http://plata.com.mx/enUS/More/358?idioma=2
and more anecdotes about trying to talk to countries about silver as currency.
and more anecdotes about trying to talk to countries about silver as currency.
Silver Money? A realistic perspective.
- Thread starter JulieW
- Start date
Pirocco
Well-Known Member
Medium of exchange
Unit of account.
Storage of value.
Medium of exchange, paper, electronic even easier.
Unit of account, no relevant difference.
Storage of value, paper, electronic easily devalued.
Silver, not.
Throwing these functions of money together thus misses some points.
Gresham and Copernicus and who all else? only reference the function of medium of exchange, but actually what happens is that the "bad" money drives the "good" money out of circulation, but ALSO "good" money drives "bad" money out the piggy bank.
And the sole reason that people accept "bad" money as payment is because they are forced by government to do so (legal tender laws).
So Greshams law is actually a government-based law.
Unit of account.
Storage of value.
Medium of exchange, paper, electronic even easier.
Unit of account, no relevant difference.
Storage of value, paper, electronic easily devalued.
Silver, not.
Throwing these functions of money together thus misses some points.
Gresham and Copernicus and who all else? only reference the function of medium of exchange, but actually what happens is that the "bad" money drives the "good" money out of circulation, but ALSO "good" money drives "bad" money out the piggy bank.
And the sole reason that people accept "bad" money as payment is because they are forced by government to do so (legal tender laws).
So Greshams law is actually a government-based law.
Last edited:
SlyGuy
Active Member
It is the best idea theoretically, but there is not enough gold or silver to be the actual money in pure form. What had worked for centuries for ancient civilizations won't work today due to population growth.
There are considered to be roughly 25-35grams of gold and roughly the same amount of silver above ground per person on Earth (yes, much more silver has been mined, but most of the silver has been consumed industrially while the gold has been preserved). That's roughly one 1oz ASE or Lib or Brit or Maple per person in the world. Even if it was all melted down and re-minted in gram coins, which are smaller than a dime, each person would only have 25 or 35 of them. That obviously doesn't work... no matter how much deflation. You could make an average car cost 1 gram of silver or a house cost 1 gram of gold, but there is still nowhere near enough of the physical metals for that to work.
It would have to be some sort of hybrid system where you have the silver and/or gold divided into small pieces and contained in plastic casings or bi-metallic donut coins or clad metal alloy coins to make the coins large enough not to get lost. Counterfeits would be probably be rampant since the bulk of the coin (plastic or cheap metal) is easy to produce and the valuable center or trace content is hard to detect in a case or when it is a small part of the alloy.
For this to work, you could only have milli or nanogram amounts of gold or silver in actual coins, with a maybe very few coins for the rich or for bank transfers containing maybe gram and larger denominations. It could technically work with the right planning, and I like the idea, but the idea of actual .999 gold or silver as money wouldn't ever work with current population size.
As for gold standard or silver standard with paper currency redeemable for the real thing... well, we know how that story ends.
There are considered to be roughly 25-35grams of gold and roughly the same amount of silver above ground per person on Earth (yes, much more silver has been mined, but most of the silver has been consumed industrially while the gold has been preserved). That's roughly one 1oz ASE or Lib or Brit or Maple per person in the world. Even if it was all melted down and re-minted in gram coins, which are smaller than a dime, each person would only have 25 or 35 of them. That obviously doesn't work... no matter how much deflation. You could make an average car cost 1 gram of silver or a house cost 1 gram of gold, but there is still nowhere near enough of the physical metals for that to work.
It would have to be some sort of hybrid system where you have the silver and/or gold divided into small pieces and contained in plastic casings or bi-metallic donut coins or clad metal alloy coins to make the coins large enough not to get lost. Counterfeits would be probably be rampant since the bulk of the coin (plastic or cheap metal) is easy to produce and the valuable center or trace content is hard to detect in a case or when it is a small part of the alloy.
For this to work, you could only have milli or nanogram amounts of gold or silver in actual coins, with a maybe very few coins for the rich or for bank transfers containing maybe gram and larger denominations. It could technically work with the right planning, and I like the idea, but the idea of actual .999 gold or silver as money wouldn't ever work with current population size.
As for gold standard or silver standard with paper currency redeemable for the real thing... well, we know how that story ends.
Pirocco
Well-Known Member
Centuries ago they didn't mine todays (example) 1000 Moz silver annually either.
Apparently population growth went together with production growth.
Why?
Because more people existing means more people producing.
The same applies to gold, houses and any product.
It doesn't need milli or nanogram gold / silver amounts just like it didn't need milli or nano houses.
Redeemable easy-to-trade representations of products are not that special, those are used all day everywhere, in the end, money is just an inbetween step to what you really wanted, well, buying something IS redeeming.
How did that your redeemable story end?
And when?
Ex Bretton Woods agreement wasn't a redeemable for the real thing story. Because governments monopolized that for themselves, everybody else couldn't redeem the dollars for gold.
