>Hmmm what about velocity? You could imagine GBC serving its
>vital role only as a lubricant at the point of exchange then being
>returned immediately to some settlement lubrication agent. e.g.
>Joe buys something on ebay. Joe gets some GBC at very low
>transaction cost somehow, uses it to pay the other guy, and
>the seller cashes it in, within a few seconds.
This assumes GBC's would be used solely or mostly to convert between
other currencies. Yes, the GBC's are 'lubricant' now, but only because
not enough merchants accept them. In the future, that same seller will not
want or need to convert back to another currency.
For now, gold is greasing the tracks of fiat commerce, however the long
term goal is to directly replace a major fraction of that money flow. The
measure of this replacement is the growth of gold in storage. I think it
is more significant than the velocity, especially at this early stage in
the gold economy.
Dave Brooks
Editor / Bricks of Gold Website & eZine
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