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Ask The Expert – Rob Kirby – (January 2015)
In this exclusive interview, Rob Kirby share his views
on precious metals, the manipulation of various markets, the inevitable
collapse of the U.S. dollar, currency wars, derivatives and more…
Rob Kirby spent the majority of his career working in financial markets
where he honed his skills and knowledge on precious metals, foreign
exchange markets, interest rate derivatives, and government and bond
markets. He’s also become one of the most sought after writers and
speakers in his discipline and writes for many respected online
publications including Le Metropole Cafe, Financial Sense, Silver
Doctors, and Safe Haven. His website, kirbyanalytics.com, has become a
valuable resource of knowledge to those seeking the truth about
financial markets.
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I think the error everyone is making is thinking that the rich will live in the same world as the rest of the peons, the normal Joes.
There will be two or more mediums of exchange. Gold will be for the big wigs. Silver will be used as well, maybe lower ups. Lower level peons will transact in skills, food and personal stuff including alcohol.
There will always be the rich who will win no matter what the non rich do. It makes sense to not try and win; try and survive....
Does anyone have any thoughts on moving from the US to Canada? My mother is from Canada and has dual US/Canadian citizenship. We recently found out that by Canadian law her 1st generation of children are considered Canadian citizens. Long story short Ive recently confirmed Canadian citizenship and obtained a Canadian passport and a social insurance card. Will Canada fare better in the coming economic collapse??? Any ideas? Your comments would be greatly appreciated...
You will need some warm clothing.
As a Canadian, as was said depends where you go, BUT, where ever you go you will get along much better leaving your American Politics in the USA. We do not like what your Government is doing. We are not Warmongers but willing to Fight, fight hard for PEACE. Not for Corporate profits. Following that, you would be welcomed. Take care. Be safe.
It really depends on what your skills are and where you intend to live. With 25,000 recent layoffs and counting (that's equal to 250,000 layoffs in the U.S.) the job market will be sparse for the near future. If it were me going back, I would stay away from any of the large cities where the real estate bubbles are now popping and rental units will be scarce. That includes Vancouver, Calgary, Edmonton, Toronto, and maybe even Regina, Winnipeg, Ottawa. Finding work and living in the interior of BC or rural areas of the prairie provinces or Ontario is probably the best bet for now. And I purposely left out Quebec and the maritimes because they're done for.
gold, of course it's manipulated- what isn't? we are living in the matrix, or passing in and out struggling to find our own reality...
think of driving to work as going into the matrix and coming home as leaving the matrix. coming home, ahhh, a sense of relief, but still the matrix is everywhere humans exist...
ps, keep the tb off (matrix intrusion), ha...
if we go back to horse and buggy, gold might be in your sash. population will be less that a billion too.
Is it me or did he never answer the first question, "What made you change your mind about market manipulation?"
Rob Kirby is one sharp dude
Whally World, I agree that was worthwhile to listen to. In light of Ron Kirby's discussion starting at the 12:30, to 14:30 mark, of that audio recording about the ESF, I provide these links to that made by Eric deCarbonnel:
http://www.youtube.com/watch?v=2ssrcD5GdPQ
The ESF and Its History_Part 1
http://www.youtube.com/watch?v=ImuVUab6WW0
http://www.youtube.com/watch?v=8Qsll_5-FXc
http://www.youtube.com/watch?v=iK-741ISz94
http://www.youtube.com/watch?v=lQf-u2nCVSw
Ron Kirby's comments about the way that the ESF operates indicates that ORGANIZED CRIME so totally dominates the established political economy that there is basically nothing left to stand against that but CONTROLLED OPPOSITION.
I am NOT a "believer in things returning to the mean." I do NOT believe that returning to a gold and silver standard is possible. Rather, I define money as measurement backed by murder, which would simply have some intermediate commodity into that basic situation. E.g.: Gold standard money is the measurement of gold backed by murder. Any attempt to back up any form of money with some commodity only changes the basic situation that money is measurement backed by murder to become money is measurement of that commodity backed by murder.
