Hello Jim, You are right with pointing out that the actual gold available on the planet is far larger than currently feasible to mine. One is remided of the fact that common sea water contains roughly half a million tons of gold. Getting it out of the water at a cost lower than then market price of gold is the tricky part (recent estimates cost the effort to extract trace element gold from sea water at an expected cost of about $50,000 per ounze with a multi-billion dollar up front investment for the plant). By the same token however, even if the moon was solid gold, getting it here is not really feasible.
So I'd say that we'd be limited to the gold deposits easily mined on mother Earth for a few centuries - if mum leaves us a few centuries, that is. In the end, the implied finity of supply is what would make it all work. If gold was plentifull and reasily available for next to no cost, then the purpose of gold as currency would be deated much in the same way the Spaniards went through major economic hardships and gold over-supply induced inflation during their colonial peak. 12 gold doublones bought one a decent size dwelling near Lisbon when Columbus left for East India. At the peak of the gold inflation 12 doublones didn't pay for a decent frock and tiny huts went for upwards of 500 doublones. A world-wide gold currency should and could function with gold in the vincinity of what is today $310 per ounze, or about $10 per gramm, simply because the average cost of mining, raffining, smelting, and making coins (plus transport, storage, administration, etc.) should not be lower than the implied exchange value. This in itself, will keep additional supplies limited and hence keep inflationary tendencies in check. In the end, this system is almost resembling a mathematical formula, based on cost of getting 10gramms out of the ground in say, South Africa and getting the same ten gramms in coin format into the poscket of a European. The cost of this, would naturally determine the base value of gold. Every other commodity, service, product, produce, property can then be meassured against that value. I other words, the question is: How much gold do I have to spend to get 10gramms of gold into the European's pocket? That amount of gold is then the base value of ten gramms. Ideally it will take me ten gramms to get ten gramms into the European's pocket. After that we only have to let the market decide how much gold it is willing to spend for coffee, a steak in a restaurant, a condo in Costa Rica, etc. Then, and only then, we will have a truly free market. Because any implied freedom vanishes when there are interests to be paid and these same interests are added to every product and service one buys - as is the case nowadays. Cheers, Robert. budget & privacy website hosting http://www.cyberica.net budget & privacy domain registrations + mail http://www.u2planet.com/cfdomaintrust.html --- You are currently subscribed to e-gold-list as: [EMAIL PROTECTED] To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
