GOLD ... The Original Bitcoin HSC 2017
As all fiat currencies, including the ancient round stones used for "community" trading in times long past, as well as the newer digital cryptos are all really backed and based on a government dictated and defined value and only accepted through a public consensus of their value at any given time, why is it that the age old, long-established value of GOLD coupled with its lustrous beauty has waned and actually even been suppressed for so long?
Unlike unsupported fiat currencies, it cannot be conjured out of thin air, in the trillions, by simple avarice and printing press as are all Fiat currencies that continue to be supported by soaring debt. Unlike Bitcoin and the multitude of newer crypto currencies that are proving popular of late, it also cannot be conjured out of thin air with a keyboard author and code master as its creators who then determine its distribution ceiling.
And yes, obviously ALL fiat currencies and commodities even GOLD itself require a “consensus of faith” as to their individual market values in order to support value and world trade.
But, while the US dollar is currently the world’s primary (although dwindling) trading and settlement currency, it is tired, insolvent and suffering from a steady decline of faith that it will ever regain its past value for settlement of goods and services against overwhelmingly massive increases in the overall US debt and loss of world prestige.
With China rapidly stepping up as the next prominent super power and such entities as BRIC now established on the world stage, there is a growing trend to settlement in other currencies thus cutting out the need for any New York based settlement of international transactions. This can only result in the continuing erosion of both support and confidence in greenbacks.
The ONLY commodity that has an established, proven and sustained value throughout the millennia is GOLD. And while its value, like all commodities, may also be dependent on a collective consensus, that recognized consensus is backed by hundreds of millions of active, faithful collectors and investors through the unrealized true value of the current estimated 5,820,203,777 ounces in existence.
GOLD is valued internationally as a precious metal, it is prized and even hoarded as an inflation hedge throughout the world and is especially revered in India and China. When unsupported fiat currencies collapse as they eventually must and Crypto currencies fail leaving only Barter to reign supreme, even if only until another market guru conjures some imaginary darling with yet a new value at centre stage, it will be GOLD that we return to.
Would it not be better to recognize and reinstate GOLD to its rightful place now as the world’s true currency base with international value recognition through properly vetted and enforced, international holdings validation.
Were countries to adopt GOLD as the one valid and true international trading commodity, each could, once again, employ GOLD as their currency base establishing a universally accepted and recognized day to day trade value.
Ideally, this would be accomplished by establishing an agreed upon, central international repository which would hold each countries’ validated currency reserves. Countries wishing to continue issuing and employing their individual currencies would have their daily currency value rate pegged to fluctuate against the established world price vis-a-vis their own, on deposit GOLD holdings.
Should this ever be implemented, it is further recommended that a practical and workable formula or ratio be arrived at that would more truly reflect the elevated risk to consumers of the minimal "banking capital “on hand” % cash reserves" maintained by too many individual banking institutions. Each financial institution/country, in turn, would determine its own allowable cap on available free capital to employ along with, hopefully requiring significantly higher cash on hand to loan ratios and a published daily financial health rating that reflects this. Or conversely, have its fiat currency value rated internationally against a total actual liquidity ratio and relative capital risk???
Moreover, we see the ability of the banks and/or governments to seize (by law) any and all depositor funds which are, essentially, trust funds on deposit as outright THEFT. We view the seizing of these funds (to replenish ill-used and too often illegally squandered depositors’ monies) as a very serious detriment to international financial reform; laws permitting such forfeiture must be repealed. More timely, stringent and absolutely transparent financial reporting would be required of all international banking and financial institutions. In this manner, countries much like corporations would feel the immediate weight of their individual fiscal policies in a more transparent way.
All individual personal GOLD holdings would obviously be pegged against the same internationally established GOLD value, but for ease of online or international trade and settlements. A new crypto currency, say “Galaxycoin” or more simply called “GOLD” (clever idea) could also be established alongside in much the same way as Bitcoin has, without the need for secure blockchains and all, as this one would be backed by the actual value and be interchangeable with that established for GOLD.
More realistically, for the immediate and foreseeable future, as the establishment of any international repository, given individual government pride, security, mistrust, etc., seems rather unrealistic and unattainable. The alternative would require, at the very least, almost monthly (or timely, on demand) vault inspections of participating member countries in order to vet their actual GOLD holdings. Failure to comply would trigger immediate action in the form of an immediate devaluation, blacklisting or some such of their currency.
*For as Ayn Rand wrote in Atlas Shrugged, “Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. – Those pieces of paper, which should have been GOLD are a token of honour – your claim upon the energy of the men who produce.”
“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and base of a moral existence. Destroyers seize GOLD and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. GOLD has an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it.”
“Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: ‘account overdrawn.”
*Ayn Rand excerpt #33186-Penguin Random House LLC Permissions Department
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