OOTS #1089 - The Discussion Thread

[Peelee]

I'm sorry, but I cannot morally give any of my money to such a scam. I simply chose not to go to any such business. Hopefully you can understand my position in the matter.

Grey Wolf

I totally understand, but that's difficult to do in the US. I'm able to avoid coffee shops and bars because I hate coffee and rarely drink, cabs because I have a car (and, again, rarely drink), but there are times when I either don't have the time or energy to cook, get invited out to special events with friends, or have congratulatory events that warrant something better than even the best I can knock out in the kitchen. I have to swallow the necessary evil sometimes. It's great that you don't.

Imean, I don't have to, but it's nowhere near as easy.

[The MunchKING]

So I, who know nothing of the restaurant business, decide how much they should be payed, based on a partial knowledge of their job? Do you get paid based on how well people walking along the street think you parked your car in the mornings when you get to work?

Well, as a landlord, I do get paid directly by my "customers" who tend to know nothing about the expenses or job of landlording. But they do know if they have a problem and how well I fix it, so I see similarities in the argument.

On top of what woweedd said, the difference is that a restaurant that did decide to do that and lost a few workers could simply keep going and hire a new bunch. If any other business did do that, they'd be sued out of existence for wage theft. The situations are not comparable at all.

Well, if they don't pay, then no one else will work for them either.

But yeah if they stuck to the "if you get tips" minimum wage rather than the default minimum, they would get sued into oblivion here too.

I'm sorry, but I cannot morally give any of my money to such a scam. I simply chose not to go to any such business. Hopefully you can understand my position in the matter.

Grey Wolf

Well then, if you go to America that will pretty much limit you to fast-food.

[The MunchKING]

This, assuming of course tips are in fact legally optional.

As far as I know, the only laws regarding tipping is the ones that say the restaurants can be held to a lower minimum wage standard.

Nothing says you must or cannot tip.

...in fact, I just now noticed that it's apparently "tipped employees can be paid well below minimum wage" these days. That's even worse! I mean, if you're going to have an arbitrary minimum wage you should actually have it as a minimum....

Oh yeah, if that's what you meant. You get an hourly wage, that can legally be below minimum wage, and are expected to make more in tips.

It's usually a better idea to try and get better employment before you quit, after all.

Oh, well yes. I assumed little details like that went without saying.

[2D8HP]

Why Tip?

[Peelee]

Why Tip?

Restaurant thinks about getting rid of tipping in lieu of a set gratuity.
Americans polled prefer tipping to a service fee.

....yeah, no kidding. "Would you rather choose how much extra money you spend, or have it set and called a "fee" or "set gratuity"?" is a loaded question, of course you'll get responses like that. Would you rather die by drowning or getting shot? Headline: AMERICANS WANT TO GET SHOT.

[Jasdoif]

Restaurant thinks about getting rid of tipping in lieu of a set gratuity.
Americans polled prefer tipping to a service fee.

....yeah, no kidding. "Would you rather choose how much extra money you spend, or have it set and called a "fee" or "set gratuity"?" is a loaded question, of course you'll get responses like that. Would you rather die by drowning or getting shot? Headline: AMERICANS WANT TO GET SHOT.

Sounds a lot like the occasional sales tax vs property tax things here. They don't commit to lowering property tax, so it amounts to "would you rather pay a sales tax, or not pay a sales tax"? Results are predictable.

[littlebum2002]

Oh yeah, if that's what you meant. You get an hourly wage, that can legally be below minimum wage, and are expected to make more in tips.

As I mentioned, though, if your hourly wage + tips don't equal the minimum wage, the employer is required to pay you the difference.

[Erys]

Man, so many posts... Almost not worth adding my 2 cents anymore. BUT, here it goes anyway.

Change the example to whatever you want: prices can go up even when you tie your currency to a rock, no matter how shiny. I gave you real world historical examples, which you chose to ignore. I have now given you a bare bone example with the hopes you would see that inflation cannot be constrained by a hard currency. Do with it what you will.

Grey Wolf

You prove over and over you don't really know what you are talking about. Like right here.

Inflation is not the same as prices rising to supply and demand.

What's the difference? And what's the difference with "fiat money" economies?

