Precious metals are not useful in a collapse scenario!

[iamnotback]

To my BCT friends who are goldbugs, the reason I speak frankly is because I want you to look at the situation objectively. I know from my own infatuation in the past with precious metals, that the drug of fighting back against the system is very intoxicating.

But the fact is that absent our existing governance and monetary system, a power vacuum forms, which sucks in roaming armed gangs which then gives rise to warlords. The warlords are the market makers. Feudalism. Power is a fact of physics and nature.

The only way your fantasy of a silver dime monetary barter system would take form is if you have an organized community with governance, security, and enshrining silver dimes as the monetary system to give it the confidence it needs. And then some market makers to provided the liquidity between debt, silver dimes, and production. And you have to then provide for defense against more powerful invaders, so your community can't be too small.

If you don't understand how governance, market makers (i.e. power-brokers), and the economy are all dependent on each other, then you of course will make silly fantasies about people trading silver dimes as a fall back option.

Understanding power vacuums, the power-law distribution of wealth in nature, etc.. are critical to forming a rational assessment of the future.

Money has always been what people trust and have confidence in. This doesn't mean the metal itself, but as Armstrong has explained many times it was the stamp on the metal. Even when the invaders took over the Roman Empire, they used the stamps on the coins from the former Empire because it was more trusted.

Bitcoin (crypto-currency on a blockchain) enable trustless money, where we don't have to trust any authority. We trust the decentralized protocol. Now that was the ideal. Unfortunately Satoshi's proof-of-work centralizes and thus we end up trusting Gregory Maxwell and the Chinese mining cartel.

So crypto-currency is not quite ready for being independent of the powers-that-be yet.

Someone may invent a solution. I happen to know someone who claims he may have such a solution. We'll see...

Question for you.

What is the most ideal money system?

In the now Id suppose this would be the system with the most liquidity and fungibility.

However if one was to theorize what the most ideal money system was, what would it

There is no perfect static one. Nothing static will ever be perfect, because static means we can't exist. Our existence is predicated on friction and thus change via irreversibility of space-time. I wrote about this recently in several places (see Economic Devastation, see one of my blogs on Steemit, and see some recent comment posts and also wrote about this on Github, don't have time to dig this up, ... google my name and "light cones").

The ideal money system is always changing. It is the one that enables society to move forward, as the needs of society changed.

As I have explained several years ago in my seminal articles which CoinCube cited, during the Industrial Age we needed to store capital in a way that maximized the economies-of-scale of constructing factories, i.e. maximizing efficiency of labor and technical capital. Whereas, now in the Knowledge Age we need to maximize decentralization and thus diversity of maximization-of-the-division-of-labor.

This is why now physical money can't move us forward. Gold and silver could only take us back to a Dark Age. We must move forward, because the degrees-of-freedom in society had shifted due to technological advancement. I would need to write another essay to explain this in more detail and don't have the time nor cognitive energy to do it now.

As Dmitry Orlov points out, everyone's priority is on food, security, and transportation. Direct trade of these is more valued than some metal which can't be traded for these needs, because these metals are not liquid.

Thinking towards your better then steemit line of thought. The next generation social network would do well to focus on these things. Allow the economy(trade of goods and services) to flourish freely. Decentralize food preparation and distribution. (Ie: uber/air bnb like: you cook some extra food and use a local service to sell and deliver it, build a rep, etc). Decentralize security, neighborhood militia, cop liasons, neighborhood watch, etc. Decentralize transportation, uber.

(Decentralization in this case, still uses a network as the centralizer, however it allows regular people to participate. Ie: gives the purpose..a job, when no ones hiring)

Disagree. IMO, the better Steemit I am working on can't focus on physical world things, because that doesn't appear to me be the low hanging fruit. The virtual world moves at much greater degrees-of-freedom (a form of efficiency in the sense of potential energy). Once you've onboarded the virtual ecosystem, it can then also take over the physical realm as an after effect of already conquering the world.

[iamnotback]

With modern day fiat money it isn't necessary for the value of the metal to be equal to the value of the stamp, rather it can be much less. The $100 bills I use do not contain $100 of paper.

I expected that you would end up saying something along these lines. But this has evidently nothing to do with the trust that people reveal towards precious metals. You seem to have massively forgotten what you started with. Namely, that the trust that people have toward a gold specie doesn't depend on what this specie is made from, but only on the stamp of it.

