Was Dropping The Gold Standard A Mistake? | Economics Explained

Is returning to the gold standard something that could fix the economic issues we are facing today?
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#Economics #GoldStandard #Inflation
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[@ellieban]

“Fungible” - a word almost no one would have understood 18 months ago and now everyone watching this nodded at that moment and thought “Yes, I know what that means”

[@richdobbs6595]

I guess I can feel proud, since I understood that word in the 1980's when I worked in oil refining. A unit of gasoline that met certain specs was fungible with any other unit of gasoline. Conoco would stick gasoline into a pipeline and pull out any particular equivalent quantity of gasoline from that pipeline half a continent away, add its magic stuff into a tanker truck, and sell it as Conoco gasoline, even if that oil had actually been refined by Citgo or Mobile or Exxon

[@farticlesofconflatulation]

I would argue most people learned what “non-fungible” was before they found out what fungible meant.

[@biscottigelato8574]

Every Bitcoiner have understood what ‘fungibility’ and other properties of money is, for over a decade. Everyone called Bitcoin a scam. Maybe people will finally realize they don’t understand what money is. And Satoshi is decades ahead of some of the self proclaimed ‘smartest’

[@calenwebb3096]

This comment deserves all the likes

[@pnutz_2]

@@richdobbs6595 same thing with the energy market and who's pushing the electrons through my computer

[@MWhaleK]

I have heard a fractional reserve Gold standard as 'being able to exchange your money for gold, as long as you never actually try to do so'.

[@jackkraken3888]

Which is exactly how fiat fractional systems work now, so not really that different.

[@patricksachs3655]

Yes, it’s not a real gold standard, but for the moments in time the U.S. was actually on one, productivity, and hence living standards, soared and inflation disappeared. btw- this video totally misrepresents the so-called disadvantages of the gold standard through arguments that are easily refuted.

[@deleted-something]

Ye

[@Saratogan]

That's why you should hold physical gold/silver. No such exchange is required. The problem is with the word "fractional". If all that a gold banker did was "store" your gold and charged you for that storage everything would be fine.

[@davidjacobs8558]

US dollar is neither backed by gold nor oil. US dollar is backed by military might of US Armed Force. If people of the world believe US Armed Force can invade another country, and take the wealth of that country by force, then US dollar will retain it's value.

[@cristobalcosta1132]

7:47 This point is a staple in Argentina. Many of us decide to buy things like cellphones through a one or two year payment plan because, even if there is a price mark up compared to paying the full price, inflation will eventually make the monthly fees cheaper over time.

[@eck0hcobra15]

Does the math actually work out for this ?

[@danielTHEgfosji]

@@eck0hcobra15 it does if interest rates are lower than the inflation

[@spicychad55]

don't the argentines convert their money to the American dollar, British pound or Euro too?

[@smokeypoobear9172]

@@spicychad55 We try to, whenever we can. But due to currency controls, this limits how much we can convert to say USD at a traditional bank, so a black market has sprung up where you can exchange with others whenever you want for a higher rate. This rate is called "Dolar Blue"

[@bg271]

wouldn't the prices just be higher so that even with inflation you are still paying the highest price the market will yield

[@rosspimentel6543]

The issue people have with FIAT currency is not that they don’t have faith in the FIAT system. It’s that they look at their leaders and have no faith in them due to their utter incompetence and corruption. That’s why people want to go back to a gold standard.

[@Saratogan]

well said. However, it has always been so. People have been "shaving" the currency for thousands of years.

[@yong9613]

​@@Saratogan FIAT currency just made "shaving" easier and faster!

[@tallswede80]

@@Saratogan no they haven't. the reeded edge removes the possibility of "shaving".

[@Saratogan]

@@tallswede80 That is a relatively recent invention. However, what have they (governments) done since then? Metal debasement. US silver coins have gone from 90% to 40% to zero after 1964. Today's coinage is every bit as much fiat currency as the paper. Same in the UK. Sterling has not been sterling since WW2. It too has zero silver in it. To get real silver and gold coinage you have to go to the mints directly and they will sell you a real silver or gold coin at the current market price plus a premium. What I was trying to explain was that "shaving" was an ancient means of money debasement. The point seems to have been lost on you.

[@tallswede80]

@@drscopeify Claiming that the gold standard is "price fixing" is a disingenuous statement. Under a gold standard, the "price" of an ounce of gold, is the quantity of goods and services you can buy with it. When the gold standard ended, the "price" of gold, was the amount of paper fiat currency required in order to purchase it. The value of gold never really changes, only the quantity of paper fiat currency required to obtain it. " in 1920 milk was $0.60 which today would be $9.38" Not an argument. Claiming that something "would be" something, is not an argument. "Also, the inflation in the USA was higher during the gold standard" Wrong. Inflation is not the increase in prices. Inflation is the increase in the amount of currency in circulation. Under the gold standard, the amount of currency in circulation was limited by the amount of gold bullion held by the government. After the gold standard, the government has been printing money without restriction. The money supply since 1971 has exploded. "More examples, the price of bread in 1920 was $0.12 which today would be $1.88" More examples of what? Your intellectual deficiency? Claiming that something "would be" something, is not an argument.

[@marwanshamsia]

Really, GDP growth graphs should be in inflation adjusted real terms to compare post and pre leaving gold standard

[@ashtonnagorski5853]

@@a.k8069 its pretty comprehendible if you ask me

[@fort809]

@@a.k8069 graphs showing Gross Domestic Product growth over time should be adjusted for inflation to accurately compare post and pre leaving the gold standard

[@americameinyourmouth9964]

US Real GDP in the 25 years before and after the end of the Gold Standard was around $2.1 Trillion in 1946 and around $5 Trillion in 1971 and $10.7 Trillion in 1996. 2.38x before and 2.14x after. So maybe neither of you are right.

[@incendiary6243]

rGDP is measured, and is used very frequently

[@tdf123emcee2]

I think he is trying to correlate whether inflation was allowed to growth irresponsibly because we left the gold standard. Our GDP can grow but that doesn't necessarily mean we are better set off than before because if the rate of inflation is faster than the rate of GDP growth as a consequence of an irresponsible printing of money then we might have a good point of debate. Edit: This is just a comment. I'm not saying that my interpretation of the previous comment is applicable and financially correct. There are more complex things to understand starting with whether or not that comparison can be made. Yet, it's good to have everyone question the way our economic is handled. Regardless of how technically correct or possible the opinion is.

[@sqeeye3102]

I wish you had mentioned the much longer history of the gold standard in America instead of just starting with the Bretton-Woods system in 1944. It seemed like there was a lot of oppertunity for some good history there that might have informed some of the decisions that were made. It would have also been interesting to examine some of the options like fractional gold/silver systems, as we literally used to mint our coins in 90% silver up until 1964 anyway.

[@hstad100]

Which depression, recession, wars, political issues where prevented during the so called "Gold Standard" era - zilch. Look if you want to buy Gold go ahead, but make sure it's the physical one not the paper one. Moreover, be prepared to pay for its storage and try to buy a Coke with it at 7 - eleven.

[@James-uk6hs]

I agree with this. Actually, this topic should go waaaay back. Even before North America became the USA. The fungibility of gold not only across countries but also across time, a gram of gold in Egypt at 1550 BC is still a gram of gold in the US today is what makes it an ideal currency.

[@sqeeye3102]

@@James-uk6hs An interesting thought. It wasn't until the very recent discovery of Tungsten, but the ability to mass produce it, that it even became possible to "fake" any significant quantity of gold. It's an unfortunate coincidence that their densities are nearly identical, with Au being 19.32G/cm3 and W being 19.28G/cm3. This is only really a problem for large volumes of material and can be accounted for, but is still an issue to consider on handheld XRF machines, since they can misread the materials in either direction.

[@shawnk7720]

@@sqeeye3102 a chemist has a go at economics. lol i loved what you wrote

[@priersackh]

​@@sqeeye3102today is an era of modernity. Testing metal not only by weight. By it's radiation, reaction to soundwave/shockwave, temperature, electric current test, and many more to proof a coin is fake or not.

[@lepkr6095]

Mate, your gold price chart is wrong in the y axis, gold was convertible at 35$/oz. It went more than 20x that price. The initial peg was at 20$/oz from 1834 to 1933 when the US govt seized it's citizens gold and devalued the peg to 35$/oz until 1971, then the free market took it to 800$/oz in january '80

[@mariusvanc]

Oh, that's just inconvenient history, we can skip that.

[@CodeineRadick]

Adjusted for inflation maybe?

[@mariusvanc]

@@CodeineRadick Nothing else in this video was.

[@kashay4415]

I think he just looked at the move until 1975 and omitted the second leg of the bull market from 1975-80

[@elwinhuisman8939]

​ @tdf123 emcee i have no idea about converions rates but the man has been talking in grams and is Australian.

[@Don_elCHARTO]

I always thought leaving the gold standard was a big mistake. No one had really explained to me the imperfections of the gold standard and why it was REALLY ditched. You have explained that very well.

[@rudyardganuelas6254]

There’s a bunch of goldbugs who insist gold is the only way to keep money to this day. To them I say, China and Russia produces 28% of the gold today.

[@sprazer]

The reason it was ditched was not the benefits of inflation system. It was ditched because of the corruptions and they had to use the inflation system to solve the economy and the financial crisis. Yes, the economy would have been slower with gold standard but the middle class and lower class people (overall) would have had a better life quality than they have today. Everything has advantages and disadvantages and the inflation system just happened to benefits the economic growths but not everyone benefits from it. If you are a business owner , small or big, you can always increase your product price to follow the inflation but if you work for salary , you are doomed because you can't just go ahead and increase your salary so. So the the faster pace of the economy doesn't mean it makes the majority of people's life better.

[@abdiganiaden]

Gold is limited, it would be hordes by the rich and boom no more gold How is that good for average person anyway

[@abdiganiaden]

@@strikerfett6624 let’s forget gov and all that for a sec What’s stopping a rich landowner or industrialist from just hoarding it all?

[@mkvenner2]

@@strikerfett6624actually the value of gold is what the government says it is. One of the US Congress’s powers is regulated the value of gold and silver.

[@davidplowman6149]

In many ways, people believe their currency has the value it has because they have no other choice. Even in a hyperinflation situation people have to go on using their hyper inflating currency because they probably have very little access to foreign currencies or gold/silver coinage.

[@alvinbjorkqvist9869]

If you look at Germans during their hyperinflation you would see that it was more common to use goods as a currency than it is today.

