Thus said Kyle Waters on Thu, 04 Dec 2008 11:18:46 MST: > I think this paragraph answers your questions. If you use a gold > standard then the value of gold would be inflated.
Correction, the demand for gold will go up because it is now serving multiple functions. It can be used for industrial uses, jewelry, etc... but now it also has a monetary demand. But that doesn't mean that its value is inflated. > As you pointed out early in your post we could break it down to an > atom and have each atom be worth a lot of other goods. Now the > problem is we have inflated the value of gold. No we haven't, the market has responded to supply/demand. If I produce more eggs than the market is willing to clear, then I will be unable to demand a high price for them, and will have to lower my prices until such time as I arrive at a price that matches supply with demand. > Thus making it too expensive to use for industrial uses. Eliminating > an entire class of goods. And what's wrong with that? If something is too expensive to be used for one type of use, then it won't be used for that particular use. So what? How does that strengthen the argument against using a commodity like gold as money? Andy -- [-----------[system uptime]--------------------------------------------] 10:08pm up 4:08, 2 users, load average: 1.03, 1.11, 1.14 /* PLUG: http://plug.org, #utah on irc.freenode.net Unsubscribe: http://plug.org/mailman/options/plug Don't fear the penguin. */
