Gold and precious metals should scale to buy coffee

[Hydrogen]

Precious metals minting standards need an upgrade.

Current precious metals shopping options.



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The current implementation of gold and precious metals do not scale.

A cup of coffee cannot reasonably be purchased by shaving gold dust off a bar and weighing it on a scale.

What is needed is minting of precious metals in standardized $1, $5, $10, $20, $50, $100 denominations. With coins $0.01, $0.05, $0.10, $0.25. The specific weight and exchange rate at the time of minting can be recorded to make it easier to calculate price drift.

This would make it more feasible to revert to a gold or silver standard in the event of war, natural disaster or emergency. If the internet and electronic payment shut down precious metals standardized units of exchange could be used to fill the vacuum and commerce could continue uninterrupted.

It would also not interfere with the current state of the economy. Precious metals would be hoarded rather than be a 1st choice of financial exchange. It would function as a fallback in the event of cash or digital finance no longer being viable.

This could help in places like ukraine where financial transactions and internet access could be unreliable.

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[hatshepsut93]

Governments around the globe are very-very strict about their citizens creating their own currencies. If someone tried to mass-produce precious metal coins, or any coins really, they would very quickly get visited by law enforcement.

And why would any government want to implement a gold and silver standard in case of war or natural disaster? It takes away their ability to print money to cover the immediate spendings.

[Hydrogen]

Governments around the globe are very-very strict about their citizens creating their own currencies. If someone tried to mass-produce precious metal coins, or any coins really, they would very quickly get visited by law enforcement.

And why would any government want to implement a gold and silver standard in case of war or natural disaster? It takes away their ability to print money to cover the immediate spendings.

Imagine this scenario, let's say I had a small amount of gold and melted it into molded weights of the most likely $ denominations that would be useful in an emergency.

I'm not minting, mass production or distributing a currency. This falls under personal use and each piece could be considered an individual work of art/jewelry. Which would be useful exclusively as a token of barter exchange if war breaks out or something crazy happens. Would that be acceptable and legal?

There are metal detectors which do a decent job distinguishing gold from iron and other metals. To help validate the authenticity of individually made gold items in custom weights. Tungsten being near the density of gold, having a metal detector which can detect tungsten would help to identify counterfeit and fraudulent gold bars which sometimes have tungsten inserts embedded in them.

[arallmuus]

Imagine this scenario, let's say I had a small amount of gold and melted it into molded weights of the most likely $ denominations that would be useful in an emergency.

I'm not minting, mass production or distributing a currency. This falls under personal use and each piece could be considered an individual work of art/jewelry. Which would be useful exclusively as a token of barter exchange if war breaks out or something crazy happens. Would that be acceptable and legal?

Aside from the question of being acceptable or legal, I think its pretty inconvenience though. Imagine that you have to mold it to $5 or $10 denominations, molding them would probably cost you some money as well.

Why would people even accept $10 in gold when they can choose to accept fiat and even in the state of emergency, why would people still accept gold when they can straight up use the barter system to exchange goods. You can do whatever you want with your gold bar but if there is no one that would accept it as a means of payment with that small denominations then its not meant to be a means of payment. I dont see any good reason on why people would accept it as its pretty much hassle though

[NeuroticFish]

What is needed is minting of precious metals in standardized $1, $5, $10, $20, $50, $100 denominations. With coins $0.01, $0.05, $0.10, $0.25. The specific weight and exchange rate at the time of minting can be recorded to make it easier to calculate price drift.

This would be a disaster for all following governments. Just imagine that average Joe starts realizing how much he's losing every year, especially now, with these high numbers for inflation...
On the other hand, for the cup-of-coffee situation, we have Bitcoin, with 8 digits after the decimal point 

PS. I did not miss the "return to gold standard" part, just it's not feasible. At all.

[so98nn]

This is not new concept here. What you referring to is go back to the Gold Coinage. History states few of the example such as Henry III of England who was one to attempt the Gold Coinage by producing gold penny ~ 45 grains which was around the value of 45 pence silver. Since the conversion was measurable in between gold to silver value, it was difficult to maintain or simply they call it, insuperable! This was in year - 1257

Later came in Edward III King of England and introduced the his own Golden Series Coins which were called as florin, leopard, and helm (1/2 and 1/4 florin). However this also failed and they went back to the silver coins.

