Perhaps the money we use today, but not in the times of the gold standard. Then all money was backed up by gold. Gold is a natural resource (which has mostly just exchange value) and not debt.
Oh no it does not! The price of gold increased tenfold in real terms over the past 40 years (something like that -my wife is in Laos with the book that has the source, namely "The Accidental Theorist by Krugman, so I can't check for the exact numbers). Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
Not in real terms i believe. The purchasing power of 1oz of gold, i believe, is about the same today as it was 40 yrs ago. My point, however was against the idea that money is debt. Money is exchangeable property. You can change your not-so-well-exchangeable property to money, it is not debt. If you find piece of gold somewhere, it is not debt. It is debt if you borrow money.
ie credit has been "monetised".
Gold backing for monetised credit ended in 1971 ie the practice of requiring the "Capital base" to be stocks of gold bullion so that credit was nominally redeemable in gold.
There is not remotely enough gold in existence sufficient to meet the needs of the global economy. What gold does exist is demonstrably subject to routine manipulation by intermediaries (and Central Banks appear to be the worst offenders), so it would be inappropriate to use it as the basis of a currency.
IMHO we should use as a basis for a currency Units redeemable for other, more abundant, forms of value, in particular land rental values and energy. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
That is absolutely correct.
"The money we use is interest-bearing debt created by credit institutions upon the base of an amount of capital set by the Bank of international Settlements in Basel."
This is very interesting and complicated. I will have to read what is written about this..
Really?
I can't find the figures for 40 years ago, but let's try 1971 then -37.
As you can see here Deflators, 40$ in 1971 would get you in 2007 (figures not available for 2008, but it would be around 3% extra):
$204.73 using the Consumer Price Index $165.75 using the GDP deflator $222.12 using the value of consumer bundle (probably the most relevant) $200.31 using the unskilled wage $336.89 using the nominal GDP per capita (that makes little sense in terms of purchasing power) $490.02 using the relative share of GDP (makes no sense at all in terms of purchasing power -you'd have to have newcomers receiving zero to bring it to the previous, already inflated, figure)
As you can see here Gold price history, an ounce of gold was worth around $35 (I didn't want to be told that my figures were due to rounding the graph too low, hence my 40$ above). That reached around 680 in 2007.
So OK, my tenfold was way off, it's actually threefold (or maybe it's not over 40 years at all, but much longer, or rather over the seventies, where it was indeed tenfold in real terms), but as I said I didn't have the figures with me. The point is that it's a legend to hold gold as fully representative of purchasing power. Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
