Slashdot Mirror
Using Gold As Online Currency
JerkyBoy writes "Salon.com has an interesting story about using gold for online transactions. One company that provides the service (goldmoney.com) describes itself as "an online payment system that combines the world's oldest money, gold, with Internet technology to provide a safe, easy and inexpensive way for anyone to transact business 24 hours a day. Payments are made electronically using GoldGrams(TM), which are grams of gold that circulate world-wide through the Internet." I wonder if I can configure the MIME types on my Apache server to send golden email attachments?" Hehe - this is basically the same thing as people have been trying to do with creating new online currency.
"Cyber currencies spawn 21st century gold rush" ???
1988 called, they want their word back.
Also intesting...
http://www.goldeconomy.com
http://www.e-gold.com
Fact. The worlds economic system is a delusion. The reason it works is that people believe in it and it's backers,the united States government, european union, etc.
Fact. United States monetary supply is no longer based on gold because the Federal Reserve decided a while ago not to limit money supply but inflation. In doing this it let the money supply balloon. If the US monetary system were based on gold then the ratio "U.S. Money Supply / U.S. Gold Supply" would have gotten really large over the last 30 years, dropping the value of the dollar in currency markets. So, instead the US government said that "We are no longer have a gold based monetary supply", and it was so. Now the value of the dollar is determined by what people think it should be worth. So, if the big one hits California and Silicon Valley, a hot economic growth spot, ends up at the bottom of the ocean then the value of the US dollar would plummet.
Fact. Gold's Value, gold is a "hedge". Hedge against what? Hedge against civilization, the US government, the Global economic system, or whatever, from falling apart tomorrow. If world war 3 or something hits and there's nobody left, or there's the preception that there's nobody left to back the system then the world(whatever's left) is going to need a monetary supply that's a bit weightier than pieces of paper. Since gold has a historical precedent in the global concsiousness as a commodity with intrisic value it would fill this gap nicely. The only reason it would fill in btw, is because it is perceived as doing so.
In closing, the saying that "Reality is a mass delusion", is closer than u think.
e-clams? Sounds like a great idea actually, pity the domain name (e-clams.com and eclams.com) is taken already (by the same company)... ;-/
Well, it depends how much gold you have on you. It's pretty heavy so if you were to put it all in a sack of some sort and twirl it around above your head and use it as a morning star it might work. Then just leave a rock of gold as payment for the machine. Still, it might make more sense to just go down to the 7-11 and buy some.
They're using Golden Grahams as currency? What if they crumble? Will my wallet stay crunchy in milk?
You can even get an account in other precious metals, such as silver and palladium. They have stats on this. One of their customers even has between 100 kg and 1000 kg of e-gold!
Now, how to convert your life savings into e-zinc and where to put it? :-)
Jacco (to e-mail me, please remove all yourclothes) /var/log
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# cd
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Warning: Slashdot may contain traces of nuts.
X: So what is this this money stuff then?
Y: It's abstracted, transportable value.
X: Is gold "money"?
Y: Yes, it's easily transportable, non-degradable valuable stuff. If you own gold, you own some money.
X: And what is paper money?
Y: A promise of value, a letter of credit made out to the bearer.
X: What value?
Y: It used to be gold to be delivered on reciept, but now it's value based on taxation of the economy.
X: Who is this "economy"?
Y: You and I and anyone who's productive and profitable on balance.
X: And what is "taxation"?
Y: Democratically endorsed theft at implied gunpoint.
X: So you're saying that my paper money is a debt which I am to be made pay off to myself, by means of slave labor? That its value to me depends on what I instruct be stolen from other people later? That it makes me both a slave and a slave driver, and the more a slave the more I produce, the more a master the more I consume idly?
Y: Yup, that's about the size of it.
X: I prefer gold.
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I intend to build a protocol that will utterly smash the idea of panoptic control of any data exchange, including monetary: http://fling.sourceforge.net
I would rather save a billion crooks from scrutiny than live in a police state. Let the cops catch people the old fashioned way, with detective work and stings. I will take my privacy, and you will be powerless to prevent it.
You have been warned.
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Without strong government-backed currency, there is NO stable financial system. This was fine back in the days when land was the basis of wealth, but is no longer acceptable today.
If you were talking about made up randum cruft like Beenz and whatnot, I'd agree that they'll fail. They have no worth beyond that of a handful of bits and an untried company's promise. Government money has no worth either, but it's backed by the ability of governments to steal money at implied gunpoint.
Gold on the other hand is Real Money. It's a pure element, nearly impossible to counterfeit, infinitely capable of being split, shaped, and recombined, and rare enough to be usable in portable quantities. Everywhere it's accepted as money, and its value is independant of any company, government, or individual's word.
E-gold simply extends these advantages to the realm of online currency by keeping track of ownership of real physical gold. For every gram of e-gold there is a corresponding gram of physical gold, there's no imaginary value there; they will even fedex it to you in one-bar increments for barely more than the shipping cost.
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Sorry. Can't help it.
Just because the dollar has been a fairly stable fiat doesn't make it any less of a fiat. True, commodities have no unique value, because the value will change with supply and demand (although central banks change the value of fiat money as well). Commodities do have inherent value, though, which is equal to what you can get for them on the market. Fiat money has a face value which is different from the open market value of the commodity that the fiat currency supposedly represents.
I'm not necessarily in favor of returning to a gold standard, but let's be clear on terms here: the U.S. dollar is established by fiat of the government, it is not based on anything real anymore, and its stability rests on the money management ability of the U.S. government, not on any real-world estimation of value.
Caution: contents may be quarrelsome and meticulous!
Your right to not believe: Americans United for Separation of Church and
How is that any different from current U.S. dollars? They're printed by the government, they're not tied to gold, and you use them because the government says to. The only difference seems to be that Continentals were supposedly tied to gold even though they weren't, whereas currently dollars aren't even remotely tied to gold. They seem a lot more similar than they are different to me at least.
Caution: contents may be quarrelsome and meticulous!
Your right to not believe: Americans United for Separation of Church and
"According to this Paul Krugman column, between 1971 and 1996, the price of gold has increased by about 1,000%, while the Consumer Price Index increased by about 250%, and the Dow rose by about 700%.
So if the country had maintained a gold standard over that period of time, then the price of gold would have remained stable, but the price of everything else would have dropped -- and the last time we had such a price deflation was the Great Depression."
The price deflation of the last thirty years (in real terms, as you showed) has been due to rising economies of scale and better technology (which in turn also drives economy of scale).
Randall.
On a visible but distant shore, a new image of man;
Property law should use #'EQ, not #'EQUAL.
> " I wonder if I can configure the MIME types on > my Apache server to send golden email
;)
> attachments?"
Hmmmm maybe it's just me.... but how do you send Email with Apache (a webserver)???
(unless you are using a webmailthingy ofcourse, but then again... it won't be using your webservers MIME type settings now would it
http://unfix.org
So if I go to Paris and buy franks with dollars for a week's vacation, but get called home after a day, they'll give me back six days' worth of currency on my card? I doubt it...
Currency exchange businesses (I work for one, I know) charge a spread & try to make a profit. We aren't charities at all. There's a bid and an ask price on grams of gold (and a lot of competition among those who sell it) for example.
JMR
Try e-gold - (contact me). I'm NOT e-
You might enjoy the work of an artist named Boggs (plug: he's my friend, and he also sells stuff for e-gold).
JMR
Try e-gold - (contact me). I'm NOT e-
There is an unlimited amount of gold at least as far as money is concerned. The amount of gold disolved in the ocean is about 1x10^7 tons. There is lots more in the rock under the ocean.
From about 5000 years ago until the 1960's an oz of gold covered a skilled persons wages for a week. Now that gold production is so much cheaper, only those countries with large gold despostis would have money. A gold standard would put South Africa and Australia as two of the richest countires in the world.
Or banks have no marketing skills. There's only a few tens of thousands of people who would give their first born for truely anonymous eCash.
How we know is more important than what we know.
I knew you could!
Seriously though it's nice to see some currency with a actual backbone. On the otherhand, can I redeem my gold grains at any time?
Although the only value gold has is one we assign it, so really the whole concept of currency is a mass dillusion.
More Caffeine. NOW
Unless credit card policies are very different in Canada, there's no interest if you pay your balance in full every month. Just use it like a check card and you'll be fine. Like lotteries, credit card interest is a tax on people who are bad at math.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
Found it hard to find an appropriate title for this post, but hopefully others can get my drift.
I find it amazing that given the considerable understanding of economic monetary systems and the value of production etc. in these forums, that there is a lack of perception of the impact that open source software (in particular free software) is having on the software industry, and even the online industry as a whole.
There are two issues...
1) collective ownership of the software. Nobody has to pay for it, assigning an intrinsic exchange value of $0 for the software. There are hidden costs in "mining" the software (ISP costs, cost of storage and other infrastructure), but these are neglible in comparison to the true worth of a utility.
2) virtually unlimited replication. You create as many instances as your "warehouse" can contain. Sort of like printing your own money when you need more. This is the stuff of inflationary monetary policy.
Both of these factors effectively reduce the value of the software to the point where it becomes uneconomic to invest resources into creating better software, eventually stifling innovation. It's really an experiment in communism. At the moment, the open source movement is basking in the euphoria that usually accompanies such a revolution, but such euphoria won't last forever.
However, I believe that history will show itself in the future with the result that open source will suffer the demise of that of any economy based on collective ownership - it may be 5 years, or it could be 50. I guess it will take around 2-3 "generations" as I suspect it has a lot to to with social engineering - the zealots start the movement, the masses reap the short term benefits, the later generations reap the damage caused.
In the meantime, we might go through a period of "dark age" mentality because true innovation of software remains unrewarded due to the devaluation of software's true worth.
The sad thing is that I believe that large companys like Microsoft fully understand the economic principles behind open source, and are secretly embracing it and encouraging it to grow. It can only increase their hold on the software industry by the removal of smaller innovators like ourselves, and in the long run, they will be the Barons of the future.
You're playing right into their hands folks.
