# The Gold Standard - Actually prefferable to fiat? **URL:** \ **Category:** Great Debates\ **Created:** [March 20, 2016, 1:03pm UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639 "2016-03-20T13:03:41Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![BuckChongo](https://avatars.discourse-cdn.com/v4/letter/b/ee7513/32.png) [@BuckChongo](https://boards.straightdope.com/u/BuckChongo)\ **Post date:** [March 21, 2016, 12:28am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/21 "2016-03-21T00:28:05Z")
I don’t understand the passion to return to the gold standard when the economy was even more unstable when we were 'on it." But I also don’t understand how, given the size of our economy, there could be enough gold to back every dollar. ---
**Author:** ![Trinopus](https://avatars.discourse-cdn.com/v4/letter/t/2bfe46/32.png) [@Trinopus](https://boards.straightdope.com/u/Trinopus)\ **Post date:** [March 21, 2016, 2:14am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/22 "2016-03-21T02:14:09Z")
Also, a gold standard would be really nice for countries like Peru and Russia and China…countries with mountainous gold-mining regions. Not so much fun for Belgium and the Netherlands. Didn’t we learn our lesson with oil? Don’t make a gigantic financial investment on the basis of the happenstance of geological distribution of resources! ---
**Author:** ![UDS](https://avatars.discourse-cdn.com/v4/letter/u/ecae2f/32.png) [@UDS](https://boards.straightdope.com/u/UDS)\ **Post date:** [March 21, 2016, 2:53am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/23 "2016-03-21T02:53:23Z")
> [@BuckChongo](#): > > I don’t understand the passion to return to the gold standard when the economy was even more unstable when we were 'on it." But I also don’t understand how, given the size of our economy, there could be enough gold to back every dollar. That would entirely depend on what a dollar was declared to be worth, in terms of gold. Which is of course completely arbitrary. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 21, 2016, 3:32am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/24 "2016-03-21T03:32:18Z")
> [@BuckChongo](#): > > I don’t understand the passion to return to the gold standard when the economy was even more unstable when we were 'on it." Some in the thread may be arguing for alternatives to the gold standard. Perhaps there’s sentiment for currencies like Bitcoin, _backed by nothing_. Let the free market decide what money is in use! At least Bitcoin prices aren’t controlled by mischievous government drones! (And Bitcoin has risen against the dollar, no?) Like Adam Smith, John Locke, Milton Friedman, etc., I rather think government has important roles to play. Central bank money (a more nuanced term than fiat money) has worked well – although in the U.S. we can be grateful that it’s authority hasn’t been turned over to Congress. ---
**Author:** ![Common\_Tater](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/common_tater/32/13846_2.png) [@Common\_Tater](https://boards.straightdope.com/u/Common_Tater)\ **Post date:** [March 21, 2016, 4:37am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/25 "2016-03-21T04:37:28Z")
> [@Little\_Nemo](#): > > A dollar is equal to a dollar. It remains constant year after year. Taking longer than we thought? No. This is precisely the point. Constant in what way? In nothing but arbitrary nominal units of no particular utility, because there is no objective unit of account. One of the chief attributes of money is a store of value. Another is convenient medium of exchange. Modern money works great in the latter, but really lousy in the former. > [@](#): > > Does the amount of dollars it takes to buy something change? Sure. But that’s because the prices of those things changed. And this is why the current arrangement is so dishonest. WHY do prices change in aggregate? Why do the ingredient qualities continue to decline? Why do the containers get smaller and smaller? Inflation is a _hidden tax_, where a part of one’s labor is stolen from, and not one in a hundred usually has a clue. People act like it’s some sort of external event, like a tornado. As a general rule all things being equal, things over time get LESS expensive, not more. Not always, but typically, as better means of production and economies of scale take place. Funny money ruins all that. Politically we see this on display. Without regard to the wisdom of a mandatory $15 an hour minimum wage, notice what is never discussed - WHY wages need to keep rising, to keep up. Without monetary inflation, this would be barely an issue. > [@](#): > > But if you had stuck a dollar in your pocket fifty years ago and pulled it out today, it would still be worth one dollar. It would still be _called_ a dollar. It would still be “worth” a dollar, but it’s purchasing power will not be anywhere close! Fail. ---
