In Gold We Trust by Julian Dibbell

January 16, 2002 6:18 AM

In Gold We Trust by Julian Dibbell "You want to be radical? You don't need to blow up the bank, just burn your bank account. And for that you are going to need an alternative. What is the alternative? E-dinar." I think economic warfare is pretty fascinating, like in the tungsten/wolframite markets of Portugal and Spain during WWII. Although the article acknowledges e-gold is pretty far from wresting away control of the money system from central banks, technology is certainly supplementing traditional (and arguably archaic) currency institutions. An interesting counterpoint is the rising popularity of decentralized money creation.
posted by kliuless (9 comments total)

I'm getting visions of Cryptonomicon... Anyone else?
posted by pheideaux at 7:26 AM on January 16, 2002

You typed it before I could, pheideaux.
posted by dong_resin at 8:32 AM on January 16, 2002

very interesting economic proposal... especially because the article suggests that gold is the thing to supplant credit, not just because of its history but because

Relative to its modest size, the 27.5 pounds in a standard gold bar is so much weight it's nearly impossible to accept that gravity alone accounts for the force you feel as you lift it. You're tempted to attribute some additional, almost metaphysical, power to the metal - as if the gold brick in your hand weren't just undeniably real but a gleaming avatar of reality itself.

posted by zerolucid at 2:22 PM on January 16, 2002

i guess some people don't get off on purple mountain majesty and amber waves of grain :)

IIRC, cryptonomicon ends in vast ecological damage to the philippine rainforest!
posted by kliuless at 2:45 PM on January 16, 2002

Recently covered somewhat by USS Clueless, where discussion evolved into more esoteric areas. But Steven made the basic point that reliance on a gold standard limits wealth creation to disocvery of new gold reserves, among other reasons it was formally abandoned with Bretton Woods (and later by free currency floats).
posted by dhartung at 3:09 PM on January 16, 2002

i think steven's board is down cuz of the IP changeover, but i'll definitely take a look later. fluffy1984 said as much in our discussion of currency systems a while back, "On the whole, I like the arbitrary quality of baseless currency. There's somethinf perfect and abstract about it, and it would be a pity to tie the ethereal stuff down to oats and wheat." [we were sort of talking about the effectiveness of a commodity reserve currency as originally envisioned by keynes and benjamin graham (but the white plan was adopted at bretton woods instead)]

personally, i like the idea of community currencies (the links at the end) to supplement national currencies better. credit creation as is i think is pretty crude. monetary policy currently assumes (rightly) a national economy and structures money growth accordingly. the problem is our economy isn't homogenous. plus moral hazard is increasingly problematic, the roots of which partly lie in the blunt tool of the fed funds rate. it invites oversteering because there's no fine tuning. you can see how awkward it is by the fed having to continually adjust rates, second-guess markets, issue statements and jawbone. and when they get it wrong it wreaks havoc not only in the US but all around the world.

i think having more types of currencies (precious metals, commodity reserve, corporate script, community based) would do a lot to stabilize economies. people would have the choice to conduct their affairs in the currency that makes the most sense (kind of like operating systems!) a more democratic money system would also do a lot to increase the general welfare/wealth creation as well as smooth out the business cycle. hopefully national governments aren't so jealous that they'll open up the monopoly they've had on money to some friendly competition :)
posted by kliuless at 5:40 PM on January 16, 2002

Very odd argument to be having in 2002. The real case to sever money from gold was made by Keynes decades ago. Many of the solutions talked about here certainly have already been exhaustively argued by economists and monetary people.

What it is east to forget is that quite often things that appear to be problems ... quite often were actually solutions to the problems of previous generations ... and it is usually the case that people arguing for these solutions inevitably point out the current problems they would "solve" and virtually never mention the new problems they might create.
posted by MidasMulligan at 9:32 PM on January 16, 2002

Multiple arbitrary currency types, in combination with some system that allows for competition over supremacy of value between them would obviously become self-regulating (beware the prospect, oooooh!). How bout precious meats, mud bog tickets, fire, joysticks and toenails? But that would be stupid.
posted by BeefyT at 4:13 PM on February 2, 2002

dude.
posted by kliuless at 9:22 AM on February 3, 2002