re: 'IMO, "Oil" has more demand/value, most folks NEED oil.'
That logic doesn't withstand scrutiny. If it did, you could apply it just as easily to the money we use today:
"Oil" certainly has more demand/value than paper dollars. Most folks NEED oil.
See?
People need money, clo. Its utility is in its ability to facilitate the purchase of other things, AND its ability to store value. If you doubt that, try carrying a barrel of oil with you into the supermarket and seeing how well that works.
So, people do NEED money. The need many not be as immediate as the need for food and oxygen, but it's still there as a mid-term need.
Unfortunately, good money must be TRUSTED. And that, primarily, means trusted against debasement. If people are going to use a common media for the transference of value, they need to be confident that whoever creates the media will not do so arbitrarily - thereby ripping off the people who use it.
Governments are inherently untrustworthy. Therefore, money that is issued by government does not deserve anyone's trust unless it is backed by something that's in limited supply. And then regular independent audits have to occur.
Once that trust is blown, you see, it's almost impossible to win back.
And that's the problem we have. Our money isn't backed. Government has discovered that it is a simple matter to print more unbacked money - far easier and expeditious than it is to tax people. It has now grown dependent on doing just that. You can bet, it will not stop printing money voluntarily. It will need to be forced.
You and Nemo don't understand what makes gold, of all things, so special. There are actually a bunch of reasons. I've posted them over and over. Some of the attributes that make it an almost ideal backing material are:
o Gold is exceedingly rare. A small amount of it can back a tremendous amount of money.
o It is portable. A man of almost any means can carry his entire worth on his person - or, at most, with the help of a wheelbarrow.
o Until fusion ends all of our problems, gold will NEVER be common. Its mines are hard to build, and they don't last very long. The world's supply of gold has increased at a steady 2 percent per year for a very, very long time. Thus, its value is extraordinarily consistent. (And if you don't think that is the case today, it's because you're comparing gold to unbacked currencies - which are losing their appeal at a record pace.)
o Gold doesn't erode. It doesn't burn. It doesn't oxidize. It doesn't rot. Virtually all of the gold ever unearthed is still being used today.
o Gold isn't dangerous. It isn't poisonous - you can put it in your mouth if you want. It isn't radioactive. It is nearly inert.
o Gold holds a special place in peoples' minds due to its aesthetic appeal. The best jewelry metal is gold.
o Gold has a history of being money that goes back thousands of years. Every country in the world understands gold's history.
There are other reasons why gold is an excellent material for backing money, but I'll stop there. Let me throw the ball back to you:
If not gold, then what? I sincerely hope that you aren't still thinking that unbacked money actually works. As you saw at the start of this thread, even Alan Greenspan is acknowledging that fiat currencies are falling apart. (He's being honest, probably because he's no longer in a public position and can actually speak the truth about money for the first time in decades.)
So, a simple enough question. If not gold, then what?
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
| 