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Texas moves to create gold-backed digital currency

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Re: Texas moves to create gold-backed digital currency

#51

Post by jelani_t »

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…

So because someone has a different worldview, you're gonna call them stupid? Cool. In the meantime, look how much purchasing power your dollar has lost since 1971. In your first point, you're also only taking into account the government-reported inflation. Go to your local grocery store and run the numbers yourself and you'll get a much higher number. After a certain percentage, inflation just becomes a tax unless you have it sitting in assets.

And I don't understand your second point either. Your savings have most definitely been undermined. Your nominal wages might be up, but your purchasing power is way down since after the stimmys. To calculate the difference, compare how many hours you'd have to have worked in the past to how many hours you'd have to work now to achieve the same standard of living.

Maybe cut out the pretentiousness and dismissiveness and listen to what people who are generally concerned about you and your purchasing power are saying.

Re: Texas moves to create gold-backed digital currency

#52

Post by throw0101b »

qwytw wrote: post #30
api wrote: post #6

Earlier quoted context omitted.

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 fac…

See also Gold Standard CPI and post-2008 CPI (when there was much rending of garments over QE):

* https://www.theatlantic.com/business/archive/2012/08/why-the...

* https://archive.is/FWKcL

Re: Texas moves to create gold-backed digital currency

#54

Post by throw0101b »

lamp987 wrote: post #44
Finnucane wrote: post #3

Earlier quoted context omitted.

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

whats practical about your wealth being stolen from you?

> whats practical about your wealth being stolen from you?

It forces you to invest it productive assets. What social value is there in locking away wealth in non-productive forms?

Buffett in 2011:

> Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.

> Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

> Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.

> A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.

* https://www.berkshirehathaway.com/letters/2011ltr.pdf

What social good does encouraging hoarding attain?

Re: Texas moves to create gold-backed digital currency

#55

Post by fredoralive »

weare138 wrote: post #41
dotcoma wrote: post #29

Is Texas getting ready to secede from the union, or what ?

No. They couldn't if they wanted to. There is no legal or constitutional basis for a state to secede. How would that even work? It's not like they can force people to leave the US and strip them of their citizenship. Are they just going to kick out over half the people in Texas? Besides Texas' economy would collapse immediately. There would be a mass exodus of businesses. Texas would be completely cut off from the na…

If it were to happen "legally", instead of "civil war II: the farce", I suppose the obvious bit would be to pass a constitutional amendment[1] to allow Texas to secede, probably after a Texit referendum. Presumably similarly to Brexit all the nitty gritty minor details like "not destroying the economy" can be worked out in negotiation between Texas and the USA, which will no doubt leave the newly independent Texas in a worse place and generally unhappy, but FREEEEEEEE.

[1] "Why would the other states ratify this?" you ask? Lets not quibble over minor details in silly make believe scenarios.

Re: Texas moves to create gold-backed digital currency

#56

Post by ur-whale »

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

> then it is no different from the US dollar

Yeah?

Can you decide to create more gold out of thin air on a Monday morning like Washington has been doing for the past 100 years with the USD?

Re: Texas moves to create gold-backed digital currency

#57

Post by ur-whale »

johngladtj wrote: post #26
kangaroozach wrote: post #23

Earlier quoted context omitted.

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

> They control the redemption process,

Not if the redemption process is inscribed in the constitution, in which case, "controlling" it is subject to quite a number of hurdles.

Re: Texas moves to create gold-backed digital currency

#59

Post by throw0101b »

jelani_t wrote: post #51
hakfoo wrote: post #13

Earlier quoted context omitted.

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…

So because someone has a different worldview, you're gonna call them stupid? Cool. In the meantime, look how much purchasing power your dollar has lost since 1971. In your first point, you're also only taking into account the government-reported inflation. Go to your local grocery store and run the numbers yourself and you'll get a much higher number. After a certain percentage, inflation just becomes a tax unless yo…

> In the meantime, look how much purchasing power your dollar has lost since 1971.

See also the amount of deflation that has occurred over the decades:

* https://www.huffpost.com/entry/radio-shack-ad_b_4612973

Re: Texas moves to create gold-backed digital currency

#60

Post by ur-whale »

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.

> Just a few minutes' reflection

I believe the person who has to spend - likely more than - a few minutes reflection isn't who you think.

IOW, burden of proof is on you.

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