We all get very rich?
ad
There are *so* many ways of analyzing the role of gold (or other commodity standards) in the constitution of money. Remember folks, it's just a consensual hallucination.
e s/ vpmc.htm
http://www.rcgfrfi.easynet.co.uk/marxism/articl
Da Blog
The real-world logic that used to back paper currencies died out after the Bretton Woods agreement, in the 70's.
Our current currencies are backed by the fact that people try not to think about it too much....
Buckets,
pompomtom
Buckets,
pompomtom
"There's an exception to every rule. Except for some rules"
There is a reason the world went off of the gold standard (as determined at the Brentonwoods agreement). The problem with the gold standard is that there is only a fixed amount of gold in the world and hence a fixed supply of money. This has a tendancy to actually increase inflation since having a country's currency backed by it gold, which would essentially be fixed at a maximum amount, since there is no infinite amount of gold in the world, would mean that for every extra dollar that the treasury prints out, the overall value of the currency would decrease. In short as the money supply grew, so would inflation.
Aslo this would mean the regulation of gold as a national resource. You can kiss any amount of gold greater then 6 troy ounces good buy in that case because it would be necessary for government to keep tabs on large quantities of gold (aka lock in in Fort Knox) in order to prevent any schemes to corner the global market for gold.
Also if any sudden discovery/excavation of gold, like all of the stuff that's sitting in Russia and the former Soviet states would devestate the world economy since a sudden rush of gold onto the world scene would be the equivalent of creating trillions of dollars in cash. It's just like how large money laudring schemes which introduce unaccountable new cash into the economy causes inflation. Oh speaking of inflation, the inflation you speak of was mainly caused by a spike in energy prices during the 70s and a major decrease in worker productivity (I think a drop from 2% to 1% which is a lot, billions of dollars, for an economy the size of the US's).
For those of you who think I'm blowing smoke all this stuff I got out of my college economics book (Baulmer and Blinder are the authors I think ).
Just like to remind people that all that's gold doesn't necessarily produce economic glitter.
____________
The sun beams down on a brand new day, No more welfare tax to pay, Unsightly slums gone up in flashing light...
a) Take your gold bar
b) Smash it through the front of the machine
c) Enjoy all the soda you can drink
d) When the police arrest you, offer to give the gold bar to the owner of the machine.
Ah, but who says it should be hosted in the US and have US laws apply to it? What if the system is setup offshore? Or what would happen if this were implemented on something like Freenet?
Gold doesn't corrode, it does not rust. While most metals corrode, Gold does not. Silver does, (not particularly with oxygen). So Gold is a trustworthy metal, cultural influences have given gold the meaning of value and trust. Printed money is still artifical. It does not cost you 100 dollars to make a printed paperbill of 100 dollar (paper and ink), the material form of the money is very much cheaper than the value it represents. Gold is gold, there is an exchange rate between any currency and gold, but gold 1 gram gold actually costs 1 gram of gold. This never changes, even when your country decides to drop their currency a use a new one (ie the Euro).
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Bizar technology?
I know this is not very informative but Im sure someone can reply and inform - but wasn't this company in massive trouble for fraud a while back? Maybe it was a competitor? If I find it - I will follow up in the thread
The ultimate network admin tool needs HELP!
This reminds me of a certain book by Neal Stephenson ^_^ Anyone who could guess which? ^_^
//John
It's still rare, pretty and shiny and people still like that. Also, it has some relatively unique chemical properties that make it valuable as a resource.
The illegal we do immediately. The unconstitutional takes a little longer.
--Henry Kissinger
He apparently holds the delusion that gold somehow has an "intrinsic" value that is fixed (yeah, like the gold price never changes), and that it's "accepted everywhere" (yeah, sure) and thus is different than any other currency (which it, of course, isn't).
The illegal we do immediately. The unconstitutional takes a little longer.
--Henry Kissinger
Now where's the "-1 Blatant Advertising" mod option?
The illegal we do immediately. The unconstitutional takes a little longer.
--Henry Kissinger
When oh when are the dot commers of the world going to realize that just because they have an idea, different perspective or inside information that does not mean that the world should buy into their delusion? Indside information.. as great an author as Neil Stephenson is, gold backed private internet currency is not necessarily what the world needs. Next it will be some jackass trying to sell the world a tattoo penal system where the state sends their criminals to mexico to get "POOR IMPULSE CONTROL" on their forehead... By the way, when I perfect radioactive isotope based power supplies for REASON and heroic robotic doggies, I'll be going public..
If voting were effective, it would be illegal by now.
to eat on a vacation in France is Hot Dogs, perhaps you should stick closer to home...
-- www.globaltics.net
Political discussion for a new world
I don't why it got moderated as funny... maybe cuz there's no +1, absurd rating. Its a mostly serious argument though I don't know where you got that monex buy back crap from.
Whether or not the panic devaluation of the US Dollar is innevitable, I'd much rather use an eGreenBack service than eGold. The exact same service, except the currency backed by dollars instead of gold. My reason: replace storage fees, and exchange and goods pricing uncertainty with interest earned.
The value of gold is based on the fickleness of the jewelrey industry. My opinion is that humanity has found alternate ways to spend its excess wealth, and gold's demand and therefore value will continue to decline.
They could even keep square millimeters of a $ instead of miligrams or thousands of a cent... if they think that's cute that is.
pretty cool plan.
Or how bout you take one of those gigantic blimps designed to haul big freight mentioned here last week.
Fill it up with so much helium that it has acsends fast enough to keep momentum past the atmosphere, rendez vous with the rock, which has had a manageable piece cut out of it, attach to the blimp, catapult back down to earth.
Exactly how serious I was or not isn't the issue here, and will be avoided diligently.
but the blimp that lifts the shuttle most of the way there instead seems like a great way to save on fuel costs. I don't see why it has to be disposable.
Timing of a shuttle blasting off around it, as the blimp purges helium partly to propel it forward and out of the way should all be manageable.
WJB wanated a bi-metalic standard (gold and silver) in order to allow the fed to print more money, inflate the dollar and consequently help endebted farmers, the "Cross of Gold" was just a catchy slogan which appealed to agrarian Christians. nuff said
The gold standard cannot be used becuase money is an numerical representation of wealth. It represents the work that people have done to create the world in which we live. It is the assignment of value to human labor and creativity.
If the world on a gold standard wants to pay its people to work, then there must be as much gold refined every day to pay for the people's wages.
However, if you base currency on other assets (buildings, land, warships) then you are basing the value of human labor and creativity on the products of that labor and creativity. Your paycheck is basically a numerical assessment of your contribution to the nation's assets. That is the concept of wealth.
The money supply must be allowed to expand and contract without any physical limits. Otherwise you will run into a situation where it is physically impossible to compensate the workforce. Managing a money supply that is not physically tied to any one asset is the tricky part and is what separates the good economies from the bad.
Remember, You are unique...just like everyone else.
It boils down to this: Do you trust a company enough to accept a new currency from them?
I don't want to have to pay my taxes in gold.
As an example, I frequently travel to Montreal, Hong Kong, and Taiwan. I regularly pull money out of ATMs there and get very nice exhange rates. I wind up paying say 3 bucks as a fee for using a foreign atm (same price I pay here in the US), and maybe eat a fraction of a percent on the exchange rate.
Dodge this !! --Trinity, The Matrix
If there was more gold around, we'd use it for additional purposes that took advantage of its properties. Instead of gold-plated stereo connections, the pins would be solid gold, and would work that much better. We'd replace our silverware with goldware which wouldn't tarnish. I suspect that using gold instead of copper for internal home wiring would improve our electricity bills a bit, as well.
I remember a National Geographic article where a frying pan was fashioned from gold. It evidently made excellent fried eggs. I also remember that aluminum was a precious metal for a few decades -- used in jewelry, for example -- but plenty of uses were found for it once it was available in large supply.
Although I think some of gold's current price is due to historical inertia, there is plenty that makes gold useful, and that would tend to support its price in light of its rarity.
TSG
Well, Deutsche Bank (and Bank Austria, Credit Suisse, Den Norske Bank, EuNET Finland, St. George Australia, Mark Twain US, and others) have been trying to establish eCash in the market. And really the truely anonymous eCash version was used. But the market didn't accept it. DB pushed lots of money in ads, cooperations, ... to no avail. It is wind down as by the end of the month. What does that tell us? The market is not ready, I guess there will be a comeback when people realize what is happening.
The gold standard seems to have been replaced by the paper standard. No longer is your money backed by gold, but by paper. Consider your assets contained within banks, credit unions, mutual funds, stocks, online brokers, what not. It's a number in a digital system of some sort. You deal with those digital numbers in most anything you do, not gold and not paper.
When you go to the ATM and withdraw money, you exchange your digital money for paper money. An electronic debit exchanges said amount digitally for said amount physically.
Same thing happens with credit cards. A credit is sent to a merchant as an electronic number, and is transferred electronically by your credit-issuing institution to the merchant's credit-accepting institution. And when you go to pay your credit card bill 30 days later, you write a check. And that check says to electronically transfer said debt amount from your bank account to your credit-issuing bank's account. No physical money is actually transferred. Checks are just an analog of electronic transfers. Your electronic money is only backed by paper money, which is backed by nothing. Just somebody's willingness to accept it.
Completely unrelated----Money is a very creative solution to a dificult problem. It allows any medium of worth to be converted to any other medium of worth. Suppose I grow apples and suppose you grow bananas. If I want some of your bananas (aside from theft) the only way to get some is to trade you my apples. But if you don't want my apples, I'm SOL. I have to convert my apples into something you want, say oranges. Now I have to go trade my apples for oranges, and those oranges for bananas. Now imagine this extended to the millions of things which can be bargained/traded for. Money is that adapter. That's all it's good for. And it's meant to be spent. It serves no purpose otherwise.
Congratulations then.
What? Runs on banks never happen with paper money? Huh? Ever hear of Principal Group, a multi-billion-dollar financial empire that went bust in 1989 because that's exactly what happened?
I understand the fraud arguments. But please don't tell me gold encourages runs. The only thing that'll stop runs is if the bank actually keeps all of its money in the bank.
my old sig used to be funny, but then slashcode ate it and now it's not funny anymore
And the U.K. doesn't have import taxes and VAT? Okay, let's say those don't exist. Then nothing stops you from setting up with PayPal and using them to buy DVDs from a U.S. site and getting them delivered to you.