In that context, cryptocurrencies are complementary currencies, that are smaller parasites riding on top of bigger parasites, in the sense that national fiat currencies, especially including the US Dollar as the global reserve currency, are primarily fiat money frauds backed by the force of governments, WITHIN which, taking that for granted, cyptocurrencies are able to operate. Thus, the big national fiat money parasites have the tiny crypotcurrencies parasites riding on top of them.
I tend to want to agree with Ron Kirby that Canada is not quite the same kind of tinderbox of violence, ready to catch fire, the way the USA is. His analysis is plausible, but only to the degree that the American situation remains relatively contained within its own borders, which is not necessarily a good assumption ... I continue to think that NOBODY can comprehend the FULL magnitude of the PROBLEM that there has been developed globalized systems of electronic monkey money frauds, backed by the threat of force from apes with atomic bombs.
I think that my definition of money being measurement backed by murder is the only definition that integrates all the facts. Every other definition of what money "should be" tends to deliberately ignore some facet of the facts about what money IS. The human abilities to measure and to murder have been amplified many orders of magnitude by progress in physical sciences, which have ended up being channeled through social pyramid systems that were based upon being able to back up lies with violence.
The currently established political economy is based on runaway systems of legalized lies, backed by legalized violence, which are OUT OF CONTROL criminal insanities: (i.e., globalized systems of electronic monkey money frauds, backed by the threat of force from apes with atomic bombs.) Since those are the FACTS, anybody who believes it would somehow be possible to return to old-fashioned forms of money backed by gold or silver, or any other commodity which manifested the conservation of matter principle, is indulging in nostalgic nonsense ...
Human civilization has NOT adapted its politics to progress in science and technology, due to the paradoxical problems that presents to political science, which would have to go through profound paradigm shifts in order to cope with the facts that governments are the biggest form of organized crime, controlled by the best organized gangs of criminals. In that context, I think that the most important points that Ron Kirby correctly emphasized was the astonishing HIDDEN IMPORTANCE of the ESF.
In order for politics to develop better political science would require surmounting the extreme paradoxes that NOBODY GUARDS THE GUARDIANS, which political problems have never been resolved by anybody so far, because, in principle, human beings and human civilizations operate as entropic pumps of energy, which correspond to operating according to the principles and methods of organized crime, which are most socially successful the more HIDDEN those are. Therefore, human civilizations operate as systems of ORGANIZED CRIME and CONTROLLED OPPOSITION. The more socially successful that ORGANIZED CRIME can be, the more totally there is CONTROLLED OPPOSITION. Governments are necessarily the biggest form of organized crime, controlled by the best organized gangs of criminals, which is how and why our political economy is based on enforced frauds.
People who promote impossible ideals that should be stopped are indugling in nostalgic nonsense. In practice, there is already an overwhelming abundance of weapons of mass destruction in the world, as well as the crucial knowledge about how to make even more of those. Therefore, the basic problem of how to back up money with murder has become magnified many orders of magnitude more than ever before in human history!
What EXISTS now are runaway systems of MAD Money As Debt, backed by the threat of MAD Mutual Assured Destruction. Meanwhile anyone who believes that the manifestation of the principle of the conservation of matter, such as demonstrated by gold backed money, or any other commodity backed money, is deliberately ignoring the PROVEN scientific fact that matter is a form of energy. By and large, anyone who believes that we could return to having sound and honest money backed by any commodity tends to deliberately ignore the issue of how there will operate murder systems to back that up. Those day dreamers of that kind of nostalgic nonsense tend to presume, without thinking about it, that there will still be some functional "rule of law," to enforce contracts, and so forth, while actually there is always the profound paradox of enforcment, that NOBODY GUARDS THE GUARDIANS.
