This subject scares the heck out of me!

[Urban Ranger]

Originally posted by Colon
South Korea did what the IMF asked it to do, even if they pretend otherwise, so did Malaysia. (even with those high profile currency controls that actually were quite meaningless) and I'd say both are doing rather well nowadays.

SK isn't exactly doing well. It isn't doing bad considering the Asian Economic Turmoil struck it pretty hard. Daewoo was completely wiped out IIRC.

As for Malasysia, again my impression is it's not doing bad but not exactly well either. Then again I do not exactly keep a tab on it

[Urban Ranger]

Originally posted by Lord Merciless
I don't understand the fuss about our trade deficit: we are getting the goods and services from other countries, while we just print out bunch papers in exchange. What's so bad about other countries regarding our papers as so valuable?

When you owe other people money, they will come collect the debt sooner or later. How do you think Japanese companies owning a whole bunch of US companies? Think Sony in particular.

[Serb]

They protest against their own government because it had been doing what the IMF told it to do. They protest now to stop it from continuing to follow the IMF.

IMF must die!!!

[KrazyHorse]

I don't know exactly how much copper and aluminum trade for but they're priced in cents per ton, not dollars per ounce

No they aren't. Copper sells at just under a dollar a pound (canadian). Hi-quality aluminum is even more expensive, IIRC...

[David Floyd]

The good thing about gold, in particular, is that it is rare. Using a common metal for barter would bring about a Hitchhiker's Guide to the Galaxy-type society in which they land on a planet and decide that leaves should be the currency, therefore everyone is rich. Actually, that is much like the fiat money system - paper becomes valuable just because, it isn't based on anything rare enough to hold true value.

Diamonds would be another good measure of worth, I think, and silver less so.

Everyone went off the gold standard for one reason, when it comes down to it - to give the government more control over the economy. You can bring up any example you want, and that's what it comes down to.

However, a government controlling the economy is a bad idea, because economics is a force of its own that doesn't need to be controlled by an entity. When a government tries to interfere with the economy, they usually end up messing it up. Government interference, for example, brought about the Great Depression, and the devaluation of the German Mark for another example.

Paper money is OK, as long as it is based on something - it can represent gold, for example, as long as the gold exists, and the paper money can be converted into gold if desired.

Sure, deficit spending would go away, but why is this a bad thing?

*waits patiently for Wraith to show up and explain far better than I did*

[KrazyHorse]

Gold is also malleable, doesn't tarnish, compact, easily recognizable, and makes pretty pretty jewelry.

[David Floyd]

Exactly.

But in my non-expert opinion, what makes it most valuable in terms of usefullness for currency is its relative rarity, combined with the fact that it is safe to handle, unlike something such as uranium.

[KrazyHorse]

The problem with something like diamonds is that they're quantized. You can't break off a chunk to pay for breakfast...

Anyhow, it's not completely about rarity; it's also about extraction costs (how much labour goes into getting an ounce of gold). These combine to put a floor on the realtive value of gold to other goods...

[David Floyd]

The problem with something like diamonds is that they're quantized. You can't break off a chunk to pay for breakfast...

Oh, I know that, gold is much better.

Anyhow, it's not completely about rarity; it's also about extraction costs (how much labour goes into getting an ounce of gold). These combine to put a floor on the realtive value of gold to other goods...

True as well. But what I'm getting it is the difference between gold and, for example, iron. Gold is much rarer, and hence a much better indicator of wealth and value than iron.

[Lung]

Even if iron was rare, it wouldn't hold it's value. Why?

It rusts

[David Floyd]

Good point.

Bah! Just accept my point the way it was intended and don't nitpick dammit!

[Lung]

If national debt was bad, then so is a mortgage. Ever tried saving up for a house? By the time you save enough, the house costs triple. By the time you save the difference, it's tripled again! The U.S. economy won't collapse until it is perceived to be unable to pay it's debts.

Australia recently had higher debt per capita than the U.S, yet turned it around. As long as they don't print money that isn't accounted for, i think they'll be okay

[Lung]

Originally posted by David Floyd

Bah! Just accept my point the way it was intended and don't nitpick dammit!

(pick...pick...pick...pick...pick.....)

[Shi Huangdi]

Originally posted by Serb


IMF must die!!!

This from someone whose country relies big time on IMF money....

[David Floyd]

Although the IMF should, indeed, die.

This from someone whose country dispenses huge amounts of IMF money. Damn those handout seeking countries like Russia!