Hyperinflation

[Techpriest]

How is it fiat currency? Did you find a way to make gold quickly and easily? Are you an alchemist?

Because as I said before it’s value is assigned for no reason, it’s a “just trust us it’s valuable ok?”

Also the gold standard has never stopped inflation in the past or done anything but cap potential economic growth and the ability of governments to influence the currency supply. It’s part of the reason some people wanted a silver standard as there’s more silver therefore there could be more money in the economy. It’s super dumb and a lot of the supposed benefits of the gold standard (long term stability of prices) aren’t actually that true - the gold standard had far more common high price runs and was a more volatile environment for prices in general.

The gold standard also runs into the issue that if we went onto it, we’d run into issues with speculators on gold, and become dependent on countries that mine lots of gold to grow our economy... like China. It’d also mean that a country could devalue our money by mining a bunch of gold... like China.

 

[MarvinTheParanoidAndroid]

"The Gold Standard" is a completely pointless thing and is fiat currency without the benefits of fiat currency. The only reason we all think gold has value is that you can use it to mint nice coins and make fancy decorations with it. It's absolutely worthless as a metal outside of those purposes (bar some use in semiconductors). It has no intrinsic value, just like the money you bitch and moan about 'just being paper.'

Nothing has "intrinsic value", value is determined by demand. One could argue that a hunting knife is the most valuable tool you could own for surviving in the woods, but lo' and behold at all the people who have no intent to live in the woods. Value is a subjective measure determined by the buying will of others.

Gold is also used in computers all the time, including the kind we send to space, and that goes without mentioning its use in dentistry. It also doesn't corrode, which gives it a 'lasting' value, as in it doesn't depreciate. It's unlike other metals such as aluminum or iron which can rust & degrade, especially against ultraviolet light, atomic oxygen and x-rays.

This is like saying diamond is worthless because of its use as jewelry despite its uses in tipping metal tools and thermal conduction.

Paper money on the other hand, degrades constantly and has no lasting permanence.

The gold standard also runs into the issue that if we went onto it, we’d run into issues with speculators on gold, and become dependent on countries that mine lots of gold to grow our economy... like China. It’d also mean that a country could devalue our money by mining a bunch of gold... like China.

You're also forgetting the biggest reason the U.S. stopped using it, because Russia was using legal tender to cash in for gold and siphoning away the value of the dollar.

 

[Techpriest]

Nothing has "intrinsic value", value is determined by demand. One could argue that a hunting knife is the most valuable tool you could own for surviving in the woods, but lo' and behold at all the people who have no intent to live in the woods. Value is a subjective measure determined by the buying will of others.

Gold is also used in computers all the time, including the kind we send to space, and that goes without mentioning its use in dentistry. It also doesn't corrode, which gives it a 'lasting' value, as in it doesn't depreciate. It's unlike other metals such as aluminum or iron which can rust & degrade, especially against ultraviolet light, atomic oxygen and x-rays.

This is like saying diamond is worthless because of its use as jewelry despite its uses in tipping metal tools and thermal conduction.

While there are uses for gold they're rather niche. The reason gold is seen as a 'valuable' metal almost entirely is because of is use in decoration and because of coin minting. That's my point, the gold standard is entirely arbitrary and the reasons why gold was commonly chosen have basically nothing to do with why gold is actually useful. It's irrational to base our monetary standard around it.

 

[knobslobbin]

What about a money standard based on a basket of useful things that hold their value? Like gold, copper, oil, the price of electricity, porn outtakes, and the weight of a barrel of BigMacs. We could call it the electricSlickSparkleBeef.

 

[SIGSEGV]

What about a money standard based on a basket of useful things that hold their value? Like gold, copper, oil, the price of electricity, porn outtakes, and the weight of a barrel of BigMacs. We could call it the electricSlickSparkleBeef.

What about a money standard based on not being a pedophile or coughing in small women's faces at the grocery store?

 

[MarvinTheParanoidAndroid]

While there are uses for gold they're rather niche.

Computers are niche? Dentistry is niche?

The reason gold is seen as a 'valuable' metal almost entirely is because of is use in decoration and because of coin minting. That's my point, the gold standard is entirely arbitrary and the reasons why gold was commonly chosen have basically nothing to do with why gold is actually useful. It's irrational to base our monetary standard around it.

