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Using Gold As Online Currency

Hemos posted more than 13 years ago | from the flooz-beemz- dept.

The Almighty Buck 214

JerkyBoy writes "Salon.com has an interesting story about using gold for online transactions. One company that provides the service (goldmoney.com) describes itself as "an online payment system that combines the world's oldest money, gold, with Internet technology to provide a safe, easy and inexpensive way for anyone to transact business 24 hours a day. Payments are made electronically using GoldGrams(TM), which are grams of gold that circulate world-wide through the Internet." I wonder if I can configure the MIME types on my Apache server to send golden email attachments?" Hehe - this is basically the same thing as people have been trying to do with creating new online currency.

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Salon.com's choice of word.. (1)

Anonymous Coward | more than 13 years ago | (#144413)

"Cyber currencies spawn 21st century gold rush" ???

1988 called, they want their word back.

Some good links (1)

Anonymous Coward | more than 13 years ago | (#144414)

Also intesting...

http://www.goldeconomy.com
http://www.e-gold.com

Why gold has, might have, value? (1)

Anonymous Coward | more than 13 years ago | (#144415)


Fact. The worlds economic system is a delusion. The reason it works is that people believe in it and it's backers,the united States government, european union, etc.

Fact. United States monetary supply is no longer based on gold because the Federal Reserve decided a while ago not to limit money supply but inflation. In doing this it let the money supply balloon. If the US monetary system were based on gold then the ratio "U.S. Money Supply / U.S. Gold Supply" would have gotten really large over the last 30 years, dropping the value of the dollar in currency markets. So, instead the US government said that "We are no longer have a gold based monetary supply", and it was so. Now the value of the dollar is determined by what people think it should be worth. So, if the big one hits California and Silicon Valley, a hot economic growth spot, ends up at the bottom of the ocean then the value of the US dollar would plummet.

Fact. Gold's Value, gold is a "hedge". Hedge against what? Hedge against civilization, the US government, the Global economic system, or whatever, from falling apart tomorrow. If world war 3 or something hits and there's nobody left, or there's the preception that there's nobody left to back the system then the world(whatever's left) is going to need a monetary supply that's a bit weightier than pieces of paper. Since gold has a historical precedent in the global concsiousness as a commodity with intrisic value it would fill this gap nicely. The only reason it would fill in btw, is because it is perceived as doing so.

In closing, the saying that "Reality is a mass delusion", is closer than u think.

e-gold (1)

Jacco de Leeuw (4646) | more than 13 years ago | (#144419)

I don't know which one was first but e-gold [e-gold.com] has been around for a while.

You can even get an account in other precious metals, such as silver and palladium. They have stats [e-gold.com] on this. One of their customers even has between 100 kg and 1000 kg of e-gold!

Now, how to convert your life savings into e-zinc and where to put it? :-)

Jacco (to e-mail me, please remove all yourclothes)
---
# cd /var/log

GoldGrams? Isn't that a cereal? (1)

Apuleius (6901) | more than 13 years ago | (#144423)

Sorry. Can't help it.

Re:GoldGrams? Isn't that a cereal? (1)

Dfiant (13407) | more than 13 years ago | (#144424)

Kellogg's lawyers are going to have a field day.

Sending email with Apache <grin> (1)

fuzzel (18438) | more than 13 years ago | (#144428)

> " I wonder if I can configure the MIME types on > my Apache server to send golden email
> attachments?"

Hmmmm maybe it's just me.... but how do you send Email with Apache (a webserver)???
(unless you are using a webmailthingy ofcourse, but then again... it won't be using your webservers MIME type settings now would it ;)

Re:who modded this moron up??? (1)

thogard (43403) | more than 13 years ago | (#144431)

There is an unlimited amount of gold at least as far as money is concerned. The amount of gold disolved in the ocean is about 1x10^7 tons. There is lots more in the rock under the ocean.

From about 5000 years ago until the 1960's an oz of gold covered a skilled persons wages for a week. Now that gold production is so much cheaper, only those countries with large gold despostis would have money. A gold standard would put South Africa and Australia as two of the richest countires in the world.

Re:e-gold (1)

QuantumG (50515) | more than 13 years ago | (#144432)

sigh [slashdot.org]

Re:It's time to go back on the gold standard (1)

Gummbah (72706) | more than 13 years ago | (#144437)

What happens to the gold standard when there are billions of tons of it literally floating around for the taking?

We all get very rich? :)

ad

Re:Gold vs the money market ? (1)

pompomtom (90200) | more than 13 years ago | (#144439)

Nope. Not the case.

The real-world logic that used to back paper currencies died out after the Bretton Woods agreement, in the 70's.

Our current currencies are backed by the fact that people try not to think about it too much....



Buckets,

pompomtom

Re:It's time to go back on the gold standard (1)

OakLEE (91103) | more than 13 years ago | (#144440)

There is a reason the world went off of the gold standard (as determined at the Brentonwoods agreement). The problem with the gold standard is that there is only a fixed amount of gold in the world and hence a fixed supply of money. This has a tendancy to actually increase inflation since having a country's currency backed by it gold, which would essentially be fixed at a maximum amount, since there is no infinite amount of gold in the world, would mean that for every extra dollar that the treasury prints out, the overall value of the currency would decrease. In short as the money supply grew, so would inflation.

Aslo this would mean the regulation of gold as a national resource. You can kiss any amount of gold greater then 6 troy ounces good buy in that case because it would be necessary for government to keep tabs on large quantities of gold (aka lock in in Fort Knox) in order to prevent any schemes to corner the global market for gold.

Also if any sudden discovery/excavation of gold, like all of the stuff that's sitting in Russia and the former Soviet states would devestate the world economy since a sudden rush of gold onto the world scene would be the equivalent of creating trillions of dollars in cash. It's just like how large money laudring schemes which introduce unaccountable new cash into the economy causes inflation. Oh speaking of inflation, the inflation you speak of was mainly caused by a spike in energy prices during the 70s and a major decrease in worker productivity (I think a drop from 2% to 1% which is a lot, billions of dollars, for an economy the size of the US's).

For those of you who think I'm blowing smoke all this stuff I got out of my college economics book (Baulmer and Blinder are the authors I think ).

Just like to remind people that all that's gold doesn't necessarily produce economic glitter.

