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John Nash RIP: “Beautiful Mind” Game Theory May Lead to Gold Standard
John Nash RIP: “Beautiful Mind” Game Theory May Lead to Gold Standard
- 'Beautiful Mind' Nobel winner Nash dies in tragic crash
- Nash was subject of movie "A Beautiful Mind" with Russell Crowe
- Nash was renowned mathematician who developed game theory
- Game theory suggests that world may be forced back onto a gold standard
- Debased dollar vulnerable to bitcoin, cryptocurrencies, silver and gold
- Gold standard could cause a price reset at $10,000
- John Nash meets with Russell Crowe and Ron Howard on the set of A Beautiful Mind
The death of mathematician John Nash on Sunday was met with a degree of sympathy and publicity seldom enjoyed by mathematicians whose contribution to society is usually a quiet, unappreciated one behind the scenes. The 86-year old was killed with his wife in a tragic taxi accident in New Jersey.
The 2002 movie "A Beautiful Mind" with Russell Crowe popularised the story of his work on game theory - a mathematical study of how decisions are made - and his life with schizophrenia. He developed what became known as the ‘Nash Equilibrium’ for which he won the Nobel Prize for Economics in 1994.
Game theory, according to Wikipedia, is the study of strategic decision making. Specifically, it is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers."
In his excellent 2012 book ‘The Golden Revolution’, John Butler describes how Nash's game theory would suggest that the era of fiat currencies is drawing to a close and the world will soon be forced back onto some form of gold standard.
Butler believes that the BRICS nations, especially Russia and China, will not stand for a dollar reserve currency in its current form and that this will likely cause them to move back to a form of gold standard. Indeed, since publication of the book the central banks of some BRICS nations have been rapidly acquiring gold - particularly the Central Bank of Russia and the People’s Bank of China (PBOC).
In an important interview with Reuters in 2012 Butler suggested that if one country - he cited Russia - were to back its currency with gold it could cause a 20% collapse in the dollar in just 24 hours. In order to stabilise the currency and in an attempt to preserve the reserve currency status of the dollar, the U.S. would be forced against its will to back its currency with gold.
If the dollar were to be fully backed by gold it would cause a dramatic spike in the price of gold. With M1 at nearly $2980 billion at the time and stated gold reserves of 8,500 tonnes, gold would have to be revalued at roughly $9,900 per ounce.
Critics will attack Butler’s bold call in terms of the timing of these events as clearly $10,000 per ounce gold did not happen in 2013. However, the substantive points Butler makes regarding game theory, a return to some form of gold standard and gold potentially being revalued to $10,000 per ounce remain valid.
Indeed, events in recent years such as
- the continuing deterioration of the U.S.’ fiscal position (national debt now over $18.24 trillion and unfunded liabilities of over $100 trillion)
- the continuing debasement of the dollar and decline in its position as sole reserve currency
- Russia’s and China’s steady accumulation of gold bullion reserves
- China’s using gold as an important strategic tool in order to position the yuan as a rival reserve currency and enhance Chinese monetary, financial and economic power all suggest that Butler’s timing will have been wrong but the call may be proven correct in the fullness of time as competitive currency devaluations and currency wars escalate.
The status of the dollar as a global reserve currency is by no means guaranteed. A fiat currency which suffers continual debasement through currency creation on a scale never seen before in history will not be tolerated indefinitely.
Continuing demand for gold and silver bullion throughout the world and especially in Asia and the emergence of cryptocurrencies and bitcoin show the world is moving towards alternatives already.
Owning physical gold in secure vaults will protect one’s wealth from the instability stemming from a disruption to or transition from the current fragile international financial and monetary system.
Must-read storage guide: 7 Key Bullion Storage Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,194.00, EUR 1,095.56 and GBP 774.77 per ounce.
Friday’s AM LBMA Gold Price was USD 1,211.00, EUR 1,083.45 and GBP 772.96 per ounce.
Yesterday was a spring bank holiday in the UK and the U.S. observed Memorial Day.
- Silver in U.S. Dollars - 10 Years
Yesterday, gold dipped below $1,200 an ounce near a two week low while the U.S. dollar climbed higher after Fed Chair Janet Yellen was seen to reaffirm the central bank's tightening stance on monetary policy.