The very nature of trading means adjudicating an arbitrary value (aka applying the underlying principle of fiat money) will happen at some point, and that value will change based on circumstances. How many dollars for a burger? Fiat and variable. How many euros for a coffee? Fiat and variable. How many pounds for housing? Fiat and variable.
Even without money, the questions and answer don't change. How many chickens for a cow? Fiat and variable. How many sticks for a bucket? Fiat and variable. How many jagged rocks for a piece of leather? Fiat and variable.

What exactly does gold/silver/whatever bring on the table?

In a nutshell: because you can only add small amounts new money to the over all supply it is more stable and fairly resistant to inflation (outside forces and internal greed notwithstanding). With fiat money, you have a government that can create new money at a whim, and the constant additional monies added cause the purchasing power of every other note to decrease.

Inflation = loss of buying power.

Chickens, cows, buckets, rocks, and leather... none of which are fiat. These are real intrinsic items. Their value may start somewhat arbitrary- but equilibrium is easily attained. If you sell chickens for a silver piece and your neighbor thinks his chickens are worth 3 silver pieces- people will come for the cheap ones... but if they come to fast and you have no chickens to make new eggs and new chickens... oops! You learn quick to raise your rates, while your neighbor learns to lower his if he wants to sell chickens at all.

Cherry picking data over the whole world means nothing, because doing so undermines your own argument about "fiat currencies always do". If you actually believed in your inevitability argument, you could demonstrate your point with the full historical data from, say, the USA. The reason gold bugs do not so is because, overall, the historical data in the USA argues against their point. Thus it is necessary to change the subject to a carefully cherry-picked far flung corner of the world the moment people who are genuinely knowledgeable start discussing the matter.

Hardly cherry picking on my part. There are many areas in South America, Europe, and Africa suffering from their fiat currencies.

The USA hasn't had their currency collapse- but they also have unique mechanisms to keep their currency afloat longer than average. Unfortunately, to really delve into this means to violate forum rules, but the somewhat non-political reasons are:

Most of the world is required, due to contracts between OPEC and the USA, have and hold US dollars to buy their oil. The world currently runs on oil... so the US has enjoyed bit of a special monopoly that has allowed us to not only sustain a fiat currency for much longer than average, but also rack up ridiculous amounts of debt in the process. (Honestly, I wish people understood this aspect of the US economy more than any other... borrowing money from a third party at interest and allowing yourself to owe more than your annual GDP is asinine. People should be upset... but most don't really understand that its even happening. By design, of course).

Now, to put some of this in perspective, since the creation of the Federal Reserve (which, interestingly enough is neither Federal or a Reserve; but I digress) in 1913 the US inflation has risen about 2374.3%. If we had stuck with, at the very least a gold standard, it is highly likely half pennies would still be in circulation and often to be used in commerce.

So what you're saying is you think an economy can work where the amount of money (gold) stays constant and the price of goods and services stays constant. Let’s see how this would work.

There are 10 people and they have 20 pieces of gold. They each sell different goods, and each good costs 1 piece of gold. Therefore, each person can buy 2 “things”.
The population increases to 20 people. Now each person can only buy 1 “thing”.

If the amount of money is constant, and the price of goods is constant, then as the population increases each person will be able to buy less goods. That’s just basic math.

Why in the world would all goods be valued the same? For that matter, why would you even need a currency when you only have 20 people?

If the amount of gold in circulation is outpaced by a population using it... its value goes up. Meaning you could buy more, not less.... assuming supply and demand for said goods remains constant to the number of new people in the 'system', so to speak.

Fun fact: the law.

U.S. Treasury
The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

Notice that is for private business....

Try paying a government utility or tax with Disney Dollars and tell me how it goes.

Except you know, how it's in play pretty much everywhere and the world economy is doing better than ever.

But other than literally everything about it, yes damning history, right there.

LOL

Maybe you should look at some of the worlds economies. Because "doing better than ever" is not what's happening. Just read about Greece or Argentina for two quick examples.

Of course, depending on where you get your news... you may be told otherwise.

Economists record another 55 times that faith in government-backed currencies has proven to be unwise due to hyperinflation. This number does not even include the hundreds of times countries have devalued their currency, significantly reducing the purchasing power, or value, of paper currency.

While many of these economic collapses have occurred in Latin American countries, examples of hyperinflation can be found in the economies of China, France and other nations. War is often a precursor of such periods of extreme inflation, but it is not the only cause. Fundamentally, economists such as Steve Hanke and Nicholas Krus have identified excessive printing of currency as the ultimate villain.