____________

Re:Gold is shiny. So what? (1)

drnomad (99183) | more than 13 years ago | (#144443)

Gold doesn't corrode, it does not rust. While most metals corrode, Gold does not. Silver does, (not particularly with oxygen). So Gold is a trustworthy metal, cultural influences have given gold the meaning of value and trust. Printed money is still artifical. It does not cost you 100 dollars to make a printed paperbill of 100 dollar (paper and ink), the material form of the money is very much cheaper than the value it represents. Gold is gold, there is an exchange rate between any currency and gold, but gold 1 gram gold actually costs 1 gram of gold. This never changes, even when your country decides to drop their currency a use a new one (ie the Euro).
--

Fraud and the likes? (1)

rosewood (99925) | more than 13 years ago | (#144444)

I know this is not very informative but Im sure someone can reply and inform - but wasn't this company in massive trouble for fraud a while back? Maybe it was a competitor? If I find it - I will follow up in the thread

Re:Fraud and the likes? (1)

rosewood (99925) | more than 13 years ago | (#144445)

E-Gold gets raided [slashdot.org] is what I found on /. I guess they are a different company but same ideas and stuff. Even though paypal has screwed me a time or two, I still like them

Hmm (1)

forgoil (104808) | more than 13 years ago | (#144448)

This reminds me of a certain book by Neal Stephenson ^_^ Anyone who could guess which? ^_^

//John

Re:Gold is shiny. So what? (1)

-brazil- (111867) | more than 13 years ago | (#144449)

It's still rare, pretty and shiny and people still like that. Also, it has some relatively unique chemical properties that make it valuable as a resource.

Re:better summation (1)

-brazil- (111867) | more than 13 years ago | (#144450)

He apparently holds the delusion that gold somehow has an "intrinsic" value that is fixed (yeah, like the gold price never changes), and that it's "accepted everywhere" (yeah, sure) and thus is different than any other currency (which it, of course, isn't).

Re:More people need to start using E-Gold. (1)

-brazil- (111867) | more than 13 years ago | (#144451)

Now where's the "-1 Blatant Advertising" mod option?

Re:e-gold (1)

-brazil- (111867) | more than 13 years ago | (#144452)

Actually, these are in the process of breaking down, having generated a tad bit too much bad rep...

Cryptonomicon (1)

Perdo (151843) | more than 13 years ago | (#144456)

When oh when are the dot commers of the world going to realize that just because they have an idea, different perspective or inside information that does not mean that the world should buy into their delusion? Indside information.. as great an author as Neil Stephenson is, gold backed private internet currency is not necessarily what the world needs. Next it will be some jackass trying to sell the world a tattoo penal system where the state sends their criminals to mexico to get "POOR IMPULSE CONTROL" on their forehead... By the way, when I perfect radioactive isotope based power supplies for REASON and heroic robotic doggies, I'll be going public..

Re:e-gold (1)

xigxag (167441) | more than 13 years ago | (#144461)

here's what happened

No, that's not what happened to e-gold.com. That's what happened to Gold-Age.net [gold-age.net] , which, frankly, doesn't have the most confidence-inspiring website [gold-age.net] .

E-gold [e-gold.com] is still around.

Re:It's time to go back on the gold standard (1)

saider (177166) | more than 13 years ago | (#144463)

The gold standard cannot be used becuase money is an numerical representation of wealth. It represents the work that people have done to create the world in which we live. It is the assignment of value to human labor and creativity.

If the world on a gold standard wants to pay its people to work, then there must be as much gold refined every day to pay for the people's wages.

However, if you base currency on other assets (buildings, land, warships) then you are basing the value of human labor and creativity on the products of that labor and creativity. Your paycheck is basically a numerical assessment of your contribution to the nation's assets. That is the concept of wealth.

The money supply must be allowed to expand and contract without any physical limits. Otherwise you will run into a situation where it is physically impossible to compensate the workforce. Managing a money supply that is not physically tied to any one asset is the tricky part and is what separates the good economies from the bad.

In the end (1)

YKnot (181580) | more than 13 years ago | (#144464)

It boils down to this: Do you trust a company enough to accept a new currency from them?

No way (1)

WildBeast (189336) | more than 13 years ago | (#144465)

I don't want to have to pay my taxes in gold.

Re:hmm (1)

Chundra (189402) | more than 13 years ago | (#144467)

*pounds chest*
Let's all move to using rocks and shells as currency.

*ungh*

Highlights to be noted (1)

rafelbev (194458) | more than 13 years ago | (#144468)

the feds don't exactly approve of a system that's more privacy-protective than the heavily regulated banking system.

Mike Godwin said the raid evokes memories of the notorious Steve Jackson Games raid by the Secret Service a decade ago, which led to the formation of the Electronic Frontier Foundation.

Re:Why gold has, might have, value? (1)

zephc (225327) | more than 13 years ago | (#144474)

gold? or maybe fresh water and limes [movieweb.com] ? =]
----

Re:this seems familiar (1)

Kierthos (225954) | more than 13 years ago | (#144476)

Well, how often do you buy things online where you pay in another currency? From personal experience, I tend to buy things online where I can get a list price in U.S. dollars, even if it might cost slightly more, rather then go to a bank to get pounds, deutschmarks, euros, what have you.

It all boils down to how often you do need it. Once a year? Not worth it. Once a month. Maybe. Every day? Would be really nice, but if you're buying things and paying in foreign currencies daily, you've probably already found a solution other then a "new" standard online currency.

Kierthos

William Jennings Bryant (1)

Bahamuto (227466) | more than 13 years ago | (#144477)

Wow, looks like I've seen this argument before... He said somethign about not being buried under a cross of gold if I remember my history book correctly. I wonder what he would have thought about some of your postings. As a side note I wonder what any of our fore fathers would have thought about slashdot in general. Would be kinda funny to see Edison say somethign about some new invention of his, that got flammed.

Re:It's time to go back on the gold standard (1)

Alatar (227876) | more than 13 years ago | (#144478)

They went off the gold standard because that way, the rich could become richer. Sad, but ultimately true.

What's the point? (1)

wrinkledshirt (228541) | more than 13 years ago | (#144479)

re: Gold payments being secure

I suppose this'll get modded down for missing the point, but I just don't get it. Insecure transactions have nothing to do with the type of currency, it has to do with impersonating the person who has the money, doesn't it? What makes this any more secure than me trying to push a currency of XXX?

Re:this seems familiar (1)

nanoakron (234907) | more than 13 years ago | (#144481)

I think you are missing a MAJOR reason for standard worldwide online currency - NO RIPOFFS from vendors in different countries selling the same items at different prices. E.g. Buying a DVD in the USA - what, about $20?....well, welcome to 'grab your ankles and take it in the ass' UK where the same thing will cost you £20....so what you say, well - it means we pay an extra $5 over here because of the exchange rates. And the same goes for cars, phones, TVs etc...etc... Nice new porsche? $60000 (with exchange rate, about £40000...comparable taxes in both countries) - so is it £40000? Nope, we pay £60000 (we'll just use a pound sign instead of dollars....no-one'll notice). It's a goddamned assraping everytime we go to the stores over here. We NEED a universal standard where something worth 3 goldgrams (or whatever the fashionable currency is at the time - hell, I even have a beenz account) in the USA is EXACTLY THE SAME 3 goldgrams in the UK, Germany, Japan, Indonesia, Kenya, wherever!

-Nano.

Just plain pissed off. Please forgive the occasional fucking expletives.