In principle there are no final solutions to the dilemma that the only connection between human laws and natural laws is the ability to back up lies with violence. Our EXISTING monetary systems are backed by our EXISTING military systems, both of which have been selected by their successfully survival through history to become based on the maximum possible frauds and deceits. All of those combined money/murder systems make perfectly good sense, from the perspective of political science which is consistent with general energy systems, revolutionized by recognizing the ways that the biggest bullies' bullshit social stories dominated the philosophy of science, just as much as every other social enterpise, so that the concept of entropy was deliberately inverted, so that our scientific understanding of energy systems operates quite well, except for overall being almost totally inverted, which inversions are not nearly as problematic for physical sciences as that becomes for political sciences.
The fundamentals are that money is measurement backed by murder, because that is merely the most abstract form of private property being based on backing up claims with coercions. There is no private property outside of some system of public violence. There is no meaningful money which is not backed by murder. All possible voluntary contacts are inside of the overall context of involuntary contracts. All possible trading, which may use money as a means of exchange, always exist inside of contexts where there could be robbery instead. Human realities are always organized lies operating robberies. The only things that actually exist are the dynamic equilibria of different systems of more or less organized lies operating robberies, while money is merely the more abstract expression of that overall situation, which is how and why we ended up with the existing monetary system being government enforced bankster fraud.
The existing money is actually based on enforced frauds, because money IS measurement backed by murder. It is not possible for real money to ever be anything else. Any insistence that there should be some sound money or honest money can not exist outside of some rule of law to back that up, but then, that drives the paradox that NOBODY GUARDS THE GUARDIANS. The only way to have sound and honest money would be to have a sound and honest murder system to back that money up, so that the meaning of those symbols would be given their meanings by that behavior.
In that overall context, I agreed that Ron Kirby was a worthwhile "expert" to listen to. I expecially thought his comments on the ESF were correct! However, his overall world view continued to be way too superficial, for my taste. I recognize that people who understand the systems of enforced frauds better may be able to do better within the established systems. I would allow the possibility that those who invest in precious metals may have made a good decision in the medium term.
However, in the longer term, the basic PROBLEM is how can human beings develop better death controls, to back up better debt controls, after the development of weapons of mass destruction. By and large, nobody has an answer to that question at the present time, and in may be that there are no solutions. Therefore, I can understand why so many people regard themselves as being "practical" when they deliberately ignore that PROBLEM, and instead indulge in nostalgic nonsense about their version of the history of gold and silver, and therefore, the value of such precious metals.
However, THEORETICALLY SPEAKING, there is no intellectual integrity in simply ignoring the magnitude of the emerging problems presented by electronic monkey money frauds, backed by the threat of force from apes with atomic bombs. The ONLY definition of money is that is consistent with all the facts is that money is measurement backed by murder, which actually have become electronic backed by atomic energy. Therefore, no good theory of money can be developed which is not consistent with physical sciences like quantum mechanics and the special theory of relativity, etc. ...
Of course, I am well aware that most trained economists and financial experts operate INSIDE the established systems of enforced frauds, in ways where they never see the overall forest, instead of just their local trees. Indeed, the best of those kinds of "experts" still tend to only perceive some of the groves of trees, but still not the forest of enforced frauds as a whole. That is how I would regard Ron Kirby, as a worthwhile financial expert to listen to, who has some good overviews of some of the bigger groves of trees that should be seriously regarded, like the ESF ... However, I do not regard even the best of those kinds of financial "experts" as getting remotely close to having enough of a perspective to see enough of the forest as a whole.
It's intimidating but there seems to be no choice. If one wants to understand UNITARY MECHANISMS then one has to learn quantum mechanics and the special theory of relativity (to some degree?). Are there "for dummies" versions? ; )
Well, MEAN BUSINESS:
There are lots of relatively popularized versions of those sciences, as well as many books that attempt to connect the topic of consciousness to those issues. However, I am not aware of any single source that would be good enough to bring someone up to speed on the basics, regarding the attempts to reconcile and creatively synthesize ancient mysticism with post-modernizing science.
The basic issues in both quantum physics and the special theory of relatively are that they are very strongly PROVEN to be correct by experiments, and the technologies were were made possible due to understanding those theories, HOWEVER, attempting to understand what they are saying is an overwhelming assault upon common sense presumptions.