Cite

And a good, light read.


***TO everyone:

Excessive printing... the core of fiat money.

Why?

Because fiat money allows a politician to make promises of things, be it new money for schools, new roads, a bridge, whatever... all while not raising taxes. That money has to come from somewhere though, right?

Its created out of nothing, and every time that happens the buying power of each note gets a little less. Year after year more and more political promises are made, more and more money is created (from nothing), and the price for everything gets a little more expensive than the previous year.

That is the nature and danger of fiat currency at its core. BUT, it gets worse.

Intrinsic money is more stable at its base, because you can only pull so much metal from Earth at one time. The down side is economic growth is slower, but also more steady, without the roller coasters you see in other monies.

The usual (but not only) way intrinsic money is debased is either by chipping (think Rome) or through the process of fractional reserve banking. This means, a bank only needs to hold a small percentage of intrinsic wealth on hand (to cover expected withdraws) and is allowed to lend the rest at interest.

This will lead to fiat currency after so much money has been lent and so much interest is due that it becomes easier to detach from the intrinsic metal and just allow government issued paper money. Because otherwise you would have to value the real amount of gold/silver to the 'on paper' amount and makes some severe adjustments, which will cause a correction/contraction in the economy.

The end game is fractional fiat currency. Not only is the currency not attached to anything real, banks are allowed to lend 9/10s of what they are supposed to hold (aka: your savings accounts). So not only are you getting inflation from the machine itself every time the government wants to create new money on a whim; but banks are adding to it through their lending practices. Any nation with a central bank is probably practicing fractional fiat currency, the US sure does.

Inflation robs you of your buying power. Sure, if you have a job that gives you raises that keep up with inflation who cares, right? But what about the people who don't get good raises (either because of personal performance or business constraints)? How about those on fixed incomes?

Those most vulnerable are the ones hurt most by our currency economic system. And for the US in particular, should the world no longer need dollars for their oil... its game over.

[Peelee]

Notice that is for private business....

Try paying a government utility or tax with Disney Dollars and tell me how it goes.

Private business was what was brought up, so I fail to see the disconnect.

[Erys]

Private business was what was brought up, so I fail to see the disconnect.

Private business is but one factor when using "legal tender".

But, I misspoke saying it was a requirement of law to use dollars... because individuals and private businesses do have the ability to negotiate other terms.

[littlebum2002]

Why in the world would all goods be valued the same? For that matter, why would you even need a currency when you only have 20 people?

I'm not quite sure I can trust your knowledge of currency if you don't know what an analogy is.

My point is, if we keep the price of goods and services the same, and we have a fixed amount of money, then a increase in population means everyone is slightly poorer

[Erys]

I'm not quite sure I can trust your knowledge of currency if you don't know what an analogy is.

My point is, if we keep the price of goods and services the same, and we have a fixed amount of money, then a increase in population means everyone is slightly poorer

No, people would be slightly richer.

Less money in circulation means the greater buying power the existing supply has.

[georgie_leech]

No, people would be slightly richer.

Less money in circulation means the greater buying power the existing supply has.

Hang on. Econ 101 here: If there are more people needing a thing, that makes Demand go up, which means prices rise. There are a lot of other factors, but it seems like you're arguing that prices would drop in response more people that want and need stuff.

[Keltest]

Hang on. Econ 101 here: If there are more people needing a thing, that makes Demand go up, which means prices rise. There are a lot of other factors, but it seems like you're arguing that prices would drop in response more people that want and need stuff.

He's suggesting that, because there is a finite amount of money, its value goes up the more people need it. Which is true if you define value as being how much a person wants a thing, but not true in any economic sense.

[Snails]

Hardly cherry picking on my part. There are many areas in South America, Europe, and Africa suffering from their fiat currencies.

So? There are many many more areas in South America, North America, Europe, Africa, Asia thriving with their fiat currencies.

The main problem with, say, Venezuela and Zimbabwe is their atrociously bad gov'ts. Gold standard would not save them in the least. Nor would gold help, say, Greece because the Euro being too much of a hard currency for their particular economy is a big part of their problem; a gold standard now would actually make approximately all of Greece's problems worse.

