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dom1971
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Copernicus, Galileo and Gold. Part II

- Hugo Salinas Price - Plata.com

Gold - the monetary Sun. Nice.

Gold need not be the centre of our monetary universe, true. However I believe it does possess the intrinsic requirements of money better than almost anything. The analogy here is fitting in some ways since the orbiting currency planets DO follow an elliptical path - i.e drifting further away from some form of gold standard and then returning closer to it. Historically currency has undergone a similar ebb and flow - debasement of coinage was often followed closely by erosion of empire which then paved the way for political change - often accompanied by a movement back to a stable and valued currency.

As humans we have the ability to make anything we like as money - in that sense it is an abstract concept. But the further away from the "sun" our currencies drift, the more open to misuse it becomes. I agree that it has been government/political misuse of money that has been its ultimate undoing, not the chosen currency itself. But that is precisely why gold is good at being money, it places a constraint on misuse that is not easy to overcome.

As for failures... yes gold has "dropped the ball" once or twice in human history but this was usually driven by factors of locality, in the absence of a global economy. The Spanish flooding Europe with gold from the new world, the Venetians playing games with gold and silver standards in Europe and Asia - not going to happen today. We're also not considering severity here. Sure, the Spanish may have pushed up prices (in gold) of staple goods in Europe by double or more over several hundred years. But that can hardly compare to price rises of the magnitude that we've experienced in less than 50 years of a fiat currencies.

The fiat currency system allows government to create an almost inescapable slavery trap for its citizens by keeping them firmly glued to the inflation treadmill. Mandated inflation targets have removed all notion of the "store of value" from money. The only way to retain its value is to keep risking it to make "more". This is seen a "productivity" to the bean-counters in high places with high salaries payed by debt left to our children. The most amusing part is they also seem to have convinced almost everybody that this system is a superior one. Sigh.

Commented 3963 days ago

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Beginning of the headline :The development of Economics and the development of Astronomy share interesting parallels. Aristarchus of Samos – the Greek island that produced Pythagoras – was born in 310 B.C. Aristarchus set Astronomy on the path that would have led to its correct development by postulating the Sun as the center of the Universe, with the Earth revolving around the Sun while revolving around its own axis; he also set the planets in the correct order of their distance from the Sun. Unfortunately, the preconcei... Read More

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