[@RecursiveRuminations]

Taxes ensure a demand on a nations currency. Get some of the fiat every year, or go to jail.

[@davidplowman6149]

I complete agree, but it’s very inefficient. People can barter to stay alive, but they need a usable currency to run an economy.

[@davidplowman6149]

The funny thing about bartering is it was, until very recently, a small but normal part of our economy. I actually encourage it because, if nothing else, it forces and strengthens social bonds.

[@djVania08]

I wouldn't also describe use of currencies as a believe. in one way or the other, you are forced to do so...

[@gersonadr2]

Are you going to address the fact the CPI formula changed in 1981? And if measured just like the 70’s, that second chart would look quite volatile?

[@elkbloodheart1188]

Ain't that something

[@robalexnat]

Multiple changes for sure both in CPI basket weightings and the definition of unemployment (see Obama era changes) but that being said consumption habits have changed, if you look at the GDP deflator for inflationary measure seems to be at least somewhat more reliable imo.

[@IamGrimalkin]

If you're referencing that graphic by shadowstats; that's not really true. Firstly because shadowstat's chart actually has quite a low volatility, it's just inflation is consistently high in his chart. Secondly because shadowstats's entire graph is based on an error where he used the cumulative change in CPI rather than the change in year-on-year inflation. The difference between the two methodologies is quite small if you don't make this glaring mistake. fullstackeconomics has a good article about this (scroll towards the bottom to get to the maths error).

[@gersonadr2]

@@IamGrimalkin very good read! Looks like the author of fullstackeconomics supports the idea of adjust price per quality, which I disagree personally.. But good points were made.. In fact, it's hard to use a single measure of inflation for everytthing.. Say, rents in my area (Sydney) had gone up by 4% per year since 1990, according to my own research, and some food items had gone down.. Some people say the CPI is "rigged". House prices definetely don't reflect the CPI. The measure they use "owner's equivalent rent" is nothing close to my reality. Australian property is close to 7% purchasing price for the last 40 years, anyways. I don't envy the BLS job

[@IamGrimalkin]

@@gersonadr2 Agreed on owner's equivalent rent. Or rather, I think they should deduce owner's equivalent rent from actual rents rather than relying on surveys. But I'm not sure how much difference it would make. Also, I doubt house prices/rent rises have much to do with the gold standard; housebuilding regulations and a lack of state housebuilding are much more likely culprits in my opinion.

[@hunter99225]

My issue with all the talk of inflation is that no one mentions the trillions of dollars of deficient spending in the preceding decade of economic growth. Yeah we spent a lot of money during the pandemic, but something had to keep the economy moving. My question is why did we cut taxes and continue spending when we were in a boom cycle?

[@ericg4915]

It's because people are short sighted but real economists know that covid spending is not the cause of inflation. The primary cause of inflation is global supply chain disruptions but you make a good point. Entering into this era with low interest rates and low taxes doesn't help. We didn't really have a strong foundation to weather this storm.

[@RallyRat]

Because any monetary contraction would cause an instant recession. Overall debt levels are high enough that they must be controlled through inflation/monetary expansion or through mass bankruptcies. The former is of course much more popular especially in the 2-6 year election cycle while the latter, though painful, would clear bad debt and ultimately lead to long term prosperity.

[@garrettgreen242]

Asking the REAL questions of our time

[@In-The-Padded-Room]

@@ericg4915What is a 'real economist', an adherent of crackpot 'modern monetary theory'?

[@DumbledoreMcCracken]

Nothing about any economy is 'real'. Yes, production produces needed products, but with very little efficiency. Money is the lubricant of the inefficiency, and stops efficiency from causing the economy to grind to a good and proper halt. Money hides the inefficiency by inflation. And money is constantly being inflated, through loans. However, price inflation is stopped by wage stagnation, barring lose monetary policy.

[@steven20653]

I think the most frustrating part for me when discussing finances and the current trends is that I am not smart enough to come up with a solution but smart enough to see that the current way of doing things is absolutely broken. Any solution outside the fantastical would require those that benefit the most from the current system to suddenly become altruistic and that is not something I see happening

[@jannik6748]

Maybe have a look at bitcoin it's a system where altruism from the rich isn't necessary in order to redistribute wealth. And it also does so in a non forcefull manner.

[@matts5247]

@@jannik6748bitcoin is too volatile though to replace a national currency

[@matts5247]

Or any other similar ecurrency

[@XauUsd.46]

Bitcoin is only solution

[@basbym]

This sounds cheezy, but look at bitcoin, unbiased, have a read, even a reread, it's a highly emotional topic these days... but the core of the solution is there

[@bmunson4920]

In much of the English speaking world, currency used to have/state 'Will pay to the bearer on demand" because one could go to the central bank and receive a set amount of gold or silver in exchange for the note. Currency now says something like "Is legal settlement for all debts" confirming its' fiat note status.

[@shiulaing5513]

The UK £20 notes still says it (the issuer of the note) "promises to pay the bearer the sum of twenty pounds". The note is issued by the Bank of England, so it can still honor that promise by letting you redeem the note for say, £20 worth of coins as that is produced by a separate entity, the Royal Mint. In the UK outside of England (in Scotland and Northern Ireland), banknotes are also issued by commercial banks (e.g. Royal Bank of Scotland) so this promise bears weight.

[@SLow-fb3qm]

Favours nations that have gold as a natural resource, or as a colonial outpost. No gold = poverty.

[@guydreamr]

In other words, if you don't like your Federal reserve note, you can take it to the bank and they will...give you another one just like it.

[@bmunson4920]

@@shiulaing5513 The UK stopped backing its' currency with precious metals just after the second world war ended. The promise as you say is that you can redeem them for coinage which is now made of base metals.

[@bmunson4920]

@@SLow-fb3qm Not really. Canada is the 5th largest gold producer on the planet, and keeps none of it for financial reserves.

[@william2501]

I think he forgot about the gold standard that happened before the bretton wood system. The reason why the US went off the Gold Standard was because it restricted the Federal Government from market intervention. From the Great depression Hoover and Roosevelt both intervened in markets to try and encourage spending for economic output. Government started printing money which forced them to go onto a fractional reserve gold standard in the 1930s. Then in the 1960s, the government was printing more money which triggered foreign central banks to redeem US dollars for gold. On the point of currency stability. The average inflaion under a gold standard for the US from 1790 to 1913 (which was when the Fed was founded) was 0.5%. Yes, average inflation which means that there was deflation. However somehow modern-keysian economics say that deflation is somehow evil and bad for the economy as potential price spirals may occur. But haven't prices decreased overtime due to technological developments and economies of scale (even with inflation). Or what about sales at the mall, people don't wait for more sales they buy before prices increase. Now onto the point of central banks setting interest rates with a gold standard. The central bank should not be able to set interest rates. If interest rates are meant to stimulate spending and investment, or decrease spending and investment isn't this the same as a central planned economy determining the output of goods; and don't we know the hisotry of central planned economies. My final point is that there is no such thing as a responsible government. Politicians are voted in who have been "sponsored" by special interest and corporations who want something in return. The Politicians don't have to raise taxes, they can just print more money to pay their special interests and sponsors. There will be a time when the US will not be able to pay off it's debt. As interest rates increase - as we can see at the moment - the interest will soon surpass national GDP (this is excluding current spending), then what happens default?

[@marconapolitano2821]

I usually don't post comments under KZbin videos, but I feel the need to show you my appreciation sir.

[@william2501]

@@marconapolitano2821 I don't usually post under youtube videos either but I feel that we are at a time in history where something has to be said. Thank you very much I really appreciate it!

[@sulimanthemagnificent4893]

I get your points, but how would a non-central bank system work?

[@william2501]

​@@sulimanthemagnificent4893 Great question. To start I want to establish the so called role of the Fed and other central banks. The main roles of the Fed include: transfering funds between banks, issuing currency, bank regulation, lender of last resort and most popular is monetary policy. Before the Fed, clearing houses were used to clear transactions of cheques and other monetary transfers between banks. Some contemporary clearing houses include Mastercard and Visa. Issuing paper currency. Central banks, most notably the Fed just print trillions out of thin air. It does this buy digitally buying Treasury Bonds. When the Fed was founded it was not allowed to buy T-Bonds. Up to the 1930s individual banks would issue paper currency redeemable for gold, this restricted government and provided greater freedom and property rights to the American people. Bank regulation and lender of last resort. Previously, Clearning houses would audit and qualify banks for membership. If banks did not meet requirements they would not be allowed membership. Also, these same clearing houses provided the lender of last resort facility. Now onto Monetary policy. Central banks conduct monetary policy to control inflation. They try to achieve this by raising and lowering interest rates. As mentioned before, inflation was well under control with a gold standard. Interst rates should be set by the free market on the amount of deposits to loans. Meaning that when there is more demand for loans interest rates rise. When interest rates are set artificially low by the Fed, there is a high demand for loans. This is why there are constant bubbles in the real estate and stock markets. Then when the Fed raise rates they pop the bubble (The 2008 financial crisis was a typical example of this). That is why interest rates have continually gone down over the years as politicans and central banks want to kick the can down the road. One more point, fractional reserve banking destabilises economis very quickly and should be abolished. Yes, it restricts banks from lending to an extent, but that is for a reason. The Amercian people had to bail out the banks as they had no reserves.

[@ponraul1221]

This guy gets it. I couldn't have said it better myself.

[@Morgainz88]

They focus on growth in a finite world is misplaced. What good is a higher GDP for the middle class if both parents now work, their house is more expensive and their savings are being eaten away by inflation. Gold standard reigns in growth which is a feature, not a bug.

[@TheBabitat]

Growth for the sake of growth is the ideology of cancer

[@wasppaul3707]

So true, the people who vouch for the federal reserve are the true idealists that can’t see the long term effects and are blind to the effects we are already feeling today

[@SirPerceval]

I know I am two years late, but your comment is perfect.

[@spikeshartell4675]

16:10 gold also has a rarity factor that contributes to people thinking it valuable. One of the reasons a gold standard works is because there is a limited supply of gold so it's a lot harder to print money at unsustainable rates

[@xxxBradTxxx]

Just wait until asteroid mining becomes a thing

[@spikeshartell4675]

@@xxxBradTxxx it's going to be a long time before mining gold from an asteroid becomes economically viable.

[@Toodyslexicforyou]

Just wait until you seem to stimulate or destimulate the economy the trust me won’t be praise gold standards

[@pllatypusmeamo2388]

There are plenty of metals that are also rare, so why is only gold ever discussed? Because of belief, which means gold does little to differentiate itself from fiat currency.

