Political Correctness and Mental Illness

[Termite]

What D5CAV said.

In addition: gold and silver are difficult to counterfeit, and they represent work; also known as TIME.

FWIW, we have had this conversation here on TGC before.

Um, no. You do realize that the labor theory of value is very heavily vested in communist economic theory right? It is the basis of the concept that payment (i.e. benefits of) an enterprise should be based on who is putting the most labor into an activity rather than who is providing the most value and also relative to risk; both of which can only be determined by the market.

You are misinterpreting my statement.

I was not discussing the labor theory of value as you described it. All labor(time) is not equal, some has greater value than others.....in general. In our modern society, a cardiac surgeon's time is considered more valuable than a McDonald's worker's time.

Gold and silver are very useful and relatively uncommon metals. This has been much of the essence of their value. I really do understand supply & demand determining value. And I quite understand that gold can, by fiat, be declared illegal as currency. FDR did so(whether he had the legal authority to do so is another discussion).
But thousands of years of human history gives evidence that gold and silver are recognized by humans as being a valuable commodity, and desireable world-wide, except for the most primitive of societies.

And yes, we have indeed had this discussion before. Scott Free, Chris Byrne, myself, and a few others were major contributers to the discussion.

[evan price]

Gold, Silver, etc. have value because people claim they have value. They are used in industrial processes and have value as a raw material. But you can't eat metal.
Gemstones? They are only valuable when you want to buy them. Diamonds are practically worthless in terms of any real value outside of optics and industrial surfacing.

However that value is always relative.
If you are sinking in the ocean and have a belt of gold coins, how much would you pay for a lifeboat?

If you are hungry and want a loaf of bread and have a gold coin, how am I supposed to make change as a humble baker? I won't. You starve or a loaf of bread is one gold coin.

[Weetabix]

Thomas Sowell wrote a pretty good essay (or portion of a book, can't remember) where he talked about the economic utility of "price gouging" during an emergency. His point was that very high prices in an emergency situation of high demand, low supply actually ensure that an item gets to where it's needed most - think generators or bottled water after a hurricane. Raising prices causes the casual hoarder with cash eschew a purchase and leaves a commodity for someone who needs it so badly that he'll pay out the butt for it. The market in that case distributes the commodity more efficiently.

That line of thinking kind of brought home for me that ALL money is a social construct - maybe not fiat, per se, but certainly a construct. The fact that gold and silver possess so many attributes that make money easier to use makes them more convenient than most others. But it doesn't make them magic.

Money is an idea, albeit a persistent one.

[PawPaw]

A blogger I follow, Murphy, has recently moved to a deep-blue enclave, and he's running into the same problem. LINKY HERE

But this past couple of weeks, they've been collectively losing their minds on the issues, and then they get really, viscerally upset if you do not share in their outrage.

Last week, they all screamed for gun control after the Orlando murders. No one should be allowed to own guns, they demanded, almost to a person. The problem isn't muslims, they say...it's white people with guns...except white muslims. And the open gays are shouting love for muslims the loudest currently, claiming that bigoted white Christians (with guns) are their only enemies.

I know that much of what we do tends to bounce around in an echo chamber, but Murphy is carrying the fight to the lesser mortals. I feel bad for the boy, I really do.

[MarkD]

Thomas Sowell wrote a pretty good essay (or portion of a book, can't remember) where he talked about the economic utility of "price gouging" during an emergency. His point was that very high prices in an emergency situation of high demand, low supply actually ensure that an item gets to where it's needed most - think generators or bottled water after a hurricane. Raising prices causes the casual hoarder with cash eschew a purchase and leaves a commodity for someone who needs it so badly that he'll pay out the butt for it. The market in that case distributes the commodity more efficiently.

That line of thinking kind of brought home for me that ALL money is a social construct - maybe not fiat, per se, but certainly a construct. The fact that gold and silver possess so many attributes that make money easier to use makes them more convenient than most others. But it doesn't make them magic.

Money is an idea, albeit a persistent one.

