How will we physically trade gold & silver at $5000 & $500?

I am expecting the govt and/or criminality to eliminate the possibility of trading gold at dealers and through shipping between individuals.

I expect this because the unfolding crisis is likely to send gold & silver so high in value, that the govt & masses will react as stated above:

http://financialsense.com/fsu/editorials/laird/2008/1211.html
http://financialsense.com/fsu/editorials/2008/1208.html

How do you plan on trading/spending your gold & silver???

I am thinking all the existing trading websites (GWT included) are DOA in the above scenario.

Seems to me that people are going to have to meet face-to-face? So how do you seek out and find the ones close by and who have a trade you would be interested in? Seems it will highly inefficient to go loitering at the mall parking lot, with a "want to trade" sign (not to mention the malls might all be bankrupt and shuttered). It also occurs to me that searching craigslist by price and product is not very efficient, not to mention it seems to waste a lot of time on non-serious inquiries, dangerous because you don't know the person. Also I think a classifieds site like craiglist, is not really anonymous, meaning the govt can know who is selling and who should be reporting on their taxes?

Seems to me, there might be a need for program that would run on your computer, which could search anonymously and in an untraceable protocol (search for "MUTE P2P" for details), to other people running the same program. In other words, there wouldn't be any website, there would only be a real-time network of anonymous programs (with real people entering their trade data in them).

It seems such a system could aid people to find and do trades with the internet part anonymous (untrackable electronically by the govt's internet monitoring databases). That seems rather sure technically. Will this be needed and helpful?

However, I don't think it could do much to help on reputation or guaranteeing safety, nor take a deposit to lockin price or seriousness. Once you use trusted stores of such data (if you know who they are to trust them, then so does everyone else), then the network becomes non-anonymous and becomes vulnerable to shutdown/regulation by the govt.

The conceptual possible future problem I am visualizing with all the current trading websites (all of them, including GWT, craigslist, eBay, seekbullion, apmex, etc), is that if the society breaks down as much as it appears to be heading, then perhaps none of these sites will be able to function, because perhaps shipping won't work (theft by the employees), the websites will be sitting ducks to be regulated/taxed by the govt.

Thoughts please? I need to read lots of thoughts. Don't be shy, or worry if you are right or wrong. Please feel free to take a counter-view. Please let me read your thoughts.

Thanks,
Shelby

The challenge may be to find businesses to barter with. If this crisis get bad enough that trade starts to shut down, you'll want to know your local butcher, family run grocery store, local metal worker, farmer, ect. For instance, buy a side a beef from the butcher or farmer for x onces of silver and then use the beef to barter for your other living essentials. You'll need to be very careful with whom you deal PMs with for security reasons. I don't see doing trades on the internet and through the mail as a risk I would take at that point.

I recently watched Chris Martenson's Crash Course (3,5 hours), which I actually recommend. I had smugly thought I know all about the unfolding crisis but Chris gave me much new insight. Furthermore, at least in theory you can serve your totally uninformed best friend chips and beer while he watches it, so that he actually understands what it's all about!

Chris's central theme was based on peak oil, and he used discovery quantity AND quality (ERoEI) as a leading indicator. In USA the lag from peak discovery to peak production was 40 years, and in the world, we are now 44 years past peak discovery. As somebody might remember, 4 years ago oil price started to rise.

Because world energy consumption will start to decrease (as it cannot be increased), the GDP measured with traditional methods will turn to permanent decline. Instead of reporting how much economy grew y-o-y, it will be told how much it contracted. Instead of new houses build, the statisticians measure how many were demolished. Population growth turns negative. And so on and so on.

The change, according to Chris, does not need to be violent, and the result can be a more satisfying life than previously under the fiat money system.

Unfortunately I don't see much chance that the transition to a declining paradigm could be made without strain. For example, fiat money is utterly unfit to be used when there is not even a prospect of growth available (it has worked for so long because energy consumption was able to be increased, which was labelled growth). The society would refuse to pay interest on a worthless digit or piece of paper, if the only backing was the future production, which was guaranteed to be smaller than present! It is much more likely that something with "embedded past production" or "embedded energy" will be selected as a basis of the new monetary system - even officially! If not, then money will likely be an interest-free banana credit.

See Fekete's thinking about gold/silver availability after crash:

http://www.gold-eagle.com/gold_digest_08/fekete121008.html

Item 1: Barrick and other gold producers that still have an open hedge book will go bankrupt.

Item 2: Other gold miners will, one after another, stop selling gold altogether, and go into hibernation.

Item 3: Junior gold mines will put off starting production indefinitely. They will consider their gold ore reserves in the ground a safer store of value than paper money in an insolvent bank.