[@spikeshartell4675]

@@pllatypusmeamo2388 those metals are also considered valuable, have you seen the prices of lithium and cobalt? The rarity of those metals is part of the reason EV's tend to be more expensive even though they're vastly simpler machines than their ICE counterparts.

[@paucaudet2643]

The argument about returning to the gold standard us not about the intrinsic value, is about having a fix supply of money that gold has it. Money is not about the intrinsic value is about the 3 functions of money and how good the money is at them : unit of account, medium of exchange and reserve of value

[@wknost]

Austrian Economics FTW

[@athirstyguy]

Precisely. And a gold standard is different from a gold-backed standard(which is what we are actually talking about). 1. Gold standard in essence freezes or slows the economy when there's no more gold to to around and expand the economy which causes a perpetual recession until more gold can be mined. Also, gold is "difficult" to transfer and store. 2. A gold backed standard leads to where the gold custodian(US) will have their gold reserves run dry when if (and when) countries choose to redeem their USD for gold(France 1959,1963) thus losing reserve currency status. As well as currency manipulation by borrowing USD through foreign banks(Italy 1963)

[@ricardokowalski1579]

I find it easier to understand when you make the distinction between MONEY and CURRENCY Money has three functions unit of account, medium of exchange and reserve of value Currency, critically, only has TWO: unit of account and medium of exchange. You cannot "store" value in currency because it will be stolen by inflation. What we have today is merely currency. Hardly different than mining company tokens (scrips) . kzbin.info/www/bejne/hGPXqJuMrbt-l9k kzbin.info/www/bejne/fGikgIqChLSHY7c

[@paucaudet2643]

@@athirstyguy well as we know from more than 100 years ago any quantity of money is optimal. Since is autoregulated by demand and offer, if there is no more offer of gold, the price of gold will go up. Please be careful, in monetary terms deflation is the reduce of the supply of money. In mainstream economics deflation is use for saying that prices are falling down which it can be good to the economy. I recommend you reading the article in defense of deflation of Philip Bacus (there is also a conference in KZbin by mises institute) he speaks about deflation and the lies about it

[@JohnDobak]

No bro you just like trAiNiNg WhEelZ. No economy can really zoom if it has training wheelz bro. What's wrong with you why don't you just trust the Fed bro?

[@anonymousAJ]

The whole point of the "reserve currency" scheme is that instead of coming to bother you about gold, when a foreign bank piles up dollars they now have more reserves to inflate their currency and make their exports nice and cheap for dollar holders.

[@elektrotehnik94]

?

[@gerdaleta]

This guy just spoke pure new speak what the f*** are you an MPC are you a robot are you so brainwashed you believe what you're saying I mean what are you even saying b******* thing is worse b******* because b******* people said so at the end of the day it's f****** paper how is it worth anything what can I do with paper gold is used in all of the technology the satellite beaming the signal down to you the s*** in your phone the computer cigarettes on your computer and wealthy people since the beginning of time have been stupid enough to want it and it's using medical procedures and actually as health benefits in the human body what can paper do be burned for heat I guess

[@loubirch4179]

Exactly, the foreign dollar market exchange subsidizes the American lifestyle along with having outsourced all manufacturing abroad including china leading to their rise but we've done this for too long and seeing effect now

[@effexon]

@@loubirch4179 so finally inflation is coming home to US too, when reagan made it only happen in those producing countries exporting a lot... TIK explained it works roughly like that, export a lot -> your inflation,price hikes shows as money flows to your local economy while importing economy enjoys cheaper prices than normal coz amount of goods is higher + excess money flows out of that economy.

[@Dragrath1]

@@effexon Yeah economies like everything else in the universe; quantum mechanics, general relativity, logic and metamathematics etc. are built off of information and thus subject to information theory and the concept of entropy the basis of the second law of thermodynamics. In a world with finite resources what goes up must come down as t6he system rebalances itself. Our current economic system is still based on the falsified notion that economies can grow infinitely via eternal exponential growth but that is only true for an open system that is far from equilibrium. In a globalized economy you no longer have an open system so it must come to an end. Any form of regulation in effect exists to balance out resource entropy with computational entropy i.e. it is an exchange of information as seen in the Maxwell's demon thought experiment.

[@kameliastoyanova7198]

"...Gold is just shiny, soft dense metal..." but it can't be printed, needs effort to mine and it's not infinite, that's why it's valuable.

[@BeHappyTo]

for what little use we have for gold... It is practically infinite within reach of humanity.

[@dick_mojo]

No, not only. It also has unique physical properties. It is the best conductor of electricity, for eg. It is indestructible. It has many industrial and commercial applications. It is valuable because it is intrinsically valuable.

[@Neothejew]

and this is true of other metals.

[@Alex-sr9pq]

only cause its rare doesnt make it valuable. its needs to provide value to individuals to be valuable, and the only value it provides is as stated: in niche industrial applications and cause it looks pretty. Thats not enough value to be able to run an economy off. Its very little value actually.

[@aliceh5289]

Haven't we created gold in a laboratory before? Even if it costs much more to do so than the amount of gold was worth, we proved it's possible, and energy will get cheaper with innovation.

[@eljangoolak]

One huge point you missed is that with the current system we have just kicked the can down the road by creating a huge debt burden 30+ trillion which we cannot get out of. Gold backed currency forces government discipline to avoid these huge debt traps.

[@franco521]

You cannot argue that money supply needs to grow at the same rate as GDP when your GDP isn't even inflation adjusted. And by inflation, I'm not talking about CPI. Add rent and home prices to that too.

[@badgerbrry]

Actually you can argue against that, mid 1800's to 1913, we have NO Federal Reserve and we were on a gold standard and it was the greatest innovation and richest period in American history!

[@ALN21000]

@@badgerbrryDidn’t the country nearly split in half during the mid 1800s?

[@virathdealwis5312]

As a semi gold bug, I generally agree with everything you've said, id just point out that while fiat shouldn't be a problem as long as no one does anything dumb, based on the history of virtually every nation state the world has ever seen, something dumb happening seems to be eventual, Assuming competence on the part of politician's seems as a whole an extremely optimistic bet.

[@virathdealwis5312]

Let's be cautious, slow economic growth, but never a crisis

[@geekobgaming5647]

@@virathdealwis5312 there was a crisis, multiple of them during gold standard. This is just an illusion that something like gold would prevent economic crisis from happening. The truth is that modern economy is very complicated. More complex systems are, more prone to errors they are. It has nothing to do with gold or fiat. Its not even about slower growth. There just isnt enough gold to back every single transaction that is happening. So we would have to shrink the economy in order to make it happen, or have it covered just partially. Both of these are pretty undesirable. Why would we shrink our economies, making people worse off? Just to have an illusion of safety with something like gold? Politicians should not meddle with monetary policy, this is why most national banks run as separate institutions, where their only job is price stability.

[@CommieHunter7]

That's a pretty good summary. I think gold standard can limit growth and incentivizes bad behavior (invasions, exploitation), but it's clear the weakness of fiat is "someone can do something really dumb"

[@iancooksley1]

@@geekobgaming5647 In short, there is enough gold, it's just not valued correctly. Based on the value of the global economy gold may need to go up from $2000 to say $100000 per ounce.

[@IamGrimalkin]

Gold can also be a problem when people do something dumb though. The depression of 1873 is widely thought to have been at least partially caused by a mishandling of the gold standard.

[@HF7-AD]

It'd be important to remember that most people advocating for a gold standard believe in Austrian economics, which don't consider deflation bad.

[@EdA-bb5gp]

Is a little deflation worse than the constant (theoretical and often missed) 2% inflation? The only valid goal is ZERO inflation. But then government wouldn't like that.

[@HF7-AD]

@@EdA-bb5gp really depends, for Austrians deflation isn't bad because it just means that the economy is bigger (but because they are against fiat currency there isn't more money to go around and thus the existing money rises in value). Keynesians think deflation is bad because it causes people to put money away from the economy and into their savings accounts, which would slow its growth down according to them. If you're a consumer you'd prefer deflation because it means your savings grow, if you're a politician (that doesn't believe in Modern Monetary theory) you want people to spend more so you can tax them the same and get more money for public projects that increase your popularity.

[@Dramatic_Gaming]

@@EdA-bb5gp Neither inflation or deflation are inherently bad. Iflation can be good if it means your wages are going up, but hurts if prices are going up while wages remain stagnant. With deflation each dollar you have will have more buying power, but if deflation goes too far than your money becomes to valuable to spend.

[@DrakeRose]

The government prefers inflation because it's taxable. Wages go up? So does your income tax liability. Wages stay the same but all other prices fall? You have more purchasing power but the same tax liability.

[@FormerGovernmentHuman]

@@Dramatic_Gaming would peoples unwillingness to part with their money not bring down prices to target that change in behavior? If it’s more valuable would you not offer far better deals to incentivize them to part with it? Although I suppose the patient consumer need only wait long enough and they get what they want for pennies.

[@susmitislam1910]

What gives gold value is not the mere belief that it has value. The value of gold comes from basic economic theory - people want it but it's hard to get by, i.e., a supply-demand issue. The same cannot be said for print money, as it's a gazillion times easier to increase the supply of money on a whim. Its value truly hinges on only one thing and that is our belief that it has value.

[@brasssnacks8413]

For why deflation is bad go look at last week's video *Goes to look at last week's video Deflation is unsustainable. See our video from last month to see why. I feel like every time someone tells me deflation is bad there's slight of hand. If a paint factory gets a new machine that doubles paint output, cool. I can paint my fence twice as often. We live in a better world. For economic leavers to then be pulled to double the cost of paint so I'm back where I'm started makes the whole exercise seem pointless. Also the productivity exists so if I'm not seeing the benefit then who is? I'm starting to suspect that only the rich would be worse off with deflation and that's why it's becoming the prevailing wisdom, but you're never going to have a janitor appointed to a central bank.

[@NaNa-wj8tw]

👍

[@darthstilton8861]

Exactly man. I wanted to buy a new gpu last year and because of the supply issues price had gone up loads. I held off my purchase because I expected it to go down. Eventually it fell enough that I was happy with the price. If i thought they were going to go up I wouldn't have bothered ever buying it as I didn't see the value. So someone now gets my money and I get a gpu rather than nobody, win win. We hear all the time over history that the rich could only afford windows, cars, curtains etc. The greatest example I always think of is food. If we had central banks and modern monetary policy 1000 years ago we'd probably still be spending all our income on eating and nothing else. The problem with the criticisms of deflation is that people always eventually have to buy. If I hold off a car purchase my current car will eventually stop working and I will have to buy, regardless if I think it will be cheaper next year. The same can be said for pretty much all the items you own. Eventually you will have to buy the things you value.