**Author:** ![sweeteviljesus](https://avatars.discourse-cdn.com/v4/letter/s/898d66/32.png) [@sweeteviljesus](https://boards.straightdope.com/u/sweeteviljesus)\ **Post date:** [March 21, 2016, 4:49am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/26 "2016-03-21T04:49:56Z")
> [@ITR\_champion](#): > > No, but it’s come close. Back in the day, [a movie ticket](http://www.davemanuel.com/whatitcost.php) cost 5 cents. One dollar could buy 20 movie tickets. Today a movie ticket costs 10 dollars. One dollar buys one tenth of a movie ticket. The dollar has lost 99.5% of its value, as measured in movie tickets. > > Or take candy bars. [Same story](http://www.candyblog.net/blog/item/rising_cost_of_candy). Costs go way up. Purchasing value of one dollar goes way down. There doesn’t seem to be any reason to expect this trend to stop, so in the limit, we can reasonably expect that the value of a dollar will approach zero eventually, unless the government changes how dollars are defined. Little Debbie Swiss Rolls went from $1 a box back in the '80s to $1.19 a box today. They aren’t as good as I remember. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 21, 2016, 4:55am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/27 "2016-03-21T04:55:55Z")
> [@Common\_Tater](#): > > And this is why the current arrangement is so dishonest. … Inflation is a _hidden tax_, where a part of one’s labor is stolen from … And this is why your entire argument is misconceived. If inflation is a tax or rent, _who is reaping the benefit?_ You seem to think someone is stealing from soemone else, reaping illicit benefit. Who is that? (Spoiler Alert: _ **No one** _: your perspective is flawed.) Of course, sudden inflation would be a big boon for debtors but (a) most people _are_ debtors, and (b) today’s inflation is small, and anyway _predictable_. If all dollar amounts suddenly doubled, the net effect would be nothing: they’re just accounting tallies. Focus on that question: _ **Who is “stealing part of your labor”** _ and using it for their own benefit? ---
**Author:** ![Common\_Tater](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/common_tater/32/13846_2.png) [@Common\_Tater](https://boards.straightdope.com/u/Common_Tater)\ **Post date:** [March 21, 2016, 4:58am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/28 "2016-03-21T04:58:03Z")
> [@septimus](#): > > This board has gone round and round on the topic of fiat money vs gold; ignorance is fought; and then, after a few months, someone else shows up, often after watching a scary goldbug YouTube. **Common Tater** , you’ve been around for a while: Have you read the other threads? > > Commodity prices vary. [Nickel is sometimes twice as expensive as tungsten, sometimes half the price.](https://people.hofstra.edu/geotrans/eng/ch8en/conc8en/img/key_commodity_prices.png) (That comparison was just the first that showed up with my lame Googling; invest a few seconds of Search and find more interesting and more dramatic effects with other commodities.) And of course, the price of electronic toys continues to plummet dramatically, at least if performance is factored in. > > And gold and silver also fluctuate dramatically in value over time. _What has retained a very stable value over the past 30 years?_ More so than any commodity you care to name? **The U.S. dollar has**. It buys almost precisely 96 to 99% of the same “basket of goods” (cf, Price Index) that it bought the year before. Would gold do that? Silver? Widgets? Overall price stability is a major goal of central banks. Before modern central-bank money, fluctuations in the prices of gold or silver were a source of financial instability. > > In other words, you’ve got it backwards. > > That leaves four matters to dispense with: Hyperinflation, Inflation, Global currency, Insane Governance. > > **Hyperinflation** is very bad, but it’s usually a symptom rather than a cause of economic problems. And even it doesn’t “destroy wealth” directly (though it will transfer wealth from lenders to debtors). Wealth consists of land, people, capital machinery, ideas, and, yes, the precious metals which have been dug out of the ground. What pure wealth _is not_ is pencil marks on a bank’s ledger. Hyperinflation, BTW, refers to an inflation rate in excess of 50% per month! That’s an annual rate over 12000%. Congratulations for avoiding the “hyper-” prefix; most goldbugs and Youtube nuts stick it on automatically. > > But very high inflation can be bad even when it doesn’t meet the threshold for hyperinflation. France experienced 20% inflation during Hitler’s occupation (and 50% for a few years after liberation). Do you think this was a cause or symptom of France’s woe during that time? In any event they’re doing OK now. > > **Inflation** of 2% per year means that a goods basket worth $10 in 1800 will cost over $27,000 in the year 2200. And over $75 million in the year 2600. Welcome to the compounding effect! If that’s your big objection to “fiat” money, please start a new thread: “_Teach me basic arithmetic_.” 