Gold in them thar Bills...
Now, I realize that there is something romantic about Swiss bankaccounts, but lets not fool ourselves. Gold in the Zurich Free Transit Warehouse depends on the good graces of the Swiss government. After WWII, the Swiss ended up with a real pile of Nazi gold in their vaults because they had been remaining neutral during all of these years. The US demanded the gold because it won the war. Here is an account from Paul Erdman's _The Swiss Account_, a docudrama about the time period. It is a work of fiction, but the true parts are as true as any history book. He gives footnotes. Where that gold was concerned, even before the war ended, the Allies threatened to maintain an economic boycott on Switzerland unless it was turned over to them. The Swiss government agreed and also promised to relinquish all other German assets in Switzerland, such as bank accounts, once it was determined how much was involved. So no embargo was imposed. This promise was subsequentally reaffirmed in a formal agreement signed in Washington after which the Swiss simply stonewalled. There was no proof, they claimed, that they had received any looted gold from Germany. And as to the Nazi bank deposits, there was no way under Swiss law that private property could be seized. They insisted that the netire matter be turned over to an international court of arbitration... which would have taken years. In the end, the Allies caved in. On August 28, 1952, in return for a lump sum settlement of ninety million dollars, the Allies concented to declare all of the claims against Switzerland arising out of World War II as satisfied. That amount represented no more than five cents on the dollar. The rest was simply kept by the Swiss, although a small amount was eventually given to the Red Cross. Now, as it stands, I really don't think that gold in a Swiss vault is , without question, better than US paper money. I can pay my US taxes in US currency, but I can't eat gold. It's just shiny and neat. It's great if you need to make gold chains and rings, but it's not that great for anything other than electronics. In my computer, the silicon is worth more than the gold. -Pete r
Peter Wayner says:
Now, as it stands, I really don't think that gold in a Swiss vault is , without question, better than US paper money. I can pay my US taxes in US currency, but I can't eat gold. It's just shiny and neat. It's great if you need to make gold chains and rings, but it's not that great for anything other than electronics. In my computer, the silicon is worth more than the gold.
As for "I can't eat gold", you can't eat U.S. Dollars, either. If you need U.S. Dollars, Marks, Pounds, Yen, or anything else, and you have gold, you can simply sell some gold. If you need food, you can buy it with currency purchased with the gold, or can purchase it with the gold directly. As for "in my book, silicon is worth more than gold", I'll happily trade you 100 kilos of silicon for 100 kilos of gold any day you like. Assuming you aren't fibbing, you should take the trade, since the silicon is worth more to you. Of course, you'd be a fool. Silicon is plentiful, and costs pennies the kilo. Gold is not plentiful -- the market value is around $10,000 the kilo. Perry
As for "in my book, silicon is worth more than gold", I'll happily trade you 100 kilos of silicon for 100 kilos of gold any day you like. Assuming you aren't fibbing, you should take the trade, since the silicon is worth more to you.
Of course, you'd be a fool. Silicon is plentiful, and costs pennies the kilo. Gold is not plentiful -- the market value is around $10,000 the kilo.
Perry, I think its foolish to refute it simply on a literal basis, but then again, that's just lil' ole me. One could reasonably argue that you simply can't walk into the corner 7-Eleven with a pound of gold and purchase 475 Big Gulps (tm), but then again, there's an advocate for each point of view (ie, Sternlight). I personally like the gold/silicon comparison, if taken from a philosophical viewpoint. Information is arguably the gold of the future, and strong crypto helps broaden the spectrum for each and every one of us. Cheers, _____________________________________________________________________________ Paul Ferguson Mindbank Consulting Group fergp@sytex.com Fairfax, Virginia USA ferguson@icp.net
Paul Ferguson x2044 says:
One could reasonably argue that you simply can't walk into the corner 7-Eleven with a pound of gold and purchase 475 Big Gulps (tm), but then again, there's an advocate for each point of view (ie, Sternlight).
I can take the pound of gold to MTB down the block and have dollars, yen, or anything else I like, within 15 minutes. I can then take those to buy Big Gulps. Perry
Perry Metzger writes:
As for "in my book, silicon is worth more than gold", I'll happily trade you 100 kilos of silicon for 100 kilos of gold any day you like. Assuming you aren't fibbing, you should take the trade, since the silicon is worth more to you.
Of course, you'd be a fool. Silicon is plentiful, and costs pennies the kilo. Gold is not plentiful -- the market value is around $10,000 the kilo.