[@anewordinary3949]

Shoes were expensive when they were made by hand. Factories made them cheap. Now most can afford multiple pairs. That’s deflation. Deflation is bad?

[@veuriam]

Just as a warning, this is pretty long-winded so it'd probably be good to put on some reading glasses or something. This example seems to make sense, but you should keep in mind supply / demand would reset that price of paint back to the 1/2 that it would have been without a change in the amount of money in circulation. But it still is twice as expensive as it would have been RELATIVE to your savings. In this example (in which inflation occurs), you would be best off to try to spend your money from your savings before it lost much of its value. And on a macroeconomic scale, this faster rate of money expenditure leads to a more productive economy. But now let's say that rather than inflating, the value of money actually increases. Now, you can buy twice as much paint as before! Great! Or twice as much gold. Or silver. Or stocks. Or real estate. All things that would be great. But if you expect that this trend will continue, it would be even more wise just to keep that money saved up. In another month, maybe you can double your purchasing power again. In this scenario, you would spend much less of your money from your savings account, keeping that money away from the larger economy. This leads to less productivity on a larger scale, as people are much less willing to purchase goods or services. And, by the way, deflation would actually be by far the most helpful to the richest people in a nation, as they have a lot more money that's free to be saved. The rich have the ability to spend a much smaller portion of their savings every year due to their immense overall wealth. Over time, that money would grow in value. This means that in reality the ultra rich would have the most to gain by creating deflation. This type of macroeconomics, like quantum mechanics, goes completely at odds with what we experience on a day to day, personal basis. That's why almost everything is counterintuitive. But in reality, deflation would likely spell disaster for the economy as a whole. If you'd like, I've linked some additional resources below. kzbin.info/www/bejne/l2q8o6qXgM2BoMk kzbin.info/www/bejne/kH2vdaylgNiFbs0 (skip to ~2:35 for the deflation question)

[@SC-zq6cu]

A person who lives in a society is never just a consumer, they are either themselves a producer or living off of a producer. Everyone needs to either earn money or need someone to earn money for them if they want to live in civilization today. When depression happens the producers earn less i.e. after a 2x depresion you need to work twice as hard as before to earn what you earned before. Its not just the rich that suffer in a depression, everyone does.

[@sor3999]

I thought the whole point of the gold standard was to transition to the new paper currency: "Here use this new currency, and if you don't quite trust it yet you can turn it in for gold anytime!" Back then gold was used as currency because it was scarce enough and easy to verify by weight.

[@Scylon1]

Correct. It was a receipt. Paper was easier to move around then a big sack with a dollar sign on it filled with gold. Then one day the government decided they just weren't going to give it back.

[@robertotovar8963]

Gold was stolen from everyday citizen..for the government debt..the government was paying national debt with gold and would have run out of gold..so the paper scheme

[@shahbaaz4024]

@@Scylon1 For some reason, i haven't been able to understand the concept of why paper money is bad and why printing more money is bad. I know its bad, but i don't completely grasp the information.

[@shahbaaz4024]

@@Scylon1 Thanks for the recommendation, will check it out.

[@shahbaaz4024]

@@patricksachs3655 I think i understood a little bit in what u said, that if there is Gold standard the Government has to rely on people. I understood it as this, In case of Gold Standard if the government is overspending the state wealth, they would eventually have to turn to its people at some point. They have two option, either 1)Cut down the spendings, make foreign countries pay them more, etc... or 2)Become the evil guy by increasing taxes, etc... (Which is not good in a democracy) Rather than being a silent killer and printing more notes to continue their overspendings (in case of paper currency) Is that correct?

[@depth386]

I would counter the “pro QE” chart and argument shown in the moments following 10:58 with the fact that inflation was hidden by excluding housing and through the ever increasing use of cheap plastic products in place of real proper furniture like closet organizers. Financial repression is evil, it reduces the motivation to work. It’s easier to just speculate on assets instead of working.

[@depth386]

@Julio Altamiranda I would caution you not to be too fixated on gold. Inflation can happen even in a scenario with no money supply growth including gold standard scenarios. A simple example is if a lot of gold is mined out of the ground. The more scary scenario is if the supply and production of other goods and services gets drastically reduced. Even solid bars of gold can experience “inflation” if an exceptional volcanic eruption goes off and food crops fail worldwide from a terrible season or terrible several years. The price of food would make gold feel “worthless”. Now that’s obviously a very dystopian and unlikely scenario but the purpose of this is to run you through some thought experiments and to point out that inflation can actually occur without money printing.

[@moonshadow7057]

It would be so much more simplistic and clear if we define inflation purely as the inflation of money, not the change of prices which can be affected by thousands of factors, production, logistics, natural disasters, things that shouldn’t be the job for economists. But no. How about we mix up everything and just say nonsense words like “supply chain caused inflation” so that people forget we just printed 40% of money this year? Brilliant.

[@cstrouts]

@@moonshadow7057 Why is supply chain caused inflation nonsense? People were in lockdown and didn't work, therefore shortages, therefore prices go up. Pretty simple.

[@moonshadow7057]

@@cstrouts because price increase is nit inflation, just like during pandemic every experts were promoting “social distance” when they actually meant “physical distance”, people weren’t and shouldn’t socially distance themselves, there were Zoom, Instagram and so on. The problem is the corruption of language, they’ve redefined inflation is a synonym of price increase, that’s nonsense

[@depth386]

@@moonshadow7057 The term is “Money Supply Growth” often referred to as M1 M2 etc. It is completely separate from inflation. It is possible for money supply to grow without causing inflation, as long as the supply of “stuff” we buy also goes up in lockstep. So if new factories, farms, bakeries, etc. are opening making stuff we want, money supply growth balances it out and actually prevents deflation. I agree with the rest of what you’re saying in your last reply though, they printed a mountain with no fundamentals, no increase in productivity and now it shows.

[@TheJpwzrd]

8:10 The ‘inflation is good because it encourages spending’ is some Keynesian bs. Capital formation is much more important. Inflation of any rate lowers time preference. Low time preference is antithetic to capitalism because no one bothers to build capital. It creates hedonism instead of sacrifice and saving in order to do things (like start a business) that are harder and take time to build to

[@will2003michael2003]

I’d prefer a world in which inflation was stagnant, but the tick of inflation is how people can use debt to gain wealth. My 100,000 cash house loan is worth -6% this year and my house is worth +10% more without me doing anything. Inflation is tax on people who save money and boon to those who borrow it.

[@slop123456789]

Wealth creation through debt is unsustainable in the long term as it requires exponentially more debt over time to generate less and less real growth. Not to mention that rewarding debtors and punishing savers is an immoral system that encourages frivolous and wasteful consumption and discourages long term planning.

[@goldfinger0303]

@@slop123456789 It's been happening for....well over a hundred years no issue though. And real global growth has not been shown to slow

[@slop123456789]

@@goldfinger0303 Closer to fifty years actually. The world officially transitioned from a system based on hard money (gold) to a credit based fiat money system in 1971. Since then, levels of debt across the world have grown exponentially in a self fulfilling prophecy: increased national debt loads lead to increased interest payments, which cause bigger deficits, which in turn increase the national debt load (etc). Such a system can only function for so long - hence why I said it is unsustainable in the *long* *term* .

[@goldfinger0303]

@@slop123456789 The Breton Woods system isn't exactly the same as the gold standard, which died in...1933 or so? And "wealth creation through debt" is more an accusation against the modern capitalist system than a currency system, which is where my hundred+ years comment comes from

[@sulimanthemagnificent4893]

@@goldfinger0303 To be fair he (initially) did say “hard money”, not necessarily the system by which it was kept/administered. Though I suppose I shouldn’t be speaking for others.

[@محمدالامريكي-ج9م]

13:20 Even tho its called the "gold standard" it doesn't mean that gold standard advocates mean only gold. Silver can be used as well. To pay for everyday goods. Not everyone can have a kilo of gold but most people can have a kilo of silver. We have enough silver for every human.

[@ParagonFury]

No we don't. There isn't enough precious minerals on the planet to back even the economy of the United States, much less the world. Nevermind the fact we actually need things like gold and silver for the production of goods (particularly electronics) and not being used as currency.

[@dex6316]

And what makes silver valuable? At the end of the day precious metal currencies rely on the belief that the currency has more value than their productive output. If this belief collapses then the gold standard collapses, which is identical to what could happen with fiat currency. Any reserve currency (whether fiat or gold standard) has to have more value than it’s productive output. Otherwise having the currency (or material) on hand will cause it to devalue creating hyperinflation, and shortages will cause deflation and economic contraction.

[@buckwylde7965]

Another great video! The biggest advantage of gold for the individual is that it preserves buying power. Habsburg Emperor Franz Joseph made such beautiful gold coins. He is gone, his empire is gone, his army is no more, his family is without political power, his banknotes, bonds and letters of credit have value only as collectables. But just one of his 100 Korona gold coins will still fill your car with groceries in 2022 just as it would fill your wagon with groceries in 1908. That is the power of gold.

[@hendrasutrisno4191]

And was it easy to get this 100 Korona gold coins?

[@buckwylde7965]

@@hendrasutrisno4191 You can still buy Hungarian and Austrian 100 Korona restrikes which have .98 troy oz.of pure gold in each coin.Original coins have a premium.

[@colinhobbs7265]

Until the shopkeeper decides that he doesn't want your metal coin, in which case you starve.

[@buckwylde7965]

@@colinhobbs7265 At what point in history has gold not been completely convertible into currency? When has that ever happened?

[@James-mc5hc]

Abandoning the gold standard encourages unlimited spending.

[@k98killer]

The GDP chart at 15:00 is not adjusted for CPI or any other inflation metric, so obviously the previous period holding the record for high inflation would have higher nominal GDP growth than the period of relatively mild inflation before it. Not a very convincing argument. When adjusted properly for inflation, the period 1951-1971 saw a real GDP growth of 210%, while the 1971-1991 period saw a real GDP growth of 183% (source: FRED). Pretty lazy to totally ignore inflation in a video about the gold standard, and it's disingenuous to then argue that the fiat standard was better given that it wasn't in real terms.

[@vgernyc]

The thing is though up until 1970, productivity and wages rose hand in hand and then wages have largely been flat. Also the calculation of CPI has been tweaked to make inflation look more favorable.