🙂 > > In fact 2% annual inflation, or even 6% inflation poses little problem _if it’s anticipated_. Interest rates tend to follow inflation: if the expected inflation rate rises from 2% to 5%, interest may rise from 6% to 9%. Savers are not punished. In fact, savers are being punished right now, as desperate central banks drop interest rates _hoping_ for inflation (or rather the positive economic growth of which that inflation would be a symptom). > > \> “makes it difficult to even make comparisons over time” > Did I answer you on this matter a few months ago? Or, by chance, are you repeating the fear of another Doper? Either way, please explain the problem you see. Many comparisons do use “constant dollars” and there are webpages that will convert to “constant dollars” for you if you want to better understand what Grandma paid for that piece of furniture. Yes, prices of commodities vary in time and space _but they would do that if measured in gold or wood or iPhones instead of dollars._ As pointed out above, the dollar (discounted by inflation) provides a more constant measure of value than gold or anything else. > > **Global currency**. Using Euros in Greece led to problems. Different economies need different interest rates and different inflation rates. Common currency interferes with that. > > **Insane governance**. It is possible for a central bank to destroy its currency, causing economic turmoil. _ **But incompetent or malicious government will find a way to do mischief even if on the gold standard!** _ Some people detest all government, assume all governments are incompetent and malicious. Start a new thread if that’s your position. For our purpose it’s sufficient to note that, despite the almost religious dogma of Hyperlibertarians, unfettered dog-eat-dog market economics itself has problems. > > Hope this helps. I’m not arguing for a gold standard. I can repeat this as often as necessary, if you think it helps keep people on track. What kind of standard are we on now? Or what would you call it? This is my point, there really is no objective standard now. The \* unit of account\* has no definition, and it can be conjured out of thin air (essentially). The framers of the constitution, fresh from the horrors of unbacked paper currency, made paper money illegal. Later, the government decided to make gold illegal. That is a little odd, don’t you think? An element on the periodic table - naturally occurring in streams and rivers etc. Jus’ Sayin’. But back to the issue at hand. I don’t know where you’re from where 2% or 6% annual inflation is OK, you’re smoking your socks. That is utterly ruinous over just a couple decades. Again, the lack of a meaningful standard unit of account means that comparisons over time become distorted, they can claim to use “constant” dollars but, we don’t have those, remember this is the issue. We can’t spin straw into gold, but everyone here wants to set up gold as a strawman. My argument here is while gold is money, money can be something other than gold, provided it will hold value over time. The current “stuff” is just awful in that regard, and is particularly bad for the elderly and those not interested in the stock markets, bonds are paying next to nothing and have done so for ten years. In fact, there is talk of “negative interest rates” and by extension, outlawing paper money as well. ---
**Author:** ![Deeg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/deeg/32/2955_2.png) [@Deeg](https://boards.straightdope.com/u/Deeg)\ **Post date:** [March 21, 2016, 4:58am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/29 "2016-03-21T04:58:17Z")
> [@ITR\_champion](#): > > No, but it’s come close. Back in the day, [a movie ticket](http://www.davemanuel.com/whatitcost.php) cost 5 cents. One dollar could buy 20 movie tickets. Today a movie ticket costs 10 dollars. One dollar buys one tenth of a movie ticket. The dollar has lost 99.5% of its value, as measured in movie tickets. Not comparable. A movie “back in the day” was B&W and maybe had sound (depending on how far back you need to go to get 5-cent tickets). The amount of work that goes into a movie these days is orders of magnitude greater than “back in the day”. It would be silly to compare straight-up the cost of movies then and now. ---
**Author:** ![Mijin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mijin/32/9369_2.png) [@Mijin](https://boards.straightdope.com/u/Mijin)\ **Post date:** [March 21, 2016, 5:09am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/30 "2016-03-21T05:09:56Z")
> [@Common\_Tater](#): > > And this is why the current arrangement is so dishonest. WHY do prices change in aggregate? Why do the ingredient qualities continue to decline? Why do the containers get smaller and smaller? Inflation is a _hidden tax_, where a part of one’s labor is stolen from, and not one in a hundred usually has a clue. People act like it’s some sort of external event, like a tornado. As a general rule all things being equal, things over time get LESS expensive, not more. Not always, but typically, as better means of production and economies of scale take place. Funny money ruins all that. Inflation is just a measure of changes in the economy. If inflation is at 2% it’s not that the government is now earning an extra 2% in tax. Inflation occurs as there is increased demand for products and services. There is an increased demand because of a growing economy and increased purchasing and investment. Which is one reason why deflation is considered such a negative state for an economy: it implies a drop in purchasing and business investment in the previous year. ---
