orthzar on February 27, 2011, 12:50:07 am
I think this would be a good opportunity to further talk about currency in a free market, in EFT itself.   Certainly gold is popular among the main characters, but what do the other residents of Ceres use?  What about the currencies of the other rocks in space?

I am not all that well versed in the peculiarities of currency, other than a basic understanding of fiat currency.   I would like to see/read how AnCap businessmen would deal with multiple competing currencies.   For instance, retail outlets might have the top three currencies listed on the items, while having the price in the top ten currencies listed in a database.   Grams of gold is appearently the most common on Ceres, but what about silver, platinum, titanium, and the numerous yet rare radioactive elements.   A mix of barter and currency might be necessary when businessmen are moving large amounts of fuel, ships, and other bulk items.

SandySandfort on February 27, 2011, 08:58:55 am
I think this would be a good opportunity to further talk about currency in a free market, in EFT itself.   Certainly gold is popular among the main characters, but what do the other residents of Ceres use?  What about the currencies of the other rocks in space?

I am not all that well versed in the peculiarities of currency, other than a basic understanding of fiat currency.   I would like to see/read how AnCap businessmen would deal with multiple competing currencies.   For instance, retail outlets might have the top three currencies listed on the items, while having the price in the top ten currencies listed in a database.   Grams of gold is appearently the most common on Ceres, but what about silver, platinum, titanium, and the numerous yet rare radioactive elements.   A mix of barter and currency might be necessary when businessmen are moving large amounts of fuel, ships, and other bulk items.

Former Secretary of the Treasury, William Simon expressed a brilliant insight in his career. When he was asked by a reporter, "What is money?" he replied. "If the dog eats it, it's dog food."

Check out this early strip from EFT:

http://bigheadpress.com/eft?page=25

Understand that the forms of money listed in panel four are just examples. The Water Bros. would always retain the right to take or refuse any type of money. In panel two, Babbette's offer to take Guy's digital assistant in exchange for rooms was both humorous and real. You are quite correct that barter could be used, just as it is use today under every currency regime. This is also true of multiple currencies and currency substitutes. Even though the US government has tried to stop the practice, casino chips are often used for purchases in Nevada and elsewhere. Costa Rican businesses accept both US dollars and CR Colones. I once purchased a watch in Fiji in a 3-currency deal (Fijian, US and Australian). For the record, I think gold would be the accounting unit in which other currencies would be computed, but it wouldn't have to be. Welcome to monetary freedom!


Holt on February 27, 2011, 10:38:59 am
Personally I would use the price of iron as a baseline. It's one of those resources that we use heavily and for a reason.

GlennWatson on February 27, 2011, 11:05:53 am
Iron rusts.

Holt on February 27, 2011, 11:09:51 am
True but Iron isn't something you store for long as if it's been mined it will be used.

GlennWatson on February 27, 2011, 11:17:36 am
You would store it if it held monetary value.  There might be giant gold safes filled with iron.

Probably not.

Holt on February 27, 2011, 11:26:39 am
Iron holds value rather well if stored correctly. Plus no matter the markets conditions there is always a demand for iron. Even if there was no market and you were in some post-apocalyptic hell, there would still be demand for iron.

terry_freeman on February 27, 2011, 12:16:37 pm
Iron has been used as currency; I happen to own a few iron coins from China, as a matter of fact. In a free market, you'd be free to use it, and more power to you.

Paper currency, on the other hand, tends toward the intrinsic value of paper, which is zero. I have a few paper notes from Zimbabwe, denominated in trillions. The largest, a $100 trillion note, is worth about the same as one egg, perhaps less.

In Zimbabwe, people resorted to trading grains of gold for food.

In the US of A, gold used to be widely used as currency, until gold ownership was banned by FDR. It was re-legalized around 1975, but one pays a tax for the so-called "profit" whenever faith-based paper dollars depreciate; this and the "legal tender" laws tend to discourage the use of precious metals for money.

If paper fetishists really believe in the value of paper, why don't they agree to a fair competition? End legal tender laws - let buyers and sellers negotiate freely whether to accept paper, or gold, or silver, or bales of tobacco, or ingots of iron, or whatever they choose. Legalize private minting of coinage. End taxes on precious metals.

If your faith-based paper is really worth what you say it is, then you should have no objections to a level playing field.

quadibloc on February 27, 2011, 12:23:42 pm
If paper fetishists really believe in the value of paper, why don't they agree to a fair competition? End legal tender laws - let buyers and sellers negotiate freely whether to accept paper, or gold, or silver, or bales of tobacco, or ingots of iron, or whatever they choose. Legalize private minting of coinage. End taxes on precious metals.
You won't get an argument from me on this, even if there might be some practical difficulties, as long as there's an income tax, in completely ending the legal tender laws.

As long as it's legal to include what would be, effectively, a gold futures clause in what is an ordinary contract for goods and services - without such trading being confined to a securities market - being required to accept the amount of paper money that can actually buy the amount of gold specified in an agreement would be little enough hardship.

Holt on February 27, 2011, 12:36:54 pm
He's not getting an argument from me on it either.

We do have a system that is effectively a scam.
However the proposed alternatives are often themselves just as much a scam.

sams on February 27, 2011, 01:27:25 pm
He's not getting an argument from me on it either.

We do have a system that is effectively a scam.
However the proposed alternatives are often themselves just as much a scam.

You don't understand what money is, so you will not get it.

spudit on February 27, 2011, 01:33:22 pm
Holt is right about iron and no it does not rust unless stored wrong, stable forever in a vacuum. The Spartans used iron for money too, seems like.

The thing that's nice about iron is it's very commonness.

Imagine an island ecconomy based on 1600 ounces of gold, 100 pounds. Life goes on and all is stable. Then someone finds a pirate treasure hoard containing 1000 pounds of gold. Bang, everything goes to hell, mass confusion, serious bummer dude. Something like it happened in Spain after they looted the New World.

Same fantasy island but the ecconomy is based on 1600 TONS of iron. A shipwreck is washed up, the ship is wood but the engine block is cast iron. Proceed from there as to the impact on that ecconomy.

In this case the gold ecconomy is easily diverted, low ineritia, the common stuff ecconomy has higher inertia and so more stable. Most stable is a mixed commodity ecconomy based on precious metals, grain, steel, water and maybe kilowatts, lots of stuff all at once.

In some big cities they buy and sell steam, delivered in pipes under the street. In a way stretch, one could call steam money, since that's what they get for it..

Does that make sense.
Vote Early and Vote Often
for EFT
have you voted today?

Holt on February 27, 2011, 02:14:18 pm
You don't understand what money is, so you will not get it.

No you mean I don't agree with you that money is this magical thing that exists outside the realm of the material.

sams on February 27, 2011, 02:39:02 pm
You don't understand what money is, so you will not get it.

No you mean I don't agree with you that money is this magical thing that exists outside the realm of the material.

Nope, you are the refusing to see anything beyond ''material goods'', services are immaterial goods that still have values. The same money is a kind of service, central banks now provide this service by providing largely consistent tokens largely accepted and enabling people to trade more easily.

In this sense the ''usefulness'' of the token doesn't matter, what matter is how useful it is for people has a means of exchange.

Next time you heard a Lady Gaga song ask yourself why the ramblings of a nude mad girl was useful in material sense for you.

Gold makes for good currency, not because gold is uber useful in your material sense, but because it is a good means of Exchange. Silver is also is used in this sense for small change.

Holt on February 27, 2011, 03:20:42 pm
Oh I understand the value of services. However you seem convinced that money is necessary for the existence of services. Then your fetishism of gold.

 

anything