But wait, then you add overseas delivery charges. And you add import taxes if they automatically do such things. And even if you have such things as a world-wide standard based on gold, or NeoPoints, or floon beans, you still have to deal with fluctuations in that commodity. All of which you avoid by going down to the local store to buy the DVD (or whatever).
Now, I'm not saying that it can never work. I don't like making absolute statements. But I don't think that it stands much of a chance, at least right now, until and unless a substantial majority of the e-commerce sites jump on the 'standard' bandwagon. How many e-commerce sites are there? Okay, I don't know either. How many use PayPal? Beats me. Same with any of the other e-commerce. I know big ones that won't take a couple of what I considered major credit cards (but maybe they don't like American Express, what the hell).
So what's the hypothetical percentage, the magic number of sites that go on the gold standard before everyone else falls in line? Again, beats the hell out of me. Maybe, if all the major car companies, all the major computer companies, and all the major boat, motorcycle, and plane companies went on it, it would be enough of a start to get the rest. But don't bet on it. The current system, for all of its' flaws, works pretty damn well. Thus, there is little current need to change it.
But I've been wrong before. Statistically, it will happen again. But I'm betting that we won't see an e-commerce standard for years.
Kierthos
Mr. Hu is not a ninja.
Well, how often do you buy things online where you pay in another currency? From personal experience, I tend to buy things online where I can get a list price in U.S. dollars, even if it might cost slightly more, rather then go to a bank to get pounds, deutschmarks, euros, what have you.
It all boils down to how often you do need it. Once a year? Not worth it. Once a month. Maybe. Every day? Would be really nice, but if you're buying things and paying in foreign currencies daily, you've probably already found a solution other then a "new" standard online currency.
Kierthos
Mr. Hu is not a ninja.
Wow, looks like I've seen this argument before... He said somethign about not being buried under a cross of gold if I remember my history book correctly. I wonder what he would have thought about some of your postings. As a side note I wonder what any of our fore fathers would have thought about slashdot in general. Would be kinda funny to see Edison say somethign about some new invention of his, that got flammed.
They went off the gold standard because that way, the rich could become richer. Sad, but ultimately true.
I suppose this'll get modded down for missing the point, but I just don't get it. Insecure transactions have nothing to do with the type of currency, it has to do with impersonating the person who has the money, doesn't it? What makes this any more secure than me trying to push a currency of XXX?
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Bleah! Heh heh heh... BLEAH BLEAH!!! Ha ha ha ha...
And for the record, I happened to take ECON 110. The numbering system is screwy, but I'd take a questionable course number over a questionable course.
I Browse at +4 Flamebait
Open Source Sysadmin
I think you are missing a MAJOR reason for standard worldwide online currency - NO RIPOFFS from vendors in different countries selling the same items at different prices. E.g. Buying a DVD in the USA - what, about $20?....well, welcome to 'grab your ankles and take it in the ass' UK where the same thing will cost you £20....so what you say, well - it means we pay an extra $5 over here because of the exchange rates. And the same goes for cars, phones, TVs etc...etc... Nice new porsche? $60000 (with exchange rate, about £40000...comparable taxes in both countries) - so is it £40000? Nope, we pay £60000 (we'll just use a pound sign instead of dollars....no-one'll notice). It's a goddamned assraping everytime we go to the stores over here. We NEED a universal standard where something worth 3 goldgrams (or whatever the fashionable currency is at the time - hell, I even have a beenz account) in the USA is EXACTLY THE SAME 3 goldgrams in the UK, Germany, Japan, Indonesia, Kenya, wherever!
-Nano.
Just plain pissed off. Please forgive the occasional fucking expletives.
He apparently holds the delusion that gold somehow has an "intrinsic" value that is fixed (yeah, like the gold price never changes),
The difference is that, while the price of gold does change, you can generally trust that it isn't going to suddenly be devalued. Only political restrictions prevent the supply of dollars or marks or euros from suddenly skyrocketing.
>and that it's "accepted everywhere" (yeah, sure)
No, it's not, and that's pretty much a Catch-22 situation. People accept currency in exchange for goods and services, primarily because they know that they can turn around and have it accepted in exchange for other goods and services. So people won't accept gold, because... people won't accept gold. A problem, but not an insurmountable one. What's needed to jumpstart it is transparency -- say, being able to hold a balance in gold but pay with a credit card using whatever currency is required, the way I can pay for goods in yen using my Visa card against my account in dollars. (Yes, I know there's a fee involved. The point is that I don't have to deal with it. It's a convenience issue, not a cost issue in this case).
and thus is different than any other currency (which it, of course, isn't).
Like I said, the difference is stability, specifically against currency devaluation. To get Weimarr-style inflation under a pure hard currency standard, you'd need a meteor of gold to strike somewhere.
"The Greens lynched a hacker in Chicago. Last month, but I think the body's still hanging from the old Water Tower."
Hey, can someone please tell me what is wrong with this idea - I honestly don't know and I've never studies economics in my life - but it seems so simple and painless that someone else must have already thought of it and rejected it for one reason or another.
1) User finds goods or a service that they wish to purchase online (say for $19.95)
2) User logs into secure bank site and transfers $19.95 from their cheque account to their "No Credit" account.
3) User then completes the transaction at the vendor site, vendor is paid by bank from the user's "No Credit" account.
4) If the $19.95 is not spent within 15 minutes, it is voided and sucked back into the User's cheque account.
??
"Anybody remotely interesting is mad, in some way or another" - Doctor Who
I've been following e-gold and this is the first I've heard of this raid.
Anyone else have more info?
I mean, I've only got a 56K dialup connection and I shudder to think how long all that gold is gonna take to move through the pipes.
Whatever happened to e-gold.com? I think I'd trust them nore than this new guy.
Umm, you're joking, right? Blimps don't rise at anywhere near the miles/second speed needed. Disposable balloons were once used to aid small research rocket launches. I don't rememver at what altitude they lit the rocket, I think 30,00 feet or more. Anyway, a higher start point meant the rocket could go higher, and besides that rockets worked more efficiently in thin air. A balloon large enough to lift the shuttle would be quite a sight! Trouble is, I think it would either have to be disposable or you'd have to drop the shuttle a couple thousand feet before lighting off, so the exhause wouldn't rip up the balloon.
I agree with you, for the most part. However, most banks have branches close together, so one could send a truck with a lot of cash to another branch if it is getting a lot of people withdrawing money. If this happens to all the branches though...
So climate's changing. So what? It has always changed. The big news would be if it wasn't changing. - Dr. Philip Stone
Well, you still own the gold...
So climate's changing. So what? It has always changed. The big news would be if it wasn't changing. - Dr. Philip Stone
If the monetary system is a gold standard, then the machine would accept your money (provided the gold is coinage accepted by the machine).
So climate's changing. So what? It has always changed. The big news would be if it wasn't changing. - Dr. Philip Stone
What if I am purchasing something from an individual in France via E-bay? I think a standard online currency would work best in that kind of situation.
So climate's changing. So what? It has always changed. The big news would be if it wasn't changing. - Dr. Philip Stone
Diamonds are the most common gem in the world! They are not rare at all. All they are is coal with a lot of pressure and temperature applied.
So climate's changing. So what? It has always changed. The big news would be if it wasn't changing. - Dr. Philip Stone
There is a great need for an online standard. After all, there will be eventually be a standard currency, probably something like U.S. dollars. A gold standard would prevent inflation in the U.S. from affecting the rest of the world as related to the internet.
So climate's changing. So what? It has always changed. The big news would be if it wasn't changing. - Dr. Philip Stone
Bank panics were unrelated to the gold standard. They were due to ignorant people thinking believing Chicken Little when he said that the sky was falling. Anyways, that wouldn't happen today, with the invention of the cashier's check, electronic transfers, etc.
So climate's changing. So what? It has always changed. The big news would be if it wasn't changing. - Dr. Philip Stone
> However, the right to anonymous payment is NOT a right you have
Actually, people do have this inalienable right. However, in the US, we have granted the government the power (over rights) to inspect these transactions for the purpose of taxation and other reasons ("we," of course, meaning "you dumb, no holds barred democracy lovers out there")
I am for the complete Trantorization of Earth.
And that is to plate the contacts of all the microprocessors, memory chips and connector pins. Has a currency it sucks, to heavy.
What is pirate software? Software for inventory of stolen treasure?
Allan Greenspan: H4x0r Economist!
Proof positive that the Leprechaun film series was a thinly-veiled allegory, years ahead of its time both cinematically and politically.
But notice how eager governments are to regulate this e-gold stuff? It represents a truly international medium of exchange. Whether or not it has intrinsic value is beside the point - people around the world recognize it as having value, and that value isn't tied to the stability of a government. National governemnts recognize that because of its nature, it's not something that they can keep entirely under their control. It's a threat to them.
To have a global fiat currency, you'd have to have a global government. The very idea of it scares the hell out of me, and probably you as well. Keep this e-gold stuff out of the governments' greedy and intrusive fingers. Stephenson's original idea (as least as far as I interpreted it in Cryptonomicon)wasn't for the establishment of a global gold standard, but a viable, secure alternative to placing your economic fortunes in the hands of corrupt governments. And I think that's an excellent goal to work toward.
You have a right to free speech.
You have other rights.
However, the right to anonymous payment is NOT a right you have, no more than owning software. You have been around money so much that you have forgotten that it is merely a very, very complex social contract. It's an invention of society, therefore society has the right to regulate it.
I want a panoptic economy. EVERY transaction should be avaliable to EVERYONE. (just the transaction itself, not necessarily any information about why the money was transferred. You can keep that as secret as you want.) An invasion of our privacy? Consider it. One thing is speech, but when you pay someone you should stand for it. Because of the social contract that money is other people have a right to know that fellow x now has some money that used to belong to fellow y.
Unless an economic system has accountability, there is NO way to fight bribery and money laundering. Those who support anonymous speech and throw in anonymous payments as an extra do themselves a bear's favour.
