 "I'm just a soul whose intentions are good.....please don't let me be misunderstood."--Eric Burdon
_______________________________________________________________________________________________________________
It is rather amusing that you would have confused my 3 simple lines for arrogance. Merriam-Webster defines it as, "an attitude of superiority manifested in an overbearing manner or in presumptuous claims or assumptions." Grover's speech highlighted a very real problem that has cropped up from time to time with commodity based currencies. i synthesised that into a single sentence and added another, warning of what happens when mistakes are repeated. If that be arrogance, then i am guilty. Perhaps if i had prefaced my remark (as everyone else here does) with words to the effect that "i am almost certainly wrong, but...." you would not have thought me arrogant. However, as my comment relied not upon presumptuous claims or assumptions, but inescapable fact and logic, i thought i could get by without the disclaimer.
Your response would seem to rely exclusively upon presumptuous claims and assumptions; not hard facts and logic. Your claim "this natural gravitation towards gold as money as demonstrated by the human race for thousands of years," is extremely presumptuous on several levels. Not only does it give credence to the rather absurd notion that people are somehow imbued with an irresistible drive to have gold and only gold represent money, it ignores the fact that silver has a longer history of representing money, as does grain. Copper and bronze coins have served as money for longer as well. And if you still really want to go with that silly longevity argument of yours, i could counter that as mankind did without any form of money whatsoever for hundreds of thousands of years, we should not ignore the countless generations of their accumulated wisdom and just get rid of the damn stuff altogether. But in reality, the length of time a belief is held neither adds nor subtracts from its objective truth.
Let us get serious. The question is: What would make for the best representation of money? It is a timely question in that we are facing the demise of most, perhaps all, of our current representations and so a sober discussion should be undertaken so as that we can be prepared for what will follow. If we can agree that no nation has willingly abandoned their form of money because it was working well, then we must conclude that all attempts at coming up with the ideal form of money have either already failed or are in the process of doing so. On this point one would have a better chance of arguing that some of the currently existing currencies are not facing collapse than countries gave up on using gold because it was working well for them. This conclusion inexorably leads us to admit that be it based on gold, silver, salt, sea shells, grain, slave girls, heifers, paper or whatever else that has been attempted, currencies have always failed. That fact has stood the test of time and there is no escaping it.
Before the question can be answered, we must agree that for the best possible representation of money, it would be desirable if it served as a good store of value. If we cannot agree upon that, then we will arrive at different answers. As i view that as a desirable quality, i see paper being the best possible choice.
Before getting to that, let us take a brief look at why currencies have failed in the past. Doing so will help us to avoid mistakes made in the past.
The reasons for failure can be broken down into 2 categories. By far the larger of the 2 has been the mismanagement of monetary matters by government. The other has been the supply dynamics of commodity based currencies. That is to say, regardless of what was used as money, government always found a way to debase its value and even when government was not busy doing that, with commodity based currencies, supply dynamics ruined the net worth of those whose wealth was held in gold or silver.
So then, in designing what will best serve our needs in representing our mental construct, we can begin by stating what is not wanted. We do not want to have something that can be abused by those entrusted with the wise stewardship of maintaining its value and we do not want something whose value is subject to large fluctuations owing to supply dynamics. To satisfy the first requirement will pose the largest obstacle in that politicians despise honest money. Nevertheless, a law that cannot be amended or repealed must be enacted that spells out in an apodictic fashion that our money must maintain its purchasing power relative to a basket of non-luxury goods (food, shelter, clothing and energy). With that in place, paper would work best in that having negligible intrinsic value to begin with and being a renewable resource and so not subject to supply shortages, we need never be concerned about the money in our pocket losing its value owing to the supply dynamics of the actual physical representation.
Paper money has a further advantage over commodity based currencies. Being both a renewable resource and recyclable, we need not be concerned that some new industry will spring up that would require so much paper that its value would be greater when used for that purpose than as money. Gold and silver are both currently used in industrial applications, which of necessity, alter the supply dynamics over time. If used to represent money, it would lead to the mint competing with the solar panel industry for the finite supply of new silver. The only way around this problem, if we desire our money maintain its purchasing power, would be to stamp each coin with an absurdly large number such that no industry could more profitably make use of the metal. But that only causes another problem, that of divisibility. For small purchases we would have to weigh out picograms of gold or go to a shop where change could be made. It may sound absurd, but we must remember in designing this ideal money that metals have competing uses and there is a finite supply of them, making their value subject to fluctuations that are never to the advantage of both borrowers and savers simultaneously. Paper, wonderful paper, presents no such problem. The discovery of vast new forests could not depreciate the value of our money and being recyclable, we would never face a day when we could not print a bill with a large enough number on it to make its value greater than the cost of the raw material itself; meaning that we will never see the purchasing power of paper money in our pockets suddenly appreciate because a new use for paper makes it more valuable in that role than as money.
_____________________________________________________________________________________________________________________
What i found rather amusing is that everyone who bothered to rate Grover's words gave him 5 stars, yet my 3 lines received a bunch of down arrows when i was not really saying anything other than what Grover had. How is it that everyone loved his words, but had a very different reaction to mine? Did you all think that he was saying that gold and silver make great money, or was he speaking about how the supply dynamics --and nothing else-- of silver had caused untold problems for the nation? It seems to me that he was very clear and it further seems that your responses to him and me show what might be thought of as signs of schizophrenic behaviour. Not that i'm saying that any of you are full blown schizophrenics, but if you gave the article 5 stars and me a down arrow, you just might want to get yourself checked out anyway; you know, just to be on the safe side.  Commented 3908 days ago |