[georgie_leech]

He's suggesting that, because there is a finite amount of money, its value goes up the more people need it. Which is true if you define value as being how much a person wants a thing, but not true in any economic sense.

He seems to be arguing for a literal purchasing power increase. So on that note Erys, say over a period of years the population of a place doubled. How much would the value of a coin go up? Like, if an arbitrary gold coin could purchase, say, 5 apples, how many apples could it purchase after the population doubling?

[2D8HP]

No, people would be slightly richer.

Less money in circulation means the greater buying power the existing supply has.

No, people who had managed to hoard/save a lot of money would be richer.

More would be poorer.

As I posted before, one person's spending is another person's income.

This is really basic.

I was born in 1968, and I remember 1980 which is the year with the highest inflation rate of my lifetime.

2009 had the lowest rate of inflation in my lifetime (see link above).

You probably remember 2009 as well.

Far more Americans fell into miserable poverty in 2009 than in 1980.

Don't you have any grandparents who told you about the 1930's?

Here's a song about it

"Brother Can You Spare A Dime"

They're far more dangerous economic beasts than inflation.

Please take another look at
Scents and Cents Ability

Sharing a meal with friends and family, and knowing that none of them is homeless and starving is far more valuable than counting the value of your gold.

I was going to suggest The Grapes of Wrath (my grandfather straddled the fender of a Model A Ford for days to get to California because of rumors of work), but I think A Christmas Carol may be better for you.

[Erys]

He's suggesting that, because there is a finite amount of money, its value goes up the more people need it. Which is true if you define value as being how much a person wants a thing, but not true in any economic sense.

It is true in an economic sense.

Money is a unit of exchange; the more of anything in a supply, be it apples during harvest or currency- the less each will be valued at the individual unit. The less in the supply, the more value each unit holds.

This is universal.

So? There are many many more areas in South America, North America, Europe, Africa, Asia thriving with their fiat currencies.

The main problem with, say, Venezuela and Zimbabwe is their atrociously bad gov'ts. Gold standard would not save them in the least. Nor would gold help, say, Greece because the Euro being too much of a hard currency for their particular economy is a big part of their problem; a gold standard now would actually make approximately all of Greece's problems worse.

While I agree completely that bad government can kill good currency; you are not really accurate about how many countries are thriving verse suffering. South America, for example, has very high poverty rates across the board- and the poorer you are, the more fiat currency systems hurt. Poor cannot adjust to raising prices like middle class and wealthy can.

He seems to be arguing for a literal purchasing power increase. So on that note Erys, say over a period of years the population of a place doubled. How much would the value of a coin go up? Like, if an arbitrary gold coin could purchase, say, 5 apples, how many apples could it purchase after the population doubling?

Literal purchasing power could increase, yes. If your money supply isn't swelling faster than goods and people are- the buying power of your currency will improve.

As for your question, too many factors in play to fairly answer that. For starters. is mining happening during this time, at what rate is new money being added in relation to new people, and how comparable are the apple harvest between the first and final years?

With an intrinsic economy those apples could cost more, cost less... or be the same. My educated guess is: you would get apples at a slightly better price.

By the same token, if you take the population of the US in 1950 to today, the population has roughly doubled. During that time our buying power has decreased 916.4%. Something that cost $20 then cost over $200 today.

In closing I leave you with a great quote:

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

[Erys]

No, people who had managed to hoard/save a lot of money would be richer.

More would be poorer.

As I posted before, one person's spending is another person's income.

This is really basic.

I was born in 1968, and I remember 1980 which is the year with the highest inflation rate of my lifetime.

2009 had the lowest rate of inflation in my lifetime (see link above).

You probably remember 2009 as well.

Far more Americans fell into miserable poverty in 2009 than in 1980.

Don't you have any grandparents who told you about the 1930's?

Here's a song about it

"Brother Can You Spare A Dime"

They're far more dangerous economic beasts than inflation.

Please take another look at
Scents and Cents Ability

Sharing a meal with friends and family, and knowing that none of them is homeless and starving is far more valuable than counting the value of your gold.

I was going to suggest The Grapes of Wrath (my grandfather straddled the fender of a Model A Ford for days to get to California because of rumors of work), but I think A Christmas Carol may be better for you.

Oy...

You might want to look into the role of the Federal Reserve during that time and other economic recession/depressions. It might surprise you.

