At least 5%. The Fed wants it to be closer to 8% so we donâ(TM)t have another financial crisis. See Basel III to understand. True, the banks only have to deposit that with the Fed but that fraction still adds up to the trillions.
No, that hasn't been true since 1990. You may be thinking of "transaction accounts" (checking accounts and some weird stuff) - the M1 less the M0, but that's a really small part of the M2, and the reserve requirements there don't add up to much.
There are 2 trillion now in excess reserves only because the Fed pays interest, starting in 2008. In 2007 the total reserve amount was trivial by comparison.
The Fed could raise the requiements above 0 at any time of course, which is why the experiment isn't reckless.
O.K. What does that give us? Banks would no longer need 3t at the reserves â" they would need 3t in the bank vaults. That just shifts the problem.
No, if the requirements were 0 that cash would be nowhere, used in some safe investment that pays 1% instead of the 2% the Fed pays (not actually sure of the Fed amount, but it's more than short treasuries pay). Cash put into savings and CDs is just a loan to the bank in modern finance, the banks don't keep that money anywhere - it's not your money, it's the bank's, and the bank invests it or loans it out.
US Money (M2) is balanced upon the smaller supply of currency with a value of about 3t. We currently have gold with a value of 240b, which leaves us a gap of~2.7t. Filling that gap would be interesting
Interesting, but irrelevant. There's just not a believable scenario where everyone with large time deposits (mostly institutional accounts) withdraws that money and stores big piles of cash in a back room of the business. That's not what cash is for. The money might be withdrawn by one person and spent or invested, but you only need enough cash for the transactions in flight, that for some reason aren't done electronically. I routinely withdraw larges sums from my checking account, but the money is quite quickly spent to buy investments, or recently a car (and in no case was physical currency involved). And of course the dealership didn't have that money idle, it went on as purchases, investments, and salaries and so on.
Talking about physical currency, or even numbers sitting in checking accounts, backing the M2 just makes no sense. Time deposits may move from bank to bank, or from savings to investment, but it's odd indeed when they move from savings to just idling somewhere as cash or a checking balance - M2 just doesn't become M1.
Intrinisc value has nothing to do with ownership. Instrinsc value "belongs to the nature of the thing".
Yup, that's how I'm using it. The thing has the intrinsic value - a thing such as a factory. Separately, one can own things, but ownership is a matter of law and custom. A stock certificate is simply a record of who owns the thing with intrinsic value, by law and custom. Sure, the record of ownership isn't what has the value, but the thing owned. Naturally. But without some concept of ownership, the concept of intrinsic value is a curiosity at best.
My point was that, unless one is worried about a very specific kind of partial collapse of social order, direct vs indirect ownership is irrelevant. A record in a database saying that you own gold is less likely to be taken from you than a gold coin, as people are robbed/burgled for more often than one very specific kind of government collapse happens. So if you think gold has intrinsic value (I don't, really, but it's a good example), then the difference between a gold coin and a share of GLD is a minor one of logistics. The difference between deeded ownership of a factory and shares in the owning corporation even less important.
That assumes it's not possible to get software right. For a small enough code base (and 500k lines of code it pretty small), that's simply not true. The most robust solution is a monoculture around a bug-free product.
The problem is that getting there takes a lot of manpower for some pretty boring work, and that takes funding. But the funding required is pretty trivial on the scale of the companies who depend on OpenSLL. This is the kind of product where Google et al should fund hiring every security expert that there is in the world to independently crawl the code, fizz test, all the usual tricks. Then offer a $1 million bug bounty. Same for SSH. It's pathetic that we can't get this basic plumbic right, when it's just a matter of resources, and damn cheap on the scale of the companies to which it matters.
If we has an NSA that actually did it's original, defensive job we'd have this done already at taxpayer expense (and money well spent, for once), but we see that's simply not possible, so it's up to the private sector to step up.
Think of it like DOSbox. For each there's a decade of games for which it's the right answer, and the more stripped down and tuned to gaming you make the OS the better. But you're supposed to have a license for that virtualized XP, after all, and you can't buy that any more, so GOG can't sell it.
I'd love to see a GOG-tuned virtual XP for classic gaming, but unless ReactOS ever somehow gets finished, it's a non-starter.
Oh, I agree, and it's aggravating. I was really hoping that VMware would put resources into ReactOS, as it fits their portfolio nicely (they have a market of "we're stuck with needing XP, help us ObiWan!" customers). But VMware hasn't had that sort of vision for a long, long time now, and they just seem to buy companies and watch them die these days, like a Symantec wannabe.
