Value is in the eye of the beholder, I totally agree with you Paul.Paul wrote: Value is not stable. Ever. When everything moves all the time, then the value will also !
As such it is not fixed, you are quite right.
Indeed it cannot.Paul wrote: Gold can not value gold.
Only the beholder/s can do this, and they can and will do it anew at any and every point in time.
It cannot be pinned down. It should not be pinned down!
But their quantity and therefore their quality is subject to the whims of their issuer, Paul, which you acknowledged when you said:Paul wrote: Free floating currencies can deal with this because they are elastic.
So tell me, who issues gold?Paul wrote: The problems with money through history are always in the issuer.
Actually, I think the fundamental problems with money have stemmed from the lack of an objective reference point to establish value.
Indeed we will. Many already have, and the solution has been shown to be simplicity itself:Paul wrote: When we want to solve this, and take a real step forward we will have to question how we prevent the mismanagement of the money without giving up the elasticity of the system.
Gold is subject to no problems emanating from its issuer, because the issuer is nature.
We simply transfer the required elasticity of the monetary system to the value of the gold.
Value is never fixed, as you point out. So the proxy for value should not be fixed either. This makes them relative.
Value is in the mind of man, and is variable. Gold, when utilized as the physical wealth reserve asset (monetary store of value), unencumbered and therefore undiluted by contractual claims, becomes the proxy for this variable value. This is why it must be unencumbered and access to it for store of value purposes must be unhindered. When everyone can value it, anytime, it truly becomes the proxy for human value. From this reference point the relative value of all else is ascertained, firstly by gold giving valuation to currencies (via the currency/gold exchange rates), and then by said currencies denominating everything else.
Remember, it is in utility that value resides, and using gold in this way is of the utmost utility to us all. Freed gold gives man the reference point to establish objective valuation of everything. There is a massive amount of value right there, my friend. Truly massive.
Once again, we agree. It appears to me that the collective need is almost at the point to force the procedure.Paul wrote: This is just procedure and can be done when collective need is there.
Gold could never do anything to prevent this because gold has never been free to do so in the past, and our understanding has never previously been such that we could grasp the nature of this.Paul wrote: The problems with money through history are always in the issuer. Gold could NEVER do anything to prevent this.
It will be the collective need, as you say, that will result in the understanding, after the procedure has been forced by this need.
Until very recently the technology has not existed to make the valuation of gold available worldwide in real time, coupled with the fact that pegging or otherwise controlling the gold/currency exchange rate has historically allowed the controller/s to misappropriate all value accorded to gold over and above their controlled rate. Gold has long been purposely undervalued to just this end. We see today the imbalances this has caused overwhelming this control. We have collective need to correct these imbalances, and allowing the value of gold to be as elastic as required is the natural counterweight.
It is indeed all relative, and it is freed gold that allows us to establish this relativity, establish a self-correcting equilibrium, and take a real step forward.
As a result, the future is so bright you will need sunglasses.
We don't need to agree Paul, but it appears that for the most part we do.