[@BiigiieCheeese]

Coming off the gold standard didn't lower or flat line wages that was due to poor union advocacy and the federal government refusing to increase the minimum wage because they were paid off by lobbyists.

[@k98killer]

@@BiigiieCheeese and why did the corporations and lobbyists and banksters and billionaires gain so much wealth and power after the end of the gold standard? Because the fiat standard is designed to advantage them over everyone else.

[@stephenjenkins7971]

@@k98killer Kinda convenient that tou ignore the wave of neo conservatism that led to lower taxes on the wealthy across the board in this time period and instead attribute it all to fiat. As if the gold standard didn't also have an absurd wealth disparity growth to begin with.

[@k98killer]

@@stephenjenkins7971 The saying in politics is "follow the money". So when we follow the money that supported the rise of the neocons, what do we find? A corporate cartel led by international bankers. Gold used to provide a check and balance against the power of the banksters and their political pawns, but it ceased to do so starting in the 1950s with the growth of the eurodollar system. It isn't fiat currency per se that is at fault -- it is unchecked ledger money creation controlled by banks that is the root issue. Gold lacked the divisibility and velocity to service a global economy, so ledgers were built that used gold for periodic settlement; the emergence of our current system was theoretically inevitable, as were the political ramifications.

[@navid617]

EE: Training wheels prevent you from going fast FED: Racing with a unicycle

[@jameswood9772]

Inflation is a disaster. This CPI report is a disaster. The FED is going to have to pull all their punches to stop the housing market. The sad thing is other markets are getting destroyed. Now you gotta rely on a pretty good diversification if you must stay green. Currently up 14% and being cautious. Still better deal than letting it sit in savings or checking earning near 0-1% interest.

[@jamescomb1170]

In many ways, people believe their currency has the value it has because they have no other choice. Even in a hyperinflation situation people have to go on using their hyper inflating currency because they probably have very little access to foreign currencies or gold/silver coinage.

[@jessicamoore3093]

@Zahair O'Brian This is why being informed pays off. I see any market condition as an opportunity, so far i just dollar cost average. I am still in profits even if i decide to sell today as my average is way lower. Kudos to my Portfolio Manager 'Eileen Ruth Sparks' . I don't pay attention to the day to day movements & Returns have been good. Not retiring any time soon so who cares what happens today?

[@jessicamoore3093]

@@shu-quinnliao7688 She is quite the genius in portfolio diversification. You can look her up on the web as she is SEC regulated.

[@jimjam5570]

In savings or checking a, you are losing ~20% purchasing power... Not earning a percent... 🤔

[@jimjam5570]

You aren't even up at 14% guy. You need to subtract inflation first. Real inflation... Anyways, housing crash will be only good part for me I hope, because I need a home. Fingers crossed for 90% housing market crash, 🤣

[@teucer4]

An economy can grow regardless of being pegged to gold in that the gold standard’s restriction on quantity of dollars will in this case act as a deflationary force, increasing currency value versus requiring an increased production of that currency. The only disadvantage of a gold standard is that it restricts the ability of a government to borrow and spend recklessly.

[@nicolagianaroli2024]

And pose a lot of obstacles to the warmonger eager to wage war

[@cosmicharlie1970]

As a coin collector, I can tell you it was a friggin' disaster.

[@ThomasJScharmann]

Then you were not a collector. You were an investor. I am a collector and I will NEVER part with my metal.

[@SisyphusJP]

@@ThomasJScharmannnstead of trying to kill the op with a snip let’s acknowledge his point. No one wants worthless universal coins as a collector. The first thing anyone who publicly discusses a coin collection speaks of is it’s worth.

[@adriansamsonhiluf7653]

There's a reason they still mint coins colored silver and gold, even though they're not as valuable. People subconciously find those color codes valuable.

[@dianapennepacker6854]

How was it a disaster exactly? Genuinely curious.

[@davidgarcia32323]

@@dianapennepacker6854 cause he can’t get rich off his collection😂

[@jamesbong4978]

Gold wasn't the only valuable metal we used as an exchange . You haven't even spoken about the removal of silver from coined currency & the knock on effect that might have had with the value of money.

[@ekesandras1481]

The problem with the gold standard is, that there is not enough gold on the whole planet to equal the money supply. There is always much, much more money in circulation than there is gold. So there may always be a bankrun. No central bank could ever cover all their issued money supply with gold.

[@suntzu6122]

Bitcoin works fine.

[@jeanmarc6517]

@@suntzu6122 For what? It has the same problem as gold without its perks, what are you talking about??

[@cronos5957]

@@suntzu6122laughs in SBF

[@basedbulgarian511]

You're assuming some astronomically ridiculous exchange rate between the dollar and gold

[@jeanmarc6517]

@@basedbulgarian511 No one is assuming this, it is how it would end up. There is already a big demand on gold in industrial sectors, electronics, luxury etc. An entire government suddenly needing lots of gold would put a giant strain on the market, and anyone with a decent mind and understanding of the market would start hoarding gold, knowing its value will grow. This would lead to a continuous inflation of the price of gold, leading to astronomically ridiculous price for gold, and as such, astronomically ridiculous exchange rate between the dollar and gold.

[@alanchacindreissig2380]

8:39 being from venezuela, love that you used that you used our currency as example. People usually don’t even begin to understand how devaluated the Bolivar is

[@jakdamac]

Question from a total amateur-- What is the basis for the total devotion to GDP to measure "health" of an economy? If I, as an individual, spend every dollar I earn, then go into debt and spend far more than I earn, is that an aspect of economic health? By this logic, I'm hurting my economy if I save money for a rainy day, live frugally, and match my lifestyle to the realities of my economic situation? I'm trying to think of an analogy. If I have healthy cells that grow, divide, die, and respond to natural needs, that's good. What's it called when my cells divide and grow completely uncontrollably? Super Health?

[@xraceboyex]

I love this comment, thanks for the analogy. Gave me a chuckle

[@rolandnelson6722]

The training wheels analogy is terrific! Also the bit about how the value of Gold itself is set by belief/the market. The exact same mechanism that sets the price of a currency.

[@safebox36]

Something I always wondered; why return to gold as a standard? It's too valuable for its practical use in electronics and semi-conductors, so why is it being put into vaults as a pegging system? Is there any other alternative material, mineral, or physical metric that currencies could perhaps be pegged to?

[@catsanddogs5728]

Exactly, I was thinking maybe and index of finite materials

[@kimobrien.]

@@catsanddogs5728 The largest cache of the world's gold still sits in vaults at the Federal Reserve Bank in New York.

[@pleasedontwatchthese9593]

I don't think we should peg it to something other than the value of the economy as a whole.

[@NXNX7]

bitcoin

[@CarrotConsumer]

Monkey NFTs

[@IsmaGF85]

This is probably one of your best videos yet. It's so refreshing to watch media that is open-minded, thoughtful and that presents a conclusion based on an actual tangible analysis... Good work, really.

[@andrewerk5942]

To your last statement: The value of gold is derived from its difficulty of being created. This is a very basic property of money, but very important. Money must be scarce. This is the reason why so many people are fanatics for bitcoin or gold. There IS a difference between a blind trust in fiat money, and the value of having a currency that cannot be easily devalued by those in power. I am not a gold enthusiast, but surely you must know this.

[@TheTaquitoProject]

How does bitcoin have any inherent value? How does gold have value beyond as a commodity (and note that it’s current price is higher than that).

[@xraceboyex]

@@TheTaquitoProject Scarcity... That's what he said (I would argue that Bitcoin being traded through IOU's on centralized exchanges with margin and derivatives removes it's supposed value)

[@colinhobbs7265]

@@TheTaquitoProject Nothing has inherent value. All value is at least relative, and most value is purely subjective.

[@blackaddam9033]

Alchemists would be very offended. They saw gold not just as a valuable metal but as perfection itself.

[@Nimbus...]

Nixon announced on 15 August 1971 that the convertibility of USD to gold would been temporarily suspended, "temporarily" is the key word

[@randomworld4662]

51 years

[@tinfever]

There is nothing more permanent than a temporary solution.

[@ericgardiner7715]

Would be interesting to hear an update on this topic since Zimbabwe has introduced a gold backed currency. Seems like the right thing for Zimbabwe to do.

[@guy0909]

You said that the GDP growth improved after leaving the gold standard but a lot of the GDP growth is from the dollar being devalued as they print more. Accounting for that I doubt there would be much difference edit: Accounting for inflation, one dollar from 1980 would be worth $3.50 today so a 3.5x. However the M2 money supply has gone up 14x in the same time period

[@mylex817]

I'm pretty sure these statistics are inflation adjusted :)

[@jeremygibbs7342]

Plus gold could never have achieved this level of wealth growth as there simply wouldn't be enough of it to go around. If gold and dollars share the same root value, belief, than neither is greater than the other.

[@NorsioNorsius]

Yes, he is a typical short-sighted economist. Growth, growth,growth!!! Big numbers on paper!! GROWTH!!! Doesn't really know what he's talking about. But eh, no economist has ever accurately predicted anything - they're just snake oil salesmen trumping up stocks and investments - whether correctly or not. BIG NUMBERS!!! GROWTH!!! GROOOOOOOWTH!!!!

[@CarrotConsumer]

@@NorsioNorsius You obviously haven't spent time around academic economists.

[@guy0909]

@@mylex817 Official inflation numbers are way below the level of money expansion though

[@pk_8820]

Totally quantity of gold is limited on this planet. Therefore it's a hedge against inflation. Limited quantity of something means it can have real value as opposed to infinite printing of currency that's happening today.

[@jeffreysanders7334]

In the Great Depression, buyers were willing and able to work for food, and farmers has food and we're willing and able to sell it to the workers. A gold backed dollar made it impossible for the two to exchange their work for the food. That's insanity. You think inflation is bad? Try mass unemployment and starvation because of a gold standard. The answer simply has to be governments neither in a gold standard nor printing too much money.

[@SiisKolkytEuroo]

@@jeffreysanders7334 need explanation for why gold standard made it impossible to exchange work for food

[@jeffreysanders7334]

@@SiisKolkytEuroo In that specific instance, many people put a lot of money in the stock market, and the sellers of the stocks had that very good limited supply of money in a vault. When the market crashed, a deflationary cycle happened. As most people don't have enough money, businesses started laying off people because most people could not afford to buy goods and services. The value of money increases as it becomes more scarce / out of circulation, and as it continues to be worth more and more, so too does it pay the people holding it in vaults not to spend it. So regular people are willing and able to work, the farmer is willing and able to sell his food to the workers, but both cannot because there is not enough yellow metal to print more money to expedite the exchange. The only option is bartering which is completely impractical and inefficient compared to money. When money is worth too much, the gold standard needs to be abandoned. This is what happened in the Great Depression.

