Gold / silver money standard, will it ever happen?

[LoveSilver]

As I see it silver and gold are the only and ultimate universal values left standing. Everything else is more or less a paper c*ap, right? Especially fiat money. Cryptos are about the same or worse. Not ready for the prime time replacing a monetary system. In my mind, precious metals were always and still are the only natural choice to back up paper money or better, be used directly as money.

What do you think? Will common sense and financial prudence prevail and we start seeing currencies 100% backed up by gold and silver? There is an article about it just posted yesterday: https://medium.com/datadriveninvestor/playing-chicken-with-gold-standard-4a1f93aacdf2?source=friends_link&sk=0ba562e19c05e22a8e3090661ebd49a0  

[goldmember44]

A very good read.

[DrKarlMoneys]

I don't think we'll ever see 90% gold and silver coins in circulation as currency again but the Chinese and maybe Russians look to be stockpiling gold with a view to making their currency redeemable for PMs a bit like the US silver certificates. Doubt we'll ever see even that in the West though.

[Abyss]

Long video released yesterday but 59 minutes in the Q&A answer the question Gold / Silver money standard, will it ever happen?

 

[Scuzzle]

Willl never happen IMO, it keeps governments accountable and in check and they have all got too used to not being subject to this, I would reckon they will bypass paper and go straight to crypto for the plebs while still trying to make out gold is not a good investment so us plebs don't encroach on their money.  There will certainly be no full return to a gold standard - possibly only initially to give confidence to crypto before taking it off it eventually, they will just run the same scam again.

[AgCoyote]

It will happen out of necessity. The credit driven, social welfare state is completely unsustainable and there is too much political tension/potential debt crises that could wreck currencies for this to last forever. Here's a great presentation by Grant Williams, it's well worth a watch.Grant Williams on the return of the Gold Standard.

[FoolzGold]

No.

[Au79]

When it happens, it does.

When it doesn’t happen, it doesn’t.

It happens all the time in the history of precious metals. There is a lot of noise in-between the decades generational turning single event. Your faith will be tested until that day come 😆

 

[PansPurse]

Well, you can't eat gold or silver, if you're talking absolute value for people, it's air, water, food, shelter. Masloe's hierarchy of needs.

[Au79]

“Maslow Hierarchy of Needs”...  a worker must labour, so freedom is limited to merely the choice of payment 🤔

 

[Agpanda]

no, will not happend

 

[LoveSilver]

I hope that people who voted "no, it will never happen" are proven wrong. I believe everybody here would want that but members with "no" opinion believe that realistically it will not happen.

I am an unwavering optimist. Just two days ago Prime Minister of Malesia called for common Asian currency that is backed up by gold. I think his position is more than just wishful thinking.   He wouldn't just blub something to make the news. People commented massively in support of that PM on YouTube. They also mentioned that the last person who wanted to do that for the African continent was assassinated but American supported rebels/mercenaries. Yes, I am talking about Gadaffi. I think times and places are changed for the better. I don't think Maelsyan PM is in danger like that. Besides that, as written in an article we are commenting about,  there is an increased number of countries that want gold standard and have a big stick behind them so are not afraid of the wrath of the US.  

[sixgun]

Some countries have enough gold and some have sold their gold.

Circulating gold and silver will never come back outside of a Mad Max situation - but asset backed cryptos are happening - in July Kinesis goes live (God willing) and you will have a 100% 1:1 gold and silver backed currency. So to say it will never happen isn't true b/c it is happening.

There is a lot of talk about gold being used in Asia - it is being used between countries - it is happening. They are dumping the USD and using gold trade notes and local currencies, settling the balance with gold. 

[erv]

9 hours ago, PansPurse said:

Well, you can't eat gold or silver, if you're talking absolute value for people, it's air, water, food, shelter. Masloe's hierarchy of needs.

You can't eat bits and bytes either.  You can eat paper; but, there is no nutritional value in that.

[Guest]

Once upon a time cheese was a form of money. And salt. That's why we have the word salary. There are communities all across the German speaking world (Tauschnetze) where they still barter food and work tools. So, cash and electronic debt are not the only form of money.

