News & Analysis
Dollar Replacement Beat Goes On ... and On
Expert: U.S. should 'give up on the dollar' – The push to replace the U.S. dollar as the world's reserve currency has been gaining steam, with one expert arguing that America "must give up on the dollar." In a Financial Times op-ed, Michael Pettis, a finance professor at Peking University, said U.S. policymakers should lead the charge to create a more diverse reserve system, "in which the dollar is simply first among equals." The dollar has been the dominant reserve currency for decades, with central banks and other institutions around the world amassing vast reserves. Pettis argues that this has resulted in dangerous trade imbalances that threaten to destabilize the global economy. – CNN
Dominant Social Theme: Get rid of the dollar and all will be well. An "expert" says so.
Free-Market Analysis: This article from CNN comments on an editorial that just appeared in the Financial Times, which like the Economist magazine, tends to enunciate the positions of the Anglo-American power elite. It confirms our suspicions once again that Western elites have in mind swapping out the dollar, and maybe sooner rather than later. The idea of course is that if Western elites can create something closer to a one-world currency, global government itself becomes a considerably more realistic proposition.
The ramifications of course are profound. But there is no way to accomplish such a move without launching a huge promotional effort. This seems to us just what is going on. The larger populations especially of the West must get used to the idea of a new currency and thus, almost every day (or week) we hear of a new initiative aimed at weakening or otherwise "broadening" the dollar reserve system and eventually replacing it.
George Soros just hosted a dollar-replacement summit that he called a new "Bretton Woods." It didn' t really make headlines but it wasn't supposed to. Its existence was the big story, and it got loads of ink leading up to the letdown of the summit itself. The International Monetary Fund has taken to issuing white papers explaining how its SDRs can be turned into a true world currency complete with a real bond market. The BRICS, as we reported yesterday, are meeting regularly to create their own currency swaps that exclude the dollar. And now, in upcoming meetings the G20 (meeting again!) are to take up the issue of the dollar's shaky footing.
We find the whole thing increasingly contrived, as we have stated before. The dollar in our view was purposefully destabilized by the US Federal Reserve and by the Bush administration via serial wars, aggressively low interest rates and Bush's strange habit of endlessly refusing to veto expansive legislation. Anyone who studies the Bush presidency can see a trend leading the US economy into economic oblivion.
Now why would the President of the United States want to do such a thing? Well, if your family has elite connections going back generations (as the Bush family does) and if Western elites want to create a global government, they need to move the world from a series of disparate currencies to just one – and in order to do that, the dollar reserve itself must be undermined.
Of course, those involved aren't simply going to come out one day and announce that the new world order demands a new currency and therefore policies have been put in place to undermine the dollar (and perhaps the euro as well, new as it is).
No, it will be done, as so much is these days, furtively. The dollar will be destabilized softly, over an extended period of time along with America's national sovereignty. And in order to acclimate people to what is happening, various groups and editorialists will continually comment on upcoming changes. It is quite possible to categorize this recent FT editorial as one such desensitizing gambit.
In his editorial, Pettis (an economics professor in Peking of all places) rolls through the whole rusty paradigm of dollar replacement. Of course that's just the point. Promotions don't seek to be original. They're supposed to be repetitive – that is how dominant social themes morph into memes. Thus Pettis repeats for the umpteenth time that "countries such as China have been able to 'game the system' by stockpiling dollars, which has allowed them to grab a larger share of global demand for goods and services."
He points out predictably (and incorrectly), that money instability has reduced currency availability within the United States and thus jobs (that's not true) and flowed to "red hot" job markets in developing economies elsewhere in the world. The United States, he writes, then has to make a Hobbesian choice between printing more money (adding to the deficit) and "stimulating" the economy or opting for a more fiscally conservative approach that will leave unemployment consistently high.