You are paraphrasing me incorrectly. I wrote:

Money has always been what people trust and have confidence in. This doesn't mean the metal itself, but as Armstrong has explained many times it was the stamp on the metal. Even when the invaders took over the Roman Empire, they used the stamps on the coins from the former Empire because it was more trusted.

By "money" I obviously mean what people trust to be currency (a universal unit-of-exchange). This has nothing to do with chunks of metal (in whatever form) hoarded for speculation and investment. You are conflating orthogonal concerns

The problem is that the very metal these chunks were minted from was considered money (in whatever form and state), not the stamp impressed on it as you and your buddy Armstrong erroneously claim. In other words, people trusted the metal, not the stamp.

You continue to conflate personal value system with PUBLIC CONFIDENCE in the stamp. A person will weigh the risk of lost of PUBLIC CONFIDENCE in the stamp against their personal assessment of the metal value, and the fact that PUBLIC CONFIDENCE in the currency is required for it to be a liquid unit-of-exchange (i.e. a personal assessment of metal value is relatively illiquid if there is not State endorsed PUBLIC CONFIDENCE in the stamp). This is why when PUBLIC CONFIDENCE in the stamp was peaking, the coins were able to be heavily debased but then as emperors were disposed every decade or less then it was necessary to increase the metal content in order to gain enough PUBLIC CONFIDENCE.

Moving the capital to more fortified location that could better leverage trade between East and West also helped Constantine establish more PUBLIC CONFIDENCE so the Byzantium Empire could carry on as Rome sank into the dust. And co-opting Christianity was another in the confluence of factors establishing PUBLIC CONFIDENCE. And then the Byzantine coins were heavily debased anew over time because PUBLIC CONFIDENCE in the stamp was high.

I have already told that people paid a relatively small fee (several percentages) for having royal coins minted from the gold or other coins they had brought to the royal mint. And that fee was the real "market" price of the stamp. This can be very easily explained by the fact that every king or emperor had been minting and accepting as legal tender his own coin, so the stamp itself cost virtually nothing. For the simple reason that rulers back then had been killed, assassinated, and overthrown every other day. The invaders that took over the Roman Empire fit into this scheme of things perfectly...

Seigniorage is exclusively for the State when PUBLIC CONFIDENCE is high. For the $100 seigniorage is about $99.9.

Just imagine what your 100 dollar bill would be worth if it had been outlawed every time a new POTUS came to power

Indeed one of the reasons the US dollar has high PUBLIC CONFIDENCE (even internationally) is because unlike European currencies which are routinely canceled, the dollar has never been (yet). That is why the stamp is worth $100.


But I am repeating myself:

But you still can't escape the simple question why authorities continued to use precious metals for minting coins until very recent...

They debased the coins in the Roman Empire and got away with it up to a point, because people trust the stamp and the strength of emperor stamped on it. But eventually the emperors were being overthrown every decade, so the stamp had to be backed by more metal value in order to bring back the confidence.

Also modern banking and paper money had not yet been invented in Western Europe yet, and I believe not until Florence, Italy if I am not mistake. China had already invented paper money though.

So if the government is perceived to be strong and stable (e.g. the USA since at least WW2), then that government can debase the hell out of their fiat, which is exactly what the Fed has been doing with the world's reserve currency and formerly strongest military power.

And why people started evading such coins when the authorities began debasing them

No one stopped using FRNs and zinc pennies and quarters. The USA government is still perceived to be strong. But we are witnessing the fall of the USA empire now. Exactly as predicted by Armstrong's model. In fact, Armstrong's model for the US empire peaked on the day Edward Snowden made his final move of no return for releasing the NSA exposé.

[iamnotback]

The problem is that the very metal these chunks were minted from was considered money (in whatever form and state), not the stamp impressed on it as you and your buddy Armstrong erroneously claim. In other words, people trusted the metal, not the stamp.

You continue to conflate personal value system with PUBLIC CONFIDENCE in the stamp. A person will weigh the risk of lost of PUBLIC CONFIDENCE in the stamp against their personal assessment of the metal value, and the fact that PUBLIC CONFIDENCE in the currency is required for it to be a liquid unit-of-exchange (i.e. a personal assessment of metal value is relatively illiquid if there is not State endorsed PUBLIC CONFIDENCE in the stamp). This is why when PUBLIC CONFIDENCE in the stamp was peaking, the coins were able to be heavily debased but then as emperors were disposed every decade or less then it was necessary to increase the metal content in order to gain enough PUBLIC CONFIDENCE

You are trying to hide the lack of substance behind verbiage. Public confidence is not a thing that exists by itself. It is an aggregate of personal attitudes and preferences ("personal value system" as you called it) toward something (in that case, the stamp, as you put it). You won't make me believe that people trusted the stamp when it changed a few times during their lifetime. In the early history of money the stamp meant essentially nothing. In Europe, people didn't use gold coins in everyday life. Such coins were used for paying taxes and for hoarding (by gold content and totally irrespective of the stamp minted on them). In other words, the public confidence in the stamp was negligible beside the public confidence in the metal itself...

