Re: [OPE-L] recent references on 'problem' of money commodity?

From: Paul Bullock (paulbullock@EBMS-LTD.CO.UK)
Date: Fri Dec 03 2004 - 18:11:50 EST

Let me put it another way, had I a couple of million dollars a year or more
ago I can tell you that I would have dumped them for gold... and I would
keep it as well for a few more years..


----- Original Message -----
From: <cmgermer@UFPR.BR>
Sent: Wednesday, December 01, 2004 6:39 PM
Subject: Re: [OPE-L] recent references on 'problem' of money commodity?

> In a reply to Paul B, Jerry wrote:
> Some time ago (on November 19) you wrote:
> >>>>
> As a matter of fact Fred, I know of no one who would not be prepared to
> accept a certain quantity of gold for any of their property , ( should
> they wish to sell it, even if they later had to exchange it for paper for
> other reasons), that is to say that this commodity remains the money
> commodity, par excellence..  <<<
> Jerry:
> Interesting, since I know of no one  (save, possibly, Claus, Akira, or
> yourself) who would be prepared to accept a certain quantity of gold in
> exchange for their property.  I know that if I wanted to sell property
> like a house (which I don't own) or a boat (which I do) I wouldn't accept
> gold as payment.  To begin with, I would have no confidence that it was
> real or that it was 'pure'.  I certainly wouldn't want to pay the extra
> expense and put up with a delay to hire an appraiser. Also, I would feel
> very uncomfortable accepting gold from a security perspective (I'd much
> rather receive a bank check).  And then I'd have the  hassle and delay of
> selling the gold.  And -- given the frequent fluctuations  in the price of
> gold (yes, gold _does_ have a price) -- I would feel  uncomfortable
> holding on to the gold since I am not interested in gold  speculation. And
> -- more to the point -- I know of no one in my  community who would accept
> gold as payment for property of any  significant worth.  If someone went
> to my landlord's office and proposed to pay for real estate in gold, s/he
> would get laughed out of the office.
> Claus:
> You might be right in claiming that gold is no longer money today, but
> your arguments are unconvincing and don't support your claim. The essence
> of your argument is that gold is not money because it does not circulate
> as money. Well, such an argument is only acceptable in a quantity theory
> framework, because according to this theory money has only one function -
> that of means of circulation - and for this reason money cannot have value
> of its own. In the framework of Marx's theory your argument is
> unsustainable, because in this case the prevalence of the function of
> means of payment and the development of an integrated banking system imply
> that money does NOT need to circulate in person, without being displaced
> from its role as money.
> I think in normal conditions I would not accept (and I guess no one would)
> an uncertified piece of gold in the example you gave. I wouldn't because
> gold coins are not issued for the the usual functions of means of
> circulation and of payment. This doesn't prove your point either, because
> gold is issued in certified bars which perform very specific functions of
> money, allowed by the nature of the global monetary system (credit system
> in Marx's terms). Thus, the fact that you and I don't use gold bars in our
> activities does not prove that they don't perform functions of money.
> Comradely,
> Claus.

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