You also need to realize that inflation being high one year and low another still means you are losing purchasing power each year. That is an additive effect, much like how one year you might have a lower deficit the the next- but all along your national debt gets bigger and bigger.

Poor people, and people on fixed incomes have the most to gain from the stability intrinsic metal bring to the economy. The little they have will buy them roughly the same amount of good year to year... whereas fiat money means poor and fixed income retirees have to learn to live on less year to year- until they can no longer afford anything and they are homeless, hungry, and suddenly in need of some contrived government assistance.

Also, he who hordes gold is also one who will horde paper wealth. I agree when you say "Sharing a meal with friends and family, and knowing that none of them is homeless and starving is far more valuable than counting the value of your gold." But just know that that is true regardless of what economic model is in play.

[2D8HP]

It is true in an economic....:

I suggest reading up on the Washington Baby Sitting Co-op

[Erys]

I suggest reading up on the Washington Baby Sitting Co-op

Paul Krugman is a Keynesian economics man through and through.

Keynesian economics is solely a fiat system... so, I don't take much of what he says as gospel as he has an agenda. That said, the baby sitting co-op is a one dimensional situation; you get coupons and spend coupons for one thing. Very poor example of a currency and even worse as an example against intrinsic wealth.

Ithaca hours might be a better example.

The only time hording really comes into play is when you have a fiat currency and you are trying to return to something intrinsic. Then people will spend the bad money and save the good. With the new currency never really getting circulated it can never really becomes a currency because in this particular situation, the fears of hording gold becomes true. However, I feel should the masses demand real money over fiat; there are ways to make such a change without provoking such responses and behaviors.

If you have an intrinsic currency at the start (or by itself), people will use it. People will always need and want stuff. Always.

[georgie_leech]

Literal purchasing power could increase, yes. If your money supply isn't swelling faster than goods and people are- the buying power of your currency will improve.

As for your question, too many factors in play to fairly answer that. For starters. is mining happening during this time, at what rate is new money being added in relation to new people, and how comparable are the apple harvest between the first and final years?

With an intrinsic economy those apples could cost more, cost less... or be the same. My educated guess is: you would get apples at a slightly better price.

Unless it's half the price or better, the average person is poorer after doubling the population: the same amount of money would have to be spread twice as thin. A "slightly better price" translates to everyone getting poorer.

By the same token, if you take the population of the US in 1950 to today, the population has roughly doubled. During that time our buying power has decreased 916.4%. Something that cost $20 then cost over $200 today.

Hey, it turns out we have data on what average wages were like in various years since 1951. Might I suggest checking to see if wages were constant over that period, or if they grew over time? Hint: I'm pretty sure minimum wage wasn't $7.25/hour back in 1950.

[Erys]

Unless it's half the price or better, the average person is poorer after doubling the population: the same amount of money would have to be spread twice as thin. A "slightly better price" translates to everyone getting poorer.



Hey, it turns out we have data on what average wages were like in various years since 1951. Might I suggest checking to see if wages were constant over that period, or if they grew over time? Hint: I'm pretty sure minimum wage wasn't $7.25/hour back in 1950.

How do you figure a "slightly better price" equals everyone is poorer?

That is completely backwards. Let's pretend that somehow the amount of currency remains completely static, twice the people means twice as many people using said currency- meaning the your money would be twice as strong. No different then double the people to a static amount of apples; those apples will be worth more due to supply and demand.

Minimum wage didn't have to be 7.50 back then; interestingly the US still was partially on the gold standard back then too. You could get paid 2 dollars an hour and have money to buy necessities and still have enough to see a movie and do whatever. In fact, in the 50's you only needed one parent working to live well.

Fast forward to today where, thanks to reckless money creation (usually called spending) people feel they need 15 an hour just to survive and most families require two incomes to keep afloat.

This is not an improvement by any measure; and it will get worse. The money supply can only get bigger- until it bust.

[Keltest]

It is true in an economic sense.

Money is a unit of exchange; the more of anything in a supply, be it apples during harvest or currency- the less each will be valued at the individual unit. The less in the supply, the more value each unit holds.

This is universal.

Ok, but the supplies are not changing at all, only the demand. The increased demand increases value, thus price. But you aren't putting any more money into the system, so the total purchasing power of X amount of currency goes down relative to where it was before, because you now are able to get fewer goods for the same amount of currency.

