Thus said Von Fugal on Thu, 04 Dec 2008 11:12:03 MST: > It's true, to say that a pie in 1933 was worth this much gold, and now > we have this many pies, there's not enough gold. The truth is each pie > would be worth LESS gold.
Here's a fun thought problem... how much pie would an ounce of gold buy in 1933? Now, here comes Roosevelt, turn in your $20 gold piece for $20 fiat dollars. Time passes, its now 2008. How much pie will one ounce of gold buy? How much pie will your $20 fiat dollar buy? Here's the T-bone steak test (which I credit to Michael S. Roeff): http://news.google.com/newspapers?nid=336&dat=19200528&id=Kh4KAAAAIBAJ&sjid=fEcDAAAAIBAJ&pg=4639,2810957 Notice that T-bone steak was $.25 per pound (assuming I'm reading it correctly) in 1929. That $20 gold coin would buy 80 pounds of T-bone steak. I haven't looked at prices recently, but how much does a T-bone steak cost now, maybe $8 per pound? So, you can buy 2 pounds of T-bone steaks with your $20 fiat, while someone holding gold can buy roughly 80 pounds (maybe more). There, in plain and simple terms is the difference between fiat money and commodity, market selected, money. > I am oversimplifying a lot in all these points, but I can't stand by > and let the equally oversimplified statement "gold doesn't scale" just > sit there. Gold is just an ancient relic... Andy -- [-----------[system uptime]--------------------------------------------] 10:02pm up 4:02, 2 users, load average: 1.19, 1.19, 1.17 /* PLUG: http://plug.org, #utah on irc.freenode.net Unsubscribe: http://plug.org/mailman/options/plug Don't fear the penguin. */