For instance, common sense presumed that time and space were independent absolutes. However, recognizing that light was a form of energy, and that electromagnetic energy had a precise speed, which was necessary for energy to be conserved, so that light had to travel at the speed of light, and could not go faster nor slower, meant that time and space had to be connected. As one went faster, then space contracted, and time dilated. At the speed of light, then there is no space, and time is infinite ... which is a way to approach what it means that energy is conserved.
That change in the basic ways of thinking about the meaning of time and space then also applies to the process of subtraction, manifested through the concept of entropy. Entropy is the way that energy is distributed and spreads out through time and space. We have no clue how energy ever got concentrated in the first place. However, everything that we experience is basically the energy from the sun shining on the earth, and then going around and around a few times, until it finally bounces back out into space. The amount of life and consciousness there is depends upon how many times the energy from the sun goes around and around, before it is finally bounced back out into space.
Most of what I am saying can be found, in one form or another, in the writings of ancient mystics. One book I would recommend in that regard is The Perennial Philosophy by Aldous Huxley:
http://en.wikipedia.org/wiki/The_Perennial_Philosophy
In a sense, that is the single best "Unitary Mechanisms for Dummies" book that I am currently aware of. Those ancient mystics were attempting to describe the kinds of perfect paradoxes which now have precise formulations in the mathematics of quantum mechanics. There are a huge number of different books which have been attempting to reconcile consciousness with quantum physics, since, after all, the brain is full of chemistry and electromagnetics, which are theoretically described by quantum mechanics. One example that comes to mind is Quantum Enigma, Physics Encounters Consciousness, by Bruce Rosenblum and Fred Kuttner. That is nowhere close to being good enough, but does provide an introduction to attempting to apply the profoundly paradoxical results of experiments that have proven quantum mechanics to be extremely useful and accurate, to its possible applications to understand human beings.
One of the most important issues in quantum mechanics are referred to as the "measurement problems." Since every kind of possible "money" must necessarily involve some kind of measurement, the deeper theories regarding general, abstract, existing in principle, "measurement problems" apply to money.
A lot of the related material arises out of information theory, and cybernetics, or how systems operate through the mechanisms of feedback loops. Obviously, all of that kind of evolutionary ecology of systems applies in principle to economic systems. However, again, the established systems were based upon the dominance of the biggest bullies' bullshit about them, which makes coming to more scientific terms with that issue much more difficult and dangerous than in any other area!
I have been spending my whole life learning about these things, working on attempts to reconcile politics with physics, and ancient mysticism with post-modernizing science, etc. ... All of that has developed my way of thinking about the combined money/murder systems. IF I live long enough, maybe I will get enough of a chance to reorganize and represent my ideas on those matters ???
However, the audience for such an endeavour is such a tiny minority, of a tiny minority, of a tiny minority, that I mostly just do what I do for my own amusement. There is barely any practical point in understanding the combined money/murder systems better, because the established systems are based on being able to back up lies with violence in ways which do not care about any more rational evidence or logical arguments ...
We continue to be watching and waiting as the contradictions between progress in physics, versus almost no progress in politics, keep on getting bigger and BIGGER! In my view, the most important theoretical problem is that most people still take for granted the old-fashioned commons sense ideas about time and space. Therefore, they understand the concept of entropy backwards. The entire orthodox scientific community also does that too, without ever thinking about it, since it was built right into the standard entropy equations, in order that measurement of power and information would end up having positive values, rather than negative values. Private property and money are treated as relative positive things, rather than relative negative things. We subtract parts from the whole, but then we reverse the meaning of that, by thinking of that subtraction as something positive rather than negative.
I summarize that by asserting that the fundamental idea upon which all of my other ideas are based is SUBTRACTION. Subtraction is the way that parts are separated from the whole. That kind of subtraction requires that one have some notions about time and space. Since the common sense presumptions that people have about time and space have been PROVEN to be totally wrong and utterly backwards, their ideas regarding how they perceive everything is similarly backward.
