'@rphb' 2) "By making all that illegal, and replacing it with a 100% backed gold standard, and a switch to full reserve banking, we won’t see inflation and we also won’t see any finanzialisation."
Ok. MV=PQ. When you switch to gold standard you lose control over emission - it is now depends on scale and efficiency of mining. Since you've switched to full reserve banking, you either abolished lending completely or forced use of some other option which is not likely to be easily controlled. So, you've lost a good chunk of control over V.
a) what are you going to do when you're faced with deflation?
b) imagine that some firm captured and successfully mined asteroid that contains large amounts of precious metals. Over the course of one year, amount of available gold increased by 20%. How are you going to avoid inflation?
3) "Gold have intrinsic value, all stuff (real economic goods) have intrinsic value, their value is internal to the thing itself."
Ok. You are in the middle of the desert, with no hope of rescue and at least fifteen days walk to the edge. You have one container full of gold, another - full of water. You can carry only one. Which are you going to carry?
You are in the middle of the forest, right next to river. No hope of rescue, fifteen days walk, same containers and same limit. Which are you going to choose?
"What we really need to look out for is things that have neither intrinsic nor extrinsic value, such as bitcoin. That is a mayor red flag.
We cannot use it to anything on its own. If nobody else wanted it, it would be Absolutely worthless, and it doesn’t come with a guarantee from anybody. It is simply a floating bunch of numbers worth only what somebody else is willing to pay."
Wrong. Bitcoin has scarcity, it's emission is known, expected and is difficult to change, there is no risk of forgery so far and transactions do not require any intermediaries or institutions. Transaction cost is high at the moment, but if it's fixed then it can be much cheaper than wire transfer.
"Extrensic goods like stocks and bonds are used to park wealth, as a form of delayed gratification and functions as an alternative to cash."
They also serve to provide a source of funding to businesses which otherwise will either have to develop over decades instead of years, or never exist in the first place.
4) " When it imports more then it exports it overconsumes. That is only possible though finansialisation, the unbacked USD."
And investment.
"As long as the world was on a gold standard nature would force such overconsumption to stop, as America would have simply run out of gold."
No, not really. US could still accumulate 14 trillion dollars in public debt alone. By some estimated US can actually afford to reach 19 trillion without obvious negative consequences.
Society as a whole cannot consume more than it produces. If US consumes more, then China consumes less. Availability of credit can shift it from one part to another, nothing more.
"The problem with kick-the-can-down-the-road is that every time the can is kicked it gets a little bigger and the road is always uphill. Eventually it is going to crush us."
It may lead to US defaulting on it's debt at some point in future, it's going to look... interesting.
So far consumption will grow simply because production grows every day and some country will be able capture more of that growth anyway, producing what you see as decadence.
5) "but finanzialisation twist everything and prevents the normal price discovery mechanism"
Availability of credit actually facilitates that. If you see an undervalued lot of goods or stocks, you can buy it out with borrowed money, therefore raising the price of remaining volume to an appropriate level. Without credit your local knowledge will be utilized only to an extent that is afforded by your personal wealth. That, by the way, tips the scale in favor of holders of established wealth.
"With floating exchange rates and sinking currency value countries like China can get a permanent comparative and Absolute advantage that is only accelerated as they get more industrialized while deindustrialized nations like America races towards irrelevance and third world status."
That's not a problem of monetary policy, but of fiscal, labor and environmental one. Gold standard or full reserve banking changes nothing with regard to difference in corporate tax rate, different treatment of trade unions and with climate alarmism on one side while another doesn't care much about quality of water and air. Ricardian comparative advantage is the reason why China has managed to capture so much of investment in industry.
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'@rphb' 2) "By making all that illegal, and replacing it with a 100% backed gold standard, and a switch to full reserve banking, we won’t see inflation and we also won’t see any finanzialisation."
Ok. MV=PQ. When you switch to gold standard you lose control over emission - it is now depends on scale and efficiency of mining. Since you've switched to full reserve banking, you either abolished lending completely or forced use of some other option which is not likely to be easily controlled. So, you've lost a good chunk of control over V.
a) what are you going to do when you're faced with deflation?
b) imagine that some firm captured and successfully mined asteroid that contains large amounts of precious metals. Over the course of one year, amount of available gold increased by 20%. How are you going to avoid inflation?
3) "Gold have intrinsic value, all stuff (real economic goods) have intrinsic value, their value is internal to the thing itself."
Ok. You are in the middle of the desert, with no hope of rescue and at least fifteen days walk to the edge. You have one container full of gold, another - full of water. You can carry only one. Which are you going to carry?
You are in the middle of the forest, right next to river. No hope of rescue, fifteen days walk, same containers and same limit. Which are you going to choose?
"What we really need to look out for is things that have neither intrinsic nor extrinsic value, such as bitcoin. That is a mayor red flag.
We cannot use it to anything on its own. If nobody else wanted it, it would be Absolutely worthless, and it doesn’t come with a guarantee from anybody. It is simply a floating bunch of numbers worth only what somebody else is willing to pay."
Wrong. Bitcoin has scarcity, it's emission is known, expected and is difficult to change, there is no risk of forgery so far and transactions do not require any intermediaries or institutions. Transaction cost is high at the moment, but if it's fixed then it can be much cheaper than wire transfer.
"Extrensic goods like stocks and bonds are used to park wealth, as a form of delayed gratification and functions as an alternative to cash."
They also serve to provide a source of funding to businesses which otherwise will either have to develop over decades instead of years, or never exist in the first place.
4) " When it imports more then it exports it overconsumes. That is only possible though finansialisation, the unbacked USD."
And investment.
"As long as the world was on a gold standard nature would force such overconsumption to stop, as America would have simply run out of gold."
No, not really. US could still accumulate 14 trillion dollars in public debt alone. By some estimated US can actually afford to reach 19 trillion without obvious negative consequences.
Society as a whole cannot consume more than it produces. If US consumes more, then China consumes less. Availability of credit can shift it from one part to another, nothing more.
"The problem with kick-the-can-down-the-road is that every time the can is kicked it gets a little bigger and the road is always uphill. Eventually it is going to crush us."
It may lead to US defaulting on it's debt at some point in future, it's going to look... interesting.
So far consumption will grow simply because production grows every day and some country will be able capture more of that growth anyway, producing what you see as decadence.
5) "but finanzialisation twist everything and prevents the normal price discovery mechanism"
Availability of credit actually facilitates that. If you see an undervalued lot of goods or stocks, you can buy it out with borrowed money, therefore raising the price of remaining volume to an appropriate level. Without credit your local knowledge will be utilized only to an extent that is afforded by your personal wealth. That, by the way, tips the scale in favor of holders of established wealth.
"With floating exchange rates and sinking currency value countries like China can get a permanent comparative and Absolute advantage that is only accelerated as they get more industrialized while deindustrialized nations like America races towards irrelevance and third world status."
That's not a problem of monetary policy, but of fiscal, labor and environmental one. Gold standard or full reserve banking changes nothing with regard to difference in corporate tax rate, different treatment of trade unions and with climate alarmism on one side while another doesn't care much about quality of water and air. Ricardian comparative advantage is the reason why China has managed to capture so much of investment in industry.