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To: getsoutalive

I'm not a fan of fiat money, but I'm not sure it makes sense to tie our currancy to a particular metal. Are the productivity gains of technology etc., really outweighed by the availability of a certain metal?


82 posted on 04/19/2006 11:08:24 PM PDT by nickcarraway (I'm Only Alive, Because a Judge Hasn't Ruled I Should Die...)
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To: nickcarraway
Are the productivity gains of technology etc., really outweighed by the availability of a certain metal?

Not really sure what you are asking. But according to Alan Greenspan, a medium of exchange (money) should be durable, fungible, divisible, rare and easily portable. The problem with paper money is that the ones in charge of the printing press have NEVER been able to resist the temptation to print. This violates the rare requirement.

Even before the closing of the gold window in the early 70's, when each dollar printed was supposedly backed by a quantity of gold, the press had run too far. That is why France began to exchange their dollars for gold and why the US was worried about emptying the vaults. Nixon closed the window because they had already inflated the currency and were in danger of losing all gold reserves.

It is less about gold itself and more about not being able to trust politicians to restrain themselves. Imagine that.

93 posted on 04/20/2006 7:32:38 AM PDT by getsoutalive
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