[@sulimanthemagnificent4893]

@@jeffreysanders7334 Yeah but this is appears to be under the assumption that the money is literally gold. It isn’t, it was paper tender that could be exchanged for gold, they still could have had access to currency, but a lack of “money” (gold) would make it practically worthless lest they were willing to wait until the banks, and by extension US government loaded up on more gold. However, the alternative of an increasingly devalued currency, that contributes to economic volatility (which they hide with cherry picked stats) and inequality, as opposed to a currency that actually has value due to its intrinsic value and limited supply is absurd. Also the depression was made was worse with government intervention, the United States had multiple smaller scale downturns that DIDN’T spiral out of control due to misguided state intervention, conveniently these NOT DEPRESSIONS, occurred before the fed, and not after...

[@jeffreysanders7334]

@@sulimanthemagnificent4893 Some of the things the US government did made the depression worse, yes. But the vast majority of economists say that too few people have too much money stored away in a vault, devaluing the currency to get the rich to spend it is good, and not doing so is terrible. And this isn't subjective because we have a perfect case study. England did exactly this prescription and got out of its Great Depression very quickly. Deflation is best cured by devaluing money. You are telling the rich, "tomorrow your money will be worse less goods, so buy today.". You can't do that on a gold standard, thus people starve to death because they don't have enough yellow metal in a vault or enough green pieces of paper, even though the economy has all the means of production still available. Again, what is your prescription for what the government should do if a few people end up with a ton of money stored away, won't spend it, and there isn't enough liquidity to exchange labor, goods, and services of you're on a gold standard? You seem to have a very odd misunderstanding of how gold backed money works. In a gold standard, you can only print as much as is pegged to the amount of gold you have. You can't print more or you're just not on the gold standard any more.

[@NotHPotter]

the wild idea that the economy can't grow if we don't have enough spare paper lying around.

[@xXPabloPeaconXx]

This is the dumbest thing I’ve read in a while! Most money isn’t even in money form or paper, due to fractional reserve banking most currency is speculative or digital. How much crack have you smoked in your life, definitely not zero.

[@binancehighlights4038]

Since 1971 prices of commodities (like real estate) grew significantly, comparing to growth of average incomes. Dropping of gold standard caused growth of inequality instead of growth of economy

[@Freiheit1232]

That's not at all what caused wealth inequality.... That was caused by changing of the tax code which benefitted the wealthy and continues to this day.

[@Christopher_Gibbons]

Money being backed by gold was always an illusion. Money is a device for storing time. The monetary cost of a thing is an estimate of how much time it would take to replace that thing if you gave it away. A bottle of water at Costco, has the same intrinsic value as a bottle on a desert island. Either way it will allow you to continue living a certain length of time if you drink it. One costs $0.25 while the other would not be parted with for any amount of money. The cost is determined by the time comparison between the time needed to replace the item relative to the amount for money one can earn in a similar amount of time.

[@BeHappyTo]

you dont need to eat gold to survive. It's just a token like seashells or glass beads. It got popular as value storage because it's hard to easly create vast amounts of it.

[@randomyoutubebrowser5217]

@@BeHappyTo Maybe we should peg the currency to aggregate land or house + land prices because it seems like everyone is so intent on those prices matching some sort of purchasing power tendency and its impossible to create more land.

[@BeHappyTo]

@@randomyoutubebrowser5217 i dont think we can peg anymore. They have created so many schemes of stealing purchasing power from others that nothing involving current establishment and money systems will work for the people.

[@bobmnz6914]

Money is the measure of your worth, by time worked. To the person you work for. If the money you work for can be manipulated by others do you have the right to ask for more, or obligation to refund some to the person you work for. IF the money changes value up or down? Money makes it possible for many to produce one thing. Yet still purchase what their lives need to carry on. Without money you have to either grow everything you need, plus the land to grow it on. Then find a way to store it until it is needed. Or barter what you have got, for what you haven't got. Better a country with a gold back currency at a set value. Than a fluctuating one that is at the whim of those who can manipulate it. Just look at a chart and ask yourself why does it look like a sinewave?

[@marius165]

Great argument. I will remember it. Thanks!

[@michaelriverside1139]

This is such a simple, yet ridiculous flaw that has led to the current world: If there is a limited ammount, it needs to flow. Basing the economy on speculation and credits left everyone and everything at the whims of the very few who control those flows, and being Human, they cluster it to their own spheres.

[@GodwynDi]

Fractional reserve systems are the biggest ponzi schemes ever allowed to exist.

[@EdmxndDantes]

The spice must flow!

[@greenredblue]

Oh look, a video that mentions the gold standard. I look forward to the comments being full of thoughtful, well-reasoned people who understand the issue and watched the video.

[@elektrotehnik94]

Preach. The amount of "I haven't thought this through" is just as expected for average KZbin comment sections.

[@thomaslynch7838]

I see your familiar with the internet, a fountain of logical and well reasoned discussion

[@pnutz_2]

it just gets worse the more you scroll

[@spamlogs2701]

Comment first watch later

[@rayakoth]

@@spamlogs2701 Comment first, watch maybe.

[@angelomaldini3316]

The very fact that the Guardian and the Atlantic conclude in the video that the Gold Standard isn’t ‘good’ means that it is good. Their motives are always standing out suspiciously in every thing they publish or say.

[@MemeatorMotivatoroftheMemes]

Interesting video, I'm glad to have learned about this today. On another note, it would be interesting to see a conceptual video on a different type of currency: Energy. Granted, power storage would have to be greatly expanded and energy generation drastically changed and regulated for this to work, but I think it would make for an interesting video based on how many sci-fi universes use energy as currency.

[@Aquaria942]

He goes into it actually in one of their videos on Eve Online, I believe

[@robmack519]

kzbin.info/www/bejne/mpSsgpeiqslrbsU

[@johnnyxrcfc]

Already covered on the video of china’s energy crisis I believe

[@anonperson3972]

This! I would love to see a more detailed video on an energy backed currency. I find the idea absolutely fascinating!

[@pleasedontwatchthese9593]

I think that would be interesting, or basically low entropy as a currency

[@ThinkEcon]

At the end of the day, having a fixed amount of money would be dangerous, leading to scarcity issues, but offers a means to retain value. However, if improperly managed (like both the US and Canadian fiat currencies often are), then fiat currencies are just as dangerous!

[@CarrotConsumer]

Yes, people need to understand that any monetary system is potentially dangerous. There is no easy, safe solution.

[@JosePineda-cy6om]

In the long run, ALL fiat currencies will eventually collapse. It's in the nature of politicians to abouse the power they're given, they simply cannot help it. A cryptocurrency with a baked-in inflation rate of, say, 2% could solve all those problems

[@MrErdem95]

Gold standard was evolved into "economy" standard. All the things you can think of, furnitures, cars and whatnot but the real "new" "gold" is the educated workforce and their living standards. Economic complexity rose to such levels that you simply can't peg it to a singular thing called gold. What happens when a government tries to cut corners in this new system is actually not known since it's a new thing and it hasn't even run it's course yet.

[@carlosjavierpalacios6194]

nah, an "educated work force" is bs, you saided yourself, there is no thing such as "a new gold". Most degrees are useless, and the ones that work are mostly related to technology because universities can't just "prestige" someone into creating something useful

[@MrErdem95]

@@carlosjavierpalacios6194 I mean, actually the New Gold Standard is the company valuation lol.

[@garrettgreen242]

Thank you, this is a very insightful perspective and makes great sense!

[@kwakukwakye885]

I think 🤔 what actually happens in this new system when a government tries to cut corners, is ridiculous hyperinflation as seen in Zimbabwe in the mid 2000s. Stable fiat money in today's system is intuitively backed by it's (fiat money) ability to be exchanged for valuable goods and services within the issuing country's economy. If hypothetically, the Canadian economy collapses completely ie. absolutely seizes the production of valuable goods and services, then the real & face value of any Canadian Dollar note, will be worth nothing more than the paper it's printed on.

[@thewhitefalcon8539]

Hyperinflation. See Weimar, Zimbabwe If X is backed by Y their long term value is equal. No matter what. Cutting corners can only keep it away in the short term by deceiving the public

[@Gary71731]

Nixon's ending the gold standard was the beginning of the end of the middle class. Ever since then income inequality has risen to the point of every nation in history collapsing. The definition of fiat currency increasing in supply as the money is used should add *as long as you're the ones using it.

[@Randy_From_Work]

“Get in the way and slow you down.” Why would we want that for our economy? You always want to crash at full speed.

[@Wolfmeister666]

With gold standard is hard to print 40 percent of all money in circulation in just couple years.

[@kaychang3184]

18 months…

[@ericg4915]

Regardless the dollar is the strongest its been in over 20 years. Thats because the US is weathering this global slowdown better than most

[@andyweal7914]

Perhaps we should look at pegging our currency to the beer standard. I’ve always found that I can get more willing help/labor/effort from people by offering a carton of the humble amber fluid versus $ per hour. Not sure if that is because of immediate reward or perceived value. Would be happy to discuss further over a carton of said amber fluid.

[@CerealforProtein]

As of April 2023, perhaps not from Anheuser-Busch (Budweiser)

[@amateruss]

Peter Griffin, is that you?

[@astralblue]

I hope nobody is getting pegged

[@jonesmatthew7511]

Worst mistake... free currency units for bankers to dole out and bail out with even more free currency units that inflate away the purchasing power of fiat currency holders. Basically the currency becomes a "hot potato". An ounce of Gold can then buy more goods over time if you just hold it.

[@nateums]

The severing from the gold standard was actually supposed to be temporary…. In politics this means permanently 🤡

[@mariusvanc]

Income taxes were supposed to be temporary too.

[@ArcaneAnouki]

@@mariusvanc America is a ponzi scheme/ tax farm

[@protox4]

@@mariusvanc First I've heard that. It was literally added to the constitution, so how could it ever have been temporary?

[@FormerGovernmentHuman]

@@protox4 In other points in our history it was utilized temporarily as in 1861, for war taxes essentially. In 1895 the supreme court decision of Pollock v. Farmers' Loan & Trust Company deemed it unconstitutional. “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration” -16th The 16th amendment overruled the supreme court decision, which is an argument in itself whether something deemed unconstitutional should ever be overruled by legislation after the fact. Key word here in the quote is shall have power, which today is permanent, but I see it as congress having the power to impose income taxes when needed not necessarily that it has to be permanently imposed. However since Congress is granted that power, the interpretation of it is unfortunately at their discretion.

