Tuesday I listened to a speaker a few days ago explain that Gold was money because it was ‘the most marketable good’ (the preferred trading good in the marketplace). He then explained that silver was what was actually used as most people didn’t own Gold and it was too valuable for marketplace trades. If Menger’s theory that money is so by virtue of the fact that it is … [Read more...]
Time Preference
Wednesday “Time-preference is simply the desire to own goods at an earlier date rather than later.” (here) I come across this regularly, and it is important to understand that this is just an observation that is sometimes true, but, equally as often, is not. Imagine receiving a crane delivery of a roof for a house before the walls are constructed. What would … [Read more...]
Wealth Inequality
Sunday Take away the ability to trade freely and what appears in its place is corruption. The more regulations, the more pervasive the corruption. When buying and selling are controlled by legislation the first things to be bought and sold are legislators. P. J. O’Rourke Today, the economies of the Western world are burdened with regulations sufficient to break the … [Read more...]
Money is not a Good
Friday I just read a piece on the monetary metals by a writer that I hugely respect. In this rare instance, he is wrong. He describes Gold as a good with a declining marginal utility. Many important new understandings emerged from Dawn of Gold. One of them (Chapter 8 – The Measure and the Measured) was that money is not a good. The logic is quite conclusive. Menger’s … [Read more...]
Subjective and Objective Value
Saturday Is gold a good store of value? Yes, the best. That is why it is money. Is all value subjective? Demonstrably not. If all values were subjective then there would be nothing with which to measure value. Transactions happen, with the ease, speed and precision that they do, only because Gold, as the stable value, is there to measure value. The measure in … [Read more...]