-- Published: Friday, 14 March 2014 | Print | Disqus
By Hugo Salinas Price
It is remarkable how billions of human beings are using fiat currencies in the world today without any understanding at all of what they are doing. Curiosity and intellect are indeed very limited in supply amongst humans.
Humanity is attempting to live by the use of fiat currencies – gold and silver as means of interaction between humans are not available today.
And humans are quite ignorant of the fact that the fiat currencies they use have each of them a HISTORY behind them, without which they would not exist.
We humans tend today to discount History. The past has lost its meaning to us. We live entirely in the Present; what happened just a few years ago is no longer of interest, except to a very small minority of humans. History has become irrelevant; we are so engrossed with Technology, the God of the present era, that we have little urge to direct our attention elsewhere.
The Bitcoin is - according to some at any rate - a technological marvel and should therefore do everything that is expected of it. But the fact that it may be a technological marvel is not enough, though people doubt that statement to begin with. "If the Bitcoin is a technological marvel, then surely it will have to be a brilliant success." This is optimistic thinking, but quite shallow.
The fact is that all currencies which we unthinkingly use incorporate a historic element. The digitalization of currencies does not eliminate the historic element. Digital currencies DERIVE from paper currencies, and paper currencies, ALL of them, derive from original monetary units which were various quantities of gold or silver.
Not all the technology in the world can eliminate the fact that all digital and paper currencies DERIVE from ancestral quantities of gold or silver which bore the names of the digital or paper fiat currencies we use today.
Humans appear to be willing to attribute derived values to fiat currencies, even when the derivation ascends into the many millions of units. Thus, the great inflations the world has experienced, one of the latest being that which took place in Zimbabwe.
Only when the number of units becomes totally unwieldy is the inflating fiat currency finally rejected, in favor of some alternative fiat currency (no recourse to gold or silver being possible at present.) And so we have had the Mexican peso that went into the thousands of units per fiat dollar, and prices of everything in Mexico into the millions of pesos, before the State decided to shave 1,000 units from the value of the Peso. And still it continues to devalue, now at $13,250 pre-1993 fiat pesos to the dollar, if the $1,000 peso haircut is ignored.
Zimbabwe had its currency go into 1 plus 22 zeros per dollar, before it was finally cast into the junk heap. Humanity is so tolerant!
I'd like to make the point, which I consider important, that critics of fiat currencies have been omitting the historic component of ALL fiat currencies. We are told by the Establishment gurus that gold is finished, that it can never return, that we are beyond gold in a new era of progress which gold could not sustain - the barbarous relic - but what remains unsaid is the enormous fact that ALL fiat currencies, digital and paper, remind us every day (if we care to think about it) that they are descended from gold or silver, and could not exist without this descent. So, gold and silver remain supreme, behind everything that is going on with digital and paper fiat currencies.
We cannot get away from gold or silver! All fiat currencies, digital or paper, testify to their origin in gold or silver.
The Bitcoin is not derived from gold or silver, it is parentless and thus will not and cannot ever circulate as a type of fiat currency, no matter how perfect its technological conception.
Originally published at http://www.plata.com.mx/Mplata/articulos/articlesFilt.asp?fiidarticulo=235
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-- Published: Friday, 14 March 2014 | E-Mail | Print | Source: GoldSeek.com