Lately, I have been researching Bitcoin. I've come across people whom are concerned that Bitcoin could be a 'world currency' and that this is a concern. A concern regarding a 'world currency' may be due to a potential nefarious authoritarian control of the currency and perhaps other reasons I'm not aware of (ya..well...deflation or inflation etc). As an owner of Bitcoins, Gold and Silver, I'm now well acquainted with posing the same question towards my Gold and Silver holdings as well as my Bitcoins. If Gold or Gold/Silver were to be the 'world currency' I would personally be elevated into a very wealthy position (Bitcoin too if it were.blah blah ). For simplicites sake, lets just say 'gold' rather than 'gold/silver'. Question: 1) Should gold be the 'world currency'?. (beyond issues of divisibility) Yes or No If you answer is 'No' go to Question 2. Question: 2) Should gold only be used in certain countries?. Yes or No If your answer is 'Yes' go to Question 3. Question: 3) Why exclude certain regions of the world from gold as a currency?. Open question... Question: 4) What do you suggest? Personally, I think people should be free to decide for themselves within a free-market situation where various options can flourish, and any Governments have to compete with their currency (but have not put a ton of thought into this). I'm also aware of theories such as the Mathematically Perfected Economy (MPE) for example. Although, there are no practical example of this theory in action that I know of. I don't understand it very well. Link: http://australia4mpe.wordpress.com Sodo people advocate a 'gold currency' for the world?.
That's irrelevant. I totally agree There should not be any world currency, but, gold is the best physical form of wealth that could back the issuance of private currencies.
Goanna, you are correct. @Bullion Stacker, the quantity of whatever is chosen as a currency is irrelevant. What is relevant is the qualities that the currency possesses, these qualities do not require any human intervention, ie they exist even if humans did not. The population of the planet has no bearing upon the value of a chosen currency, but it does hyave an impact upon it's availabilty, which in turn drives its exchange price higher or lower. A good does not have to be shared equally amongst a population for it to be considered a currency. In fact scarcity is a prerequisite. In a way, it's not irrelevant I guess lol.
Okay but if gold were to be the main currency, then it would be traded in exchange for goods and services correct? Ie, going to buy a burger from McDonalds or to pay the gardener for mowing your lawn. There is just simply not enough to perform such actions. I think I am missing the whole point but anyway lol
It doesn't have to be involved in the actual transaction as long as the credit note used or the currency used is backed by a store of gold then that is not a problem. This is where trust in the issuer of the currency note or IOU is imperative. Obviously, "In God We trust" has proven to be a bit lame.
4.. make sure you have your hands on everything.. gold silver bitcoin litecoin.. any coin.. realestate.. stocks...
We have the same problem here as we do with fiat - it's based on trust by virtue that there is simply not enough gold to back the currency in entirety - it would have to be a fractional system and very, very fractional at that.
I don't think I agree with this statement. As it stands already, a very large portion of the world survives on a coupe of $ a day and what is it? Something like 10% of the people have 90% of the wealth - it does not need to be equally divided among people. Plus, gold can be broken down to grams, and I don't see why this could not be done, say for instance mixed with other non valuable metals in coinage.
But our current system is not based upon trust, it is based upon coercion. That is, it is illegal to use any other currency that is not legal tender. Trust plays no part in our present currency.
It can be a fraction of a fractional - just water it down with something cheap, like cupronickel. There's no reason why a dollar coin can't have 1/1389 of an ounce of gold in it. The problem is after a while we begin to trust that it is actually there, and then the issuer waters it down a bit more........
Buyers of our government debt trust that we will be taxed sufficiently in the future to repay said debt, and they trust that the repayment, will be made in a currency that will still have some purchasing power. I don't think the US will be able to say the same for much longer.
I think you need to define what you mean by 'world currency' as the thread has gone all over the place. The US dollar is considered the 'world currency' because it is the primary currency used for international transactions. Every day transactions are conducted in local currencies and not the 'world currency' (apart from in the US obviously and some countries using the USD as a defacto local currency)
It's not a question of "how much" there is, but a question of PRICE! 0.0001 oz could be worth a house or 20 oz could be worth a new house. It's rather a thing of proportions. Bitcoin is a good example: you could buy 1 BTC for a few cents a few years ago. Nowadays to buy 0.01 you need 8-9 USD! Today 1 oz of goldcosts about 1,200 $. One day it could cost 50,000 $. You never know... There is enough gold, there is enough silver to back a currency. The only question is how much value you attribute to a unit of gold. Otherwise put as an example: how many ounces should back 1 unit of currency? 1 ounce? 0.001 oz? If any major currency (let's say the yuan) would start getting gold-backing, the value of gold will start going very high. There may come a day when you will only be able to buy 0.01 oz of gold with today's 1 ounce's price. Just like it happened with Bitcoin. Then again: this is just a theory and I don't think any currency will be backed by gold anytime soon.
A single united currency that everybody in every country uses worldwide. The currency is fungible worldwide. In the context of those whom fear a 'world currency' (and this is the context of this thread) - this means an enforced 'world currency'. The only currency accepted by institutions, corporations, businesses and Govts globally.