Re:better summation (1)

Dave Emami (237460) | more than 13 years ago | (#144482)

He apparently holds the delusion that gold somehow has an "intrinsic" value that is fixed (yeah, like the gold price never changes),

The difference is that, while the price of gold does change, you can generally trust that it isn't going to suddenly be devalued. Only political restrictions prevent the supply of dollars or marks or euros from suddenly skyrocketing.

>and that it's "accepted everywhere" (yeah, sure)

No, it's not, and that's pretty much a Catch-22 situation. People accept currency in exchange for goods and services, primarily because they know that they can turn around and have it accepted in exchange for other goods and services. So people won't accept gold, because... people won't accept gold. A problem, but not an insurmountable one. What's needed to jumpstart it is transparency -- say, being able to hold a balance in gold but pay with a credit card using whatever currency is required, the way I can pay for goods in yen using my Visa card against my account in dollars. (Yes, I know there's a fee involved. The point is that I don't have to deal with it. It's a convenience issue, not a cost issue in this case).

and thus is different than any other currency (which it, of course, isn't).

Like I said, the difference is stability, specifically against currency devaluation. To get Weimarr-style inflation under a pure hard currency standard, you'd need a meteor of gold to strike somewhere.


I dunno about this... (1)

dswensen (252552) | more than 13 years ago | (#144485)

I mean, I've only got a 56K dialup connection and I shudder to think how long all that gold is gonna take to move through the pipes.

e-gold (1)

TheSHAD0W (258774) | more than 13 years ago | (#144486)

Whatever happened to e-gold.com [e-gold.com] ? I think I'd trust them nore than this new guy.

Re:It's time to go back on the gold standard (1)

Mahonrimoriancumer (302464) | more than 13 years ago | (#144488)

I agree with you, for the most part. However, most banks have branches close together, so one could send a truck with a lot of cash to another branch if it is getting a lot of people withdrawing money. If this happens to all the branches though...

Re:Gold vs the money market ? (1)

Mahonrimoriancumer (302464) | more than 13 years ago | (#144489)

Well, you still own the gold...

Re:who modded this moron up??? (1)

Mahonrimoriancumer (302464) | more than 13 years ago | (#144490)

If the monetary system is a gold standard, then the machine would accept your money (provided the gold is coinage accepted by the machine).

Re:this seems familiar (1)

Mahonrimoriancumer (302464) | more than 13 years ago | (#144491)

What if I am purchasing something from an individual in France via E-bay? I think a standard online currency would work best in that kind of situation.

Re:Gold is shiny. So what? (1)

Mahonrimoriancumer (302464) | more than 13 years ago | (#144492)

Diamonds are the most common gem in the world! They are not rare at all. All they are is coal with a lot of pressure and temperature applied.

Re:this seems familiar (1)

Mahonrimoriancumer (302464) | more than 13 years ago | (#144493)

There is a great need for an online standard. After all, there will be eventually be a standard currency, probably something like U.S. dollars. A gold standard would prevent inflation in the U.S. from affecting the rest of the world as related to the internet.

Re:It's time to go back on the gold standard (1)

Mahonrimoriancumer (302464) | more than 13 years ago | (#144494)

Bank panics were unrelated to the gold standard. They were due to ignorant people thinking believing Chicken Little when he said that the sky was falling. Anyways, that wouldn't happen today, with the invention of the cashier's check, electronic transfers, etc.

Do I hear a question on capitalism? (1)

screwballicus (313964) | more than 13 years ago | (#144500)

Questions of basic economic theory? This sound like a job for

Allan Greenspan: H4x0r Economist [rdwarf.com] !

Undeniable (1)

ez76 (322080) | more than 13 years ago | (#144501)

Proof positive that the Leprechaun film series was a thinly-veiled allegory, years ahead of its time both cinematically and politically.

Owning it (1)

trommaster (443182) | more than 13 years ago | (#144507)

But you're still going to have to buy the gold, right?
Well, you could buy it using some more gold that you got with that other gold that you got with........ :)
--

Re:better summation (1)

Silver222 (452093) | more than 13 years ago | (#144511)

The reason your US dollars disappear is due to conversion costs. Go to Reuters and look up the current cross rates, and then walk into your bank and see if they are the same for you.

You think just because you have gold in your pocket instead of paper, the moneychanger isn't going to take his cut?

Inherent problems (1)

penthouseplayah (454492) | more than 13 years ago | (#144512)

There is no need for another currency. Even though this would be a gold based one the company still have to go through some country to really work. They would still have to compete with Visa and the other creditcard that are standar these days. No if they instead focused on microtransfers from a couple of cents they would have a product. Also, why go through triple money transactions? Bying a book from the UK, as I do from Denmark: Now Dkk -> UK£, with visa GM: Dkk -> Goldmoney -> UK£, that seems ridiculous. Also, the prices would have to be higher to accomodate the fluctuations in goldprices, or the prices would change from day to day, and also depend on eventual gold laws and taxes the nations have. They could avoid this by residing in one country, but then..... No, it'll never work, they're just on to making a product they hope somebody will buy.

Re:this seems familiar (1)

whereiswaldo (459052) | more than 13 years ago | (#144515)

Gold schmold... YOU STILL SHOP AMAZON??!! Sheesh.

Been there, done that. (1)

Gazelem (460580) | more than 13 years ago | (#144517)

We tried it here in the states in the first half of this century. They were called "silver certificates" and "gold certificates". For a variety of reasons, it doesn't work.

This is really no different than a credit card with a front-end conversion to a standard monetary unit. The only reason this made news is because it was gold that was suggested. Yes, gold is a precious metal unlike all other currencies, but nothing is valuable unless people are willing to exchange goods for it. Whether it's sea shells, gold nuggets, the eurodollar or gold-pressed latinum (had to get that star trek reference in there), it's all the same. We've done it before.

The simple fact is that there are too many people to have a single standard for anything monetarily.

Re:A guide to digital currencies (2)

Jacco de Leeuw (4646) | more than 13 years ago | (#144524)

Here's a pretty cool web site about digital currencies with an emphasis on using gold.

It seems that the guy on this website has a vested interest in e-gold, so take this with a grain of er... salt.

Jacco (to e-mail me, please remove all yourclothes)
---
# cd /var/log

Money laundering (2)

Julian Morrison (5575) | more than 13 years ago | (#144525)

Actually, I wonder how anyone could like the idea of a monetary system that's not under government control. If such a system were widely accepted, it would make money-laundering a breeze

Money laundering is a fundamental human right. Your money, your property, your business and nobody else's. The government only hates it because it lets people bypass thieving taxes and idiot prohibition laws. Forget talk of "the mob" - they can launder money anyway, trivially, by coordinating a slew of tiny transactions. This BS about money laundering is aimed square at the free individual who doesn't want to have to ask government permission to spend his OWN DAMN MONEY.

