar that is born into existence is lent into existence, and interest is payable on that dollar. The dollar with which to pay the interest on the debt incurred does not yet exist - that too must be lent into existence.
The reason this can happen is that banks have "taken over" the creation and issuance of money - it is no longer being done by the government itself - it is being done by a private organisation maquerading as a quasi-government entity.
And all of that is possible only because the world moved away from a gold standard, backed currency to a pure fiat currency - which meant that suddenly there were no constraints on the amount of money that these quasi-government entities could create, and 40 years later, here is where we are.
Returning to a government issued, honest and sound money (e.g. gold), would prevent the rampant printing and conjuring of currency out of thin air - it would put limits on levels of debt, and the amounts that governments, individuals and corporations could borrow, and return us to a much more sane world.
Will it be possible to arrive in this position without a massive reset of the entire financial system on a global scale? Absolutely not in my opinion - there is far too much money sloshing through the system, and far too much debt to not have to rest at the very least, a large proportion of it.
Any further proof that may be required as to whether or not gold as money is workable or not can be obtained through looking at history - gold and silver as money have lasted for 5000 years, it is only in the last 40 that we have abandoned this honest money, and moved to a purely fiat currency. Take a look at where we were in 1971, and compare it to today. Then look back over 5000 years of history, and acknowledge that no purely fiat currency over all that period of time ever survived, yet gold and silver did, and did so without the downward spiral of doom that we are finding ourselves in today.
Thank you too for a good, well discussed debate
We may agree to disagree, but it's a pleasure being able to set forward points of view and debate them
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