The biggest bullies, the ruling classes, waged perpetual warfare against the consciousness of those they ruled over. The vast majority of people do not understand the elementary principles of philosophy or genuine spirituality, which are about how the human mind makes a model of the world, with a model of itself inside its model of the world, while the "truth" is that we are not that model of a model, but the whole, which flows through as as the ability to model. Of course, ancient mystics were always saying the same things, but state religions did their best to destroy that kind of understanding. Ultimate "truth" is always paradoxical!
Of course, within our society all of the psychedelic drugs that might assist people having mystical experiences are all completely criminalized, which is merely one tiny aspect of the overall war against consciousness waged by the ruling classes against those they rule over. The whole social pyramid system is based on being able to back up lies with violence, in order to keep most people ignorant and afraid, so that they can be controlled and exploited. The monetary system has been developed primarily as a tool of coercion, rather than enabled to become a better tool of cooperation. Of course, there are endless levels to go through when attempting to understand that, while the lies tend to be different at every level.
One could almost paraphrase the first line in the Bible to be: "In the beginning was the word, and the word was a lie." When one thinks about it, it is NOT possible to ever separate anything completely from the environment. Everything actually IS the environment. Living things are vortices of energy and matter, all of which are actually made of infinite loops of energy and matter from the environment, which return to the environment. The separation of the human individual from the whole is always only relative. However, the hallmark of the biggest bullies' bullshit world view is to assert false fundamental dichotomies, in ways which tend to alien people from themselves, and each other, as well as from the environment as a whole.
Subtraction is never absolute. However, to the degree that one does subtract a part from the whole, then, across the boundaries thereby defined, there is a flow of energy and matter. Living things TAKE energy, as fuel in order to continue living. The basic English definition of TO TAKE is ROBBERY. Therefore, the perception of robbery follows from the perception of subtraction. Those processes necessarily flow from SUBTRACTION TO ROBBERY. Since the subtraction is never absolute, the robbery is never finished. The basic ways that we understand all living things is as energy systems. However, since we have inverted the meaning of entropy, because we presumed upon an inverted, backward way of thinking about time and space, everything else follows from those mistakes, that we are living inside of a Bizarro Mirror World, or a Wonderland Matrix, where everything appears backwards and absurd. If we were still just monkey or apes tearing up the jungle, or running through the grasslands, then our errors would not matter much. However, we ARE now monkeys and apes with electronic money, backed by atomic bombs.
One of the ways that I express that problem is through the summarizing statement that: ENERGY IS SPIRIT. Many of the ancient mystics already had perceived that intuitively, in correct ways, and have attempted to express those paradoxes through their kinds of transcendental poetry, such as in The Perennial Philosophy. However, so far, the primary applications of science and technology have been through social pyramid systems based on backing up lies with violence, in which the biggest bullies' bullshit social stories dominated that kind of civilization. Therefore, we have a monetary system based on enforced frauds, whose social success depends upon the vast majority of people not understanding that, because they have been conditioned to feel like they do not want to understand.
Lots of people make the point that we need some spiritual renewal, to cope with the kinds of political problems that we have. I agree with that, however, I assert that such a spiritual renewal should be based on intellectual scientific revolutions, which would have to be extremely profound, just to barely be enough. The runaway problems of MAD Money As Debt, backed by MAD Mutual Assured Destruction, ONLY EXIST because of progress in physical sciences, that make electronics and atomic energy possible for human beings to harness. However, despite those PROVEN changes in the ways that we perceive the world, back in the world of politics, it continues to be old-fashioned religions and ideologies that dominate everything, almost totally, despite those being utterly out of touch with the REAL advances in science and technology.
