From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Mon Nov 15 2004 - 05:49:43 EST
Paul B ---------- Dear Fred, Just a couple of related questions to your idea that gold has been de-monetised, since this seems to be your view. Why is it that gold is retained as part of the reserves of all central banks? Why is it that eg the Swiss Franc is still backed 40% ( I believe) by gold, and it was 70% until very recently? Why do most central banks still periodically issue gold coin , issued in various quantities, if only in thousands? ------------------ Paul C The gold once in existence is not going to disappear. It will stay in the vaults of the central banks until it is either a) used industrially b) transferred to private hoards Both of these processes are underway but take time. The gradual run down in the percentage of reserves held as gold show that these processes are occurring. ------------------------ Paul B Finally if money need not be a commodity 'at heart', then what is the way in which paper money is accepted a as valid expression of abstract, social labour. Who does the guessing? ------------------ Paul C It occurs through the state appropriating a portion of social labour and issuing state money to pay for it. The amount of state money issued for this quantity of social labour defines the value of state money.
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