Crown's Total Income

[vonGenf]

Which also meant that currency fluctuations were practically non-existent. Because gold is gold. I think the first inflation in Europe happened when the spanish brought back tons of the stuff from the new world and suddenly the value of gold changed (not being quite so scarce anymore).

That's discounting the inflation due to debasing, of course.

But even discounting that, the supply of precious metal coins is far from fixed. I saw a study once (sadly can't find a reference) about trade between the byzantine and persian empires. The Byzantines used silver coins for trade and gold was mostly hoarded as family treasure and jewels. The persian on the other hands used gold directly for coins.

What would happen is that some traders would arrive in Byzantium with their gold coins and sell them against silver. They would then use the silver to buy stuff from the markets and bring it back home. The gold would be melted in Byzantium. Others did the reverse and silver was melted in Persia. Overall, the amount of precious metal was constant, but the amount of coins in circulation was in steady decline, leading to deflation with no underlying economic cause.

There's a reason we are off the gold standard. It was stupid.

[De-Legro]

That's discounting the inflation due to debasing, of course.

But even discounting that, the supply of precious metal coins is far from fixed. I saw a study once (sadly can't find a reference) about trade between the byzantine and persian empires. The Byzantines used silver coins for trade and gold was mostly hoarded as family treasure and jewels. The persian on the other hands used gold directly for coins.

What would happen is that some traders would arrive in Byzantium with their gold coins and sell them against silver. They would then use the silver to buy stuff from the markets and bring it back home. The gold would be melted in Byzantium. Others did the reverse and silver was melted in Persia. Overall, the amount of precious metal was constant, but the amount of coins in circulation was in steady decline, leading to deflation with no underlying economic cause.

There's a reason we are off the gold standard. It was stupid.

Tom mentioned debasing, and some of the techniques taken to prevent it. I'm not so sure about the Byzantium story. Because of currency was based on precious metals part of the whole advantage was they could increase the circulation of currency, without devaluing the currency. The value of currency wasn't based on some abstract value of the economy that produced it, but based solely on the price of the precious gold. Conversely this meant that the ruling bodies often tightly controlled the mines and industry for the appropriate precious metal, in order to have some control over the supply and thus maintain the value. Obviously if the value of the metal dropped or rose, that affected the currency, but the amount of coins in circulation should not be as important as the relative scarcity of the metal itself.

I believe the gold standard you refer to, the modern gold standard was a Gold Exchange Standard or a Gold Bullion Standard, where the gold standard of medieval times was a gold specie standard.

[fodder]

mint dodgy coins?

... or declare certain coins to be worthless because it's got someone's ugly mug on it.. and confiscate them.

[vonGenf]

Tom mentioned debasing, and some of the techniques taken to prevent it.

He mentioned coin scrapping, but there was also official debasing. This was done on an immense scale in the late roman empire: soldiers would be promised a pay in denarii, which were a silver coin, but the silver content was re-defined when time came to actually hand out the cash. This was harder to do in the middle ages because there was not much contract law to go about and people indeed weighed gold, while in the roman empire it was possible for citizens to sign long term enforceable contracts labelled in some currency.

(Amusing irrelevant fact: the denarius' name is a derivation from the root latin word den which means ten, because a denarius was worth ten asses. Yes, asses. Make of it what you will.)

I'm not so sure about the Byzantium story. Because of currency was based on precious metals part of the whole advantage was they could increase the circulation of currency, without devaluing the currency. The value of currency wasn't based on some abstract value of the economy that produced it, but based solely on the price of the precious gold. Conversely this meant that the ruling bodies often tightly controlled the mines and industry for the appropriate precious metal, in order to have some control over the supply and thus maintain the value. Obviously if the value of the metal dropped or rose, that affected the currency, but the amount of coins in circulation should not be as important as the relative scarcity of the metal itself.

That is true, of course, but the morale of the story is that you can never control anything that happens to your metals. Since the metal production, melting and coinage has nothing whatsoever to do with actual economic activity, you get two independent variables where you only really need one.

Also, the value of money is not imposed from above through some abstract calculations. There is an actual offer and demand going on; money is worth what you will give up for it. I give 41 hours a week for a certain of money, that's what it's worth to me, not grams of gold. Gold could be a means of exchange, or many other things, but it only counts as a means of exchange, not as gold.

I believe the gold standard you refer to, the modern gold standard was a Gold Exchange Standard or a Gold Bullion Standard, where the gold standard of medieval times was a gold specie standard.

True.

[Lefanis]

There's a reason we are off the gold standard. It was stupid.

No more stupid than fiat money, where the currency is backed by an entity which would gladly devalue it and create inflation by printing wads and wads of currency. Many governments just print money and create massive debts only to show "economic growth". Short term gains for the economy and the interested politician, and long term hell for the country.

