[Skybird]

Originally Posted by Catfish

It is not all wrong, however i beg to differ that a currency 'guarantee' only exists if people agree on its value.

No, the value of currency is not needed to be separately agreed on in value, since a currency is just a formal token, a palceholder. What coutns is the vlaue of the good or commodity that each currency unit stands for. And that value, the worth of that material backup, is object of market mechanisms. Supply and demand. In cas eof preicous metal sbeign used to mint coins this means a banknote is just a token for a certain ammount of silver or gold that is stored away somewhere, lets say one ounce. The note then reads "one ounce" (currency titles like Dollar and Taler originally were quantity measurements, like karat, wihich is the weight of a diamond. There shall be no notes for which their is no appropriate ammount of preicosu metal ins torage ADDITIONALLY tot he metals beign sued to make coins of it. Only then the banknbote doe snto ifnlate the currency unit colume, which is of utmost importance. So even when banknotes of paper are beign handed aorund, the real money is not the banknote, but the preciosu metla it stands for. The note is just a placeholder a chip for a coat at the reception.

The ammount of total precious metal available in the world, does not matter, the numerical fixing of price indices simply adapt. Thats all. Ammount of gold int he world doubles? The oucne is worth half only, so prices for other goods double. TGhe ammount of gold int he world halves? The value of the ounce doubles, the price indices halve. Simplified, but in principle its like this.

This sets limits for what potlicans can spend out. And thatswhat they never liked. So the kind reserved the royal privilge for minitn cpoins,a dnpotlicians of modenr times invented central banks and Fiat money. Both serve the same purpsoe: forging money to increase "liquidity", and hiding in that that somebody wants to spend more money than there is.

The minting privilege of states must be destroyed, if needed by force. Central banks must be destroyed as well, if needed by force. This is of utmost importance. What is needed is a value-based real currency, not a Fiat counterfeit money. It does not matter who mints a gold coin - the ammopunt fo gold in it is what counts. The look is absolutely irrelevant,m the cretaor is irrelevant. Before the civl war, in the US there were half a dozen of different dollars in ciorucklation, most or even all of them from private mints. One dollar of silver (dollar is a quantity measurement, coming from the word Taler!!) is one dollar of silver. Full stop. If you sell a gold ring or a necklace, they only check the wieght of the in cluded gold. Who created the ring, the origin of the necklace, the hair colour of the goldsmith, are not relevant. 30 grams of gold are 30 grams of gold. It does not need a state's approval!

Gold is certainly a standard, but more is being found every day, also after WW2 you could not even buy a loaf of bread with a bar of gold, seems the farmers did not agree to the value when bread was scarce, and needed to survive.

The total amount of gold that has been mine din the history of all mankind, is surprisingly small small, its estimated to be around 187 - 197 thousand tons - in all millenia that man has mined it. That equals a cube with an edge length of around 21 - 21,7 meters. Only very little new gold gets added every year to the already existing gold, less than 1% of the traded gold per year on the markets actually is newly mined gold. Gold mining takes place since around 6000 years. The other 99+ % gold avialaboe for trade, actually is old gold that just gets sold by its previous owner to a new one, bartering it for somethign else.

If a simple gold coin of lets say 1 ounce is too big and unpractical, that divide it into pieces. The charm of gold cpoins is that what matter sis not the shape of the coin, but the ammount of gold. You goive the gold a finer denomination (Stückleung, make of one cpoins twenyt coins, et voila. Or small tiny flakes of 1 gram, whcih in Germny would give oyu a value of currently around 50-60 Euros. Or trade your gold for something else allowing even finer denominations of value - traditionally this has been silver.

You must not have millions of tons of gold to have a gold currency. The ratio, the relation of prices to each othe ris what coujtns, and when gold is just a trading commodity like any other trading commodity, it doe snot matter how big or small a coin is or who printed it - gold is gold, and only the total ammount is what matters.

If enough people agree on a currency, and be it toilet paper, it is worth what people give for it. And that depends on time and general cirumstances of trade.

Absolutely correct. Historically, gold and silver and jewelry have shown to be much more preferred as a universal trding item, for many advantages. Especially precious metals do not rot, and their total av ialability is limited.
Central banks HATE both facts.

And if gold would really be so bad and worthless, then somebody must explain to me why central banks have bought it in huge quantities over the past 15 years, stored and lock it away, and threaten to prohibit private possession of gold?

Central Banks know damn well that the only real money is not Paper-Euros and Paper-Dollars, but Gold and Silver and the likes.

Toilet paper, anyone? In Corona times, it worth pure gold!

When i was still into investing, I had, amongst others, these two rules, which I copied I think from Warren Buffet. Do not sell what the other wants from you urgently. Do not buy what the other wants to sell you at all cost. Well, central banks want my gold. And they want to give me paper leaflets or bits and bytes on a server. Hear my mind clicking.