--

Re:It's time to go back on the gold standard (2)

Apuleius (6901) | more than 13 years ago | (#144526)

Dude, back when there was a gold standard,
there were bank runs and panics every 5 years
or so. Count me the hell out.

Gold is shiny. So what? (2)

VValdo (10446) | more than 13 years ago | (#144527)

Could someone explain the whole gold market to non-economically minded folks such as myself?

I seriously don't understand why gold has value anymore. For the first couple thousand years of civilization, sure, I can see it-- it's a limited resource, it's pretty and shiny and malleable, you can make jewelry out of it.. but today does gold have any fundimental value as a resource, like say natural gas or oil? Is there really that much demand for it? If so, why? Just wedding rings 'n the like?

Basically, I'm thinking about it and aside from its "agreed upon" value, I don't really need any.

Aside from such things as electronics, tooth fillings, and necklaces, is there any non-traditional gold is worth anything?

Incidentally, I hear that the world's diamond supply is controlled largely by one company that artificially caps supply, thus maintaining its value. True?


-------------------

this seems familiar (2)

htmlboy (31265) | more than 13 years ago | (#144542)

isn't this exactly what happened in Cryptonomicon?

That aside, there are some obvious questions (IMO). Is there really a need for a service such as this? I can buy stuff online from other countries with my credit cards. The vendors get their currency of choice, while I pay my card off in dollars. I recently made a purchase at amazon.co.uk and never once found myself thinking "this would be so much easier with an online standard." But maybe things like that are just hacks to get us through until there's a viable uniform currency available.

ck

Re:It's time to go back on the gold standard (2)

jcr (53032) | more than 13 years ago | (#144545)

> What happens to the gold standard when there are billions of tons of it literally floating around for the taking?

That depends on the cost of retrieving it from said asteroid. Delta-V isn't cheap.

-jcr

better summation (2)

joq (63625) | more than 13 years ago | (#144546)

Sorry I should have posted this in the original posting.


Former Treasury Secretary Lawrence Summers has warned of malcontents using the Net and encryption to dodge taxes, and it's possible that the feds don't exactly approve of a system that's more privacy-protective than the heavily regulated banking system.

Current federal regulations require banks and credit unions -- about 19,000 in all -- to inform federal law enforcement of all transactions $5,000 and above that have no "apparent lawful purpose or are not the sort in which the particular customer would normally be expected to engage."

Because e-gold is not a bank that lends money -- it's more akin to a warehouse that stores gold on behalf of its customers -- it's not covered by those rules.


It's these same rules which will not allow many governments to allow online gold companies to flourish. What's really cool about gold is it holds its weight no matter where you are in the world as opposed to currency which means a country's currency means squat.

Do you think the US with a strong dollar wants you to trade for gold which can bring down the value of a dollar? e.g. Take 1,000 US dollars and travel through Europe without spending a dime solely exchanging the currency and you will see it will be gone quickly without you even spending, but with gold, it's always going to be a set price. There is no competition for it, which is why all governments are paranoid of people turning to gold.

Re:e-gold (2)

joq (63625) | more than 13 years ago | (#144547)

Re:Gold is shiny. So what? (2)

0xA (71424) | more than 13 years ago | (#144549)


I've read horror stories about how in previous decades hundreds of ultra-low-paid African workers either worked in the fields to get diamonds (apparently in one spot they were so abundant they could be found above ground) or in dangerous mines.


Don't think that this kind of pratice is over, its' not. As a matter of fact there is currently a civil war in Sierra Leonne being fought over diamond fields. THe "rebels" have taken to chopping civilian's arms off at the elbow in order to keep them in line. There are whole viliages there with only one arm.

The really twisted part of this is that DeBeers doesn't own all of the mines in the world but they do own most of the distribution network. If these guys are selling diamonds from the fields guess who they are probably selling them to.

Ethical Money (2)

Baldrson (78598) | more than 13 years ago | (#144550)

Gold is a fundamentally more ethical form of money than are so-called "fiat money" such as Federal Reserve dollars. [geocities.com]

Federal Reserve money buys protection from punishment. You are punished if you don't pay taxes. This has become the Federal Reserve's primary monetary authority. The moral hazard of basing monetary authority on punishment has now been realized in the systemic and out-of-control gang rapes of prisoners in the US. All other unlawful acts by US governments are now overshadowed by the murderous, sexually sadistic character of governmental authority that has developed in US penal systems. Federal Reserve money is now protection racket money, or, if you prefer "punishment protection money". Calling it "fiat money", "debt money" or even "legal tender" obscures its true character.

Re:Nope (2)

OakLEE (91103) | more than 13 years ago | (#144552)

On the first account your right I was trying to get the point across that you explained.

In reality, inflation has been virtually non existent through history with gold based currencies.

However, I would like to point out that the primary reason why there was really no statistical inflation prior to the end of World War II was primarily because the Fedral Reserve, indeed other central banks took it upon themselves not to intervene much in the economic affairs of their nation. That is to say they let the currency float and sink according to economic conditions. Long periods of economic growth and inflation were often followed by periods of severe deflation since, instead of relying only on cutting employment, buisnesses would often cut wages of employees to bring down the cost of their products. Needless to say that paycuts now, espcially in union dominated industries are not as common as they were in the late 1800s - early 1900s. Instead we people just get fired, and even then most of the work force has unemployment insurance that will kick in to insure that people always have money. If you can find a graph of inflation in the US from 1840-present, you'll notice that there were huge spikes and dips (meaning inflation and deflation) prior to the adoption of Keynsian economic theory.

Also on the subject, since you have read Freidman, you should know that one of the primary goals of a moniterist is to match money supply to the economic growth. This was very hard to do when the economy's money supply was fixed (essentially) as it was under the gold standard. The lifting of the standard allowed better control of the money supply so that it would be easier to as Friedman, Volker and other moniterists wanted to do, contract and expand the monetary supply according to growth. True this policy din't last long, but still the lifting of the gold standard, allowed for greater shifts and fluctuations in the supply of money then would be possible with fixed supply.

There also is the matter of fixed money supply causing balance of payments surpluses and deficits in international markets, since with a fixed currency value (as the US dollar had when it was the benchmark during the days of Brentonwoods), it makes it very hard for the currency to maintain a value indicative of the economies strength when it was pinned to the value of gold. This most effected developing nations who were often subject to runs on their currency since revaluations had to be announced in advance, thus leading to currency speculation. (Well it's something like that, please correct me if I'm off a little... or a lot).

Hope this corrects my mistakes and doesn't create new ones, feel free to respond!

_________________

E-money (2)

drnomad (99183) | more than 13 years ago | (#144554)

We've seen a lot of e-money initiatives. Perhaps PayPal is the biggest player in this area. I worked on a project which was to re-introduce PayPal into Europe in some partnership form. We also discussed things like having Gold as the global currency, and some interesting arguments were given.

