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The Invention of Money

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Re: The Invention of Money

#111

Post by tim333 »

rags2riches wrote: post #108
throwaway_gold wrote: post #103

Earlier quoted context omitted.

Very, if you like high quality items. Unlike plastics and most other metals, Gold is easy to work with (i.e. non-brittle, low melting point, easy to mold/cast, it is conductive so its easy to plate other metals) and it is non-corrosive. Therefore, gold jewelry is historically a finer end product that can be made with less skill and the result lasts longer. To a lesser degree of importance for jewelry, but still a pri…

So when I can get a big fat gold ring for a quarter next to the bubble gum machines at the gas station, you think it will still be good for an engagement or to commemorate 25 years of service because it is so very non-brittle, conductive and easy to melt, mold and cast?

It would still probably be used for inexpensive jewellery but maybe not things where showing investment was important. That said with engagement rings most of the cost is the diamond not the gold. Also it will remain in limited supply unless we start mining asteroids.

Re: The Invention of Money

#112

Post by nosianu »

nybble41 wrote: post #106
nosianu wrote: post #24

Earlier quoted context omitted.

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…

> 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). You're assuming that the debt is backed by labor and involves a commitment to perform some specific service. Such promises are generally considered unenforceable as the capacity for future labor is inalienable, at least in societies which don't permit slavery or indentured serv…

> You're assuming...

You are assuming absolutes. The universe does not have any guarantees.

I'm being relative. In relative terms debt-based currency is more than you get from something far more arbitrary, like gold. Of course, here the argument depends on how fixed and static you see the basis of the mass-psychology based "value" of gold.

If humans stop cooperating, the very basis of human society, you've got bigger issues than a currency standard. If they only stop valuing gold there is no problem at all really, except of course for those who relied on it somehow magically remaining "valuable" (based purely on psychological reasons).

Re: The Invention of Money

#113

Post by OnlineCourage »

Symmetry wrote: post #48
contingencies wrote: post #18

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...

I read that book and mostly enjoyed it than I got to the last chapter and found it was riddled with errors I could easily spot like the in following sentence: Apple Computers is a famous example: it was founded by (mostly Republican) computer engineers who broke from IBM in Silicon Valley in the 1980s, forming little democratic circles of twenty to forty people with their laptops in each other’s garages. Reading arou…

...and the founder of that company? None other than Tim Apple.

Re: The Invention of Money

#114

Post by nybble41 »

nosianu wrote: post #112
nybble41 wrote: post #106

Earlier quoted context omitted.

> 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). You're assuming that the debt is backed by labor and involves a commitment to perform some specific service. Such promises are generally considered unenforceable as the capacity for future labor is inalienable, at least in societies which don't permit slavery or indentured serv…

> You're assuming... You are assuming absolutes. The universe does not have any guarantees. I'm being relative. In relative terms debt-based currency is more than you get from something far more arbitrary, like gold. Of course, here the argument depends on how fixed and static you see the basis of the mass-psychology based "value" of gold. If humans stop cooperating, the very basis of human society, you've got bigger…

I am not assuming any absolutes. Gold just currently happens to be a marketable commodity with a long history of stability—far more so than promises of labor. Obviously that could change. If you don't care for gold, substitute any other marketable commodity.

Gold could lose all value if everyone, including the owner, stopped demanding it, including for industrial use and jewelry. There is no precedent for such an event but it is indeed a possibility. A promise of labor, on the other hand, can lose all value if just one particular person chooses to renege on the agreement or is rendered unable to fulfill the IOU. That sort of thing happens all the time.

Re: The Invention of Money

#115

Post by panarky »

malandrew wrote: post #109
panarky wrote: post #41

Earlier quoted context omitted.

> It was unseemly to lend money to someone who, without it, would die. "Medical debt is a uniquely American phenomenon, a burden that would be unfathomable in many other developed countries." "Nearly 60 percent of people who have filed for bankruptcy said a medical expense 'very much' or 'somewhat' contributed to their bankruptcy." https://www.theatlantic.com/health/archive/2019/03/hospital-...

If the procedure I need costs more than $1 million such as CAR T-Cell therapy, should others be forced to lend or give me that money even if I have no hope of being able to pay it back?

That's what insurance does.

