What is money?

[Kshartle]

Yes, but what happens once the lender has all the gold? That will necessarily happen eventually if their interest income in excess of their spending, in gold ounces, is more than the amount of newly mined gold, as they will be consistently reducing the amount of gold in the rest of the system.

Again, I don't know of any case in history where this has been a real problem, and I'm willing to take the chance that it will be a problem, given the real and horrible consequences of paper money. But it doesn't help our position to deny mathematical reality.

No need to worry. The lender will want to buy stuff. He/she will trade gold for stuff.

Money..REAL money makes the world go 'round!

No problems with gold as money. Works just fine.

Yes, in practice that is probably true, but we should acknowledge the potential for this problem to occur. Otherwise we weaken our positions vis-a-vis those who deny the real, terrible problems of paper money.

Probably true?

If people believe it's possible for one entity to get all the gold and refuse to trade it for stuff. Well.......I would not take an opposite position with them.

It's immoral to get into a battle of wits with an unarmed man. It's also poor sport.

[Kshartle]

Yes, but what happens once the lender has all the gold? That will necessarily happen eventually if their interest income in excess of their spending, in gold ounces, is more than the amount of newly mined gold, as they will be consistently reducing the amount of gold in the rest of the system.

Again, I don't know of any case in history where this has been a real problem, and I'm willing to take the chance that it will be a problem, given the real and horrible consequences of paper money. But it doesn't help our position to deny mathematical reality.

No need to worry. The lender will want to buy stuff. He/she will trade gold for stuff.

Money..REAL money makes the world go 'round!

No problems with gold as money. Works just fine.

Seems weird that it all works fine and dandy with gold, but not with credit. In a credit-based society, the lenders aren't constantly spending base/real money into the economy. So, credit just gets ratcheted up...

[align=center][/align]

So, tech was correct. If the lenders don't spend people need to borrow more on a Macro level to pay the interest — and that seems to happen with credit-money in our reality (as private credit keeps expanding and expanding and expanding...).

Please adresses either my logic or PS' if you dissagree. I welcome being proven incorrect. Then I will actually learn something.

[doodle]

Otherwise we weaken our positions vis-a-vis those who deny the real, terrible problems of paper money.

What are these horrible consequences of "fiat money"?

Since we went off the gold standard in 1971, Americans living standards have increased enormously and our economy has been extremely innovative. I don't see empirical evidence in the real world that would make me think fiat money is terrible for producing real wealth.

Every fiat currency has failed in history - True.....but so has every attempt to maintain a gold standard. There are probably certain advantages and disadvantages to both.

For example, after World War 1 Germany was devasted and broke. They had no gold yet by creating a fiat currency they were able to create a vibrant and thriving economy within about a decade. Now, that effort later became misguided and turned to destructive purposes, but if they had decided to constrain themselves to a gold standard they never would have been able to initiate such a surge in productivity. 

[Libertarian666]

Otherwise we weaken our positions vis-a-vis those who deny the real, terrible problems of paper money.

What are these horrible consequences of "fiat money"?

Since we went off the gold standard in 1971, Americans living standards have increased enormously and our economy has been extremely innovative. I don't see empirical evidence in the real world that would make me think fiat money is terrible for producing real wealth.

Every fiat currency has failed in history - True.....but so has every attempt to maintain a gold standard. There are probably certain advantages and disadvantages to both.

For example, after World War 1 Germany was devasted and broke. They had no gold yet by creating a fiat currency they were able to create a vibrant and thriving economy within about a decade. Now, that effort later became misguided and turned to destructive purposes, but if they had decided to constrain themselves to a gold standard they never would have been able to initiate such a surge in productivity.

Ok, then to prove your point, all you have to do is to show us exactly what the world would have looked like if we had used the classical gold coin standard since 1913. Then we will compare the two situations and see which is better.

Problem solved!

[Gumby]

I don't know of any case in history where this has been a real problem

BTW.......if one person got all the gold.....and refused to volutarily trade it......gold would be exposed as not a very good form of money.

Are you guys familiar with the Free Silver movement? It's believed that L. Frank Baum's The Wonderful Wizard of Oz was an allegory for that movement.

