My best sense is that anything becomes a currency if enough people believe in it and trade in it. Examples inlude tulip bulbs, cowry seashells and a host of toher useless items including giant stone wheels. Look, there are people who do not believe in the value of a us paper dollar but who do believe in an ounce of gold and that it has more value. Governments acquire gold these days. So – what the most recent poster said will never come to pass but I do believe we will see gold rise again – maybe to unprecedented leverls and in doing so I expect silver will get dragged along for the ride as it is a precious metal and therefore money as much as gold is – just worth less.

As the markets plunders around the Globe and the stank of the wealthy and corporate greed runs amuck. Gold and Silver will not be worth anything to any one in the near future, nor will be traded anymore.

There will be point of self proclaimed persons of statue and recognized who meet each year in America and the other countries abroad. Will order to bring the markets around the World to a suitable stable economy, there will be a need to have a one currency system with out exchange rates and to make Gold, Silver, Stock certificates and etc illegal to trade with any thing, like commodities and other stuff.
You will see the day, if some of us live this long to see people try to feed, themselves and their families with a bar of Gold and be told to go away from farmers and etc, stores and stuff. It will be illegal and severely punishable crime, right up there with meth and other hard drugs.

1st: A proclamation, gold starts to bottom out, the wealthiest in the world will sell out fast as ordered. Another part of the economic chaos brought to us.
“Remember panic, fear threats and stuff to stock markets gets a lot of people motivated to put money from their accounts to precious metals, Gold and Silver mostly. This is what drive the price up!”

2nd: People will panic and governments around the World will take action.

3rd: “Planed” Emergency Summit meetings begin for WTO and WBank with assortment of governments invited.

4th: After a number of meetings and governments aboard, there will be an announcement to everyone in the World to bring all their Gold, Silver and etc to stations points around the World. There will be a massive buy out of Gold and etc to be electronically credited for a small price to the current value to each government allows.

5th: Time later, debit dollar will be introduced and used around the World. Based on supply and demand, exchange rates will be abolished.

And John, actually the US dollar is backed by OIL in a sense. I read that all oil is traded using the petro dollar, which is inturn a US dollar. So all this middle east (and russian) companies get paid in the US dollar and then store that money in US banks – which in turn gives the US banks the ability to offer more credit to its clients.

Now the big problem/reason for a gold boost is b/c these countries want OIL to be traded with the Euro, not the dollar. What will happen then is we wont have as many peolpe using our currency or as much cash available to our banks, and lending will not be as easy. When less people use our dollar then its value will go down and golds value will stay constant pretty much to the Euro, but since the US dollar drops in value to the world, the value of GOLD will be worth a lot of US dollars.

I’m quickly summarizing a few things I’ve read or heard so let me know if your thoughts. Good read to search “Dollar collapse” on youtube or google…

(Note – I like your pretentious use of viz.)

Also, I agree that people won’t be walking into groceries stores with oil, but I just don’t think they’ll be doing that with gold either.

Gold is important cuz aliens want it.

http://xfacts.com/sumerian_culture.html

If one were to own all the blue cheese and canned peaches in the world, during times of a global catastrophe, you’d be the wealthiest person alive. (Assuming that everybody likes blue cheese)(and canned peaches)

All these invididual demands and supplies of gold meet, and the market splits by karats, etc. and what you get is people trading their favorite kind of gold at pretty much a market-emergent price. There is no “one true value” of gold, or some objective standard. Its price is the result of the interaction of supply and demand. It’s value? Well, that’s up to you to decide, what you want to do with it.

And this brings me to my next point… historically, people used barter, but they find it very cumbersome to carry around their cart of mellons to find people to exachange mellons for spears, or whatever you needed. Money emerged, via a long but rather simple process: all goods can be exchanged for money at market prices and with this money you can get what you want… it takes barter and splits it into 2 different operations.

Current day money is a State monopoly. The State is the only institution on its territory that can legally print currency. The State uses this monopoly to expand the money supply therefore creating inflation with which to finance its deficit. It’s a pretty awful business!

If the State would allow people to use whatever they deemed fit for currency (if the Legal Tender Law would be rejected) they’d be able to print their own currency (not US Dollars but with a name of their choosing, to be clear)

Many distinguished economists claim that over time, people would gravitate towards currencies represented by scarce resources, such as gold, since the supply of gold is practically constant, you don’t get inflation and the continual deterioration of the worth of the money in your pocket, as you do with the curernt Stating monopoly.

In any case, Gold, the Gold Standard, has been proposed as a solution to the issue of inflation: it is portable, it is rare, it makes good money (you can keep it in a bank and still use checks, as long as these checkes are backed by gold)

If the gold’s scarcity, portability, international use, and so on don’t interest you, and you think it’s something you want to get rid off, you’d better find a way to sell it all off in one go, at a high enough price, or “leak” it onto the market in small quantities at a time.

Gold reserves allow States to stash a lot of worth in a relatively small space, and a cheap and painless manner (to be contrasted with the industrial requirements of the storage of oil or natural gas!)

What would be interesting would be to examine the value of our gold reserve in terms of what it has cost us to protect it. Anyone care to do research?