Henry III had attempted in 1257 to issue a gold coinage by striking the gold penny (45 grains) of the value of 20 pence silver, later raised to 24; but the difficulty of relating gold to silver proved insuperable, and the coinage was withdrawn. In 1344 Edward III issued his fine gold series—florin, leopard, and helm (1/2 and 1/4 florin)—but his attempt to introduce a gold currency failed. A gold coinage was finally established in currency in 1351 with a noble of 120 grains of gold and its subdivisions, the half- and quarter-noble. In the same year, the silver penny was reduced to 18 grains and the groat issued (on Flemish models). The noble was valued at six shillings and eightpence (1/2 mark). Its obverse, the king in a ship, is supposed to allude to the naval victory off the Flemish city of Sluis in June 1340.

This introduction of Gold coins continued till Elizabeth came into rule and by 1600 she kept experimenting the different coins and shillings through East India Company. However this only lasted up until Civil War, and by 1662 Modern Coinage started.

Elizabeth I continued her father’s denominations and restored the purity of the silver coinage. She soon discontinued the groat, Edward VI having introduced the silver sixpence and threepence, although she continued its half, the twopence. Her “portcullis,” or trade coinage for use by the newly incorporated East India Company, appeared in 1600–01. She also experimented with machinery for coinage, although the insistence of the moneyers on their immemorial right to use manual methods delayed its establishment until after the Restoration. James I introduced a number of new gold coins, the most important being the “unite,” or sovereign (20 shillings), so called from its legend (Faciam eos in gentem unam [“I will make them into one race”]) alluding to the union of the crowns of Scotland and England. Charles I made no changes in the coinage until the Civil War (when Parliament coined in London and the king’s mint traveled with him); the king’s financial difficulties added many new coins to the English series.

Reference: Gold Coinage

Obviously these are just glimpse of it. History is already known for biggest gold rush and its trading for the daily needs in various kingdoms and dynasties. We using today's money system because that evolved with the time and made lives more easier than to carry bag full of gold coins.

What is needed is minting of precious metals in standardized $1, $5, $10, $20, $50, $100 denominations. With coins $0.01, $0.05, $0.10, $0.25. The specific weight and exchange rate at the time of minting can be recorded to make it easier to calculate price drift.

This would be a disaster for all following governments. Just imagine that average Joe starts realizing how much he's losing every year, especially now, with these high numbers for inflation...
On the other hand, for the cup-of-coffee situation, we have Bitcoin, with 8 digits after the decimal point 

PS. I did not miss the "return to gold standard" part, just it's not feasible. At all.

Yes, if we talking about Gold then why not bitcoin? It is modern coinage, we need more or less digital currencies to pay on the go. With development of Unified Payments Systems, NEFT, RTGS, and all no one would want to carry Gold coins in their pockets?

Gold is amazing store value. You can have physical security and you can easily get loans on it.

[teosanru]

I know one person who had introduced this idea of gold standard a few years back arguing that no fiat has ever stayed in the economy for a long run eventually it comes back to metal standards, but I think such type of minting isn't really required these days, you can have a central depository stored somewhere offshore which is a decentralised organization having say of all the members. Then you can introduce digital gold and just transact using digital gold easily with the tap of your mobile phone.

[Poker Player]

Precious metals minting standards need an upgrade.

...

The current implementation of gold and precious metals do not scale.

A cup of coffee cannot reasonably be purchased by shaving gold dust off a bar and weighing it on a scale.
...
This could help in places like ukraine where financial transactions and internet access could be unreliable.

I don't quite understand you. Are you trying to go back to the past? Scaling up precious metals to be used as day to day currencies would happen if there was a need and a market for it, but the places at war where the internet sometimes doesn't work, still use fiat currency, of bills and coins with which you can pay for your purchases.

I don't see a future scenario where gold and silver will have to be used for small payments, as there are better alternatives.

[_act_]

What is needed is minting of precious metals in standardized $1, $5, $10, $20, $50, $100 denominations. With coins $0.01, $0.05, $0.10, $0.25. The specific weight and exchange rate at the time of minting can be recorded to make it easier to calculate price drift.

But the problem there is that the government can decide to begin to go against the buying of gold, especially the $1, $5, $10, $20, $50, $100 denominations you mentioned above. To them, it will be a threat to their fiat. I do not think it would be a threat but the government are very sensitive to such situation and will make laws that will make sure that would never happen to be effective because they will think people will leave fiat and turn to spending gold. But in my opinion, I think people will not even want to spend the coin unless they have hold it for long and the value have increased to the extent they make profit from it or spend in the time of war.

This would be a disaster for all following governments. Just imagine that average Joe starts realizing how much he's losing every year, especially now, with these high numbers for inflation...

This is the reason it will not be a disaster for the government because people will realize how the government have been making the value of fiat to decrease and go for gold coins, but not for spending but for holding. People will still prefer to spend fiat because they know if they hold it, the value will decrease.

[NeuroticFish]

This would be a disaster for all following governments. Just imagine that average Joe starts realizing how much he's losing every year, especially now, with these high numbers for inflation...