Never mind that we hear over and over again that the US job situation is improving (it likely is not). The dollar reserve system actually collapsed in 2008 and had to be revived by an incomprehensible injection of some US$20 to US$50 trillion in loans and other sorts of dollar funding schemes – not just in the US but also around the world.
While the dollar system was propped up for a time, it is probably beyond salvage. The job situation in the US is terrible (not because of currency flows as Pettis argues) because the whole economic system is so distorted that it is impossible to tell a healthy company from an unhealthy one. Businesses don't want to hire and people are yet reluctant to spend.
Even if this situation changes, economic health will not improve much because central banks around the world will then have to raise rates and otherwise "sterilize" the world's economy of its massive dollar overhang. Rates go up and economic vigor, what there is of it, begins to recede. This can go on for years.
Pettis also runs through the usual options when it comes to the dollar's replacement. He examines the euro, before discarding the idea and then takes a look at the International Monetary Fund's SDRs. In fact, we have come to believe that Western elites dearly wish to replace the dollar with some sort of SDR derivative. Here's some more from the CNN commentary:
The global monetary system and the dollar will be discussed this weekend as finance officials from the Group of 20 economies gather in Washington for the spring meetings of the International Monetary Fund and the World Bank. The dollar found some support Friday as investors turned cautious ahead of possible policy changes stemming from this weekend's summit. "Today's risk will come from sideline comments from the G20 and IMF meetings as well as the deluge of U.S. data," said Camilla Sutton, chief currency strategist at Scotia Capital. Investors are also focused on the outlook for global interest rates, as central banks adjust to rising inflation.
We wrote yesterday about the orchestration of world events when it comes to the BRICS, and how orchestrated this economic "threat" seems. We argued, hypothetically anyway, that the Western elites are still calling the shots and we would argue the same thing regarding the "dollar crisis." The BRICS are working on their own version of a dollar replacement, one that's perhaps gold-backed and the IMF is elaborating on SDRs.
It doesn't take a genius to see that at some point an additional crisis can be manufactured for the express purpose of pressuring the two sides to sit down at the table together and merge their approaches into one single currency. We don't know if the euro will be involved, or if perhaps the euro will be used to trigger a larger currency crisis but every time another article or white paper comes out on the issue, our suspicions are raised.
Conclusion: The IMF has been especially thorough with recent reports while cautioning that a replacement for the dollar is perhaps decades away. We used to believe that ourselves but these days we tend to believe the opposite of what elite institutions say. If the IMF is presenting the SDR as an alternative to the dollar "reluctantly," then its institutional stance is more likely an eager one. And if such changes can only occur tectonically over decades than we would tend speculate that they are more likely only years or even months away.
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Posted by The Daily Bell on 04/30/11 07:38 AM
Thanks for the link.
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Posted by sovereignthink on 04/29/11 10:57 PM
Utah Silver and Gold Staged to Kill the Bank - Utah Vs Fed
This bill recognizes gold and silver coins that are issued by the federal government as legal tender in the state and exempts the exchange of the coins from certain types of state tax liability.
Utah Gold and Utah Silver allow individual citizens in Utah to completely remove themselves from the Usury and Lien that is the foundation of the Debt based Federal Reserve Debt Note System.
There is a Re-Publicing in Utah, the Re-Turning in Utah with the 'Utah Sound Money Act'.
(full)
Click to view link
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Posted by Bischoff on 04/22/11 06:29 PM
@ DB Reply
"Very impressive as usual with the exception of your insistence that gold be anchored by a government quotation. Let the free-market decide. There have doubtless been plenty of episodes in history when gold and silver floated in value to one another and the market itself determined pricing."
The government doesn't quote gold. If the overwhelming part of the population in the world were to decide on silver as the "STANDARD OF VALUE", who am I to disagree? There can only be one "STANDARD OF VALUE" even if expressed in two separate commodities. However, if the work (joules) required to produce of the two commodities government differs markedly then the two can not be equivalent. To leave it up to the market will always produce a preference of one commodity to be the "Standard of Value" over the other. This market decision took place in the U.S. a 150 years ago. To clamor for a return decision today makes little sense.
