It appears technology has moved the world one small step closer to a sound money. On Wednesday, a hotel in Abu Dhabi unveiled the GOLD To Go ATM, a gold dispensing vending machine created by a German firm. The machine dispenses 24-carat gold bars in 1, 5, and 10 gram sizes as well as gold coins. A computer inside the machine keeps track of the gold price in real time and updates it every ten seconds but maintains the price for a given buyer for ten minutes. The machine itself sports a gold leaf finish. There are plans to install 200 more machines in Austria, Germany, and Switzerland. It is noteworthy that the technology of tracking the gold price in real time could be adapted to tracking the gold-silver exchange rate thus reducing the transactions costs and facilitating the development of gold and silver parallel standards. Silver coins would be much more convenient than gold coins for everyday transactions. At current prices, a 1 gram silver bar would have a purchasing power of about $.70 and a 5 gram bar of about $3.50. “Small change” would be provided by bearer vouchers printed on base metal or on paper notes issued by nationnwide merchants like Walmart, McDonald’s, Best Buy etc. which would not be claims directly redeemable in gold or silver money but redeemable in their merchandise (like mall or store gift certificates). As long as these vouchers were not issued in excess they would be readily acceptable as small change in exchange.
Source link: http://archive.mises.org/12717/the-gold-atm/
The Gold ATM
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Your typical American media person has no appreciation for the foreign mindset – especially among the Swiss, Germans, Arabs, and others. These guys have no respect whatsoever for the nonsensical myths the US keeps propagating about itself.
And it’s not like these guys have no clue how investment banking works. They kind of… y’know, invented it. None of them like having their economies centrally planned by the dumbest gang of semi-competent criminals that ever managed to make it to the top. The kids are even turning away from US brands (because the quality keeps declining).
I mean, wearing something from D&G is now the mark of being lower class.
Technology overcoming the problems of bimetallism? Awesome.
The reality is, should commodity money become acceptable again in transactions for whatever reason, you won’t have to worry about paper vouchers, but I’m sure they’d exist. You’ll see 1/2 gram and 1/4 gram silver pieces. In the interim, if the market were left to its own devices, I’m sure you’d even see weights of commodity money that are semi-perforated in case of the need to “make change” for some reason. Maybe even like in colonial times when you’d have “bits” of gold coins. “2 bits” could actually mean something again.
Or just credit/debit cards denominated in gold.
Silly old-timers, carrying around all that heavy metal.
Seriously, I had a non-gold-fan try to tell me that without fiat currency, there would be no credit and therefore no way to “grow” an economy. I laughed in their face.
Can someone please provide the exact coordinates for this gold atm? I need to feed the location to this predator drone.
Thank you,
Barack Obama
actually, i’ll wait till a queue of arabs builds up at the atm, and then kill two pigeons with the one drone, so to speak.
the gold atm is really a decoy to test a new russian stealth radar system.
http://www.whatshouldreallyhappen.com
but with the accuracy of the intelligence the former head of the cia had with babies torn from incubators maybe you should leave the atms alone…it could be chineese engineers killed by mistake.
Dubai uses not so libertarian slave labor to build its sky scrappers. Maybe a few bombs here and there would bring them back to their senses. Just don’t kill any expats by mistake.
Silver is rarer than gold in terms of above ground weight. How exactly will it serve as small change?
I think copper or some other less precious metal would have to serve as small change.
It is not a matter of what you think. It is what the market decides. Traditionally gold was used in big transactions and silver for smaller ones. The metals freely exchange with each other based on previaling market conditions. I suppose there are instances where copper is preferred over silver.
Obviously I’m not trying to dictate the market by fiat. It seems, however, that my predictions about the market should make sense to anyone who understands Austrian theory.
Previously gold was much rarer than silver, and the fixed exchange ratios between them were an expression of supply. Of course, we’d see Gresham’s Law favor one over the under without a floating price. Gold and silver coin, however, became relatively less common than banknotes. Silver was demonetized. Gold was made illegal. The 60:1 ratio is mostly historic. If both metals were to actually serve as money, their prices would spike, subject to much larger demand schedules, in terms of real goods.
