With the advent of the swiss parliment discussing the Gold Swiss Franc http://www.zerohedge.com/news/swiss-parliament-examines-‘gold-franc’-currency-today , I think its time Australia starting heading the way to introduce a sister currency. A currency that would run parallel with the A$ and acutually have gold content. Something like a normal copper/nickel coin with a amount of gold in the middle equiv to the current value. Would be an excellent way for people to save and continue to use fiat for the everyday stuff? The gold should be sourced from Australian producers only to keep the money in Australia. Any thought on this?
Better off using bank notes or warehouse receipts for gold. As long as they are 100% backed by gold or silver then it could work. The main problem would be fixing the ratio between the two currencies, otherwise, I would spend the fiat and hoard the specie, as would everyone else. Might as well just buy gold and silver. if you can get the Gov to accept the gold for taxes etc. then you might have better luck.
If you do it right you only need 1 currency. Just ditch the idea of dollars and pounds and use metric weights of silver. Then you let private companies mint their own currency to the Australian standard. The customer can chose which currency to adopt based on their trust and support of the company issuing the currency. Charities can issue their own currency which you can buy with the last of your Aussie dollars and make a donation at the same time. Of course the mints will be able to produce large volumes cheaper so will have a competitive edge but smaller local projects would be able to benefit as well. Collectors would go crazy of course. As most transactions would still be done by credit card or bank transfer there is no need for everyone to have a massive safe in their house to house their silver, banks will just have to have bigger vaults and actually have money in them.
That wash goes all the way through, Bronze aluminium alloy. If your wash comes off you probably have gold painted lead.
How about an Aussie Krugerrand? 1oz 22k, no face value. Stick a euro on it and you could call it the "Wallaroo" :lol: Then there's Hugo Salinas Price's idea for a new Greek silver drachma - a circulating precious metals coin with no face value, but a daily value published by the central bank, but that can only be requoted at a higher price. So if you had a 1oz silver coin and spot was $32.50, the nominal value might be quoted at $33 - but if spot fell to $31, the nominal value would remain at $33 to protect your purchasing power. So basically the nominal face value of the coin would always be the historical maximum spot value of the coin plus a small buffer premium, e.g. historical max spot rounded up to the next dollar. Spot is $32.00 to $32.99 - published value is $33 Spot rises to between $33.00 and $33.99 - published value upgraded to $34 Spot falls below $33, published value stays $34. You would probably use a London daily fix etc to determine what spot price was used to minimise intra-day fluctuations in value. Pretty much guaranteed to keep abreast of inflation, so you could save in cash. Banks would love that Or we could all start using XAG denominated currency er, intrinsic tender, it's not currency
Even easier to extract when the value of the gold goes higher than the face value, don't need to smelt old coins, just burn the notes! I think that having notes redeemable on demand for a certain amount of gold would be enough but intrinsic value would be better. That way you can burry the notes and when your relatives dig them up in 100 years time they are still worth something. Burying Australian notes now would do you no good as in 100 years time you might not be able to exchange them for Australian Roubles.
Jislizard is right, private currencies or gold backed bank notes. There is a real problem using precious metals in circulating currencies:
My Liberty Dollar Banknotes were warehouse certificates, redeemable on demand, however I do not think the FBI are redeeming them at this time. When the FBI raided the warehouse they confiscated the gold and silver belonging to the people who owned the certificates, hardly any of the seized gold and silver belonged to the "Domestic Terrorist" Bernard Von Nothouse. None of the people who have had their property taken have been accused of any crime. This highlights the importance of having the Government involved. I read that the Mexicans were thinking of having a silver circulating coin as well http://www.thebullandbear.com/articles/2010/0710-Silver.html This was a while back and nothing seems to have come of it.
Just do this. Australian legal tender for whatever the metal content happens to be worth in AUD today.
The American Open Currency Standard (AOCS) is trying something similar, whilst also trying to distance themselves from the only private precious metal currency that actually worked (Liberty Dollar) http://www.opencurrency.com/
The main problems which keep coming up are... Small denominations for everyday purchases. Either you debase the metal or you have tiny little coins no one can see. Fakes, these exist anyway, most notably the 1 coin. In Australia there were a few $2 fakes but not enough to cause a problem. There are plenty of fakes of predecimal coins which were circulating at the time. Suddenly it becomes worthwhile to fake Australian coins. Clipping, shaving, shaking them up in a bag, numerous ways of reducing the metal content. Do we want to go back to weighing our coinage at each purchase? Comparing the fixed face value to an moving intrinsic value, eventually it will be worth melting down the coinage. Manufacturing costs, people want to pay $1 for a $1 coin, no seigniorage. Gresham's Law, if you have two circulating currencies the one with intrinsic value (good money) will be hoarded and the debased or fiat money (Bad money) will be offloaded. Overseas people buying Australian currency and it leaving the country. The Government loses its manufacturing costs. Canada brought out its $20 silver coin (about $7 worth of silver in it from memory) for $20. You swap $20 fiat for $7 specie and it is still worth $20, what could go wrong? You can't spend it, it is a novelty and the mints of the world churn out so many "coins" that no one will take them seriously. None of the problems are insurmountable but it does seem to be in the "too hard basket" Plus the voters don't seem to be clamouring for it so why bother?
Why on earth would any government realistically entertain the option of introducing a currency they cannot steal through inflation? They just spent the last 100 bloody years getting rid of those protections turning your money into 1s and 0s! The government REQUIRES you to be unable to protect your wealth from this process, why would they actually want to introduce a fiscal policy that's directly retrograde to how they function? If they reintroduced a currency once more that stops them being able to steal your wealth, does anyone realise what the impact of that would be on society and the awakening process of the masses? Big guv has the public right where they want them today, why would they want to change that? Besides, your PM coins are already 'money' in the literal sense. They're both intrinsic and have a nominal value. The moment you can take those silver coins down to the store and buy their nominal value's worth of goods and services for the face value, it's effectively game over for the fiat model and with it, a complete reboot of the system. Don't hold your breath hoping for that. It will not happen unless there's no other options left to the policy makers. The very LAST thing they want here is for people to abandon the system they currently have in place... it'll render them powerless. May as well ask the chook why it doesn't want to take the axe to cut off it's own head. It's just not logical.
For someone that ridicules the status quo so regularly, I find that post somewhat hypocritical AusPM?