[@SirPerceval]

Milton Friedman used to say that nothing was so permanent as a temporary government programme.

[@vaguelysomething]

Okay I know gold is way overvalued because we blindly say it is, but lets not pretend gold is significantly better than copper for electrical applications

[@chrimony]

The US was spending money it didn't have, even with fractional reserves. That's the real problem with a gold standard represented by paper -- and gold always ends up being represented by paper.

[@Ziegfried82]

Unethical governments going off the gold standard meant kicking the can down the road, it was a terrible choice by Nixon. I consider Nixon the worst modern US president for a number of reasons but going off the gold standard is a big one! The problem isn't gold represented by paper, the problem is a fraudulent government committing ever increasing amounts of fraud. At the very least the gold standard forces governments to some degree of accountability...without it you get what you see today, something far worse.

[@chucktangy]

Are you calling the gold standard a GSINO? (Gold standard in name only). Come in bruh give it up. 🙄

[@chrimony]

@@Ziegfried82 Nixon just dispensed with the charade. The US was printing paper beyond gold reserves because they could. That's what ALWAYS happens when paper is traded as a promissory note -- the incentive to cheat is just too great. If you want to call a US president the worst, call out Roosevelt, who confiscated gold from the people and handed out government notes in return.

[@Giatros89]

There's always going to be counter party risk unless you use something that doesn't have any counter party risk. Gold can't be that since it's hard to transport across space however Bitcoin can be easily transported across space and therefore you don't need paper representation you can have final settlement.

[@chrimony]

@@Giatros89 BitCoin doesn't scale. And lightning networks are not the answer.

[@ukasztokarski3715]

16:10 no, you are wrong. Belief in gold has strong basis. It is very rare, it is nonrenewable, it is very stable, very old (created at the beginning of the universe) has much technological and medical uses and even religious ones.

[@TheBruces56]

Gold has inherent value based on its rarity and the labor needed to produce it. It has been a store of wealth for thousands of years and has stood the test of time over the hundreds of currencies that don't even exist anymore. Gold's worldwide value is fairly stable and it is accepted anywhere in the world. To a lesser extent silver is the same. They are not just shiny metals.

[@javiercmh]

In the same logic, Bitcoin has inherent value based on its rarity and the labor needed to produce it

[@kashay4415]

@@javiercmh the difference is that gold is a useful commodity. And one of THE most important points this video completely ommits is that Gold has the physical properties of a precious metal (of which there are only four) which make it an ideal store of value. These are the properties Gold has been blessed with by this thing called "physics"

[@javiercmh]

@@kashay4415 he did not say gold is worthless; he said it's overpriced

[@kashay4415]

@@javiercmh it's not, the Gold/M2 ratio is pretty low considering the inflation we are having and will continue to have. And the point is that you can store value in gold much better than in copper, tin, oil, wheat etc... because of it's physical properties. (Which he doesn't mention at all) What properties do precious metals have?

[@TheBruces56]

@@javiercmh That may be accurate. Bitcoin is so rare it doesn't physically exist, rather it is just data in a high tech digital world. Despite the claims of Blockchain tech I fear that digital wealth could just evaporate and there are a number of events that could bring that about. I hope it never happens.

[@12q8]

The two charts aren't really sending a message beyond large swig lines bad. In fact, if we compare the two, the first one jumped, and then equally fell before stabilizing, while the second just kept going up and up and up, and still is, impacting prices year after year, slowly, but surly. End of the day, gold standards limit state and government power to manipulate the economy. Fiat gave them more power and control and it's just making things more expensive because the economy's blood line is all about consuming products.

[@SmallSpoonBrigade]

The going up is only reall a problem because our taxation and regulatory policies encourage the wealthy to stockpile money rather than allowing workers to share in the growth.

[@Bishop_Heahmund]

Can you perhaps talk about the fact (or maybe theory) that the amount of money in the hands of very few grew immensely since the abandonment of the gold standard whilst the wealth of the rest mostly kept up with inflation.

[@singaporeghostclub]

Well said.

[@wickedbird1538]

😢😢the problem is that the US government politicians were never able to control spending. We have mortgaged the futures of our future generations.

[@sh4d0wfl4re]

Honestly the problem with money is that it can inflate or deflate away from the combined value of the “costs of living.” We need either had a guarantee that all people could afford food, housing and other “living wage essentials,” before money came into the picture (see food stamps, affordable housing and other social safety net problems except funding 100% of those costs) or having a minimum wage set at above the costs of living (which means 100% compliance, regular recalculating of the minimum wage every year and government assistance for smaller companies in paying their employees)

[@xraceboyex]

Please explain to me how my currency deflating could possibly be an issue... Are you telling me that if my currency goes up in value and products get cheaper - I won't be able to buy as much? This makes no sense

[@sh4d0wfl4re]

@@xraceboyex the problems with deflation are twofold: 1) there are two ways deflation happens a decrease in total printed money or an increase in the value of GDP. The former is great, while the latter is terrible for those struggling to obtain enough money to live on. If only the latter were to occur, that would be fine except for 2) stability of a currency as a base unit. If one tries to prevent a currency from ever going down in value... that goal becomes harder to maintain if you ever let it go up. It is like the myth of endless growth... doomed to fall further the higher you let it rise. By preventing growth of the currency's value, you can maintain the viability of the currency for longer and have a smaller crash when the market inevitable crashes (as capitalism demands they do)

[@saeedhossain6099]

there was also a massive crop failure in the 1930's, kinda like the supply chain failure...

[@kimyoung8414]

As an elder millennial, one of the few advantages is having lived through the Great Recession. My advice. Reduce unnecessary expenses, increase your savings by investing in financial markets and do not sell. One thing I know for sure is that diversifying your income can help insulate you from much of the craziness going on in the world.

[@erichkraetz2622]

True..... I'm thinking of investing in stocks or digital assets to grow my money for the first time, but I lack the in-depth knowledge and mental toughness to deal with these recurring market conditions. please any advice or pointer on how to outperform the market producing good returns

[@jimbo9305]

My main concern as a regular nobody is war and inflation. Fiat money makes going to war a lot easier. When you have trouble funding the war, print more money. Governments are concerned more with how the economy looks rather than how the citizens are doing. If the economy is looking bad, adjust the rates, print more money. Why care about the regular guy when the bankers and CEOs are in trouble? Sure fiat money gives the government greater control of their economy, but is that a good thing for the average person?

[@FrancesRyan-b2p]

If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you, prevent inflation from eroding your savings, build generational wealth, and cultivate good habits and financial knowledge, you must be in the market.

[@AaronRichardsMusic]

I love your channel so much. The way you frame everything is so well thought out and helpful. Interesting and easy to understand. Can't stop watching

[@TheFeatInk]

Too bad he’s wrong on everything

[@petergrammortensen1884]

I love the sentence: high inflation is obviously a bad thing.... For whom?

[@johanmalmborg191]

Great video! Being from Sweden 🇸🇪 I would like to point out that Sweden was also industrialized and not bombed during the second World War. :-) I think Sweden also benefitted heavily economically from this up until the end of the 60's.

[@ShauliGros]

Gold-backed usd was replaced by the petro-dollar when the US vowed to protect the house of Saad as long as they only accept usd for oil. The USA was able to continue to spend more than it could afford because it's currency was always in demand. There was no other way of buying energy. And those who didn't tow that line got cut off quick. Now with Russia accepting only rubles for its oil, with an agro-ruble looming near (as food supplies are threatened agriculture will become as high valued a commodity as energy), the dollar won't be in perpetual demand anymore.

[@shorewall]

I think Russia has more problems than only accepting Rubles for its oil.

[@graemebrink2394]

“Savings account with 3% interest” - we are lucky to get a third of that in the UK.

[@j.lizbardo]

3% ? it depends on the currency. 3% is almost as much as you get in colombian pesos in a bank in colombia, with a 10% country inflation post pandemic era. Pre pandemic era inflation was 4% in colombia. you are loosing money on the bank account anyway.

[@JK8]

Now you aren’t

[@johnnixon4085]

We wouldn't have been able to double the money supply over the past few years if our currency was tied to gold.

[@falcorthewonderdog2758]

The price of gold was around 40 dollars a troy ounce in 1971. Now it's over 2050 an ounce. This clearly shows the same ounce of gold that cost 40 dollars now goes for over 50 times that value. This one ounce of gold didn't change over the last 50 years. It's the same gold. It takes 51 times as many "dollars" to buy the ounce of gold.

[@kenofken9458]

The economy has also grown many times over. In 1971, GDP was just north of $1 trillion. It's now more than $25 trillion. That $40 from 1971 is also not comparable to $2,050 today. In today's terms it has roughly $303 in purchasing power.

[@Teyo_Music]

who else here after the adin x top G stream

[@noanmme]

top G

[@MissPopuri]

No, but I’m not surprised that Adin or Top G himself would be interested in Economic talk.

[@YandaMazantsana]

⁠@@MissPopuriyou are supposed Top G is interested in economic talk? Money and Making money is all he talks about. He’s trying to wake everyone up

[@MissPopuri]

@@YandaMazantsana I said I’m not surprised which is not supposing. A supposition is similar to an assumption based on no evidence. Having comments about Top G and Adin Ross are pleasant to see because it means I know what I can generally talk to them about if I got the chance.

[@pedromanzke]

Shouldn’t the graph showing GDP growth before and after 1971 be adjusted for inflation? Since the money printing after leaving gold standard, the dollar values less and less year after year

[@bigbones916]

That would disprove his whole video can't have that.

[@siddharthsinha4512]

true 1950 - 1960 - 52% 1960 - 1970 - 50% 1970 - 1980 - 25% 1980 - 1990 - 31% this is inflation adjusted growth Economics explained - i am gonna pretend i did'nt see that

[@breeezy57]

The gold standard isn't training wheels for the economy, its more like training wheels for the goverment. A monetary system backed with a physical commodity keeps the goverment from reckless spending and forces them to actually balance a budget.

[@amedpty]

Good video but I disagree with your conclusion. For centuries gold has been the standard store of value and empires have fallen by debasing their currencies (printing money).