If you had a parallel standard, speculators would buy up all the silver, then sell it back to you at ever-higher rates until it traded 1:1 with gold. It would not be available for use as small change.
would they really spike?? if a great deal of held gold and sulver and jewelry began to make its way into the money system wold the metals actually spike that much??
what is a parallel standard?? wouldnt market conditions jsut make the metals fluctuate against one another??
if pressure for high cost items (oil platforms, nuke centrifuges) paid for in gold began to increase wouldnt gold-grams just increase in value to silver-grams??? until such time as market forces changed???
Gold was made illegal. The 60:1 ratio is mostly historic. If both metals were to actually serve as money, their prices would spike, subject to much larger demand schedules, in terms of real goods.
If you had a parallel standard, speculators would buy up all the silver, then sell it back to you at ever-higher rates until it traded 1:1 with gold
would all the historical ratios really mean anythig at all if gold and silver retuned as money?? if the coins actually do circulate as money and were owned how would speculators buy all the money???
why is this so hard to understand? my whole argument is that in a free market (no bimetallism, legal tender, or fixed exchange ratios), silver CANNOT serve the function of small change, if gold is considered money.
The price between gold and silver is essentially barter – however much gold one is willing to swap for silver and vice versa.
if the actual amount of silver is equal to gold, but the price is 60:1, one can buy up ALL silver with 1/60th the gold supply.
I doubt anyone could actually corner the entire silver market. However, by withholding any supply of silver, it creates a new need for small change, assuming that’s what silver is used for.
Essentially, consumers will need small change to the point where they are willing to bid up the price of silver relative to gold.
So let’s say you need 1/60th oz gold to buy something. The merchant will additionally accept cash only, particularly gold. However, he’ll also accept 1 oz silver. So you ask your bank to deduct your gold account by 1/60 oz and give you 1 oz silver. They say, “Silver supplies have fallen, so we will only redeem 1/60 oz of gold as 0.7 oz silver”.
This will continue until silver is abandoned as small change or reaches the same real price as gold, in which case it fails to be able to be used as small change anyway, because it faces the same problem as gold – the small change is TOO SMALL.
what if they are both considered money??
wouldnt some market exchanges work better with one than the other.
if they withhold silver (for some strange reason) wouldnt that just be one more person not using silver and not effect any new need for small change. ? 1 million people withholding silver and not using it again for some strange reason.
They say, “Silver supplies have fallen, so we will only redeem 1/60 oz of gold as 0.7 oz silver”.
doesnt make much sense to me. one persons silver has fallen and gone to another?? right?
“This will continue until silver is abandoned as small change or reaches the same real price as gold, in which case it fails to be able to be used as small change anyway, because it faces the same problem as gold – the small change is TOO SMALL.”
how do you know that will continue. if one is more abundant than the other wouldnt mining have more direct effect on the exchange rate between the two metals?
what would withholding silver (numerous small change purchases, iow) do for a consumer?? isnt it just as likely that many large price would only be paid for in gold or the scarcer mnetal??
what makes silvers market prices so much less than gold?? jewelery??
does silver currently have far more use in industry now??
Well silver oxidises and turns black, gold doesn’t, maybe it’s one of the factors.
is the silver really less in above ground weight?? is there a place where that can be verified??
every mention i have read at mises sites said otherwise.
and would it really matter?? isnt it likely that the most scarce metal with properties most suitable for coinage would have greater purchasing power??
How much is the overhead above the spot?
There’s nothing wrong with contractual credit. It’s critical to maintaining flow of business. But the banking system is… insane. The West is pretty much totally deluded.