Anthropologists have been complaining about the Myth of Barter for almost a century. Occasionally, economists point out with slight ex­ asperation that there's a fairly simple reason why they're still telling the same story despite all the evidence against it: anthropologists have never come up with a better one. This is an understandable objection, but there's a simple answer to it. The reasons why anthropologists haven't been able to come up with a simple, compelling story for the origins of money is because there's no reason to believe there could be one. Money was no more ever "invented" than music or mathematics or jewelry. What we call "money" isn't a "thing" at all, it's a way of comparing things mathematically, as proportions: of saying one of X is equivalent to six of Y. As such it is probably as old as human thought. The moment we try to get any more specific, we discover that there are any number of different habits and practices that have converged in the stuff we now call "money," and this is precisely the reason why economists, historians, and the rest have found it so difficult to come up with a single definition.

Credit Theorists have long been hobbled by the lack of an equally compelling narrative. This is not to say that all sides in the currency debates that ranged between 1850 and 1950 were not in the habit of deploying mythological weaponry. This was true particularly, perhaps, in the United States. In 1894, the Greenbackers, who pushed for de­taching the dollar from gold entirely to allow the government to spend freely on job-creation campaigns, invented the idea of the March on Washington — an idea that was to have endless resonance in U.S. his­tory. L. Frank Baum's book The Wonderful Wizard of Oz, which ap­ppeared in 1900, is widely recognized to be a parable for the Populist campaign of William Jennings Bryan, who twice ran for president on the Free Silver platform — vowing to replace the gold standard with a bimetallic system that would allow the free creation of silver money alongside gold. As with the Greenbackers, one of the main constitu­encies for the movement was debtors: particularly, Midwestern farm families such as Dorothy's, who had been facing a massive wave of foreclosures during the severe recession of the 1890s. According to the Populist reading, the Wicked Witches of the East and West represent the East and West Coast bankers (promoters of and benefactors from the tight money supply), the Scarecrow represented the farmers (who didn't have the brains to avoid the debt trap), the Tin Woodsman was the industrial proletariat (who didn't have the heart to act in solidarity with the farmers), the Cowardly Lion represented the political class (who didn't have the courage to intervene). The yellow brick road, silver slippers, emerald city, and hapless Wizard presumably speak for themselves. "Oz" is of course the standard abbreviation for "ounce."

Source: http://www.indybay.org/uploads/2012/08/ ... _years.pdf

So, for instance, J.P. Morgan (the banker who believed that only "gold" was money) was considered by the Populists to be one of the Wicked Witches. Liquidity (water) would extinguish his power and liquidity was needed (as oil for the tin man) to un-rust midwest industry.

The point being is that if you went back 130 years ago, you would have found a lot of midwesterners who were complaining about their not being enough gold in their ecosystem to pay back their debts to big city bankers. They said that these bankers had the ability to tighten up the gold money supply in the midwest (by not spending enough there), drive down prices, then the bankers would buy up property, force the farmers to go into debt if they wanted anything, and force them into a debt trap.

So, the Populists wanted a free silver movement. The ruby slippers were originally silver in the book (they changed them to ruby for the "technicolor" movie).

I'm not trying to start an argument for the free silver movement. All I'm saying is that 120-140 years ago, there were a lot of midwesterners who were very much against gold and the "tight money" supply that bankers forced on them. They were literally squeezed into a debt trap.

[Gumby]

Please adresses either my logic or PS' if you dissagree. I welcome being proven incorrect. Then I will actually learn something.

I'll try to prove your point. Here is how I can repay 110 credits when only 100 credits exist (and you start out holding all of them), without anyone else or any other money supply being involved:

Step 1: You lend me 100 credits (now I have 100 credits, you have 0 credits, and with interest I owe 110 credits)
Step 2: I buy some widgets from you for 45 credits (now I have 55 credits, you have 45 credits, and I owe 110 credits)
Step 3: I repay 55 credits of my debt to you (now I have 0 credits, you have 100 credits, and I owe 55 credits)
Step 4: I use the widgets to make some gizmos
Step 5: I sell the gizmos to you for 55 credits (now I have 55 credit, you have 45 credits, and I owe 55 credits)
Step 6: I repay the remaining 55 credits (now I have 0 credits, you have 100 credits, and I owe nothing)

Tada!!

But, that's a very simple micro example. And it only works if the economy remains healthy and the creditors are willing to spend money before all loans are due (as I did in the example above). If you don't like the word "credits" you can use "gold" just as well.

[doodle]

Gumby, That quote is from Graeber whose book I recommended above as a potential interesting read....have you read it yet?

[Libertarian666]

I don't know of any case in history where this has been a real problem

BTW.......if one person got all the gold.....and refused to volutarily trade it......gold would be exposed as not a very good form of money.

