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| Thread: Debaters' Guild I - World Currency |  This thread is pages long: 1 2 3 · «PREV |
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TheDeath
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posted February 07, 2009 06:39 PM |
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Yes the money supply can grow, that's how inflations are made in the first place. Banks can't just "measure productivity" as easy as that, because everyone can go bankrupt for example. That's why fluctuations occur.
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In your closing statements, please make it clear if you are for or against.
Mvass, it's not that easy. I'm not against it. I just think it won't work in practice...
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mvassilev
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posted February 07, 2009 06:53 PM |
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Yes the money supply can grow, that's how inflations are made in the first place.
Not quite. The money supply isn't the only determinant of inflation - productivity is too. If the money supply grows 1% and productivity grows 2%, then, even though the money supply would increase, deflation, not inflation, would occur. On the other hand, if the money supply grows 2% and productivity grows 1%, then inflation does occur.
But, under a gold standard, the money supply cannot grow at all (unless more gold is discovered, of course). If the bank has 50 kilograms of gold, then the money supply that bank can issue will be at most 50 kilograms of gold. It can't increase it beyond that. Or, to explain it more easily, let's say $1 = 1 gram of gold. If there are only 500 kilograms of gold in existence that are owned by somebody, then the money supply cannot increase beyond $500,000. That's the way a full-reserve commodity standard works.
And if you're against it "in practice", then you're against it.
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TheDeath
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posted February 07, 2009 07:00 PM |
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Yes exactly. And you can't measure productivity, you can just predict it. That's why inflation or deflation occurs. But this is closed locally. Unless you also want a single country in the world, then this will have consequences on every country. May lead to conflicts, and all sorts of bad stuff that wouldn't extend otherwise beyond the borders.
And what is with the gold standard? I thought we're talking about "printing gold" (my example) since a global currency would be printed? 
By the way, I'm not "against" it in practice -- I just think it won't work. Because it isn't harmful, since I predict if it were to happen people would revert to local currencies, and probably use the global one as 'international' currency. 
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mvassilev
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posted February 07, 2009 07:09 PM |
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If you're talking about printing the global currency, then I don't understand what you mean by "backing" it.
And nearly every country has inflation, and, unless it's high, it's really not that much of a problem.
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Because it isn't harmful, since I predict if it were to happen people would revert to local currencies, and probably use the global one as 'international' currency.
Because France reverted to francs and Germany reverted to Deutschmarks. Nobody in the Eurozone uses the Euro except as international currency, right?
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del_diablo
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posted February 07, 2009 07:30 PM |
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Global commodity currency = everyone uses gold/silver/etc.
Global fiat currency = everyone uses money printed by the same central bank
There is NO difference betwhen the 2 of them since its THE global currency.
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Not quite. The money supply isn't the only determinant of inflation - productivity is too. If the money supply grows 1% and productivity grows 2%, then, even though the money supply would increase, deflation, not inflation, would occur. On the other hand, if the money supply grows 2% and productivity grows 1%, then inflation does occur.
Productivity got no effect whatsoever on the currency if we got a global one.
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But, under a gold standard, the money supply cannot grow at all (unless more gold is discovered, of course). If the bank has 50 kilograms of gold, then the money supply that bank can issue will be at most 50 kilograms of gold. It can't increase it beyond that. Or, to explain it more easily, let's say $1 = 1 gram of gold. If there are only 500 kilograms of gold in existence that are owned by somebody, then the money supply cannot increase beyond $500,000. That's the way a full-reserve commodity standard works.
And with this there cannot be any inflation, this is the one i am going for.
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And nearly every country has inflation, and, unless it's high, it's really not that much of a problem.
Wrong, every country is stupid enogh to keep printing more and more. If we stopped printing and ONLY had the amount backed up used we would have NO inflation whatsoever. However since there is many currency's we got value going up and down since they are compared to each other. World Economical Crises is nothing more than the wheel of money starting to stop, not really much else.
If we got 1 currency, its value would be constant, otherwise it would server no purpose of existing. If we got 1 currency inflation is more than killing its purpose to live. Then i agree with Death that we would be far better with local currencys.
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