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0 pointsthrow0101b2y ago0 comments

> Modern society needed something scarce and was hard to manufacture/process (thus ensuring price stability) to use as an intermediate currency between currencies.

And now we have no intermediary and no one bothers with gold when going between USD and EUR or JPY and CAD. Gold is completely useless for such exchanges in 2023 and would just add overhead. So given that it is worse than useless (being an hinderance due to an extra step) in such transactions, how can it have "intrinsic" value? If you're travelling internationally, do you exchange your domestic currency for gold, cross the border, and then exchange the gold for the destination currency?

What exactly is gold useful for in 2023 besides jewelry and some minor industrial uses? Can you buy groceries? Pay property taxes? Can you show up at a car dealership with a brick or two and get a new ride?

What is the value of me having gold in my possession?

> Those countries agreed to use gold as this intermediate currency.

It was socially agreed to it having value, but if it had "intrinsic" value, (a) no such agreement would have been needed because it would have been self-evident (the Gold Standard was only formalized in 1870), and (b) it would still be valid today. When the agreement stopped the intermediary status also stopped, showing there was nothing "intrinsic" about it: it just happened to be a convenient convention (for a time).

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mwbajor2y ago

I agree with everything you are saying with the exception of the fact that it seemed to be a better intermediary than paper currency. I think that is something the "end the fed", "bring back gold" people don't understand. You're right, I cant do anything with gold alone, its actually quite useless.

My argument for gold (if you even want to call it that) is more to keep politicians in check from printing more money where "printing more money" really means a politicization of the financial industry and increasing wealth inequality. The human element was less when a gold standard existed. I'd be all for a paper currency if limits to politician involvement were somehow built into it, I'm not really a fan of Gold in any sense. I've read that in 1972 some of these checks were supposed to be implemented but never were, partly because the nixon shock was supposed to be temporary and partly because polticians realized they could have more power.

throw0101bOP2y ago

> My argument for gold (if you even want to call it that) is more to keep politicians in check from printing more money where "printing more money" really means a politicization of the financial industry and increasing wealth inequality.

The Gilded Age, when income inequality in the US and EU was at its highest, occurred during the Gold Standard:

* https://en.wikipedia.org/wiki/Gilded_Age

The US has returned to those levels of wealth concentration, but having paper currency backed by gold didn't prevent the first round. Further, there was much more wealth inequality, with the aristocracy, when gold and silver coins were the actual currency (rather than paper notes).

> The human element was less when a gold standard existed.

Wild gyrations of finance and economy due to human behaviour were worse pre-Fed and during the Gold Standard:

* https://www.theatlantic.com/business/archive/2012/08/why-the...

* https://archive.ph/FWKcL

Various 'incidents' during the Gold Standard era:

* https://en.wikipedia.org/wiki/Panic_of_1873

* https://en.wikipedia.org/wiki/Panic_of_1893

* https://en.wikipedia.org/wiki/Panic_of_1896

* https://en.wikipedia.org/wiki/Panic_of_1907

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