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TranscendentalEmpire@lemmy.today 3 days agoSorry, you’re flat out wrong here. While the value of gold is heavily inflated due to its association with currency, it absolutely does hold inherent value, particularly in electronics
Okay, so it should have an inherent value somewhere between copper and aluminum. That does not help your argument, why not just hoard aluminum, it’s lighter anyways.
Nope, they’re not. A central bank can make more fiat currency to make up for the reduction in liquidity. You can’t make more gold. Once you’ve spent it all it, its gone.
The value of gold is able to be regulated…which is what we did in the past. I’ve already explained this.
Yes, but only gold has inherent value. Yes, inflated, but it still has worth beyond its use as currency. That’s the point that you’re missing.
It’s inherent value is not any more meaningful than any other conductive metal. Meaning that your claim is that we should use any material to back a currency. It also means that your argument doesn’t apply to the vast majority of time we backed currency with gold before the advent of complicated electronics.
As someone who lived through it, no, that’s not what happened, although it was a result.
What are you talking about? You specified the crisis that happened during the Carter administration, so that would be the 1979 oil crisis. That was the result of the Iranian revolution that started in 78, which makes it impossible to be the result of the 79 crisis.
OPEC saw a weakness in the dollar as a result of the decoupling from gold, and used the embargo to artificially drive up the price of oil to where it became a commodity with the strength of gold
Okay, so you are talking about the oil crisis in 73…6 years before Carter was in office.
Again… The reason we decoupled from gold was because it was a shitty way to back a currency.
“Under the Tehran Price Agreement of 1971, signed on 14 February, the posted price of oil was increased and, due to a decline in the value of the US dollar relative to gold, certain anti-inflationary measures were enacted. A severe drain on US gold reserves lead to higher inflation and lack of confidence in the strength of the dollar, President Nixon issued Executive Order 11615 on August 15, 1971, which closed the gold window. This action made the dollar inconvertible to gold directly, except on the open market, and was soon dubbed the Nixon Shock, leading eventually to the collapse of the Bretton Woods system in 1976”
There are 48 official recessions in the US, and if you look though the statistics on the link above
Did the United States Confederate in 1854…? The reasons I did not date before then is because the “NBER does not date recessions before 1857, economists customarily extrapolate dates of U.S. recessions back to 1790 from business annals”
if you look though the statistics on the link above, the recessions after 1971 occur more frequently, last for longer, and have higher unemployment rates when you compare to the 50 years previous with the exception being the Great Depression
Lol, that’s quite the window youve carved out…
Okay so we’re looking at 1921-1971, I’ll play ball.
So we are starting in the depression of 1920-1921(-33%), which started just 10 months after the post war depression(-14%), but we won’t count that one.
1923-1924 (-23%) recession 1926–1927 recession (-12%) 1929-1933 the great depression (-27%) 1937–1938 recession (-19%) 1945 recession (-13%) 1949 recession -(8%) 1953 recession (-6%) 1958 recession (-8%) 1960–1961 Recession (-7%) 1969–1970 Recession (-6%)
Now we have 1971-2021
1973–1975 recession (-9%) 1980 recession (-8%) 1981–1982 recession (-10%) 1990 recession (-8%) 2000 recession (-6%) 2008-2009 recession (-10%) 2020 recession (-14%)
So yeah, no they were notore frequent, worse for the economy, or lasted longer. The longest after 71 was for 2 years, and the worse only lasted 2 months…
The link that you utilized did not mention employment statistics for each recession, but I’d like to know how you dreamed that up. I guess you could be using a total instead of per capita, like yeah… There are more people with jobs now compared to the 30s…
Until the de facto currency represents true value capitalism will continue to grow like a cancer.
There is no such thing as true value… That’s the whole point of capitalism. The market determines value.
This is why I say money is imaginary - we believe it holds true value, when in fact the only value it holds is what we give it.
How is that different from the value of gold? According to you it’s true value is just as a conductor, so gold should be priced slightly by its conductivity relative to aluminum? What are you talking about?
arotrios@lemmy.world 3 days ago
You’re missing the point, and the unemployment stats are in the table at the end of the text from the link here . Gold isn’t an ideal currency, I agree, but it’s better than a fiat currency tied to an arbitrary value.
