Quote:
Originally Posted by GGG
What’s interesting is that if Gold is actually a store of value then we still operate on the gold standard over long periods of time and the existence of Bitcoin doesn’t change this. As money is printed the value of gold in terms of those dollars rise.
Ergo we aren’t constrained on a day to day basis but the gold standard but the fundamentals of inflation relative to a store of value don’t change. Or Gold isn’t a real store of value given the current levels of asset inflation occurring.
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You understand what the Gold standard was though I assume, it is not that Gold was/is a store of value, the Gold Standard required countries to have Gold to back their currency, the British Pound was called a pound because you could walk down to the Bank of England and demand your pound of Gold for the pound note the bank issued, it was always more theoretical than actual but the requirement of reserves meant countries couldn't print their way out of a crisis, there is a whole class of raving loons that think countries should go back to the Gold Standard, to a large degree bitcoin proponents remind me of them, all of them seem to forget though that when you severly limit liquidity it causes incredible constraints on all areas of the economy, ordinary people lose access to any kind of credit, prior to the second world war people bought houses buy paying cash, there were no mortgages for the likes of us, that was solely for the filthy rich, that was because there was no liquidity in the system at all