From: cmk@athena.mit.edu (Charles M Kozierok)
Subject: Re: Views? :
Organization: Massachusetts Institute of Technology
Date: Mon, 14 Dec 1992 00:18:56 GMT

In article <!SS=bp+@engin.umich.edu> positron@engin.umich.edu (Jonathan Scott Haas) writes:
>In article <1992Dec13.134148.26485@samba.oit.unc.edu> bolden@beta.math.unc.edu (Jeffrey Bolden) writes:
>>In article <a0R=Lv_@engin.umich.edu> positron@engin.umich.edu (Jonathan Scott Haas) writes:
>>>
>>>Look at the free market, pal, look at the free market. It doesn't really
>>>matter what gold is *used* for, what matters is that there is a demand
>>>for it, and that there is a supply of it. The most useless thing in the
>>>world has value if people want it and people can supply it. Gold is a
>>>good store of value because it's durable, doesn't rot, decay, or dissolve,
>>>and is relatively rare. If you can come up with something else on which
>>>to base currency, sounds good to me. As long as it's *something* concrete.
>>>I want a guarantee from the government along the lines of, "We're giving
>>>you these green pieces of paper to use as currency, and we assure you that
>>>you can always exchange five hundred of them for an ounce of gold" or
>>>something like that. Without any backing, the government can just print
>>>more currency, causing inflation.
>>>
>>
>>	I think your discription of gold is slightly off.  The demand for
>>gold is relativly small.  The supply is huge, the major holders of gold
>>and the major suppliers, are the people who maintain the high price by
>>chocking off supply.  The natural supply of is very big.  As for golds
>>physical properties that's true. What I would tend to think might be a
>>good medium for exchange that does have an intrinsic value is oil.
>>	Sort of like in early America where we used tabacco.
>>
>
>Horsepucky. You think my discription [sic] of gold is slightly off. You

no need to start "sic"ing.. we all make mistakes, don't we?

>think wrong. If you think that the price of gold is limited by people
>choking off supply, I invite you to visit COMEX and watch the gold
>trading pits. MILLIONS of ounces of gold trade hands EVERY DAY. There
>is no shortage of a free market in gold.

true. but what is the volume compared to what would be needed to back
the US currency? and i would also point out that the vast majority
of commodity contracts exist as paper entities only and are never
exercised. the figure i heard was 97%. so of the millions of ounces
of gold traded each day, most of it is just in the form of paper
obligations.

>
>Oil as a store of value?? Have you SEEN the price of oil flunctuate over
>the past decade?

have *you* seen the price of *gold* fluctuate over the past decade?
i sure have.

>What you want for a medium of exchange is something
>*stable*... otherwise, the price of EVERYTHING flunctuates with the price
>of your store of value.

actually, it would fluctuate with the perceived value of the backing
commodity. the price itself would not change, by definition, because
it would be fixed, wouldn't it?

>Oil varies widely in price, has an extremely
>limited supply, gets USED UP, and is primarily supplied by foreign
>powers.

everything you say about oil above is also true of gold, with the possible
exception of being used up, though even that could be argued. it can
certainly be destroyed, though that is not implicit in its use the way
it is with oil. mostly it is stored in vaults. the same could be done
with oil, though it would be less practical.

>Do you want the economy of the U.S. to sit firmly in the palms
>of Arabian sheiks? (bear in mind, all they'd have to do is embargo to
>cause mass deflation here in the U.S.)

i'm sure he doesn't. but as another poster pointed out, do you want the
US economy to rest in the palms of south africa or the former soviet
union?

--
charles
Newsgroups: alt.politics.libertarian