**Author:** ![Common\_Tater](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/common_tater/32/13846_2.png) [@Common\_Tater](https://boards.straightdope.com/u/Common_Tater)\ **Post date:** [March 21, 2016, 5:16am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/31 "2016-03-21T05:16:48Z")
> [@septimus](#): > > And this is why your entire argument is misconceived. If inflation is a tax or rent, _who is reaping the benefit?_ You seem to think someone is stealing from soemone else, reaping illicit benefit. Who is that? (Spoiler Alert: _ **No one** _: your perspective is flawed.) > > Of course, sudden inflation would be a big boon for debtors but (a) most people _are_ debtors, and (b) today’s inflation is small, and anyway _predictable_. If all dollar amounts suddenly doubled, the net effect would be nothing: they’re just accounting tallies. > > Focus on that question: _ **Who is “stealing part of your labor”** _ and using it for their own benefit? What happens typically those who get the first use of “printing press” money reap the most benefit because it hasn’t cycled through the economy yet and resulted in higher prices. Remember inflation is ever and always a monetary phenomenon. When purchasing power erodes as a result, that is a loss of wealth. Let’s be clear here, this is because the unit of account is undefined. I will agree the US has probably the longest lasting currency extant, over 100 years, e.g. small size Federal Reserve notes are still technically legal tender, although one might get looked at a little strange. No other country comes close. And this I think, is the original poster’s point. Numerous countries have had several currencies come and go - becoming worth less and less, to worthless, overnight devaluations and other fuck all moves that impoverish millions overnight, this has happened over and over and it’s not unreasonable to raise an eyebrow at a government debt that will never be paid and unfunded promises that dwarfs that. The theft starts out slow, then all at once, to paraphrase somebody. ---
**Author:** ![Common\_Tater](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/common_tater/32/13846_2.png) [@Common\_Tater](https://boards.straightdope.com/u/Common_Tater)\ **Post date:** [March 21, 2016, 5:24am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/32 "2016-03-21T05:24:00Z")
> [@Mijin](#): > > Inflation is just a measure of changes in the economy. If inflation is at 2% it’s not that the government is now earning an extra 2% in tax. > > Inflation occurs as there is increased demand for products and services. There is an increased demand because of a growing economy and increased purchasing and investment. Which is one reason why deflation is considered such a negative state for an economy: it implies a drop in purchasing and business investment in the previous year. No, let’s define our terms. Inflation is an increase in the money supply. Prices can indeed fluctuate without regard to monetary inflation. What we see over time though, is prices going up, and up, and up. That is not the natural order of things, generally speaking. This is my point. With an objective unit of account, a pound of coffee doesn’t change much in price over time. The quality doesn’t go down. It doesn’t get smaller in weight, and the “new” pound consist of 8.37 ounces in the twee packages. ---
**Author:** ![UDS](https://avatars.discourse-cdn.com/v4/letter/u/ecae2f/32.png) [@UDS](https://boards.straightdope.com/u/UDS)\ **Post date:** [March 21, 2016, 5:37am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/33 "2016-03-21T05:37:51Z")
> [@Common\_Tater](#): > > No, let’s define our terms. Inflation is an increase in the money supply. Prices can indeed fluctuate without regard to monetary inflation. What we see over time though, is prices going up, and up, and up. That is not the natural order of things, generally speaking. What will keep prices constant (all other things being equal) is the money supply expanding and contracting exactly in line with expansion/contraction in the total value of goods and services offered in the market. There’s no reason to suppose that gold-backed currency will have this outcome; in fact it would be an astonishing coincidence if it did. It’s at least _possible_ for the supply of fiat currency to be managed in a way which approximates to this outcome; there’s no prospect for the supply of gold being managed in that way. ---
**Author:** ![Trinopus](https://avatars.discourse-cdn.com/v4/letter/t/2bfe46/32.png) [@Trinopus](https://boards.straightdope.com/u/Trinopus)\ **Post date:** [March 21, 2016, 5:39am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/34 "2016-03-21T05:39:03Z")
> [@Common\_Tater](#): > > . . . What kind of standard are we on now? Or what would you call it? This is my point, there really is no objective standard now. The \* unit of account\* has no definition, and it can be conjured out of thin air (essentially). . . . We’re on a Federal Reserve standard. Just 'cause you don’t like it doesn’t mean it “isn’t a standard.” Yes, the FRB could “conjure money out of thin air.” They’re doing that right now. They can also slurp money away again, if inflation rises too high. That’s the point of the system: it’s controlled (to a