I believe the topic was international settlements.  The problems with paper in this area have been addressed.

That's the thing though. Once you add that abstraction layer you can not prevent it from becoming fractionalized.

Are you really going to mail in gold coins to pay your gas bill?

Is someone from Algeria really going to DHL gold to Chicago to pay the rent on their oil tanker?

Too hot

It doesn't take long, but it generally can't be exchanged directly. That kills the convenience factor.

But do you see the problem? If "those peeps" account for the mass of the economy they don't just make their own beds... It affects the whole economy... It affects you.

there is no way to take delivery of pm's on a global scale expeditiously.  that's the point.

Only, a decent chunk of people won't do this, because they cant. Just like they can't function without plastic. 

Yes, but it's officially treated as a tradeable asset, not a currency. Treating it as a currency would be very simple in practice.

Fractionalization depends on the notion that everyone won't do that, and they won't unless there is a run, and there wouldn't be a run if everyone is assured that the full value of their currency in the form of the metal is at hand... It is still a house of cards that is dependent on the assurance by an external authority that things are operating as they should.

that is best handled by a modernized gold ratio system integrated with the fiat system.

If I end up being a scammer, I'll buy bulanula's debt and pester myself till I pay.

Just because you don't think gold is not a world currency doesn't mean it's not.

That's right. Heavy metal is still heavy. Unless you control it physically (either in your pocket or in a vault) you can not be assured that what you are transferring is fully backed by the metal, i.e. the metal itself. Practical, daily movements will require the addition of an abstraction layer and that will be vulnerable to fractionalization. The direct transfer of value in the form of the metal itself will always be relegated to a backwater of economic functionality.

It's done for the Euro - marked to market daily. The ratio of the Euro to gold is monitored, and additional supply is supposed to be created to maintain a steady ratio to gold. At least, that's the idea. In practice, USD inflation has threatened international price stability, so the dollar has to be taken out of the picture before gold can be used as a basis - a floating ratio range tied to gold as the foundation.

If the Euro fails, the US dollar almost certainly will also, and vice versa. Next step: SDRs based on the same principle of a gold ratio.

My concern remains management. Bitcoin has no direct management, whereas the Euro and all other fiat currencies do (although the Somali shilling is an interesting case).

Fiat doesn't have to be abandoned. Gold now acts best as a reserve for balance of payment transactions rather than a common transactional medium. Paper still has plenty of use for transactional purposes so long as its value remains stable during the period in which the transaction occurs, so instantaneous, days, months... months/years and longer is the point where gold would be a reserve for savings instead of fiat.

Sorry for misunderstanding the time. Yes per week is hgh My accounts have always been calculated daily and paid monthly I assumed his where calculated weekly and paid weekly. But unless otherwise noted interest is calculated per year. I saw no notation to the contrary. So I assumed people knew that interest is normally expressed as an Annual Percentage Rate. And payday loans can get quite high and still be legal since it isn't interest charged but fees. Again By all means express the incredible amount that he pays sure but do it in a more normal context.
FYI it looks to be 4132% Now is that likely an issue Sure. Is that the same as an APR of 7% NO.
So to get this cleared up in my head if you have 10 BTC in the bank you would in 1 week have 10.7?

I just think it's more likely that the metal which is under official control will be monetized first because the state is loathe to give up control and will only do so where it sees some semblance of control can be maintained. With existing reserves of gold, a measure of control is possible - with no reserves of silver, control is uncertain. Hence, official acknowledgement will probably not be as forthcoming for silver.

Only, without an actual banking system to accommodate all the day-to-day things that have to happen with PM's as currency it will remain little more than a curious historical footnote, with no real effect on the way the economy of Utah operates...

It was just an example. I don't think it's 20:1 either. It's most likely between 25-50:1


It has, and it will retain that aspect. I expect Mexico and certain other regions that are richer in silver than gold to support silver more readily, at least domestically. Western nations are another story.

Private parties can make use of gold or silver for exchange right now. A main barrier is convenience - it's easier to exchange dollars, Euros, or whatever other medium is more convenient. This applies mostly to western nations. Use as a transactional medium isn't the issue; use as a means of saving is.

If metal is going to sit for a long time, 10x or more in storage costs is not reasonable. Consider the amount of storage expansion that would be necessary to house official reserves. Can you imagine how much bigger Ft. Knox or West Point would have to be to accommodate 10x the physical material? Even a 50:50 mix of gold:silver reserves would require facilities 25x the size. Space is the premium even over cost, not to mention rapidly escalating security measures that rise with the area involved.

There is nothing that guarantees a bi-metal stance. Only real market forces, which cannot be ignored, but can be delayed. Eventually, silver may surpass gold in reserves. Even platinum or rhodium may come to be used more readily.

The difference is incentive. Imagine this scenario: Facebook decides that it will only release an app for iPhone and announces this. With hundreds of millions of users, how many people will take into consideration availability of the FB app for their next phone purchase? It will assuredly not be an insignificant number.

Now imagine that I control the supply of diamonds, a la De Beers. Western governments announce that diamonds and fiat currencies may be used for transactions, and anything else will be penalized, with rewards paid for reporting unauthorized forms of payment. How many sheeple will use anything other than diamonds and fiat?

Replace diamonds with silver. How many people will use gold? Now reverse the two. How many people will use silver? The incentive structure favors one over the other, and the social herd will avoid pain to seek the path of least resistance so they can continue to eat, breed, and avoid introspection. It's a very well-examined, emergent psychosocial pattern. It's been analyzed, modeled, tested, and manipulated. It'll always be limited by fundamental factors in the end, but it can go against them until exhausted. Don't fight the flow.

At one time they had a market share of over 80%.

It is currently 67%.