Redefinitions From The Left

[Speaker to Animals]

I understand that. It is stupid.
The coins have no intrinsic value. Only exchange value.
The value of money can decline regardless.

Wrong. The intrinsic value of a coin is the value of the metals that compose it. The intrinsic value of a 1930s Peace Dollar is the current spot price for an ounce of silver. The face value is now worth zero, since it's no longer currency.

Consider that a dollar used to be traded as a coin made from an ounce of silver. But an ounce of silver is now worth $17.09.

We all got fucked by the bank.

[Hanarchy Montanarchy]

That presumes the price of silver would be the same, or that people wouldn't just be payed in smaller increments of coin. When the peace dollar was issued, it was worth a buck. If we had kept precious metals, you would still be being payed in a bucks worth of silver, the coin would just be a lot smaller.

The fact that the price of silver changes in relation to actual purchasing power sort of undermines the idea of it having 'intrinsic value.' At least, any intrinsic value vis a vis trade.

Whatever intrinsic value silver can be said to have, it can't really be measured in USD (by definition), and if it is being used as the totem for trade, it can still have its exchange value completely pulled out from under it.

[Fife]

Wow, some of us are just discovering debasement by the crown. Awesome!

https://en.wikipedia.org/wiki/Debasement
https://en.wikipedia.org/wiki/The_Great_Debasement

Pro tip: The king used to have to actually give you a smaller coin. You could physically feel the ass fucking as it occurred, not that there was much you could have done about it anyway.

Nowadays, you don't see any difference in the coin or note as the ass fucking occurs, you just need moar gibs, not that there was much you could do about it anyway.

It's good to be the King!

[Hanarchy Montanarchy]

So you can still get totally buttfucked with precious metal currency.

Fixed value currency is a barrier to free trade.

[Martin Hash]

The very idea of fixed money is ludicrous. There were 2.5 million people living in America in 1776, now there are 100x more. How does that even work? If population growth was 5%, that's the very minimum inflation you need, and people have become 1000x more productive, so that's a lot more required inflation. Then there's 10,000x more money in the shadow banking system. My god, folks simply don't know their economics.

[Hanarchy Montanarchy]

Not to mention the fact that to create a currency that has fixed, intrinsic value would really mean price fixing; even with a static population and no exotic financial products floating around.

[Speaker to Animals]

Red herring fallacy.

Fixing the value of money to a commodity is not the same thing as fixing the size of the money supply.

They are not even the same sense of the word fix.


Lame.

[Fife]

The very idea of fixed money is ludicrous. There were 2.5 million people living in America in 1776, now there are 100x more. How does that even work? If population growth was 5%, that's the very minimum inflation you need, and people have become 1000x more productive, so that's a lot more required inflation. Then there's 10,000x more money in the shadow banking system. My god, folks simply don't know their economics.

WTF is "fixed money?" What's the definition of that term?

Do you mean anything other than government fiat currency, or something else?

[Hanarchy Montanarchy]

Red herring fallacy.

Fixing the value of money to a commodity is not the same thing as fixing the size of the money supply.

They are not even the same sense of the word fix.


Lame.

The money supply by itself is irrelevant. It only exists to lubricate trade, and talking about it unrelated to purchasing power is meaningless. The only way to make its value consistent would be to fix prices.

This is why they locked almost all of the QE money away. It existed, on paper, only to cover banks expenses, but was to be kept out of the flow of currency until it could be paid back. That was the whole point. The value of currency only really exists when it is moving. They didn't actually print a shitload of bills and just toss them into the economy.

[Martin Hash]

From what I can tell, Smitty & Hanarchy both "get" money. It's interesting that they are also the two most quoted in "Ask a Liberalist." Insight must be universal.