A new currency will never be accepted by all banks all over the world, gold is not only the oldest money around, it is also a global currency. The U.S. dollar is not a global currency as in some parts of the world it is even an 'illegal' currency (ie Iraq, China), so gold is accepted everywhere. Problem is the exchange rate between your local currency en the gold currency. Also the right to own gold and trade with gold is something which differs among different countries. PayPal is the biggest player in E-Money, I understand that even the CityBank is scared is hell from PayPal (and I'm not even a U.S. citizen!). PayPal has a working concept, it is very unlikely that a competitor in E-Money will survive.
--

Re:e-gold (2)

-brazil- (111867) | more than 13 years ago | (#144555)

Actually, I wonder how anyone could like the idea of a monetary system that's not under government control. If such a system were widely accepted, it would make money-laundering a breeze, and I'd hate to think what kind of power it would give those who control it.

Re:Highlights to be noted (2)

-brazil- (111867) | more than 13 years ago | (#144556)

Translation: We tried to bypass some pretty important rules, and we got bitchslapped, so now we'll try to get sympathy by association.

Re:Gold vs the money market ? (2)

proxima (165692) | more than 13 years ago | (#144565)

Wrong.

You just stated what may be the biggest myth of currency. I believed it until I took my first Economics class. Currency represents buying power, or the amount of goods or services others are willing to give you for a certain amount of the currency. Yes, the U.S. government does have a gold store locked up at Fort Knox, but not enough to make up for the trillions of U.S. dollar value floating around.

If you think about it, the buying power idea makes a lot of sense. It explains (in part) why some currencies can change value compared to others by several percent each year (or in some cases, dozens of percent). The Ruble (Russian currency) would not be so low in value if there was gold backing up each ruble. It's just that the Ruble has very little buying power, because merchants either don't want it or don't want to give much for it.

That's the simplified explanation of currency.

Re:Gold is shiny. So what? (2)

proxima (165692) | more than 13 years ago | (#144566)

About diamonds:

Yes, diamonds are almost exclusively controlled by DeBeers Corporation (not sure if I spelled that correctly). They bought out their competitors and control the mining of diamonds worldwide.

I've read horror stories about how in previous decades hundreds of ultra-low-paid African workers either worked in the fields to get diamonds (apparently in one spot they were so abundant they could be found above ground) or in dangerous mines. I'm not sure how much DeBeer's has stocked up, but they sure managed to make diamonds seem quite valuble.

For this reason I absolutely hate society's fascination with diamonds - people have the false sense that they are really rare. Truth is look-alikes aren't hard to make, industrial ones can be manufactured, and one company controls the supply so we all overpay.

Good thing my girlfriend isn't the diamond type =).

Re:who modded this moron up??? (2)

YKnot (181580) | more than 13 years ago | (#144574)

You wouldn't end up with a coke in your hand if you had a 100$ bill either. There are however several problems with a truly gold-backed currency:
  • There is a fixed amount of gold. Productivity however increases, resulting in increasing "value" of gold in the long run, in other words deflation. Deflation is counterproductive because it stiffles investments. Keep your gold, get more for it tomorrow.
  • The amount of accessible gold is not fixed and not coupled to relevant economic processes or goals. "Printing money" is up to mining corporations. Advancements in mining technology cause your gold to drop in value, a flooded mine make it more valuable. Not exactly predictable or desirable.
  • But at least with gold there is a "hard" reference of value. So we won't tumble into a situation where suddenly all our money is worthless. Bzzzt. Wrong. If I get the impression that I can't buy what I want or need, because no one has the skill or will to produce it, I won't give my products to you, no matter if you pay in gold or not. In return, you refuse to sell your products for gold. So do your former customers. Suddenly gold will buy you nothing. It has become worthless. The "intrinsic value" of gold is what it can be used for in production, no more no less.
  • Gold is untraceable. This creates all sorts of problems, for example it makes fighting organised crime much harder.
The most important part is of course the fact that while money is seen as a placeholder for gold in a gold-backed currency system, gold itself is just a placeholder for trust. If people stop trusting an economic system, basic needs dictate what is most valuable. Most people do not count possession of gold as one of their basic needs.

Re:this seems familiar (2)

Chundra (189402) | more than 13 years ago | (#144575)

If you're using a credit card, it doesn't cost you anything to "exchange" currency. I've done this many times and the only thing you might want to do is look up the current exchange rate.

Re:If it's real money..... (2)

Technician (215283) | more than 13 years ago | (#144580)

If it is really gold, will they send it to me? I don't trust any credit I can't immediatly cash in for face value at any time. If I have to cash in more than one troy oz of the credit certificate to receive a real troy oz of gold, then I firmly believe it's not really worth an oz of gold.

Anyone having any credits (currency) that has the value of gold better be ready to cash it in for it's full value in gold. Otherwise it inflates and becomes worthless. Remember a dollar could pay a days wages to a good worker at one time. It has de-valued some since.

Re:Been there, done that. (2)

Technician (215283) | more than 13 years ago | (#144581)

It stopped working when the government provided the certificates for the real gold and silver people had in the bank. Then they did not allow cashing the soft currency back in for the full value of the real gold and silver. The people were robbed of the hard currency and it was replaced by easily printed soft currency. The government made it not work. If they were required to always provide hard currency at face value upon request, then it would still be a valuable currency based on a gold and silver standard. Sadly this is not the case. This is where many people got a big distrust of banks in the US. They were robbed by uncle sam.

Those who do not learn from history are condemmed to repeat it.

Re:this seems familiar (2)

Kierthos (225954) | more than 13 years ago | (#144582)

Why? No offense, but e-shopping seems to be doing fairly well without a standard currency. In fact, the lack of a standard currency may be helping. E-sale sites in the U.K. use the pound, U.S. sites use the dollar, Japanese sites use the yen or the dollar (okay, the few I've been to use both). I imagine that European sites either use their local currency or the Euro.

Yes, a standard currency would make it easier for, say someone in France to buy stuff in the U.S, or Japan, and vice versa. But e-commerce seems to have that taken into account. I've bought things from U.K. sites and I could have paid in pounds or dollars. I decided to see the prices in dollars so I could better appreciate how much I was paying. Heck, I don't even think there was a fee for currency exchange.

Kierthos

Re:It's time to go back on the gold standard (2)

Kierthos (225954) | more than 13 years ago | (#144583)

Um, yes and no. A bank panic could still easily happen today, it's just more difficult. With electronic money transfers, a bank can electronically 'have' more money. But it doesn't give the bank any more actual greenbacks. So if the bank runs out of actual paper cash, it doesn't matter how much they have electronically.

And if more then one bank is getting rushed by customers who are withdrawing all their cash, it snowballs.

Kierthos

No matter how far we come... (2)

HongPong (226840) | more than 13 years ago | (#144584)

The dawn of the information age, economies built on silicon and dreams... A new age of communication, a new time for civilization.