Overnight, gold bullion in Singapore was down 0.8 percent at $1,197.46 an ounce and gold has traded sideways in London too.
Today, there is more U.S. economic data due - core durable goods, durable goods orders, HPI, flash service PMI, CB consumer confidence, Richmond manufacturing data, and new home sales. Negative data should see gold rise and positive numbers could see more weakness.
The outlook for Greece remains very uncertain. If they do not make their IMF payment next week it may trigger more safe haven demand for gold bullion.
The risk that the heavily indebted Chinese economy goes into recession and drags the U.S. and the world with it remains underestimated. China's top banking regulator warned overnight of rising credit risk from real estate, local government debt and “unconventional” forms of finance, sources with direct knowledge told Reuters.
The regulator highlighted Beijing's struggles to prevent risky debt from engulfing a stuttering economy.
In late morning European trading gold is down 1.06% at $1,194.05 an ounce. Silver is off 1.99 percent at $16.76 an ounce and platinum is also trading off 1.37 percent at $1,132.20 an ounce.
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Gets very messy trying to put a fiat currency back onto ther gold standard.
1.) What backs the current gold ETF's if the gold is now backing currency?
2.) The other issue is what knocked the dollar off the gold standard to begin with and that was fraudulently creating so much currency that if people start to redeem it for the standard you will never have enough.
In both points especially as the QE rape train is travelling around the world right now Japan for sure does not have enough gold to back their fiscal policy for the trillions being created. On top of that the likes of India and China have been creating large amounts of stimulus from nothing let along the leverage on loans, interest etc. We ain't even touched how much gold would need to exist to back the current rate of the western INFLATIONARY ECONOMIC MODEL.
(Actually at the moment they are printing to stand still ... so how much gold do we need to add to maintain this position? TOO BLOODY MUCH!).
Will never be enough gold to back the current economic system as they create currency far faster than gold can be dug out of the ground.
re "never be enough gold"
bollox. its always a question of price. And in the absence of a monetary system backed by something durable and genuinely scarce, the amplitude of volatility will continue to increase until even the most risk-loving oligarch will cry 'ENOUGH' and seek a system that has safe harbours, and is not simply an endless ocean
But on topic, Nash's theory is flawed because it presumes 'rational' competitors/co-operators
we are well into a period demonstrating that market players can stay irrational longer than nash can wait for a nobel
But why the heck would any country do such a thing and be confronted with a quickly rising currency in a world where everybody does everything to keep the own currency as low as possible?
Money is what 'we the people' accept as money.
So the simple facts that most of 'we the people' :
Easier believe a lie, than accept we are being lied to.
Rather live one second longer in the 'save and comfortable fiat dream' even at the risk of being compleetly ruined the second after it, iso stepping out of that dream and actual really start living, because most of us are afraid that a real life could just require some more risk and/or more work to be done.
Makes it quite hard to expect a 'gold standard' soon..
A gold standard gives us clear boundaries and clear limitations.
Altough quite healthy in most cases, most people like to gamble in the fiat dream for that small chance on the jackpot.
Realizing the casino is the only one with a guaranteed, giant, profit doesn't seem to bother most.
So altough the gold standard as final outcome is quite clear, the way to get there and the when remains a mistery.
Also talking about gold in terms of fiat is absurt.
Once the real properties of fiat becomes clear to most this will finaly change.
But even than, expecting that those current profiting on the system will let that power go without a fierce fight...., no fu.... way.
If we know the number of people surviving that fight it will give us a better insight of the value of gold at that time than all the bs of all 'experts' together.
Take care,
K a n s
WTF??!!??
The ECB has 10,800 tons of gold on it's balance sheet MARKED TO MARKET. How is this not 'backed by gold'?!!
If anyone thinks we are going back to a country offering gold at a fixed price again...yer nutz. In this world it would kill their economy in a week. Strong currencies are the death of exports.
What the ECB is doing IS the future of 'gold backing' a currency. If gold rises in dollar terms what will that do to the ECB balance sheet?
Think about that.
