Money

I thought I'd talk a little bit about establishing a separate gold standard that we could all use. I'm not sure how to go about it, but I did discover that you can buy gold in one troy grain coins, which is rather small. market value on that right now seems to be around four United States Fiat Dollars, which means in all likelihood you'd double your purchasing power by investing in such coins within the next few months. I base that on the inevitability of hyperinflation now that King Obama and his loyal henchmen have doubled the M1 monetary base over the last few months.

But to get more basic, why gold in the first place? Rothbard and his peers have gone very in depth on this, and I'm not going to retread them at this point. Instead, I'm going to do it very simply. Since a great many anarchists are NOT market oriented, I hope this will educate somewhat on the market anarchist's stance.

Gold is not the only possible money. Most of us adhere to it for a multiplicity of reasons, though we know other things could be used. Here's the main reason:

It's scarce, valuable for many things, and does not tarnish.

Money is not a magical thing. It's not some "grand system" that must be overseen by overlords. It is simply something commonly accepted IN LIEU OF goods and services to facilitate trade. Without money, direct trade is the only real possible way to exchange goods and services. Direct trade, while definitely valid, has serious problems of both scale and reach. With accepted monetary standards (plural deliberately), one person can leverage their goods and services to a much greater degree. This allows specialization without enslaving the specialist. Direct trade runs against serious problems of comparative value, whereas money can be set according to what the market will bear.

So, what are the main things a good needs to be useful as money?

First, Scarcity. Paper ain't scarce. The less of a desired thing there is, the more valuable it is. Too scarce, and it won't work as a unit of exchange, but that's an argument for another time.

Second, and probably just as important, portability. This is why gold makes good money and oil doesn't. Oil is more useful to the general public, but it's basic unit of sale is a 55 gallon drum. You can't really put that in your pocket.

Third, durability. This is less important than the first two, but not much.

Gold meets all of the above better than just about any other substance, though silver and other precious metals can be used as well. In the open market, any set of standards or even just two people agreeing is good enough.

But for wide trade, there need to be published and accepted standards. They don't have to be "one size fits all", as the market will weed out the poor or less popular ones without any external interference. To that end, I'm trying to work out a gold based monetary standard that anyone who can acquire gold could accept. I'll post it as I go. At the moment, I'm basing it on one grain of gold as the base unit, which is 480 grains to an ounce. Currently, this would be about two to three dollars per base unit. And yes, smaller divisions than that are available on the market.

Comments are greatly appreciated.