Our current day electronic mercantile system is possible only because of the banking credit card which enables trading of a government fiat currency for real good and services. But if that fiat currency fails, we ask whether or not there is another possible fool proof electronic trading system. And the answer seems to be “yes” if we consider a gold back crypto currency.
WHY GOVERNMENT CURRENCY INSTEAD OF GOLD:
Gold has always been considered globally to be a real currency. There was a time when there was enough gold available relative to earths population to be carried around in small quantities for trading purposes.
But then as populations grew, the availability of goods and services increased diminishing their value, while the value of gold increased making it too difficult to slice up gold into extremely small and unmeasurable quantities to be used in physical trading. So sovereign governments began issuing gold backed currencies to enable easier trading.
WHY GOLD BACK CURRENCY WAS ABANDON:
In 1931, gold backed currency began to unravel in the most powerful country in the world: England. When the Great Depression hit, the people in England panicked, and started trading in their paper money for gold. It got to the point where the Bank of England was in danger of running out of gold. Quite obviously, when England created its currency, it failed to slice and dice its gold supply into small enough quantities as to allow its currency accommodate the growing population. Had England made its currency to represent extremely small quantities of gold in the first place, it would have been able to better deal with the run on its currency. Nevertheless, it eventually gave up on the gold back currency, opting to allow its currency value to be determined by the gold backed US dollar market, making the US dollar the world’s reserve currency supported by a Federal Banking System. However, for fear of running into the same problem of not being able to sustain a run on its currency, 40 years later, the US government abandoned the gold back dollar. And so we now have pure fiat currency backed only by the faith and confidence in the US government.
THE CURRENT SITUATION:
Many of today’s economist argue that being off the gold standard helped to recover from the Great Depression. But what were the real causes of the Great Depression? For one thing, it was too easy to borrow money to be used in gambling on the stock market. So when the market went down, the loans of such money were called in forcing the borrowers to sell at lowered prices resulting in a market crash, a steep sell off. Currency became tight causing bank depositors to withdraw savings in a run on banks and companies to stop hiring. So economists reason that had the government the ability to print more money without basing it upon gold, there would not have been the Great Depression.
Analysis of the economists solution shows that what they really accomplished was a way of devaluating its currency in relation to increased gold value resulting from increased population. In other words, to fight a depression/recession they employ inflation. But what if there is too much inflation? Here they employ higher interest rates.
Now this would be all well and good assuming an honest government. But what we have learned more recently is that corrupt governments will manipulate the value of currency for selfish gain. Politicians will do what politicians do, lie and cheat. So we have to ask, is there a better way?
THE SCARCITY PRINCIPLE & THE NEED FOR
DYNAMIC CURRENCY DENOMINATION VALUATION:
Remember we said the value of the gold increases as the world population increases or as the amount of gold decreases. From this
the inverse is true, ie, the value of the gold decreases as the world population decreases or as the amount of gold increases.
What we want is to eliminate the need for human intervention in dynamically determining the total amount of a hypothetical currency denomination supply as a function/multiple of global population, as well as dynamically increasing or decreasing the value of that hypothetical currency denomination determined by dividing the global population by the total amount of gold available. By basing the total amount of a denomination supply upon global population, you can pretty much be assured you wont run out of gold in backing the denomination should there be a run on the currency.
This task is well suited to a computer. In essence, using a computer we can automatically compute how much gold should be represented by the denomination of a crypto currency, as well as how many denominations should be available world wide.
But the question remains as to who would be allowed to setup and administer such a system. Certainly it should be the owner of gold. It seems likely that the sovereign nation with the most gold would be the dominant provider of such a crypto. Currently it is said that the US has the most gold among sovereign nations.
Crypto Data Mining should be backed by gold.
Ultimately the price of goods should be subject to the scarcity of gold.
At least that seems to be the manner in which old bartering systems seemed to work.
Those who have the most gold would seem to devalue it more than those who have no gold. So they would be more inclined to trade it away for more functional goods and/or services.
Those not having gold would be more innovative in producing functional goods and services.
to be traded for gold.
Govrrnments should not be part of the value in determining market value.
But that is easier said than done.
Credibility among governments varies.
That fact provides some fodder in support of global government, which in turn opens the door to global tyranny.
So we seem to be stuck in a catch22 situation.
