Social status is far more important than wealth. Social status allows
one the opportunity to acquire wealth. Being wealthy is frequently
correlated with high social status but doesn't automatically elicit
the respect of the community.
However, individuals who have acquired high social status because of
intrinsic abilities and are, as it were, thrust into the limelight by
their fellows, find it difficult -- nay well-nigh impossible -- not
to comport themselves differently from the rest of the community.
Among other aspects such as voice or bearing, high status
individuals, being rare themselves, are allowed -- indeed, encouraged
-- to wear clothing or ornamentation that is also very rare. As far
as can be determined from recorded history and, archeologically, from
pre-history and, anthropologically, from the few remaining
hunter-gatherer groups observed today, personal ornamentation with
rare objects has always been the case.
Rare metals (e.g. gold), rare gemstones (e.g. rubies), rare coloured
rock (e.g. lapis lazuli or chrome), rare natural objects (e.g.
particularly rare sorts of seashells or snailshells) or rare natural
byproducts (e.g. amber or jet) have all featured as personal
ornamentation for at least the last 100,000 years. But gold, being
almost infinitely malleable, is the only rare material that emerged
in all civilizations and thus universally desired.
The majority portion (about 70%) of all gold that's mined and refined
today goes into jewellery for everyday wear. However, well within a
few generations, it will subsequently recycle from there as it
becomes overwhelmingly concentrated in individual hands due either to
the dowry effect (India) or the primogeniture effect (China) or death
duty avoidance (in the West) and becomes too much for one individual
to carry around. A proportion of unfashionable jewellery is then
scrapped-out every year and then melted, re-refined, re-purchased and
then cast into bullion ingots (international currency for governments
only at the present time) or (in the last century) minted into
tablets or coins (potential high-priced currency for individuals who
are worried about banknote inflation in the coming years).
Today, jewellery is 50% of the total stock of the world's gold.
Because of annual scrappage this is steadily declining. It will never
be a one-way street, however. Even if in the years to come when
jewellery comprises only 20%, say, of the world's visible gold, we'll
still see gold rings, bracelets and Rolexes. Its main use will be as
a stored buffer against inflating banknotes and occasional financial
catastrophes.
Of course, given the immense size of today's world's economy, gold
coins can never be used again as a practical everyday currency as it
was two centuries ago. It then began to be stored as the ultimate
guarantee in case banknotes failed when panics arose. And then, of
course, banknotes became impractical as the sole currency and had to
be bolstered with personal bank cheques, And then, in turn, cheques
had to be bolstered with personal credit cards. Very shortly (in 10
years' time?), cards will have to be bolstered by the use of mobile
phones when making transactions.
All the way through, however, gold has maintained its fundamental
(albeit disguised) use as international currency. It is now quietly
re-emerging as the basic world currency. Two years ago, Robert
Zoellick, President of the World Bank was the first to explicitly
suggest this. The Bank for International Settlements (the central
bank of central banks) has deleted gold's previous risk factor from
50% to zero. It is now given Tier 1 currency status. The largest
investment bank in the world, JPMorganChase, are now treating gold as
currency.
What is China doing? So far, in copying the products of the West on a
massive scale, China has shown itself to be the ace reverse engineer
of the world. No wonder! Every year, its universities disgorge more
engineering graduates than the rest of the world put together. But
also, its universities produce more economists every year than the
rest of the world. We can't possibly think otherwise than that, even
with odds of 1,000 to 1 against, many hundreds or thousands of
Chinese economists thoroughly understand the financial engineering of
the West since the first year of Capitalism (1694 in the UK, 1811 in
the US -- the first legislation allowing joint-stock, limited
liability corporations).
Before too long, China intends to expand its Pan Asian Gold Exchange
(PAGE) into Europe and America when gold shops and depots will be set
up. Purchasers on the Internet can either pick up their tablets or
coins from the shops or store them in secure depots. There is no
other conclusion in my mind that the Chinese know which side of the
future world trading currency is going to be buttered. It's not going
to be the inflating dollar or euro. When the gold standard is
restored as a basic, albeit invisible, discipline, as it was prior to
WWI, governments will not be able to print money beyond which their
economies need from year to year.
Keith
Keith Hudson, Saltford, England http://allisstatus.wordpress.com
_______________________________________________
Futurework mailing list
[email protected]
https://lists.uwaterloo.ca/mailman/listinfo/futurework