Item 4: The closing of the gold window at the Comex will furnish an excuse for other issuers of paper gold including the bullion banks to declare bankruptcy fraudulently.

Item 5: GLD and other joint depositories of gold will be under enormous pressure to default and let the owners of the ETF shares hold the bag. Let them sue for the gold. They won’t get it: their contracts give them no right to physical gold. They will get small change, in paper. The principals will cut up the gold pie among themselves. No crumbs will trickle down to shareholders.

Item 6: Even allocated and segregated metal account gold is not safe. The temptation on the account providers to default will be irresistible. They are not going to release the gold until expressly ordered by the courts, and will make sure that no gold will be left by then.

Item 7: Central banks forfeit their gold under leases due to backwardation, causing an uproar of citizens whose patrimony was sequestered and dissipated in such an ignominious manner.

Item 8: The only market for gold will be the fragmented black markets in various countries each charging a price whatever the traffic can bear. All legal protection of the ownership of and trade in gold will be suspended. The Dark Age will descend on the trading world, just as it did when the Roman Empire collapsed.

When Roman Empire was in early declining stage, there was an enormous amount of gold and silver in circulation. When emperors debased coins, after one or two tries, ALL good coins disappeared, and the amount of metal that went to hiding was enormous. Thus the empire lost a part of the medium of exchange. Because there is some merit in the Quantity Theory of Money, the gold in hiding increased the value of the "official coins" over their metallic value. This encouraged the emperors to debase more, after all in the end it was illegal and punishable to own a good gold coin.

All possible gold went into hiding, to wait for a saner ruler and saner monetary system. In 1933 it was only required to wait for 41 years, but after Roman Empire the waiting was even hundreds of years.

Because of this, the value of silver in late middle ages was equivalent to 800 of 1998 dollars. So much of it was all the time in hiding:
http://goldinfo.net/silver600.html

What we have now, resembles very much the Roman Empire decline and collapse. We still feel rich, but at least in my country the vast majority of people has never even seen EITHER a gold or a silver coin. So we are not so rich when the rug is pulled from under paper money. At that time a single coin will be very valuable. Especially a small one. If the trading is made even more difficult (believe me, it already is in silver in Europe), and all systems break down, then a small coin like 90% dime will be in huge premium compared to 100oz bar.

I visited a mint museum in Paris last summer; the median size of medieval silver coins was 1 gram (<1/2 the size of dime). If in similar situation, prepare similarly!

Govt wants to keep silver non-fungible, to make quotes and trade impossible (without the need to let the blood run..).

Shelby

I have been thinking about the exact same problem so I appreciate your raising it. If we are lucky(?) enough to have this problem it seems that it will be very tricky.

The first idea that comes to mind is that we would need very small amount to trade with. So small quanities will be easier to deal with.

Second what will your butcher do with the 1/10th of an ounce of gold/silver you just gave him for your meat purchase? Where does he go to excahnge it? etc. How does he make change??

So unless everyone becomes involved a bartering scheme, as suggested by your earlier poster, we need another solution.

Keep in mind that if we try to leave the government out of the equation they will try to figure out a way to become involved since 60% of the GDP is based on consumer spending. They will need their version of the VAT to have revenues.

Maybe private banks will emerge where you can do PM transactions. Ultimately it seems that we will need to have some system that the masses has confidence in or we will have the anarchy that our friends over on the web site have been suggesting for years.

I look forward to reading the thoughts of the other posters on this topic.

Howard

Note that I do not agree with the peak energy issue, but I don't want to explain that in this thread. I want to stay focused on how we will trade if backwardation breaks the financial system as we know it. The energy disinvestment is a symptom, not a cause. Sidewalks do not cause raindrops. I had already debated Chris about that early in 2008 when I had discovered his excellent website. But let's discuss that in another thread (create one if you want).

==============

About the looming outcome of backwardation, forcing the world to local commerce, is the same as shutting down the world economy. It means massive suffering and will not be tolerated PEACEFULLY by society. Read below, it is obvious the plan of the cabal. The plan explains why they have been consolidating everything into a few large banks.

However, if the economy will NOT be taken down to the point that all physical gold goes into hiding (i.e. local only use only, while paper gold disintegrates), then trading sites such as GWT (apmex, etc) can flourish.

But we need also a plan B trading platform, that can flourish if the cabal will succeed in what appears to be the plan to take down the world economy entirely. Again don't confuse this with deflation. We can at the same time get hyperinflation (devaluation) of world currencies, simultaneous with shortages (means higher prices). This is disintegration meaning that the financial system (trading and transactions) can completely breakdown, except on a local level (very inefficient and akin to Dark Ages).

