100 percent gold backed system
Can’t help with the numbers, but Professor Antal E Fekete is a proponent of separate gold and fiat currencies in the expectation that fiat money would perish pretty quick in such an environment, see here and read all his stuff. ’tis truly amazing, but heavy (as befits gold) going. He says that linking gold directly with USD will simply not work.
In another post, I mentioned a step in the Prof’s direction: the use of gold itself as currency, Wiki DGC (digital gold currency). The Prof extends the simple use of coin to the creation of 91-day bills that are, literally, "as good as gold".
Professor Antal E Fekete takeon things makes sense and is real scary.
Thanks for the link Ted
To get deep into these theories in my opinion is counterproductive to your task at hand .. Mises (Rothbard) and Fekete were at odds on their views (ARTICLE) on calculating gold values. It will have you going back and forth trying to figure things out, and reminds me of an old poem ..
The centipede was happy quite
Until the toad, in fun,
Said, pray, which leg moves after which?
This raised her doubts to such a pitch
She fell distracted in the ditch,
Not knowing how to run.
My point is, buy as much physical gold as you can possibly afford, (Krugerrands seem the easiest to acquire right now) if you can’t afford any .. buy silver.
I have read Feteke’s articles and now am reading on mises.org.
In the mean time every single euro i have left is in gold. I buy in Thailand so physical gold is very easy, just walk to the shop on the corner and buy it.
The reason i asked is to have an idea of what is going to happen after the collapse of the dollar. A dollar that is worth 1/10000 oz or a dollar worth 1/1000 oz is quit a big difference. You can ask also will it even matter? But having an idea of how the number will be can help in judging if the reserves of the bank at this moment will be sufficient to keep a strangehold, or if they are going to loose it.
To get deep into these theories in my opinion is counterproductive to your task at hand .. Mises (Rothbard) and Fekete were at odds on their views (ARTICLE) on calculating gold values.
Thanks, Tom. A fine article which hurt my brain but appeared to make good sense. The fractional reserve system, as opposed to 100% gold, made sense too. However, I did get stuck when "bank notes" appeared.
I can see that a bill of exchange would be directly linked to gold, irrespective of the fraction of the reserve; and did I get it right that the fraction of gold reserve need not be mandated by any law or regulation?
Reason I ask is that I’m having difficulty imagining the value of a banknote vs. goods and services. Is our dollar "bill" the equivalent of a banknote i.e. are banknotes "fiat"?
Item of trivia: Paper money in England (where I’m from) is called "notes" as opposed to "bills" here in the USA.
OK Ted, we have two adversaries, both of which are for a gold backed economy, fighting among each other, each one determined to prove the absolute purity of their doctrine. Ten minutes into either ideology I am already lost in the language of financial science & unfamiliar acronyms … then along come what I call the groupies for Fekete and Rothbard who try to simplify things for the not so scientific (me). Some of their links are bad now, so I have to try to find where they are …
I lean toward Fekete, just because he seems to think more logarithmic than linear, such as his acceptance of the "fullerton effect" which he describes in "Where Mises Went Wrong".
Long story short.. I feel like I’m wasting my time quibbling over which gold backed economy I am for or against. The central banks hate them both .. that’s good enough for me.
"The limits of my language are the limits of my mind. All I know is what I have words for."
— Ludwig Wittgenstein
Swiss gold bullion in huge demand as trust in banks dives
gold refiners are having great difficulty in keeping up with demand for
gold bullion leading to long delivery times as investors wary of other
stores of wealth.
Author: Arnd Wiegmann and Lisa Jucca
17 Dec 2008
MENDRISIO/ZURICH, Switzerland (Reuters) –
off by grey concrete walls and barbed wire, the workmen in protective
glasses and steel-toed boots at this smelter cannot work fast enough to
meet demand from the nervous rich for gold.
This refinery near Lake Lugano in the Alps is running day and night
as people worried about recession rush to switch their assets into
something that may hold its value.
"I have been in the gold business for 30 years and I have never
experienced anything like this," said Bernhard Schnellmann, director
for precious metal services at the refiner Argor-Heraeus, one of the
world’s three largest.
"Production has dramatically increased since the middle of the year.
We cannot cope with demand," said Schnellman, wearing a gold watch on
Spot gold hit a record $1,030.80 an ounce on March 17. It fell below
$700 in late October, partly because investors sold their holdings to
cover losses in equity and bond markets hit by the credit crisis, and
is now around $830 an ounce.
link to the rest of the article…..