Comments by "" (@DegreesOfThree) on "Stossel: Money, Money, Money" video.

@Somewhat-Evil I'm not sure how any of that supports your laughable claim that there's not enough gold to back our money. Gold is money. We have the technology now to trade fractions of an ounce digitally. There's no need for paper subtitutes, although respected banks could issue certificates if they want. The only thing keeping people from using gold now are the legal tender laws and government threats of violence for not paying taxes in dollars.
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Daniel Obviously, no one will be buying a piece of gum with physical bullion, but gold is already being traded digitally in tiny fractions of an ounce. If you want to cash out from digital to physical, you have to reach a minimum threshold. Banks would operate more like vaults where the ownership is traded digitally.
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holidayhouse03 Awesome. I've got some to sell you then.
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niall larter I'd be pretty pissed if I only got paid in salt after risking my ass fighting for the Romans.
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billiondollardan The inherent value of fiat is that property and income taxes must be paid in it. This creates a built in demand.
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Daniel This is economics 101. Obviously the price of gold would have to be much higher to accommodate all the paper currency in circulation. If anything, it just tells you how undervalued gold is right now. In a world without coercive legal tender laws, everything would be priced in terms of ounces, so there would be no need for dollars or euros. Paper checks and certificates could still exist, but they would be denominated in ounces and would only be as valuable as the reputation of their issuer.
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Andrew Leatham We don't need debate. We just need freedom from legal tender laws. Gold became money naturally, not because somebody won a debate.
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@andrewleatham3198 Because gold doesn't dissolve in water. Any other questions?
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Andrew Leatham Silver tarnishes, platinum is difficult to distinguish from silver, and meteorites are not divisible into identical units because they are composed of many different elements. Gold is most suitable as natural money because of its distinctive properties, not because of an arbitrary decree.
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Daniel Paez You have to trust that others will want your Bitcoin and that it can scale and the protocol won't continue to be messed with. None of these things are guaranteed, but gold has always had value for its intrinsic physical properties. Blockchain technology combined with gold would be ideal, but governments will fight it.
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Uatu Gold didn't lose the market process. It went from $35 an ounce to $1300. Legal tender laws create the built in demand for fiat because that's how you have to pay taxes. Without the threat of violence, paper has no value.
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drmodestoesq A number of problems with that comparison. The tally sticks were still backed by a physical commodity. Our current fiat money is not backed by anything. There is no limit to how much paper can be created. Tally sticks were never in widespread use. Can you imagine having to lug a pile of wood around so you can make change for small purchases? Gold, silver, and barter were the predominant means of exchange throughout the 800 year period you mention.
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@drmodestoesq A government promise to pay what? ...Something tangible no doubt, otherwise no one would bother redeeming it. Federal Reserve notes are not backed by any promise.
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@drmodestoesq The threat of jail works up to a point, but even the most powerful army in the world can't prevent paper from returning to its inherent value, which is zero. The nature of the debt based economy prevents it from being sustainable, because eventually the debts far exceed the amount of money in circulation. Ideally, we can move toward a more voluntary arrangement in which people opt in to the services they desire, rather than being forced to pay for what they don't want.
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Andrew Leatham The difference is people want gold without being told to want it. Nobody would accept pieces of paper if the force of government wasn't behind it. No one said returning to a gold standard would be easy. Governments don't want to relinquish the power to print money. However, the IMPLEMENTATION of a gold standard would be simple in the absence of government coercion.
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