Thursday, November 17, 2011

Money Chemistry

Posted by dkuehn at 8:44 AM


An interesting Slate video on the chemical properties of different elements and why gold has been used as money.

I found the part about radioactive elements interesting. They had two reasons for rejecting them:
1. Health risk, and
2. Radioactive decay - as they say "your money would disappear!"

Now, to a Slate columnist those sound like bad things. But to an economist worried about liquidity preference, that would be a feature, not a bug! Who would want to hold on to money if it depreciated rapidly and posed a health risk?

Silvio Gesell enters the nuclear age!

4 comments:

  1. But to an economist worried about liquidity preference, that would be a feature, not a bug! Who would want to hold on to money if it depreciated rapidly and posed a health risk?

    Why is it bad if consumers want to hold money? What's wrong with money that retains value over time?

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  2. Because it's just paper. You're supposed to use it as a tool to acquire truly desirable goods.

    At least thats how I understand it. I'm sure theres much more nuanced arguments out there.

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  3. Those guys did a much longer version of this on their planet money podcast this summer or whenever. It really bugs me. Silver was used as the main currency and/or a perfect substitute for gold for a long, long time and the modern "gold standard" is only like 130 years old and it's dominance was kind of decided by a bunch of arbitrary decisions.

    I mean, really? Something you make forks out of? What about using something you fill your cavities with?

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  4. Mat Von G-

    Holding specie means that its not being circulated as capital and isn't available for investment or consumption. I.e. what Carl said.

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