You are right on, IMHO about the problems with gold. If a person or agency holds dollar-denominated assets and the dollar rests on speculation and moving trends that person or agency is not secure. But gold is not necessarily the answer. But if a nation has natural resources, even commodities like copper, grain and so on that is fairly stable, is that something that can work? For example, suppose a nation produces petroleum, refined petroleum products such as gasoline, and petrochemicals. Is there some universality of utility and demand that values the petroleum and byproducts so as to provide a basis for currency? Just a thought. ----- Original Message ----- From: "Richard Prosser" To: "Microcontroller discussion list - Public." Sent: Sunday, March 30, 2008 10:13 PM Subject: Re: [OT]: Unbelievable and a bit scary! > On 31/03/2008, Peter Todd wrote: >> -----BEGIN PGP SIGNED MESSAGE----- >> Hash: SHA1 >> >> On Sun, Mar 30, 2008 at 03:34:01PM -0400, Rich wrote: >> > Your expectations are realistic, Cedric. Gold will likely continue to >> > increase. If at some point a nation with huge stores of gold should >> > dump a >> > large amount of gold on the market and drive down the price, that >> > nation >> > could corner the market on gold. >> >> That's the problem with gold. You have two choices really, you either >> put government in charge of the economy (fiat currencies) or you put >> gold miners in charge. Heck, Spain and it's trading partners underwent >> severe inflation while they were busy getting all the gold they could in >> the New World. Now days one nation dumping gold on the market would >> severely distort the economy of completely unrelated nations who's >> currency was based on gold. >> >> That's the beauty of the current floating exchange rate system too. >> Currency is completely and transparently related, on the international >> level, to how much stuff, be it real goods or securities, a nation is >> exporting. The US can print money all they want, but from the >> perspective of other countries the problem fixes itself, either with a >> devalued currency, or, by having China buy you... Yet, the US can't >> screw up the economy of any country that isn't based on US dollars by >> printing more dollars. >> >> A decent tradeoff I think. >> >> - -- >> peter[:-1]@petertodd.org http://petertodd.org > > And there I was, thinking that the US dollar was based on oil :-) > > RP > -- > http://www.piclist.com PIC/SX FAQ & list archive > View/change your membership options at > http://mailman.mit.edu/mailman/listinfo/piclist -- http://www.piclist.com PIC/SX FAQ & list archive View/change your membership options at http://mailman.mit.edu/mailman/listinfo/piclist