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Texas moves to create gold-backed digital currency

kitco.com

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Re: Texas moves to create gold-backed digital currency

#21

Post by KRAKRISMOTT »

ilaksh wrote: post #20

I hope they use an existing, leading-edge project. There are some very advanced and capable cryptocurrencies. Or Ethereum which is catching up and would be amazing. It seems like the US would just try to block something like this on principle though. Having your own currency puts you in competition with other countries, doesn't it? And that's not part of the concept of a (US) state. https://en.wikipedia.org/wiki/Texa…

If the fiat conversion endpoints are subject to the same regulatory KYC and AML regime then it is no different from the US dollar

Re: Texas moves to create gold-backed digital currency

#23

Post by kangaroozach »

KRAKRISMOTT wrote: post #21
ilaksh wrote: post #20

I hope they use an existing, leading-edge project. There are some very advanced and capable cryptocurrencies. Or Ethereum which is catching up and would be amazing. It seems like the US would just try to block something like this on principle though. Having your own currency puts you in competition with other countries, doesn't it? And that's not part of the concept of a (US) state. https://en.wikipedia.org/wiki/Texa…

If the fiat conversion endpoints are subject to the same regulatory KYC and AML regime then it is no different from the US dollar

Still different because it wouldn’t be fiat. There is no ability to print more gold.

Re: Texas moves to create gold-backed digital currency

#24

Post by bheadmaster »

hakfoo wrote: post #13
Finnucane wrote: post #3

Earlier quoted context omitted.

Goldbugs like deflation. Goldbugs like gold. Practical economic usefulness is not a consideration.

I suspect there are three flavours of gold bugs: 1) Wealthy + Paranoid + Stupid. They'd rather keep their money in sovereigns under their mattress, than put it into any sort of productive economic activity. On a long term, especially in the US, you could pretty much throw darts and build a portfolio that competes with, or beats, inflation. 2) Conspirational: "fiat currency is a grand scheme to undermine our savings f…

> fiat currency is a grand scheme to undermine our savings

How exactly is it not? Inflation = stealing value from people, that they have already created, time-limiting their spending power so that there's no way to actually save money in the long-term.

Money printing is theft, indirect taxation without consent.

Re: Texas moves to create gold-backed digital currency

#25

Post by KRAKRISMOTT »

kangaroozach wrote: post #23
KRAKRISMOTT wrote: post #21

Earlier quoted context omitted.

If the fiat conversion endpoints are subject to the same regulatory KYC and AML regime then it is no different from the US dollar

Still different because it wouldn’t be fiat. There is no ability to print more gold.

The Bretton Woods are calling and want their policies back.

Re: Texas moves to create gold-backed digital currency

#26

Post by johngladtj »

kangaroozach wrote: post #23
KRAKRISMOTT wrote: post #21

Earlier quoted context omitted.

If the fiat conversion endpoints are subject to the same regulatory KYC and AML regime then it is no different from the US dollar

Still different because it wouldn’t be fiat. There is no ability to print more gold.

They control the redemption process, hence can devalue it any time they want

Re: Texas moves to create gold-backed digital currency

#27

Post by TheOtherHobbes »

api wrote: post #6
bediger4000 wrote: post #2

What's the motive behind wanting deflationary currency? Just a few minutes' reflection should convince you that's a very bad idea for any free market, capitalist economy.

That's one of the crazier political rabbit holes to go down. There are reasonable and/or reasonable-sounding arguments for pretty much every position and those arguments have been rehashed in every imaginable way for decades and decades. Online there's probably tens of gigabytes of debate between "hard money" advocates and "fiat" or inflationary currency advocates. After seeing endless debates between various schools…

All money is fiat money, in the sense that value is based entirely on social negotiation and agreement, not inherent use value.

Anyone who doesn't understand this should try eating gold. Or an ETF. Or a dollar bill.

Of course gold does have some use value, but so do plenty of other metals. The only special thing about it is that it has a history of being valuable - already a social agreement - and it gives a very clear agreed social signal when used in jewellery.

Re: Texas moves to create gold-backed digital currency

#30

Post by qwytw »

api wrote: post #6
bediger4000 wrote: post #2

What's the motive behind wanting deflationary currency? Just a few minutes' reflection should convince you that's a very bad idea for any free market, capitalist economy.

That's one of the crazier political rabbit holes to go down. There are reasonable and/or reasonable-sounding arguments for pretty much every position and those arguments have been rehashed in every imaginable way for decades and decades. Online there's probably tens of gigabytes of debate between "hard money" advocates and "fiat" or inflationary currency advocates. After seeing endless debates between various schools…

> We don't know and we'll never know. All you can do is tell just-so stories

You can compare the permanent boom and bust cycle the global economy was in prior to the Great Depression to the relatively stable inflationary environment of the last several decades.

Just look at:

https://www.officialdata.org/us/inflation/1800?amount=1#:~:t....

Specie based money (with not meaningful monetary policy) is not stable, in fact it's less stable than Fiat money it's just that periods of high inflation are followed by periods of very high deflation. And unpredictability is clearly an obvious downside...

(to be fair I almost thoroughly disagree with your reasoning).

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