But we humans just can't help bright shiny objects. Pretty... shiny! All the world's economies are a collective hallucination, swapping gold for $$, yen or pounds doesn't mean anything. I just hope that everyone doesn't notice money has no real value at the same time.

--

Re:e-gold (2)

Alatar (227876) | more than 13 years ago | (#144585)

Current federal regulations require banks and credit unions -- about 19,000 in all -- to inform federal law enforcement of all transactions $5,000 and above that have no "apparent lawful purpose or are not the sort in which the particular customer would normally be expected to engage."

Because e-gold is not a bank that lends money -- it's more akin to a warehouse that stores gold on behalf of its customers -- it's not covered by those rules.

Right there's your answer. The feds didn't the idea, so they raided the business and shut them down. Not that they were doing anything illegal, but hey, the feds don't like anything that's not under their control. Sure, in a few years maybe, the feds will be found negligent and restitution will be made, but that's a little late for e-gold, which is pretty much the idea.

Gold vs the money market ? (2)

SirFlakey (237855) | more than 13 years ago | (#144586)

The way I understand basic economic theory our basic paper (or plastic) currency is a form of "place holder" for hard currency resources. I am guessing that means that the value ofa country should roughly balance out with the total of it's currency in circulation - is that correct?.

Just wondering weather this is so - and then what "gold currency holders" do in case of a dot-crash ?
--

Didnt someone get in trouble for this? (2)

ConsumedByTV (243497) | more than 13 years ago | (#144587)

Because it was a fraud?
And the fbi was happy to shut down a service where people could use untracable money?


The Lottery:

back to basics (2)

hyrdra (260687) | more than 13 years ago | (#144588)

We should go back to the oldest currency known to man -- teeth! We could call it e-teeth. We would send our teeth in a little plastic bag where we would have it stored and converted into electronic teeth, suitable for worldwide Internet distribution.

Re:It's time to go back on the gold standard (2)

markmoss (301064) | more than 13 years ago | (#144591)

Getting to the asteroid is expensive. Once you've put the necessary processing plants in space, getting the asteroid materials back to earth may be pretty cheap. (1) Put a nuke reactor and a catapult on the asteroid. Start processing gold and iron. (Most rocks are partly iron oxide; if you are lucky enough to find gold in an iron-nickel asteroid instead of a rocky one, even better. And if there is titanium in the rocks, smelt that also...) Build a catapult to throw the waste materials away -- this serves as a slow orbital transfer drive to bring the asteroid to earth orbit. (2) Use a few thousand tons of asteroid iron to build a _big_ glider. Load up the gold and other trade goods. Re-enter the atmosphere and land in water -- for example, Lake Michigan, close to the ironworks around Chicago. Besides the cargo, the glider itself is sold as raw metal.

The initial investment is huge, but so is the potential payback -- from the steel, because it won't take many hundred-ton shipments of gold to run the price way down.

We went off this in the 30s (2)

fors (310930) | more than 13 years ago | (#144594)

There have been people saying we went off the gold standard in the 70s with Nixon. That is incorrect. We went off the gold standard during Roosevelts first term in office. All Nixon did was sell off some of the last reserves. We went off the gold standard so the money supply could be more closely regulated. There has not been a time since then that the US has had enough gold on hand to back all of the dollars in circulation.

And what some people forget (2)

Sycraft-fu (314770) | more than 13 years ago | (#144595)

Is the POINT of money. Money exists to store value. It allows you to do produce a good, do a service or in some other way create value for the world and then store that value in some form, which you can later spend for some other thing of value. This way you don't have to attempt to directly barter your goods or services for what you want. Ok, so then the only important thing about whatever is used as money is that everyone accepts it. It can be gold, paper, electronic, it doesn't ultimately matter so long as everyone has trust in the currency.

Now this isn't to say there aren't some advantages to a gold backed currency (personally I don't think it's a good idea), however it doesn't make any fundimental difference in what money is or how it's used. Much of the money in modern scoiety doesn't exist as anything more than numbers inside computer networks. However, so long as people trust that and value it as money, it works as such.

Fools Gold (2)

k-flex$ (315275) | more than 13 years ago | (#144596)

Micropayment systems shouldn't need a gimmick to be successful...

Perhaps Clams next?

Re:It's time to go back on the gold standard (2)

koreth (409849) | more than 13 years ago | (#144597)

It may not happen in the next 50 years, but plausibly in the next 100 we'll be able to mine asteroids for rare metals. What happens to the gold standard when there are billions of tons of it literally floating around for the taking?

No raw material is a good basis for a lasting money system. There's too much of everything in the universe and eventually we'll figure out how to get at it and/or manufacture it. Money is an abstraction for (though frequently not a fair measure of) the value of human activity anyway, so I have no problem with acknowledging that it's abstract and keeping it that way.

Re:It's time to go back on the gold standard (2)

Tachys (445363) | more than 13 years ago | (#144598)

First you say this

This is truly sad. Instead of being able to predict how much a dollar will be worth tomorrow, we leave that decision up to the whims of international currency daytraders.

But then you say this

Right now, with metal prices at a fraction of their all-time highs

So you think you can perdict how much gold will be worth tomorrow?

What is money worth, anyway? (2)

buglord (455997) | more than 13 years ago | (#144600)

Face it, money has become so abstract a concept that it all ends up to a trading of trusts.

There is no way you can be sure of how much your dollar is worth. Even if it's backed with gold you just gotta trust the man that he really has your money's worth!

On second thought, nobody seems to care much about what money really is, so it might as well be backed by clamshells.

who modded this moron up??? (3)

Anonymous Coward | more than 13 years ago | (#144601)

this is the one of the stupidest things i've ever heard. if you had ever taken an introductory economics class you would have learned that gold is about as "intrinsically valuable" as tulips. (if you don't believe me, try using gold to buy a coke from a coke machine on an abandoned university campus in the middle of the night. it doesn't matter how much gold you have, if no one is there to exchange it)

if you would like to learn more about economics, go to your local community college and sign up for something called "economics 101".

Gold doesn't have intrinsic value (3)

samael (12612) | more than 13 years ago | (#144602)

Gold isn't actually intrinsically worth anything. It's a pretty metal, with uses for a few industrial applications, but most of its historic value is down to it being easily workable and looking nice. It's modern value is mostly down to people having been told it's worth a lot (like Diamonds, which again are worth money purely because they're worth money and pretty).
_____

It's a great idea, but... (3)

jcr (53032) | more than 13 years ago | (#144607)

as I mentioned some months ago in a comment on e-gold, I really don't see this going anywhere until a national government (like, say, South Africa) issues a digital specie currency.

It's going to take a digital Krugerrand, Panda, Maple Leaf, or Eagle, before an online, gold-backed currency will gain enough market penetration that it's worth it to convert our fiat national currencies, and do business strictly with uninflatable, commodity-based currencies.

