Thread: 30K Investment
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Old 11-01-2013, 07:52 PM   #26
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Join Date: Oct 2010
Posts: 3,279
2) Fiat currencies have 0 intrinsic value, ie you cannot use SGD for eating/manufacturing/etc... Their only use is as a medium of exchange and store of value, their market value is thus solely derived from the available supply.

...If you use something more constant like gold/silver, you can see how much real inflation is.
Does your employer pay you your salary in gold?

Do your investments pay you back in gold?

Do you pay for your food, water and electricity in gold?

Did you buy your house and car with gold?

Did you pay for that overseas holiday you took with gold?

If you believe your fiat money is worthless, please send it over to me. Thank you.

Here's a recent comment by Paul Krugman about the gold standard mentality that many people still have even though the gold standard was a failure and is long gone. As always it is amazing how delusional gold cultists like yourself can be. You can honestly believe all the wealth around you is somehow an illusion because you can buy less of a piece of yellow metal today than before.

For many people on the right, value is something handed down from on high It should be measured in terms of eternal standards, mainly gold; I have, for example, often seen people claiming that stocks are actually down, not up, over the past couple of generations because the Dow hasnít kept up with the gold price, never mind what it buys in terms of the goods and services people actually consume.

And given that the laws of value are basically divine, not human, any human meddling in the process is not just foolish but immoral. Printing money that isnít tied to gold is a kind of theft, not to mention blasphemy.

For people like me, on the other hand, the economy is a social system, created by and for people. Money is a social contrivance and convenience that makes this social system work better ó and should be adjusted, both in quantity and in characteristics, whenever there is compelling evidence that this would lead to better outcomes. It often makes sense to put constraints on our actions, e.g. by pegging to another currency or granting the central bank a high degree of independence, but these are things done for operational convenience or to improve policy credibility, not moral commitments ó and they are always up for reconsideration when circumstances change.

Now, the money morality types try to have it both ways; they want us to believe that monetary blasphemy will produce disastrous results in practical terms too. But events have proved them wrong.
Barbarous Relics -
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