Compared to the early-mid 90s? Sure. But there are only a handful of good games from those days. XP stripped down for gaming is actually quite lightweight, and is by far the best option for older, but post-DOS, Windows games.
AFAIK, none of the currently-common Linux distros is as small or fast as these custom XP builds (the 90% of shit you'd turn off for fast gaming they've actually ripped out of the image, so the install is quite small).
VMware workstation is coming along well in that regard. I hope VMware keeps funding that product, as proper 3D acceleration for virtualized 10-year-old platforms is a great thing.
I read a conservative forum where 30 year old grandmothers aren't uncommon, which makes for an entertaining spectacle when someone goes off on a rant about teen mothers.
Baby Boomer is a much better denigrating term IMO.
The monetary base seems uninteresting to me, and quite volatile. The US currently has 0 reserve requirements for savings accounts and CDs (the M2+ ex M1). Those reserves in excess of physical currency could be 0. They aren't as the Fed is doing a bold experiment with paying interest on voluntary Fed reserves - we'll see how that plays out in the coming decade. But there's no actual requirement.
And why would you want the government to procure more gold if it should decide to raise reserve requirements, and thereby shrink the money supply. Sounds backwards to me.
But I guess it's not that relevant in any case, as neither of us really care for a "hard" currency. Personally, I see worrying about the value of the dollar beyond it's indirect effects on trade and such is entirely missing the point of saving and investing - a misunderstanding all to common in the US today.
There are a few people out there using XP because they think it's a cool, lightweight OS (mostly for gaming). That's a very geeky crowd who can likely manage on their own, until the "open source XP project" matures the was DOSbox did.
Pretty much everyone else left on XP is a company install needed because some important, expensive, hard to replace thing happens to need XP. If you've got some $50k equipment that's halfway through its 20 year useful life that needs XP, you have a PC somewhere running the XP you need. Microsoft's patching policies won't likely change that, one way or another.
The "stocks" have as much value as a "deed", or for that matter a gold watch that tells really good time: men with guns can take those things, were it not for the rule of law protecting property rights. None is more or less intrinsic simply because ownership is a matter of custom (because, of course, that's true of basically everything).
I don't see it. "Valuable to someone" is the only meaning of value. Again, one can insist on some definition of "intrinsic" that produces an empty set, but I reject useless definitions. Something with durable value to many people, independent of the dictat of some central authority, has "intrinsic" value, or nothing does.
If you don't like "intrinsic", what other distinct term would you proffer for "durable, valuable to many people, not valuable only because of a specific authority's whims"?
Sure, that's quite true. However, without the force of law to back such property ownership, we're left only with what we have the weapons to protect. Thus the bunker-builders talking about ammunition-based currency.
Sure: goods have value. Wealth has value per unit time. Energy vs power. Capitalism is interesting in that wealth can itself be bought and sold and traded for goods, but that idea is only a few hundred years old, and still not true in many places.
I find it helpful to think of two distinct units of measure: the dollar kind, and the micro-percentage of all stock kind.
Why 3 trillion? If the currency was gold-backed, we'd just need enough gold for the currency (the M0 is less than $1 T, IIRC). And of course the last time that happened, FDR just outlawed private ownership of gold, then re-valued the dollar as being backed by less gold - problem solved!
Hmm, I think I still have a $5 US Note somewhere, not that it's still redeemable for anything (though I wonder if its collectors value exceeds the value of the silver it was worth in 1968 when redemption ended - funny how money works).
think we're splitting hairs here, but if all you own is a clothing brand and some employees who design these clothes, that seems like a huge amount of risk and very little of any value, should things go south
Manufacturing just isn't that important or valuable any more. Automated production continues to advance, and get cheaper and easier. Guessing what people want or need, and providing that instead of some other thing is what has value in the modern world. It's an idea that takes some getting used to, to be sure! But then, I'm sure it was the same in the 1600s when the idea of a textile mill as having value seemed very strange when clearly farmland was where value lies.
It's also worth pointing out that a significant percentage of those on the "worlds richest people" lists are fashion names. Guessing what people want is a skill, and some people are reliably good at it.
Of course, services are similar. What's the value in being a brand of service provider distinct from the actual people skilled in providing that service? It seems to be pretty significant, as a trusted brand or provider counts for a lot (if you've ever had to hire e.g. a painter, you likely understand the pain of a lack of trusted providers can bring).