Someday, I'm sure we'll have all manner of electronic currencies, backed by gold, kilowatt-hours, barrels of Brent North Sea crude oil, or backrub-minutes (redeemable at dozens of outlets in any decent-sized city!), with online clearing markets to easily convert among them, but I'm afraid that any private company short of DeBeers simply won't have the pull to make it happen.

-jcr

Who's the moron? (3)

Gorimek (61128) | more than 13 years ago | (#144608)

It's worth noting that many prominent economists, including Nobel price winner Milton Friedman, agrees with this "moron".

They have taken economics 101.

Nope (3)

Gorimek (61128) | more than 13 years ago | (#144610)

The problem with the gold standard is that there is only a fixed amount of gold in the world and hence a fixed supply of money. This has a tendency to actually increase inflation since having a country's currency backed by it gold, which would essentially be fixed at a maximum amount, since there is no infinite amount of gold in the world, would mean that for every extra dollar that the treasury prints out, the overall value of the currency would decrease. In short as the money supply grew, so would inflation.

Yeah, expect it's completely opposite. If money is backed by gold, the money supply is by definition the gold supply, which while not constant, grows very slowly. The money supply can only grow strongly by abandoning the gold standard, and printing more money than you have gold. You can do that without officially acknowledging that that's what you're doing, which may be what you're referring to.

In reality, inflation has been virtually non existent through history with gold based currencies.

For those of you who think I'm blowing smoke all this stuff I got out of my college economics book (Baulmer and Blinder are the authors I think ).

I hope that's a misreading of the book. A good book on the subject is Money Mischief : Episodes in Monetary History [amazon.com] by Milton Friedman.

There are more interesting things out there! (3)

friday2k (205692) | more than 13 years ago | (#144612)

Like this story [wired.com] in Wired that talks about Zeroknowledge [zeroknowledge.com] licensing out Stefan Brands patents in toolkit form and eCash [ecash.net] doing the same with the (way, way more important) Chaum's blind signature and other patents. This will give interested parties the opportunity to develop anonymous networks, with limited traceability (another Chaum patent) and with anonymous payment methodologies (utilizing the blind signature patent) or building other applications. And then somebody is talking about yet-another-scam payment system. Yawn! Good night!

Flaky banks? hmmmm.... (3)

corvi42 (235814) | more than 13 years ago | (#144614)

Well the E-Gold seems a bit more reliable, but the description of GoldMoney: A bahamas based company that contracts a South-African company to run webservers on the British channel island of Jersey?

Does that sound like a fly-by-night company or what?

It's time to go back on the gold standard (4)

alewando (854) | more than 13 years ago | (#144617)

Integrating gold with online fiat-currency transactions is a nice start, but it hardly goes far enough. It's time to go back on the gold standard for good.

When the Founding Fathers wrote the constitution, the fundamental property rights it embodies were rooted in actual intrinsicly valuable commodities. When the Federal government took your land under the 5th amendment, they had to compensate you in gold. Even well into the end of the 19th century, the biggest hotbutton currency debate concerned minting silver instead of gold.

Today, we're off the gold and silver standards altogether. This is truly sad. Instead of being able to predict how much a dollar will be worth tomorrow, we leave that decision up to the whims of international currency daytraders. It's little surprise that inflation rates under the Carter administration crested well over 10% so soon after Nixon pulled us out of Vietnam and took us off the gold standard.

The economy of the twentyfirst century cannot withstand uncertainties. The technological revolutions of the industrial age all occurred under the gold standard. Why should we experiment with a proven thing? Why let politicians pay off their political debts by devaluing our currency? Brazil went down that path, and we needn't follow.

In today's economic climate, the prudent investor will consider converting at least part of his or her paper assets into precious metals. Right now, with metal prices at a fraction of their all-time highs, may be an ideal time to invest in precious metals. The Gold Vienna Philharmonic sets the standard in purity and popularity. And with the exclusive Monex buy-back guarantee, your gold investment can only maintain or increase in value for one year, which adds a unique benefit to your gold purchase. Sign up today and receive a free copy of Gold In The Age Of Uncertainty.

banks (4)

QuantumG (50515) | more than 13 years ago | (#144618)

Yep, and eCash is forever plagued from the ideas from the early 90's, banks. I would love to be able to say to my bank "fork me some untracable electronic currency please" but it aint gunna happen. Banks would like to get rid of cash altogether IMHO, but regardless, banks dont jump on bandwagons and eCash is feeling it. So where does that leave you? As a merchant selling a payment service (ala PayPal) which results in you needing a way of getting money into and out of the system and seeing my money is in my bank that means I need a way of transfering money from my bank account to your bank account. Again we hit banks. Suprising enough PayPal has actually managed to make this happen, I can register a checking account with PayPal (if I'm in the states) and click money between my bank account and my PayPal account, great, but what about that great promise of anonymity? You know, the whole allure of "cash". We're pretty far from zero knowledge by now. The merchant I'm buying from can track who I am (look at the FreeNet donations page ffs), PayPal can browse through all my transactions at will, my bank can see how much money I've put into my PayPal account, the government can monitor my PayPal Bank account transfers and PayPal would probably give up any information they wanted after a few cool threats. Will banks ever get off their ass and give us what we want? Not really, and even if they do we're not going to get "zero knowledge" because I dont trust my bank.

wont last long here's why (4)

joq (63625) | more than 13 years ago | (#144619)

Remember earlier this year...

WASHINGTON -- The Secret Service has raided a New York state business that exchanged dollars for grams of the digital currency called e-gold.

A bevy of agents from the Secret Service, Postal Service and local police recently detained the owners of Gold-Age, based in Syracuse, and seized computers, files and documents from the fledgling firm.

source: Wired Magazine [wired.com]

For those interested in gold, and the government I suggest reading "End of Ordinary Money [orlingrabbe.com] by Orlin Grabbe, and take a quick look at Jim Bell's [antioffline.com] case where he created Assassination Politics, which delved slightly into currency which could be used anonymously. Now please don't jump the gun so quick to say it won't happen, if that were the case the government would be quick to assist developing a financial system they thought would improve the economy, business, etc., and they haven't in fact it's been the opposite.

Great Idea, but... (4)

Tsujigiri (77400) | more than 13 years ago | (#144620)

they should call them Gold Pieces, or GP for short. They could then supplament them with other metals for smaller denominations, like Silver Pieces (SP) and Copper Pieces (CP).

Then I can start looking around the internet for Armour and Swords and maybe a lantern and a sack, and head off to the Sword Coast to find adventure and loot.

(Submitted in the five minutes before heading home from work, brain broken, must sleep...)

"I'll take the red pill, no, blue. AAAHHHHHHHHHHHHHHHH........"

Reasons for going off the gold standard. (4)

corvi42 (235814) | more than 13 years ago | (#144621)

All this talk of going on/off the gold standard also belies another aspect to current money which is that there is only about 10-30% of the money in circulation in any country actually exists as cash. The rest of it only exists as data in bank computers.

