> Would you be happy with no paper certificates for gold and just use gold coins? From your earlier argument I suspect the answer is no.
Everyone's answer is no. Even during the prime of the standard, people made transactions on paper currency promising they represented gold because no one is going to lug around heavy coinage, spend the time to authenticate it (since it's easier to counterfeit than modern paper/plastic currency), or have to decide between making trips to banks or having a pile of it they have to constantly guard.
> Every single argument you have made is that governments and banks cant be trusted with paper money even when it is backed by gold. So, why do you push for fiat currency?
Because for every person who isn't part of the aristocracy close to centers of power, there is no difference. If a currency is mismanaged, it doesn't matter whether it promised gold or low inflation. During all of the previous crises, the first things banks and governments did is suspend specie payments.
> If government and banks are not to be trusted with paper money then hard currency is the only solution left that doesn't require trust in anybody.
If you want to live in a nation state with a credible legal system, and I think everyone does, you have to trust them to some extent. You have to trust that they won't take away your property by force, throw you in jail to take your wealth, allow someone else to do those things without consequences, or mismanage their currency to the point where it hyper inflates.
Credible governments have things like the FDIC so normal people don't have to worry about their local credit union going under as long as their account has less than $250k in it. Since the average liquid net worth of Americans is less than $50k[1], that pretty much covers everyone. It has virtually ended the problems of bank runs and panics except for black swan events like 9/11.
Even for things like the 2007 Financial Crisis, being on a gold standard wouldn't change anything. The policy mistake of removing the firewall between traditional banking and investment banking as well as leverage limits would have still led to over-speculation and CDO Ponzi schemes. The gold standard would have just added another knot to the crisis as well as provided some video footage of huge crowds trying to get specie payments and walking away empty handed. Nations like Canada avoided that entire crisis, except for what was unavoidable due to their relationship with the global economy.
Not too worried about it. It only happens during wartime for G20 nations, the last being in the 1920s/1940s. When those nations were on the gold standard.
Everyone's answer is no. Even during the prime of the standard, people made transactions on paper currency promising they represented gold because no one is going to lug around heavy coinage, spend the time to authenticate it (since it's easier to counterfeit than modern paper/plastic currency), or have to decide between making trips to banks or having a pile of it they have to constantly guard.
> Every single argument you have made is that governments and banks cant be trusted with paper money even when it is backed by gold. So, why do you push for fiat currency?
Because for every person who isn't part of the aristocracy close to centers of power, there is no difference. If a currency is mismanaged, it doesn't matter whether it promised gold or low inflation. During all of the previous crises, the first things banks and governments did is suspend specie payments.
> If government and banks are not to be trusted with paper money then hard currency is the only solution left that doesn't require trust in anybody.
If you want to live in a nation state with a credible legal system, and I think everyone does, you have to trust them to some extent. You have to trust that they won't take away your property by force, throw you in jail to take your wealth, allow someone else to do those things without consequences, or mismanage their currency to the point where it hyper inflates.
Credible governments have things like the FDIC so normal people don't have to worry about their local credit union going under as long as their account has less than $250k in it. Since the average liquid net worth of Americans is less than $50k[1], that pretty much covers everyone. It has virtually ended the problems of bank runs and panics except for black swan events like 9/11.
Even for things like the 2007 Financial Crisis, being on a gold standard wouldn't change anything. The policy mistake of removing the firewall between traditional banking and investment banking as well as leverage limits would have still led to over-speculation and CDO Ponzi schemes. The gold standard would have just added another knot to the crisis as well as provided some video footage of huge crowds trying to get specie payments and walking away empty handed. Nations like Canada avoided that entire crisis, except for what was unavoidable due to their relationship with the global economy.
[1] https://ofdollarsanddata.com/wp-content/uploads/2020/06/liqu...