when the dollar was gold backed... | |
Anonymous Coward User ID: 68668158 United States 04/30/2015 08:28 PM Report Abusive Post Report Copyright Violation | currency outgrew any possible relationship with gold due to the inability of the production of gold to keep pace with economic growth. you can count the amount of gold in the world by the hundreds of billions, the world economy operates now in the hundred of trillions. |
Anonymous Coward User ID: 57534053 Canada 04/30/2015 09:29 PM Report Abusive Post Report Copyright Violation | currency outgrew any possible relationship with gold due to the inability of the production of gold to keep pace with economic growth. you can count the amount of gold in the world by the hundreds of billions, the world economy operates now in the hundred of trillions. Quoting: Anonymous Coward 68668158 That is fucking stupid. There is no limit to the price of gold, or any precious metal for that matter. If "x" amount of of gold is considered $1.00 and eventually leads to not having enough gold for trading then simply make "x" amount of gold equal to $10.00 and it will recirculate. Need more? $100.00. Get the idea? Say there is only 1 Oz. of gold in existence and only 10 people are in existence. These 10 people could trade back and forth the gold non stop without any need to change the "value" of the gold. With only 1 Oz. total of gold in existence it costs 0.1 Oz. for a loaf of bread because you need 10. But when the population doubles and you need 20 loaves of bread you simply make the loaves worth only 0.05 Oz each. This "doubles" the buying power the original 10 people had in which they can now purchase all the bread their gold would have bought and still have the same "amount" of monetary wealth as they did before the price change. Here you would become richer as the economy grew and the population increased without needing to increase gold reserves. Theoretically someone could have all the gold and refuse to barter but that would require everyone else to buy this one person's goods and not leave anything for themselves. In this case, another precious metal would simply take it's place to trade systematically among the rest leaving the gold hoarder all alone. Then you make the new metal worth more than gold and balance is restored. If the gold hoarder now wants to participate in society they will have to produce a good/service in which the people are willing to give the new metal up for. |