What is “Value”?
What is “Value”?
It continues to amaze me that people talk about money and value as if there is some magical thing out there that REALLY DOES HAVE VALUE. There isn’t, unless it has a use and then we get into the problem of a monopoly competition. And when there is a recession or event that affects the productivity or employment and incomes of people… what then? In these circumstances, those who have will eventually accrue more since those who don’t will have to sell to stay alive. Unless there is a plan to redistribute the gold or crypto or whatever. And we’re practically back in the jungle.
Virtually no functioning government on earth operates a gold- or other commodity-backed currency or uses anything but analogues to fractional reserve banking.
And why is that? Because gold or any other commodity looks like one of the charts below. And you can’t run an economy on something that forces every citizen to reprice every item they need or use on an hourly, daily, weekly… basis.
I do understand that most human beings and those who occupy the crypto space abhor complexity. Having to understand even simple things seems to challenge them and pull them in. And the biggest one is “inflation”. This is the bugbear for gold bugs and crypto folks. But even this simple circumstance challenges their analytical ability: inflation means nothing as long as living standards rise with it. Yes, a hundred years ago you could buy a hamburger for 12 cents. But your daily wage (and excluding healthcare, education, electronics, infrastructure and all these other living standard multipliers) was about a dollar.
Backed by gold.