You mentioned the denarius, that's an excellent example of how governments debase their own money so they can pay of outstanding debts. Or the post world war one Germany, which tried to print its way out of the reparations it had to pay.

Fiat money is like crack with it's short term high. But you keep on wanting more and more of it, and it compels you to have/make more. Ireland in January was making euros out of thin air, even now we are hearing the ECB may start printing money... Just digging themselves into a deeper holes.

[Anaris]

Fiat money is like crack with it's short term high. But you keep on wanting more and more of it, and it compels you to have/make more. Ireland in January was making euros out of thin air, even now we are hearing the ECB may start printing money... Just digging themselves into a deeper holes.

Sounds to me like the gold standard has inherent problems, while our current system can work better, but tempts governments to do stupid things with it that cause other problems (which may or may not be worse than the problems inherent in a precious-metal standard).

[Ramiel]

Its because the banks are not public and are owned by powerful banking families that we have all this hassle. I mean if the Federal Reserve is the 'standard' that most people think it is for banking, then its a miracle we still cling to some abstract idea that we are free...

Going on a Standard (whatever we, pretty much no one cares at this point, heck do it on a Bubble Standard so long as it is on a standard!) just curtails those banking families from printing all this worthless money.

Having money based on nothing but trust leads to our current financial and economic state.


Saddam and Gadaffi had the brilliant idea of not accepted $US but only accepted gold/money based on a gold system for oil/services as well as making a new currency (in Gadaffi's case) for the African continent based on a gold standard (or the money would actually be gold, something along those lines) and look how quickly they got invaded and overthrown. Yes they were right gits and deserved what they got in the end but if they had not breached the human rights and committed the mass murders they had, they would still have been invaded and overthrown.

And all because it would have meant that they would dictating the cost and not the $US and those who control it.


Or at lease some people say...

[Vellos]

"In addition, the realm made 0 gold from other sources (fines, etc.), bringing the crown's total income to 2589 gold."

YEah.... not fixed at all. Gotten worse.

[Tom]

(Amusing irrelevant fact: the denarius' name is a derivation from the root latin word den which means ten, because a denarius was worth ten asses. Yes, asses. Make of it what you will.)

I once wrote a pen&paper roleplaying game with every country in the background world having its own currency, variable exchange rates, the whole nine yards.

Players very quickly started to inquire about the prices of a very short list of common goods when they reached a new coin. They based their perception of the value of local coins not on exchange rates (which not only changed, but they were also constantly exploited by the money exchangers who abused their ignorance of the "proper" exchange rate), but on the price of pants and beer.

So there's your answer. Asses most likely because they were a common property of some value that most people could easily grasp.

[Tom]

Sounds to me like the gold standard has inherent problems, while our current system can work better, but tempts governments to do stupid things with it that cause other problems (which may or may not be worse than the problems inherent in a precious-metal standard).

Actually, no. Your "can" is based on an incorrect assumption - that you could ever have a government that is not stupid and corrupt. That's like saying if we could exceed the speed of light, we could solve world hunger by importing grain from the future when we've solved world hunger. Yes, it is true in a pure logic sense, but unless you can prove point a) first, everything following it doesn't work out.

[Indirik]

Or at lease some people say...

MMmmmm... Gotta love me a some good conspiracy theories...

* Indirik starts making a new tinfoil hat and mashing them taters...

[Tom]

"In addition, the realm made 0 gold from other sources (fines, etc.), bringing the crown's total income to 2589 gold."

YEah.... not fixed at all. Gotten worse.

What do you mean? Should the total sum be lower or should the other income not be zero?

[Anaris]

What do you mean? Should the total sum be lower or should the other income not be zero?

The total is not being zeroed out when taxes are distributed.

You fixed this a few days ago; the fix just hasn't gone live yet.

[Tom]

The total is not being zeroed out when taxes are distributed.

You fixed this a few days ago; the fix just hasn't gone live yet.

The total is calculated during tax collection. The other income wasn't zeroed out, and I fixed that and put it live. Most realms are now at 0.

[Indirik]

Astrum's "other" income was indeed zero. My tax report goes like this:

Libidizedd: 634 gold
Duchy taxes from the other two regions in the duchy: 17 gold
Realm taxes from the other duchies: 104

Crown's total income: 755

The game reports: The crown has received 755 gold tax income thanks to a realm share of 5 %.

All good so far. The table all calculates out and adds up. But then we get this:

In addition, the realm made 0 gold from other sources (fines, etc.), bringing the crown's total income to 2379 gold.

So, we had 0 income from other sources, which is probably right. But 755 + 0 does not equal 2,379! Where did that extra 1,624 gold come from? And I really did get it, too!