What happens to gold and silver prices when world goes to a cashless society?

[Murph]

12 hours ago, breaktwister said:

   In respect of loans, these should be managed by the government, not by private banks.  

 

That would give them a nice monopoly and a way to tax you given that very few people could afford to buy a house or car without taking out a loan.  The old building society or a cooperative would please me more I think but greed did for them.

[sovereignsteve]

4 hours ago, SteveDavies said:

If the world goes cashless, then gold and silver can be the free market cash

Good in theory, but to most people they would be worthless if they coundn't be freely exchanged for the mainstream currency. You wouldn't be able to "buy" things with them.

[Guest]

9 hours ago, Sal said:

Just answer me this simple ? question. Is there a reasonable chance that over time gold and silver trend to worthless?  Say in the next twenty years.

Absolutely not! Gold and silver have an intrinsic value, beyond the convertibility into fiat currency. You can rest assured that gold will always be worth something. 

[sovereignsteve]

9 minutes ago, savoyard said:

Absolutely not! Gold and silver have an intrinsic value, beyond the convertibility into fiat currency. You can rest assured that gold will always be worth something. 

explain it's value in the scenario I outlined above.

whether that scenario could or would ever come to pass is debatable.

[sixgun]

21 hours ago, Oldun said:

The banks are not the problem. The government borrowing is in my opinion.

Governments can create the currency and at no interest. Several US presidents attempted to get rid of the parasite banks and they ended up dead.

Why does our government borrow the currency for the banks when it could create it itself. The Treasury did create currency at the beginning of WWI, the 'Bradbury pound', so let no-one say it cannot be done. The government is in the pocket of the banks, the reason there are government borrowings is the banks. The problem always comes back to the parasite banks and crooked politicians.

[sixgun]

10 hours ago, sovereignsteve said:

picture a world with only one universal currency, fully digital, totally cashless. Why would you need gold and silver? It could easily be made illegal to own it and if you bought and sold it, all transactions would be apparent. The "currency" wouldn't be backed by gold and as there was only one means of exchange, gold would not be needed as a store of wealth. The world government(s) would simply abolish it.

China, Russia, parts of the Middle East, Turkey....... are amassing huge amounts of gold. Germany had at least some of its gold returned. The question is why are they doing that if they have no plans for gold? 

The only reason a US/UK currency could not be gold backed is they've sold the gold to China. It is reliably estimated that China has around 30 000 tonnes of gold. Control of the physical gold market has gone to Asia. They can and will revalue gold when they have wrung the last ounce they can out of the West. It serves their purpose to have currencies gold backed b/c they would have most of the money. 

[sixgun]

17 hours ago, savoyard said:

If the Central Bank stops issuing cash, private banks will do. 

If the Bank of England stops issuing cash there will be no more Bank of England [promissory] notes. As in India the government can declare any of the denominations of your BoE notes null and void. They become worthless paper by next Thursday, you need to exchange them for the new BoE crypto coin. You will either lose all your cash value or you will take the crypto.

[Oldun]

1 hour ago, sixgun said:

Governments can create the currency and at no interest. Several US presidents attempted to get rid of the parasite banks and they ended up dead.

Why does our government borrow the currency for the banks when it could create it itself. The Treasury did create currency at the beginning of WWI, the 'Bradbury pound', so let no-one say it cannot be done. The government is in the pocket of the banks, the reason there are government borrowings is the banks. The problem always comes back to the parasite banks and crooked politicians.

Interesting

https://www.quora.com/Why-doesnt-the-US-Government-print-its-own-money

[Oldun]

21 minutes ago, sixgun said:

If the Bank of England stops issuing cash there will be no more Bank of England [promissory] notes. As in India the government can declare any of the denominations of your BoE notes null and void. They become worthless paper by next Thursday, you need to exchange them for the new BoE crypto coin. You will either lose all your cash value or you will take the crypto.

You think the bank of england will stop issuing cash ?

[Martlet]

1 hour ago, sixgun said:

Why does our government borrow the currency for the banks when it could create it itself.

Because it's inflationary.  I must say i'm seeing some very odd and conflicting views here, advocacy for gold and government printing at the same time.    

[augur]

1 hour ago, sixgun said:

Governments can create the currency and at no interest. Why does our government borrow the currency for the banks when it could create it itself.

5 minutes ago, Martlet said:

Because it's inflationary.  I must say i'm seeing some very odd and conflicting views here, advocacy for gold and government printing at the same time.    

 

The whole system of Fractional Banking is inflationary. How can banks lend money (and receive interest) on money they neither possess nor did it ever exist in the first place.

