[OT] Ameros will clog the tubes - was Re: Network Neutrality

Andy Bradford amb-plugg at bradfords.org
Thu Dec 4 21:45:35 MST 2008


Thus said Michael Torrie on Thu, 04 Dec 2008 10:54:42 MST:

> Currency devaluation is largely a  government policy. And deflation is
> as bad for country as inflation.

Depends  on  how you  define  deflation.  It  was deflation  that  saved
Germany's economy when hyperinflation was the norm in 1923.

> While the dollar was indeed worth  more compared to a basket of goods,
> our economy is so large now that  there's no amount of gold that could
> cover the entire value of our economy.

Any amount of currency will serve the purpose of a medium of exchange as
well as any other amount will. It doesn't matter how much gold there is,
as long as the  amount is stable, but even then, are  you of the opinion
that money isn't subject to supply/demand?

On the the proper amount of gold/money see:

http://mises.org/money/2s8.asp

There is a better discussion of what  supply of money is best in chapter
5 of:

http://mises.org/mysteryofbanking/mysteryofbanking.pdf

> And apparently in a global economy, a gold standard would dramatically
> increase the disparity between rich and poor.

Again, how  does fiat money help  reduce the disparity between  rich and
poor?

> It's no fault of a poor nation  they don't happen to have any gold to
> mine.

What exactly does that  have to do with wealth? If  a country can't grow
oranges, do you  say that they are  poor with respect to  oranges? Or do
you believe  that Adam  Smith (and  many others)  who have  expounded on
division of labor are wrong?

> One of  the miracles  of our  modern fiat currency  system is  that it
> allows very poor nations to push off poverty simply through education!

What if that very fiat money  system actually causes an overabundance of
educated individuals than the market really demands? Or is there no such
thing as supply/demand when discussing education?

> Besides all that, what makes gold valuable?

It's subjective  as mentioned  before. But gold  does have  thousands of
years of money history. What exactly does fiat have going for it?

> If gold  is just sitting  in a bank somewhere,  it's doing no  one any
> good.

Usually money in a bank is loaned  out is it not? That's of course doing
nobody any good!

Andy
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