What the DB seems to object to is that the government set a "STANDARD OF ACCOUNT". A "STANDARD OF ACCOUNT" is something different from a "STANDARD OF VALUE".
The "standard of value" is chosen by the free will of millions and billions of people. The "standard of account" is arrived in standardizing a certain weight and purity of the commodity which serves as the "standard of value" by forming it into coins and bullion.
It is immaterial whether the "Standard of Account" is set by the government, by a private association or by a plebicite. However once the "standard of account" has been decided it must remain constant and it must be adhered to. How can it work any other way in a monetary system?
The problem with Austrian economics is that it uses "marginal utility analysis" to discover prices. However, when you speak of a price, you speak of a ratio. A ratio can only be calculated in an equation which has a constant, i.e. a "Standard of Account" such as a Dollar, a Euro, a Franc, a Pound, etc. . Yet, everytime I point this out, the DB replies that the "Standard of Account" should be set by the market. That amounts to proposing that an equation can be solved with only variables. I disgree.
"Marginal utility analysis" is a marvelous tool as applied by Carl Menger. As long as the value derived by this analysis compares the value of one good in terms of the value of another good, it is a valid process. As an example, the value of a pair of shoes could be compared to the value of a bushel of apples, or the value of a barrel of Saudi crude could be compared to the value of a side of beef, but none of these values could be expressed in U.S. Dollars, because a U.S. Dollar is expressed as a fixed amount of gold.
Ah, but.....waitjustaminute....the USD/FRN does vary in value in direct relationship to the value of a barrel of Saudi crude.....Maybe that is what the DB means by "let the market" decide. I take it all back. I think I understand Austrian economics now........:)
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Posted by The Daily Bell on 04/22/11 03:02 PM
That's sad.
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Posted by Bischoff on 04/22/11 02:55 PM
The LIBERTY DOLLAR issued by Bernard von Nothouse was doomed, because it used the word "DOLLAR" on its certificates. This gave the Secret Service an excuse to justify the seizure of the certificates on the ground that "counterfit laws" were violated. This whole raid in Idaho was instigated by the Fed, no doubt.
Von Nothaus will prevail in the courts, but it maybe 20 years before he does.
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Posted by forbestop10 on 04/22/11 08:58 AM
Money is in the edigital form. ETF's are in the digital form. The inventories are guaranteed;but are the inventories verifiable? One world curency. Again; They have tried it by making the USD; the petro dollar. All oil brought and sold is to be done first in USD. BRICS have changed that option of oil translated into USD only beofre a trade is completed. If the BRICS encounter the same problems of the USD;the cycle of investment flow and use of USD could flow back to the option of using the USD for oil again. THe USD is being plunged and that is fine for the speculators. The shorts on the USD make money. The mining companies have investment capital to mine and to drill because of the commodities bull run. Variety in currencies gives the protector of their wealth; the option to run to another stronger currency. Billions in digital gold and digital silver go to accounting verifiable in bullion stored all around the world. Good News about the medallion like a Ron Paul medallion and the silver medallion minted by Bernard von Naughthouse (Poor chap). The liberty Dollar is an accepted collectible. The authorities say it is legal to own;however;You may not use it as money to replace the USD. Don't try to pass the LIberty DOllar on like it is American money. Anyhow; back to the what you don't get on the swing; You get on the MerryGoRound. When the USA credit rating is doing good and this does happens in cycles....investors around the world look and foresee opportunity to flow their capital cash back into testing and investing in the USD. People watch the Bell Curve of human activity; human psychology and predict the rise and fall of currencies. Recovering economies are like a money magnet;investors cycle back their investments to the USD betting it will return one day;but when? Election year is coming and whoever is in power will do anything they can to make things rosey during the election year to get reelected. THe money masters of the universe do not want global world war iii. it would be like drinking your own lethal milk shake to assume WWIII would be a controled war. Military are thinking to scale down their forces and to be ready to install and act as smaller forces with more punch power. People complain of Chinese presence in war torn and war free countries of the world. The Chinese brought American debt instruments in the form of bonds. Possibly; a share of the investments are allowed while the Western Powers are fighting the wars. Trade credits are transacted on super computers through cloud computing remote data storage centres. Computer engineers, private and government sponsored hack masters try to get the