certain extent.) It’s a thermostat. If it gets too hot, they cool things down; too cold, they help heat it up again. The Gold Standard (or any other “objective” standard) would be like setting a forest fire and moving away any time it seems too hot. A Reserve system lets us control the size of the fire in the first place. > [@](#): > > The framers of the constitution, fresh from the horrors of unbacked paper currency, made paper money illegal. Later, the government decided to make gold illegal. Now we have backed paper money, not unbacked paper money. > [@](#): > > That is a little odd, don’t you think? An element on the periodic table - naturally occurring in streams and rivers etc. Jus’ Sayin’. And highly variable in its market value, plus highly subject to change due to ore discoveries and mining. You don’t like inflation, yet you point, with admiration, to a substance whose value is highly susceptible to inflation. Ecuador makes a major mining breakthrough…and all the gold in your pocket suddenly loses a part of its purchasing power. > [@](#): > > . . . My argument here is while gold is money, money can be something other than gold, provided it will hold value over time. . . . IBM stocks…and Superman (Number 1) comic books have held (or increased) their value. The trick isn’t basing the economy on something that will hold or increase value. The trick is knowing what will hold or increase in value! The stock market remains attractive because many stocks increase in value. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [March 21, 2016, 6:27am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/35 "2016-03-21T06:27:26Z")
> [@ITR\_champion](#): > > No, but it’s come close. Back in the day, [a movie ticket](http://www.davemanuel.com/whatitcost.php) cost 5 cents. One dollar could buy 20 movie tickets. Today a movie ticket costs 10 dollars. One dollar buys one tenth of a movie ticket. The dollar has lost 99.5% of its value, as measured in movie tickets. No, it has never come close. The value of dollars has remained so stable, decade after decade after decade, the people in other countries want to use dollars as their currency. As for the rise in movie prices, have you thought that maybe they reflect the increasing costs of making movies? Pretty sure “back in the day” when movie tickets cost a nickel, those movies didn’t have $200,000,000 budgets. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [March 21, 2016, 6:30am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/36 "2016-03-21T06:30:40Z")
**Common Tater** , you didn’t properly address the question I asked… > [@Common\_Tater](#): > > What happens typically those who get the first use of “printing press” money reap the most benefit because it hasn’t cycled through the economy yet and resulted in higher prices… > > When purchasing power erodes as a result, that is a loss of wealth… > > The theft starts out slow, then all at once, to paraphrase somebody. 😕 This makes no sense. The “printing presses” are operated by the government. Are you worried that the government somehow gets illicit gains? If it did that would be … _good!_ – that would mean less need for the taxes and fees businesses and consumers need to pay to finance government activity. (Nevermind about the “hasn’t cycled yet” which makes little sense.) Challenge your own confusion when you write “loss of wealth.” The “wealth” you worry about losing primarily subtracts(_) from bondowners, mostly banks. Is that who you’re worried about “having wealth stolen from them”? And if there were a loser, of course there’d be a winner too. Regard the accounting as a zero-sum game. (_ - Though, again, no “subtraction” applies with _anticipated_ inflation, as interest rates adjust.) You’re parroting incorrect memes without honestly making the contemplation I asked you to. When you do, you’ll see that your formulation is incomplete. Remember that central-bank money isn’t _wealth_ – wealth is land, capital, manpower, mined metals, etc. – it’s just marks on paper. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [March 21, 2016, 6:37am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/37 "2016-03-21T06:37:14Z")
> [@Common\_Tater](#): > > Taking longer than we thought? No. This is precisely the point. Constant in what way? In nothing but arbitrary nominal units of no particular utility, because there is no objective unit of account. One of the chief attributes of money is a store of value. Another is convenient medium of exchange. Modern money works great in the latter, but really lousy in the former. Then go ahead. Stop telling us there’s a more stable unit out there. Tell us what it is. You say you’re not talking about gold. Well, drop the other shoe. What standard do you think we should base our economy on? Silver? Diamonds? Oil? Land? Stocks? Movie tickets? The value of all of those has fluctuated much more wildly than the value of a dollar has. ---