Otherwise, rulers of all sorts might have safely used fiat instead of precious metals

I am sorry because you speaking bat shit gibberish now.

You accept a $100 bill because you believe that the PUBLIC CONFIDENCE is high and that everyone will honor the $100 stamped value.

[iamnotback]

And so what? This doesn't in the least mean that people always had, have or will have that public confidence in the stamp you are talking about.

I am so glad what I have a functioning brain stem. I can't imagine what it must be like to be so intellectually handicapped.

You obviously are unable to comprehend that the appraisal of the stability and longevity of PUBLIC CONFIDENCE that we make is based on how long we will anticipate holding that $100 bill before we spend it.

Obviously my point has been (in numerous responses to you before this one) that when PUBLIC CONFIDENCE is deemed to be lower (or less stable) by the public, then the government is forced to institute other measures to restore sufficient confidence in the currency, such as by lowering the seignoriage (i.e. increasing the metal content value) and other measures.

Please this point is irrefutable and has been made by myself over and over again in response to your numerous myopic comments. It you still can't get it, there is no hope of you ever getting the irrefutable point.

I have been very patient and respectful to you, but there is a limit. You need to try harder to think, before you post. You are obviously not thinking.

[LisaLee555]

Can it be caused by upcoming global financial crisis? I recently came across an article ( http://planetaryproject.com/global_problems/economic/ ), which says that world experience a huge economic crisis every ten years, I found it rather interesting.

[freshman777]

Why physical gold matters and will matter for a long time to come.
http://www.zerohedge.com/news/2016-11-10/gold-price-skyrockets-india-after-currency-ban

[dirokkl]

Why physical gold matters and will matter for a long time to come.
http://www.zerohedge.com/news/2016-11-10/gold-price-skyrockets-india-after-currency-ban

Precious metals is a relic of the past. Their main property is resistance to oxidation. Now chemistry allows the use of other metals with such properties. I think the price of gold will fall.

[freshman777]

Why physical gold matters and will matter for a long time to come.
http://www.zerohedge.com/news/2016-11-10/gold-price-skyrockets-india-after-currency-ban

Precious metals is a relic of the past. Their main property is resistance to oxidation. Now chemistry allows the use of other metals with such properties. I think the price of gold will fall.

Yeah, like progressives "thought" that Trump can't possibly win. Underestimating and ignoring innate instincts and legacy is dangerous, it comes to bite in the ass one day.

[iamnotback]

Why physical gold matters and will matter for a long time to come.
http://www.zerohedge.com/news/2016-11-10/gold-price-skyrockets-india-after-currency-ban

India is unique in that gold jewelry is ubiquitously worn (especially by females) as a form of savings. Nevertheless gold is gradually dying as unit-of-exchange in India and electronic currency is growing my leaps and bounds. It won't be long before gold is an ancient relic in India also.

[freshman777]

Why physical gold matters and will matter for a long time to come.
http://www.zerohedge.com/news/2016-11-10/gold-price-skyrockets-india-after-currency-ban

India is unique in that gold jewelry is ubiquitously worn (especially by females) as a form of savings. Nevertheless gold is gradually dying as unit-of-exchange in India and electronic currency is growing my leaps and bounds. It won't be long before gold is an ancient relic in India also.

India, China, the Middle East, North Africa, even rap culture in Afro-american gettos -  for billions of people gold and gold jewelry is strongly rooted in their culture. Women request gold as gifts from finances and husbands. You can't change that easily. White nerds can't change that. I don't expect gold to take a downturn any time soon. With Trump promising infrastructure spending, lowering taxes and having to finance a good part of legacy social programs to avoid complete chaos, inflation will rain. It can't be anything but positive for gold, the erosion of fiat value even white nerds will understand.
I mean real gold. Not the paper promises the price of which will eventually go to zero.