On the other hand, in a panoptic economy, bribes would be the first to fall. Do you know how much that will have to say for third-world citizens? And then the organized crime networks will come tumbling down. It CAN happen. Only they will fight the panoptic economy every step of the way, with every means possible.
xkcd is not in the sudoers file. This incident will be reported.
You have missed the point completely, it's just that money exchange is NOT merely data exchange. It's as I said a social contract. Think about it yourself! In all likelihood this means that your brilliant system will be useless for the purpose of facilliating anonymous cash. It's not as if something like remailers or freenet will work.
Stand by your actions. You don't have any right to anonymous payments, just as you have no right to anonymous violence.
xkcd is not in the sudoers file. This incident will be reported.
Gold as electronic payment has been around for years. Duh! Heard of e-gold Slashdot?
You think my comment is reundant? This whole thread is redundant! OK so Slashdot is talking about Duke Nukems phrase competitions and things that have been around for years. I could forgive this if it wasn't for that right now Operation Clambake is in serious trouble because the ISP has given in to Scientology pressure and is removing his site for good. Hello?!? Then it becomes a bit silly to come here and talk about Protein Music.
xkcd is not in the sudoers file. This incident will be reported.
The article basically defined how our paper money works, which made me gasp in horror. Paper money is not actually worth ANYTHING... it is a promissary note on FUTURE taxing power of the government... but if the economy tanks, how can the government be able to collect all those taxes, especially when a tanking economy leads people to cash in such measures?
Greenspan, in his article, outlined why gold is good. It is homogenous, divisible, precious and rare, a luxury... things that make it worth something objective. So, if an economy does tank, you have a physical resource that can be traded, not reciepts of checks the goverment may never honor.
I think the gold company listed in this article is a great idea. Why? Because it gives freedom to consumers to choose a money supply. They can go government, or private industry. While the price of gold may fluctuate on the market, it is much more stable than the inflationary value of the dollar.
Reason, free market capitalism, and individualism
But you're still going to have to buy the gold, right? :)
Well, you could buy it using some more gold that you got with that other gold that you got with........
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The only true backing for money, is the ability to pay taxes with it.
So, money will keep its value as long as the government is able to impose and collect a sufficient amount of taxes across the economy. The government agency preserving the value of money is in the first place the IRS and only then the FED.
Money doesn't need any other backing.
You're alive, aren't you? That's because you've managed to eat in the past fiscal year? That's because you've had means of subsistence? How much? You don't want to tell us? So, we estimate that you've been able to make the equivalent of $20,000. You owe us now $6,000. Thanks. Unless you want to go to prison.
Can you see why you need money? No gold involved.
The talk of gold standard vs. paper money misses the economic essentials-- The real issue is fiat money vs. commodity money. As a historical fact (not necessarily what may be printed in an Econ 101 textbook) the gold standard in the U.S. was de facto abandoned in the late 19th-- early 20th century due to pressure from indebted farmers to have the government devalue the currency (and thus ease their debt burdens) by fiat (the Greenback and Populist movements. The fact that the Federal Reserve manipulates the value of money via the subtle more subtle/sensible technique of changing interest rates (or the price of the dollar) rather than printing it outright is due to the influence of economists like Friedman and Greenspan and does not change the unfairness and impediment inherent in fiat money.
Fiat money is a type of control that hamstrings the ability of individuals to agree to a mutually desired/ valued medium of exchange. For a long time, gold was universally valu(ed)(able) and arguably still is. Like any other commodity, there are costs associated with using gold (storage, mining, security measures). Any mutually desired/valued commodity can be used, and in a free market for money, the most reliable standard will emerge (probably gold-backed private reserve notes at this point).
It is worth noting that the U.S. Constitution only grants Congress the power to "coin" money and forbids States from making anything but gold and silver legal tender for payment of debt. The Founders, whatever their flaws, seemed to recognize the con game of state-managed currency from the outset.
The explanation on the web page you list is pretty thorough, but it assumes the need for a government central bank. In a commodity money system, the whole idea is that the central bank is eliminated and the value of everything (including the medium of exchange) is determined by the market(s,) including spot markets for rival banks' money. This forces reliability (nix on fraudelent fractional reserve practices) to emerge as a prerequisite to the banks making a profit. Inflation as created by central banks' issuance of unbacked paper or devalued metal ceases to exist as a phenomenon.
Incidentally, though you may disagree with the analysis given by commodity money advocates, "fiat money" is a genuine term of art used by economists. See, e.g., http://www.bartleby.com/65/fi/fiatmone.html
You think just because you have gold in your pocket instead of paper, the moneychanger isn't going to take his cut?
"It's not a war on drugs, it's a war on personal freedom. Keep that in mind at all times." Bill Hicks
There is no need for another currency. Even though this would be a gold based one the company still have to go through some country to really work. They would still have to compete with Visa and the other creditcard that are standar these days. No if they instead focused on microtransfers from a couple of cents they would have a product. Also, why go through triple money transactions? Bying a book from the UK, as I do from Denmark: Now Dkk -> UK£, with visa GM: Dkk -> Goldmoney -> UK£, that seems ridiculous. Also, the prices would have to be higher to accomodate the fluctuations in goldprices, or the prices would change from day to day, and also depend on eventual gold laws and taxes the nations have. They could avoid this by residing in one country, but then..... No, it'll never work, they're just on to making a product they hope somebody will buy.
It basically means that contracts denominated in gold cannot be enforced. In other words, even if I loan gold to you, I cannot bind you to repay me in gold. If you offer dollars instead, I will be obliged to accept them.
Funny that this report should come when this rumour is buzzing around.
WARNING: the site linked to contains abusive language and NO idiot filter. Be warned.
SD
__
Not believing in force is like not believing in gravity.
Gold schmold... YOU STILL SHOP AMAZON??!! Sheesh.
I prefer the chocolate standard however, and I'll be offering the means to pay all your debts with choco-doubloons through my Internet Start-Up Choco-Money.com
It's the New New Economy.
I survived the Dick Cheney Presidency 7 to 9 AM 7-21-07
This is really no different than a credit card with a front-end conversion to a standard monetary unit. The only reason this made news is because it was gold that was suggested. Yes, gold is a precious metal unlike all other currencies, but nothing is valuable unless people are willing to exchange goods for it. Whether it's sea shells, gold nuggets, the eurodollar or gold-pressed latinum (had to get that star trek reference in there), it's all the same. We've done it before.
The simple fact is that there are too many people to have a single standard for anything monetarily.
Rocks might have been used or not. What speaks against it is that there are rocks, seashells and other things suggested eveywhere. Gold on the other hand was rare. And the gold is still used as a currency.
Pot like any other organic material loses in it's value over time. Gold doesn't.
The idea behind bank is that people lend money to bank for an interest and the bank lends it out with bigger interest. Bank takes risk with your money, e-gold doesn't. I don't understand the part that "They could just as well skip the gold part, and hold the money for you". Gold is money.
This is a great topic and for those that are interested in taking this to the next level go to your local library and get a copy of "The Sovereign Individual" by James Dale Davidson and Lord William Rees-Mogg. They too see a future with some sort of digital currency backed with gold or possibly something else. What I find even more interesting about their view is that they see governments of the future COMPETING for residents rather than the current situation where most of us are like employees. Technology is changing business models. Does it matter whether Microsoft is based in Bangkok or Zurich? We can even see it now with lots of money moving offshore, and not necessarily to places like the Caymans or Bermuda. Tax competition is just getting started. Would you rather pay 50 % marginal income tax in New York with no medical care, personal safety, or decent education for you kids, or go to a place like France(or any number of other countries) and pay 55 with great medical care, and top notch schools?? It may be right around the corner that technology and the power of the internet make shopping for a busines jurisdiction, place to raise children, or an alternative to the U.S. dollar, is as easy as comparing auto insurance on the web. Missingmay
Alchemists dreamed about a way of turning lead into gold, but our modern system allows just that. There is nothing that prevents the treasury departments from printing more money because there is no scarcity for paper and ink. If you get right down to it, we are trusting those who print the bills. In the US the printing press runs 24 hours a day.
In short, this is the major factor in inflation. In my short life of 27 years I have seen many prices double. As a consumer I think of it as an increase in price, but wages have also gone up. Everything is fine, right? Wrong. There is a brief period between the time when money is printed and when it is circulated where the value of money hasn't caught up with the new supply. It is a very small and gradual shift, but it basically acts a hidden tax that the majority of society pays. This isn't an entirely new process. It has been recorded that kings would require all citizens to turn in their coins and they would be clipped smaller and the king would have the clippings remelted into new smaller coins. After this point everyone's money was less valuable and wages had to raise to compensate... but not before the king enjoyed the spending power of his coins at the old perceived value.
So what is so great about gold? The fact that governments can't capricously manufacture more gold means that you are shielded from this problem. That deeply disturbs financial planners. Mind you, hard currency like gold does have its own set of problems, but the great thing about it is how it eliminates the arbitrary inflation and hidden tax of paper currency.
-- Solaris Central - http://w
It seems that the guy on this website has a vested interest in e-gold, so take this with a grain of er... salt.
Jacco (to e-mail me, please remove all yourclothes) /var/log
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# cd
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Warning: Slashdot may contain traces of nuts.
Actually, I wonder how anyone could like the idea of a monetary system that's not under government control. If such a system were widely accepted, it would make money-laundering a breeze
Money laundering is a fundamental human right. Your money, your property, your business and nobody else's. The government only hates it because it lets people bypass thieving taxes and idiot prohibition laws. Forget talk of "the mob" - they can launder money anyway, trivially, by coordinating a slew of tiny transactions. This BS about money laundering is aimed square at the free individual who doesn't want to have to ask government permission to spend his OWN DAMN MONEY.
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Dude, back when there was a gold standard,
there were bank runs and panics every 5 years
or so. Count me the hell out.
Could someone explain the whole gold market to non-economically minded folks such as myself?
I seriously don't understand why gold has value anymore. For the first couple thousand years of civilization, sure, I can see it-- it's a limited resource, it's pretty and shiny and malleable, you can make jewelry out of it.. but today does gold have any fundimental value as a resource, like say natural gas or oil? Is there really that much demand for it? If so, why? Just wedding rings 'n the like?
Basically, I'm thinking about it and aside from its "agreed upon" value, I don't really need any.
