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by PaulHoule
1307 days ago
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Those people want to be https://en.wikipedia.org/wiki/Goldfinger_(film) when they grow up. The USD is backed by the "full faith and credit" of the US government which has the power to tax the productive capacity of our farms, mines, manufacturing, service and financial economy. Gold is limited in supply, I grant it that, but the existence of gold is not linked to the existence of productive capacity for anything else people want. The best argument for gold is that the demand for gold has existed for a long time, I read somewhere that a Roman might have been paid a few pounds of gold a year which is about what an American might get paid if they got paid in gold. The best argument against it is that there is not enough gold in circulation to support a modern economy without the value of gold exploding to the point where you'd have a very hard time measuring it out. That's why goldbugs are really betting on the collapse of civilization, like that guy in the Bond movie. |
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Yes, the USD is backed by the "full faith and credit" of the US government but the Petrodollar's global reserve status is fading. Saudi and Russia are both gearing up to trade oil to China in Yuan, for example. America's debt has passed 100% of its GDP and it has entered a period of high inflation. If the BRICS countries introduce a common PM-backed currency, it could present a better store of value than dollars and that could mean the end of the dollar's good run.
> gold is not linked to the existence of productive capacity
Industrial demand and investment demand are two different things. Silver has high industrial demand but that doesn't make it any better or worse a choice than gold for backing a currency.
> The best argument against it is that there is not enough gold
I'm not sure that's an argument against it. Also maybe it could be silver, or a basket which includes both.