jamest wrote:THWOTH wrote:You're not paying attention. In the event of this predicted fiscal collapse how is your possession of gold or bitcoin going to allow you to acquire chinos and advocaat, or toilet paper, or energy? Do you believe that commodities like gold &/or bitcoin have some kind of inherent value that insulates them from wider social-economic factors? If so, where is that value located?
A means of global trade is an absolute necessity, which is to say that a trusted global currency is an absolute necessity. Gold has fulfilled that role many times for thousands of years. It has worked, at least temporarily, to facilitate economic order across the globe. Its value and capacity to do that was derived mainly from its scarcity, which is why bitcoin could also fulfil the role. The point is that when the fiat system collapses
there will be no other choice than to adopt such a commodity to re-establish economic order and stability.
In the event of the collapse of the fiat system there will be a brief period of panic and carnage in which your fiat currencies will be deemed next to worthless such that you'll probably need a wheelbarrow to carry enough funds to buy a loaf of bread. I expect though that governments already have an emergency plan for such a situation: revaluing their currency against a new world reserve currency. That will probably be gold initially, as the US has a lot of it and the price of gold will skyrocket. In this scenario a gold-backed $ might still act as the world's reserve currency but by this juncture I suspect that many nations will have had their fill of the USA and $, especially the BRICS nations. Also, the memory of 1971 still lingers. In any case, gold could still be used to stabilise the situation even temporarily.
All you're saying is that, in the event of a massive fiscal collapse, gold will back whatever reserve currency replaces the US dollar. That's not addressing the issues or solving the problems you have with fiat money - that's just maintaining and moving the concept around a bit. You've just reinvented fiat money to replace fiat money.
The gold standard was abandoned because there wasn't enough gold in the world to represent the amount of value created by the system. Economists call denying this The Goldfinger Hypothesis - the assumption that the value money represents is inextricably tied to material, either the amount of coins and notes in the world, or the amount of gold or bitcoins etc. In order to progress your argument you need to think about value: what it actually is and where it actually comes from: what makes money, gold or bitcoin worth something.
Think of it this way. The predicted fiscal collapse is upon us. Under the previous system you were lucky (wealthy) enough to acquire 10 kilos of gold. Whatever that gold cost you under the previous system it's value has now obviously changed. Now, is it more or less valuable than it was before - how do you calculate the value 10 kilos of gold now represents?
Because the old money system has collapsed, has your 10 kilos become both a token of value and a token of exchange? In other words, how do you actually spend it? How many pairs of chinos or bottles of advocaat can you buy with it, how long will 10 kilos last and how do you acquire more gold to replace what you spend? On balance, is your pile of gold going to get larger or smaller? On balance, is the value of the gold you hold going to go up or down, or remain constant? These are important, practical questions.
Let's assume that in order to survive you are going to have to transfer whatever value 10 kilos of gold has in this new world to others. However, a lot of people don't value gold as a token of exchange because it has no practical, functional use for them - they can't eat it or wipe their bums with it. These people place greater value on your labour than on that dull, yellow heavy metal, and so only by donating your labour can you secure the essentials you need to keep you and your loved ones afloat. You agree between you that in return for a day's labour you'll receive a certain weight in potatoes. Your body and it's capacity for work has now become the token of value and exchange on one side of an economic agreement, and potatoes have become the token of value and exchange on the other. Perhaps you are too old and broken to labour for a day, but somebody else in the community does value gold enough that you can pay them in it to perform a day's labour on your behalf, such that you get some spuds and they get some gold. How do you work out a fair equivalence in value there, let alone go about quantifying the amount of value in this system or determining what the 10 kilos of gold under your floorboards is actually worth?
If scarcity determines value then the gold under the floorboards is going to become increasingly more precious and valuable to you as the pile goes down, because it represents the only way you can secure the things you need to live. But at the same time the shrinking pile is going to become increasingly less value to others because you have less and less to offer them. Towards the end you'll have to offer greater amounts than you did to begin with as your hunger and thirst become more acute. Ultimately, your understanding of economics as a form of barter mitigated only by tokens of exchange (money, gold, bitcoin) leads to your dessicated remains becoming the subject of study by future archaeologists.
As I keep suggesting, you have to account for what value is and where it comes from before you start thinking about how it is generated, distributed, and represented socially - either through gold, coins and notes, or a string of digits on your banking app. I asked the earlier question--
"Do you believe that commodities like gold &/or bitcoin have some kind of inherent value that insulates them from wider social-economic factors? If so, where is that value located?"--in order to strike at this fundamental question about value. You didn't answer it, but simply repeated your misapprehensions about money as-if things like gold or bitcoin do have some inherent value which automatically insulates them from wider social-economic factors. Such assumptions are misplaced.
The time for you to exercise your legendary philosophical skill on the question of value is well overdue my friend. I suggest starting small, and working up.
Question 1: What is value?
by 
). This might remain hidden until you, for example, asked me to pay for the petrol to deliver the apples which you still give me for free. At that point, the disparity in the cost to me comparative to my lack of desire for the apples might induce me to tell you to stuff 'em where the sun don't shine. 
