Articles NewsFlow Gold & Silver Prices Market Briefing

Recevez notre Marketbriefing

In the same category
The Anti-Concepts of Money: Conclusion Keith Weiner Gold Stocks: Good Times Are Here Stewart Thomson Gold Price Reaction: Key Zones To Buy Stewart Thomson Gold Stocks: A Pause With Grace Stewart Thomson Gold Looks Great Silver Is Superb Stewart Thomson

SNAFU
Member since May 2012
58 commentaries -

0 followers

has posted a comment on the article :

Bill Murphy: Silver – The Only Commodity 66% Cheaper Than 37 Years Ago!! - Rory Hall - Sprott Money -

Right.

Gold is money, but, if I understand well, we have no use for it in the world, because of popular TV show and because the idea has been erased from conscious memory

The idea has not been lost from conscious memory, just wait for banks to go bust and you will see.

You might just want to check Mises regression theorem on money
https://mises.org/library/origin-money-and-its-value

....................

We need to explain why money has a certain exchange value on the market. It won't do (so these economists thought) to merely explain this by saying people have a marginal utility for money because of its purchasing power. After all, that's what we're trying to explain in the first place—why can people buy things with money?

Mises eluded this apparent circularity by his regression theorem. In the first place, yes, people trade away real goods for units of money, because they have a higher marginal utility for the money units than for the other commodities given away. It's also true that the economist cannot stop there; he must explain why people have a marginal utility for money. (This is not the case for other goods. The economist explains the exchange value for a Picasso by saying that the buyer derives utility from the painting, and at that point the explanation stops.)

People value units of money because of their expected purchasing power; money will allow people to receive real goods and services in the future, and hence people are willing to give up real goods and services now in order to attain cash balances. Thus the expected future purchasing power of money explains its current purchasing power.

But haven't we just run into the same problem of an alleged circularity? Aren't we merely explaining the purchasing power of money by reference to the purchasing power of money?

No, Mises pointed out, because of the time element. People today expect money to have a certain purchasing power tomorrow, because of their memory of its purchasing power yesterday. We then push the problem back one step. People yesterday anticipated today's purchasing power, because they remembered that money could be exchanged for other goods and services two days ago. And so on.

So far, Mises's explanation still seems dubious; it appears to involve an infinite regress. But this is not the case, because of Menger's explanation of the origin of money. We can trace the purchasing power of money back through time, until we reach the point at which people first emerged from a state of barter. And at that point, the purchasing power of the money commodity can be explained in just the same way that the exchange value of any commodity is explained. People valued gold for its own sake before it became a money, and thus a satisfactory theory of the current market value of gold must trace back its development until the point when gold was not a medium of exchange.1

The two great Austrian theorists Carl Menger and Ludwig von Mises provided explanations for both the historical origin of money and its market price. Their explanations were characteristically Austrian in that they respected the principles of methodological individualism and subjectivism. Their theories represented not only a substantial improvement over their rivals, but to this day form the foundation for the economist who wishes to successfully analyze money.

Commented 2544 days ago

Send

Beginning of the headline :Can you name any product, service or any item of any type that is 66% cheaper than it was in 1980? Of course not. There is one item on the planet that is cheaper today than it was in 1980 – silver. Why is that? How can that be? We have seen several of the too big to jail banks be assessed “fines” for rigging markets and funding terrorist. LIBOR and FOREX just to name the two biggest market rigging schemes conducted by 5 of the too big to jail banking cabal members. This is to say nothing o... Read More

Reply to this comment

You must be logged in to comment an article

8000 characters max.

	RSS feed		24hGold Mobile
	Gold Data Center		Gold & Silver Converter
	Gold coins on eBay		Silver coins on eBay
	Technical Analysis		Fundamental Analysis