Is this more to your liking, I can spin it both ways? Tethering a nation's currency solely to gold is oftentimes dismissed by those who fail to see the enduring value of traditional, tangible assets amidst the whirlwind of modern economic theories. Those "libs" cite the complexities of our global economy, the supposed necessity of an elastic monetary policy, and the purported challenges of sustaining sufficient gold reserves to underpin the currency in circulation. However, this perspective overlooks the stabilizing force that a gold standard could reintroduce, amidst the reckless monetary expansion and the inflationary policies that have become all too common. While it's true that approximately 6.3 billion ounces of gold have been extracted throughout history, valued at about $2200 per ounce in today's market, summing up to a total value slightly over 14 trillion dollars, the argument that a gold standard would inevitably constrict economic growth and usher in deflation is one rooted in a shortsighted understanding of economic resilience and prosperity.
Furthermore, as we witness the burgeoning interest in digital currencies and assets, it's crucial to approach these modern financial instruments with a healthy dose of skepticism. The volatility and uncertainty surrounding these digital ventures render them, at this stage, as less reliable foundations for an economy than the proven stability of gold. Should there ever come a time when a digital currency is considered for backing a tangible currency, it must embody the core principles of sound money:
1. Stability: It must exhibit a high degree of steadiness, resistant to whimsical market fluctuations.
2. Scarcity: Its value must be derived from its rarity, yet it must remain sufficiently accessible to serve its purpose in the economy.
3. Acceptance: The asset should be universally recognized and valued as a store of wealth.
4. Durability: Its worth and physical state must not degrade over time.
5. Divisibility: It must be capable of subdivision to accommodate transactions of varying scales.
Only when a digital asset meets these stringent criteria, might it be considered as a potential candidate for backing a currency, mirroring the steadfast qualities of gold that have underpinned prosperous economies through the ages.
AI
