<Gold too can be easily transmitted electronically, in infinitely divisible form, once you have a system set up to do so ... and there is such a system - goldcurrencies.ca >
Quite right and any asset can be transmitted like that. But that ignores my central point that gold has to be dug up which is a total waste of effort if the purpose is to hold it as a form of money [electronically transmitted or not].
Fiat currencies rest on political hot air. Gold rests on the scarcity and difficulty of getting more and the production cost of more is well-known and reasonably stable. But there is no need to dig up companies to create a store of value. They already exist.
To turn companies into money, all that is needed is to make the transaction costs low and very simple and secure, which cyberspace is now able to do. Until now, it has been a project to transmit ownership of a share or part share to somebody else, involving lots of paperwork and delays and costs. That is rapidly changing.
Not only is ownership of shares easily transferred and there is no need to dig up more or hold a bunch of gold in secure storage doing nothing but sit there in a pile, but shares are busy producing more wealth. So the owner of the Q gets an income from owning the Q. Owning gold gets no such income. It just sits there doing nothing. You'd have to lend it to get income and that would involve risk of bankruptcy or other default.
When the dot.bomb and tech.wreck bubble burst and real valuations became more important to people, the losses were large. Similarly, if the US$ bubble bursts and people take a closer look at the foundations when a competing currency, the Q, shows up, with all the advantages, the losses to the US$ holders will be spectacular because a lot of people think they own a LOT of dollars.
But I think it will be a slow process [without a bursting] as people gradually abandon the $ and Uncle Al manages the process so that the US$ retains a stable value. But he'll have to reduce the amount in circulation as people move to the Q, and boost interest rates a LOT.
The huge and profitable US$ money-printing and exporting game will be over. No more free lunch for the US government from Uncle Al's money machine.
Mqurice |
