Why would anyone want gold standard?

[UndercoverElephant]

Do you want to try again, this time without contradicting yourself in your first paragraph?

Please do not patronise me. I have not made any personal attacks against you.

I did not contradict myself in the first paragraph. I presume you are equating "coming to the most reasonable conclusion" with "proof." These are not the same thing.

 

[MattC]

With all due deference to the posters who preceded me, peak oil is also not quite what this thread covers - though the drift does tend that way, the gold standard seems to have little to do with peak oil. In an attempt to return the topic to its prior focus, please excuse the remainder of this post for having nothing at all to do with oil in any form.

I suppose my question in response to both the thread title and kevsta's comments is "Why gold?" Why standardize gold as opposed to, say, silver? In other words, what is so inherently good about gold itself that makes it so worthy of being used as the basic economic unit of account?

To be fair, there's a certain value in having a clear standard - declaring "money = gold" simplifies a lot of the philosophical questions that might arise. The question, though, is whether or not this philosophical ease transfers over to everyday economic gains. Perhaps most obviously, if gold is indeed such an appreciating metal, standardizing the price of it would appear to kill any sort of growth potential - those who hoard gold might find this a significant shock to their economic future. Perhaps I erred in saying that I'd not mention oil again, the idea of an 'oil standard' is interesting. However, other posters have presented (what I, at least, consider) worthy arguments about the nature of a commodity-based standardization of money, and my limited comprehension of them leads me to agree.

For my part, I cannot perceive any value in standardizing gold that is not related to this philosophical simplicity. Perhaps I erred above in saying that I'd not mention oil again, an oil standard would seem to have approximately the same benefits and flaws of a gold standard. It thus appears to me that any attempt to replace gold with some other commodity runs into the same problems as the gold standard once did.

I'm not then sure that the gold standard, or really any commodity-oriented standard, can truly be successful - I'm frankly surprised gold lasted as long as it did, though to be fair it did have a few thousand years' head start on economic theory.

~ MattC

 

[UndercoverElephant]

With all due deference to the posters who preceded me, peak oil is also not quite what this thread covers - though the drift does tend that way, the gold standard seems to have little to do with peak oil. In an attempt to return the topic to its prior focus, please excuse the remainder of this post for having nothing at all to do with oil in any form.

Fair enough. There are connections, but I agree the thread has drifted off-topic.

I suppose my question in response to both the thread title and kevsta's comments is "Why gold?" Why standardize gold as opposed to, say, silver? In other words, what is so inherently good about gold itself that makes it so worthy of being used as the basic economic unit of account?

Silver has obviously been standardised in the past, and some countries (notably Mexico) want to use it as the base for their currency now. There is a major problem with remonetarising silver now though because it is such an important industrial metal.

To be fair, there's a certain value in having a clear standard - declaring "money = gold" simplifies a lot of the philosophical questions that might arise. The question, though, is whether or not this philosophical ease transfers over to everyday economic gains. Perhaps most obviously, if gold is indeed such an appreciating metal, standardizing the price of it would appear to kill any sort of growth potential...

At which point we come full circle and need to start talking about oil again. What if there isn't any more growth potential because of physical limitations? In that situation, there is no potential left to kill.

- those who hoard gold might find this a significant shock to their economic future. Perhaps I erred in saying that I'd not mention oil again, the idea of an 'oil standard' is interesting. However, other posters have presented (what I, at least, consider) worthy arguments about the nature of a commodity-based standardization of money, and my limited comprehension of them leads me to agree.

An energy-backed currency has been proposed, and I know some people who support it.

 

[Sledge]

Please do not patronise me. I have not made any personal attacks against you.

I did not contradict myself in the first paragraph. I presume you are equating "coming to the most reasonable conclusion" with "proof." These are not the same thing.

If you can't provide proof for your claims, just say so. It'll allow the discussion to move on, rather than dealing with feeble attempts to change the subject.

 

[UndercoverElephant]

If you can't provide proof for your claims, just say so. It'll allow the discussion to move on, rather than dealing with feeble attempts to change the subject.

Eh?

Apparently you do not understand the difference between proof and a balanced judgement in a complex situation where hard evidence is hard to come by. Just to give you an example: Saudi Arabia does not publish accurate figures for its own oil exports - we have to rely on people watching tankers leaving Saudi ports and noting how low they are sitting in the water. Is this "proof"?

What subject do you thinking I'm trying to change?

