Gold-Backed currency?

Hey so who here supports a gold-backed currency? I read that if all our money is backed by gold we would never hack to worry about inflation.

Flash, you raise a good point. This is something that should definately be explored. Unfortunately, I have little knowledge in this area.

Perhaps you can do your own research? Start off by searching 'Hard Currency', 'Gold Standard', and 'World Currency' in wikipedia.

I think an energy backed currency would be more ideal. as energy gets cheaper, the amount of energy each Spero (latin for hope) could be readjusted by the government. This has the additional benefit of making electricity a public project, instead of private.

Hmm, interesting idea. Do you know where I could get more info on this?

no, because as far as I know, I invented it.

By tying an economy to any commodity, you limit the economy. There is not anywhere near enough gold (for instance) to back the global economy.

Also, a commodity can be "cornered" (where a person or group collectively owns most of it), and that would provide that person or group control of the economy.

Fiat money (not tied to any intrinsic value) allows the economy to grow without limits. It works fine, until people manipulate it in ways that are "bad" for the people.

well, it seems that we need a currency that
A) Can't be cornered
B) Can't be manipulated

Perhaps some sort of 'data backed currency'? I have no idea how it would work, but it would be interesting.

The fact that fiat currency can be manipulated is in my opinion worse than the limits of a gold backed currency.

In Making Money (Terry Pratchett) the currency was Golem-backed. More prescisely, work-backed. How about that? The manipulation that gold-backed currency gets (those who own the gold own the economy) would become (those who do most of the work control the economy). Or is that too Communistical?

this is a CS- if it works, then it's good. Perhaps make the 'joule or labor' (by a more appealing name, of course), be the currency.

Bringing this up again in regards to the government discussion. Who implements the currency, the state or the federals? If the federals, how can they leave the economy alone?: That requires a currency backed by something, if so, what?

Unless the currency organization is a seperate entity, made up od the states governments, with the right to withdraw from the common currency (provided you repay your citizens)?

Federal currencies, of course. That's what works, it encourages trade, a prosperous economy, etc.

I agree that the currency should be backed by something in order to make it stabler (after all, let's say we have a design life of 5,000 years for the CS, assuming conditions remain more or less the same.

I know that during the French Revolution, they had a currency based on land, and that was very unstable. That however, may just have been because of the incompetent financial policies of the french government at the time. Gold Based has obviously been tried, and I would say it failed because of deflation.

I guess what we really need is something of which the supply is nearly, but not completely fixed, so that one may account for population and economic growth. Can anyone think of anything?

Yes, the Federal government will control printing of the currency, within reason.

Land and gold can be successfully used to back currency. Austrian school economists I believe see deflation as a good thing.

Quote :

I guess what we really need is something of which the supply is nearly, but not completely fixed, so that one may account for population and economic growth. Can anyone think of anything?

Let's reconsider the energy-backed currency.

Yea, I agree that energy is a very good thing to back a currency with. I suppose really now we should ask ourselves whether money is worth watts or joules. I'm torn on this one, but in the end I think Watts would be a better system, because it makes money itself a form of capital, and presumably would be pretty easy to stabilize. The only problem might be in terms of building powerplants. Also, Job paying would not be in, for example, 5 watts an hour (although it seems to me that that might be considered pretty low), one would add 5 watts to ones available store for working a job one hour per week.

One might then invest that energy in a project, and get more out of it as in capitalism. This also makes the economy energy-centric (although that possibly (?) would be a bad thing, as there are certainly other important things in a market than energy, for example labor and capital). It would have the benefit of making the government make powerplants if it wants to up spending/devalue currency.

Things might be paid for using joules, making the pay for a job more like 5 watt-years per year, but I think you get the point.

Do you guys think we can ever have Digital money?

There are several questions hear that several people want answered.

Let see if I can answer those question and add a few more things to the fire, just for kicks.

Gold Standard.

This is straight forward. If you have enough gold for ten coins then that your money supply. So you have a limited supply of gold to create money with and you can't go out side that supply to create money. As one person already knotted, you will have a fix money supply with very little expansion and contraction capabilities. The one that has most of the gold, rules. Because, that is what being use to determine who wealthy.

There also a statement that goes like this:

The one with the gold, makes the rules!

Gold Reserve Standard.

Is used between countries to shore up a trade imbalance between two countries. Usually, if one country is continually having a trade imbalance with some other country, they will ask for gold in the amount of the trade imbalance instead of continually accepting the script of the other country for payment of goods and services.

Floating Exchange Rate

Is a money supply that been decoupled from both the price of physical good and services and/or decoupled from the Gold Standard or the Gold Reserve Standard. Nixon took us off the Fix Exchange rate and took us into the Floating Exchange Rate. I means exactly what the name implies, the money that being put out there isn't tied to anything and it seek it own level in what it is suppose to be worth. When more money is put into the system, then the value of the money that in circulation, the value of the dollar in buying power decreased accordingly. In a Floating Exchange Rate, money is always decreasing in value, because of the vary nature of the system that it is. Now consider that seven trillion dollars that was generated and pumped into this Floating Exchange Rate Economy and what will happen.

Fix Exchange Rate

A Fix Exchange Rate can be set to one or more of the following, a Gold Standard, Gold Reserve Standard and/or to the price of physical goods and services. Because, a Fix Exchange Rate is tacked to one or more of the above items, it doesn't inflate or even deflate like a Floating Exchange Rate does. If you do choose to generate more credit and bring it into the system, you have to bring it in on the physical side of the house instead of the financial side of the house. The reason that that is so is, we have to increase the production of goods and services to offset the increase in the money supply and so we can maintain an equilibrium between those to. So we can maintain the same value per dollars to goods that are out there to the new credit that we putting into the system. The goal is to maintain the same buying power per goods bought.

Larry,

The more I think about, the more energy-backed currency stands out above the rest. We're in a fairly advanced technological age, so why doesn't our money reflect that?

As energy becomes cheaper, the rate of exchange (or more precisely value) of currency vs. energy would increase, giving more "bang for your buck." This would give a huge incentive to develop efficient energy sources. Eventually we will come to the point of nearly "free" energy.

But what does that do for our currency?

Then again, at that point we'd be post-scarcity, so it woldn't matter.