At 12:33 18/07/2010 -0400, you wrote:
(RH)
You mean like a social contract?
I don't understand you I'm afraid.
If you are asking me whether I regard the passing of money as a social
contract, I certainly do. Non-currency contracts (mutual help, kindnesses,
etc) work well in small defined social networks where actors are known to
one another, interactions are frequent and reciprocation usually takes
place sooner or later. In some cases, however, transactions can build up
very long-term social credit in the individual or even -- if the social
debtor has died -- in group memory. In the case of currency transactions,
they are between people who are strangers or who see one another too
infrequently to build up an accurate picture of the other's honesty or
reliability. Thus the transactions are immediate or, if not, safeguarded in
all sorts of other ways (written promises to pay, etc).
I see absolutely no difference between social contracts and monetary contracts.
Keith
(RH)
Because all of them, including gold, have industrial purposes that make
them too valuable to be used as money or a base for hoarding.
(KH)
They don't have to be used as (everyday) currency. They can be the backing
for money -- a guarantee that your banknote can actually mean something
specific if you presented it at the bank and asked to exchange it for real
value.
The high value/small mass aspect of gold, platinum, rhodium, and iridium
make them superb candidates for hoarding. And if you're saving for your
old age and your house burns down they'll still be there in the ashes --
unlike banknotes or diamonds.
(RH)
Why not Platinum?
(KH)
Why not? It could serve the same purpose as gold. Or iridium, or rhodium
(also precious metals) or copper or tin -- anything with a steady and
hard-won supply.
(KH)
Because China, Russia and the Middle East -- at a crunch (albeit extremely
stressful even for them) -- could survive the demise of the West (there
are plenty more potential consumer markets in the world), the latter
couldn't survive without the former. Unless we have universal warfare,
this is why gold will resume its role as a world currency before too long
-- as future historians will relate (with some amazement no doubt that
America was so resistant). And it will probably occur when the likes of
Goldman Sachs and JPMorgan Chase decide to turn from poachers to
gamekeepers for a bigger -- but more law-abiding -- future, not because of
any particular G20 summit.
Keith
Keith Hudson, Saltford, England
You keep trying, Keith, and I do wish you luck but I do not see a
possibility of a return to the inflexibility of the gold standard. As I
pointed out in a previous posting, currencies are strategic devices that
governments can use to their advantage, and to their disadvantage as
well. Currencies can be inflated and deflated for domestic economic
purposes and they can be pegged to other currencies to achieve advantages
in international trade. How China has used the renminbi is an example of
the latter.
Would countries really want to lose such strategic flexibility just to
pile up huge hoards of gold or run out of gold? I hardly think so.
Ed
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Keith Hudson, Saltford, England
Keith Hudson, Saltford, England
Keith Hudson, Saltford, England
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