Is there no compromise between your view and those who hope for a gold standard?
If strong currencies are the death of exports, are they not also the lifeblood of countries which import heavily, like the US?
In any case, I would much prefer to see the country "die" once by returning to honest money than to allow the kleptocracy continue to print as much fiat as they desire to rule the world and to snuff out all opposition.
We may be able to ignore bad choices, but we can't ignore the consequences of those choices. Eventually, the US will be merely a footnote of history if we continue on the path we're on.
Does nothing really to their level of debt except have the gold price better reflect the pruchasing power of the Euro (if it still exists) and gold.
Gold needs to be there because the banksters increasingly don't trust each other -- and they should know. The US was trustworthy for years - until the Nixon gold default (courtesy of Johnson's budgets). Since then the world has been in monetary la-la land. We are supposed to believe this is the new normal and it's sustainable, an evolutionary change. Butllshit - it's excalated into financial madness and it's about to blow up. Currency needs an anchor - that has always been gold or silver. "Federation Credits" or "Quatloos" may seem like a good idea but central money power cannot be trusted and central planning doesn't work. This becomes more obvious every day.
I just got in another shipment of delightful, harmless tribbles.
Clearance priced at only 6 credits each. Quatloos accepted with a 4% surcharge.
Call BR-549, ask for Harry.
Gold is money. They hate that, but it still is and always will be.
Silver, too. The Chinese don't want to hold diminishing fiat for all the slave labor they provide, swapping for something real is a no-brainer.
http://en.wikipedia.org/wiki/Hee_Haw
With regard to China and what they may or may not do with their gold: The Chinese need not announce to the world that they plan to 'back' the Yuan/RMB with gold - it is not necessary. The current global economic/geopolitical situation with the attendant volatility and uncertainty, combined with the foreknowledge of civilizations much older than the U.S., that gold was/is/and will be, a store of value by comparative measurement against fiat currency, is enough to engender the confidence of trading nations towards fellow nations that have in their possession, un-leased, un-rehypothecated, or otherwise un-compromised gold, to do business with them, as opposed to a nation who either doesn't have a sufficient amount in its possession or, won't let on to their actual physical holdings by way of open, independent audit.
Audits are not needed or likely to happen. All that will matter is that if gold is needed it can be produced. In today's monetary system it is all but irrelevant. That may change but I see much wishful thinking about gold causing changes to the current system. It could if there are significant shortages that become visible....they probably won't.
Changes to the system will probably come with hyperinflation of the dollar, a dramatic collapse in the markets or some hidden surprise in derivatives that the Fed can't fix by printing (it would have to be enormous).
I don't see the scenario presented here happening in the absence of war between China and the US. Why would China want to go to a gold standard? Why would Russia? Having a fiat currency gives them flexibility that they would lose under an Au standard. Unless Russia and China have a truly ginormous amount of gold in the ground that can be easily produced, it makes no sense at all.
What does make sense is that a jihadist empire (a Caliphate) would go to a gold standard from the get-go. It would have no choice. as nobody would trust a currency of an entity that could easily disappear in a mushroom cloud tomorrow, and nobody would trust their word either. And a large Caliphate that ruled the whole Mideast could force the rest of world to pay for oil in gold.
"it is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers."
In reality, we need "the study of mathematical models of conflict and cooperation between intelligent irrational sociopathic financial decision-makers." Then maybe we can send The Great Red Dragon (Snakes In Suits) back to their lair.
Meanwhile Asia keeps buying up as much physical as possible. It's a force of nature. The only way to stop it is with mass murder.
They are probably buying physical as insurance. Gold reserves say nothing about any intentions to go to a gold standard. It just prepares them to operate if external conditions moved in that direction.
This word fart gave me such a sudden belly laugh that I sprayed coffee all over my screen - what an absurd silly suggestion !!!
NO major regime will EVER EVER EVER adopt any precious metals as currency or adopt ANY ANY ANY level of precious metals backing for their fiat currency - this is an absurd obsolete delusion promoted by wackos and those peddling the precious metals.
Why ?
Very simple, 2 reasons:
1. Humans as a species are not competent and disciplined enough to control and limit their spending, therefore ANY effort to restrict or control spending is impossible.