[dicker]

I think where a country gets into big trouble with inflation they it is possible they could offer something like gold depository receipts i.e. a bit of paper that can be redeemed for gold or equivalent currency.  However I am of the mind that if a government got into the situation where hyper-inflation had taken hold then people would not trust them with certificates.

On this basis I personally think the odds are low that we will see gold or silver backed currencies in the western world in the next 20 years - who knows after that.

Best

dicker

[Groundup]

On 06/06/2019 at 16:26, sixgun said:

Some countries have enough gold and some have sold their gold.

Circulating gold and silver will never come back outside of a Mad Max situation - but asset backed cryptos are happening - in July Kinesis goes live (God willing) and you will have a 100% 1:1 gold and silver backed currency. So to say it will never happen isn't true b/c it is happening.

There is a lot of talk about gold being used in Asia - it is being used between countries - it is happening. They are dumping the USD and using gold trade notes and local currencies, settling the balance with gold. 

AMEN to that brother

[MetalMandible]

Entertaining article, thanks for sharing!  

[Bimetallic]

On 05/06/2019 at 09:53, LoveSilver said:

As I see it silver and gold are the only and ultimate universal values left standing. Everything else is more or less a paper c*ap, right? Especially fiat money. Cryptos are about the same or worse. Not ready for the prime time replacing a monetary system. In my mind, precious metals were always and still are the only natural choice to back up paper money or better, be used directly as money.

What do you think? Will common sense and financial prudence prevail and we start seeing currencies 100% backed up by gold and silver? There is an article about it just posted yesterday: https://medium.com/datadriveninvestor/playing-chicken-with-gold-standard-4a1f93aacdf2?source=friends_link&sk=0ba562e19c05e22a8e3090661ebd49a0  

There isn't enough gold or silver to 100% back major currencies like the USD. At least not without dramatically inflating the price of gold and/or silver, which would have noteworthy distortionary effects.

Hardly anyone cares about gold and silver, so they can't be universal values. A universal value is, well, universal. People who are focused on making money or changing the world are not generally thinking about gold and silver. That could change, but right now we're a very niche subpopulation.

There is a type of gold standard that could work well. It's a gold price standard. I think that's what Steve Forbes and others have called for. It would stipulate a dollar to gold ratio, a price, and then task the Fed with managing the money supply to maintain that price. So for example we could stipulate that 1 troy oz gold = $1,200. Then the Fed would engage in their usual open market operations, expanding and contracting different parts of the money supply to keep the dollar at that level. There would be no need to "back" the dollar with physical gold (though the Fed might still hold some gold, as they do now). As long as you maintained the price standard, you'd end long-term inflation and have great price stability.

I propose a modified version: a gold price standard based on a long-term moving average price of gold, say 200 days or a year. That would smooth it out and make it easier to maintain. There's no need to worry about daily gold price fluctuations in my framework. I'm also much more interested in seeing this happen in the form of a private currency, ideally in a free banking context, as opposed to a government gold standard. I'm not confident that a government could be trusted to maintain a gold standard, even a gold price standard, and I'm not a big fan of government control of money as such.

[Bimetallic]

And probably scratch silver as a monetary backing. Hardly anyone wants that, and it doesn't have anything like the stature of gold. Silver is extremely inefficient right now as a store of small increments of value. For example, premiums on 1 oz silver coins are often 20% or more if you only buy one or a few (Eagles especially). And that's in the US, without a VAT to account for. Gold is much more efficient, with tiny premiums by comparison.

[EdNug]

Gold registered on a blockchain, securely monetised through cryptography and stored in a regularly audited and transparent facility is as secure and solid as money can get. Venezuela have created a (sadly sanctioned) commodity-backed crypto, Russia are talking about launching a gold-backed crypto for inter-state trade, the Prime Minister of Malaysia is suggesting a gold-backed inter-state Asian currency; then there are the personal gold-backed crypto projects of Kinesis, Gold Money and, undoubtedly, a few more.