Are you guys familiar with the Free Silver movement? It's believed that L. Frank Baum's The Wonderful Wizard of Oz was an allegory for that movement.

Anthropologists have been complaining about the Myth of Barter for almost a century. Occasionally, economists point out with slight ex­ asperation that there's a fairly simple reason why they're still telling the same story despite all the evidence against it: anthropologists have never come up with a better one. This is an understandable objection, but there's a simple answer to it. The reasons why anthropologists haven't been able to come up with a simple, compelling story for the origins of money is because there's no reason to believe there could be one. Money was no more ever "invented" than music or mathematics or jewelry. What we call "money" isn't a "thing" at all, it's a way of comparing things mathematically, as proportions: of saying one of X is equivalent to six of Y. As such it is probably as old as human thought. The moment we try to get any more specific, we discover that there are any number of different habits and practices that have converged in the stuff we now call "money," and this is precisely the reason why economists, historians, and the rest have found it so difficult to come up with a single definition.

Credit Theorists have long been hobbled by the lack of an equally compelling narrative. This is not to say that all sides in the currency debates that ranged between 1850 and 1950 were not in the habit of deploying mythological weaponry. This was true particularly, perhaps, in the United States. In 1894, the Greenbackers, who pushed for de­taching the dollar from gold entirely to allow the government to spend freely on job-creation campaigns, invented the idea of the March on Washington — an idea that was to have endless resonance in U.S. his­tory. L. Frank Baum's book The Wonderful Wizard of Oz, which ap­ppeared in 1900, is widely recognized to be a parable for the Populist campaign of William Jennings Bryan, who twice ran for president on the Free Silver platform — vowing to replace the gold standard with a bimetallic system that would allow the free creation of silver money alongside gold. As with the Greenbackers, one of the main constitu­encies for the movement was debtors: particularly, Midwestern farm families such as Dorothy's, who had been facing a massive wave of foreclosures during the severe recession of the 1890s. According to the Populist reading, the Wicked Witches of the East and West represent the East and West Coast bankers (promoters of and benefactors from the tight money supply), the Scarecrow represented the farmers (who didn't have the brains to avoid the debt trap), the Tin Woodsman was the industrial proletariat (who didn't have the heart to act in solidarity with the farmers), the Cowardly Lion represented the political class (who didn't have the courage to intervene). The yellow brick road, silver slippers, emerald city, and hapless Wizard presumably speak for themselves. "Oz" is of course the standard abbreviation for "ounce."

Source: http://www.indybay.org/uploads/2012/08/ ... _years.pdf

So, for instance, J.P. Morgan (the banker who believed that only "gold" was money) was considered by the Populists to be one of the Wicked Witches. Liquidity (water) would extinguish his power and liquidity was needed (as oil for the tin man) to un-rust midwest industry.

The point being is that if you went back 130 years ago, you would have found a lot of midwesterners who were complaining about their not being enough gold in their ecosystem to pay back their debts to big city bankers. They said that these bankers had the ability to tighten up the gold money supply in the midwest (by not spending enough there), drive down prices, then the bankers would buy up property, force the farmers to go into debt if they wanted anything, and force them into a debt trap.

So, the Populists wanted a free silver movement. The ruby slippers were originally silver in the book (they changed them to ruby for the "technicolor" movie).

I'm not trying to start an argument for the free silver movement. All I'm saying is that 120-140 years ago, there were a lot of midwesterners who were very much against gold and the "tight money" supply that bankers forced on them. They were literally squeezed into a debt trap.

Debtors always complain about not having enough money to pay back their loans, and are generally in favor of "cheap money" to make it easier to pay them back.

This has exactly the same economic validity as the observation that the money supply cannot ever be too big, because if you ask someone if they would like more money, they always say "yes".

[Gumby]

Gumby, That quote is from Graeber whose book I recommended above as a potential interesting read....have you read it yet?

I've read a few chapters. Very interesting look at the history of "money" or "debt" of whatever we're calling it now!

[Gumby]

Debtors always complain about not having enough money to pay back their loans, and are generally in favor of "cheap money" to make it easier to pay them back.

This has exactly the same economic validity as the observation that the money supply cannot ever be too big, because if you ask someone if they would like more money, they always say "yes".

Yeah, but the bankers basically turned the midwest into a dustbowl! At some point, you have to acknowledge that there can be a case of too little liquidity. If you were going to do exactly that, gold would be the prefect medium to accomplish that.