[xdrpx]

In Middle east and India, gold and silver are traded in masses and are considered as valuable mediums of exchange for liquid cash. Even in situation of crisis where cash reserves are less and gold smiths don't have cash to exchange your gold, gold by itself could be exchanged as a barter for another item of equivalent worth. You'll always be able to go to a bank and deposit your gold and get a gold loan for lower interest rates and this shows that even in a collapse scenario it's possible to get back with your investment in gold and silver. Remember that the gold standards where Gold was used as a peg for fiat currency? That could come back into effect as well.

[20kevin20]

Wrong. Precious metals are the ONLY useful things you can use in case of a collapse. It's always been used in collapse and war scenarios and became WAY more valuable (up to 10x times if not even more!). This is why I'm investing in precious metals: they're going to rise one day. We never know when, but I am 1000% sure it will one day. And trust me, it will NEVER go down or fail. That's impossible.

[iamnotback]

In the Econ. Total. thread I mention a little about The Road to Ruin, the brand-new book by Jim Rickards.  I just started.  I will have lots more to write about it as I explore his ideas.

Of interest is that many of his ideas, so far anyway, parallel Armstrong's ideas.

He is saying that ~2018ish when the defaults go bezerk, the central banks will be trapped, and the global elite will close the financial system, so that the elites can buy up all the distressed corporations and assets, before they reopen the financial system.

Hard assets will preserve wealth long-term but they won't be liquid during that period:

https://bitcointalk.org/index.php?topic=1665943.msg16749910#msg16749910

THAT would be the acid-test of a new crypto: whether the black market guys would accept it.

I disagree. I am not here in crypto-land to create black markets. I am here to create a mainstream market of billions of people using crypto-currency.

For liquidity, you are going to need crypto-currency. And that is why you need crypto-currency with billions of users for massive liquidity. Bitcoin isn't going to get us there fast enough. That is why I will release the "Bitcoin killer" early 2017.

Proof-of-work coins such as Bitcoin, Monero, and Zcash will lose all their security in the coming crisis, because miners won't be able to exchange BTC for fiat to pay their electricity.

[iamnotback]

Why physical gold matters and will matter for a long time to come.
http://www.zerohedge.com/news/2016-11-10/gold-price-skyrockets-india-after-currency-ban

India is unique in that gold jewelry is ubiquitously worn (especially by females) as a form of savings. Nevertheless gold is gradually dying as unit-of-exchange in India and electronic currency is growing my leaps and bounds. It won't be long before gold is an ancient relic in India also.

India, China, the Middle East, North Africa, even rap culture in Afro-american gettos -  for billions of people gold and gold jewelry is strongly rooted in their culture. Women request gold as gifts from finances and husbands. You can't change that easily. White nerds can't change that. I don't expect gold to take a downturn any time soon. With Trump promising infrastructure spending, lowering taxes and having to finance a good part of legacy social programs to avoid complete chaos, inflation will rain. It can't be anything but positive for gold, the erosion of fiat value even white nerds will understand.
I mean real gold. Not the paper promises the price of which will eventually go to zero.

You don't trade a $1000 gold chain for dozen eggs.

And nobody wants your stupid silver rings in exchange for the precious food. They want other forms of food, water, ammo, or medicines.

You'll learn the hard way, just as you did when Trump won as I predicted and gold declined as I predicted.

[Killerpotleaf]

gold is not hard to counterfeit.

 

[freshman777]

Why physical gold matters and will matter for a long time to come.
http://www.zerohedge.com/news/2016-11-10/gold-price-skyrockets-india-after-currency-ban

India is unique in that gold jewelry is ubiquitously worn (especially by females) as a form of savings. Nevertheless gold is gradually dying as unit-of-exchange in India and electronic currency is growing my leaps and bounds. It won't be long before gold is an ancient relic in India also.

India, China, the Middle East, North Africa, even rap culture in Afro-american gettos -  for billions of people gold and gold jewelry is strongly rooted in their culture. Women request gold as gifts from finances and husbands. You can't change that easily. White nerds can't change that. I don't expect gold to take a downturn any time soon. With Trump promising infrastructure spending, lowering taxes and having to finance a good part of legacy social programs to avoid complete chaos, inflation will rain. It can't be anything but positive for gold, the erosion of fiat value even white nerds will understand.
I mean real gold. Not the paper promises the price of which will eventually go to zero.

You don't trade a $1000 gold chain for dozen eggs.

And nobody wants your stupid silver rings in exchange for the precious food. They want other forms of food, water, ammo, or medicines.