Of course, I like to think about those things, and to try to understand them. However, there appears to be no practical point to doing so. After all, the vast majority of people are only interested in making "money" within the established systems, without the slightest interest in understanding those systems themselves. There is almost no practical point to understanding that the established monetary system is based on legalized lies, backed by legalized violence, or enforced frauds, because people are personally successful to the degree that they adapt to operate inside of those systems, in order to make "money" inside of those systems of organized crime and its controlled opposition, and therefore, almost nobody is interested in the kinds of cognitive dissonance that would be provoked if they began to recognize the degree to which their apparent success was based on psychotic bullshit, which was destroying themselves in the longer term.
That we theoretically should change our politics to make it consistent with our physics is something that a vanishingly small percentage of the people are interested in. Since the audience for that kind of message is such a tiny, tiny, tiny number, there is no feasible way to produce such messages and disseminate them, other than currently through the Internet, to that infinitesimally sized, self-selected group of people, who might be interested ... However, obviously, there continues to be no practical point to that, as long as the established systems automatically become more psychotic and criminally insane every day, as they are currently doing!
I merely amuse myself attempting to do the best I can to understand things. I write stuff as a tool to help me think. However, I am not able to think of any practical ways to produce something like a good book, which would be "Unitary Mechanisms for Dummies," since I doubt that more than 0.0000001% of the people, or less, would be interested in something like that.
RM, a late comment, maybe you'll see it -- your many reflections here have a cumulative effect that I liken to the music of Philip Glass, as you relentlessly repeat a small set of essential, core ideas, resonant intellectually and emotionally, and each time introduce small variations and nuances, in content and in style, e.g. here w/ "One could almost paraphrase the first line in the Bible to be: 'In the beginning was the word, and the word was a lie' " and here with an expansion on your multiple earlier references to the history and philosopy of science. "ENERGY IS SPIRIT" is a construction that harkens back to my undergraduate reading of Hegel's "Philosophy of History." I've also wished that you would offer somewhere a definitive version, but appreciate that that is perhaps not stylistically nor aesthetically possible, and not from your pov of practical use.
It's not difficult for me to understand... your doubt, RM.
The release of The Perennial Philosophy was exactly the time that humanity entered a collective 'post traumatic stress disorder" of a radically new kind thanks to the atomic bomb so it's bound to be a time when people seek out ancient mysticism. To borrow a current buzzword, collectively our *head explodes* so they would bury themselves in Buddha or booze. It was relatively short-lived it appears thanks to the 'explosion' of consumerism and soon the computer age. Mysticism was driven back out to the fringes, can't have the natives going off the reservation right? That would be bad for business!
You keep at it hammer and tong during seemingly the WRONG time (space?).
Looks to me that you were busy "BTFD"! Humanities collective head is soon going to explode (literally and figuratively) a billion times worse that in 1945 and lo and behold YOU are the one that is better prepared than anyone!
So as far as I'm concerned you'd better starting watching for that decimal place to start moving to the right at a pretty good SPEED. Stars above, your Zero Hedge posts alone would make a good book so don't go dying before Unitary Mechanisms for Dummies" goes to e-press ok? Deal!
Cheers!
Thanks for saving me about $200,000 on that physics degree! your reply did help me along significantly : )
p.s. Natural Science RUSH (written1980) LIVE eh?!!!
1. Tide Pools: wheels within wheels in a spiral array...
2. Hyperspace: A quantum leap forward, in time and in space...
3. Permanent Waves:
Science, like nature
Must also be tamed
With a view towards its preservation
Given the same
State of integrity
It will surely serve us well
Art as expression
Not as market campaigns
Will still capture our imaginations
Given the same
State of integrity
It will surely help us along
The most endangered species
The honest man
Will still survive annihilation
Forming a world
State of integrity
Sensitive, open and strong
Good point, MB:
"The release of The Perennial Philosophy was exactly the time that humanity entered a collective 'post traumatic stress disorder' ..."