2. Spending is the primary means of getting and keeping power and control for regime leaders - they will NEVER commit power suicide by embracing ANY limits on their spending.
As I said above, only a Jihadist empire (Caliphate) or a China in actual war with the US would have any need to go to a gold standard. If ISIS conquers the whole Mideast, they will have to operate under a gold standard from the get-go. They will have no choice, as no one will trust them, no one will bank with them, and they will be in a position to demand payment for oil in gold.
It is not an issue of spending discipline. If it was, the Chinese would not have let theirs get so far out of hand. The issue is a nation having ~something~ that engenders a level of confidence in their currency for other nations trading/investing with them. The Chinese need not 'back' their currency with gold, rather, all they need do is to show that they have in their possession, an unencumbered/un-leased/un-rehypothecated, etc., amount, sufficient to engender confidence.
Opinions are like assholes. Everybody has one.
opinionw are plural. most people have multiple opinions but only one asshole. some people have colostomy bags but that doesn't represent a true second asshole.
people have single assholes. so no. opnions ar enot like assholes you asshole.
and the bigger the opinion the bigger the.......
If you'll excuse the guy that doesn't work in finance, I do wonder this: Is there enough gold above ground to even have a gold standard? There appears be trillions if not quadrillions of currency running around the globe. Is there enough gold to cover that without gold being priced at 12K an ounce or whatever? Or is it a total reset with trillions being wiped off the map?
I do love me some shiny in my safe, but will we ever really see all the paper money backed by real assets other than military action?
what a CROCK OF SHIT.
the THREAT OF A GOLD STANDARD WILL BE USED TO GET CHINA INTO THE IMF AND CUT A DEAL ON INTERNATIONALISM.
THERE IS NO WAY IN FUCKTILLION THAT A COMMUNIST COUNTRY WANTS ANY STANDARD OF ANY KIND THAT WILL STOP THEM FROM DEBASING THEIR OWN NATIONAL CURRENCY.
there are two worlds of currency----the currnecy used in transactions by peasants, and the currency used for settling international trade transactions. the 3rd derived form of currency is that traded on forex exchanges for speculation purposes.
china is accumulating gold for a war on the 2nd and third forms of currency. they will NEVER BIND THEIR OWN GOVERNMENT TO GOLD WITH RESPECT TO DEBASING THE local currency.
the chinsese evne have two names to descibe the currency. the renminbi will NEVER BE ON A GOLD STANDARD. the yuan however will be threatened with a gold standard if it is not accepted as a currency of equal represenation at the imf.
the AIIB might be an attempt to build their own tower of power. however, the chinese will then have to USE THE THREAT ITSELF AND MAKE THE YUAN GOLD BACKED, if the AIIB is ever to rival the imf in the next 50 years.
i don't think the chinese really want to do that. they want a real seat at the real table , and teh threat of a yuan backed gold currency will get them that. and it's probably a little bit of both, their standing at the imf will go up even as the AIIB starts to gain in strength .
this is a true international transition stage.
but no----the communist government of china could never ever possibly back their local currency with gold. the government would collapse IMMIDIATELY .
there 's too much money , too much credit, and too much of a need for printing more money to keep the government in control over every future collapse of credit bubbles. if they back the renminibi with gold, the 1 billion people of china will hand in their renminbi over night and take all the gold . it just doesn't work this way anymore.
gold is the curreency of kings and military industrial corporate banking oligarchies. the people DONT GET TO TENDER FIAT FOR GOLD ANYMORE.
you want fiat, you go out and buy it at price + premium. you are not getting cheap tender gold from the gov treasury for your paper. not in the west , not in the east, not in the north, not in the south.
You understand little. A "gold standard" does not necessarily mean that people can redeem their Yuan or dollars for the physical. People will always be able to sell their physical for fiat however.
The neo Bolsheviks in the Obama admin and at the Fed cannot ever have any form of a gold standard I agree, however it will be forced upon them. The (A) gold standard can take many forms but methinks it will be tethered to SDR's or some similar benchmark currency either at IMF or BIS. Fiat currencies will float "freely" but will reflect the amount of gold held by that sovereign nation, but also current account trade and capital flows as perceived by traders.