When gold is remonetised via encryption, the blockchain and transparent auditing it defeats the issue of currency debasement, makes gold practically divisible down to the fraction of a grain, increases its liquidity and velocity and negates the need to carry or personally store any physical metal.

Gold is already being remonetised, and where gold goes silver will likely follow - there is no demand for it yet, but as the silver fiat price takes off and the financial infrastructure is built for blockchain gold then silver will soon be monetised in the same way.  I envision blockchain registered private 'banks', made accountable to government oversight, at which one can deposit ones gold and/or silver in an encrypted digital account and spend/receive it in the contemporary ways.

Encryption and blockchain technology makes it very easy to monetise all PMs, though the central banksters and their lackey politicians and institutions will seek to resist it for as long as possible.

[LoveSilver]

I don't agree with a most what Bimetallic said, but everybody is entitled to opinion. And yes, gold standard is name of the game. It is possible, doable, there is enough gold going around, people have done it before and I believe will do it in future. I think it would be under wrong pretence if gold would be valued at fixed amount in dollars($1200.00 mentioned would be crazy low).

People worked out value the other way around for hundreds of years and I daresay that evaluation is more natural and much more effective. In that article was mentioned something like a litre of olive oil is 1 gram of silver. That's it. There is your true value. No Dollars or Euros or Yens, just exact weight of pure silver. That pricing and economy would work much better and would be pretty much universal for wide range of geographical locations. 

Bimetallic is right in one thing, silver is dirt cheap, nobody wants it (except us here ), but with just tad of imagination one could see silver coins and rounds absolutely reigning everyday lifes! Groceries, transportation, small items, food ... things person buys every day with paper money could be purchased in silver even more effectively.

EdNug's visions are very possible and I think things will unveil that way. They will have to if we want to get out of mud pit.  

[Guest]

On 12/06/2019 at 22:04, Bimetallic said:

 

Hardly anyone cares about gold and silver, so they can't be universal values.

If that is the case, why have central banks been hoarding gold for the last 10 years?

[mr-dead]

I think the next evolutionary phase of money after another global crisis will be asset backed, state issued cryptocurrency (making all "unregulated" crypto e.g. BTC illegal in the process).

It will be backed with oil, gold etc. starting out with "honest" money which will again be watered down through increasing leverage over time and we'll be back to square one in the not too distant future.

 

 

[EdNug]

1 minute ago, mr-dead said:

I think the next evolutionary phase of money after another global crisis will be asset backed, state issued cryptocurrency (making all "unregulated" crypto e.g. BTC illegal in the process).

It will be backed with oil, gold etc. starting out with "honest" money which will again be watered down through increasing leverage over time and we'll be back to square one in the not too distant future.

 

 

The only complication i can see with this prediction is that many states lack the quantity of standardisible liquid assets to make their own asset-backed cryptos possible. PMs are the only things that really work in terms of hard assets because the quality and cost of oil varies greatly and the same applies to gem stones. Its the elemental qualities of Ag and Au that give them their real value.

If your scenario does come to pass then more than a few countries (UK included) will have to adopt foreign gold-backed currencies just to survive. Their mission then would be to accumulate enough gold to launch their own.  Most governments would probably be so daunted by the responsibility and complexity of the task they'd rather pass it up to the regional free trade zone bureaucracies - the EU, ASEAN, NAFTA etc. But, once authority and the decision making process is elevated above that of the publicly accountable state the greedy international banksters will be able to fiddle it and debase just as they always have done. (There's been an interesting argument recently about whether Italy's gold should be stored by the Italian government or by the EU - the EU aren't happy that the Italians have asked to have their custody back.) Which is why I firmly believe that, at the personal level, heavily reformed privately owned banks registered to a publicly accessible blockchain and accountable to government oversight are the most likely future. (Private ownership would also include community ownership, like the credit unions.) At the state level, countries with little to no gold had better figure out how to start cultivating profitable trading relationships with the countries who do have healthy stocks of the heavy elements.