With government options they could at least borrow from the people and we would receive interest. This way we get near to zero interest on savings while the banks get all the interested...

[Martlet]

3 minutes ago, augur said:

The whole system of Fractional Banking is inflationary. How can banks lend money (and receive interest) on money they neither possess nor did it ever exist in the first place.

With government options they could at least borrow from the people and we would receive interest. This way we get near to zero interest on savings while the banks get all the interested...

I think you know what I meant, high inflation of the sort that collapses economies like Zimbabwe, Venezuela or Wiemar Germany.  And before QE is mentioned, that is a specific controlled mechanism that can be reversed by simply reselling the government bonds, it shores up fragile balance sheets in the meantime (unfortunately hasn't worked as expected as money went to assets and commodities rather than investment, they didn't address any policy to encourage actual investment). 

The government does borrow from the people, though savings and bonds.  May well be indirect via pensions and such, but those are the primary purchasers of government bonds and benefit us long term. 

I know banks are unpopular, but its quite odd to see people advocating replacing them by government spending and control, who aren't hard line socialist - this is the current policy of UK Labour party to borrow/create and spend £500bn.  Certainly going to be glad to holding silver and gold in that scenario, perhaps thats the agenda here to promote the seeds of collapse so that PMs are worth more and profit! 

[sixgun]

45 minutes ago, Oldun said:

You think the bank of england will stop issuing cash ?

i said 'If the Bank of England stops issuing cash....." 

If there is a 'government' crypto currency then of course pounds notes will disappear. These would become worthless.

[Oldun]

And you think this would happen simultaneously ?

[Murph]

28 minutes ago, sixgun said:

i said 'If the Bank of England stops issuing cash....." 

If there is a 'government' crypto currency then of course pounds notes will disappear. These would become worthless.

Pound notes.  I miss the little green things.  Much nicer than the brown 10/- note or the brown tenner.

[sixgun]

29 minutes ago, Martlet said:

I think you know what I meant, high inflation of the sort that collapses economies like Zimbabwe, Venezuela or Wiemar Germany.  And before QE is mentioned, that is a specific controlled mechanism that can be reversed by simply reselling the government bonds, it shores up fragile balance sheets in the meantime (unfortunately hasn't worked as expected as money went to assets and commodities rather than investment, they didn't address any policy to encourage actual investment). 

The government does borrow from the people, though savings and bonds.  May well be indirect via pensions and such, but those are the primary purchasers of government bonds and benefit us long term. 

I know banks are unpopular, but its quite odd to see people advocating replacing them by government spending and control, who aren't hard line socialist - this is the current policy of UK Labour party to borrow/create and spend £500bn.  Certainly going to be glad to holding silver and gold in that scenario, perhaps thats the agenda here to promote the seeds of collapse so that PMs are worth more and profit! 

Let's imagine a situation. People use pieces of paper with Toy Town (TT's) on to 'buy' what they need in the village. If Eric works all day on the farm he will be paid 10 TT's.  His house is worth 100 000 TT's. It will take Eric 10 000 days to earn the TT's for his house. The man in the big house prints out TT's and lends them to people. He prints off 100 000 TT's every week. He just pushes the button on the printer and out they come. He goes playing golf the rest of the time. 

This is the situation we have. Ultimately the only things of real value are the labour of the people and the land we live on. Nothing can happen otherwise. Gold cannot be mined, food cannot be grown, cars are not made and so on. And yet the people slave away all their lives for Toy Town paper which the man in the big house prints off for next to nothing. 

The people become the slaves of the man in the big house. They can only get the Toy Town paper by borrowing it. It is borrowed into existence in the village. Everyone except the man in the big house is a debt slave. The money system is a debt system which has been created to siphon off the labour and assets of the people. 

The Wiemar Republic went into monetary meltdown because Germany was sold out at Versailles. Germany was held responsible for everything and was to pay reparations she could never afford. All her gold was taken, to pay the massive demands the government printed currency like no tomorrow. The currency in circulation exploded and the value of the currency collapsed. Germany was in an impossible situation. Hitler came to power. Germany broke free of the international banking cartels and the country boomed.

Venezuela is a victim of the US economic hit men.

Zimbabwi is run by a despot. The country is run by incompetents for the incompetents. When a country goes from being a bread basket to being unable to feed its own people the currency will collapse. 

Governments can spend and spend and spend. This is the problem we have. The banks want this phony money system b/c it is literally licence to print money at the push of a key. Government like it b/c they get overpaid jobs when they leave politics and there are no constraint on the creation of currency. The people and the next generations will pay the interest on this phony currency, never mind. 