 

[kevsta]

With all due deference to the posters who preceded me, peak oil is also not quite what this thread covers - though the drift does tend that way, the gold standard seems to have little to do with peak oil. In an attempt to return the topic to its prior focus, please excuse the remainder of this post for having nothing at all to do with oil in any form.

I suppose my question in response to both the thread title and kevsta's comments is "Why gold?" Why standardize gold as opposed to, say, silver? In other words, what is so inherently good about gold itself that makes it so worthy of being used as the basic economic unit of account?

If you start with the periodic table, and work though it using basic logic, there is really only one sensible conclusion.

"For the earth, with every parameter we have, gold is the sweet spot," he says. "It would come out no other way."

Silver is also workable, but the above ground inventory is in permanent decline, and the future production will likely not meet levels we would need, plus it really is indispensable in many applications. we would not want to pick something that people want to melt down and use for something else at some point in the future.

there is plenty of gold above ground already, and the supply increases steadily every year.

To be fair, there's a certain value in having a clear standard - declaring "money = gold" simplifies a lot of the philosophical questions that might arise.

The question, though, is whether or not this philosophical ease transfers over to everyday economic gains. Perhaps most obviously, if gold is indeed such an appreciating metal, standardizing the price of it would appear to kill any sort of growth potential - those who hoard gold might find this a significant shock to their economic future.

IMO those who hold gold are already holding it as attempted protection against significant shocks to their economic futures, and most would welcome a situation where governments acted responsibly, and we did not have to take such action to protect ourselves from their BS.

Perhaps I erred in saying that I'd not mention oil again, the idea of an 'oil standard' is interesting. However, other posters have presented (what I, at least, consider) worthy arguments about the nature of a commodity-based standardization of money, and my limited comprehension of them leads me to agree. For my part, I cannot perceive any value in standardizing gold that is not related to this philosophical simplicity. Perhaps I erred above in saying that I'd not mention oil again, an oil standard would seem to have approximately the same benefits and flaws of a gold standard.

the problem with oil, is rising demand and flat (and inevitably declining into the future) production means the price is definitely going to increase as we move forwards. this is not a stable money scenario is it?

It thus appears to me that any attempt to replace gold with some other commodity runs into the same problems as the gold standard once did.

yes, setting the price wrongly at the beginning and then having to spend money to defend it against free market forces is never going to work long term, whatever the commodity.

In the end, the market is always going to just roll right over you.

see http://en.wikipedia.org/wiki/London_Gold_Pool

I'm not then sure that the gold standard, or really any commodity-oriented standard, can truly be successful - I'm frankly surprised gold lasted as long as it did, though to be fair it did have a few thousand years' head start on economic theory.

and it will still be here, long after what passes for modern economic theory is gone.

 

[Sledge]

Eh?

I don't think I can make this any simpler for you: could you provide some proof for everything in post #169, UndercoverElephant? So far, the answer is "no." Can you provide any reason for me not to think you're just pulling stuff out of your arse in a desperate attempt to back up your opinion?

 

[timhau]

I often wonder why, if "Peak Oil" is such a problem, it's not on the front page of the WSJ and NY Times on a daily basis. After all, the survival of our entire civilization depends on us solving this.

Let me guess. Big Oil owns them.

ETA: Sorry, never mind. Already covered.

 

[UndercoverElephant]

I don't think I can make this any simpler for you:

Your problem is that you are attempting oversimplify it. The problem is not that I'm having trouble understanding the complexity of your question but that you don't appear to appreciate the complexity of the answer.

could you provide some proof for everything in post #169, UndercoverElephant? So far, the answer is "no." Can you provide any reason for me not to think you're just pulling stuff out of your arse in a desperate attempt to back up your opinion?

Of course I can't PROVE it. I have already explained to you that this subject is not simple, and that proof is hard to come by. You appear to believe that because I can't prove it in a couple of short paragraphs, I must be talking nonsense. If so, you live in a world that is far too simplistic for me to able to communicate sensibly with you.

I can talk to you about what I believe and why I believe it, but I'm not going to play your silly "Prove it!" game. This is not paranormalism we are talking about here. It is complex geo-politics, mixed with socio-psychology. Sorry for the long words...

 

[timhau]

Wow. Just... wow.

 

[psionl0]

There's actually several reasons why it's not all over the mainstream media, including the financial press. The first is that quite a lot of those people have vested interests in not recognising the reality of peak oil, for one reason or another. The second is that quite a lot of people don't actually realise what is going on yet, because they are all waiting for somebody else to tell them instead of figuring out for themselves. The third reason is that nobody wants to scare people, because fear itself just makes the existing economic problems worse.