[doodle]

Debtors always complain about not having enough money to pay back their loans, and are generally in favor of "cheap money" to make it easier to pay them back.

This has exactly the same economic validity as the observation that the money supply cannot ever be too big, because if you ask someone if they would like more money, they always say "yes".

Yeah, but the bankers basically turned the midwest into a dustbowl! At some point, you have to acknowledge that there can be a case of too little liquidity. If you were going to do exactly that, gold would be the prefect medium to accomplish that.

We see this even in todays fiat system as certain small towns create their own currency to combat credit crunch: http://www.telegraph.co.uk/news/worldne ... rency.html

[doodle]

And if you are eccentric enough and proclaim yourself emperor of the United States, then you can even get away with printing your own money.

http://en.wikipedia.org/wiki/Emperor_Norton

Although he had no political power, and his influence extended only so far as he was humoured by those around him, he was treated deferentially in San Francisco, and currency issued in his name was honoured in the establishments he frequented.

[moda0306]

This is quite simple, if the amount of oustanding gold-currency-based principal and interest within loans exceeds the amount of gold, this is unsustainable.

It seems asinine to me that we actually limit our economic growth (facilitated greatly by the existence of a healthy debt system (not saying ours is healthy)) not because of environmental/ecological concerns, or oil scarcity, or overpopulation, but the existence of a limited-use shiny yellow metal.

As I believe it was doodle who pointed out, debt obligations (of goods and services) were used as money before gold was.  Gold money was facilitated by goldsmiths and states, who didn't care to store their wealth in the form of IOU's for pigs and lumber.  People liked it too, but they didn't own much of it, and government was probably more of a force to induce gold being used as a currency, originally, than against it.

[Gumby]

Debtors always complain about not having enough money to pay back their loans, and are generally in favor of "cheap money" to make it easier to pay them back.

This has exactly the same economic validity as the observation that the money supply cannot ever be too big, because if you ask someone if they would like more money, they always say "yes".

Yeah, but the bankers basically turned the midwest into a dustbowl! At some point, you have to acknowledge that there can be a case of too little liquidity. If you were going to do exactly that, gold would be the prefect medium to accomplish that.

We see this even in todays fiat system as certain small towns create their own currency to combat credit crunch: http://www.telegraph.co.uk/news/worldne ... rency.html

I mean, this is why the Wonderful Wizard of Oz was written. It wasn't a whiny story about people wanting money. It was about a march on Washington (originally called "Coxey's Army") for more liquidity in a region that was being suffocated by an artificially tight gold supply. It's too easy for bankers to accomplish a situation of artificial tight money with gold.

So, what we find at the end of the 19th century is two very different narratives. In the big cities, you people with lots of liquidity and trade, who had newspapers who were friendly to bankers who told a narrative of gold being the only "sound" money. Those people voted for McKinley...

[align=center][/align]

And in the midwest you people like L. Frank Baum, who were saying that "sound money" was a lie and being used to destroy their lives. Those people voted for Bryan...

[align=center][/align]

So, I'm not convinced that gold is some kind of perfect money. I mean it is from an elemental standpoint (i.e. the physical qualities are perfect). But, it was obvious that bankers were taking advantage of gold's qualities to create an artificial tight money situation in the midwest. Those bankers wanted the power that came from issuing gold backed money, and then proceeded to figure out how to brainwash us to believe that gold was the only worthy form of money. (And when gold was dropped from the money supply, the bankers figured out how to stay in the credit game with a ramped up credit-based money system).

There was nothing "sound" about gold when it came to policies that made the midwest a dustbowl. The big city bankers won and had a better a media campaign with more biased editorials and better posters. The Free Silver campaign was the underfunded grass roots campaign that fell flat in the more prosperous cities.

[Kshartle]

The point being is that if you went back 130 years ago, you would have found a lot of midwesterners who were complaining about their not being enough gold in their ecosystem to pay back their debts to big city bankers. They said that these bankers had the ability to tighten up the gold money supply in the midwest (by not spending enough there), drive down prices, then the bankers would buy up property, force the farmers to go into debt if they wanted anything, and force them into a debt trap.

I'm not familar with the free silver movement.

Whatever they said is not relevant. It's a red herring. that fact they couldn't pay their bills is evidence they took on debt they were unable to repay. It's not evidence that there wasn't enough gold. I've demonstrated through analysis (that anyone is free to refute the logic of) that the concept is nonsensical.