edge to control data systems. Controlling a country's or a corporate data base; its telecomm etc could paraylyse an economy. Peeking into the plans of organizations can help forecast the future and steal expensive priceless R+D. Say Dr Delgados electrode is planted in the brain of the Minator. It can steer the bull to the right or the left make it heal command its every move. Control the brain and you control the whole body...your bank your country your politicians your security forces...power water food transport... Cyber Security is in a constant change. The unrest around the world; Middle East and in other regions find their form of money does not buy the commodities essentially food oil cooking gas as much as it did in the past. Opening a can of peaches; i freeze and feel wasteful when throwing a steel can away. Pop cans are metal; they are worth money too. It worries me to toss a coffee can; it is saved along with the other coffee cans. A neighbor finds an old long bed ford truck parked on the side of the mountain. its been there for about 15 years. it was junk but now its worth $6 grand in metal. Any scrap copper a miner finds at the Kentucky coal mines; the miners pick up and throw it in their truck. They know; a little at a time could be a fortune. The college maintainance man collects all the copper from the written off air conditioners and heat pump systems. He knows; commodities translate into dollars. Steel beams are recovered from torn down buildings on campus. The workers haul them off and bury them in their front yards. They know; metals bring pretty prices. Whole sheets of heavy steel plate are uplifted off rail road crossings and copper is stripped from abandoned buildings because folks know metals translate into dollars. The local farmers at the auctions chit chat talkiing about renting more land more bottom land to grow corn. It translates into dollar power. Hillary came to Hazard Kentucky and spoke of farmers and most of the people there were miners, central banking district people and school people. Hillary knew food is an important commodity. She made her first 100k in cattle. She's a Chicago Girl... CBOT.... Weather patterns change the crop cycles. Ozone holes in the atmosphere seem to impact the rainfall in regions around the world. Perth Western Australia predict the what if water resources of West Australia for the next fifty years. China dam up waters to save their people and their agriculture. Jim Rogers buys Chinese currency and hard commodities. He probably is buying the Brazilian Real too. Planners do a spread so they will not loose it all (a basket of currencies). Speculators in currencies search for weaknesses and strengths that cause inflation and deflation of currencies. When the people on various levels of the pyramid seek to profit; they do what they do to control values. Deflation is Fat City for the poorest of the poor at the bottom of the pyramid. Inflation of commodities with a mismatch of buying power of a currency hurts the poor and the common lower levels of the pyramid of levels of people. When people are so stressed they cannot buy commodities to survive or their standard of living is reduced;they feel control at the top are responsible. When management cannot provide relief;people get more creative. Hopefully civil unrest is not the resort of the frustrated. If civil unrest happens; the elite vacate to greener pastures. They are not stickin around for the hell. The Petro dollar power USD today is such that USD does not buy petroleum quantity as it used to. If the elites will permit American transport to switch to natural gas liquified petroleum gas to fuel transportation; the scream of oil is too high would end. Oil might drop to $15 dollars a barrel. Its not mainstream;but locals in Utah can take their truck to a mechanic who will for about $600 dollars switch their pick up truck from using gasloine to using LPG. The free market enterprises like UPS and FEDEX have operating their trucking fleet on natural gas. Silver stock piles are low. The demand has outstripped the supply. Kentucky power just stocked up on its coal. Last week delivereies were successful. Dollar General, Big Lots and Family Dollar Store are doing a roaring business. Why pay high retail when you can get the benefit of low retail. Every loss in the buying power of gasoline causes the American consummer to become more penny wise and less dollar foolish. 4 months ago a silver dollar at the flea market sold for 2 dollars above spot price. Several 1996 dollars for selling for 22 dollars; key silver eagles but don't worry. Minions who had silver eagles were approaching the flea market salesmen selling their eagles for 16 18 and 20 Yankee dollars each. They wanted paper dollars so they could purchase Americano gasolina. A one ounce silver LIberty Medallion sold on eBAy for a grand. its become a rareity after the FEDs confiscated the warehouse of 7 million in gold silver and certificates from the LIBERTY DOLLAR of Bernard von Nothouse. ROn Paul said;"The FEd does not like competition." or was that the government does not like competition? It may be in vogue to shout give up on the USD. Out with the old in with the new. One should be aware what is todays darling currency may be tomarrows orphan. The elites will switch currencies often.