As it stands, it would appear tbat for free market sake, the non globalization of currency is the best we can do.
And the best currency is the one backed by gold.
For crypto currency to be viable, the data miners should be the owners of gold and their crypto currency should represent a partial ownership in their total holdings of gold, or a portion there of.
This assumes that gold has a universal fixed value.
Why would one gold owner trade away more gold in exchange for a lesser amount in gold?
So different cryptos may slice and dice their gold holdings in different increments. But the overall relative values stay the same.
The desired result is the ellimination of government balloney being construed as value.
The bottom line is that a legitimate crypto currency should be a denomination representing a quantity of gold ownership.
You in effect are buying gold and using it to purchase goods and services.
Trump has endorsed the idea og crypto. Lets just hope he gets it right.
Why should gold be the standard global currency?
1. It has been recognized world wide as having value.
2. It is hard to replicate. Anything else other than a precious raw metal is easy to be made to look good.
3. There is no substitute.
Once a large scale of gold creates a crypto backed by gold, there would be no need for smaller scale gold owners to create their own crypto, because they could sell their gold to the existing crypto owner.
BITCOIN is currently the most viable crypto. BUT IT IS NOT BACKED BY GOLD.
And worse yet, those who create bitcoins, the DATA MINERS, are unknowns employing God-Knows-What protocols to create bitcoins.
Anotner requirement for a crypto provider is that he must be subject to regular validation audits of his gold holdings.
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THE IDEA BEHIND FIAT CURRENCY.
We begin with the idea of “value of currency” and the factors that
contribute to its inflation or deflation. But what is ‘inflation”?
Quite simply, “inflation” is
. . THE RISING COST OF GOODS AND SERVICES
. . DUE TO THE OVER ABUNDANCE OF MONEY.
And “deflation” is just the opposite.
A. THINGS THAT CONTIBUTE TO INFLATION:
1. INCREASED ACCESS TO MONEY.
. . a. PRINTING MORE MONEY.
. . . It should be noted that it is not necessary to physically print more
. . . money. All that needs happen is for the Federal Reserve to buy
. . . government ious and make a book-keeping entry crediting their
. . . own account with a phoney deposit & then debiting their account
. . . for the amount of the purchase of those government iuos.
. . . He who does the book-keeping controls the economy.
. . b. LOW INTEREST RATES.
. . c. LOW TAX RATES.
. . d. DECREASED
. . . POPULATION. MORE
. . . MONEY PER PERSON.
2. INCREASED COST OF
. . . PRODUCTION DUE TO
. . . SCARCITY OF RAW
. . . MATERIAL AND/OR
. . . LABOR. INCREASED
. . . WAGES OR INCREASED
. . . ENERGY COST.
3. EXCESSIVE SPENDING.
. . MONEY TOSSING.
. . TOO MUCH MONEY CHASING
. . GOODS AND SERVICES. ESPECIALLY PERTAINS
. . TO GOVERNMENT.
B. CURBS AGAINST. MONEY HOARDING
1. DECREASED ACCESS TO MONEY.
. . a. HIGH INTETEST RATES.
. . b. HIGH TAXES.
. . c.. INCREASE IN POPULATION.
. . . LESS MONEY PER PERSON.
2. OVER ABUNDANCE OF RAW MATERIAL
. . AND/OR LABOR.
3. OVER PRICING, HIGH COURT COSTS,
. . CHARGING MORE THAN THE MARKET WILL BARE.
This is why the gov is struggling to gain total control over crypto currency. It takes away their ability to control the market. But crypto does offer a way for the gov to control induviduals.
A FIAT currency is not based upon any commodity like gold. It is strickly a book keeping system maintained by the banking cartel. The world departed from a currency system bssed upon gold back with Nixon. It is probably better to have the value of gold determined by the free market rather than a government opinion. But the hazard of that is that it allows rogue nations to hoard it and possibly upset the existing fiat currencies in use. The same may even be possible with crypto currency since it is like an electronic commodity that has limited supply.
In the end, it would seem that any currency sysyem amounts to the old barttering system in the exchange of goods and services. The question is HOW MUCH DO YOU WANT A THIRD PARTY,
like the government, interfering in your exchanges. And if you really
want a third party interfering to the extent that it forgets its basic
function of securing the nation’s borders, then lots of luck with that,
because you wont even have a nation to live in or a government to
protect you from unfair trading.