P.S. The most signficant segment of the transcript of that interview:
Rob Kirby: My view about who shorts the gold is that the shorting of gold is all orchestrated by the U.S. Treasury. Specifically, within the U.S. Treasury there’s an adjunct of the U.S. Treasury known as the Exchange Stabilization Fund, or E.S.F. for short. The E.S.F. is an institution that was created in 1934, and it was created at the same time when the U.S. government confiscated gold from American citizens and then quickly revalued it upwards, creating a huge capital gain or windfall profit. That windfall profit is alleged to have been around, I think in the two to three billion dollar range in 1934 dollars. It was that money that was used to seed this ultra secretive adjunct of the Treasury called the E.S.F. That served as the working capital.
Understand everybody, that institution, the E.S.F., took that two or three billion in seed money in 1934, and they have been growing that money operating it as they see fit with absolutely no oversight. They do not answer to Congress. They do not publish annual financial statements. They’re free to operate in any market, and they operate above any and all laws in the United States. Just think about if you take the annual reported inflation rates and if you had actually just taken $3 billion and been rolling it at 3, 4, or 5 percent for all those years what sort of amount of money you’d have at your disposal.
This is all off balance sheet, because this doesn’t come on the visible books of the U.S. Treasury. The amount of money that this entity, the E.S.F., has is absolutely and utterly scary, and I reckon it is absolutely hands down the most powerful financial entity on the planet.
There just isn't enough gold to do a "reset to gold" legleft alone copper.
Oil or natural gas or refined product on the other hand...I mean days like today speak for themsleves.
"A rush to buy things that are real" meaning liquid. That would be the dollar and energy.
... There just isn't enough gold to do a "reset to gold" legleft alone copper
What a load of BS ! There is enough gold for anything in this world, provided the PRICE is right. If the price is artificially controlled, there isn't enough toilet paper to clean all the nonsense from your posts either (as Venezuela recently proved). There is however, an infinite amount of dollars...
All the gold in the world: cube would measure 20 yards, by 20 yards, by 20 yards. That's what the internet says.
HAL, is that you?
I can't think of any reason why gold could not be revalued upward as much as needed to replace fiat.
Correct me if this is wrong but the problem is that gold is so valuable that you would need impossibly tiny units of physical to conduct everyday transactions. A tenth-oz coin is probably as small as is practical; if you buy a candy bar with that how are you going to make change? Sure you could alloy it down but there are limits.
Hence, silver as the medium of everyday exchange. Bimetallism is a drag but if transactions need to happen in physical what alternative do you have? Yet at $1000/oz (thanks for the stroke aid Kirby) even 5% silver coins would be too valuable and some kind of copper coinage would seem necessary. Trimetallism? Again?? Educate me...
The divisibility issue, and the ability to avoid counterfieting, and less expensive security and transport, are the attributes that Bitcoin has as an advantage over physical gold/silver. Bitcoin's primary disadvantage is that it does not have 6000 years of trust, and is limited to the digital environment.
But no matter, we are probably moving to a mix of bi-metal, plus Bitcoin, plus the usual govt printed funny money. In fact, we already have that, it is just the proportion of usage for each class of currency that will change over time.
@Alberich,
You can weave gold filament into any type of fabric, even with teflon.
Thus you can have any nomination of gold weight as currency.
And you can potentially even recoil and recycle your gold filament from that fabric.
Is there historical precedent for this? It seems like the difficulty would be in the authentication, but perhaps the same technologies that prevent counterfeit of paper fiat could also enable gold-filamented notes. Thanks for that.
No historical precedent yet. However, the technology is already available if the need arises.
Preventing counterfeiting is the smaller obstacle, nothing compared to overcoming government hostility.
alberich,
check out:
http://valaurum.com/
"Using a proprietary process, very thin and precise quantities of gold are accumulated between layers of polyester film. On a standard 1/10 gram Aurum, the gold is 404nm thick, approximately one percent of the width of a human hair."
they make 1/10th gram gold notes, paper-thin. it's not really economical yet as their scale is small, but if it were widespread it would be an option.
there's also the option of actual gold-backed paper, like us bills used to be - i know that goes against the adage "if you dont hold it you don't own it", however, if it's carried out by a company that's regularly audited and insured, there's no reason it can't work.
Correct.
no ... real meaning real... like PMs