Hmmm. 450 to 1453 AD is not exactly known as a time of great progress.
Yes, it is. It was a time of great progress in Byzantium and in the Caliphate. The Caliphate eventually succumbed to the Mongol hordes of Genghis Khan, and Constantinople finally fell to the Turks. But, during this time, there were great advances in agriculture, military technology, gunpowder, printing presses. You have no idea.
It is better known as the dark middle ages.
Maybe in backwards places like England or Belgium. The Hanseatic League did very well in this period.
Renaissance Italy saw much of its flower bloom from the Twelfth to Fifteenth Centuries. You could look it up.
Algebra was developed to a crescendo by a guy named al Jebra in the Caliphate during this time. William of Ockham learned to shave with his Razor, so England wasn't utterly devoid of progress.
Saddles were improved with stirrups, allowing armored knights to guard the countryside in much of Europe. Several new types of plows were developed, along with a harness that wouldn't choke horses or oxen.
Everything remained stagnant for 1000 years.
You are an ignorant savage who knows nothing about the progress of the ages.
basically it was a time of slow and continuous decline.
Again, you write from ignorance. The period was a time of dramatic developments in fields as diverse as astronomy and agriculture. Trade and commerce flourished.
The time of dramatic decline was from the heights of 175 BC in Egypt and Greece to the nadir of the Roman Empire around 250 AD. The Romans burned more libraries and murdered more scholars (e.g., Archimedes) than any other empire on Earth. Brutal savages, the Romans were famous for debasing their coinage. No mistake that "fiat" is a Latin word.
Yeah, and that's a wonderful encouragement to the workers if you lower their wages...
You are the vicious thug who insists on imposing paper money on these workers, not me. I'm not the one who is destroying the value of savings and pensions to the detriment of everyone in the hypothetical economy, you are. I think the workers would be better off if they would string you up from a lamppost for your economic lunacy.
Yet, Italy created Ferrari cars, luxury clothes and shoes,
Now who is enthusing about wealth for the few? What exact percentage of the Italian people were driving around in Ferraris?
The modest inflation they got encouraged people to trade their liras for something that keeps value a little longer.
Yes, and that purportedly modest inflation caused all kinds of dramatic capital flight. Italy in that period went through a new government every six months. Many Italians fled to more stable economies, and even more moved their wealth over the Alps into Swiss francs.
Economies elsewhere were much healthier and much wealthier, without so much inflation.
It served their economy well.
There is no point in discussing this nonsense with you. You wouldn't know a sound economy from a gulag.
But I certainly agree that inflation of 20% or more will be counterproductive.
So, what magic wand do you propose to wave to prevent inflation of 20%, once you have inflation at 10%?
No, the savings kill the economy.
I see. Savings is bad because it is capital, and you are some sort of vicious socialist thug.
The money that is hoarded does not serve any exchange of goods anymore.
It does serve its owners as a store of value. And, it is a thug who is opposed to private stockpiles. Why? Because they are harder to steal.
Besides, money that is saved is often available for investments. It is not necessarily the case that savings are in the form of cash.
I just happen to live in Bulgaria since last year, and this is one of the countries that was part of this Byzantine empire.
That's nice.
A great deal of the gold ended up in the churches where it never left
You'd be amazed at how thin gold leaf really is.
Nevertheless, I am not a great supporter of the Catholic and Eastern Orthodox churches.
anymore. (Just visit any Orthodox church today and you will see the gold on the walls everywhere.)
Where individuals choose to put their money is their business.
While the gold accumulated in some rich families and mostly in the churches and monasteries, the economy simply ran dry on cash.
You are badly mistaken. The economy ran quite well, for a thousand years. Makes the economy of one of the inflationist governments of Italy look like a mayfly in comparison.
It was force that killed the economy of Constantinople, first with the Mongols overrunning most of Asia and the Caliphate, then their successors the Turks sacking Constantinople itself.
Kubla Khan turned around and used the gold solidus as the unit of value for his mulberry bark paper money, which destroyed the economy of China in a short time.
I did not say that the people in the 5% top group never change...
You suggest that money never changes hands, though. Ridiculous. The wealthy spend more money and are often more in debt than others.
Yes, you will have liquidity crises now and then. But with 'only gold' you will have a continuous liquidity crisis.
Then how did Byzantium last a thousand years? How did its economy survive for ten centuries? You are mistaken.
That's exactly illustrating my point.
No, it isn't. You are supposing that I'm illustrating your point, when in fact I'm identifying fixed exchange rates as unworkable.
Gold becomes too scarce and people start using silver.
But, what causes gold to become scarce? It is scarce only when there is a fixed exchange rate to another metal money or to paper money. It circulates freely where there is no attempt to fix or limit its value.
When silver is also scarce they use copper and platinum.