In real estate, the driving priority is location, location, location.
In government, the driving priority must be
THE BORDER, THE BORDER, THE BORDER.
=============================================
THE IDEA BEHIND FIAT CURRENCY.
We begin with the idea of “value of currency” and the factors that
contribute to its inflation or deflation. But what is ‘inflation”?
Quite simply, “inflation” is
. . THE RISING COST OF GOODS AND SERVICES
. . DUE TO THE OVER ABUNDANCE OF MONEY.
And “deflation” is just the opposite.
A. THINGS THAT CONTIBUTE TO INFLATION:
1. INCREASED ACCESS TO MONEY.
. . a. PRINTING MORE MONEY.
. . . It should be noted that it is not necessary to physically print more
. . . money. All that needs happen is for the Federal Reserve to buy
. . . government ious and make a book-keeping entry crediting their
. . . own account with a phoney deposit & then debiting their account
. . . for the amount of the purchase of those government iuos.
. . . He who does the book-keeping controls the economy.
. . b. LOW INTEREST RATES.
. . c. LOW TAX RATES.
. . d. DECREASED
. . . POPULATION. MORE
. . . MONEY PER PERSON.
2. INCREASED COST OF
. . . PRODUCTION DUE TO
. . . SCARCITY OF RAW
. . . MATERIAL AND/OR
. . . LABOR. INCREASED
. . . WAGES OR INCREASED
. . . ENERGY COST.
3. EXCESSIVE SPENDING.
. . MONEY TOSSING.
. . TOO MUCH MONEY CHASING
. . GOODS AND SERVICES. ESPECIALLY PERTAINS
. . TO GOVERNMENT.
B. CURBS AGAINST. MONEY HOARDING
1. DECREASED ACCESS TO MONEY.
. . a. HIGH INTETEST RATES.
. . b. HIGH TAXES.
. . c.. INCREASE IN POPULATION.
. . . LESS MONEY PER PERSON.
2. OVER ABUNDANCE OF RAW MATERIAL
. . AND/OR LABOR.
3. OVER PRICING, HIGH COURT COSTS,
. . CHARGING MORE THAN THE MARKET WILL BARE.
This is why the gov is struggling to gain total control over crypto currency. It takes away their ability to control the market. But crypto does offer a way for the gov to control induviduals.
A FIAT currency is not based upon any commodity like gold. It is strickly a book keeping system maintained by the banking cartel. The world departed from a currency system bssed upon gold back with Nixon. It is probably better to have the value of gold determined by the free market rather than a government opinion. But the hazard of that is that it allows rogue nations to hoard it and possibly upset the existing fiat currencies in use. The same may even be possible with crypto currency since it is like an electronic commodity that has limited supply.
In the end, it would seem that any currency sysyem amounts to the old barttering system in the exchange of goods and services. The question is HOW MUCH DO YOU WANT A THIRD PARTY,
like the government, interfering in your exchanges. And if you really
want a third party interfering to the extent that it forgets its basic
function of securing the nation’s borders, then lots of luck with that,
because you wont even have a nation to live in or a government to
protect you from unfair trading.
In real estate, the driving priority is location, location, location.
In government, the driving priority must be
THE BORDER, THE BORDER, THE BORDER.
=================================================
Before the advent of electronic banking, the use of a paper iou in the form of a check with the payor’s checking account number and hand written signature was sufficient for the bank to diminish the funds in the payor’s checking account. The only danger to the owner of a checking account came from the possibility of another person being able to to perfectly copy the hand written owner’s signature, something very improbable and easy to protect against occurring.
Then came the computer with its ability to perfectly copy the signature of a person. With a picture of the signature of a checking account owner and knowledge of the account number, it became much easier for thieves to do electronic forgery. The question now is, how to minimize this threat. And the answer would appear to be simple.
First, we nust realiaze that in order for the computer to copy a signature it can only do so in graphic mode. So what we need is a non-displayable text mode signature. And with online banking, we already have that non-displayable text mode signature in the form of a password. Therefore, any electronic transaction authorizing a bank to diminsh the funds in a checking account should require the password of the checking account owner. Should a bank fail in providing this security, then it should be held laible for any losses due to its negligence.