Why a Duck?

 

With the rise of Rand Paul, the subject of the gold standard also rises.  When choosing a standard of any kind, one must ask what makes that standard special. Gold has value beyond paper money because gold has held its appeal across civilizations across centuries and thus has a track record that transcends politics or any other human-conceived entity. Gold is also a nearly finite resource and thus its tradition as a hedge against inflation, but could conceivably be influenced if someone were to hit the Mother of All Mother Loads (see more below). Thus the desire for a gold standard is inversely proportional to the faith and trust we put in our governments, and ultimately reflects our trust in our fellow man.

Crude oil had very little value throughout human history and often could be found bubbling to the surface in places (even outside of Arkysaws), but once modern society found a use for it, its value increased dramatically.  Increasingly gold’s practical uses are on the rise as it is an excellent conductor of electricity, it is very malleable as metals go, it does not corrode easily, it is a good reflector of radiation, yadda-yadda (see Wiki). As it becomes progressively valuable to industry, its value will begin to increase disproportionately to its traditional use as just a pretty ornament. This could hold significant implications for its traditional use as the last refuge for storing wealth. Also perhaps digging too deeply into science fiction, as technology advances we could reach a point where we can turn lead (or something else that is not gold) into gold. While the implications of that breakthrough could far exceed the impact on using gold as a wealth storage, it certainly would upset the apple cart of its traditional usage.

In today's world gold is usead as a financial utility as a hedge against inflation.  As an "investment", gold doesn’t produce anything.  It is simply a commodity. It just sits there. Worse, it costs money to keep it safe. Businesses produce the wealth that is temporarily stored in money and/or gold.  Of course businesses have assets that must be maintained and protected, but they also produce wealth well beyond their maintenance value.  If not for this business economic productivity, gold’s value would hit a ceiling and stay there.  Personally, I feel that investing in gold is just short of investing in bullets so I would prefer to stay ahead of the curve. The implications for such a perception by governments is scary. 

Ultimately, money doesn’t matter. Nor does gold. They are just middlemen, so to speak. What ultimately matters is the productivity of a society. The ability of a society to manage its wants and needs against its abilities is what is important. The only thing that really matters for an economy is the exchange of goods and services via some stable value-holding medium. If whatever that medium is, be it dollars, gold, or pairs of Paris Hilton’s underpants, its value can be expected to remain somewhat stable through the umm…period of the transaction, all is well economically.

 

Comments

[Devremülk]

Nice post. I love it. Waiting your new posts. Thank you...

[Sleuth]

An intriguing subject, trying to establish a good medium to pass between one another, representing something valuable and actually theoretically holding the same value as that thing. In one post-apocalyptic scenario dreamed up by someone or other, the people used bottle caps as currency. I wonder how that would have developed as universal currency, after all gold is just the traditional valuable thing and was traded for other, more practical possessions and money just developed as a handy representation of gold and other such commodities, I think. So how do you reach bottle caps? It probably just took a while.

Anyway, the whole thing reminds me of a lovely quote from a terrific film: 'the things you own end up owning you'.

I really should say something more, but it's getting late and I'd really like to have a read of Machiavelli's 'the Prince', it's had some excellent reviews.

[WTP]

Yeah, I'd think bottle caps would be quite a stretch. That does sound familiar, though. I would think in a real post-apocalyptic scenario, commodity currency like salt or rice would make more sense than bottle caps.

Good luck with "The Prince". I was a little disappointed when I finally got around to reading it many years ago. I expected it to be a bit more evil. I found Sun-Tzu's "The Art of War" more instructive in that regard.

[WTP]

Oh, and BTW, welcome back.

[Sleuth]

Glad of the welcome, I'll try to post a little more regularly where I can.

Food and water would be pretty valuable and maybe people wouldn't bother with a currency as we have now for a while, especially as it would probably be hard to get everyone united again.

As for Machiavelli, I'm starting to see what you mean; but it's good to have a little general insight into the world and particularly Italy 'back in the day' and from the eyes of a native (even if it is some form of political/philosophical treatise rather than tourist guidebook or history of Italy). He seems far more practical and merely amoral in his examinations than most people believe. I hope he was actually a good writer in Italian though, as the translation that I have is terribly cumbersome.

Next on my list is Hannah Arendt's 'On Revolution', I'll chalk up Sun-Tzu after that for a bit of variety, though I did listen to the Tao Te Ching not too long ago as my regular dose of Eastern thinking.

I like the tid bit of debate under your 'Angels' post, but I think he probably should have said 'perfect beings' or somesuch to be more accurate; after all - angels were not made with equal grace and Satan fell from favour etc. etc.
Part of me wishes that people would have more faith in humanity.