Hi. Several thoughts spring to mind:
1) Gold IS a currency, a US DOLLAR based currency, and can be traded as such.
2) As such, physical gold has a tactile appeal as a currency, a "feel" missing in other currency formats.
Some would opine gold currency is more visually pleasing as well.--and one MAJOR reason why "vapor gold/e-gold" not backed by either a government nor a major bank will ever survive. The closest to "getting there" is the Moslem gold backed e-currency. If you are a trader, this may be the "one on the come" for maximum ROI.
3) Thirdly, while most of the world wouldn't know a Swiss Franc --coin or currency-- if it sat next to them in a rickshaw; darn near everyone recognizes a gold whoozit, regardless of sovereign die stamping variations..
4) Such metallic intrinsic gold recognition lends to universal convertibility, making gold whoozits easier to "spend" regardless of geographic boundaries than say a Swiss/French/German/US/Canadian/Thai/Indian/Spanish currency whoozit of brass/nickel/cupro-nickel/copper/zinc/aluminum OR paper.
5) Some of us eschew even the cutesy bullion and prefer the even more archane "raw" gold, i.e., nuggets for holding and trading. I am one of those. Raw gold is very easily converted in my part of the world for services and goods. And it commands little premium except in larger sizes, is abundantly available, and in infinite size and weight and purity variations. And none of these variations require an assay. Most don't even require a simple chem test on the spot. We all basically know of its feel, heft, and physical markers.
6) There are several gold backed currencies, why select the S/F in your example?
If you are a currency trader, then you have no use for aesthetics, history, or even convertiblility, frankly, since you can trade at the click of a mouse in and out of either a futures account or a bank deposit account.
So, while there maybe an Armageddon in the future, I for one goldbug am NOT planning for it.
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If I were a currency trader, any currency which had moved percentage-wise moved from $252 per oz to $310ish in a V-E-R-Y short period of time, would most assuredly catch my attention simply based upon a ROI basis.
However, since currency and politics are so inextricably intertwined and I don't understand politics, I keep it simple: I prefer and understand gold--
I know how to
identify gold
weigh it,
price it,
store it,
spend it,
find it,
even alter its form into anything my buyer might wish, as it is ultimately infintely convertible.
However, if I had the fascination with currency trading that is implied in your post, I'd spend a great deal of time both charting the intricacies of currency crosses, and following global political tide tables. Additionally, I would overlay charts of gold and local currencies I knew to be gold backed and keep an eye on that relationship when making any trading decision. ONE of the best in the business for my money is Ian McAvity, chartist extraordinaire, especially in currency and political interps. His publication is: Deliberations. It is worth every cent.
Some examples of gold backed currencies:
The French---poopoohed but still one of the largest govt owned supplies in the world...now EU regulated
The German--ditto--
The HongKong $ (prior to re-assimilation)--Was 100% backed
The US$--officially unhooked in '71 by Nixon, but.............................
The EU--18% to 35% backed depending upon with whom you are speaking
The coming AMU--probably another 18-35% backed currency if current EU is an indicator
The Swissie--was 40%, now headed for under 20% due to referendum and political silly season
Perhaps for you, a gold bullion coin litho on the office wall would suffice.<grin>
g_t |
