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I have no idea what one ounce of gold bought a century ago, nor what a pound bought. I don't see how that makes a difference.
The value of gold only exists because we desire it - that's what value is. Now, it happens that people consistently seem to want gold - but, were they to decide that, say, topsoil was much more desirable, they'd sell their golf for topsoil. The value of gold'd plummet - and it'd buy very little - and the price of topsoil would rise, meaning that it'd buy more.
Rather like a currency. Gold may be less volatile over the short term, but that has to do with human psychology more than with gold itself.
Conversely, a currency is valuable if and only if people want it. It doesn't need to be guaranteed by anything except people's faith in it. (And don't go thinking that gold is a guarantee against inflation - it isn't - or that it provides a stable mark of value - witness the stories about the Malian emperor who, in the 14th century, undertook the Hajj. While in Cairo, he gave away so much gold that the market collapsed and the economy took years to recover.)
Incidentally, were I to pay you for a good or service in gold, you'd be relying on the probability that someone'd want to exchange that gold later for food or shelter or something. Rather like a promissory note, in fact...
Fanny Mae and Freddy Mac were monumental fuck-ups. So what? Noone denies that, and it doesn't alter the general picture.
Your quotations add nothing - except... Rothschild owned the BoE? Eh?
Apologies for typos - I'm a bit tipsy.
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Enzyme is powered by sunlight, Thu 5 Mar 2009, 17:52,
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