Interesting opinions but surely nothing that can be proven?

Is playing the superior intellect card on someone who challenges your opinions the appropriate response to you?

 

[kevsta]

Interesting opinions but surely nothing that can be proven?

Is playing the superior intellect card on someone who challenges your opinions the appropriate response to you?

to be fair I think he was reacting to someone else doing that to him (and I) to start with anyway.

GoldTards, POTards etc. nobody's asking him to prove that Peak Oil = nonsense, or even back up that he understands what it is.

 

[The Central Scrutinizer]

If returning to the gold standard solves so many problems, you would think that governments around the world would be lining up to do so. I wonder why they aren't?

 

[armageddonman]

If returning to the gold standard solves so many problems, you would think that governments around the world would be lining up to do so. I wonder why they aren't?

Jews, Bilderbergers and Freemasons? Surely it must be some huge conspiracy!

 

[Sledge]

Your problem is that you are attempting oversimplify it.

No. The problem is that you have made many claims. You cannot prove any of them BY YOUR OWN ADMISSION. I do not care about your personal opinions and prejudices if you cannot support them. You can believe that oil will run out on December the 25th because Santa will use the last of it the day before to fuel his reindeer-shaped delivery aircraft, I don't care. I, and most other people on this board, will care if you present that opinion as fact, then refuse to support it.

This is not paranormalism we are talking about here.

And yet you are using the same methods as every other woo. "I can't prove it, and you're wrong to ask me to. You just have to take my word for it, and I'm offended if you don't."

 

[kevsta]

If returning to the gold standard solves so many problems, you would think that governments around the world would be lining up to do so. I wonder why they aren't?

 

[The Central Scrutinizer]

http://www2.jogjabelajar.org/modul/how/c/cruise_missile/cruise-missile-intro.jpg

I have no idea what this is supposed to mean.

 

[UndercoverElephant]

No. The problem is that you have made many claims. You cannot prove any of them BY YOUR OWN ADMISSION.

TYPING IN CAPITALS ISN'T GOING TO MAKE YOUR CRAP ARGUMENTS READ ANY BETTER.

You appear to believe there are two sorts of claims in the world - those which can be proven and those which should be dismissed as nonsense. The real world is not like this. In the real world, there are scientific claims, which stand some chance of being proven, and there are a vast amount of other claims which can never be proven. I'm sorry you are finding this too difficult to understand, but I am not going to waste any more of my time trying to explain it to you. The subject of Peak Oil is not just about science. It is about politics, psychology and sociology, and I'm afraid those aren't hard sciences. There is no PROOF in politics.

I do not care about your personal opinions and prejudices if you cannot support them.

So you do not care about anything I can't prove [scientifically]? I suggest you stay out of the economics, business and finance section of this board then, because none of those things are science.

You can believe that oil will run out on December the 25th because Santa will use the last of it the day before to fuel his reindeer-shaped delivery aircraft, I don't care. I, and most other people on this board, will care if you present that opinion as fact, then refuse to support it.

Actually, most people on this board are a bit more clued-up than you are about the real world. There are a few scientistic extremists, and plenty of dogmatists of one sort or another, but most of them do actually understand that there are non-scientific things worth listening to.

And yet you are using the same methods as every other woo. "I can't prove it, and you're wrong to ask me to. You just have to take my word for it, and I'm offended if you don't."

Jesus F. Christ.

Politics is not science. Psychology is not science. You cannot simply dismiss all non-provable claims as "woo". Not unless you have a brain the size of a pea.

You are not having a debate with me here. You are trying to score points by saying "Prove it!" in a situation where nobody can prove very much and it takes a lot of evidence and explanation before most people are even capable of understanding what is being proposed. And I fully expect your next post will consist of "Hah! You haven't proved it!"

 

[timhau]

Oh well. I suppose it was either that, or coming up with evidence. Nice choice.

 

[UndercoverElephant]

Interesting opinions but surely nothing that can be proven?

Is playing the superior intellect card on someone who challenges your opinions the appropriate response to you?

There will be no proof of peak oil until ten year after it has happened (probably about 2018). Does that mean that everybody should forget about it until then?

And if I'm faced with somebody on this board who thinks they can just say "Prove it!" and win any argument, then I will indeed play a superior intellect card. Real skepticism requires more than that. Where, for example, is the skepticism that the mainstream media, financial press and Big Oil are likely to be telling people the truth about these issues? I see no skepticism of that coming from some of the self-proclaimed skeptics in this thread.