A gold back currency imposes tremendous discipline. If you have no gold you cannot create more currency. Gold flushes most of the inflation out of the system. If the governments issued asset backed currency there would be very little inflation and a massive saving b/c there is no interest going to the banks. Economies thrive in stable situations like that. 

[sixgun]

3 minutes ago, Oldun said:

And you think this would happen simultaneously ?

It depends on the circumstances of a switch. If GBP and the other fiat currencies collapsed in real terms, the cash is worthless anyway. The government would issue a new currency on the pretext it was necessary to stop widespread rioting. 

If it happened in a more orderly way there would be a transition process, it could take weeks to years. It is simply like taking the old £5 out of circulation and introducing the new £5 note except it isn't a paper note. What happens in the electronic currency domain where for example i pay for coins on the silver forum by bank transfer or i pay with a card at the filling station would not be noticeably different. 

[sixgun]

1 hour ago, Oldun said:

Interesting

https://www.quora.com/Why-doesnt-the-US-Government-print-its-own-money

i wonder about the author of this. It is vague and parts are wrong.

He says the Federal Reserve is not a private entity. So what is it b/c it is not Federal. 

https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserve-banks

According to the St Louis Federal Reserve Bank, part of the Federal Reserve Banking System, "The Federal Reserve Banks are not a part of the federal government..."

"While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends. "

Lots of smoke and mirrors. Trump appoints the Fed chair but has no control over this person. Its a charade. When asked by Congress where did the $trillions go, the answer is we don't know or we won't say. The Federal Reserve Bank is not under the control of the Federal government and the Federal governments does not own it. The US Treasury wants some more USD so it sends Treasury notes to the Federal Reserve which are backed by the people and bear interest and in return the Federal Reserve has the Treasury print some more of its Federal Reserve notes which are not backed by anything. It is a parasite on the people. 

[Martlet]

27 minutes ago, sixgun said:

A gold back currency imposes tremendous discipline. If you have no gold you cannot create more currency. Gold flushes most of the inflation out of the system. If the governments issued asset backed currency there would be very little inflation and a massive saving b/c there is no interest going to the banks. Economies thrive in stable situations like that. 

Agree gold backed money limits inflation, though banks, fractional reserves and inflation all existed in the gold standard era, its not without problems either.

The idea of a government backed crypto is quite interesting actually if you take it back to Satoshi's original concept - a fixed amount of currency.  Maybe that would be too far (deflationary), however with some adjustment one could be devised that would constrain government strictly to the value of the country's economic output.  The current tools would need to be overhauled, crypto simply isn't ready for prime time public use today, then again if it were government mandated many of the issues (shops acceptance) would be immediately resolved.

[sixgun]

13 minutes ago, Martlet said:

Agree gold backed money limits inflation, though banks, fractional reserves and inflation all existed in the gold standard era, its not without problems either.

Yes but fractional reserve lending could be stopped. It is allowed to happen. Our governments do not serve the people. A system of credit would be created by the nation not a system of debt to the private banking system.

The fractional reserve banking system is based on fraud. The gold merchants took deposits of gold for safe keeping and issued redeemable certificates. Then they realised only a small percentage of the gold was ever redeemed. They could create certificates for gold that did not exist. This was fraud. The banking industry is built on fraud. The regulators are window dressing. Governments are bought and paid for.

i still do not fully understand the Brexit vote. i have not believed fair voting ever happened and then we had Brexit. The powers that should not be, do not want Brexit. If they did we would have been out the week after. No plan for Brexit was made and there still isn't a proper plan. Brexit is being stalled until it can be cancelled. 

[STONE]

29 minutes ago, sixgun said:

i wonder about the author of this. It is vague and parts are wrong.

He says the Federal Reserve is not a private entity. So what is it b/c it is not Federal. 

https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserve-banks

According to the St Louis Federal Reserve Bank, part of the Federal Reserve Banking System, "The Federal Reserve Banks are not a part of the federal government..."

"While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends. "

Lots of smoke and mirrors. Trump appoints the Fed chair but has no control over this person. Its a charade. When asked by Congress where did the $trillions go, the answer is we don't know or we won't say. The Federal Reserve Bank is not under the control of the Federal government and the Federal governments does not own it. The US Treasury wants some more USD so it sends Treasury notes to the Federal Reserve which are backed by the people and bear interest and in return the Federal Reserve has the Treasury print some more of its Federal Reserve notes which are not backed by anything. It is a parasite on the people. 