As to the chronology it goes like this:
1971 - Gold standard abandoned - Nixon/Ford
1973 - 1975 OPEC oil embargo in push to jack price against the dollar, which has lost its connection to real wealth (gold) - Carter
1979 - Iranian revolution (in direct relation to the Shah’s use of the suddenly exploding oil wealth) - Reagan uses this in hostage crisis against Carter in the 1980 election and wins
1980 - 1982 recession - Reagan. Massive erosion of worker rights during this period (Air Traffic controllers strike, etc).
1991 recession - Bush - war in Iraq to maintain Kuwaiti oil supply and thus keep Iraq from being able to devalue the dollar (which at this point is tied more to oil than to gold)
1992 - 1999 - Clinton - best economic years in American history, but at the same time, significant erosion of labor capital with NAFTA and various neo-lib policies. Union membership drops further. Manufacturing begins to leave the US, further eroding the labor market.
2000 - Dotcom crash, preceded by the Asian market crash (I was actually working in the market around this time. It was not fun). Bush, 2nd Iraq war and Afghanistan, all ostensibly about oil, and propping up the dollar. Manufacturing accelerates its movement out of the US.
2008 - 2009 the degradation of labor capital comes full circle with the Great Recession, permanently displacing a significant portion of the middle class and beginning a homelessness crisis we’ve yet to resolve. You can see this in frozen minimum wage, the inflation we now grapple with, and the current collapse of the economy.
Right now, the dollar is holds its value based on faith in the American empire. When that faith in America is too tarnished to hold a shine, the dollar will fully collapse, and with it, the empire.
Gold won’t. It will always be used as a measure of wealth, regardless of a particular currency’s collapse. This is why Trump wants to “take a look” at Fort Knox. Even if he earns billions, a dollar collapse would wipe out his empire, but if he has a huge pile of gold, well…
TranscendentalEmpire@lemmy.today 3 days ago
Ahh I found the peak unemployment column, but they do not support your argument. Both the great depression and the recession in 37 are well above COVID. Plus we started recovering from COVID in like 2 months
First, the value of currency is largely set on people trusting the American government to pay their bills via Treasury bonds.
Secondly, gold itself is more arbitrarily valued than the dollar and is much more subject to inflation. Just look at the volatility in the gold market.
And what was the reason we abandoned the gold standard…
Gold can and will eventually become devalued if it ever becomes the standard once again. There has only been little over 200k tons in circulation throughout history. There is about half that of proven and currently economically minable gold known right now, there’s about an additional 100k tons of unknown or currently uneconomically recoverable gold in the earths crust. There’s also millions of tons suspended in the ocean, more than that in the core, and lords knows how much in space.
If gold becomes the end all be all standard of value then someone will find a way to increase supply. Money has always been about trust, value is completely subjective.
arotrios@lemmy.world 3 days ago
And thus effectively imaginary, proving the point in my original post. And like all imaginary things, it only holds power over us if we believe in it.
As to gold vs. fiat, if I offer you a currency backed by gold or the same amount in a fiat currency back by the faith in a nation-state, which would you choose, all other things being equal? Which is the more stable investment? Which will hold value after the nation-state collapses?
Hint: it’s not fiat.
TranscendentalEmpire@lemmy.today 3 days ago
Yes, but you went on to make claims that gold is somehow inherently different. Which it is not. Gold is only valuable valuable because you believe it is as well.
Fiat… The nation is less likely to have a massive depression and more able to recover from one of it does happen. I don’t think you understand that it doesn’t matter if a currency is backed by gold or not. You are still trusting the country to pay you that gold, or to release the gold at the price you originally bargained for… That doesn’t happen in a recession.
Why do you think the US made people turn in their gold during the depression and then cease all redemptions?
Stable… Again, fiat currency. Value after the collapse of a nation state? Who the hell knows? At this point if we experienced a complete collapse I would probably rather have the value in guns and ammo. However, i’m not betting on the world to end any time soon.