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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: rotweil who wrote (64692)6/7/2005 5:38:47 PM
From: Maurice Winn  Read Replies (2) of 74559
 
Thanks for the link. <Nor could I imagine a scenario where our currency was completely devalued and a gold standard was reinstituted. The reality is that our population , and the world population has gotten too big. There isnt enough gold in the world, let alone in the US to reconstitute a new currency based on gold.>

This is the key point about gold as a currency. Divide the number of ounces of gold that exist in human hands by 6 billion and there isn't enough of the stuff at $1000 an ounce for everyone to have an ounce, which is about what would be needed, at the very least, to use it as a currency without building yet another fiat currency on top of it.

If gold went to $1000 or $2000 an ounce, the world would turn into an Easter Island economy, wasting time digging gold Moai ce.eng.usf.edu Pointless totems draining the energy of people which would be better devoted to something more useful.

There would be swarms of people digging gold, filtering the ocean to get more of the stuff. A vast economic effort to achieve nothing. Then, somebody would figure out that it is better to have a pixelated cybercurrency and the mountains of gold would be as useless as Moai guarding the deserted Moai quarries. The price of gold would collapse as people try to unload it as jewelry or something, anything.

Mqurice
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