Redefinitions From The Left

[Martin Hash]

Cool. Dueling podcasts.

[Speaker to Animals]

I would argue we kind of still have a gold standard. The USD is the primary reserve currency of the world. The United States is sitting atop the largest gold reserve in the world. The next highest gold reserves are Germany, Italy, France, and China. The top three reserve currencies are the USD, EUR, and the RMB (China's Yuan). The USD and EUR are floated, but the RMB is totally fixed and managed. The only unifying factor between the three is that the nations that issue them sit on the largest gold reserves in the world. The UK sold off so much of their gold reserves that they are no longer a factor.

If you still don't believe it, then run a little mental exercise by imagining what exactly would happen to the USD if the US announced it had been quietly selling off our gold reserves for the past two decades and most of it was now gone. The USD might be ostensibly separated from our gold reserve, but I guarantee you would see the USD fall relative to other floated currencies within seconds. Like bigly.

[Fife]

USD is backed psychically by gold; not physically. The mental image of Ft. Knox is what holds it all up. Seems risky, eh?

[Smitty-48]

USD is backed psychically by gold; not physically. The mental image of Ft. Knox is what holds it all up. Seems risky, eh?

Gold has no particular intrinsic value and does not reflect the actual worth of American IOU's, so gold is actually even more psyhcological, since it has no bearing on the actual value of the dollar and is in fact an exponentially more arbitrary measurement in the end.

You're simply swapping a measurement of worth based on market forces for an arbitrary measurement of worth based entirely on a magical rock theory. "Magical rocks in Ft. Knox reflects the worth of the American economy"; apparently not, so, moving on...

If, psychologically, you desire to cling to a magical rock theory, go ahead and put some magical rocks in your mattress, but that doesn't actually reflect a more intrinsically valuable IOU than the dollar, but if it makes you feel better, knock yourself out.

[Speaker to Animals]

That's why the nations who print the top three reserve currencies sit on the largest gold reserves. No connection at all.. LOL

[Speaker to Animals]

What happened to the pound sterling after the UK sold off so much of their gold reserve to pay down their debts?

[Martin Hash]

The abstraction of money is beyond most people's comprehension. Really, as long as production exceeds consumption, it makes no difference how much imaginary money there is. Hyper-inflation comes when a baker can charge anything they want for a loaf of bread because he's the only one with flour.

[Smitty-48]

The abstraction of money is beyond most people's comprehension.

That's really what it comes down to, it's all abstract, all currency is inherently abstract, but some people need to cling to magical rocks to make themselves feel better, as it seems less abstract to them, when in fact, magical rock IOU's actually changes nothing in real terms.

You can hand me a magical rock IOU, or you could just print that IOU on a piece of paper, but it changes nothing in terms of my confidence in whether or not I could redeem those IOUs, as nothing actually says you're more likely to allow me to redeem my magical rocks in the end, when push comes to shove.

[DBTrek]

Man, everyone knows magic yellow rocks are fucking VALUABLE.
Pirates know.
Dragons know.
Leprechauns know.
It's like .. . Universally known.

But try and convince people that colored paper is valuable?
C'mon man, whaddaya take us for . . . rubes?!?!

[Smitty-48]

The magic of the American IOU is relative security, stability, and the rule of law, doesn't matter how many magical rocks the Russian Czar may have in his treasure chest, because that doesn't incite me to take his IOU's more, as I have no cofidence in him to allow me to redeem my Russian IOUs, based on the pile of magical rocks in his stash, because there's no way for me to access that stash should he fail to honour the transaction, absent Operation Barbarossa 2.0, which, we all know how that goes.