Aside from such things as electronics, tooth fillings, and necklaces, is there any non-traditional gold is worth anything?
Incidentally, I hear that the world's diamond supply is controlled largely by one company that artificially caps supply, thus maintaining its value. True?
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This is my SIG. There are many like it, but this one is mine.
Hmm. Your translation indicates a world view with which I disagree. If I wish to transfer money privately or anonymously, I am not by definition doing it because I am a criminal or a cheat. Maybe I'm just doing it because I think that the extra information people demand when I transfer money is incredibly intrusive.
Actually, there is a point to this sort of thing for some of us. Some of us don't live in the countries in which we are citizens, and have such a hard time transferring money back home (because it seems that anyone who sends money over a border is by definition a money launderer), that this sort of thing would be great.
Most of the measures that have got in my way transferring money seem to make the assumption that money launderers don't lie. This would be laughable, if I didn't have people checking my every move. So, we know money launderers probably don't mind lying, so why exactly are the powers-that-be making my life difficult? Hmmmm? It seems more like a privacy issue to me than anything else.
I find it very irritating that governments can help themselves to my money for a month or more whilst I write facile faxes to confirm that I don't launder money, and give them my life story and sexual habits.
In short, I will do whatever I can to avoid this crap because I see it as tantamount to censoring books because they might contain pornography, whilst asking me for all sorts of personal details to make sure I'm not the pornographer.
So what is dirty money anyway? Does it have something to do with that money-making war-on-drugs thing?
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You fail Econ 101. The value of the currency changes as the supply of currency changes relative to all goods and services which can be purchased for that currency. When the government causes the supply of currency to grow faster than the supply of purchasable goods, which is historically pretty much all the time, there is inflation.
"Inflationary Pressures" have been low since the beginning of the Reagan years because the Federal Reserve has deliberately acted to restrict the growth of the money supply to not much faster than the growth of the economy. In the late 1990s, the money supply increased more rapidly, in a way that a lot of the new money was fed into the tech boom; we're seeing a typical end-of-inflation crash in at least the tech sector this year and likely next year.
The Gold standard was a nightmare in the United States. There were depressions every 10-15 years caused by bank panics as the relative values of silver and gold shifted. Inflation ran as high as 15%, since after 1860 the amount of gold in the economy ceased to expand.
The "gold standard" which caused "panics" was a fractional-reserve gold standard, which allowed a small increase in the gold supply to create large increases in the money supply. Generally, the maximum potential money supply, as some multiple of the gold supply, was not circulating, so the money supply could increase rapidly up to a point, but then could not increase once the limit was reached. The end of the inflation was what caused the crash - investments which counted on paying back dollars worth significantly less than the dollars loaned would fail when the dollar ceased to drop in value.
You can't get inflation of 15% if your money supply isn't growing, unless the supply of goods and services drops. There was inflation after the Civil War, as prices were freed from wartime controls and rose to match the inflated money supply.
According to this Paul Krugman column, between 1971 and 1996, the price of gold has increased by about 1,000%, while the Consumer Price Index increased by about 250%, and the Dow rose by about 700%.
So if the country had maintained a gold standard over that period of time, then the price of gold would have remained stable, but the price of everything else would have dropped -- and the last time we had such a price deflation was the Great Depression.
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send all spam to theotherwhitemeat@ropine.com
Well, she probably won't be your girlfriend much longer.
BilldaCat
this is all about trust.
The whole idea is, they are acting as a bank, in the more traditional sense. You give them money, they buy gold, and hold that gold for you. It's yours. They don't spend it, lend it, or anything else, but they do charge you a small service fee.
They will transfer gold between accounts, etc. The gold is a security to represent your money.
They could just as well skip the gold part, and hold the money for you, but I have a feeling that would requrie a Banking license, which they probably don't have.
So instead, they buy gold.
While I don't have a degree in economics.. the history books clearly show... gold has retained it's basic value for thousands of years.
Untracable? Who cares. Cash is not traceable EITHER.
Over the long term, gold retains value (I make this statement by looking at history, not by predicting the future).
An couple ounces of gold, in Roman times, would buy a nice outfit for a roman statesman. A couple ounces of gold today will buy you a nice suit.
An ounce of gold will buy you dinner at a fine paris restaurant. An ounce of gold a hundred years ago would do the same.
The odds of a mine 'flooding the market' with more gold are very low. Gold production has remained relatively constant for recorded history; that's one reason it IS trusted so much; there is no percieved risk of someone distorting the market in the way you describe.
'Printing money' is up to mining corporations? The amount of gold held by a company like this is a small fraction of the global gold supply. There is a global, steady market for gold... it's more liquid than stock.
$100 bills are about the same then.
Gold's value is basedon market perception, and for thousands of years, there has been a merket for gold.
If we encountered economic collapse, and the dollar was worthless, people WOULD accept gold.
Though that is how most banks operate. Believe it or not, there are still banks that maintain a 100% cash reserve.
Banks by definition are places to hold your money; everything else varies.
The concept of money is about trust, that's what we are saying here.
Yes, of COURSE they are in this to make money... who thought they weren't? They make money off service fees, off volume of business. The reserves they hold, which would be audited by a reputable financial firm. I've had a look at e-gold's.. looks good to me, have you?
LAte reply to this, but it seems to me that delta-v isn't really an issue. Just create a branch of Fort Knox (or whatever the agency is that runs it) on the asteroid in question. The govt then has the gold, and can use it to back the useful paper currency.
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E_NOSIG
isn't this exactly what happened in Cryptonomicon?
That aside, there are some obvious questions (IMO). Is there really a need for a service such as this? I can buy stuff online from other countries with my credit cards. The vendors get their currency of choice, while I pay my card off in dollars. I recently made a purchase at amazon.co.uk and never once found myself thinking "this would be so much easier with an online standard." But maybe things like that are just hacks to get us through until there's a viable uniform currency available.
ck
Sequence of links to get to the article:
E
http://wire.ap.org/APnews/?SITE=KSPAR&FRONTID=HOM
then "tech"
then "Cyber Currencies Spawn Money-Laundering Fears"
(sigh, as if green paper doesn't work for that!)
JMR
(speaking only for myself.)
Try e-gold - (contact me). I'm NOT e-
> What happens to the gold standard when there are billions of tons of it literally floating around for the taking?
That depends on the cost of retrieving it from said asteroid. Delta-V isn't cheap.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
It's these same rules which will not allow many governments to allow online gold companies to flourish. What's really cool about gold is it holds its weight no matter where you are in the world as opposed to currency which means a country's currency means squat.
Do you think the US with a strong dollar wants you to trade for gold which can bring down the value of a dollar? e.g. Take 1,000 US dollars and travel through Europe without spending a dime solely exchanging the currency and you will see it will be gone quickly without you even spending, but with gold, it's always going to be a set price. There is no competition for it, which is why all governments are paranoid of people turning to gold.
Want Root?
I've read horror stories about how in previous decades hundreds of ultra-low-paid African workers either worked in the fields to get diamonds (apparently in one spot they were so abundant they could be found above ground) or in dangerous mines.
Don't think that this kind of pratice is over, its' not. As a matter of fact there is currently a civil war in Sierra Leonne being fought over diamond fields. THe "rebels" have taken to chopping civilian's arms off at the elbow in order to keep them in line. There are whole viliages there with only one arm.
The really twisted part of this is that DeBeers doesn't own all of the mines in the world but they do own most of the distribution network. If these guys are selling diamonds from the fields guess who they are probably selling them to.
Federal Reserve money buys protection from punishment. You are punished if you don't pay taxes. This has become the Federal Reserve's primary monetary authority. The moral hazard of basing monetary authority on punishment has now been realized in the systemic and out-of-control gang rapes of prisoners in the US. All other unlawful acts by US governments are now overshadowed by the murderous, sexually sadistic character of governmental authority that has developed in US penal systems. Federal Reserve money is now protection racket money, or, if you prefer "punishment protection money". Calling it "fiat money", "debt money" or even "legal tender" obscures its true character.
Seastead this.
For most of us, the most important difference is that if E-Gold were to go bankrupt, we should be able to get our gold back out, not subject to being used to pay off the creditors first.
I do not deploy Linux. Ever.
On the first account your right I was trying to get the point across that you explained.
In reality, inflation has been virtually non existent through history with gold based currencies.
However, I would like to point out that the primary reason why there was really no statistical inflation prior to the end of World War II was primarily because the Fedral Reserve, indeed other central banks took it upon themselves not to intervene much in the economic affairs of their nation. That is to say they let the currency float and sink according to economic conditions. Long periods of economic growth and inflation were often followed by periods of severe deflation since, instead of relying only on cutting employment, buisnesses would often cut wages of employees to bring down the cost of their products. Needless to say that paycuts now, espcially in union dominated industries are not as common as they were in the late 1800s - early 1900s. Instead we people just get fired, and even then most of the work force has unemployment insurance that will kick in to insure that people always have money. If you can find a graph of inflation in the US from 1840-present, you'll notice that there were huge spikes and dips (meaning inflation and deflation) prior to the adoption of Keynsian economic theory.
Also on the subject, since you have read Freidman, you should know that one of the primary goals of a moniterist is to match money supply to the economic growth. This was very hard to do when the economy's money supply was fixed (essentially) as it was under the gold standard. The lifting of the standard allowed better control of the money supply so that it would be easier to as Friedman, Volker and other moniterists wanted to do, contract and expand the monetary supply according to growth. True this policy din't last long, but still the lifting of the gold standard, allowed for greater shifts and fluctuations in the supply of money then would be possible with fixed supply.
There also is the matter of fixed money supply causing balance of payments surpluses and deficits in international markets, since with a fixed currency value (as the US dollar had when it was the benchmark during the days of Brentonwoods), it makes it very hard for the currency to maintain a value indicative of the economies strength when it was pinned to the value of gold. This most effected developing nations who were often subject to runs on their currency since revaluations had to be announced in advance, thus leading to currency speculation. (Well it's something like that, please correct me if I'm off a little... or a lot).
Hope this corrects my mistakes and doesn't create new ones, feel free to respond!
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The sun beams down on a brand new day, No more welfare tax to pay, Unsightly slums gone up in flashing light...
