hmm okay so i've been doing some reading today.
first of all some things i didn't know - gold has been issued by bullion banks at a rate of 45x the actual amount of gold they own. in theory with a market trading in gold certificates this has no real problem, only if the owners of the certificates on mass request the physical bullions that they are entitled to. this number is unprecedented, and over the last 3 years, there has been a slow increase in the rate of gold being requested through certificates, a thing to keep an eye on.
the roman empire was originally completely backed by precious metals, their coins made from silver and gold. eventually due to the rapid expansion of the empire, they printed money, also essentially converting to FIAT (partly) (back then they clipped coins, remelted them, mixed them with copper) hence reducing the 'value' of each coin. in 301 ad because of inflation the edict of prices was introduced which prohibited any shopkeeper selling goods above government mandated prices at penalty of death and also froze all wages. but as they produced more coins, merchants still rose prices (some were killed) and many closed business. in the end 20% of its citizens were living of todays version of food stamps (wheat hand outs). eventually rome adopted a massive military recruitment and public infrastructure spending (US gov/agency related spending accounts for 50% of their GDP) eventually led to the first ever case of hyperinflation.
today in the US 1 in 4 children is fed by gov. subsidized food stamps.
as of dec '10 it is 43million
an interesting corellation, i thought.
Berlin WWII, exact same thing. massive military spending, fiat currency not linked to gold. i think it was something like 8 bullions of gold in 1945 could have bought you an entire block of units/houses in central berlin. a single egg went from 8c to 80billion marks. complete collapse of the economy.
this is literally kids playing with millions of marks. worthless, however.
ugh i learnt a lot today. so much i want to discuss/argue about.
still am skeptical about the idea of gold, yes it clearly has historical precedent, just from a logical point of view to have it as a substitute/hold of wealth in a collapsed economy is nonsensical to a degree.