I fully concede that ownership of the means of production is not, itself, the means of production. A kitchen does not spontaneously generate pies. It still has value.
OTOH, ownership in common stock very much is control over that company, but of course only in rough proportion to the amount you own! I've seen the stockholders challenge the boards position on the basic company strategy and win, changing the composition of the board and replacing the CEO, several times in my career, just at companies I've worked for. 100 shares gets you 100 shares worth of control: a very small amount indeed. But if a majority, or even a significant and active plurality, of stockholders think the leadership of a company has gotten it wrong, they certainly can change things. It's really not uncommon.
Do you get a share of company revenue? Perhaps. What you're buying is a share of company profits. Across the whole of the US economy, corporate profits are less than 10% of total US salaries, so much of the revenue goes to the workers (surprised its over 90/10? I was) and of course the cost of goods sold. But you do get your share of the profits - either as a dividend or through growth.
It's never useful for discussion to insist on a technical term that excludes everything. It's like philosophical skepticism: sure, it's true that we can't prove we're not in the matrix, and it's briefly amusing to ponder that, but it's not a useful insight.
The whole point of economics is to quantify and measure peoples needs and wants, and discuss ways of meeting those needs. What else is there, really? Not every need can be met with a good or service, sure, that's true, but even those things can be valued and taken into account.
Mistaking currency for more than it is is the big mistake. At any given point in time, we can measure the value of a want or need, or a societies collection thereof, in dollars, and that's useful if we want to compare them to some other want or need, at that point in time. But that measure will continuously change over time.
Ownership of the means of production, OTOH, will always have value. Now, just what those means of production are will change, sure. If you buy 1 micro-percent of all the worlds companies today, and then never change the exact composition of that, eventually that will be worthless, when the last company dies. But if you buy some index fund or somesuch that shifts what you own gradually as new companies are created or vanish, to keep your micro-percentage the same, then you're fine. And hat is, of course, how the investments products you can actually buy happen to work.
What you describe is precisely "diversifiable risk". If I own 10% of one clothing provided, that's genuine wealth, but there's significant risk as you note. If I own 0.1% of all clothing providers (lets pretend that costs the same), the "customers may go elsewhere" risk goes away. Either way I have wealth (ownership of the means of production), but the latter way I take fewer risks.
There's still risk, of course. 3D printing could mature to the point where most people print their own clothes, or maybe social order will collapse leaving my stock certificates as so much paper, but anything you might own has some baseline risk: doesn't mean it doesn't have intrinsic value.
Well, I fully support your freedom to avoid contending with me for ownership of the means of production. If you delight in not being wealthy, hey, more for me.
But for many centuries, since long before capitalism, it's been well understood that the means of production are what wealth is. Historically, that was productive land. Through the industrial revolution, that was mostly factories, and the value of farmland diminished over time. Today, it's mostly services and design, and the value of manufacturing is declining over time. But whatever shape it takes: owning whatever provides the goods and services that others want or need is wealth.
If you're skeptical that indirect ownership is "real", unlike direct ownership, well, conservative is one thing but the idea has 400 years of success now, and I think that's adequate QA.
Service providers have just as much value as manufacturing lines - more in the modern age. A company that designs or creates something, more still.
Yes, there's risk, but it's mostly "diversifiable" risk. Fashion may shift from one companies clothes to another, but people will be buying clothes from someone, and so a micro-percentage of all the worlds companies has intrinsic value. It's still not risk-free, but nothing is.
Common stock is the ownership of the means of production. So, OK, it requires basic property laws to have value, but then so does everything else you own other than weapons (and I know bunker-builders who favor ammunition as currency *eyeroll*).
If I buy 1/8th of a pie, that's consumer consumption, and irrelevant to my point. If I but 1/8 of a pie factory, I have something of intrinsic value. Of course, there's risk there too, but if I instead buy 1 micro-percent of all the worlds companies that produce something, then my risk is more limited (there's always risk in anything though - no telling when the next big meteor will come).
Even more important: the money supply has very little to do with the physical currency in the first place. Dollars or gold or BTC, it wouldn't matter really. What matters is fractional reserve lending, and really all forms of contract for future payment including QE-style government games.
Gold is a poor choice because you get this awkward tension between its value as a currency and its value as an industrial metal, which won't do any favors for companies that actually produce and consume gold. Pegging the currency to gold will do little to prevent the government from metaphorically printing money, or spending like a drunken sailor.
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At least 5%. The Fed wants it to be closer to 8% so we donâ(TM)t have another financial crisis. See Basel III to understand. True, the banks only have to deposit that with the Fed but that fraction still adds up to the trillions.
