Single World Currency based on gold/silver....would it work?

gecko109

Something I have been giving alot of thought to is a single world currency. Doubtful that I will ever see it happen in my lifetime, but will most likely eventually happen.

I anticipate it might work something like this....A few of the world's leading financial powerhouse nations will get together to form a super warehouse facility that will store all the gold and silver bullion owned by them. They will then set up a printing facility to make currency based on those gold/silver deposits. It might have notes for gold ranging from 1/100th oz up to 1 ounce, and silver notes from 1/100th to 1 ounce. All products and services would then be priced accordingly. For example, a carton of eggs may be priced at "8/100ths SLV"....while a new boombox might be priced at "10/100ths GLD". Other nations would then be able to ship their bullion deposits in exchange for these new notes, as well as private citizens for tiny processing fees. The "super warehouse" would be open to auditing at least 4 times per year by a team made up of representatives from perhaps 25 nations. In addition, any nation or private citizen would be able to exchange their notes for physical metal at any time at a small cost for processing. With the new "super facility" charging miniscule fees for exchanges both ways, I think it could basically pay for itself.

The major benefit to this system would be the obvious inability of any 1 nation to manipulate its currency....a BIG problem happening right here right now. Inflation would only grow as newly mined gold/silver grew. That rate would be far less than the 3-5% we experience currently. It would also make nations more fiscally responsible as there would be no more multiplying the money supply. That is the single biggest reason we are having the problems we face right now.


With this new system, there would be no need for a "gold standard", as pricing on goods/services would be in gold and/or silver anyway. Your paycheck would be paid in these new notes as well, so there would be no reason to worry about trading paper for metal so long as the system maintained 100% integrity. Think about it in these terms....would you be happy to be paid in gold and silver as long as everything you bought and paid for was done in gold and silver?


Unfortunately, the above thoughts would only work if all countries agreed to give up their right to fleece their citizens through government made inflation. If I was able to use my laser jet printer to LEGALLY produce as much "money" as I saw fit, I would not use any of my gold/silver reserves....somehow I doubt that any of the financial powerhouse nations would either....and they CAN print as much money as they want already....that is, until we all stop taking it!

Weiss

I suppose it could work. It was in essence the why and how of paper currency from the time of its inception 1500 years ago until the invention of fiat currency.

Except rather than inspection, the value of the paper money was tied closely to the trustworthiness of the issuing government: Print more paper than you have metals, the value rapidly decreases. Different technique but same outcome?

The idea behind gold and silver certificates was that they were payable in equivalent gold or silver coin. Once we went off the gold and silver standards, they were no longer redeemable. But there's nothing to say they couldn't be revived--just without the option of paying in previously denoted coin. You couldn't redeem a NEW$1 bill for a silver dollar, for example. But you could redeem it for whatever the equivalent of silver a NEW$1 bill would "buy", be it a grain, a gram, etc.

BigE

I would love it to be able to cash a check at a bank and get paid in gold or gold certificates, silver or silver certificates, and get the change with real copper cents, silver dimes-quarters and halfs. Tellers might be confused if they had the 2 1/2 gold pieces though!----------------------BigE

TomB

On the surface the idea is quite simple, yet elegant. However, I also note that you find a major flaw in the imprementation of the system in that what nations would possibly agree to this if they are voluntarily restricting their ability to buy time? In some ways I like the idea and it is quite familiar to those of us who have seen silver certificates, but I don't think it will happen.

secondrepublic

I doubt it will happen. From the standpoint of central banks and governments, the ability to manipulate and print currencies is not a "defect" in the present system; it's a main feature. Governments don't want their hands tied with a gold/silver standard.

roadrunner

It would work. And at some point in the future it will be the only option as nations default on their paper promises. The IMF will in some way oversee the a new world currency with a link to gold and/or other commodities/PM's. It doesn't mean there has to be a 1-1 ratio in value with currency vs. hard asset. But there will have to be a way to prevent unlimited monetary creation without backing.

It has to head in this direction because at some point the system is just going to blow up as the final accounting for the humongous pile of debt occurs it one final dump. The unbacked paper fiat game has to come to an end (ie the clock will run out). There really will be no other alternative unless living in caves is ok with the majority.

roadrunner

1jester

I don't see how a bi-metallic system could ever work (in the sense that one unit (say, a dollar) is valued officially in both metals), since the value of the respective metals is not constant over time. Pick gold, or silver, or make sure there was a completely free float between the metals. Then it could work extremely well.

PerryHall

We already have a world currency based on gold and silver---it's basic denomination is called the Troy Ounce.

derryb

I think the answer lies in the success or failure of the euro, one currency being used by multiple nations. I personally think the euro's days are numbered. As long as a currency, such as the US$, is valued at the "good faith" of a nation, each nation will need its own currency. Of course a world currency would mean US banksters relenquishing total control and I don't think you'll see that happen any time soon.

roadrunner

The banksters have been making money off the fiat system since as long as there has been paper money. In the case of the USA for the better part of the last 100 yrs. And at some point something "different" will take precedence or replace the dollar. After taking away 99% of the value of the USDollar it will be time to switch to something new to start fresh. When the bankster's hands are finally forced to make the switch they will be well prepared by having their assets denominated in oil, gold, silver, commodities, etc. Don't worry about them as they won't be the ones holding the proverbial bag...that would be J6P. It will be the culminating event where they and their politically connected benefactors will be able to cheaply buy the assets that remain as the new monetary system commences.

roadrunner

NitroCruiser

I'd think that quantity would be an issue. Is there enough to go around the way it is and still meet the demands of consumers (jewelry) and industry?

buffalohunter

its just a matter of time, with the us gov taken over everything

gecko109

<< <i>I'd think that quantity would be an issue. Is there enough to go around the way it is and still meet the demands of consumers (jewelry) and industry? >>




"Industry" uses just a tiny fraction of gold each year, but silver uses up a bit more. Those usages can be factored into the new structure easily though. There is plenty of gold/silver above ground to start this system easily. As long as everything is relative, it doesnt really matter how much bullion exists. The important part of my concept is that "new" money could not be just made to order anymore. That would pull in the reigns on worldwide government's ability to manipulate our financial systems for good.....thats the crux of my proposal.

renman95

It's already here with SDR's in small degree. I have read that SDR's will be backed by gold in the near future. This years IMF meeting is to reevalute the current basket of currencies. The last major meeting, 2005, the dollar & US economy was a far different animal. It may take another meeting or two for the SDR world currency to come into fruition. It all depends when the US will implode under it's debt time bomb and how the future political clime can be melded into a new world (socialist) order.

bluelobster

no