Fed Chairman Ben Bernanke: Gold is not money

[rambone]

Ron Paul vs. Ben Shalom Bernanke: "Do you think gold is money?"



Do you think President Ron Paul would renominate George W. Obama's pick for Fed Chairman? I don't!!





http://www.youtube.com/watch?v=gpfooQG7AYU

 

[pudly]

Wow. That was a political answer rather than an economic one. Money has the following characteristics (there are variations on this list):

• Widely accepted in exchange for goods and services
• Durable
• Relatively scarce. Leaves and sand fail here.
• Portable
• Divisible so that it can adjusted to different exchange values

Seems that gold and silver fit this list rather well.

 

[navarre1095]

Gold is worth something.

 

[Expat]

Do you think President Ron Paul would renominate George W. Obama's pick for Fed Chairman? I don't!!

I don't know. Libertarians all seem to stick together. Bernanke

 

[jsgolfman]

Ya see, central banks keep gold because it's tradition.

lmao, what a buffoon

 

[JetGirl]

If only there was a way to back up our (over-inflated) paper I.O.U. notes with some sort of precious metal (like gold) to cut the indiscriminate and reckless "dollar printing" impulse ... maybe like some sort of "standard"...
I dunno

 

[level.eleven]

I don't know. Libertarians all seem to stick together. Bernanke

Did you read that, or simply link the first google search result for "bernanke libertarian"?

 

[dom1104]

I agree with him.

Gold isnt money.

 

[Expat]

Did you read that, or simply link the first google search result for "bernanke libertarian"?

Yeah, I read it first awhile back as I posted it back then. Don't miss out on all three pages.

 

[Fletch]

I agree with him.

Gold isnt money.

You're right, and wrong at the same time. Gold is not money, because money is a concept -- an idea. But gold does satisfy more completely the criteria for money than paper dollars.

http://mises.org/books/econforrealpeople.pdf

See pages 83 - 86 for a discussion of the qualities that make something good for use as money, and why precious metals fit these criteria better than just about anything else.

 

[joslar15]

The Bernanke may not think it's money, but one ounce of gold is now worth $1593.30 Fiat FRNs!

 

[joslar15]

http://www.youtube.com/watch?v=YWyCCJ6B2WE

 

[IndyPrepper]

If SHTF I can guarantee that at some point Whiskey and Fuel would be money... Or at least worth a whole hell of a lot in trade.

 

[Rob377]

Wow. That was a political answer rather than an economic one. Money has the following characteristics (there are variations on this list):

• Widely accepted in exchange for goods and services
• Durable
• Relatively scarce. Leaves and sand fail here.
• Portable
• Divisible so that it can adjusted to different exchange values

Seems that gold and silver fit this list rather well.

I'm gonna go to Kroger with a chunk of gold to get groceries. Hopefully they have something to break off a few chunks of it to make change.

 

[Fletch]

I'm gonna go to Kroger with a chunk of gold to get groceries. Hopefully they have something to break off a few chunks of it to make change.

The market for gold in terms of goods and services was at one time far more sophisticated than your simplistic portrayal. There was a system of paper currency, much like our modern currency, backed by precious metals, which was exchanged and counted very easily in the market. Paper money used to be certificates representing an amount of gold or silver on deposit at a given bank. You'd take your "chunk of gold" to the bank, they'd weigh and verify it, and issue you a certificate (or group of them) for the amount on deposit. Then you would be able to go to Kroger, pay with your paper certificates, receive paper certificates in change, and there wouldn't be the need for any breaking off of chunks anywhere except maybe in the bank vault when someone wanted to withdraw an amount of the metal itself.

 

[jsharmon7]

So gold isn't money, but paper is? The same theory you see applied in the classifieds here on INGO is the same one that applies here: it's worth what somebody will give you for it. If a retailer decides that the $20 paper bill in your hand is worth trading for their Levi's, then you've got a deal. If a private person decides that the gold nugget in your hand is worth their 1974 Ford Pinto, then you've got a deal.

 

[badwolf.usmc]

Gold is worth something.

Not to me, Iron is worth something.

 

[RockofStrength]

Gold isn't money, at least as this tool understands money. It has value as a tradeable commodity, independent of the " full faith and credit" of any particular nation.

To him, that aint money any more than a cow is money

 

[JetGirl]

So gold isn't money, but paper is?

Read it again:

The market for gold in terms of goods and services was at one time far more sophisticated than your simplistic portrayal. There was a system of paper currency, much like our modern currency, backed by precious metals, which was exchanged and counted very easily in the market. Paper money used to be certificates representing an amount of gold or silver on deposit at a given bank. You'd take your "chunk of gold" to the bank, they'd weigh and verify it, and issue you a certificate (or group of them) for the amount on deposit. Then you would be able to go to Kroger, pay with your paper certificates, receive paper certificates in change, and there wouldn't be the need for any breaking off of chunks anywhere except maybe in the bank vault when someone wanted to withdraw an amount of the metal itself.

Paper is the I.O.U., or "promissory note" even today. The problem is...nothing is backing it up, but more paper. That creates the problem that they try to fix by...printing more paper.
They're all "notes".
In fact, look at what's printed on the top of the face side...

 

[Fletch]

Paper is the I.O.U., or "promissory note" even today. The problem is...nothing is backing it up, but more paper...

And "the full faith and credit of the United States"...