Tuesday, October 9, 2018

Company touts new gold backed digital currency could act as medium of exchange for international settlement

With Europe last week publicly joining the growing number of nations and regions bent on a course of de-dollarization, the biggest question hanging over this policy shift is should the dollar lose its reserve currency status, what is prepared to take its place?

1.  A basket of currencies?
2. The SDR?
3. Gold?
4. Cryptocurrencies?
5. A combination of several of these...

Indubitably, the world is rushing headlong towards a cashless society where even right now over 90% of all transactions take place in the digital realm.  And while there are hundreds of millions of people spread throughout the globe that would balk at a purely digital monetary system due to the fact that all access to money would be left in the hands of untrustworthy bureaucrats, a more acceptable outcome would occur should the system include the world's money being backed by some form of tangible asset.

This is why it is unlikely that a de-centralized cryptocurrency like Bitcoin would be able to function in this manner, especially because history has shown that people have always demanded a return to a gold standard following the spectacular failures of fiat currency systems.

Government money manipulation and floating currencies have appeared since before the birth of Christ; and also since before the birth of Christ, the discontented citizenry has brought to the fore political leaders to return their country's currency to stability. Alexander of Macedonia unified the Mediterranean world under a hard silver coinage; 25 centuries later, he remains known as "the Great." Julius Caesar returned Rome's currency to a gold standard, and he remains an icon of Rome's greatness. Alexander Hamilton helped launch the United States with a gold dollar, and his face today graces the $10 bill. The person who hired him, George Washington, is on the $1 bill. Napoleon returned France's currency to a gold standard, and the French accepted him as their emperor. Lenin returned hyperinflationary Russia to the gold standard, and statues of him were erected throughout the land. Mao Tse-tung returned China to a gold standard, and the country rallied around him. The US. occupation government in Japan returned the hyperinflationary yen to the gold standard in 1949, and the Japanese allied themselves with the country that attacked them with nuclear weapons only three years earlier. Richard Nixon plunged the world into monetary chaos, and he remains the only U.S. president ever torn from office.  – Bull Not Bull
But again I must stress that we now live in a digital age as opposed to times past, and the potential for a cryptocurrency to replace fiat currencies in international settlement if it is gold backed is a very real possibility.
With the support of gold digital currency GGC, Goldlinks initiated a more efficient international trade business model. As a breakthrough trade settlement tool as well as barter trade pricing tool, GGC will foster the broad-spectrum growth of international trade and bring the salient benefits of gold based trade settlement to the table. Compared to the traditional method of settlement, the gold-based method is more efficient, more transparent as well as more cost-effective. Since the authenticity of the goods and funds is verified through blockchain, which is a non-modifiable and traceable model, security of funds is ensured and risk of international trade fraud is mitigated to a great degree. High stability is another added advantage of the gold-based trade settlement model. The white paper of the project also claimed that the risk associated with exchange rate fluctuations can be completely avoided by using this model. GGC, which is a deflationary currency, has the potential to become a super-sovereign and decentralized instrumental property. – Business Insider
Now we at Shotgun Economics are certainly not advocating that Goldlinks or any other gold backed cryptocurrency currently in the financial system will be co-opted by sovereign entities to serve the purpose of international settlement, but what we are advocating is that even Russia and China are in the process of a combined effort to accumulate gold and create their own sovereign cryptocurrencies, meaning that they appear to be preparing for such a transition, and as a viable replacement for the dollar once it loses its last remaining hegemony.

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