Well said, here is a video that expounds upon your comments.

 

[Atuwaya]

Crypto gold coin or not, there will be a reset. Debt worldwide is unmanageable today and it will only get worse. When the SHTF, and it will, some late Friday afternoon, most likely after 4pm EST when world markets are closed, the Comex will settle up all contracts in cash. The reset is in. How do you then value PMs? Easy, debt vs. Gold. How much debt vs. How much gold? You have all seen the predictions. Will it be $10,000, $20,000, $50,000 per oz? What of silver? $600, $900, $3,000? Impossible? Why are China, Russia, Germany and even Turkey been buying gold hand over fist for years? In the meantime I keep stacking on a regular basis snd now am diversifying my PMs to include numismatic coins. This is new to me. I enjoy learning and having fun collecting while I wait for the Monday morning we will all wake up to.

[sixgun]

25 minutes ago, Atuwaya said:

Crypto gold coin or not, there will be a reset. Debt worldwide is unmanageable today and it will only get worse. When the SHTF, and it will, some late Friday afternoon, most likely after 4pm EST when world markets are closed, the Comex will settle up all contracts in cash. The reset is in. How do you then value PMs? Easy, debt vs. Gold. How much debt vs. How much gold? You have all seen the predictions. Will it be $10,000, $20,000, $50,000 per oz? What of silver? $600, $900, $3,000? Impossible? Why are China, Russia, Germany and even Turkey been buying gold hand over fist for years? In the meantime I keep stacking on a regular basis snd now am diversifying my PMs to include numismatic coins. This is new to me. I enjoy learning and having fun collecting while I wait for the Monday morning we will all wake up to.

Yes this is how i see it. 

There are two options.

1. China reveals how much gold she really has. Lays it out in the national stadium in Beijing. Credible estimates would say 30 000 tonnes. The gauntlet has been thrown down. People will do the sums and realise all the gold has gone to Asia. Western gold has gone East. There would be a MASSIVE gap up in price. Hundreds if not thousands of dollars. 
2. The Western central banks settle up in cash before the reset. COMEX longs are settled for cash at the closing price that Friday. The market reopens on Sunday at the new price. We have all the bullion banks holding gold in unallocated and probably allocated gold accounts that don't hold any gold. These people will be settled in cash. 

If the Western central planners allow China to reset the price the losses for the cartel in the West will be significant, potentially it will bankrupt them. The derivatives run to $trillions. China will trigger option 1 if there is no more gold to extract from the West. There are indications steps are being made towards options 2. Goldman Sachs has been very active on the spot markets which are not nearly as visible as the COMEX. There are indications gold is being bought and positions taken. Speculators going short in the West are going to be toast.

[Atuwaya]

Provisions are already in place under the Comex regulations to ensure any and all contracts be settled for cash in the event of any unforeseen circumstance. The game has always been rigged. Not sure how much longer it can last. The new oil/Yuan/gold market in Shsnghsi, in conjunction with the already operational gold market, will start operations within 2 months. I'm presently in China and the news is out. Tick tick tick...

[Oldun]

6 hours ago, sixgun said:

i wonder about the author of this. It is vague and parts are wrong.

He says the Federal Reserve is not a private entity. So what is it b/c it is not Federal. 

https://www.stlouisfed.org/in-plain-english/who-owns-the-federal-reserve-banks

According to the St Louis Federal Reserve Bank, part of the Federal Reserve Banking System, "The Federal Reserve Banks are not a part of the federal government..."

"While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends. "

Lots of smoke and mirrors. Trump appoints the Fed chair but has no control over this person. Its a charade. When asked by Congress where did the $trillions go, the answer is we don't know or we won't say. The Federal Reserve Bank is not under the control of the Federal government and the Federal governments does not own it. The US Treasury wants some more USD so it sends Treasury notes to the Federal Reserve which are backed by the people and bear interest and in return the Federal Reserve has the Treasury print some more of its Federal Reserve notes which are not backed by anything. It is a parasite on the people. 

Do we need to distinguish between The Federal Reserve Bank and The Federal Reserve Banks that you cite here ?

 

The Federal Reserve System (FRS) is the central bank of the United States. The Fed, as it is commonly known, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, DC, the Board of Governors and 12 regional Federal Reserve Banks in major cities throughout the U

Read more: Federal Reserve Bank http://www.investopedia.com/terms/f/federalreservebank.asp#ixzz4wjrm08hV 
Follow us: Investopedia on Facebook