Re: [Pen-l] Re: Gold money is fiat money too.

[Shane Mage <shmage@xxxxxxxxxxxx>]

On Jan 31, 2009, at 11:53 AM, Laurent GUERBY wrote:

In the internet age you can practically move away from fiat currency

if

you want too: buy and sell gold/whatever ETF and keep the strict

minimum

of fiat currency on your regular account (including the right amount

the day you pay your taxes). One click per day.

No you can't.  

Yes you can (tm).

Money is used to settle debts (that is what money is--legal tender,

the "medium of deferred payment").  No debt contract has contained a

gold clause since 1932.  All you do is make yourself a perpetual

speculator going broke from transaction costs.

Enter debt, earn fiat money to buy gold ETF, sell gold ETF for fiat
money, settle debt.
My point is that's now practical to do this. Ten years ago it wasn't.
And transaction costs are low compared to pla[s]tic money fees.

"plastic money fees" are not low--they're *negative* if you use a "rewards" card and pay in full by the due date (and of course zero if you use a debit card).  And transaction costs of speculating in gold are anything but low--you pay the dealers "ask" price every time ("one click per day") you buy, but get the dealer's "sell" price every time you buy. The spread is your transaction cost per day, and it aint peanuts.

Shane Mage

This cosmos did none of gods or men make, but it

always was and is and shall be: an everlasting fire,

kindling in measures and going out in measures."

Herakleitos of Ephesos

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