Should Somalia move to the gold standard?

[merka]

The Federal Government is currently planning to introduce a new currency to replace the old Somali shilling.

Since the Shilling right now is basically worth shit due to hyperinflation this is a good opportunity for Somalia to move to the gold standard.

What do y'all think?

 

[ArchBishopofAtheism]

We should move to the rule of law standard first

 

[YoungFarah]

Wasn't the gold standard abandoned in the 70s?

 

[merka]

Wasn't the gold standard abandoned in the 70s?

Only the US was based on gold after WW2 until the 1970s. Every other currency was pegged to the US dollar.

 

[TheMadMullah]

Farmaajo should introduce the Turkish lira

 

[Foreman]

Threat USD hegemony and Somalia is toast. This goes to every other country in the world. The real reason behind US invade of Iraq is because Sadam was planning to sell his oil in Euro setting precedent of breaking long stand taboo of selling oil in non Dollar currency.


Hellary Killton leaked messages has shown French spearheading the collation in Libya to prevent Gadaafi from issuing gold backed Dinar that will render Frank Franc useless in the African continent especially north Africa.

A gold backed Libyan Dinar will to be equally catastrophic to the USD as world reserve currency, because its backed with something tangible not empty words and paper bounds. Gaddafi regime has been actively accumulating gold and silver by the ton along the years to lunch Dinar as pan African currency, had he pulled it off it would have wrack havoc in the international and exchange markets forcing the world into a new fair and better monetary system on equal footing with the west. Most countries are already sick and tired of federal reserve manipulation that cause boom/bust cycles, so US gave its blessings "leading from behind"


Short answer is no.

 

[Asma]

Threat USD hegemony and Somalia is toast. This goes to every other country in the world. The real reason behind US invade of Iraq is because Sadam was planning to sell his oil in Euro setting precedent of breaking long stand taboo of selling oil in non Dollar currency.


Hellary Killton leaked messages has shown French spearheading the collation in Libya to prevent Gadaafi from issuing gold backed Dinar that will render Frank Franc useless in the African continent especially north Africa.

A gold backed Libyan Dinar will to be equally catastrophic to the USD as world reserve currency, because its backed with something tangible not empty words and paper bounds. Gaddafi regime has been actively accumulating gold and silver by the ton along the years to lunch Dinar as pan African currency, had he pulled it off it would have wrack havoc in the international and exchange markets forcing the world into a new fair and better monetary system on equal footing with the west. Most countries are already sick and tired of federal reserve manipulation that cause boom/bust cycles, so US gave its blessings "leading from behind"


Short answer is no.

You just said exactly what I wanted to say, so thanks.

 

[merka]

Threat USD hegemony and Somalia is toast. This goes to every other country in the world. The real reason behind US invade of Iraq is because Sadam was planning to sell his oil in Euro setting precedent of breaking long stand taboo of selling oil in non Dollar currency.


Hellary Killton leaked messages has shown French spearheading the collation in Libya to prevent Gadaafi from issuing gold backed Dinar that will render Frank Franc useless in the African continent especially north Africa.

A gold backed Libyan Dinar will to be equally catastrophic to the USD as world reserve currency, because its backed with something tangible not empty words and paper bounds. Gaddafi regime has been actively accumulating gold and silver by the ton along the years to lunch Dinar as pan African currency, had he pulled it off it would have wrack havoc in the international and exchange markets forcing the world into a new fair and better monetary system on equal footing with the west. Most countries are already sick and tired of federal reserve manipulation that cause boom/bust cycles, so US gave its blessings "leading from behind"


Short answer is no.

Somalia's GDP is lower than a Fortune 500 company. Moving to a gold standard will not threaten their economic hegemony

 

[offensive bias]

you need to have large gold reserves to start a gold pegged currency.
anyway its the stupidest thing you could do.
Gold prevents you from using monetary policy to grow your economy.

people are ignorant about what money is, they confuse it with wealth,
and if they studied economics would give the standard answer which is " store of value and medium of exchange"
this is not what money is , its what money does.

The true definition of money that you wont get in an economics textbook is that money is simply an agreement.
If 2 parties agree on it, than anything can be money, no need for gold.

So you need trust first and foremost.

 

[Apollo]

No, it has been discredited by most credible economists. Sometimes you have to control the money supply as a government and you can't do that with gold.

Keynesian economics works better than Austrian economics. Major economies like China and Japan all are not on the gold standard.

 

[Prince Abubu]

Gold is not as stable as most people think it is. Plus, currency-manipulation is an important weapon in trade. Pegging your currency to good doesn't allow you to do that..I think Somalia should have two currencies; one for spending and circulation and another for saving. Maybe the latter one can be pegged to gold.

 

[merka]

No, it has been discredited by most credible economists. Sometimes you have to control the money supply as a government and you can't do that with gold.

Keynesian economics works better than Austrian economics. Major economies like China and Japan all are not on the gold standard.

The governments of China and Japan have a major say in the planning of their economies. Can Somalia's government be trusted to do the same?

A gold standard is perfect for a laissez faire free market economy like Somalia. The government is too corrupt to be trusted to control the money supply.

 

[Apollo]

The governments of China and Japan have a major say in the planning of their economies. Can Somalia's government be trusted to do the same?

A gold standard is perfect for a laissez faire free market economy like Somalia. The government is too corrupt to be trusted to control the money supply.

The gold standard literally caused Hitler.

It's the most retarded economic policy ever. People only like Gold for it's ''realness'', but still will end up using paper tokens stored by a central banks who can fiddle with the numbers. Why not go full fiat instead and have a modern economic system?

A low value currency is good for exports as well. If Somalis want to save money, they should do so in other currencies.

 

[Von]

The goal standard? you're asking for the complete destruction of the Somali people, don't mess with the global (USA) financial system

 

[offensive bias]

I would recommend MMT ( Modern Monetary Theory)
A fiat currency makes sense , but with a good and basic tax system, money culd be directed towards areas of development.
We have the resources , the manpower but people are just sitting idle chewing qat and waiting for handouts when there is so much work to be done.
Work that doesn't require precious foreign currency.

 

[Deactivated]

There's about 2000MT of gold between Puntland and Somaliland. Nobody is digging for gold because it the current business model is getting Aid instead of getting Paid.

 

[Xaagi-Cagmadigtee]

Horta, why is this thread in the Politics section? This is an economic question.

As for the topic, very unwise idea to begin with. One fundamental (and easy) question to ask is, where is all this gold reserve held in Somalia? If you couple the economy with gold, it only grows as much as your asset's (gold in this case) value increases -- very foolish idea which limits growth. Best thing ever happened to America during the Great Depression was decoupling the economy from gold, which, eventually, tamed inflation and brought down interest rates.