gaelic cowboy 17:46 11-15-2012
Originally Posted by rvg:
You don't. You set the values of OTHER things in Joules.
but your merely moving the goalpost here trying to tie things down in values of x = y amount of money.
You still dont explain why fixing money to anything helps it's value, plus if for any reason we increased energy production we would increase the available joules changing the potential price of an object in joules.
itt communist economic education
Originally Posted by gaelic cowboy:
but your merely moving the goalpost here trying to tie things down in values of x = y amount of money.
You still dont explain why fixing money to anything helps it's value, plus if for any reason we increased energy production we would increase the available joules changing the potential price of an object in joules.
To me it's self-evident. You need one point of reference against which everything is measured. As for why energy, it's because the demand for energy is universal and will always be that way.
Sir Moody 18:16 11-15-2012
Originally Posted by rvg:
To me it's self-evident. You need one point of reference against which everything is measured. As for why energy, it's because the demand for energy is universal and will always be that way.
Demand is universal yes but the cost of production is not
1 Joule produced from a Coal powered power plant will cost X while 1 Joule produced from a Gas Y and so on - how do you fix a value on something which is inherently linked to the form (more specifically the fuel) of its production?
This is why some think a "Gold" standard would work - because Gold is gold and the more you have the more valuable it is...
The problem with the Gold standard however is the fact the value of your money is inherently linked to the amount of Gold you have independent of how well the actual economy is performing - if you have little gold you have to raise interest rates regardless of how well the Economy is actually performing
Originally Posted by Sir Moody:
1 Joule produced from a Coal powered power plant will cost X while 1 Joule produced from a Gas Y and so on - how do you fix a value on something which is inherently linked to the form (more specifically the fuel) of its production?
Same can be said about gold. Gold doesn't come from mommy and daddy gold, it needs to be mined. Mining gold is an expensive and difficult process, but it varies alot. Yet the value of gold is the same, regardless of how it was obtained.
Sir Moody 18:27 11-15-2012
Originally Posted by rvg:
Same can be said about gold. Gold doesn't come from mommy and daddy gold, it needs to be mined. Mining gold is an expensive and difficult process, but it varies alot. Yet the value of gold is the same, regardless of how it was obtained.
actually it isn't - another reason the Gold standard fails - it is far too simplisitc
Originally Posted by Sir Moody:
actually it isn't...
And the reason for that is?
gaelic cowboy 19:09 11-15-2012
Originally Posted by rvg:
Same can be said about gold. Gold doesn't come from mommy and daddy gold, it needs to be mined. Mining gold is an expensive and difficult process, but it varies alot. Yet the value of gold is the same, regardless of how it was obtained.
This value your talking about is not fixed though it's merely an agreement between two parties.
Originally Posted by rvg:
And the reason for that is?
Any increase or decrease in the amounts of gold changes the variables of the two parties and so changes the price of gold.
Changes in the price of gold would severely hurt an economy no matter how robust or diversified it's industrial base.
Originally Posted by gaelic cowboy:
This value your talking about is not fixed though it's merely an agreement between two parties.
So what? Every commodity is worth whatever it can be sold for.
Originally Posted by :
Any increase or decrease in the amounts of gold changes the variables of the two parties and so changes the price of gold.
As it should be.
Originally Posted by :
Changes in the price of gold would severely hurt an economy no matter how robust or diversified it's industrial base.
That has yet to happen...
HoreTore 19:22 11-15-2012
Originally Posted by rvg:
That has yet to happen...
lol, what?
The price of grain is more stable than the price of gold.
gaelic cowboy 19:30 11-15-2012
Originally Posted by rvg:
So what? Every commodity is worth whatever it can be sold for.
But your not trying to allow it to float so it can be sold RVG you saying you want to fix a value to a currency. Therefore increase/decrease of the denominated notional commodity be it energy, gold or oil will change value of your currency.
Originally Posted by :
That has yet to happen...
Well that's cos no one has been daft enough to fix there currency to gold since the disaster we had the last time it was done.
However if you want to see what a gold standard style recession looks like then check out the euro crisis, once you tip into recession you cant print money leaving only deflation of the economy.
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