No, that hasn't been true since 1990. You may be thinking of "transaction accounts" (checking accounts and some weird stuff) - the M1 less the M0, but that's a really small part of the M2, and the reserve requirements there don't add up to much.
There are 2 trillion now in excess reserves only because the Fed pays interest, starting in 2008. In 2007 the total reserve amount was trivial by comparison.
The Fed could raise the requiements above 0 at any time of course, which is why the experiment isn't reckless.
O.K. What does that give us? Banks would no longer need 3t at the reserves â" they would need 3t in the bank vaults. That just shifts the problem.
No, if the requirements were 0 that cash would be nowhere, used in some safe investment that pays 1% instead of the 2% the Fed pays (not actually sure of the Fed amount, but it's more than short treasuries pay). Cash put into savings and CDs is just a loan to the bank in modern finance, the banks don't keep that money anywhere - it's not your money, it's the bank's, and the bank invests it or loans it out.
US Money (M2) is balanced upon the smaller supply of currency with a value of about 3t. We currently have gold with a value of 240b, which leaves us a gap of~2.7t. Filling that gap would be interesting
Interesting, but irrelevant. There's just not a believable scenario where everyone with large time deposits (mostly institutional accounts) withdraws that money and stores big piles of cash in a back room of the business. That's not what cash is for. The money might be withdrawn by one person and spent or invested, but you only need enough cash for the transactions in flight, that for some reason aren't done electronically. I routinely withdraw larges sums from my checking account, but the money is quite quickly spent to buy investments, or recently a car (and in no case was physical currency involved). And of course the dealership didn't have that money idle, it went on as purchases, investments, and salaries and so on.
Talking about physical currency, or even numbers sitting in checking accounts, backing the M2 just makes no sense. Time deposits may move from bank to bank, or from savings to investment, but it's odd indeed when they move from savings to just idling somewhere as cash or a checking balance - M2 just doesn't become M1.
Intrinisc value has nothing to do with ownership. Instrinsc value "belongs to the nature of the thing".
Yup, that's how I'm using it. The thing has the intrinsic value - a thing such as a factory. Separately, one can own things, but ownership is a matter of law and custom. A stock certificate is simply a record of who owns the thing with intrinsic value, by law and custom. Sure, the record of ownership isn't what has the value, but the thing owned. Naturally. But without some concept of ownership, the concept of intrinsic value is a curiosity at best.
My point was that, unless one is worried about a very specific kind of partial collapse of social order, direct vs indirect ownership is irrelevant. A record in a database saying that you own gold is less likely to be taken from you than a gold coin, as people are robbed/burgled for more often than one very specific kind of government collapse happens. So if you think gold has intrinsic value (I don't, really, but it's a good example), then the difference between a gold coin and a share of GLD is a minor one of logistics. The difference between deeded ownership of a factory and shares in the owning corporation even less important.
That assumes it's not possible to get software right. For a small enough code base (and 500k lines of code it pretty small), that's simply not true. The most robust solution is a monoculture around a bug-free product.
The problem is that getting there takes a lot of manpower for some pretty boring work, and that takes funding. But the funding required is pretty trivial on the scale of the companies who depend on OpenSLL. This is the kind of product where Google et al should fund hiring every security expert that there is in the world to independently crawl the code, fizz test, all the usual tricks. Then offer a $1 million bug bounty. Same for SSH. It's pathetic that we can't get this basic plumbic right, when it's just a matter of resources, and damn cheap on the scale of the companies to which it matters.
If we has an NSA that actually did it's original, defensive job we'd have this done already at taxpayer expense (and money well spent, for once), but we see that's simply not possible, so it's up to the private sector to step up.
Think of it like DOSbox. For each there's a decade of games for which it's the right answer, and the more stripped down and tuned to gaming you make the OS the better. But you're supposed to have a license for that virtualized XP, after all, and you can't buy that any more, so GOG can't sell it.
I'd love to see a GOG-tuned virtual XP for classic gaming, but unless ReactOS ever somehow gets finished, it's a non-starter.
Oh, I agree, and it's aggravating. I was really hoping that VMware would put resources into ReactOS, as it fits their portfolio nicely (they have a market of "we're stuck with needing XP, help us ObiWan!" customers). But VMware hasn't had that sort of vision for a long, long time now, and they just seem to buy companies and watch them die these days, like a Symantec wannabe.
