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Money Can't Buy You Economic Prosperity. But a metal can???

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wolfman posted on Tue, Apr 26 2011 8:57 AM

Money Can't Buy You Economic Prosperity. But a metal can???

Gold is just a mineral. A metal.

Just as paper can't buy you prosperity a metal would not if used as money.

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Merlin replied on Tue, Apr 26 2011 8:59 AM

Gold only allows prosperity to increase by letting people know how to act rationally. Inflationary money invalidates that.

The Regression theorem is a memetic equivalent of the Theory of Evolution. To say that the former precludes the free emergence of fiat currencies makes no more sense that to hold that the latter precludes the natural emergence of multicellular organisms.
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They're distinguishing between a capital good and a medium of exchange.  Money is indirectly productive, in the sense that you can buy goods (like metals) and put them into the process of production or consume them (which is the consumption of wealth).

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Esuric replied on Tue, Apr 26 2011 9:09 AM

I don't understand this question. Gold, a metal/natural resource, is employed in the production of various final consumer goods which means that an expansion in its supply necessarily constitutes a higher degree of wealth. An expansion in the supply of gold, if it is used as money, and only as money, does not constitute an actual expansion in wealth (an expansion in the supply of money, be it commodity money or paper money, never actually increases wealth; it only leads to inflation).

Some individuals prefer commodity money (gold for example) over paper fiat money because its supply is not arbitrarily controlled by politicians with political agendas, who would gladly destroy the wages of laborers, inflate away savings, arbitrarily elevate investment beyond the sustainable level, etc, in order to get re-elected.

So to answer your question once again: money can never "buy you economic prosperity," even if it takes the form of gold, but commodity money assures that its supply is not arbitrarily manipulated by the state (it also creates equilibrating forces if it is employed internationally).

"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."

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