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

Von Fugal von at fugal.net
Thu Dec 4 21:06:23 MST 2008

<quote name="Daniel C." date="Thu,  4 Dec 2008 at 14:59 -0500">
> On Thu, Dec 4, 2008 at 2:56 PM, Michael Torrie <torriem at gmail.com> wrote:
> > This is fascinating in light of what you have said about how gold would
> > work as an economy grows.  Since the answer to the keynsian argument
> > that there's only so much gold to go around lies in the idea of
> > arbitrarily dividing the gold, then in reality, having gold-backed
> > currency is no different than using leaves for currency.  While there
> > are not an infinite number of atoms of gold, there probably are at least
> > as many as leaves in a forest... And it solves none of the problems of
> > fiat currency since the division of gold is arbitrary and artificial.
> > No wonder they threw it out back in the day.
> It also doesn't solve the problem of inflation* because a gold-backed
> dollar (assumed to represent one "division" of gold) would still
> become worth less and less as the standard division of gold became
> smaller and smaller.

That is exactly how it would NOT work. Say you have some unit called a
foo that represents one gram of gold. Say over time growth causes 1 gram
of gold to be too large a unit to do business efficiently with. (I don't
want to think about thousanths of foos). What you then do not do is
redefine a foo as 1/1000 of a gram, holders of foos would be up in arms!
(yet in fact this is exactly what so called expanding the money supply
(inflation) does). No, what you then do is create an entire new
denomination, a bar, defined as 1/1000 of a foo.

A gold standard is not without problems, but let's be honest here.

Von Fugal
Government is a disease that masquerades as its own cure
-- Robert Lefevre
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