Sure this is a picky point, but the author of the post called gold the oldest currency. Certainly other things (shells, rocks, etc.) were used before gold.
A new currency will never be accepted by all banks all over the world, gold is not only the oldest money around, it is also a global currency. The U.S. dollar is not a global currency as in some parts of the world it is even an 'illegal' currency (ie Iraq, China), so gold is accepted everywhere. Problem is the exchange rate between your local currency en the gold currency. Also the right to own gold and trade with gold is something which differs among different countries. PayPal is the biggest player in E-Money, I understand that even the CityBank is scared is hell from PayPal (and I'm not even a U.S. citizen!). PayPal has a working concept, it is very unlikely that a competitor in E-Money will survive.
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Bizar technology?
Hint: the reference to the Vienna Philharmonic is a big giveaway.
--Fesh
--Fesh
Kill -9 'em all, let root@localhost sort 'em out.
Gold is a commodity, and it fluctuates like a commodity.
There's now a promotional organization, the World Gold Council, trying to hype up the price of gold. They're trying to do for gold what the DeBeers Consolidated Selling Organization ("A Diamond is Forever") did for diamonds. It's not working.
There are many marginal gold mines, mothballed until the price of gold goes up. Some have been waiting since the 1970s. If the price ever goes up much, those old mines will open again and flood the market.
Don't look to gold for long-term stability. There's an argument for currency diversification, but not for gold.
I'm pretty sure gold is in a historical downward trend, partly because of that. People only need so much jewelry, and you can't exactly pay with a piece of gold at your local supermarket. It might get a renaissance when developing countries start getting some buying power, and want some pretty metal around their necks/fingers. The other reason is that governments all around the world is continually selling off their gold reserves because they don't think they need them anymore. So I would not recommend any investments in gold until the gold market stabilizes (which probably means you'll be waiting for at least 20 years).
...for a reason, wasn't it? Perhaps there were problems having the value of money tied to a commodity that might fluctuate in value for reasons beyond our control. For example, right now gold is at a historic low. If we were on the gold standard the dollar would be really weak right now instead of really strong. Of course, that would be good news because the dollar is too strong right now.
OTOH, one of the reasons gold is less valuable now is that gold jewelry apparently isn't as fashionable as it once was (remember the 80s? Mr. T and his chains, etc. You don't see that anymore). Do we really want the value of the dollar tied to fashion sense? You think Greenspan is bad? Wait till some Paris designer starts making economic policy.
If this e-gold stuff has legs, then maybe I'll go back and study some economic history from when we had the gold standard. It might be possible to score some wins buying and selling e-gold at the right times.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
Actually, gold does have a fairly high intrinsic value. It's a very useful material with a variety of highly desirable characteristics. It's nearly perfectly corrosion resistant, easy to work, has a wide range of useful alloys, is a wonderful conductor of heat and electricity, and is extremely reflective. A lot of people also think that it's very attractive. Its use is currently restricted to high-value applications because of its scarcity, but it would be an excellent material for a wide range of everyday applications if it were common enough.
There's no point in questioning authority if you aren't going to listen to the answers.
Let's face it, gold is just another merchandice. It's not even very stable, gold prices has been known to have relatively big variations. Why not silver, plastic, tobacco, oil, stock bonds, toothbrushes or even bananas? Well the last two are somewhat silly, and bananas are pretty volatile, but the idea remains, and at least bonds seems to be a very attractive idea (with proper care they will even increase value, meaning you can issue more of the currency without inflationary effects). But there are many other choices as well...
What is it that is so special about gold that it always remains a popular choice to base a currency upon? I don't know...
Wrong.
You just stated what may be the biggest myth of currency. I believed it until I took my first Economics class. Currency represents buying power, or the amount of goods or services others are willing to give you for a certain amount of the currency. Yes, the U.S. government does have a gold store locked up at Fort Knox, but not enough to make up for the trillions of U.S. dollar value floating around.
If you think about it, the buying power idea makes a lot of sense. It explains (in part) why some currencies can change value compared to others by several percent each year (or in some cases, dozens of percent). The Ruble (Russian currency) would not be so low in value if there was gold backing up each ruble. It's just that the Ruble has very little buying power, because merchants either don't want it or don't want to give much for it.
That's the simplified explanation of currency.
"The universe seems neither benign nor hostile, merely indifferent." --Carl Sagan
About diamonds:
Yes, diamonds are almost exclusively controlled by DeBeers Corporation (not sure if I spelled that correctly). They bought out their competitors and control the mining of diamonds worldwide.
I've read horror stories about how in previous decades hundreds of ultra-low-paid African workers either worked in the fields to get diamonds (apparently in one spot they were so abundant they could be found above ground) or in dangerous mines. I'm not sure how much DeBeer's has stocked up, but they sure managed to make diamonds seem quite valuble.
For this reason I absolutely hate society's fascination with diamonds - people have the false sense that they are really rare. Truth is look-alikes aren't hard to make, industrial ones can be manufactured, and one company controls the supply so we all overpay.
Good thing my girlfriend isn't the diamond type =).
"The universe seems neither benign nor hostile, merely indifferent." --Carl Sagan
The government can control the money supply in our current system. In a gold based system, the only means by which control may be exerted is the buying and selling of gold. (Which had disasterous consequences several times in US history alone)
The gold standard in the late 19th century set the price of silver to a specific quantity of gold.
Your statement regarding the "panics" of the 19th century is partially true; but increases in silver supply were more to blame -- little new gold was discovered post 1860
More transactions were made with silver coin & specie, as the supply of gold was constricted. As the supply of silver changed relative to the set silver/gold exchange rate speculators made millions as banks failed and merchants went out of business when their loans were called.
Conformity is the jailer of freedom and enemy of growth. -JFK
I disagree.
An example of fiat money would be the "Continentals" of the revolutionary era. These were paper notes printed by congress that traded at par with gold despite having no tie to gold. You traded with them because the army said to take them, and their actual market value was 1/16 of the "face" value.
Conformity is the jailer of freedom and enemy of growth. -JFK
Continentals were a war currency backed the faith and credit of a non-government. They was no claim that continentals were backed by gold. The offical value was simply the same as gold. (Similar to the Ruble in late-Soviet russia) Their market value was nil, and you were often forced to accept them at face value by gunpoint. Until the constitution and Federal control of the currency, Spanish currency was the favored instrument of trade. Modern dollars are NOT fiat currency, they are a commidity unto themselves. As I have said before, dollars are backed the nearly unlimited taxing power to meet obligations of the US government. This page has a decent explanation about why the gold standard is a load of bull. http://www.j-bradford-delong.net/Politics/whynotth egoldstandard.html
Conformity is the jailer of freedom and enemy of growth. -JFK
You are a moron or a troll.
Setting your currency to some amount of some raw material sitting in a vault somewhere is a sure path to ruin in an expanding economy.
The gold standard resulted in a shortage of capital which starved capital markets for centuries. In addition, changes in gold prices relative to other precious metals (ie silver) made accurate cost accounting difficult and equitible taxation impossible, since taxes are payable in gold, while much of the money supply is actually backed by silver, since enough gold is not available.
Conformity is the jailer of freedom and enemy of growth. -JFK
"the most reliable standard will emerge (probably gold-backed private reserve notes at this point)"
You have displayed your complete and utter ignorance of economics. The most reliable monetary standard has been (and will be for some time) the US Dollar.
The dollar is not 'fiat' money, as you describe it. The US Dollar is backed by the faith and credit of the United States Government. That means that US specie is backed by the full taxing power of the United States, which is quite alot of value. In addition, the value of currency increases and decreases as the size of the economy rises and falls; limiting inflationary pressures.
Gold is simply a commodity, with no unique value. Why not base your monetary supply on pork bellies, or oil, or iron?
The Gold standard was a nightmare in the United States. There were depressions every 10-15 years caused by bank panics as the relative values of silver and gold shifted. Inflation ran as high as 15%, since after 1860 the amount of gold in the economy ceased to expand.
Take a couple of hours to learn what money is, and you'll find out what all of these 'e-gold' and 'real money' schemes are -- schemes to dump lousy investments (look at the historical price of gold over the last 30 years) into the hands of ignorant suckers at inflated prices.
Conformity is the jailer of freedom and enemy of growth. -JFK
- There is a fixed amount of gold. Productivity however increases, resulting in increasing "value" of gold in the long run, in other words deflation. Deflation is counterproductive because it stiffles investments. Keep your gold, get more for it tomorrow.
- The amount of accessible gold is not fixed and not coupled to relevant economic processes or goals. "Printing money" is up to mining corporations. Advancements in mining technology cause your gold to drop in value, a flooded mine make it more valuable. Not exactly predictable or desirable.
- But at least with gold there is a "hard" reference of value. So we won't tumble into a situation where suddenly all our money is worthless. Bzzzt. Wrong. If I get the impression that I can't buy what I want or need, because no one has the skill or will to produce it, I won't give my products to you, no matter if you pay in gold or not. In return, you refuse to sell your products for gold. So do your former customers. Suddenly gold will buy you nothing. It has become worthless. The "intrinsic value" of gold is what it can be used for in production, no more no less.
- Gold is untraceable. This creates all sorts of problems, for example it makes fighting organised crime much harder.
The most important part is of course the fact that while money is seen as a placeholder for gold in a gold-backed currency system, gold itself is just a placeholder for trust. If people stop trusting an economic system, basic needs dictate what is most valuable. Most people do not count possession of gold as one of their basic needs.And engaged men the world around would jump for joy! Two months' salary, indeed.
sulli
RTFJ.
If we encountered economic collapse, and the dollar was worthless, people WOULD accept gold.
Yes, and people would also accept guns, butter, and sugar. And all the Y2K people would become the nouveau riche. Hmm... that gives me an idea.
Coming soon: e-guns.com (or e-sugar.com)
-----
D. Fischer
ShoutingMan.com
I have full knowledge that if I stick cash in a box in the basement for 20 years, it will buy much less later. It will not keep it's value. I keep my wallet mostly empty. I have invested in more durable goods. Anybody properly investing in realestate? The market may slump, but they can't print more land on demand. If you can't research realestate yourself, buy anyplace a new Wal Mart is going in. They have done the research already. They build in fringe areas that they know are going to grow. My last property I bought 2 years before Wal Mart built. It's doing very well.
