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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Claude Cormier who wrote (63577)	2/9/2001 2:56:16 AM
From: sea_urchin	Read Replies (1) \| Respond to of 116796

Claude, many thanks for your very comprehensive answer. I do see what you are getting at in that transactions will be asset and not debt based. However, debt and bank debt is the way that most business is run today. For this reason I feel it will require a major change in philosophy to use gold transfers. Responding to the various points in your reply: >1) the fact that gold currencies payment do not need to clear. The transfer of the asset is instant.... performed in micro-seconds. No matter where you are on the planet. Perhaps I miss the point here, but one can do that already with existing means of payment. I do accept that, at present, all payments have to pass through the banking system in one way or another. With gold, one could avoid that. >2) Much lower fees than credit cards. OK >3) the currency is backed by an asset... not credit OK. But ultimately every credit has to be backed by an asset or else a bank guarantee. >4) Payment are non repudiable (very important for merchants) OK >5) Gold currencies cannot be debased. This is where the debate started about the mines flogging the gold simply for the purchase of jewellery. It is my contention that with the continued unbridled production and fall in POG that gold is being continually debased. <But then, who is to say the value of gold will be stable?> >History shows that gold has been the most stable of all currencies. Just in the last 15 years, look at the currencies that have gone down down.. Just because the USD has been good for the past few decades..doesn,t mean that it will be in the next few decades. Here you are talking long or very long term. As you mentioned in point 1, the transaction will occur in microseconds. So, the long term stability is really unimportant. <The price of gold could be more volatile than the relative value of the currencies!> >Volatility ...for sure. But in the long run stability. If there is volatility it is only because our governemnts lack monetary discipline either way. The instability of currencies has provided an enormous business opportunity for thousands of speculators, wheeler dealers etc. This includes the banks. They are not likely just to give it up. In fact, it is also the means the paper aristocracy use to wield political power. What the gold currency implies is the use of an alternative international currency outside the existing ones. In addition, the gold currency will not have a nationality like all the others (except maybe SDRs) do. So, there will be political implications because the use of gold, as a currency, suggests that all the others are defective (which they are). In fact, this is the reason why there is now a virtual war between the banking system, dominated by the paper money aristocracy, and those who want to return to a "classical" form of exchange. You will fight long and hard to re-establish gold, universally, as a means of exchange. The vested paper money interests would rather die than see their paper money turned to toilet paper!