10 years ago when you bought that equipment, it required a current, fully supported OS. Industrial equipment can last a long time in internet years.
Compared to the early-mid 90s? Sure. But there are only a handful of good games from those days. XP stripped down for gaming is actually quite lightweight, and is by far the best option for older, but post-DOS, Windows games.
AFAIK, none of the currently-common Linux distros is as small or fast as these custom XP builds (the 90% of shit you'd turn off for fast gaming they've actually ripped out of the image, so the install is quite small).
VMware workstation is coming along well in that regard. I hope VMware keeps funding that product, as proper 3D acceleration for virtualized 10-year-old platforms is a great thing.
I read a conservative forum where 30 year old grandmothers aren't uncommon, which makes for an entertaining spectacle when someone goes off on a rant about teen mothers.
Baby Boomer is a much better denigrating term IMO.
The monetary base seems uninteresting to me, and quite volatile. The US currently has 0 reserve requirements for savings accounts and CDs (the M2+ ex M1). Those reserves in excess of physical currency could be 0. They aren't as the Fed is doing a bold experiment with paying interest on voluntary Fed reserves - we'll see how that plays out in the coming decade. But there's no actual requirement.
And why would you want the government to procure more gold if it should decide to raise reserve requirements, and thereby shrink the money supply. Sounds backwards to me.
But I guess it's not that relevant in any case, as neither of us really care for a "hard" currency. Personally, I see worrying about the value of the dollar beyond it's indirect effects on trade and such is entirely missing the point of saving and investing - a misunderstanding all to common in the US today.
There are a few people out there using XP because they think it's a cool, lightweight OS (mostly for gaming). That's a very geeky crowd who can likely manage on their own, until the "open source XP project" matures the was DOSbox did.
Pretty much everyone else left on XP is a company install needed because some important, expensive, hard to replace thing happens to need XP. If you've got some $50k equipment that's halfway through its 20 year useful life that needs XP, you have a PC somewhere running the XP you need. Microsoft's patching policies won't likely change that, one way or another.
The "stocks" have as much value as a "deed", or for that matter a gold watch that tells really good time: men with guns can take those things, were it not for the rule of law protecting property rights. None is more or less intrinsic simply because ownership is a matter of custom (because, of course, that's true of basically everything).
I don't see it. "Valuable to someone" is the only meaning of value. Again, one can insist on some definition of "intrinsic" that produces an empty set, but I reject useless definitions. Something with durable value to many people, independent of the dictat of some central authority, has "intrinsic" value, or nothing does.
If you don't like "intrinsic", what other distinct term would you proffer for "durable, valuable to many people, not valuable only because of a specific authority's whims"?
Sure, that's quite true. However, without the force of law to back such property ownership, we're left only with what we have the weapons to protect. Thus the bunker-builders talking about ammunition-based currency.
Sure: goods have value. Wealth has value per unit time. Energy vs power. Capitalism is interesting in that wealth can itself be bought and sold and traded for goods, but that idea is only a few hundred years old, and still not true in many places.
I find it helpful to think of two distinct units of measure: the dollar kind, and the micro-percentage of all stock kind.
Why 3 trillion? If the currency was gold-backed, we'd just need enough gold for the currency (the M0 is less than $1 T, IIRC). And of course the last time that happened, FDR just outlawed private ownership of gold, then re-valued the dollar as being backed by less gold - problem solved!
Hmm, I think I still have a $5 US Note somewhere, not that it's still redeemable for anything (though I wonder if its collectors value exceeds the value of the silver it was worth in 1968 when redemption ended - funny how money works).
think we're splitting hairs here, but if all you own is a clothing brand and some employees who design these clothes, that seems like a huge amount of risk and very little of any value, should things go south
Manufacturing just isn't that important or valuable any more. Automated production continues to advance, and get cheaper and easier. Guessing what people want or need, and providing that instead of some other thing is what has value in the modern world. It's an idea that takes some getting used to, to be sure! But then, I'm sure it was the same in the 1600s when the idea of a textile mill as having value seemed very strange when clearly farmland was where value lies.
It's also worth pointing out that a significant percentage of those on the "worlds richest people" lists are fashion names. Guessing what people want is a skill, and some people are reliably good at it.
Of course, services are similar. What's the value in being a brand of service provider distinct from the actual people skilled in providing that service? It seems to be pretty significant, as a trusted brand or provider counts for a lot (if you've ever had to hire e.g. a painter, you likely understand the pain of a lack of trusted providers can bring).