If people wouldn't pay enough for their products or services so the they could make good on their debts that's on them. It's not a banker conspiracy. The bankers are always the scapegoat for some groups failure. If the bankers were so bad they should have tried some other way to raise capital.

[Kshartle]

Please adresses either my logic or PS' if you dissagree. I welcome being proven incorrect. Then I will actually learn something.

I'll try to prove your point. Here is how I can repay 110 credits when only 100 credits exist (and you start out holding all of them), without anyone else or any other money supply being involved:

Step 1: You lend me 100 credits (now I have 100 credits, you have 0 credits, and with interest I owe 110 credits)
Step 2: I buy some widgets from you for 45 credits (now I have 55 credits, you have 45 credits, and I owe 110 credits)
Step 3: I repay 55 credits of my debt to you (now I have 0 credits, you have 100 credits, and I owe 55 credits)
Step 4: I use the widgets to make some gizmos
Step 5: I sell the gizmos to you for 55 credits (now I have 55 credit, you have 45 credits, and I owe 55 credits)
Step 6: I repay the remaining 55 credits (now I have 0 credits, you have 100 credits, and I owe nothing)

Tada!!

But, that's a very simple micro example. And it only works if the economy remains healthy and the creditors are willing to spend money before all loans are due (as I did in the example above). If you don't like the word "credits" you can use "gold" just as well.

If only 100 ounces of gold exist and there is no possibility of getting more (which was the assumption) then how on God's green earth can you pay me back 110?

If I loan all 100 of my "credits" where do the credits come from to buy the widgets in step 2?

I cannot follow the logic. I am too dumb.

[Gumby]

I'm not familar with the free silver movement.

Well, you should learn about it if you're going to dismiss it.

These farmers weren't careless with their debts. They were given no choice because they didn't have gold to begin with and they certainly didn't have access to the gold to pay their interest.

Whatever they said is not relevant. It's a red herring. that fact they couldn't pay their bills is evidence they took on debt they were unable to repay. It's not evidence that there wasn't enough gold. I've demonstrated through analysis (that anyone is free to refute the logic of) that the concept is nonsensical.

All you've demonstrated is that you could pay off your debts if there was enough liquidity (i.e. creditors spending back money before the loans are due). Which is what Libertarian666 said in the first place. You never proved that the debts/interest could be paid off if the creditors aren't spending. Bankers removed liquidity from the midwest to turn it into a dustbowl. After they caused a tight money depression, they went in and bought everything for discounted prices.

[Kshartle]

It seems asinine to me that we actually limit our economic growth (facilitated greatly by the existence of a healthy debt system (not saying ours is healthy)) not because of environmental/ecological concerns, or oil scarcity, or overpopulation, but the existence of a limited-use shiny yellow metal.

Economic growth will not be limited by gold. Unsustainable false growth and bubbles will be limited. That's what I mean by false, the ones that can only be sustained by a growing money supply and not their productive output.

That last sentence describes the government to a tee. Gold will limit the growth of the parasite that limits everything good. That's why they don't like it and tax it and penalize it's ownership and use as money. It competes with their theft and gives people a way to escape the inflation tax.

[Kshartle]

I'm not familar with the free silver movement.

Well, you should learn about it if you're going to dismiss it.

Strawman alert. I need to setp up a cornfield to put all these strawmen in.

I don't even know what the free silver movement is and have never read about it. If I've dismissed something chances are it's just a logical fail. It goes like this:

"A said they didn't like B so therefore B must be bad" - FAIL

That is not evidence that B is bad. That is not logic and reason.

[Gumby]

Please adresses either my logic or PS' if you dissagree. I welcome being proven incorrect. Then I will actually learn something.

I'll try to prove your point. Here is how I can repay 110 credits when only 100 credits exist (and you start out holding all of them), without anyone else or any other money supply being involved:

Step 1: You lend me 100 credits (now I have 100 credits, you have 0 credits, and with interest I owe 110 credits)
Step 2: I buy some widgets from you for 45 credits (now I have 55 credits, you have 45 credits, and I owe 110 credits)
Step 3: I repay 55 credits of my debt to you (now I have 0 credits, you have 100 credits, and I owe 55 credits)
Step 4: I use the widgets to make some gizmos
Step 5: I sell the gizmos to you for 55 credits (now I have 55 credit, you have 45 credits, and I owe 55 credits)
Step 6: I repay the remaining 55 credits (now I have 0 credits, you have 100 credits, and I owe nothing)

Tada!!