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Posted by Ingo Bischoff on 04/22/11 12:30 AM
@ Dave Jr
"Ha, you have discovered a tautology" ... Nice defense.
If that comment is meant for me, I have to disagree in general. Here is your other comment:
"There are many "forms" of money. FRNs are money, bank drafts are money, if I exchanged redeemable and exchangeable coupons, they would be money. Gold is money. If you are saying gold is the best form of money because it cuts off opportunities for fraud and corruption, you will have no argument from me. I just disagree that gold is the definition of money. That is the question you asked, isn't it?"
Let me deal with your statement point by point.
1. There are many "forms" of money --- This is completely wrong. My argument is that only GOLD is MONEY and nothing else. In that regard I associate myself entirely with the contention of J.P. Morgan as it regards Gold and Money.
2. FRNs are money, bank drafts are money --- This is completely wrong. FRNs, bank drafts, silver coins, copper pennies are currency. They are NOT Money. Only GOLD is MONEY. A currency is a medium of exchange, and Gold can be a currency. However, Gold is entirely inadequate as currency in a modern economy. This does not mean that Gold is no longer MONEY. It only means that gold is the one commodity preferred over all others to serve as an intermediate to facilitate exchange. In other words, gold is the most liquid commodity, bar none.
3. Gold is not Money because it cuts off opportunities for fraud and corruption. The opportunities for fraud and corruption maybe cut back, but they are still there. "Gold is Money because it serves as the STANDARD OF VALUE, and it serves as the STANDARD OF VALUE because it is the most liquid commodity". If that is the tautology to which you refer, then I guess you are correct.
4. My definition of Money is this: "The commodity with constant or near constant marginal utility".
BTW, what is your definition of Money? You named a number of things which you called money. Can you wrap them up in a definition?
Let me just go on. The inadequacy of gold as currency was overcome by circulating Real Bills through the use of uniformly denominated banknotes in their stead. To meet the constitutional requirements under Section 10, Article I of the U.S. Constitution, this banknote currency had to be redeemable. As long as the banknotes were used for purchases of everyday needs, there was no need to redeem banknotes. However, if one wanted to save, one could redeem the banknotes for gold to purchase "gold bonds".
The redemption requirement further served as a surety against bank fraud. If a bank couldn't redeem its banknotes with gold reserves on hand, it had to rediscount its Real Bills against which it had created the banknotes. If it still could not get enough gold to meet redemption requirements, it had committed fraud, and it was subject to prosecution.
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Posted by Dave Jr on 04/21/11 07:54 PM
"Ha, you have discovered a tautology" ... Nice defence.
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Posted by Dave Jr on 04/21/11 07:46 PM
There are many "forms" of money. FRNs are money, bank drafts are money, if I exchanged redeemable and exchangeable coupons, they would be money. Gold is money. If you are saying gold is the best form of money because it cuts off opportunities for fraud and corruption, you will have no arguement from me. I just disagree that gold is the definition of money. That is the question you asked, isn't it?
