It would be more boring and more stable.
Nah. The Euro situation is not a parallel. We can also pretend governments are not interested in maintaining their grip over people.
Yeah a straw man.
Libertarian ideas are worthless to governments. I agree they are DOA as long as there is not overwhelming education about the nature of money and government predation.
How can a plethora of competing unregulated currencies be boring?
Like I said, gold and silver would probably win out. It wouldn’t take too long. If there is some technological breakthrough that introduces something better, it will be ushered in by stodgy Board of Directors types and heavy capital investment.
You are thinking competition will be like social network competition with new upstarts popping up all the time. Is competition in cheap ink pens exciting? No, Bic is on top. No. This will be very boring like the oil industry.
Are we worried about which station to by gas from? Nah.
Another good parallel would be the insurance industry where reputation and conservatism win out. That’s how banking should be if the feds weren’t so involved.
Mea culpa. I forgot that absolutely nothing that happens in the real world can be a lesson about why libertarianism wouldn’t work in libertopia.
I’m curious how this plays out. There’s in the ballpark of $1 trillion of gold (at today’s prices) in government vaults worldwide I think. M1 for just the U.S. and Eurozone exceed $10 trillion. Would the price of gold adjust to ten times its present level? Would people melt down their wedding rings to help out?
Will paper money be introduced? By whom? I suppose it’s caveat emptor all around. Are you aware that shortage of specie led to frequent financial crises in gold-standard economies?
Alessan: “How can a plethora of competing unregulated currencies be boring?”
Is that why the gold standard is such a great idea? Cheap thrills?
remember that some Libertarians claim that the income tax is unconstitutional even though it was voted in by states!
The insurance industry is super regulated, at least in the US.
As for the OP - I’m a libertarian, and I’m pretty indifferent about the Fed.
i think after a few panics and bank failures after some dumbasses tried to corner the gold market and failed would solve this argument forever bill gates would have to save the country instead of jp morgan
Relative to the size of the US economy today (or the size of the US budget), Gates has zero chance of doing what JP Morgan did in the past.
Why gold and silver, anyway? They’re just metals. They have some applications in the jewelry and electronics industries, but other than that, they have no intrinsic value. Why base your currency on them?
I’m just reading along in this thread, but I was wondering about this as well.
Base it on lead. It’s so common everyone will be rich!
Because they are/were rare, basically. And pretty of course. And that rarity along with the perception of value allowed them to become a exchange medium, instead of having to always do a direct barter. It’s a lot easier to give some guy a few coins made from precious metals for your two pigs as opposed to having to bring in a few wagon loads of wheat instead. It’s also nice that it’s relatively difficult to go out and find more gold or silver to make more coins to get those pigs.
There are, of course, all sorts of issues when someone DOES go out and find a bunch more of the stuff, as it causes all sorts of inflation issues, but that’s another story.
The Lead Standard would also allow for a lot of Hollywood one-liners:
“Hey, punk–you forgot your change!” BANG! BANG! BANG!
J.P. Morgan may not have even been the 10th richest American in 1907, but his wealth was probably greater than Gates’ as a percent of the economy. More importantly, Morgan was a banker in control of liquid assets and with great influence.
The Panic of 1907 began with a shenanigan. The Heinze brothers attempted to engineer a short squeeze in the United Copper Company they controlled, and borrowed heavily to do so. They miscalculated and became insolvent. Banks began to fail and stocks began to crash. It was a rather mild crash by today’s standards — much smaller in percentage terms than the 2008 crash; at the depth of the 1907 crash the market was still well above its 1903 low. Moreover in those days the business cycle was much more vicious than at present. Crashes were common.
But this crash led to worldwide panic, and runs on banks both in the U.S. and in Europe. The world was on a gold standard then so many parties demanded that they be paid in … wait for it … gold. The Bank of England watched its gold supply deplete. American banks watched their gold flee to Europe as French investors sold American stocks. Investors didn’t want paper, let alone today’s “electrons.” They wanted Gold, and gold was in short supply.
J.P. Morgan was summoned out of retirement, in part at the request of the U.S. Secretary of the Treasury, to lead a cartel of big bankers to maintain liquidity. This is not altogether different from Paulsen cajoling big bankers during the 2008 crisis. One difference is that Morgan pledged a good portion of his personal fortune to a joint civic-minded endeavor of many banks while firms in 2008 indulged in competitive jostling and greed, and laughed as Bear Stearns went under.
Twenty-five years after the Panic of 1907 much of the world went off the gold standard, trading much of its gold bullion to the U.S. Treasury for Dollars at what seemed like an inflated price. A glance at a chart of the Dow-Jones Industrial Average will show that the erratic oscillation between boom and panic was largely tamed after that point. The Crash of 2008 should serve as a reminder that, if unregulated, Wall Street players will continue to have their fun, running con games and other shenanigans.
Because they’re MAGIC! Don’t you ever read fantasies? Fairies and elves and dragons and troll kings collect gold and silver. Not gadolinium or lithium or tin. They know what they’re doing! We need to base all our economies on fantasy! Why can’t you people understand that!!!
Gold in particular does have some important uses. It makes very good dental crowns and has the advantage of being especially neutral for some medical applications. Silver has been used for some mirrors (because, I guess, it was easier to refine than, say, chromium), is vital in film-based photography and has been used in cloud seeding (AgI).
In fact, I think applicability makes a substance less desirable as a trading base. Maybe our monetary system should be based on [sup]244[/sup]Pu, which no one would want to have stockpiles of.