Celebrating 150 years of the periodic table
For the 150th anniversary of the periodic table, we asked our scientists about their favourite element
Prof. Dr. Thiess Büttner, Chair of Public Finance, on gold:
“From the perspective of financial history, gold is an incredibly exciting element. Since ancient times and into modern times, it has been minted in coins and used as a means of payment – money. If the denomination is higher than the gold value, minting results in the so-called seignorage. To increase this profit, new coins were often issued with a lower gold content. Although this lead to a fall in the value of the coins and an increase of prices – inflation –, it enabled the state to mobilise substantial resources, at least in the short term. Governments usually turned to this financial instrument in a state of excessive debt. Economists regard this form of state financing as an indirect way of taxation and call it inflation tax.
Today, gold coins don’t play a role as means of payment anymore. However, the possibilities to finance government spending by printing money have expanded with the emergence of paper money and the abandonment of the gold standard. Right now, the question arises if crypto currencies will undermine this government privilege in the future. They could be a new form of money, whose “digital” gold content cannot be reduced by a government.”