A next step for those ATM’s would be to dispense gold coins inside tamper-proof pouches. That prevents clipping and sweating of the coins. Better still, keep the coins in a secure location and have the ATM’s dispense paper gold certificates, thus reducing the risk of robbery. Another improvement would be to allow customers to buy gold certificates from the machine in exchange for an equal value of currency or other designated financial securities. Of course, if the ATM company were robbed, or for some reason didn’t have enough assets to redeem all its certificates in gold, then the ATM’s would be subject to a bank run, where the last customers in line get nothing for their certificates. The ATM company could avoid this by reserving the right to suspend convertibility of its certificates into gold. That would be regrettable, but still preferable to the worse alternative of a bank run.
Oh, wait…
we eagerly await the atm that issues sproul dollars. the rollout to commence shortly.
perhaps smart cards would provide a bevy of services. actual coin and account to account transfers of metals..with receipt verification.
or also setting gold aside for dispensing certificates.
i expect if the atm were robbed it would be out of service and a theft would occur.
so it wouldnt be subject to a bank run. just a theft were a good is lost. i guess some type of property insurance would come into play or a bomb rigged atm.
wait for what
The modern availability of tungsten has made it cheap and easy to counterfeit gold bullion. The densities of the two metals are almost identical (19.25 vs. 19.30 g/cm3). I think silver will end up being the standard for this reason.
Tungsten is pretty hard to work with. Large bars could be faked but I haven’t seen any real proof that it’s possible to use tungsten to counterfeit gold coins.
By the way, silver can also be faked. It’s pretty easy to stuff a 100oz silver bar with a lead alloy.
The electrical conductivity of gold is way higher than tungsten. Easy to distinguish them nondestructively.
Does a gold-plated tungsten coin make the same ping as a genuine gold coin?
i dont know. i suppose various assaying firms would determine the metal purity. the ping test, etc.
Anyone read about THAT????
“Personal ID scanner (money-laundering protection) and camera”
http://www.gold-to-go.com/en/the-gold-vending-machine/the-gold-vending-machine/
Fine. Next step would be another gold ban… think about Roosevelt!
Before the advent of a gold ATM, I said on the Mises blog that I believe that the market will replace fiat money with gold, and sooner rather than later, because the ever escalating cost of using fiat currencies or fiat-currency substitutes, all of which are subject to depredation by governments, would soon prod the world’s money consumers to force the issue, and that the market would respond creatively to the demand for sound money. Evidently it has.
Gold or silver? Who cares? Let the market decide, and whatever the outcome it will be the right choice. Here on the US Reservation, the only barrier holding back a return to gold (or silver, or copper, or whatever) is the lousy way in which dealers treat their customers. ATMs are brilliant, if the prices are realistic. I personally thought if Wallmart (or similar big guy) started a gold-coin department (exchange–silver too, for that matter) with paper thin mark ups/downs, the company would rapidly capture a large portion of the world market, make a nice profit, and the gold dealers who didn’t meet the competitive challenge, as well as the gov. fiats, would all be on their way to extinction long before any species is done in by global warming. Governments will never willingly release their grip on people’s throats by means of legal-tender laws and monetary regulations, but who cares what those idiots say or do; markets will prevail–I think, I hope.
All thought reverting back to using gold as the common medium for exchange I believe in the twenty first century we can finally start using a universal credit line. Basically a digital version of currency that can be used world wide without exchange rates or different currency confusing. Either way I feel that some kind of universal currency would be great but it would only work if everyone joined in.
A gold vending machine what will they think of next. I guess next vegas will come up with vending marriage chapels slide your driver license pay 200 bucks with your credit card say I do in the video and you are married.
Yes right now i concur gold will never get old as the dollars is weaking.
I think this is going on in Germany as well as some of the middle east countries. One can understand the desire for tangibility given the debasement that is going.
I’ve also heard that one of the low-end wholesale stores (I think it is Lidl) is about to sell gold coins thru wending machines in Germany. Well personally, I’m not sure whether this new consumerism is really going to cut it – especially if anyone has witnessed the last hipe in the gold/silver markets last month when everything was sold out within a few hours…
Gold vending machines!!! All you need is hot dog goodness and you’re set!
HM now i’ve seen everything!
Wonderful, thanks.
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