I fully concede that ownership of the means of production is not, itself, the means of production. A kitchen does not spontaneously generate pies. It still has value.
OTOH, ownership in common stock very much is control over that company, but of course only in rough proportion to the amount you own! I've seen the stockholders challenge the boards position on the basic company strategy and win, changing the composition of the board and replacing the CEO, several times in my career, just at companies I've worked for. 100 shares gets you 100 shares worth of control: a very small amount indeed. But if a majority, or even a significant and active plurality, of stockholders think the leadership of a company has gotten it wrong, they certainly can change things. It's really not uncommon.
Do you get a share of company revenue? Perhaps. What you're buying is a share of company profits. Across the whole of the US economy, corporate profits are less than 10% of total US salaries, so much of the revenue goes to the workers (surprised its over 90/10? I was) and of course the cost of goods sold. But you do get your share of the profits - either as a dividend or through growth.
Nothing has intrinsic value in economics
It's never useful for discussion to insist on a technical term that excludes everything. It's like philosophical skepticism: sure, it's true that we can't prove we're not in the matrix, and it's briefly amusing to ponder that, but it's not a useful insight.
The whole point of economics is to quantify and measure peoples needs and wants, and discuss ways of meeting those needs. What else is there, really? Not every need can be met with a good or service, sure, that's true, but even those things can be valued and taken into account.
Mistaking currency for more than it is is the big mistake. At any given point in time, we can measure the value of a want or need, or a societies collection thereof, in dollars, and that's useful if we want to compare them to some other want or need, at that point in time. But that measure will continuously change over time.
Ownership of the means of production, OTOH, will always have value. Now, just what those means of production are will change, sure. If you buy 1 micro-percent of all the worlds companies today, and then never change the exact composition of that, eventually that will be worthless, when the last company dies. But if you buy some index fund or somesuch that shifts what you own gradually as new companies are created or vanish, to keep your micro-percentage the same, then you're fine. And hat is, of course, how the investments products you can actually buy happen to work.
What you describe is precisely "diversifiable risk". If I own 10% of one clothing provided, that's genuine wealth, but there's significant risk as you note. If I own 0.1% of all clothing providers (lets pretend that costs the same), the "customers may go elsewhere" risk goes away. Either way I have wealth (ownership of the means of production), but the latter way I take fewer risks.
There's still risk, of course. 3D printing could mature to the point where most people print their own clothes, or maybe social order will collapse leaving my stock certificates as so much paper, but anything you might own has some baseline risk: doesn't mean it doesn't have intrinsic value.
Well, I fully support your freedom to avoid contending with me for ownership of the means of production. If you delight in not being wealthy, hey, more for me.
But for many centuries, since long before capitalism, it's been well understood that the means of production are what wealth is. Historically, that was productive land. Through the industrial revolution, that was mostly factories, and the value of farmland diminished over time. Today, it's mostly services and design, and the value of manufacturing is declining over time. But whatever shape it takes: owning whatever provides the goods and services that others want or need is wealth.
If you're skeptical that indirect ownership is "real", unlike direct ownership, well, conservative is one thing but the idea has 400 years of success now, and I think that's adequate QA.
Service providers have just as much value as manufacturing lines - more in the modern age. A company that designs or creates something, more still.
Yes, there's risk, but it's mostly "diversifiable" risk. Fashion may shift from one companies clothes to another, but people will be buying clothes from someone, and so a micro-percentage of all the worlds companies has intrinsic value. It's still not risk-free, but nothing is.
Common stock is the ownership of the means of production. So, OK, it requires basic property laws to have value, but then so does everything else you own other than weapons (and I know bunker-builders who favor ammunition as currency *eyeroll*).
If I buy 1/8th of a pie, that's consumer consumption, and irrelevant to my point. If I but 1/8 of a pie factory, I have something of intrinsic value. Of course, there's risk there too, but if I instead buy 1 micro-percent of all the worlds companies that produce something, then my risk is more limited (there's always risk in anything though - no telling when the next big meteor will come).
Even more important: the money supply has very little to do with the physical currency in the first place. Dollars or gold or BTC, it wouldn't matter really. What matters is fractional reserve lending, and really all forms of contract for future payment including QE-style government games.
Gold is a poor choice because you get this awkward tension between its value as a currency and its value as an industrial metal, which won't do any favors for companies that actually produce and consume gold. Pegging the currency to gold will do little to prevent the government from metaphorically printing money, or spending like a drunken sailor.
Ayn Rand has fuck-all to do with modern libertarian thought. Don't confuse the two camps.