Yes, but it is the trimetallism idiocy of the 1792 Mint Act which made gold, silver, or copper scarce at various times. Sometimes two of the metals would be scarce. All attempts to fix exchange rates are mistaken.
Before you know it you are issuing 'money' with your house or any other tangible asset as backing.
Not me, Danny. I'm no John Law thug.
But then we are simply back to the paper dollar as a common denominator between the various tangible assets that back it.
It won't last. It never does. Get back to me in 968 years and we'll talk about this almighty dollar.
The cow is poor store of value, so that's why it can be a great medium of exchange.
It makes a lousy medium of exchange. How do you make change from two cows if you are trying to sell something worth 1.5 cows?
You try to exchange the cow before she is dead and smelling unless you have decided to eat her and consume the value yourself.
Not me, man. I try to keep the cows to make more cows. Must be my artful cleverness in economics.
Better for the economy.
Sez you. Sieg heil.
It cannot be denied that since the US has given up the gold standard in the 1970's, more wealth has been created than ever before.
The US gave up the gold standard in 1933. It gave up the gold cover clause in 1971.
And, yes, it can be denied that more wealth has been created than ever before. You see wealth where I see a pyramid of debt, inverted on a tiny point of gold.
Moreover, you merely assert that this wealth would not have been created in an economy with honest money. It wasn't the government that created the surge of wealth in the 1990s, it was the enhancements to productivity created by the inventors and coders of computers.
Moreover, much of the actual inflation takes place from 1971 to 1982, a time of tremendous stagnation. The inflation was called "stagflation" to capture this feature of it. Maybe you've forgotten the misery of that decade, but I haven't. Not only was inflation high in England and the USA, so was unemployment.
By way of comparison, inflation from 1982 to 2002 was around 2% per year rather than the 5% to 10% of the 1971 to 1982 period. So, at your best, you are wildly enthusiastic about too much inflation. As I've pointed out, the increase of gold over the last few thousand years has averaged about 2% per year. When the inflationists and fiat money aficionados manage to mimic that growth, things go fairly well.
As well, the most critical factor for the economy from 1982 to 1999 was the dramatically lower tax structure as compared to 1971 to 1982. Taxes were cut by Reagan in the USA, by Thatcher in the UK, and in some other places. Amazingly high tax rates are extremely detrimental to production, and lowering taxes makes productivity soar. The obvious corollary is that with zero taxes the economy would be in much better shape.
And, of course, without taxes, there would be no one to run the issue power of money as a governmental monopoly. So the booms would not be as small and the busts not so lingering.
The 1982 to 1999 economy worked out okay because Greenspan and company were able to keep inflation to a pace consistent with how it would be if gold were the main currency. However, there is no evidence that the Federal Reserve can keep inflation and deflation in check.
Even if the whole house of cards built on debt and paper money collapses,
If?!
the houses and factories and durable goods that were produced during this period will remain for quite a while.
Not necessarily. As in the film "Titanic" wherein the captain points out "this ship is made of iron - she will sink" those houses are made of wood and will burn. The factories are not productive if they stand empty. That's why we call the northeast USA the rust belt.
The value of the house (or whatever real estate) before and after the bubble is just the same, it is still a house.
The house may be the same, but its value is very different.
Like I said, people are too much focussed on the money.
Whereas you are too much focused on inflation.
The very same house, it can be priced at $10 or at $10million, but it is the same house, it's economic value is the same, you can live and sleep in it just like before.
The economic value of a cardboard box is the same, too. One can live or sleep in it. Try borrowing against it, though, and you run into some difficulty. Try borrowing against a house priced at $10 and you have the same problem.
The real value is in the house. What price the market sets on it is secundary.
That price doesn't seem so secondary to those who have had homes foreclosed out from under them.
And, while I agree that you may have a major liquidity crisis when a bubble bursts, we cannot deny that these houses built during the bubble are not gone.
Actually, quite a few houses get destroyed in rioting and the like.
Without bubble maybe they would not have been built..
So, we don't know whether the bubble of the 1990s was the only way to produce the wealth you point to. It could have as easily been created with gold as money.
So, after a bubble and a burst, we are still richer then we would have been without it.
"We" isn't at issue. "We" don't own all the wealth in the economy. Individuals each own some of it. It is wrong to treat private property as a commons.
Maybe not in money terms, but in terms of 'real assets' that are in the country.
Fortunately, the economy isn't in the hands of rabid inflationist thugs such as yourself.
Indeed, and now 13 years after their bubble burst, the Japanese are still officially the richest people on the planet.
That must be some comfort to them. It is certainly not a favorable commentary on the other fiat money economies.
It is because so much wealth was created during their boom, so much houses and factories were built,... that they can still bank on it.
And has it lasted a thousand years, Danny boy?
Regards,
Jim http://www.ezez.com/
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