[Svata]

How do you figure a "slightly better price" equals everyone is poorer?

That is completely backwards. Let's pretend that somehow the amount of currency remains completely static, twice the people means twice as many people using said currency- meaning the your money would be twice as strong. No different then double the people to a static amount of apples; those apples will be worth more due to supply and demand.

Minimum wage didn't have to be 7.50 back then; interestingly the US still was partially on the gold standard back then too. You could get paid 2 dollars an hour and have money to buy necessities and still have enough to see a movie and do whatever. In fact, in the 50's you only needed one parent working to live well.

Fast forward to today where, thanks to reckless money creation (usually called spending) people feel they need 15 an hour just to survive and most families require two incomes to keep afloat.

This is not an improvement by any measure; and it will get worse. The money supply can only get bigger- until it bust.

The problem here isn't that we've decoupled. Its that wages haven't risen accordingly cause the people who run corporations are greedy ****s.

[georgie_leech]

How do you figure a "slightly better price" equals everyone is poorer?

That is completely backwards. Let's pretend that somehow the amount of currency remains completely static, twice the people means twice as many people using said currency- meaning the your money would be twice as strong. No different then double the people to a static amount of apples; those apples will be worth more due to supply and demand.

Because if you have twice as many people and the same amount of money, everyone gets half as much. Unless you're arguing these new people will have a disproportionately small part of the available currency, you necessarily have fewer bits of currency to go around.

Here, watch: Let's say your currency can buy an extra 60% as much as you used to, quite a bit better than the "slightly better price" you suggested earlier, no? If a coin could buy 5 apples before, 1 coin now buys 8. By extension, half a coin buys 4. If there are X coins, and Y people, there are X/Y coins per person. We're assuming double the population, so now there is 2Y population. So now it's X/2Y. Which is half as much. So now everyone that had a coin before has half a coin; they could buy 5 apples before, but now they can only buy 4! If they could buy 1000, they can now buy 800. The price has gotten better; the actual buying power any given person has goes down.

[KorvinStarmast]

This thread has lost the plot.
Krugman did too, but that's a separate issue.

[Erys]

Because if you have twice as many people and the same amount of money, everyone gets half as much. Unless you're arguing these new people will have a disproportionately small part of the available currency, you necessarily have fewer bits of currency to go around.

Here, watch: Let's say your currency can buy an extra 60% as much as you used to, quite a bit better than the "slightly better price" you suggested earlier, no? If a coin could buy 5 apples before, 1 coin now buys 8. By extension, half a coin buys 4. If there are X coins, and Y people, there are X/Y coins per person. We're assuming double the population, so now there is 2Y population. So now it's X/2Y. Which is half as much. So now everyone that had a coin before has half a coin; they could buy 5 apples before, but now they can only buy 4! If they could buy 1000, they can now buy 800. The price has gotten better; the actual buying power any given person has goes down.

I see where you are coming from in this example. But, the odds of you killing a wizard, looting a boat-ton of gold from him, starting a small town, and being stricken by a curse so that you cannot add new money your economy... are pretty slim. If that did happen, I believe golds value would raise in proportion to the population. Half a coin would buy 5 apples, just like a full coin did all those years ago.

But more than likely you will have a mining operation and prices would be stable throughout the years. Your 5 apples might cost an 1/8 oz less perhaps. By contrast we have a fiat system which has doubled the money supply in about ten years, and in that time inflation has gone up about 18%.

[georgie_leech]

Objection, you were arguing for a slightly better price earlier, and now you're arguing prices would literally halve. You are arguing the economy would be completely static by virtue of... I can't even tell at this point. Some mysterious power of gold coins that prevents prices from being raised.

[Cazero]

But more than likely you will have a mining operation and prices would be stable throughout the years.

You mean magic. Mining can't extract gold forever, is unlikely to have a steady production, is even more unlikely to produce even roughly the amount you need, and does nothing to block outside gold from getting in and inside gold from getting out.
Even assuming the best, the only thing using gold does is loss of all control over your de facto fiat money, wich is now dictated by random chance and technological progress.
Eventualy we'll run out of new gold to dig, or doing so will stop being profitable, or we will find a new use for the material that negates its utility as money. Establishing a better standard by then is only common sense.