No, there is a rationale, the fact gold doesn't depreciate, it doesn't rust and it doesn't decay, it's a concrete, permanent representation of value. Paper money is the opposite, it's a transient representation of value which rapidly decays. Not to mention that gold is universally accepted as valuable, while paper currencies are largely dependent on the strength of and faith in the country producing it.

 

[DiscoRodeo]

The part that makes me laugh is that people angry about Roosevelt "getting the US off the gold standard" don't even know what they're angry about, and I don't mean as in "Nixon actually got us off of it entirely".

The gold standard, the way people imagine it, has basically never existed. Sure, there has always been a limited supply, but there have been multiple times where congress officially changed the required amount banks had to the dollar (by the time Roosevelt was even around, it wasn't even that you needed 1 ounce of gold for one dollar), congress had passed multiple acts to adjust the dollar to the availability of gold (see multiple gold rushes, international flooding of markets, etc). What you wind up with and what even the US had was gold that changed in terms of price on the regular relative to the dollar and the supply of gold, and even artificially with differing acts of congress.

What people really complained about in the 30s was the fact that the government made it so that you could no longer choose to pay people in gold bullion or the dollar, that they had to pay people with the dollar, which gave the government immense ability to manipulate the value of commodities and trade domestically. If you have an alternate currency, that greatly limits that and can keep the power of the dollar in check.

Most "goldstandard" tards don't even know why they're angry, or that their gold standard has frankly never existed. There has never been a period of time where the US government wasn't able to inflate or deflate the value of their dollar relative to gold.

 

[knobslobbin]

I don't want a return to the gold standard, I just want the government granted monopoly on what is considered money to end.

Gold back crypto, fiat backed crypto, independent precious metal notes issued by states, or fuck even pretty shells would all be better options than being forced to transact in federal reserve notes.

Technically if I barter for something in gold I have to declare the transaction to the irs and pay a capital gains tax on any change in value from when I obtained said gold. Same for crypto, that's retarded.

 

[DeadFish]

I don't want a return to the gold standard, I just want the government granted monopoly on what is considered money to end.
.

That might happen. If america gets weaker then forigen powers might start doing to us what was done to Syria.

Russia backing Assad. America (for some fucked up reason) backing Isis. Kurds forming their own zone.

Once that starts you'll see balkanization real quick. You might see states issue their own currency again.

 

[mindlessobserver]

In somewhat related "money is free" news, I just locked in my home loan interest rate. 2.6%. Absolutely bonkers but okay. If we get even 3% inflation I will be sitting pretty cozy.

 

[DeadFish]

In somewhat related "money is free" news, I just locked in my home loan interest rate. 2.6%. Absolutely bonkers but okay. If we get even 3% inflation I will be sitting pretty cozy.

I couldve gotten you something better.

 

[mindlessobserver]

I couldve gotten you something better.

No doubt, but 2.6 is still pretty good lol

 

[knobslobbin]

That might happen. If america gets weaker then forigen powers might start doing to us what was done to Syria.

Russia backing Assad. America (for some fucked up reason) backing Isis. Kurds forming their own zone.

Once that starts you'll see balkanization real quick. You might see states issue their own currency again.

Already starting: https://thenewamerican.com/texas-launches-gold-backed-bank-challenging-federal-reserve/

 

[Never Scored]

The CPI in the US hit 4.2% yesterday, and we all know the CPI understates inflation because it doesn't include the price of property as it considers it an asset. Hang onto your butts.

I don't think we're going to be using US Dollars as toilet paper anytime soon, but I think 1970s style stagflation in looking increasingly likely.

 

[Rich Evans Apologist]

The CPI in the US hit 4.2% yesterday, and we all know the CPI understates inflation because it doesn't include the price of property as it considers it an asset. Hang onto your butts.

We've come out of a global pandemic and manufacturers are severely understaffed and as such producing under-capacity. So as demand is booming, supply is lagging behind - McDonalds is now increasing pay by an average of 10% at all of its restaurants because it can't get workers. Unemployment claims only just recently dropped under their levels in April 2020, so we're lagging behind bigtime.

