The Virtue of Hoarding

[Kevin_Kennedy]

How much gold bullion do you actually own, that you have ready access to touch and feel, or do you own certificates or futures (paper) where the actual, physical gold is held by someone else? (What's your address, I'll send my boys over-- LOL); and that's my point. US may as well use uranium as basis for currency, any other metal (or all of them), plus capital goods, inventory, federal lands & assets, etc. Gold is just a preference. You're obsessed with one element of nature and you don't have a rational explanation why. You would likewise have other people in thrall to the same yellow metal, again for no rational reason. That dumbs us all down.

100% reserves isn't practical, trillions (in credit) outstanding today, which is what made this rich and diverse economy you love, possible. The only problem with that is, we're working for bankers and not for ourselves. You're still defending banking even when you know they're crooks and the reason for our tax system. Why not just pay bank owners a distribution fee? Gummint could just print enough money for that, no %. Me thinks you still like the idea of earning money for nuthin' (letting it sit somewhere to accrue.) With Uncle Sam as lender of record to everyone at 0%, would be difficult for private lenders to get a leg up, and that would be a good thing.

Gold and silver have historically been chosen by the market as the commodity of choice because of their value and the ability to put them into different forms to be used. However, any commodity backing the currency that the market chose would be fine. But having a commodity standard doesn't "enthrall" us, it frees us. It frees us from having our money diluted by a central bank or federal government, and it would free us from the business cycle. Yes, I'd rather my money gain in value than lose value, and why shouldn't I?

 

[uscitizen]

Dr. Oz thinks I should throw away all my old worn out socks from my lifetime? !!!

Wow how radical.

I will keep my gold though.

 

[thrival]

"But having a commodity standard doesn't "enthrall" us, it frees us. It frees us from having our money diluted by a central bank or federal government, and it would free us from the business cycle. Yes, I'd rather my money gain in value than lose value, and why shouldn't I?"

A commodity standard to back currency is fine, but commodities do go up and down in value based upon supply and demand.

The other issue is that if government has a commodity to back currency, then the govt. needs to own sufficient amounts of that commodity, to serve as backing for the value of script in circulation. If gold was the backing, do you think they would let you own it too? It might even be in a government's interest to hoard a commodity to itself while keeping it artificially scarce to everyone else. The alchemists claimed success in manufacturing gold from cheaper materials. What would that do to the value of a government's currency backed by gold?

Certainly any backing is better than no backing, but then government-issued currency has automatic value, even without backing, because government asserts exclusive right to print the currency of the land, and has laws against counterfeiting. You can print your own currency with your face on it, but not too many people will accept it, because it has no credibility (unless you want to share your financials with everyone whom you do business.) And even when a governemt has no asset backing their script, they have one
remaining ace that substitutes for assets, call it "muscle."

The real issue is whether a government is trustworthy or not, to use the script it prints in
service to the people it's supposed to serve. That's the ultimate basis of value, or our full
"faith and credit" of the US govt.

The unspoken economic premise that everyone seems to buy into without questioning, is that we must do something to get the script of the land, no one has any entitlement to it. And yet most of it gets delivered by the truckload to the un/loading docks of banks for next to nothing, and almost none of it, to you. The banks with government, are protecting you from the moral hazard of a lazy, shiftless and wasted life (sic),
"money for nuthin'."

You should keep your gold, your silver, steel, cement, plastic, and corn puffs. They all have some degree of real usefulness in this world, if only to be recycled into something else.