This is the reason it will not be a disaster for the government because people will realize how the government have been making the value of fiat to decrease and go for gold, but not for spending but for holding. People will still prefer to spend fiat because they know if they hold it, the value will decrease.

Well, when they will see that in January their salary did worth more, they won't be happy, whether they spend or not.
Then everybody will pay the taxes in the latest possible so they pay less.
And if people will buy gold, then the inflation may not be so much beneficial for the govt because there will be less paper money that'll lose value.

I don't see anything beneficial for the govt here.

[Smartvirus]

It would also not interfere with the current state of the economy. Precious metals would be hoarded rather than be a 1st choice of financial exchange. It would function as a fallback in the event of cash or digital finance no longer being viable.

This could help in places like ukraine where financial transactions and internet access could be unreliable.

I understand your trying to think or make out a scenario of this but, is this even possible?
For digital currency, I could imagine that as it only comes with network of which, it can be easily reverted. Like Elon Musk did Ukraine a huge favour in providing them with some space network as results of disruptions on communication in the on going war. For fiat, the disruption that could occur with this is a reduction of the money in circulation but not a complete stop to push us to the Wild West era.

One thing I'm pretty sure of, what ever disrupts the activities of digital currency and fiat currency is sure to disrupt the gold minting too!

[hugeblack]

For the average user, you can do this as long as you buy gold in a legal way, but the problem remains that the second party will need to get those gold coins, re-inking them again because the sale is made in standard units sealed with weights greater than those that enable you to buy coffee.

But the question is will governments allow this as a societal behaviour? Definitely not, because this may undermine the financial stability of the state, especially in times of crisis when a decrease in the exchange rate occurs due to the government's need to borrow from the banking system "printing money"

[hatshepsut93]

There are metal detectors which do a decent job distinguishing gold from iron and other metals. To help validate the authenticity of individually made gold items in custom weights. Tungsten being near the density of gold, having a metal detector which can detect tungsten would help to identify counterfeit and fraudulent gold bars which sometimes have tungsten inserts embedded in them.

It's already unfeasible for a lot of people to own metal detectors, especially at the times of crisis, but low-grade consumer metal detectors won't cut it, they won't tell the exact content of gold, which leaves a lot of room for fraud.

Switching to precious metals creates more problems than it solves. Currencies don't lose all their value overnight, so on practice people keep most of their wealth in some store of value and have a small portion of their wealth in fiat currency for daily spendings and small emergencies.

[adaseb]

Yes you cannot legally do this. If you are an old timer you heard of Casaciuous physical bitcoins. It was really popular in 2011 or so. Either way they were coins which had an QR code with a BTC address and if you peeled it off the private key was inside. They became very popular.

However the creator got in trouble with the treasury department because you cannot create currency like this. This is not like having a chocolate coin which has no value. So if they did do something like this with gold it would be deemed illegal and confiscated most likely.

[The Sceptical Chymist]

OP, I hate to tell you this but not only don't precious metals need to "scale", but there's no chance in hell the world is going to go back to using gold and/or silver to purchase everyday stuff.  As I'm sure you're aware, the world has been moving away from physical money ever since countries began dropping the gold standard. 

Actually, it was before that--it was when the US stopped using 90% silver for coins above $0.05.  No one uses coins much anymore, and no one wants to.  I'm finding more of them than ever on sidewalks and other places, and people even leave change on the counter in stores because they just don't want it.  So I don't know if you're serious here or not, but what you're proposing is just unrealistic in this day and age.

[SyndicateLabs]

So we have a lot of different options to trade. I'm not too strict on this when looking back at using fiat to buy things, including coffee and rare metals,...
The reason products need a 3rd mediator is also a way of making sure between the value of trust and many other things that I don't know. Today, the economy may be unstable, so we can see a lot of negative issues in the financial system, but there is no need to worry because we have a government that will step in and lead people along the right process.

[Kakmakr]

Are you listening to yourself? You saying it should be weighed at the time of minting and that should be the price forever? That cannot happen with a precious metal with limited supply.    The price of 1 ounce Gold does not stay the same after it was minted or melted and placed in a mold.

Here is a 100 year historical price chart for Gold ===> https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart .....so you can see the price fluctuations and Why it will not work to have a fixed price. 

[Vatimins]

     I like the idea and do certainly agree with your thoughts about this op. Too bad though, there are quite a lot of variables to be considered when talking about this. I mean, it is pretty impossible that after all this years no one really ever thought of this. You get my point? in simpler terms, such idea has been thought of but couldn't be implemented either because of personal greed and reasons by a group of people or the government itself doesn't want to lose control.