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Posted by Dave Jr on 04/21/11 07:36 PM
Ingo,
By your own words:
"Why did gold become "Money"? It became money because gold evolved as the "Standard of Value". Gold is valuable in a refined format. In order to produce gold in a refined format, a certain amount of work (joules) is required to be expended."
"Gold is the "Standard of Value", meaning the amount of work (joules) required to obtain a certain amount is used as bench mark against which all other products and services are judged."
Gold gets its value from human effort performed. So it would seem, human effort, work, joules is the pre-existing standard of value. Men only agree that gold will be the unit of measure, as has been done for thousands of years.
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Posted by Ingo Bischoff on 04/21/11 07:01 PM
@ Dave Jr
Human society during its evolution went from "Hand-to-Mouth" exchange during the period of the "Hunt" to a "Barter System" at the advent of agriculture when surpluses occurred. The constraints of the "Barter System" were the lack of a standard of value limiting exchanges in space and time.
The solution to the limitations of space and time attached to the "Barter System" was found by the introduction of "Money". Money is an intermediate "good" of such liquidity (constant marginal utility) that traders readily accept this commodity in lieu of any other. Over the last 3,000 years, gold has become the sole commodity with constant marginal utility. "Gold is Money and nothing else" (The words of J. P. Morgan before the Pujo Committee in 1911.)
Why did gold become "Money"? It became money because gold evolved as the "Standard of Value". Gold is valuable in a refined format. In order to produce gold in a refined format, a certain amount of work (joules) is required to be expended. Due to the special physical and chemical characteristics of gold, the amount of work (joules) required to obtain refined gold has remained remarkably constant over 3,000 years. Alchemists throughout centuries have attempted shortcuts, but to no avail. Gold still has to be mined and refined. It cannot be merely produced by an industrial or chemical process.
Gold is the "Standard of Value", meaning the amount of work (joules) required to obtain a certain amount is used as bench mark against which all other products and services are judged. The ratio is known as "price". As the "Standard of Value", Gold has no "price". Otherwise trying to obtain a price would be like trying to solve an equation with only variables.
One may argue that Platinum has the same physical and chemical characteristics as gold, and it takes roughly the same amount of work (joules) to mine and refine it. Why is platinum not "Money"?
Gold has a history of being money which goes back 3,000 years. Platinum has not. It is strictly that.
Platinum is a commodity used in catalytic converters, etc. Copper is a commodity used in the construction industry and as a conductor. Copper pennies are the still used as monetary metal, but has no effect on the commodity price. Silver, which was used to establish the value of the U.S. Dollar was valued in terms of gold at the ratio of 15:1. Silver used as money proved to be more practical for small purchases because of its divisibility, but the value of silver was anchored to gold not the other way around. This became clear when the silver finds in 1858 became much greater in relation to gold and the gold to silver ration fell apart. The 1853 Coinage Act actually ushered in a de facto Gold Standard. The de jure Gold Standard came in 1900.
Gold is by far and away the most prolific commodity on earth, if judged by the existence of above ground inventory based on annual production. There are 80 years of annual production of gold in vaults all over the world. The amount of annual production of platinum in inventory is 2 years. The amount of annual production of copper in inventory is years or 3 month. The annual production figures for silver and the above ground inventory of silver are hard to obtain. (There are various reasons for this.) Silver is mostly an industrial commodity today. Also, the stock to inventory flow for silver is easily accomplished. Silver may still be considered a monetary metal for use as currency, but it is not "Money" by definition meaning used as the "Standard of Value" to obtain "prices".
My whole point in the argument with the DB is that the fixed "Standard of Value" provided by gold has been removed from currency and replaced by a "Variable Standard of Value" which is Arabian crude priced in USD(FRN)/bbl. If you want to convert the prices for goods and services obtained by using the "Variable Standard of Value" into prices which would otherwise have been obtained by a "Fixed Standard of Value", all you need to do is consult the precious metals markets and reverse the ratio in the quotation. The reason this works is because the value of a bbl of Arabian crude tracks to value of the USD/FRN in terms of gold perfectly. Just check the charts.
