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@freemo @anon00110 @johnnada i approximated figuring that out, but i wasn't satisfied with it. basically had to do with selecting a handful of target commodities and then using those as the reference frame.
one tradition is pegging everything by kilograms of gold, but the way people actually use money is to buy food and rent.
one tradition is pegging everything by kilograms of gold, but the way people actually use money is to buy food and rent.
The typical indexes are based on the buying power of everyday items.. so yea food is a way better measure. But it still pegs the value to the location it is in and not an absolute thing.
@freemo @icedquinn @johnnada Yeah it's pretty much a theory instead of an actuality, which is why you can buy things so much cheaper in some places even though based on exchange rates it should be equally costly - it's because they didn't price in cereal, or maid services, etc when pricing the exchange rates. Precious metals and the dollar are most often used to peg values.
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Precious metals is just as bad a peg off value as anything else. Precious metals have real world use that cause their values to swing, often, even more so than fiat itself.
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@anon00110@kiwifarms.cc
@freemo @icedquinn @johnnada That's true, but in practice those swings should effect the global market equally sans the consideration for transport and tariffs. It's also subject to the demand for the individual currencies. Would you be more willing to accept dollars or rubles for your gold in 1987? Such swings in pricing and in demand for currencies is where the arbitrage opportunities exist.
@anon00110
I'd be equally willing to take rubles and US dollar for my gold, since I would immediately (before either had a chance to crash) use that money to invest in things.
@freemo @icedquinn @johnnada That's a perfectly acceptable answer and others in the market would prefer one over the other and vice versa. Which is why the swings occur on demand for the currency as much as the comparable buying power for commodities.