[@Dramatic_Gaming]

Inflation by printing money isn't inherently bad. If your economy is growing to match the printing or you're investing that noney in things that will have returns, then it's fine. The problems you're pointing to are when counties' economies contract and they think the way out is to just print money a la post-WW1 Germany. Global inflation right now is mainly due to the last two years of reduced production; Economies aren't producing goods, so they start to shrink while the money supply remains the same, so the buying power of currencies go down.

[@xraceboyex]

@@Dramatic_Gaming The problem with your argument is that you assume you can give an arbitrary entity 100% authority to print money and they won't use it to nefarious ends XD

[@2killnspray9]

@@Dramatic_Gaming Printed existed with gold standard BUT it limited the ability to print to much making inflation unable to rise too fast

[@4000valentin]

Price stability measures, without inherent value to support the price, can only be done through means of theft. A backed currency wouldn't have unique problems, compared to fiat currency. It simply wouldn't have any dirty ways of hiding the economic problems in the first place.

[@KodakKid33]

Fiat USD doesn't only have value out of "belief". It has trillions of dollars in inherent demand every year because taxes must be paid in USD. Obviously this is only makes up a fraction of USD's value, but it's significant and intrinsic

[@msdm83]

Money created through loans are backed by the assets of the debt. It's just a belief only if you think a mortgage is just a belief.

[@stephenhowes6509]

@@msdm83 Not only that but the money is only really "fiat" when it's lent out but becomes "real" when it's paid back.

[@chrisandsneaky2453]

Not really. You don't have to pay taxes if you earn no money; there are millions of Americans who don't: children, college students who don't work, housewives, the disabled, the very poor, etc.

[@KodakKid33]

@@chrisandsneaky2453 That doesn't change the fact that the US govt made $3.5 trillion in revenue in 2020. That $3.5 trillion *had to* be paid. There's no getting around it. That means there is $3.5 trillion of inherent demand for the currency, which gives the currency intrinsic value. To say that because some people don't pay taxes, taxes don't give currency value is like saying because some people don't own iPhones, iPhones don't have value. You don't need 100% market share to still have significant demand, and demand means value

[@nateisawesome766]

Its value isn't backed by the money commodity (Gold), so it will depreciate over the long run

[@gussampson5029]

The Fed intentionally targeting inflation IS bad for exactly the reasons you say it isn't bad. People shouldn't be forced to consume and borrow constantly in order to maximize their economic utility. Saving is a good in and of itself. And it leads to far fewer economic catastrophes and personal catastrophes.

[@ricardokowalski1579]

9:15 The "gold standard" discussion is a red herring 1- currency can be backed by ANY asset, not just gold 2- all the "problems" that are intrinsic to gold are used to distract from the real issue "much harder for reckless money printing"

[@alfredlear4141]

Capitalism = free market economy Marxism = centrally planned economy My ideal currency is a basket of commodities

[@CarrotConsumer]

Governments will always interfere in the economy. No amount of grandstanding or sanctimonious whining is going to change that.

[@sgtDrumriX]

Bro imagine if we had only 1 dollar to split amongst every american, or £1 to every brit... That wouldn't work, because a capped currency cannot facilitate transactions, especially with increasing populations and expanding consumer demand. If you want inflation to diminish then we need to make it easier for people to make transactions not harder. That can be in many forms, but restricting currency growth is not one of them :(

[@redakteur3613]

@@sgtDrumriX who said this? Is there may be an example when there was “not enough”? Governments are dumbass idiots, if it is not related to the policy that benefits them, why everyone cancelled? Why government controls money and why we can’t compare “fiat” to strong money ? The best one will always win, and I guess, actually not guess but know, fiat will always loose

[@ricardokowalski1579]

@@sgtDrumriX You contradict yourself. "expanding consumer demand"...causes monetary expansion but isn't monetary expansion the recommended action to "increase demand" (as Keynesians like to say) Also... making transactions harders lowers inflation because it reduces demand. For example, with the economy in lockdown the trillions pumped into it had no effect, because you couldn't spend the money. You seem to confuse price level with the RATE OF CHANGE of prices. When a good is scarce, or has taxes, or it is prohibited... it is EXPENSIVE.. but this is NOT INFLATION INFLATION is the RATE of price increases, not the LEVEL of prices. BIG DIFFERENCE

[@VirtualVictoryTM]

Here me out "the oil standard"

[@zeketargaryen1440]

🤔📝

[@Stephen-vu2gk]

Can the economy be steered effectively? Who's hand is on the wheel? How exactly are they making control decisions?

[@Lusa_Iceheart]

Well it's currently flying off a cliff, someone steered it there and they were pretty freaking effective with the result. How they did it is hard to pin exactly. That's the short answer to your very existential questions.

[@FormerGovernmentHuman]

Have you seen the south park episode “Margaritaville”? It is one of their best works as far as commentary on modern reality. Essentially, it can kind of be steered. Unfortunately everyone may not have two full hands on the wheel, but everyone is atleast administering some type of input into the steering wheel, which I’m sure you could guess how that may go if practiced while actually driving. Terribly inept people are making control decisions from both sides of the aisle as far as the US, the Left far more than the Right at the moment. What we can do is alter regulations, open resources, and attempt to change import/export values and numbers or as China does devalue our currency. We can realistically only implement small changes here and there and study the effects. What may boost an economy in small moderate doses, sometimes destroy an economy when used as a coverall bandaid. Even the most intelligent people that have ever studied economics sometimes struggle to grasp what economic changes will do short and long term or where an economy could be headed. Because it would be equally as important to be extensively educated on mass human psychology to get a more detailed picture.

[@Stephen-vu2gk]

​@@FormerGovernmentHuman I think it's possible for economics to become as rigorous as physics. At the moment, that day seems far away. The block chain experiment is interesting. But with weak models of human action, it's still immature. What would we do with a crystal ball that sees the present and the future? It seems like disunderstanding uncomfortable truths and weaponizing information gradients would be most likely. How do we survive our godlike power long enough to discover godlike wisdom?

[@PositiveMentalAttitude284]

not a mistake for the elites, but a mistake for majority of ppl

[@billygoatguy3960]

My most immediate answer is that there is no real measurable societal value in gold bars sitting in a safe other than literally just keeping track of money. Machines do that for us now.

[@commoguru]

It puts a tangible cap on wealth & prevents inflation.

[@kwoltekublai3337]

The only thing it does it minimize the impact of government incompetency (fairly unlimited), at the expense of what is essentially a tax on unproductive assets (one of the better methods of taxation imo).

[@gaffgarion7049]

​@@commogurudoes it? Because part of the reason why the Spanish empires economy declined was because they were extracting so much gold that it devalued the gold. If we went to space found and mined asteroids made entirely of gold it would render the value of gold near worthless. Money at the end of the day is a representative of value whether it's fiat , gold or cattle.

[@commoguru]

@@gaffgarion7049 Gold wouldn't become worthless, it's still a limited resource. Spain declined for many reasons, it wasn't because of too much gold. In the early 1900's you could buy a new suit for a $20 gold coin, you still can today essentially. Diamonds are the most abundant gemstone on earth but are outrageously expensive.

[@gaffgarion7049]

@@commoguru they're outrageously expensive because the monopolies that own them limit their sale. It's still entirely arbitrary and you argued against my claim about Spain without actually saying anything. "Spain declined for many reasons" Ok? And ? I'm talking about their economy where their currency was in fact devalued because they imported so much gold from their colonies. The point is gold alone is not an assurance on economic stability because it isn't.

[@ThomasJScharmann]

Exponential expansion: Forcing economic and environmental catastrophe to future generations. Expansion limited by a thing with a high stock to flow ratio: force the current generation to pay its own bills (and not leave it all to the kids) while limiting us to what nature and physics allow.

[@dougpatterson7494]

This is a very good idea. As a “late millennial”, I always found the trope “Millennials are irresponsible with money compared to older generations” a little tone deaf. Why did they leave younger generations with so much debt if they were so fiscally prudent? Looking at the 2014 budget of my country, Canada, the federal government spent more money on debt servicing than higher education. My generation and generation Z are no better. Since 2014 Canada elected a government less concerned with balancing the budget. Then the pandemic hit and “modest deficits” went to record setting deficits. For some strange reason when the finance minister started to raise concerns about this the position changed…

[@joergkalisch7749]

This is nonsense. Debt never get passed to the next generation. The system always cranks on till the point of no return and then collapses. Fresh start, no more debt. Just a reset. Well no govt debt at least, which is the biggest chunk anyway .

[@IFRYRCE]

Define 'current generation' because as an early Millennial my 'own bills' would include of necessity the 94k of national debt I inherited and derived little from as a middle class individual. Or worse, as someone who has been a taxpayer every year since before I left high school, the share of national debt per taxpayer is 246k. The generations responsible for that debt invented retirement via the ponzi scheme of social security at my expense. Trust me, I'd love nothing more than a system where all I have to do is pay my own bills. It's paying other people's bills I've got a problem with.

[@joergkalisch7749]

@@IFRYRCE Nice concept. Who then pays for the road you travel on, provides the power infrastructure, defense, police, healthcare infrastructure, education system? But don’t worry no one will come after you for the public debt. That will either get Inflationed away or set to zero when the new dollar gets invented 😎

[@IFRYRCE]

@@joergkalisch7749 I don't have a problem paying taxes for infrastructure education or defense. Those are things I use, and in a sense, 'my' bills to pay. Basic services aren't what has the US in a pile of debt - it's playing World Police, and refusing to deal with social security being underfunded. Both of those are paying other people's bills - Europe and Asia's defense spending, and Boomer's retirement.

[@SuperDagod1]

Keep this in mind, no currency throughout history has ever survived! Good and silver will save you

[@Alejandracamacho357]

After researching the history of great assets such as real estate, dividend-paying stocks, gold, oil, and other commodities, I've come to the conclusion that most excellent assets never come down to the price you want to acquire them at. Simply get the ones you can afford right now

[@viviangall1786]

Make it a habit to do your own research before investing your hard earned money in a stock because your friend told you about it

[@Robertgriffinne]

This is the problem! Most times people with little or no knowledge of the financial market try investing by themselves.

[@tinfever]

Doge coin to the moon!!!!1!1!1111

[@hiimjustin8826]

@@tinfever you're replying to bots lul

[@tinfever]

@@hiimjustin8826 that sounds like something a robot would say...

[@TheFeesher]

Ok, this makes sense, but you showed GDP. What about the other financial charts that clearly downtrend or plateau upon leaving the gold standard. This seems to be an idealized version of how an economy not on the gold standard could be useful, not necessarily if the US leaving the gold standard was a mistake or not

[@bigbones916]

Its also not measured for inflation which is the whole purpose of the gold standard.