Why The Gold Standard Is Not What People Thought It Was
Many have illusions and romanticize the gold standard. As I said before, it was total mythology.
In this video I discuss how there were other forms of money being used which made the backing of the USD with gold as non-material.
▶️ 3Speak
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You've posted this too late..
I imagine that backing our money in gold has been going on for a long time, so it can take years to change that saving culture, since some still resist new technologies, such as Cryptocurrencies.
I agree that the gold standard would not solve the issue. In the end, currencies are more of a confidence game.
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Summary:
Task discusses the gold standard, debunking the myth and romanticism surrounding it. He explains that while the US dollar was backed by gold, it was not the only form of money in operation. Task highlights the creation of convertible notes by the US domestic banking system during the gold standard era, along with the emergence of the Eurodollar system in the 1950s, which reshaped the concept of money. He further delves into the historical practice of ledger-based money creation by merchants since the 1500s, illustrating how credit was extended to customers over time. Task emphasizes that the gold standard was not as significant or romantic as commonly believed and urges viewers to research terms like ghost money and ledger-based banking for a deeper understanding.
Detailed Article:
Task starts the video by dispelling the myth and romance associated with the gold standard. He clarifies that while the US dollar was indeed backed by gold, it was not the sole currency in operation during that period. Task reveals that the US domestic banking system concurrently engaged in creating convertible notes for various financial activities such as settlements, remittance, collateralization, and cross-border payments.
Moving on to the 1950s, Task explains how the international banking system unintentionally phased out the gold standard by establishing the Eurodollar system. This system, he describes, revolutionized lending, borrowing, remittance, cross-border payments, and swaps, effectively diminishing the significance of the US dollar under the Federal Reserve banking system. Task emphasizes that even today, the dollar's role is overshadowed by the Eurodollar system, which now predominantly controls global finance.
Task then delves into the historical context of money creation, dating back to the 1500s, through ledger-based systems. He vividly recounts how merchants offered credit to customers, fostering money creation through local, trust-based relationships. Task uses personal anecdotes from the 1970s and 1980s to illustrate how shop owners would extend credit to regular customers, accumulating tabs that were settled periodically without the direct exchange of legal tender.
Through these examples, Task underscores the prevalence of money creation through credit arrangements, a practice that has existed for centuries in various forms. He urges viewers to explore terms like ghost money, ledger-based money, and banking to gain a comprehensive understanding of the longstanding tradition of money creation outside the gold standard framework.
In conclusion, Task challenges the perception of the gold standard as a historical pinnacle, suggesting it was merely one facet of a complex monetary system that evolved over time. By encouraging viewers to delve into the historical practices of money creation, Task aims to debunk common misconceptions and cultivate a more nuanced appreciation for the dynamics of money and finance throughout history.