That argument comes from an ancient list of arguments against gold. But nobody seems to be able to explain why that would matter at all. There doesn't need to be any correlation with the amount of currency and the economic output. And there has never been any such correlation, including right now with the dollar or any other currency.
Isn't a more modest opinion that gold admits a guaranteed minimum on its price because of scarcity and demand from industrial applications? That guaranteed minimum on its price is what enables it to be used as a hedge against a possible hyperinflation event of the USD. By comparison, the USD, like all other fiat currencies, might not have any guaranteed minimum price.
Imagine if there was a gold which could be transferred across borders easily and completely securely within seconds, proof of holdings and ownership could be easily proven, and there was no future risk of gold supply shocks (eg gold asteroid hitting earth or alchemy becomes viable).
Gold is a terrible unit of international money because the supply isn't flexible enough to accommodate any growth in international trade.
Contrary to popular belief, during history gold has always had limited role in the monetary system, because it was too scarce to really be useful (in most of human history, Silver, not gold was the cornerstone of trade, and trade itself was a tiny part of economic activity in an era where most of it was subsistence farming). It's only when banking and paper money replaced silver that gold took a bigger role in the monetary system. The gold standard is in fact an invention of the late 19th century and it didn't last long before it disappeared progressively (the first world war being the beginning of the end).
Unfortunately for us, it just happened to be the period when a bunch of influential economists grew up (particularly Ludwig Von Mises), and like every human being they assumed that the system they grew up with was special and what came after was decadent, an idea that has unfortunately since then become widespread in the general population.
Most people wrongly assume that the key property for a commodity to become the basis of a monetary system is scarcity, but in reality scarcity is a drawback. Money must be abundant enough (too abundant is bad, but too scarce is even worse).
Only the fact that it would be an idiotic policy that would destroy the economy.
Why would you let your monetary policy be run by gold miners in China, Russia and Australia? They could cause inflation or deflation simply by increasing or decreasing gold production.
Conversely how is the Fed supposed to manage inflation if it runs out of gold?
Gold is an industrial metal, also used in jewelry, not a financial panacea.
Now you know why so many countries want to leave the dollar system. There are no meaningful constraints on the supply of dollars.
Gold at least places real constraints on the growth of the money supply. Imperfect as it is, it’s better than a financial cabal in one country creating money to suit their needs irrespective of any other objective.
All the arguments against gold are completely bogus because there is nothing stopping the price of gold from climbing to meet the economic need. The price of gold was suppressed for a long time by institutions, but this active suppression is increasingly difficult to continue.
As for verification and transfer, that's what electronic shares are for, distributed across a few key physical asset holders.
Price of a commodity metal can do whatever they want without causing a big problem. It is just a resource allocation signal. However if you base your currency value on it suddenly you are forcing debtors into bankruptcies if the value shoots up. Credit relationships aka investments are what make an economy run and grow, not some arbitrary commodity price.
Debtors who roll their loans also go bankrupt when the fed raises interest rates.
Rolling loans is par for the course for many capital intensive businesses. This is because in a low interest rate environment if you act prudently you’ll get outcompeted.
You're just so used to a debt fueled economy that you can't think of it being any other way. That is the problem though in that 99 times out of 100, debt goes rogue in a runaway sense and blows up the system. It is a time bom.
In essence, debt doesn't need saving from the system; it's the system that needs saving from debt.
In my case, the people I looked up to generally had tried these things and reported them as valuable or interesting experiences. So I decided to ‘roll’ the dice and am glad I did.
No one knows what would happen. That is unprecedented. There would be mayhem in financial systems as all types of collateral is vaporized. All types of on paper net worth would collapse towards zero
It's be unprecedented for the foundation of the contemporary financial system. Argentina defaulting on their debt is very different than a country which every other country, and their banks hold bonds from since it's deemed the safest investment possible.
It would eliminate the notion of the USD as the basis of foreign trade across the world, almost all of the finance system is supported by the USD being the safest investment available.
> Five years from now AI might still break down at even a small bit of complexity, or it might be installing air conditioners, or it might be colonizing Mercury and putting humans in zoos.
do all these seem logically consistent possibilities to you?
Yes, obviously. You presumably don't know what "consistent" means in logic, and your untutored intuition is misleading you into guessing that possibilities like those could conceivably be inconsistent.
or I just wanted to make sure that you were adamant that the list of those three possibilities were equally probable, to reiterate
> AI might still break down at even a small bit of complexity, or it might be installing air conditioners, or it might be colonizing Mercury and putting humans in zoos.
that each of these things, being logically consistent, have equal chances of being the case 5 years from now?
OK well you obviously seem to be having some bad time about something in your life right now so I won't continue, other than to note the comment that started this said
>There’s a significant difference between predicting what it will specifically look like, and predicting sets of possibilities it won’t look like
which I took to mean there are probability distributions around what things will happen, and it seemed to be your assertion that there wasn't, that a number of things only one of which seemed especially probable, were equally probable. I'm glad to learn you don't think this as it seems totally crazy, especially for someone praising LLMs which after all spend their time making millions of little choices based on probability.
The logic doesn’t scale. You can’t impose arbitrary and subjectives thresholds to gloss over this fact. The obvious conclusion is that safety is one of many moral factors to balance.
I think this is a popular but unrealistic take based on real observation.Real observations being. Increase friendliness towards Russia. Decrease friendliness towards Europe/canada. Don’t confuse inflection points with the actual position.
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