Essentially the "trust" behind the US dollar (reserve status) has been eroded by the neo Bolsheviks allowed to stay alive in the US. They have prospered largely due to massive Fed Gov't deficits and Fed money printing the last 8 years. International money recognizes this, even though western Media cries "racism" or "right wing", and International monet will want something more "trusting" than a currency at the whim and satanic call of the neo Bolsheviks in the US.
That will be a gold , perhaps silver backed (at some trade / capital flow ratio), currency benchmark. It may not exist today. The only candidate for that would be the SDR. Give the amount of fiat chasing the gold / silver, I would guess gold to be at 10 - 15 k / oz, silver at 200 / oz. Hard to pinpoint now, but it wil definitely be refective of the global reset.
Of course this is all subject to a costly war between the US / Japan / and China. In which case gold goes even higher.
hey go fuck yourself with your coded anti-semitism. i'm not suffering nazi antisemites on zh anymore with coded JEWS RUINED EVERYTHING, KHAZARIANS, NEO-BOLSHEVIKS BLABLABLA ALL JEWS ARE BANKERS AND ISRAEL RUNS THE WORLD AND JEWS ALL LOVE ISREAL AND ARE TRAITORS.
THIS SAME SHIT IS CONTINUOUSLY SPEWED BY NAZI ANTISEMITES AND I'M JUST SAYING TAKE A FUCKTILLION OF DICKS AND STICK IT UP YOUR ANTISEMITE ASSHOLE.
p.s. you said the exact same thing in your post that i said without adding ANYTHING. that you disagree with what i wrote, while actually confirming the substance of my remarks shows you are a fucktard asshole.
FUCK YOU. shut your stupid comment pie hole.
^^^ This ^^^
You just wrote my fav ZH post ever.
"this is a true international transition stage."
Yes. Terms are being (re-)negotiated. I don't hear 'our voice' in the mix :-)"gold is the curreency of kings and military industrial corporate banking oligarchies. the people DONT GET TO TENDER FIAT FOR GOLD ANYMORE."
Its got the same name, but our money and ther money aren't the same in quantity or nature. (A btlike Kevin Kelly talked about spliiting the currency way back in Out of Control). No way does a Government go for less control.
The speculated cash ban + negative rates, and maybe some kind of clean float or gold backing only available to the Giants will bring this about. For us minnows now, metals are still available at a hefty discount, but the window will close soon enough.
I'd try to predict when, but I never got numerology.
+1 for Fucktillion!
BULLSEYE !!!!!!!!!!!!!
Bring the gold.
https://www.youtube.com/watch?v=_qO66Rmi1Mw
Obviously he wasn't being John Malkovich, at the time...
Gold will be worth the same. It is te dollar and othr fiat currencies that will be devalued in terms of gold.
ATM --I could not agree more.
In 1920 gold was worth $20/ounce and $20 rented a two bedroom furnished apartment for a month.
Today gold is at $1220 and that rents a two bedroom furnished apartment.
DO NOT MEASURE YOUR FINICAL SUCCESS IN DOLLARS -- Measure your success in ounces of gold.
BD
its not rocket science. the major currencies, dollar, euro are involved in competitive devaluing. smaller currencies, with larger relative gold reserves, like south africa, back their currency with gold, that currency becomes the most desirable standard for finance. one day Manhattan is the financial center the next day its Pretoria. the major currencies cannot back their currrency with gold, because there is too much money and not enough gold. the rand or the ruple, or a basket of gold backed currencies becomes the reserve currency because they are more stable. the volume of the gold backed currency does not need to expand to accomodate trade, the trade simply goes through them. ergo the majors are all pegged to a gold back currency basket, and the fed/eu is forced onto a gold standard. additionally there is a transaction only currency, and PMs become the place where you park your money. in the world of perpetual zirp the non-interest component of gold becomes a non-issue. pay people to hold fiat and they will hold fiat, penalize them and they will use gold and silver. hence the new economic war against these gold back currencies will heat up.