Also, this isn't / shouldn't be about gold / silver alone, people should be free to chose anything as money, and different currencies could exist simulteanously and compete with eachother. Actually not special either.
Apparently population growth went together with production growth.
Why?
Because more people existing means more people producing.
The same applies to gold, houses and any product.
It doesn't need milli or nanogram gold / silver amounts just like it didn't need milli or nano houses.
Redeemable easy-to-trade representations of products are not that special, those are used all day everywhere, in the end, money is just an inbetween step to what you really wanted, well, buying something IS redeeming.
How did that your redeemable story end?
And when?
Ex Bretton Woods agreement wasn't a redeemable for the real thing story. Because governments monopolized that for themselves, everybody else couldn't redeem the dollars for gold.
Also, this isn't / shouldn't be about gold / silver alone, people should be free to chose anything as money, and different currencies could exist simulteanously and compete with eachother. Actually not special either.
SlyGuy
Active Member
Well, aside from the quantity logistics, the other reason silver would never become the world's money in the near future is that the governments don't have very much of it... most of it is in industry, private banks, or private ownerships. The central governments wouldn't get to control silver as money as well as they could control and manipulate a money system gold, which is majorly held in central bank vaults globally.
...After USD hyperinflate and/or our economy weakens significantly relative to other major ones abroad, the next world monetary system will be one or a combo of the following:
1-New world reserve currency... whichever country has the strongest economy and has currency that hasn't printed to oblivion and/or somewhat gold backed (Chinese yuan probably)
2-Multiple world reserve currencies
3-SDRs (from IMF)
4-Gold standard (probably can't be actual physical gold or silver as the physical money for reasons stated above)
5-Chaos (barter system or anarchy)
...I would personally bet on 5 being avoided (sorry to disappoint some ppl) and IMF beaten out by a hybrid of 1 and 4 above: expect yuan (likely to be gold-backed at some percentage) as the world reserve currency. We shall see, but it is more a matter of "when" than "if" on the USD getting to its end as world reserve currency. Then you can watch yuan do the same thing after awhile... or at least your kids or grandkids can. Good stuff
(many good minds discussing the issue of the next global monetary system)
...After USD hyperinflate and/or our economy weakens significantly relative to other major ones abroad, the next world monetary system will be one or a combo of the following:
1-New world reserve currency... whichever country has the strongest economy and has currency that hasn't printed to oblivion and/or somewhat gold backed (Chinese yuan probably)
2-Multiple world reserve currencies
3-SDRs (from IMF)
4-Gold standard (probably can't be actual physical gold or silver as the physical money for reasons stated above)
5-Chaos (barter system or anarchy)
...I would personally bet on 5 being avoided (sorry to disappoint some ppl) and IMF beaten out by a hybrid of 1 and 4 above: expect yuan (likely to be gold-backed at some percentage) as the world reserve currency. We shall see, but it is more a matter of "when" than "if" on the USD getting to its end as world reserve currency. Then you can watch yuan do the same thing after awhile... or at least your kids or grandkids can. Good stuff
Last edited:
...I would personally bet on 5 being avoided (sorry to disappoint some ppl) and IMF beaten out by a hybrid of 1 and 4 above: expect yuan (likely to be gold-backed at some percentage) as the world reserve currency. We shall see, but it is more a matter of "when" than "if" on the USD getting to its end as world reserve currency. Then you can watch yuan do the same thing after awhile... or at least your kids or grandkids can. Good stuff
Thanks for the great video.
While the USD may stop being a reserve currency, the Yuan won't be the replacement reserve currency in the short to medium term.
There was a time when the Chinese banks in Singapore were marketing Yuan time deposits at like over 3% interest - I can't remember exactly what rate as it was a coupe years back. In comparison, the time deposit rates for Singapore dollars were ridiculously low, maybe 0.1%-0.3% a year? But yet, the Yuan time deposit were not popular. And this is before recent the Yuan devaluation.
Now with US interest rates rising (and Singapore interest rates generally follows the US), the Yuan is now under pressure. If US interest rates are 2%, the RMB interest rates must be much higher just to avoid depreciation.
Last edited:
Bank Of China and others are offering better deals for low spenders as well...
check them out, looks like in matter of years, people will totally move to them instead of local banks
their account is multi-currencies, very convenient to hold RMB as well as taking RMB cash out
check them out, looks like in matter of years, people will totally move to them instead of local banks
their account is multi-currencies, very convenient to hold RMB as well as taking RMB cash out
I'll probably take a look again. So far, it appears that Malaysian banks are offering a better deal. Of course the local banks suck in terms of interest rates.
SlyGuy
Active Member
Yes, it is interesting to see the savings interest rates offered around the world and how they change.
A lot of people in the USA are now using online savings banks, which are likely using foreign banks in turn to offer higher interest than typical USA major banks can?
That is a good idea that I had not considered.
