I contemplate the lack of “real” in “money” sometimes. We really don’t have real money any longer. We print ‘trillions” of nothing, except we don’t even really “print” them – the Fed just changes some decimal points. And, I wonder, when it collapses how bad will it be?
I got to thinking about this when I read “Gold as a Last Link to Reality” on Economic Noise:
Having had plenty of horrible experience with infinite money, the American Founders knew all this and so insisted on commodity money. But their descendants lacked such experience, and so it came to seem primitive to let the money supply be determined by how much metal could be pried out of the ground each year. Indeed, it is primitive. It just seems that any more sophisticated money inevitably becomes too sophisticated, and the result of that is far worse than primitive — predatory, corrupt, totalitarian, and unreal.
The Founders knew. About money, like so many other things, they knew. But they weren’t smart enough to write a lasting system to protect us. They let us (We the People) CHANGE the Constitution, perhaps necessarily, but far too easily as it turns out. And the results will be bad.
Very bad. It has to be. But is gold the answer?
I’m dubious. I think skills – real world skills, like welding, farming, fixing things will be valuable. Fuel and ammo will be valuable. Martial skills will be valuable. Middle management of financial derivatives traders? Not so much. A dump truck full of gold? What would I do with it? I’d take the dump truck.
A reasonable strategy might be to load up on debt and own lots of “useful” things for when it all goes south. And learn to make things and food. And how to protect things and food.
I would dearly love to have a currency that is not subject to financialization and fiat. Note that gold isn’t immune to this – much more gold is owed than is actually available.
That is why ideas like BitCoins, impervious to whim and manipulation, appeal to me. And to be “perfect” – multiple BitCoins – all competing for reliability, security and steadfastness.
Time and again we’ve proved that smart people aren’t smart enough, or honest enough, to be trusted or monitored. We need a currency system that cannot be manipulated except by the actions and decisions of billions of free choices.