undefined | Better HN

0 pointswintersFright13y ago0 comments

Physical gold bars are not money but a phyiscal, tradeable asset. It cannot be inflated except via mining - but even then there are roughly known quantities of metal in the ground that are then liberated. What can be inflated however is paper gold where more paper gold exists and is traded than physically exists - some estimate a 100 - 1 paper to physical ratio.

True that gold has no intrisic value, it's value is derived from other people valuing it and willing to trade services for it - and they have done so for thousands of years, where as a typical fiat currency (USD) does not have such a timespan. "Paper money eventually returns to its intrinsic value – zero." (Voltaire, 1694-1778)

btw - as i understand it wasn't a 10% tax, it was a mandatory debt for equity trade- meaning the depositors now own some part of the bank.

0 comments

InclinedPlane13y ago

Gold can inflate quite easily, and does all the time, independent of its scarcity. It's possible for the price of anything and everything to go up, on an absolute scale. And if that happens accross the board then you've effectively inflated even some hypothetical absolute currency.

Money has no value, it is in fact nothing more than tradeable debt. It has as much value as the market is willing to allow. To imagine this in an extreme case imagine if the entire worldwid economy collapsed and food bacame very much rarer. Now you'd expect to have to pay vastly more gold for food. Inflation.

My point is that no part of the economy is static, all of it is dynamic. All of it. The value of everything, labor, goods, food, even money is dynamically dictated by the action of the economy.

ars13y ago

The intrinsic value of gold is also 0.

The intrinsic value of EVERYTHING is 0. Things only have value because people want them, not because they have some intrinsic value.

j / k navigate · click thread line to collapse