The truth shall set you free!
Anyone having any credits (currency) that has the value of gold better be ready to cash it in for it's full value in gold. Otherwise it inflates and becomes worthless. Remember a dollar could pay a days wages to a good worker at one time. It has de-valued some since.
The truth shall set you free!
Um, yes and no. A bank panic could still easily happen today, it's just more difficult. With electronic money transfers, a bank can electronically 'have' more money. But it doesn't give the bank any more actual greenbacks. So if the bank runs out of actual paper cash, it doesn't matter how much they have electronically.
And if more then one bank is getting rushed by customers who are withdrawing all their cash, it snowballs.
Kierthos
Mr. Hu is not a ninja.
But we humans just can't help bright shiny objects. Pretty... shiny! All the world's economies are a collective hallucination, swapping gold for $$, yen or pounds doesn't mean anything. I just hope that everyone doesn't notice money has no real value at the same time.
--
--hongpong.com
Just wondering weather this is so - and then what "gold currency holders" do in case of a dot-crash ?
--
Jon - TheSpork
Because it was a fraud?
And the fbi was happy to shut down a service where people could use untracable money?
The Lottery:
"Not my manner of thinking but the manner of thinking of others has been the source of my unhappiness." - M
We should go back to the oldest currency known to man -- teeth! We could call it e-teeth. We would send our teeth in a little plastic bag where we would have it stored and converted into electronic teeth, suitable for worldwide Internet distribution.
"I'll just chip in a bit for RedHat: I actually have that installed on my university machine." - Linus, '95
Delta-V in the vertical direction simply didn't exist for anything heavier than air 100 years ago (at least not for any sustained period). 100 years is a long time.
On a related note, Delta-V is very cheep when you're allready on the asteroid. See R.A. Heinlein's The Moon is a Harsh Mistress for examples of creative use of Earth's gravity well. I used to have figgures for this, but basicly it boils down to this. Shipping anything to earth from space (not from another planet surface) is the cheepest air freight you'll ever pay. The answer is the rail gun or celonoid cannon (different designs, same basic end). This page would have you belive one could construct a device at home capable of reaching escape velocity.
This has been another useless post from....
Killfile(TGK)
No trees were killed in the creation of this post. However, many electrons were inconvenienced.
Getting to the asteroid is expensive. Once you've put the necessary processing plants in space, getting the asteroid materials back to earth may be pretty cheap. (1) Put a nuke reactor and a catapult on the asteroid. Start processing gold and iron. (Most rocks are partly iron oxide; if you are lucky enough to find gold in an iron-nickel asteroid instead of a rocky one, even better. And if there is titanium in the rocks, smelt that also...) Build a catapult to throw the waste materials away -- this serves as a slow orbital transfer drive to bring the asteroid to earth orbit. (2) Use a few thousand tons of asteroid iron to build a _big_ glider. Load up the gold and other trade goods. Re-enter the atmosphere and land in water -- for example, Lake Michigan, close to the ironworks around Chicago. Besides the cargo, the glider itself is sold as raw metal.
The initial investment is huge, but so is the potential payback -- from the steel, because it won't take many hundred-ton shipments of gold to run the price way down.
Endless arguments over trivial contradictions in books written by ignorant savages to explain thunder in the dark.
Endless arguments over trivial contradictions in books written by ignorant savages to explain thunder in the dark.
There have been people saying we went off the gold standard in the 70s with Nixon. That is incorrect. We went off the gold standard during Roosevelts first term in office. All Nixon did was sell off some of the last reserves. We went off the gold standard so the money supply could be more closely regulated. There has not been a time since then that the US has had enough gold on hand to back all of the dollars in circulation.
"If there is nothing you are willing to die for, then you are not really alive." Myself
Now this isn't to say there aren't some advantages to a gold backed currency (personally I don't think it's a good idea), however it doesn't make any fundimental difference in what money is or how it's used. Much of the money in modern scoiety doesn't exist as anything more than numbers inside computer networks. However, so long as people trust that and value it as money, it works as such.
Perhaps Clams next?
No raw material is a good basis for a lasting money system. There's too much of everything in the universe and eventually we'll figure out how to get at it and/or manufacture it. Money is an abstraction for (though frequently not a fair measure of) the value of human activity anyway, so I have no problem with acknowledging that it's abstract and keeping it that way.
First you say this
This is truly sad. Instead of being able to predict how much a dollar will be worth tomorrow, we leave that decision up to the whims of international currency daytraders.
But then you say this
Right now, with metal prices at a fraction of their all-time highs
So you think you can perdict how much gold will be worth tomorrow?
The inflation problems you refer to were caused by using a fractional reserve system. Bankers of the time couldn't resist keeping smaller and smaller reserves of gold to back their banknotes, eventually the public would get wise to this fraud, and a run on the bank would result. The Federal Reserve System is fraud. It was created by bankers for the benefit of large banks. It gives the large central banks (and to a lesser extent, the Federal government) the ability to create money out of thin air. Fact: These "magic" dollars compete with your dollars (the ones you worked some job to earn, presumably) for goods and services in the economy, AKA inflation. Do you see the inherit unfairness of the system now? Oh, and by the way, the banks earn the going rate in interest for doing the hard work of making an entry on their balance sheet. So far the system has been remarkably stable. After all, the value of a dollar in terms of the goods it will purchase has only declined about 90% in the last 30-40 years. But we are always in danger of some economic shock revealing the system for what it is.
Face it, money has become so abstract a concept that it all ends up to a trading of trusts.
There is no way you can be sure of how much your dollar is worth. Even if it's backed with gold you just gotta trust the man that he really has your money's worth!
On second thought, nobody seems to care much about what money really is, so it might as well be backed by clamshells.
-- sigs are like parking spaces - all the good ones are occupied
this is the one of the stupidest things i've ever heard. if you had ever taken an introductory economics class you would have learned that gold is about as "intrinsically valuable" as tulips. (if you don't believe me, try using gold to buy a coke from a coke machine on an abandoned university campus in the middle of the night. it doesn't matter how much gold you have, if no one is there to exchange it)
if you would like to learn more about economics, go to your local community college and sign up for something called "economics 101".
Gold isn't actually intrinsically worth anything. It's a pretty metal, with uses for a few industrial applications, but most of its historic value is down to it being easily workable and looking nice. It's modern value is mostly down to people having been told it's worth a lot (like Diamonds, which again are worth money purely because they're worth money and pretty).
_____
My Journal
The same reason your 10 shares of IBM have value.
They don't add up to squat, but they have value, because there is a market for them.
Same reason money has value; because people accept it.
Yes, Diamonds are actually not rare at all; DeBeers keeps them artificially rare. As far as you or I are concerned; they ARE rare, but factually, DeBeers has an unimaginable number of diamonds locked up in vaults all over the place.
This is not the case for gold.
Yes, the U.S. government does have a gold store locked up at Fort Knox, but not enough to make up for the trillions of U.S. dollar value floating around.
Also, the US government would very much like to get rid of the gold that it has in Fort Knox, now that it is financially useless. This is true of most governments that have gold reserves.
It explains (in part) why some currencies can change value compared to others by several percent each year (or in some cases, dozens of percent).
Currencies can change value dramatically overnight entirely because of speculation, the same as stocks. A national economy doesn't fundamentally change overnight; only the perception of it can change that quickly. Also, foreign-exchange traders are given to torpedoing currencies in order to move markets and turn quick-and-dirty profits.
The Ruble (Russian currency) would not be so low in value if there was gold backing up each ruble.
The Ruble has a low value because the Russian government and economy are in political and financial chaos. The Russian government probably has a stockpile of gold somewhere, but it's financially useless in the modern world. Anyone with enough money to buy lots of gold would probably understand how useless it is.
as I mentioned some months ago in a comment on e-gold, I really don't see this going anywhere until a national government (like, say, South Africa) issues a digital specie currency.
It's going to take a digital Krugerrand, Panda, Maple Leaf, or Eagle, before an online, gold-backed currency will gain enough market penetration that it's worth it to convert our fiat national currencies, and do business strictly with uninflatable, commodity-based currencies.
Someday, I'm sure we'll have all manner of electronic currencies, backed by gold, kilowatt-hours, barrels of Brent North Sea crude oil, or backrub-minutes (redeemable at dozens of outlets in any decent-sized city!), with online clearing markets to easily convert among them, but I'm afraid that any private company short of DeBeers simply won't have the pull to make it happen.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
It's worth noting that many prominent economists, including Nobel price winner Milton Friedman, agrees with this "moron".
They have taken economics 101.
I have read a lot of Friedman, and I guess you're right that I overstated his position. I don't have time to search my books for quotes, but as I remember it he never clearly comes out in favor of any monetary system. He observes that commodity based schemes have their problems, but they have shown to be pretty workable and safe over the centuries, and that fiat money systems are responsible for pretty much all monetary disasters in history. I think he says that the current system with sophisticated fiat currencies is a historic experiment, and it's too early to say how it's gonna work out until it's been operating a few centuries.
So I guess what I should have said was that Friedman finds the original posters position a perfectly reasonable and respectable one, even if he may not fully agree with it. Calling it "one of the stupidest things i've ever heard" that is refuted by economics 101 is clearly a statement from an ignoramus. I'm sorry that I let myself get dragged down to that level, and I appreciate you correcting it
The problem with the gold standard is that there is only a fixed amount of gold in the world and hence a fixed supply of money. This has a tendency to actually increase inflation since having a country's currency backed by it gold, which would essentially be fixed at a maximum amount, since there is no infinite amount of gold in the world, would mean that for every extra dollar that the treasury prints out, the overall value of the currency would decrease. In short as the money supply grew, so would inflation.
Yeah, expect it's completely opposite. If money is backed by gold, the money supply is by definition the gold supply, which while not constant, grows very slowly. The money supply can only grow strongly by abandoning the gold standard, and printing more money than you have gold. You can do that without officially acknowledging that that's what you're doing, which may be what you're referring to.
In reality, inflation has been virtually non existent through history with gold based currencies.
