This page has been archived and commenting is disabled.
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.
Breaking News and Research Here
»
- GoldCore's blog
- 14355 reads
- Printer-friendly version
- Send to friend
- advertisements -
in california a helmet in the crosswalk is a good idea.
Goldcore you are such an idiot.
"Game theory suggests that world may be forced back onto a gold standard"
umm....game theory is about CHOICE.
There's no forcing. In fact, mankind ditched the gold standard so there's your proof it's NOT coming back.
Force is the oposite of game theory. Quit with your gold standard is returning , central planning bullshit.
more and more people are waking up to the fact that gold is just a shiny rock with no intrinsic value, backed by nothing at all
in fact, more and more people are stepping up to "just say no" when presented wtih shiny rocks for sale, trade, or gift
https://www.youtube.com/results?search_query=mark+dice+coin
they are more comfortable, instead, with federal reserve notes, which are accepted around the world and are backed by such things as treasurys, federal lands, and future payments on loans made to students in the higher education system who will in the future be earning large amounts of these very same federal reserve notes
hugs,
irwinSchiff
If enough people (countries, governments) around the world Choose to no longer accept Federal Reserve Notes, the USD is devalued by X percent, likely considerable. Then, if there are any brains left in the US government (a stretch, I know) they will realize that it is Game over for them and reinstitute the gold standard. Their hand has been Forced by circumstances, wouldn't you say?
What makes you think that an overnight 20% decline in the dollar wouldn't be exactly what the dear leader of the US wants?
If you are referring to Obama, I agree that he cares little for America or her people. However, he's not the one in charge so what he wants matters little.