Alomost thdere, but South Africa is not gold rich, they sell the gold internationally and take the USD. The ANC led Gov't cannot afford to "buy" gold from the RSA mining companies and stash it. Doubtful that Russia would go it alone with a gold backed currency, although not impossible.
As mentioned in an earliwer post here, I do believe the banks are too powerful In ternatioanlly and they d realize thast the neo Bolsheviks in the US power structure have completely fucked the future of the US. The future 5 or so years based on the illegal immigation into the US is going to be a live picture show of the historic, unfettered migration into another land. Much like the Roman empire but with obvious differences given the technology etc.. But equally brutish, violent and satanic.
Therefore, there will be a SDR (or soemthing similar) backed by gold / silver. The Internet will be globally managed / shared by an arm of the newe IMF that has China, India and Russia occupying a far greater influence than they do today.
Gold = 10k to 15k/oz , happening anytime between 6 months to 5 years from today. No extra charge for the exactness of my timing of the event.
they are sitting on huge reserves, the problem is the cost of mining that gold, but why should that bother anyone, its like oil reserves. you dont pump out all your oil reserves right now and put them in storage. and yes the central banks of europe and america will go to war over that, ultimately its a one two punch, a bitcoin type transaction only currency, and countries holding large gold reserves relative to their currency. i think there is a bull market in gold, maybe the first ever, these parabolic panic moves are nice, but a bull market is much better
..
When talking about governments, the study of mathematical models of conflict and cooperation between intelligent rational decision-makers is where his theory braks down
Until the psychopaths and those who benefit from them in power are purged, there is no hope. I am doubtful those who exhibit the dark triad of personality traits (Psychopathy, narcissism and Machiavellianism) would act in accordance to the Nash Equilibrium but I can't say in confidence they are unintelligent and irrational.
Miffed
No worries Miffed dear - The Nash Equilibrum theory accounts for those types of neo Bolsheviks, because eventually other people act "rationally" and rid the earth of them. Timing being the key of course. Can we start being "rational" now ?
Hehe, my hope as well;-)
Unfortunately, I have found today rationality is not a universally agreed on concept. Having sat on 4 juries has cemented this opinion. Perhaps this is the fault of logic not being taught in schools. A mind must be taught to be ordered and disciplined.
You would imagine at a certain point of oppression, people would rise up and eliminate their oppressors however I don't see the will to do this as yet. I do see lots of anger and frustration in the productive class, more than ever before. It will be interesting to see the tipping point.
Miffed;-)
How about a nice game of chess... Games theory is ignored far to often nowadays since it doesn't give people like Krugman the answer they want......
slihgtly off topic, aren't passengers in taxi cabs in NY required to wear seat belts? woody allen once said, the only cultural advantage in california is a right turn on a red light. i think we can add one more, mandatory seat belt laws.
Nash unfortunately lost his life in a crash in NJ, on a highway. Cabs do not travel fast enough (usually) in NYC, given the traffic, to have a deadly accident. Also, being on the grid system - drivers have a clear 180 view of what is around them. Leads to very, very few deadly accidents in NYC. Plenty of hard fender benders, but few critical.
So be like Nash and not a "think I know it all" Californian and do some thinking outside your Gov't knows best, box.
If an activity or action does not threaten the safety or well-being of others, why should it invoke a law against it?
I don't want anyone telling me how I should live my life. I am an adult and can decide for myself what risks are acceptable to me. Don't try to make me be what you want me to be with your laws-- leave me the hell alone.
Depending of the accident, wearing seat belts can help or really not make much of a difference. I was glad to seat rear seats get shoulder straps as well as lap bands. I can't tell you how many colostomies I saw performed in accidents due to the lap band only situation. I always wondered if the patient would have been better off without one.
Miffed
Mandatory seat-belt laws are bullshit.
I've been in EMS for 18 years, I would disagree with that statement having seen countless wrecks where the occupant ended up with some shoulder rash instead of getting thrown and possibly crushed by the vehicle. I can remember two where perhaps no seat belt would have been better, both involved the victim trying to get out under his/her own power, with the belt latch hard to unclasp.
Mandatory seat-belt laws...
yup, kinda like having to wear a helmet whenever you use a crosswalk.