Newstopia Explains the Reserve Bank

tally sticks as a means of exchange worked in the UK for hundreds of years before fractional reserve banking stole the national wealth and enslaved the ignorant masses into debt servitude.

Fractional reserve banking of fiat currency IS ultimatly the biggest con on the face of the planet. However one may justify it as a means to stimulate increases in production, ultimately debt growth outstrips productivity growth at which point a crash happens and the banks take back the all wealth.

A perfect explanation of the current state of the world economy.

The problem is not about the value of the money. The real problem is the money isn't control by anyone of the citizen nor the government. When it's amount and value is privately controlled by a small group of individual, the problems start.

All that money is, is a means to trade in a way that's more convenient than bartering: Instead of swapping ie a bucket of milk for a couple of loafs of bread, people use official "I Owe You's" (aka paper money).

In this example the value of the money is a bucket of milk, and it can be used to buy something of equal value, ie a few loafs of bread. There's no need for rare resources to get involved in that process, except as yet another good to be traded.

The Predatory Capitalism you describe has been around for a long time even before the gold standard was abandoned. There also was compound interest and loan-sharking in the time when the only money was gold pieces.

Our current system is inflationary by its very nature. Money is created by debts, debts increase via compound interest, and the only way to pay off interest is growth, which means creating more money by creating more debt, etc.

The gold standard was, in a way, a way of checking growth. It made growth more difficult, but it meant that your money was always worth something. It's not perfect either, sure, but it worked for centuries before our time and I think the world was wrong to abandon it.

"As I posted before, though, the question isn't whether the economy *should* be limited by gold or anything else.
The question is whether an economy based on growth is sustainable at all."

If the question is about the sustainability of economic growth, then why bring up the gold standard?

I know there's a lot wrong with the economy and money system as it is.
All i'm saying is that a gold standard does not solve those problems.

As I posted before, though, the question isn't whether the economy *should* be limited by gold or anything else. The question is whether an economy based on growth is sustainable at all. Sure, there's finite amount of gold et al, but there's also a finite amount of raw materials from which to make products.

Remember, it's the promise of things to invest in, without the things themselves, that has caused our current economic mess.

If you hit a max amount of gold in circulation then each piece of gold is worth more and can buy more because there is a lower supply than demand. Don't forget there is also silver or even platinum.

"The world's economy doesn't run on precious metal now"

But you think the world's economy should be limited by the availability of gold.

We could run out of gold so that according to you no more money should be printed, even if there would still be other resources that - with labor invested - would grow the economy - yet in the system you propose it would not be allowed to grow.

That doesn't follow from anything I've ever said or written. The world's economy doesn't run on precious metal now - and just look at the state it's in. :)

It's clear from your comments that you don't understand the historical role of precious metals in the world economy, nor the economic volatility of the last century, nor the centuries of stability that preceded it because of the pound sterling. I suggest you read "Gold Wars" by Ferdinand Lips, or what Chris Martenson's "Crash Course".

"The economy will always be limited by finite resources, whether that means gold or any other matter."

So according to you, if there would be no gold on this planet, then there should be no economy.

The economy will always be limited by finite resources, whether that means gold or any other matter. Once you reach these limits - as we are rapidly doing already - the demand for products made from these resources loses its meaning because supply can no longer meet it.

Please conclude this argument, and the 5000+ years of wisdom that has come before it, by explaining to all of us the ideal basis for a stable, sustainable economy based on growth.

"The economy can still grow if you find more gold"

So you tie the size of the economy to the amount of gold on this planet.
I can only hope most people will see that's pointless.

The point of backing a currency by a precious metal isn't growth: it's protecting the value of money in the long term. Neither the existing fiat money system nor your "(potential) supply of goods and services" could ever be considered honest money. (The economy can still grow if you find more gold.)

Besides, growth exists mainly to create the money to pay the interest on the debt created by creating the money in the first place. That sounds like "nonsense" too, but that's what really happens.