The way I understand it, part of the reasons for going off the gold standard was to give the Federal government more control over the economy. When you're tied to only issuing as much money as you have gold in stockpile, then there's a limit to your control over that aspect of the economy. But when you are working in a money-market type situation, you can look at the given value of your currency in the money market, and then decide to either print / issue more money and see how the markets react to you.

Anyone read "Cryptonomicon"? Remember the absurdity of the chinese banks in the first chapter, running about demanding of each other to see the gold? This is another aspect to the money-market situation that makes it advantageous not to use gold. In the case of a serious economic downturn, you can prevent the 'run on the bank' in which everyone dashes to their local bank and demands gold for their money - which can't happen when you're off the gold standard. It also prevents 'goldrush' type phenomena, which is bad when you find rich new gold deposits somewhere and the market is flooded with gold which devalues all currencies around the world.

DeBeers has been artificially controlling the diamond market for years to prevent exactly this sort of thing. They have huge stockpiles of diamonds from south africa and russia, but only release them in small quantities to keep the prices up. Apparently if they released them all then diamonds would be worth about as much as - I don't know really, but not worth much anyway.

This isn't the only example of an artificial market: aluminum ( or aluminium if you prefer ), is actually 'worth' a whole lot more than we normally think. The only way to extract aluminum from other metals is with powerful electric currents, which makes it very costly to produce, but governments subsidize the aluminum industry so heavily that it keeps the consumer price very low. This is why the first thing government wants to get out of a recycling program in any city is lots of aluminum.

As an aside, being off the gold standard is not always a bad thing for all countries. Switzerland for example has had a currency that over the last 100 years or so has been more stable than the gold market - so its actually a better investment ( if you want stability ) to put your money in a swiss bank than to buy gold.

Re:It's time to go back on the gold standard (4)

ma_sivakumar (325903) | more than 13 years ago | (#144623)

This is one of the grand old debates of Economics and gold standard is the darling of many armchair experts. In reality it is no more than one way controlling the amount of currency in circulation

A currency is a lubrication for the economic activity of capitalist system. If there is not enough currency in ciculation to support the level of economic activity, the society will suffer due to reduced level of investment, production etc. On the other hand if there is too much of currency, it will lead to inflation affecting the most vulnerable sections of the society.

A gold standard ensures that the amount of currency in circulation is tied to the amount of gold available with the government. This is the reason for the flurry of economic activity witnessed whenever there was a new 'God Rush' during the gold standard days.

In today's floating currency systems the amount of currency in circulation is determined by the governments. In many countries this is managed by largely autonomous central banks who look at the economic activity and take necessary policy and physical steps. If the central bank does a good job, the economy benefits otherwise it suffers (Mexico!!)

Going back to gold standard will not ensure prosperity. At best it will make certain that the governments act responsibly. At worst it will stiffle economic progress by tying the amount of available currency to the skills of miners than to the knowledge of central bank governers!!

Re:wont last long here's why (5)

e-gold (36755) | more than 13 years ago | (#144624)

Here's more about Parker Bradley [gold-age.net] . Despite three months + having passed since the raid, Parker [gold-age.net] has yet to be charged with jack squat. *sigh* Parker Bradley [gold-age.net] is a friend of mine, and life isn't too nice [gold-age.net] for him these days...(get some e-gold and donate it to him). e-gold isn't anonymous cash like in Cryptonomicon or the Grabbe piece, it's just another flavor of money, but one that can be particularly useful, IMO (see below). e-gold provides a level of privacy exceeding credit cards (they don't sell, trade, give away, etc. customer info) but not exceeding bearer stuff, so it's not a good idea for the Jim Bell types.

e-gold (which has so far lasted since 1996) andOmniPay [omnipay.net] (I work for them, not e-gold, and I speak only for myself) are doing fine, actually. I'd like lots of Slashdot folks to try the stuff, because you tend to be programmers, and nice things [metalproxy.com] happen when programmers play with e-gold. I'd like for Slashdot-like sites to sell mod points (a quickly expiring currency) so I've offered a ten-gram reward for it (about 80-90 bucks' worth, at the moment, so not much). I'd like for folks to think of e-gold for the cool stuff [magazinedepot.com] that can be done with it. Using the shopping cart as a tipjar [e-gold.com] and direct, voluntary donations to musicians might solve the Napster problem someday, IMO. e-gold is a bit tough to understand at first (grams as a currency?!?) although selling gold (a very emotional substance with humans, still, whether it's electronic or physical) can be a business where it's very hard to love *every* single customer...Mostly it's fascinating and lots of fun. The currency is growing pretty fast without much marketing budget, in part because of the "fan club" of sites like BananaGold [bananagold.com] and cool directories maintained by others. It's very nice for me.

Anyway, if folks on Slashdot want to try it, I have a promotional account, so just send me your account number and I can click you some (not much, I don't toss this stuff [e-gold.com] around like Paypal, but OTOH we're in the black...) gratis. Thanks.
JMR

Re:Who's the moron? (5)

Skald (140034) | more than 13 years ago | (#144626)

It's worth noting that many prominent economists, including Nobel price winner Milton Friedman, agrees with this "moron".

They have taken economics 101.

Um... no. Some of us actually have read Milton Friedman. To state Professor Friedman's conclusion first, for the impatient:

'My conclusion is that an automatic commodity standard is neither a feasible nor a desireable solution to the problem of establishing monetary arrangements for a free society.'

The following passages are excerpted from Capitalism and Freedom. It's really an excellent book, if you're into this sort of thing. Keep in mind, though, this was written in 1962, so the 'current situation' isn't very current.

'The fundamenal defect of a commodity standard, from the point of view of the society as a whole, is that it requires the use of real resources to add to the stock of money. People must work hard to dig gold out of the ground in South Africa -- in order to rebury it in Fort Knox or some similar place. The necessity of using real resources for the operation of a commodity standard establishes a strong incentive for people to find ways to achieve the same results without employing these resources.'

[...]

'But, as just noted, such an automatic system has historically never proved feasible.'

[...]

'It should be noted that despite the great amount of talk by many people in favor of the gold standard, almost no one today literally desires an honest-to-goodness, full gold standard. People who say they want a gold standard are almost invariably talking about the present kind of standard, [ed. 1962] or the kind of standard that was maintained in the 1930's; a gold standard managed by a central bank or other governmental bureau, which holds a small amount of gold as "backing" -- to use that very misleading term -- for fiduciary money. Some do go as far as to favor the kind of standard maintained in the 1920's, in which there was literal circulation of gold or gold certificates as hand-to-hand currency -- a gold-coin standard -- but even they favor the co-existence with gold of governmental fiduciary currency plus deposits issued by banks holding fractional reserves in either gold or fiduciary currency. Even during the so-called great days of the gold standard in the nineteenth century, when the Bank of England was supposedly running the gold standard skillfully, the monetary system was far from a fully automatic gold standard.'

-- Milton Friedman, Capitalism and Freedom

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