Uh huh. Gold is only valuable because we've decided it's valuable, for most of us it has no practical utility, can't eat it, can't use it to stay warm. I guess you COULD make bullets out of it, but....

It's very GOOD for use as money because (a) the supply is limited (b) the supply increases at a predictable rate and (c) increasing the supply is difficult enough that the rate of increase isn't likely to change. All the things that suck about paper money (yeah, I know, it's really cloth). When the government decided to dump a few trillion new dollars on the market, the market responds accordingly. Even if the WANTED to dump that much gold coin in they couldn't.

As for Mr Sowell, I WISH he'd run for President, I'd vote for him in a heartbeat.

[Weetabix]

It's very GOOD for use as money because (a) the supply is limited (b) the supply increases at a predictable rate and (c) increasing the supply is difficult enough that the rate of increase isn't likely to change. All the things that suck about paper money (yeah, I know, it's really cloth). When the government decided to dump a few trillion new dollars on the market, the market responds accordingly. Even if the WANTED to dump that much gold coin in they couldn't.

Plus it's fungible, relatively impervious to decay, and divisible into usable fractions.

As for Mr Sowell, I WISH he'd run for President, I'd vote for him in a heartbeat.

*head explodes* But! But! You're a racis'! You can't vote for him. That's cultural appropriation.

When Obama was first running, I told people I'd never vote for him in a million years. "Racist'!" I'd say, "I'd vote for Thomas Sowell in a heartbeat." *blinks*

[Vonz90]

Thomas Sowell wrote a pretty good essay (or portion of a book, can't remember) where he talked about the economic utility of "price gouging" during an emergency. His point was that very high prices in an emergency situation of high demand, low supply actually ensure that an item gets to where it's needed most - think generators or bottled water after a hurricane. Raising prices causes the casual hoarder with cash eschew a purchase and leaves a commodity for someone who needs it so badly that he'll pay out the butt for it. The market in that case distributes the commodity more efficiently.

That line of thinking kind of brought home for me that ALL money is a social construct - maybe not fiat, per se, but certainly a construct. The fact that gold and silver possess so many attributes that make money easier to use makes them more convenient than most others. But it doesn't make them magic.

Money is an idea, albeit a persistent one.

Uh huh. Gold is only valuable because we've decided it's valuable, for most of us it has no practical utility, can't eat it, can't use it to stay warm. I guess you COULD make bullets out of it, but....

It's very GOOD for use as money because (a) the supply is limited (b) the supply increases at a predictable rate and (c) increasing the supply is difficult enough that the rate of increase isn't likely to change. All the things that suck about paper money (yeah, I know, it's really cloth). When the government decided to dump a few trillion new dollars on the market, the market responds accordingly. Even if the WANTED to dump that much gold coin in they couldn't.

As for Mr Sowell, I WISH he'd run for President, I'd vote for him in a heartbeat.

Still could with gold it is just harder, look at history, on the gold standard, add silver, devalue, etc. Even back in the day when they used specie they would inflate by adding more copper or silver content.

The fact that it cannot easily be inflated is actually a big problem with gold. It leads to regular periods of deflation which is much worse than inflation. That is part of the boom / bust cycles that used to be quite regular.

That is the key understanding what the FED has been doing since 2008. We have been in a very deflationary environment. The bigger problem is that the rest of the government (and events in the outside world) are not helping at all. There is some fair criticism of the FED that can be made, but they are pulling on the levers they have to slow down a phenomenon that the Obama admin is pushing in the wrong way.

[First Shirt]

Seem to recall reading that the ancient Chinese used aluminum for coins, and they were worth more than gold. Mainly because making aluminum from bauxite is a fairly complex electro-chemical process. (That's why the peak on the Washington Monument was aluminum, and not gold or silver.)

[HTRN]

Uh, you do know that aluminum was first refined in 1825, right?

AND napoleon IiI used to serve important guests dinner on aluminum plates..

[First Shirt]

No,aluminum was first refined in Europe, in 1825. The Chinese were using it for coins several hundred years before that.

When it was used as the capstone of the Washington Monument, the aluminum was, by weight, worth more than silver.