I suspect what Peter Wayner was referring to was either pure silicon, which is indeed expensive (dollars per gram no longer in my memory bank, alas), or silicon that has been processed into SuperSPARCS, Pentia, and the like. Not raw-out-of-ground silicon (from beach sand and even rice hulls...no lie). A tiny sliver of silicon is much more valuable gram fro gram than gold is. Even a blank wafer of ultrapure silicon may be...I'd have to do some calculations and get some current prices. Be this as it may, electronic money depends on _reputation_, on the expectation that a depositor or payee will get what he thinks he will, whether in gold, in dollars, in francs, in Safeway discount coupons, or in Get Out of Jail Free cards. The stability of the final currency, inflation rates, etc., are orthogonal to the issues of expectation and reputation. That is, when one opens a bank account in dollars or rupees, one worries about the bank returning the dollars or rupees, not the "meta" (and important, but at a different level and time horizon) issues of the ultimate fate of the rupee. In any case, free banking means accounts can be denominated in whatever the market wants...chunks of silicon, gold coins, Xeroxed Slovenian currency, or whatever. --Tim May -- .......................................................................... Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay@netcom.com | anonymous networks, digital pseudonyms, zero 408-688-5409 | knowledge, reputations, information markets, W.A.S.T.E.: Aptos, CA | black markets, collapse of governments. Higher Power: 2^756839 | Public Key: PGP and MailSafe available. Note: I put time and money into writing this posting. I hope you enjoy it.
Be this as it may, electronic money depends on _reputation_, on the expectation that a depositor or payee will get what he thinks he will, whether in gold, in dollars, in francs, in Safeway discount coupons, or in Get Out of Jail Free cards.
Since the topic of backing seems to go towards gold, what about the purity of the bullion and who (which government) presses it? Gold pressed by the Canadian government at .999 troy oz might not be worth a whole lot as backing if that government collapses tommorow. What's to say it isn't iron pyrite or any similar looking material if the government isn't there to back it? Anything to say on this, Perry? -Alex Reynolds
Alexander Reynolds says:
Since the topic of backing seems to go towards gold, what about the purity of the bullion and who (which government) presses it? Gold pressed by the Canadian government at .999 troy oz might not be worth a whole lot as backing if that government collapses tommorow.
Pardon, but what does the purity of the gold have to do with who mints it?
What's to say it isn't iron pyrite or any similar looking material if the government isn't there to back it?
Have you ever heard of doing an assay? Perry
Since the topic of backing seems to go towards gold, what about the purity of the bullion and who (which government) presses it? Gold pressed by the Canadian government at .999 troy oz might not be worth a whole lot as backing if that government collapses tommorow.
Pardon, but what does the purity of the gold have to do with who mints it?
My parents used to live in Canada and purchased some gold there; I was using Canada merely as an example. But the question of how the reputation of a country might effect the reputation of its gold reserves stands.
What's to say it isn't iron pyrite or any similar looking material if the government isn't there to back it?
Have you ever heard of doing an assay?
Yes, but that would be at the expense of the owner, and if it looks like gold, feels heavy in the hand like gold, and if it has the word Canada and the number .999 stamped on it, then people (bankers) might take it at face value (or might not, depending on the stability of that country).
Alexander Reynolds <chrome@jhunix.hcf.jhu.edu> writes
Since the topic of backing seems to go towards gold, what about the purity of the bullion and who (which government) presses it? Gold pressed by the Canadian government at .999 troy oz might not be worth a whole lot as backing if that government collapses tommorow.
Gold is gold. As a jewelers son I can assure you that it is quite easy with a touchstone and a few chemicals to assay the gold. This is what makes gold such an easily convertable currency, you can easily determine the purity and weight of the bullion. I have seen coins pressed by the 17th century spanish empire (from the Atocha, mostly silver, but a few of the gold ones as well) that one could still negotiate today. The value of the coin or bullion is not that it has the backing of a particular government, it comes from the material used. This very fact is what distinguishes gold and other scare materials from paper currency. If the U.S. government collapses your dollars are going to be just paper, but your gold coins will always be gold and can always be used for negotiation. This is why gold increases in value as governments and economies become unstable (e.g. the recent problems in Russia caused a slight increase in the price of gold as more people bought it, just in case...) because it will always have a value regardless of which government happened to package it. In fact, it need not even be packaged/minted by a government; I could just as easily melt down some jewelry and package it as bullion myself and anyone else who I wish to negotiate my gold with could easily verify the weight and purity of the gold themselves. jim
participants (7)
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Alexander Reynolds -
ferguson＠icm1.icp.net -
Jim McCoy -
Perry E. Metzger -
Peter Wayner -
pmetzger＠lehman.com
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tcmay＠netcom.com