Past couple of months, local banks have been promoting dollars savings accounts. You may not have realized it but since the beginning of this year, dollars are now very much sought after, and the interest is also higher than other currencies so they are popular with depositors as well.
I'll be wary of these foreign online savings banks unless they are big names like HSBC. We'll never know if the cash is lent out to places like Turkey or Argentina.
https://www.zerohedge.com/news/2018...stin-fitts-warns-americans-face-end-financial
Fitts explains, “Right now, economists say the dollar is ‘dangerous and dominant.’ It’s still, if you look at the market shares around the world, it’s still very, very significant portion of total reserves. So, it’s still very important. At the same time, the U.S. dollar hegemony is probably not going to last forever..."
Fitts explains, “Right now, economists say the dollar is ‘dangerous and dominant.’ It’s still, if you look at the market shares around the world, it’s still very, very significant portion of total reserves. So, it’s still very important. At the same time, the U.S. dollar hegemony is probably not going to last forever..."
Pirocco
Well-Known Member
The chance is high that the next crisis the central planning thieves club does have the arrogance to declare savings above that defined treshold (100000 euro in my country) as lost. If they fail to make depositors waste enough of their money along stocks and other frontrunned markets, they'll do what necessary to make their theft succeed.
Big name banks won't make much difference.
Big name banks won't make much difference.
SlyGuy
Active Member
The USA just does bail outs... and sadly, the big name banks will be more likely to get the bail outs than small banks and credit unions.
In the United States, we have the Federal Deposit Insurance Corporation (insures each account up to $100,000... supposedly), but we all know that just means they will print the money to cover it. People are out of their mind if they think the banks or the government actually has that money to cover all of those accounts. The currency creation would trigger massive inflation... but they have been doing a good job so far on the containing the inflation by exporting most of it or hiding it in real estate. We shall see.
Don’t discount Yuan as a fast emerging world currency, rivaling SDR (already) and Euro (soon), Yuan as world reserve currency very soon within our lifetime.
Vast majority of Chinese debt is Yuan denominated like Japanese debt, so currency fluctuations doesn’t influence the Local bond holders, though it crushes foreign bond holders.
Chinese stock market is reacting to Chinese Government squeeze that started before Trump.
USA regulators are reactionary where as Chinese regulators are proactive.
Chinese GDP is cruising along at 6%
Chinese have a very high savings rate.
Vast majority of Chinese debt is Yuan denominated like Japanese debt, so currency fluctuations doesn’t influence the Local bond holders, though it crushes foreign bond holders.
Chinese stock market is reacting to Chinese Government squeeze that started before Trump.
USA regulators are reactionary where as Chinese regulators are proactive.
Chinese GDP is cruising along at 6%
Chinese have a very high savings rate.
Last edited:
SlyGuy
Active Member
Yes, that is what I suggested as a primary option above. Yuan would be pretty strong, esp if they gold-backed it to some degree.
https://www.silverstackers.com/forums/index.php?threads/silver-money-a-realistic-perspective.89804/#post-1063837
...However, don't underestimate the wizard powers that be holding together the house of cards with USD as world reserve for quite awhile longer. Bla
how long will the reserve status hold ???
if there are more and more bilateral trades avoiding USD, and being settled in nationals currencies
then USD is no longer needed is 65%, but a 25% or less
with such low level, it is only going to get lower, as they are just too risky with such a weaponized currency to be saving into
if there are more and more bilateral trades avoiding USD, and being settled in nationals currencies
then USD is no longer needed is 65%, but a 25% or less
with such low level, it is only going to get lower, as they are just too risky with such a weaponized currency to be saving into
Yes, that is what I suggested as a primary option above. Yuan would be pretty strong, esp if they gold-backed it to some degree.
https://www.silverstackers.com/forums/index.php?threads/silver-money-a-realistic-perspective.89804/#post-1063837
...However, don't underestimate the wizard powers that be holding together the house of cards with USD as world reserve for quite awhile longer. Bla
If I didn’t think Sydney property price will go lower faster, I’d buy Yuan in a big way.
But I’m waiting to get back into property market
When I converted my proceeds from selling my properties in Sydney few years back to US currency at over parity, it was a game changer.
With US looking near the top I’ve started to convert back to Aussie pesos, just biding my time for some distressed sales to come along
JOHNLGALT
Well-Known Member
"With US looking near the top I’ve started to convert back to Aussie pesos, just biding my time for some distressed sales to come along"
I love it, well stated @Ivp6Ready. LOL, _JOHNLGALT
p.s. A bit of colour to go into the post.
p.p.s. I noted that the @Bigfella has joined the colorful team.
I wonder if the snipers will pick on him, lol.
I love it, well stated @Ivp6Ready. LOL, _JOHNLGALT
p.s. A bit of colour to go into the post.
p.p.s. I noted that the @Bigfella has joined the colorful team.
I wonder if the snipers will pick on him, lol.