Fiat money

[Vee]

Regards Gold, it doesn't matter. The Gold standard has collapsed and did so many years ago.

However, I think Night may fundamentally misunderstand the concept of economics. The value attributed to Gold is due to its level of scarcity. The basic foundations of any economic school of thought is based on scarcity.

Now there is a limited amount of Gold on the planet, and a limited amount of Gold in circulation.

There is no limit to the amount of Fiat money on the planet but there is a limited amount of Fiat money in circulation.

[Dan_77]

Quote by: Vee Regards Gold, it doesn't matter. The Gold standard has collapsed and did so many years ago. However, I think Night may fundamentally misunderstand the concept of economics. The value attributed to Gold is due to its level of scarcity. The basic foundations of any economic school of thought is based on scarcity. Now there is a limited amount of Gold on the planet, and a limited amount of Gold in circulation. There is no limit to the amount of Fiat money on the planet but there is a limited amount of Fiat money in circulation.

Incorrect. The value of gold is based both upon scarcity and DEMAND.

If no one demands gold, it doesn't matter whether I have one ounce of gold or one ton, either way what I have is of no value.

Cow poop is very scarce north of the Arctic Circle. But no one up there is paying $1000 an ounce to import it. Get it?

[soothsayer]

true all... but the demand for gold is driven by widespread apprehension of corrupt monetary policy.
if govts (especially the major industrial nations') ran reasonable budgets and didnt politicize spending, there would be stability in their currencies and gold prices would stagnate.
in theory, a gold std is not necessary, but inevitably, govt treasuries get greedy and begin to add zeroes to the balance sheets of their financiers.

[Vee]

Value is placed on it due to its scarcity, that is why there is demand. There is an ultimate limit to amount of gold.

However, this discussion is about fiat currency

Perhaps this explains it better than I did: YouTube - Modern monetary theory - Mitchell and Wray Q3

[grandpa]

Quote by: Vee Value is placed on it due to its scarcity, that is why there is demand. There is an ultimate limit to amount of gold.

Which limits its useability in trade, and in determining price.

Grandpa h.