But, that's a very simple micro example. And it only works if the economy remains healthy and the creditors are willing to spend money before all loans are due (as I did in the example above). If you don't like the word "credits" you can use "gold" just as well.

If only 100 ounces of gold exist and there is no possibility of getting more (which was the assumption) then how on God's green earth can you pay me back 110?

If I loan all 100 of my "credits" where do the credits come from to buy the widgets in step 2?

I cannot follow the logic. I am too dumb.

Whoops... I was assuming that you had some extra gold/credits in the bank vault and my (private sector) supply was limited. I'll revise...

Step 1: You lend me 100 credits (now I have 100 credits, you have 0 credits, and with interest I owe 110 credits)
Step 2: I buy some widgets from you for 45 credits (now I have 55 credits, you have 45 credits, and I owe 110 credits)
Step 3: I repay 55 credits of my debt to you (now I have 0 credits, you have 100 credits, and I owe 55 credits)
Step 4: I use the widgets to make some gizmos
Step 5: I sell the gizmos to you for 45 credits (now I have 45 credit, you have 55 credits, and I owe 55 credits)
Step 6: I pay 45 credits of my debt to you (now I have 0 credits, you have 100 credits, and I owe 10 credits)
Step 7: I use the widgets to make a few more gizmos
Step 8: I sell the gizmos to you for 10 credits (now I have 10 credit, you have 90 credits, and I owe 10 credits)
Step 9: I pay the last 10 credits of my debt to you (now I have 0 credits, you have 100 credits, and I owe nothing)

My point is that I can only repay the debt if you are willing to play ball and buy my goods/services.

[Gumby]

I'm not familar with the free silver movement.

Well, you should learn about it if you're going to dismiss it.

Strawman alert. I need to setp up a cornfield to put all these strawmen in.

I don't even know what the free silver movement is and have never read about it. If I've dismissed something chances are it's just a logical fail. It goes like this:

"A said they didn't like B so therefore B must be bad" - FAIL

That is not evidence that B is bad. That is not logic and reason.

Well, we are talking about scarecrows

But, the point is that the nation was very divided. There was no right answer. Gold wasn't the perfect form of money. And you certainly haven't proven that it is (nobody has).

Much of the propaganda of why we think of gold as "sound" money comes from the McKinley campaign.

[Kshartle]

All you've demonstrated is that you could pay off your debts if there was enough liquidity (i.e. creditors spending back money before the loans are due). Which is what Libertarian666 said in the first place. You never proved that the debts/interest could be paid off if the creditors aren't spending.

Another logic FAIL.

A loaned money to B so A must buy more products from B exceeding the original loan amount or never get paid back.

If B was only borrowing to provide goods and services to A that's just called buying in advance. I give you 100 today to build me a house. I don't give you 100 today so you can sell me a house for 110 which you then pay back the loan with.

Creditors are not needed to provide the payback money.

You're forgetting about C. Other parties that buy products and services with money.

If you think, again, that one party can aquire all the money in the world.....I have an earlier post on that. It's nonsense, even theoretically. If they could that money would not work so this is a non-starter.

[Kshartle]

My point is that I can only repay the debt if you are willing to play ball and buy my goods/services.

My point is that is theoretically and realistically, completely and utterly false.

[Gumby]

You're forgetting about C. Other parties that buy products and services with money.

If you think, again, that one party can aquire all the money in the world.....I have an earlier post on that. It's nonsense, even theoretically. If they could that money would not work so this is a non-starter.

No, no no. You're not understanding. There is no C in this example, because B represents the entire private sector as a whole. It's a MACRO example. So, in order for C to acquire gold to buy my goods, C needs to take out a loan from another gold owner. And it creates a debt trap because B and C will eventually run out of liquidity if A isn't spending money constantly.

You are basically trying to argue that there can never be a liquidity issue with gold. Am I'm telling you that IT ALREADY HAPPENED IN THE LATE 1800s!

[Kshartle]

Gold wasn't the perfect form of money. And you certainly haven't proven that it is (nobody has).

No I haven't, nor would ever attempt to. I trust the voluntary exchange of people acting in their own enlightened self interest to discover the best money and I am certain it would continue to evolve.

Determining it with guns and dungeons however......proves that is not ideal.

When one side uses force it's clear that one side is the loser. When both sides agree on a transaction (no force) it's win-win. It's the difference between working for an agreed upon wage and working as a slave.

I love this old saying:

Gold is the money of Kings
Silver is the money of citizens
Barter is the money of the poor
but FIAT is the money of slaves