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So if gold is the only real money (and everything else is just debt)... What does gold’s year-long rally this year tell us?
In what sense is gold the real money? Gold doesn't back most currencies any longer. Money is the real money.
So if gold is the only real money (and everything else is just debt)... What does gold’s year-long rally this year tell us?
The current gold rally tells us that there is a lot of global political and economical uncertainty. Think of the Brexit, the Iran troubles and the global trade war. All these issues could cost big money for governments so it makes their bonds less attractive.
So if gold is the only real money (and everything else is just debt)... What does gold’s year-long rally this year tell us?
If it breaks a certain threshold, then you can be certain it will be the global reserve currency again. People often forget how stable the world economy was under Bretton Woods.
I think it's a mistake to attribute the stability of the post-war world economy to the Bretton Woods system alone; there are numerous factors that coincided. Bretton Woods probably helped to some extent insofar as it allowed the US to rapidly exert a lot of influence, but we in the US still do that now without the Bretton Woods system.
So if gold is the only real money (and everything else is just debt)... What does gold’s year-long rally this year tell us?
To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an organization). Gold has no inherent value at all apart from some minor uses of relatively small amounts in the economy. Except by agreement, which debt also has.
An example for debt-based I once read somewhere was a kid writing an IOU for garden work. As long as the debt is not paid - i.e. the kid does the work and the IOU is destroyed - that piece of paper circulates through the neighborhood. It has real value (actual work). This example also illustrates what's wrong with calling for all debts to be repaid, which makes sense for the individual but not for the economy (like so many or maybe even most suggestions around money and power, where things that work very well for someone make no sense if applied to everybody, the difference between "works for anyone" and "works for everyone").
Earlier quoted context omitted.
Even beyond that, there's an argument to be made that money (and debt) are at their core quantified and malleable representations of social relations.
Isn't that stretching "social"? The money I hold is not tied to the yet unknown individual or group with with whom I will exchange it for goods or services, the person might not even be born yet.
> Probably considered Simmel's greatest work, Simmel saw money as a structuring agent that helps us understand the totality of life.
So if gold is the only real money (and everything else is just debt)... What does gold’s year-long rally this year tell us?
Crashes are a manic-depressive devotional cycle. Collective optimism becomes stretched to delusional levels. Then it snaps, pessimism and debt paranoia take over, the central government has to make reassuring noises which reassure the right people, and the hype cycle can begin again.
Gold is a faith-token - valued because it's heavy and shiny and because there's a long tradition of valuing it when investors become pessimistic about more evanescent asset classes, not because of its relatively limited practical utility.
Fiat money is just faith-token money without a tangible base. The process by which it gains/loses trust is the same.
The tangible items that aren't primarily faith-based are land and housing, so they do well as reliable investments. But even they're not faith-free, because they will still lose value in an area if no one believes it has a future.
Debt: The First 5,000 Years is my preferred introduction. Critically this New Yorker account is missing the word 'usury' which was largely agreed to be evil by early religions and societies that experienced its effects...
It should be noted that the reasons we borrow money today is different than why it was done in the past.
In the past, the "average" person was usually a farmer, and if they needed to borrow money, it was probably because their crops had failed and they needed to money to buy food to feed themselves. It was unseemly to lend money to someone who, without it, would die.
Borrowing money nowadays is usually for mortgages and consumer spending. Very different situations, with different moral contexts.
Of course some people do still need money to survive, which is where payday loans tend to come in, and I think a lot of people find them distasteful--and the fact that people in our society may need to use them also a sad reflection on our society.
So "usury" was/is considered morally wrong not because of the charging of interest, but of the moral context under which it used to be done. There are of course 'usury laws', but they reflect the idea that charging more than x% interest unseemly because there should be no need for it (to produce a reasonable ROI).
Earlier quoted context omitted.
In what sense is gold the real money? Gold doesn't back most currencies any longer. Money is the real money.
Then why would it make sense for a country like say China to build up massive (largest ever) hoarse of good? https://tradingeconomics.com/china/gold-reserves
And came to pretty similar conclusions, in particular, that modern fiat money is quite worthless!
So if gold is the only real money (and everything else is just debt)... What does gold’s year-long rally this year tell us?
How is gold more real than debt? To me debt is far superior. Debt means you have a commitment from a human (directly or indirectly, if the debt is owed by an organization). Gold has no inherent value at all apart from some minor uses of relatively small amounts in the economy. Except by agreement, which debt also has. An example for debt-based I once read somewhere was a kid writing an IOU for garden work. As long as…