Reply from The Daily Bell
Very impressive as usual with the exception of your insistence that gold be anchored by a government quotation. Let the free-market decide. There have doubtless been plenty of episodes in history when gold and silver floated in value to one another and the market itself determined pricing.
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Posted by Dave Jr on 04/21/11 06:40 PM
What is more important, the creative productive abilty of men, or a rare earth element. You say a rare eath element. The PE know better.
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Posted by Dave Jr on 04/21/11 06:35 PM
Gold and silver, is way less important to the PE than getting you to agree on THEIR accounting system. If we traded widgets, they would set out to own and control the supply of widgets.
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Posted by Dave Jr on 04/21/11 06:04 PM
"David Rockefeller is supposed to have once said that the trick in life is to own nothing and control everything."
Trusts. When you own nothing, you are taxed nothing. Create a ficticous non-profit entity, put all your worth into it, no tax, but retention of control.
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Posted by Ingo Bischoff on 04/21/11 05:40 PM
@ DB
"You seem to believe central banking in its archaic form is a good."
How you can come to that conclusion escapes me. However, that is besides the point.
You claim that it is power and control exercised by the City of London elite, which yields "real" money and the ability to control the MONETARY SYSTEM.
I'll ask again:
1. What is "real" money?
2. How does power and control yield this "real" money?
Could you please be specific and direct in answering these two simple questions? I do appreciate your answer.
Reply from The Daily Bell
2. Real money is gold and silver.
3. Power and control is exercised by those who control central banks. The ability to print money from nothing allows power elites (that control these "banks") to buy all the gold and silver they want by printing money for nothing. Power elites are interested in acquiring control of the world and everything in it. So generally they are more interested in "control" than gold and silver per se. The Rothschild family alone is said to be worth trillions though of course no one knows for sure. David Rockefeller is supposed to have once said that the trick in life is to own nothing and control everything.
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Posted by Dave Jr on 04/21/11 05:36 PM
So if it were found, it could change? Then it doesn't meet your definition.
Reply from The Daily Bell
Ha, you have discovered a tautology. Only trouble is we have no idea what you are talking about.
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Posted by Dave Jr on 04/21/11 05:31 PM
If a better resource was discovered, like unobtainium, and everyone agreeded to use it as money; what would happen to silver and gold? It would find its' market value based on how much effort it takes to mine and refine just like all other commodities. Gold and silver is not ordained from the heavens as money.
Reply from The Daily Bell
No, but that's just the point. Nothing better has been found. Not yet anyway.
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Posted by Dave Jr on 04/21/11 05:25 PM
"gold and silver and quantitatively and qualitatively different than wheat or coal, etc."
How is this so? They all come out of the ground and require human effort to refine, how are they different? They are different only in agreement among men. I'll repeat, "an instument devised by Man". Agreement is man made, and not a natural resource.
Reply from The Daily Bell
No David. A money metal has to be divisible, rare, beautiful and transportable. Four things and only money metals fulfill these criteria. And only gold and silver are historical money metals.
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Posted by Dave Jr on 04/21/11 04:54 PM
Money is not a natural resoure. It is an instument devised by Man. That is not to say that gold and silver can not be used as money, in barter transactions. So long as we know the difference.
Reply from The Daily Bell
No David, gold and silver and quantitatively and qualitatively different than wheat or coal, etc. Money has properties and only gold and silver fulfill those properties. Gold and silver are money and have been recognized as such (valuewise anyway) probably for tens of thousands of years.
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Posted by Dave Jr on 04/21/11 04:48 PM
"Gold and silver are real money."
Gold and silver are natural resources, like oil, wheat and uranium.
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