The future of gold as currency actually rests on one foundation --
the absence of wars. By this I mean major wars between major nations
when their economies gear up to the maximum extent to produce heavy
artillery and when a high proportion of their young men are
conscripted into armies in order to kill other young men. Actually,
both of these are relatively recent innovations from the 18th
century, so we have had only three major wars as I define them -- the
Napoleonic wars, WWI and WWII.
The last of these major wars finished in 1945 when America and its
Allies defeated Germany and Japan. Since then, during periods when
tensions between the major powers rose to almost fever pitch, we
might have had three other major wars. America versus Russia. China
versus Russia. America versus China. That these didn't happen was
fortunate because all concerned were only just recovering
economically from WWII. If any of these had taken place we would
probably be in a much worse economic state today than we are now
because, almost certainly, the initial third party in any of them
would have joined one side or the other in order to protect its own
interests, and thus we would all have been involved.
Wars will continue, of course. It's very much part of our human
nature to fight. We might very well have future wars of major nations
against medium or small nations, such as America versus Korea or
Vietnam, China against Cambodia, or Russia against Chechnya in the
past. Or we might have wars between medium or small countries, such
as seems probable in the Middle East sometime or in South America or
Africa unless the big powers jointly put a stop to them. Also, we
could all put a major bet on about 30 minor wars taking place
internally every year in various parts of the world, as they have for
decades past.
There'll be no more major wars because, quite simply, all the major
nations are, in fact, already bankrupt in one way or another and,
besides, young men and their mobile phones and their growing contempt
for politicians are moving on culturally. They would probably refuse
to be enthusiastic cannon fodder on a large scale as they were
before. If there are to be any major wars between the great powers,
or even by small and medium nations against big ones, then it will be
cybernetic warfare which hardly costs anything at all. Even an
individual hacker with an ordinary PC can bring down major defence or
corporate computer systems. This why governments are becoming
hysterical about them. Scores of these hackers are being expensively
bought-off every year in order for our present financial and
governmental systems to continue at all.
More specifically, major nations can no longer go throw the gold
standard over and go into massive money printing as they did during
the Napoleonic wars and WWI and WWII.
But, you might say, we no longer have a gold standard financial
system to throw over! Oh, but we have. Advanced country governments
have never entirely thrown gold out with the bathwater, despite what
official spokesmen and politicians have manipulated the masses into
believing. Despite saying that gold is useless as a currency, and
despite America forcing the (mostly) European countries to sell a
great deal of their gold, the central banks never entirely got rid of
their bullion. And America has certainly hung onto its own gold! And,
since the Eurozone, with its new Euro, challenged the supremacy of
the American Dollar in 1999, central banks have been buying gold
again. It was slow and tentative at first but, today, increasing
numbers of those countries which aspire to economic growth, are now
buying gold.
Gold is quietly restoring itself. When its price is high enough and
when the value of the Dollar, Euro and Renminbi become low enough,
the gold standard will return. It will recapitulate its several
thousand year-old history. About five thousand years as it graduated
from being a precious status item to becoming a reliable currency for
trading (Greek merchants in the Mediterranean at about 500BC). About
two thousand years as it was adopted throughout the world as currency
and then as it evolved to became the fulcrum of the most
sophisticated financial system yet known to man in pre-1914 England.
That is, when we had absolutely no currency inflation for a century
beforehand. One day -- and probably very soon -- governments will be
forced back to that desirable state of affairs.
Keith
Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/08/
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