**Author:** ![Mijin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mijin/32/9369_2.png) [@Mijin](https://boards.straightdope.com/u/Mijin)\ **Post date:** [March 21, 2016, 7:18am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/38 "2016-03-21T07:18:22Z")
> [@Common\_Tater](#): > > No, let’s define our terms. Inflation is an increase in the money supply. Well it’s an increase in the money supply _relative to other factors_. The absolute amount of money could increase yet prices could be in a period of _deflation_ if there is a greater contribution from increased productivity and low investment. > [@](#): > > This is my point. With an objective unit of account, a pound of coffee doesn’t change much in price over time. The quality doesn’t go down. It doesn’t get smaller in weight, and the “new” pound consist of 8.37 ounces in the twee packages. Likewise, if I buy some office space in the center of my town because I see the town is flourishing and think I will be able to sell it on at a profit…it should remain exactly the same price forevermore, because money should have a fixed peg? 😕 ---
**Author:** ![Budget\_Player\_Cadet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/budget_player_cadet/32/205_2.png) [@Budget\_Player\_Cadet](https://boards.straightdope.com/u/Budget_Player_Cadet)\ **Post date:** [March 21, 2016, 8:40am UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/39 "2016-03-21T08:40:45Z")
> [@Common\_Tater](#): > > I never mentioned locking money value to a commodity. > > What I said was, there is currently no objective _unit of account_, when it comes to money. This is almost unique, and glaringly so. The yard is defined, the ounce, the kilometer, an hour, an acre of land, etc to an ever increasing level of precision down to the number of vibrations of certain atoms. A dollar? Who the hell knows. Because value is inherently subjective? Units of measurement are arbitrarily and objectively defined against each other and this works because the lengths actually _are real_. If you measure an object and I measure an object and we come up with different lengths, then at least one of us is objectively wrong. But how much anyone is willing to pay for any given object is highly subjective - some people might be willing to drop millions on what is essentially random paint splatterings, while I might buy the piece for a few hundred if I saw the opportunity. An old momento like a sled with some initials carved into it with a penknife might have untold value to the right person but be worth maybe 20 bucks at a yard sale to someone else. “Value” is, in this way, utterly arbitrary, and it’s almost impossible to peg any sort of “inherent value”, even to things like food or land that everyone needs. this is a problem inherent to money, as the thing it seeks to “measure” is inherently vague and vacuous. Or can you tell me what objective worth a plot of land on the everglades has, independent of any other factors? ---
**Author:** ![Common\_Tater](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/common_tater/32/13846_2.png) [@Common\_Tater](https://boards.straightdope.com/u/Common_Tater)\ **Post date:** [March 21, 2016, 12:52pm UTC](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639/40 "2016-03-21T12:52:04Z")
> [@septimus](#): > > **Common Tater** , you didn’t properly address the question I asked… > > 😕 This makes no sense. The “printing presses” are operated by the government. Are you worried that the government somehow gets illicit gains? If it did that would be … _good!_ – that would mean less need for the taxes and fees businesses and consumers need to pay to finance government activity. (Nevermind about the “hasn’t cycled yet” which makes little sense.) > > Challenge your own confusion when you write “loss of wealth.” The “wealth” you worry about losing primarily subtracts(_) from bondowners, mostly banks. Is that who you’re worried about “having wealth stolen from them”? And if there were a loser, of course there’d be a winner too. Regard the accounting as a zero-sum game. (_ - Though, again, no “subtraction” applies with _anticipated_ inflation, as interest rates adjust.) > > You’re parroting incorrect memes without honestly making the contemplation I asked you to. When you do, you’ll see that your formulation is incomplete. Remember that central-bank money isn’t _wealth_ – wealth is land, capital, manpower, mined metals, etc. – it’s just marks on paper. Perhaps the confusion itself is the definition of money, if there are some misconceptions on what words mean then of course we can’t really agree on anything. When you claim that money isn’t wealth, just marks on a piece of paper or whatever, maybe this is part of the problem. Money is in a sense an abstraction, a method of keeping score, this is also true. At the most basic level the attributes of money were described thousands of years ago. Of course we live in a highly technological environment relative that. Now, as money, no other currency comes close to gold in terms of longetivity. 5000 years? I dunno, and the US is looking a little hinky at 50. I said I wasn’t arguing for a good standard, just that without an objective unit of account, the numbers soon become meaningless and unpayable, fake money unfortunately causes real problems. [Previous page](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639.md?page=1) [Next page](https://boards.straightdope.com/t/the-gold-standard-actually-prefferable-to-fiat/749639.md?page=3)