For those of you who think I'm blowing smoke all this stuff I got out of my college economics book (Baulmer and Blinder are the authors I think ).
I hope that's a misreading of the book. A good book on the subject is Money Mischief : Episodes in Monetary History by Milton Friedman.
First of all, you have to realize that gold has very little useful value. Sure, it is used in industry, and in jewelry, but most of it is merely stored for currency purposes.
So why is the global economy so reliant on gold? It's very simple, because it can't be counterfeited. Au is an element. Short of a nuclear reaction you just aren't going to produce it from something that doesn't already contain gold. There therefore need no government regulations on it whatsoever.
You could just as easily have a monetary system based on points stored in a computer system. As long as the total number of points in the system was fixed, you'd have the same stability as gold (more since gold is being found every day). The reason you don't do that is because of fraud and regulations.
Now consider goldmoney.com. Even if they really do back your "points" with real live gold, how are they protecting against robbery? If someone steals the gold, goldmoney.com is going to go out of business, and guess what, you're broke. Goldmoney.com is also only as secure as the country in which it is located. Someone takes over that country, they can then confiscate all your gold. Even without a coup the gold could still be confiscated by the government.
Really the only thing you're getting here is the promise of privacy. If that's what you need, and you can't find it anywhere else (you certainly don't get it with credit card payments), fine. But for stability, I'd say the Swiss government is much more stable than the corporation running goldmoney.com. You even get the privacy there, just not the privacy for the transactions themselves. Maybe Switzerland should look into forming it's own e-transaction system.
ok then your [sic] infringing on my copyright! Could you as [sic] me next time before STEALING my comments for your own?
Like this story in Wired that talks about Zeroknowledge licensing out Stefan Brands patents in toolkit form and eCash doing the same with the (way, way more important) Chaum's blind signature and other patents. This will give interested parties the opportunity to develop anonymous networks, with limited traceability (another Chaum patent) and with anonymous payment methodologies (utilizing the blind signature patent) or building other applications. And then somebody is talking about yet-another-scam payment system. Yawn! Good night!
I also liked the comment by the providers of this currency:Translation:
We welcome money launderers, those looking to hide funds from their spouse, and just about anyone else who wants to enguage in any sort of even halfway shady dealings.
There is one other application of this sort of independant international currency. That is, when someone (aparently not Hilton 1, 2, 3) get around to building a hotel or other tourist destination in space, or some other location beyond the jurisdiction of any one country, such as a deep sea hotel. Currently, there is only one player remaining in this arena as far as I know, but they'll need a currency, and in order to avoid national ties, this type of cyber-currency would be perfect.
--CTH
---
--Got Lists? | Top 95 Star Wars Line
Does that sound like a fly-by-night company or what?
There are a thousand forms of subversion, but few can equal the convenience and immediacy of a cream pie -Noel Godin
There is of couse the issue of credit itself. Some people (like me) have real problems living on borrowed money. I'd much prefer to be able to spend MY OWN money, thanks. Especially as I don't have to worry about over-extending myself, as once the money's gone, I can't incur interest.
Please don't make me quote statistics on how many university grads declare bankruptcy, in no small part due to the $5,000.00 credit cards issued upon graduation...
For some of us, credit just isn't the answer.
(Note: I'm Canadian, and maybe the financial world is just skewed here.)
Endless arguments over trivial contradictions in books written by ignorant savages to explain thunder in the dark.
Integrating gold with online fiat-currency transactions is a nice start, but it hardly goes far enough. It's time to go back on the gold standard for good.
When the Founding Fathers wrote the constitution, the fundamental property rights it embodies were rooted in actual intrinsicly valuable commodities. When the Federal government took your land under the 5th amendment, they had to compensate you in gold. Even well into the end of the 19th century, the biggest hotbutton currency debate concerned minting silver instead of gold.
Today, we're off the gold and silver standards altogether. This is truly sad. Instead of being able to predict how much a dollar will be worth tomorrow, we leave that decision up to the whims of international currency daytraders. It's little surprise that inflation rates under the Carter administration crested well over 10% so soon after Nixon pulled us out of Vietnam and took us off the gold standard.
The economy of the twentyfirst century cannot withstand uncertainties. The technological revolutions of the industrial age all occurred under the gold standard. Why should we experiment with a proven thing? Why let politicians pay off their political debts by devaluing our currency? Brazil went down that path, and we needn't follow.
In today's economic climate, the prudent investor will consider converting at least part of his or her paper assets into precious metals. Right now, with metal prices at a fraction of their all-time highs, may be an ideal time to invest in precious metals. The Gold Vienna Philharmonic sets the standard in purity and popularity. And with the exclusive Monex buy-back guarantee, your gold investment can only maintain or increase in value for one year, which adds a unique benefit to your gold purchase. Sign up today and receive a free copy of Gold In The Age Of Uncertainty.
Yep, and eCash is forever plagued from the ideas from the early 90's, banks. I would love to be able to say to my bank "fork me some untracable electronic currency please" but it aint gunna happen. Banks would like to get rid of cash altogether IMHO, but regardless, banks dont jump on bandwagons and eCash is feeling it. So where does that leave you? As a merchant selling a payment service (ala PayPal) which results in you needing a way of getting money into and out of the system and seeing my money is in my bank that means I need a way of transfering money from my bank account to your bank account. Again we hit banks. Suprising enough PayPal has actually managed to make this happen, I can register a checking account with PayPal (if I'm in the states) and click money between my bank account and my PayPal account, great, but what about that great promise of anonymity? You know, the whole allure of "cash". We're pretty far from zero knowledge by now. The merchant I'm buying from can track who I am (look at the FreeNet donations page ffs), PayPal can browse through all my transactions at will, my bank can see how much money I've put into my PayPal account, the government can monitor my PayPal Bank account transfers and PayPal would probably give up any information they wanted after a few cool threats. Will banks ever get off their ass and give us what we want? Not really, and even if they do we're not going to get "zero knowledge" because I dont trust my bank.
How we know is more important than what we know.
source: Wired Magazine
For those interested in gold, and the government I suggest reading "End of Ordinary Money by Orlin Grabbe, and take a quick look at Jim Bell's case where he created Assassination Politics, which delved slightly into currency which could be used anonymously. Now please don't jump the gun so quick to say it won't happen, if that were the case the government would be quick to assist developing a financial system they thought would improve the economy, business, etc., and they haven't in fact it's been the opposite.
Want Root?
Then I can start looking around the internet for Armour and Swords and maybe a lantern and a sack, and head off to the Sword Coast to find adventure and loot.
(Submitted in the five minutes before heading home from work, brain broken, must sleep...)
"I'll take the red pill, no, blue. AAAHHHHHHHHHHHHHHHH........"
"I'll take the red pill. No! Blue! AAAaaaahhhhhhhhh"
- Monty Python meets the Matrix
The way I understand it, part of the reasons for going off the gold standard was to give the Federal government more control over the economy. When you're tied to only issuing as much money as you have gold in stockpile, then there's a limit to your control over that aspect of the economy. But when you are working in a money-market type situation, you can look at the given value of your currency in the money market, and then decide to either print / issue more money and see how the markets react to you.
Anyone read "Cryptonomicon"? Remember the absurdity of the chinese banks in the first chapter, running about demanding of each other to see the gold? This is another aspect to the money-market situation that makes it advantageous not to use gold. In the case of a serious economic downturn, you can prevent the 'run on the bank' in which everyone dashes to their local bank and demands gold for their money - which can't happen when you're off the gold standard. It also prevents 'goldrush' type phenomena, which is bad when you find rich new gold deposits somewhere and the market is flooded with gold which devalues all currencies around the world.
DeBeers has been artificially controlling the diamond market for years to prevent exactly this sort of thing. They have huge stockpiles of diamonds from south africa and russia, but only release them in small quantities to keep the prices up. Apparently if they released them all then diamonds would be worth about as much as - I don't know really, but not worth much anyway.
This isn't the only example of an artificial market: aluminum ( or aluminium if you prefer ), is actually 'worth' a whole lot more than we normally think. The only way to extract aluminum from other metals is with powerful electric currents, which makes it very costly to produce, but governments subsidize the aluminum industry so heavily that it keeps the consumer price very low. This is why the first thing government wants to get out of a recycling program in any city is lots of aluminum.
As an aside, being off the gold standard is not always a bad thing for all countries. Switzerland for example has had a currency that over the last 100 years or so has been more stable than the gold market - so its actually a better investment ( if you want stability ) to put your money in a swiss bank than to buy gold.
There are a thousand forms of subversion, but few can equal the convenience and immediacy of a cream pie -Noel Godin
Both systems failed for the same basic reason, there simply was not enough metal to back the amount of money required by a modern economy. If you think about it the idea that the optimum amount of money in circulation should be tied to the amount of a shiny metal that has been taken out of the ground is rather odd.
The US federal government still has ownership of something like 50-60% of the total world gold reserves. Most of that is the payment on war loans made by the British following world war I and II which in turn was the booty of Empire. The total quantity of gold bullion has at most doubled since WWII, in the same time the GDP of the US has in real terms expanded at least ten fold.
There simply is not enough yellow metal to go round. Nixon abandoned the gold standard for the simple fact that even under the system of managed exchange rates there was simply not enough yellow metal to support the economic activity. The supply of gold had become the limiting factor for the economy.
The idea that money should be backed by real value has emotional appeal to many. Back at the turn of the century the Deomcratic party was essentially captured by a monomaniac called Willian Bryans Jennings whose sole speech was 'that man should not be crucified on a cross of gold' - monetary reform by moving to a bimetalic standard.
It is not surprising that people trying to invent their own currencies should attempt to base them on gold. But there is a big difference between having a gold ingot in the hand and having an account with a fly by night operator in St Mcru (pop 5 penguins).
It is now 30 odd years since the US was on the gold standard and the number of people expecting a return is rapidly diminishing. At the same time most other countries have abandoned the gold standard and nobody wants to have a managed exchange rate (although some are forced to). I suspect that the diminishing gold price reflects the fact that gold is loosing its traditional role as a safe haven in troubled times.
Looking for an Information Security student project suggestion?
Try http://dotcrimeManifesto.com/