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I'm not in Teheran and I don't speak Farsi. But taking the words from Iman a rumor emerged that fake dollars where flowing to the black market. Even if not true, this rumor itself creates the expectation of expanding supply and has an impact on the velocity of this asset. luis_de_sousa@mastodon.social
Obviously you can weigh it, find the volume, and calculate the density, but can you do it accurately enough to get a useful result? Worse, I can think of several ways to make a counterfeit gold coin without even working at it; how do gold enthusiasts claim to protect themselves from this problem?
If you're so interested in assaying gold coins at home you can do it by yourself using a bit of high-school chemistry, the periodic table and some instruments to measure volume and electrical conductivity. luis_de_sousa@mastodon.social
http://commoditybullmarket.blogspot.com/2009/04/how-to-detect-counterfeit-gold-coins.html
If you have the facilities to melt a bar, you can adulterate the alloy to reduce the gold content. For example, if you start with a tungsten slug and wrap it in aluminum you can get the density of a core correct, and then surround it with gold you can get a bar that will pass everything except a melt-down or an x-ray. Whether that will be cheaper then the underlying gold is an interesting question.
Apparently it all boils down to trust, where you buy from somebody you trust and then trust that somebody else will buy it from you when the apocalypse arrives.
Also it seems, based on cursory investigation, that it's not illegal to sell "counterfeit" gold. It's a commodity, not government-issued currency.
I would not be counterfeinting, but surely there are laws in most countries against selling a commodity while claiming it is another? Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
The gold bug thing has fraud written all over it...
It's the threat of counterfeit that would drive people away from using dollars as money, not that gold in of itself would be more preferred than dollars.
Precisely. Under this scenario the velocity of greenbacks goes up while for gold it remains stable. luis_de_sousa@mastodon.social
- Jake Friends come and go. Enemies accumulate.
I believe - and you seem to agree - that money should store value only long enough that its depreciation is not an inconvenience in ordinary transactions, because money is an instrument for organising transactions. In this picture, the failure to store value over years or decades says nothing about the suitability of currency to function as money, because money only needs to store value on the order of weeks and months.
There are huge parallels here to the financialization of commerce that brought the booms and busts.
Gotta have booms and busts. Higher money velocity generates higher returns for financial parasites. I'm reminded of Kurt Vonnegut's analysis of lawyers:
"To encourage movement of money and always take ten percent." Align culture with our nature. Ot else!
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