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2010-08-18 Southeast Asia

Malaysia looks to ancient alternative currency - gold

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Posted by tipper 2010-08-18 06:17|| || Front Page|| [2 views ] Top

#1 Currency is just a proxy for the amount of time exchanged in the economy.

As such gold is just as fiat as paper. Though supply is slower to expand. However paper money CAN be burnt, gold cannot, so in a recessionary environment the gold currency cannot be kept stable with the amount of work the economy does.

Posted by Bright Pebbles 2010-08-18 08:20|| 2010-08-18 08:20|| Front Page Top

#2 There's a fascinating discussion of the gold-as-fiat issue in Smith's Wealth of Nations. Smith thought that gold *could* be consumed through non-monetary usages - art, teeth, goldsmithing, industrial usages, etc - or loss via shipwreck or burial.

There's even a section on "treasure trove" - the medieval practice of hiding away cash prior to a raid or a war, and then the guy who does the hiding gets whacked, leaving the money to fall out of circulation. I was just reading a book on the Angevin kings, and Richard I was mortally wounded while besieging one of his vassals over a dispute arising because some peasant had dug up one of the treasure troves, and King Dick wanted his cut. Ironically enough, after his pissed-off army seized the castle, they tore it to pieces looking for the treasure, and it had disappeared again, presumably into another trove.

Posted by Mitch H. 2010-08-18 09:33|| http://blogfonte.blogspot.com/ 2010-08-18 09:33|| Front Page Top

#3 History shows that coinage gets debased with non-precious metals just as paper is inflated though excessive printing. Most of the American population is unaware that dimes and quarters were once minted in silver, let alone dollars.

Posted by Procopius2k 2010-08-18 09:38|| 2010-08-18 09:38|| Front Page Top

#4 Besoeker ~~Malaysia~~ looks to ancient alternative currency - ~~gold~~ non-US minted silver and gold.

Posted by Besoeker 2010-08-18 12:20|| 2010-08-18 12:20|| Front Page Top

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