Short-term inflation is unavoidable in these circumstances. Medium-term is very dubious, as the fed always has the release valve of interest rates to tweak if overheating is actually occurring. Stagflation vis-a-vis the 1970s is absurdly unlikely. That 4.2% value hearkens back to levels not seen since 2008 -- kindof makes sense, given a global recession happened in 2020. Rates of inflation from 2008-2020 were hardly extreme outside of health care, homeowning, and education - which were increasing well before that recession anyways, being that they seem to be massive speculators' markets.

edit: bitcoin is by definition not fiat currency, it's just a wholly speculative store of value

 

[DeadFish]

Question. What will happen to the cartels if the dollars gets weaker? Part of why theyre Makin profit is the exchange rate

 

[HOMO FOR LIFE]

We've come out of a global pandemic and manufacturers are severely understaffed and as such producing under-capacity. So as demand is booming, supply is lagging behind - McDonalds is now increasing pay by an average of 10% at all of its restaurants because it can't get workers. Unemployment claims only just recently dropped under their levels in April 2020, so we're lagging behind bigtime.

Short-term inflation is unavoidable in these circumstances. Medium-term is very dubious, as the fed always has the release valve of interest rates to tweak if overheating is actually occurring. Stagflation vis-a-vis the 1970s is absurdly unlikely. That 4.2% value hearkens back to levels not seen since 2008 -- kindof makes sense, given a global recession happened in 2020. Rates of inflation from 2008-2020 were hardly extreme outside of health care, homeowning, and education - which were increasing well before that recession anyways, being that they seem to be massive speculators' markets.

edit: bitcoin is by definition not fiat currency, it's just a wholly speculative store of value

Fed will not increase interest rates. They will let the inflation win. It's the only way to service the debt.

 

[Piss!]

Nothing has "intrinsic value", value is determined by demand. One could argue that a hunting knife is the most valuable tool you could own for surviving in the woods, but lo' and behold at all the people who have no intent to live in the woods. Value is a subjective measure determined by the buying will of others.

Gold is also used in computers all the time, including the kind we send to space, and that goes without mentioning its use in dentistry. It also doesn't corrode, which gives it a 'lasting' value, as in it doesn't depreciate. It's unlike other metals such as aluminum or iron which can rust & degrade, especially against ultraviolet light, atomic oxygen and x-rays.

This is like saying diamond is worthless because of its use as jewelry despite its uses in tipping metal tools and thermal conduction.

Paper money on the other hand, degrades constantly and has no lasting permanence.

You're also forgetting the biggest reason the U.S. stopped using it, because Russia was using legal tender to cash in for gold and siphoning away the value of the dollar.

The price of diamonds used in jewelry is absolutely propped up by nonsense and diamond company FUD. Synthetics are far cheaper, and totally identical in every way (other than "but a real diamond will have flaws under a microscope!" blah blah who gives a fuck)

The kind of diamond used for industrial abrasives, etc is orders of magnitude cheaper. And the type used for coatings is crystallized from vapor (i.e. normal carbon is used as a feedstock, you don't need to start with a diamond)

 

[Rich Evans Apologist]

Fed will not increase interest rates. They will let the inflation win. It's the only way to service the debt.

lol do you think the national debt is purely us lending to foreign countries? that's the only scenario in which you could maybe spin domestic inflation into debt relief
tip: as inflation increases, the cost of shit the government buys increases alongside it. this completely negates the 'benefit' of servicing older debts with a weaker currency

 

[mindlessobserver]

Honestly I've thought about how the powers that be think they can get out of this, and the only solution I am coming up with is they will attempt to create a global reserve currency, and try and spread the pain of a dollar implosion around the G20 nations. This will require massive concessions on the part of the United States vis a vis China, and other peripheral countries like Mexico and Russia, but our fearless leaders will do it because they have no moral stake in whether or not the United States specifically succeeds. They only care about the international monetary system. We are already seeing this being done with the US treasury shipping hundreds of billions of dollars out of the country to the IMF in order for them to issue more SDR's.

I would say the best bet right now would be to try and lock in assets or currencies that will have good conversion to the new global reserve currency once the powers that be pull the plug on the petro dollar.