Some events are extremely rare and extremely expensive. We shouldn't expect every individual to have enough savings to pay for every eventuality.

Sharing that risk allows nearly everyone to live better.

The question here is whether that insurance should be provided by a profit-making corporation or a government agency.

Though the US system of private insurance is badly broken, evidence from other countries shows that both approaches can work.

Re: The Invention of Money

#116

Post by throwaway_gold »

rags2riches wrote: post #108
throwaway_gold wrote: post #103

Earlier quoted context omitted.

Very, if you like high quality items. Unlike plastics and most other metals, Gold is easy to work with (i.e. non-brittle, low melting point, easy to mold/cast, it is conductive so its easy to plate other metals) and it is non-corrosive. Therefore, gold jewelry is historically a finer end product that can be made with less skill and the result lasts longer. To a lesser degree of importance for jewelry, but still a pri…

So when I can get a big fat gold ring for a quarter next to the bubble gum machines at the gas station, you think it will still be good for an engagement or to commemorate 25 years of service because it is so very non-brittle, conductive and easy to melt, mold and cast?

Yes, people will still purchase the $.25 gold ring over the $.25 plastic ring. Do you ever look at two identically priced items and purposely purchase the one of lower quality?

Re: The Invention of Money

#117

Post by misja »

navigatesol wrote: post #58
misja wrote: post #22

Earlier quoted context omitted.

The value of gold is inversely correlated with the trust in government bonds. The reason is clear when reading the article; gold is the only real money so the higher the chances of defaults on bonds, the more attractive it becomes to swap paper money for gold. 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…

> All these issues could cost big money for governments so it makes their bonds less attractive. If bonds are unattractive, why are yields at near-all-time lows? Gold is appealing when real rates of interest are low, as it maintains purchasing power over time.

Good point! In a normal market situation you would expect the bond yields to increase when they become less attractive, but this is currently not the case.

Here is a hint why this happening: not all government bonds have such low yields: only some European countries and Japan have, the USA bond yield for instance is quite a bit higher.

The reason is that there is currently a huge buyer for European government bonds: the ECB. The ECB's "quantitative easening" that has been going on for the last years is artificially keeping the yields low.

Re: The Invention of Money

#118

Post by throwaway_gold »

nwah1 wrote: post #85
throwaway_gold wrote: post #69

Earlier quoted context omitted.

>Gold has no inherent value at all apart from some minor uses of relatively small amounts in the economy. I've never understood this argument that gold has no inherent value or no use in economy. First, lets acknowledge you couldn't even make your comment/post from any computer/smart phone on the market that doesn't use gold. That is gold is a great conductor of electricity, maybe not the best conductor, but when com…

Gold is a useful metal, yes. Its use as a money standard is arbitrary. A wiser commodity standard for currency would be a basket of non-scarce commodities that historically do not fluctuate much in price. But commodity standards in general are not preferred by governments. You could even make an argument that forgoing fiat currency is a national security risk. Countries which use fiat money can conduct warfare more e…

>Its use as a money standard is arbitrary.

But it is not. Gold is finite which is important for a currency. Gold is one of the easier metals to work with/coin, which is important, at least historically. And Gold is non-corrosive, which again is important in coinage.

Sure these unique characteristics may not seem important now that most fiat is digital, but we are talking about a system of money going back thousands of years. It has withstood the test of time, not because its arbitrary, but because gold will last thousands of years, something no digital or paper/cotton based bank note can claim. Plus you can counterfeit all paper/cotton based bank notes, to date no one has successfully reproduced Gold.

Re: The Invention of Money

#119

Post by yellowstuff »

ci5er wrote: post #95
epistasis wrote: post #60

Earlier quoted context omitted.

That's a shocking amount of inaccuracy to pack into a single sentence!

It is! I've been trying to think of a more compact/dense incorrect sentence for a bit now, and I can't really think of an alternative. (Although some of the political screeds from the election of 1800 might have been close, and I have yet to go mine twitter for examples)

This is a close competitor:

> For those who don't know how the Fed works: technically, there are a series of stages. Generally the Treasury puts out bonds to the public, and the Fed buys them back. The Fed then loans the money thus created to other banks at a special low rate of interest ('the prime rate')...

Also from "Debt, The First 5000 Years".

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