You'll learn the hard way, just as you did when Trump won as I predicted and gold declined as I predicted.

You don't go to exchange a gold chain for dozen of eggs. You take a few chain links, weigh and deposit them in a pawn shop, get fiat, buy food for a week. That's how you do it. At some point fiat is not wanted by businesses because inflation will be so high that owners of food stockpiles will want gold directly. There are always big stockpiles of food somewhere, sold at a right price for the right kind of money unless we talk big war and rationing. In the latter case internet will be down and Knowledge Age isn't an option for our lifetimes. I don't believe there will be that kind of drastic collapse though, more likely is muddling through years of economic decline (not complete collapse!), with a few fiat resets wiping out people's savings, and they'll need some gold chains to get them through it.

Gold did not decline, paper derivatives price declined (after rising) but it is irrelevant because it's not gold price that you see at kitco. Retail physical gold on the ground doesn't react to these minor fluctuations, in fact, in India demand for physical gold has driven the price higher because of war on cash there. This is one of the fiat resets I mentioned in the first paragraph, India wiped out big savings of those who chose to ignore physical gold. I don't want you to learn this the hard way, better learn from the forum and make preparations.

http://www.zerohedge.com/news/2016-11-15/first-india-now-australia-should-abolish-big-bank-notes-according-ubs

Coming to your country soon.

[markj113]

gold is not hard to counterfeit.
 

Gold is impossible to counterfeit as its an element. 

People try to make fake bars/coins that look similar but there are always give away signs if you have half a clue.

Fake coins always lack the correct detail.
Specific gravity test.
Ping test.
XRF test.
Acid test.
Ultrasonic test.
Weight.
Dimensions.

[freshman777]

I went to convert my banned banknotes into new ones. The largest amount one can have converted is Rs 4,000 ($60), until further notice. There was a huge rush of people at the bank. Arguments were erupting, as people refused to stand in queues and the banks gave no explanation of what needed to be done. Fights were breaking out.

Full story:
http://www.zerohedge.com/news/2016-11-16/stunning-scenes-panic-gold-price-skyrockets-india-after-currency-ban

Only $60 worth of old bank notes are allowed to be converted, the rest of bank paper notes if you have them are wiped out. Now you tell me with a straight face that precious metals are not useful?

[markj113]

I went to convert my banned banknotes into new ones. The largest amount one can have converted is Rs 4,000 ($60), until further notice. There was a huge rush of people at the bank. Arguments were erupting, as people refused to stand in queues and the banks gave no explanation of what needed to be done. Fights were breaking out.

Full story:
http://www.zerohedge.com/news/2016-11-16/stunning-scenes-panic-gold-price-skyrockets-india-after-currency-ban

Only $60 worth of old bank notes are allowed to be converted, the rest of bank paper notes if you have them are wiped out. Now you tell me with a straight face that precious metals are not useful?

seems iamnotback was wrong  

Prime example of why you should always hold gold for when fiat goes tits up.

Demonetisation impact: $1 billion worth of gold imported so far since Nov 9

http://www.business-standard.com/article/markets/demonetisation-impact-1-billion-worth-of-gold-imported-so-far-since-nov-9-116111500555_1.html

Gold is supposed to be trading at $2380 oz on the black market in India currently

http://www.tribuneindia.com/news/business/gold-touches-rs-50-000-in-mumbai-black-market/320951.html

[iamnotback]

Only $60 worth of old bank notes are allowed to be converted, the rest of bank paper notes if you have them are wiped out. Now you tell me with a straight face that precious metals are not useful?

seems iamnotback was wrong

Quoted for your future facepalm.

Your Zerohedge propaganda doesn't reflect the reality for most Indians. And India is rather extreme cultural exception given that women wear their dowry.

Also India is doing this to force the people towards electronic currency. They will not be able to resist, because gold is simply not a suitable unit-of-exchange in our modern economies. Dowries aside, you are sensationalizing propaganda and misinforming yourself as to the reality.

Any way, I encourage you to buy moar gold and silver. Back up the truck, so you can experience a future of an illiquid asset.

Gold is supposed to be trading at $2380 oz on the black market in India currently

Paid in small denomination Rs bank notes  

Because the large denomination Rs notes have lost CONFIDENCE because the banks will no longer accept them. Indians have CONFIDENCE in gold as a savings and dowry, but not as a unit-of-exchange. It would be instructive for you to learn more about the distinction.