The deeper point is that I think we may need a different kind of system to get the level of trading people are going to need as we head into backwardation, because backwardation will not occur without the side effects of destroying the financial system and all means of transacting. I started this thread to discuss this, and I will be adding to it on Saturday:

Specifically I think the model of selling from a dealer location is eventually DOA, but only *if* the cabal is determined to break the entire trust in the world financial system. It appears dealers such as apmex and tulving, will dominate by hedging off the Comex, until backwardation closes the Comex (2009?) well before any new non-hedged trading platforms can become popular enough. When backwardation closes the Comex, then the entire financial system is going to grind to a standstill. The dealer model will then be useless.

It appears obvious that the cabal's plan is that a few big banks will then reopen the world's financial system using "gold credits", like a virtual credit card backed by gold that they claim to have. Only those large banks will have the size and social/political power, and the gold/silver, to offer this sort of "trust this new kind of money" system. First they will let the world suffer, so that we will beg and agree to that coming "666"-like (i.e. consolidated financial control) system.

Unless this backwardation will be reversed, which is only possible if the govt mints will open at full speed and the FED will stop creating a bond bubble to save the largest banks, then we are near the end of times.

If that above trend continues, we head into a Dark Ages style local barter subsistence economy (temporarily, maybe a few years, until the cabal offers it's new "gold credits" replacement currency via JP Morgan), unless someone can design a system that can work to replace the world's financial system. I have an idea. Will be posting about it on Saturday in this thread. During that Dark Ages period, which could be very short or very long depending how quickly the world will agree to a new financial consolidated control, then there could erupt another world war.

Some analysts have clearly got it all wrong (some even so formerly erroneously bullish, that they ended up recently selling at the bottom losing 80 - 95% in junior mining stocks), because they (perhaps being so myopically focused on supply/demand and unit of account) apparently did not consider the other crucial property of money called liquidity (spread). Some might remember me getting into public arguments/debates since 2006 with "that other analyst" over and over about the urgent need to figure out how to make gold & silver work in a liquid payment (transactions) system, else we were doomed.

And he still doesn't appear to have a clue about the issue of liquidity!

http://silverstockreport.com/2008/standard.html

...I'm in favor of a return to using silver and gold coins and bars as money, as measured by weight, and traded at their intrinsic value according to the price in an open and free market place...

That will never work! Returning to local barter will collapse the world economy, and is akin to going back to the Dark Ages. Any solution (other than the cabal's planned "gold credits" world currency) is going to have to be something of a complete paradigm-shift in technology that the cabal did NOT anticipate. I think I now have that idea.

http://silverstockreport.com/2008/grind.html

...assume that the current system will die a slow death that lasts 20 years as it takes a whole new generation to adapt to change...

It is not going to take 20 years. When the gold window closes, then the price goes to infinity, and the world economy shuts down. The mistake Hommel is making, is he is forgetting the side-effects and other effects of the infinity gold price. He is not thinking it through. His thinking is myopic and overly simplistic. Listen to following from 16:46 min point forward (btw, Taleb appears to not see the gold backwardation outcome, so he is missing part of picture, he apparently doesn't understand that cash and bonds will be destroyed).

...some people understand, that a fast turn around time, in a bull market for metals, is worth quite a lot...

Yes! That is why "gold credits" will always beat physical gold & silver barter. That is why Hommel is wasting his time, he can never compete with the liquidity of the plan of the cabal, that I detailed at the start of this post. All that silver will be nearly useless for him, if it can only be spent in local barter, as he couldn't spend 200,000oz in local barter even if he had 1,000 years to do it. That is why all of us are focused on the wrong goal. We do NOT need more silver, we need to figure out how we will be able to spend and trade the silver we do have. This is a very real problem for us.



Okay, I think I by now have a workable idea of how to do it, and it will involve 100% anonymity to avoid persecution, see this thread tomorrow, wherein I will detail my idea.

rpietila, I hope you don't mind if I quote something you wrote on other forum (if you do mind, then email me and I will delete this):

rpietila wrote:...2. In general, Europeans are better served if we keep prices high. This enables us to do profitable business and encourages new players to do vigorous marketing and all this boosts the whole industry. Perhaps we will have a network of coin shops, and at some point there will be inevitable price competition also (which is a natural market phenomenon).

By selling at low prices, nobody gains. Dealers stay in weak condition, cannot give good service, cannot spread the word, no new dealers come because prices are low, NO AFTERMARKET EMERGES because too little existing bullion.

To avoid cartellization charges, I cannot guide you in pricing, but....
to get 50% more profit, you need to raise prices only 10%. Do you really think this cuts a third of your volume? Furthermore, risks are a function of volume, and lower volume (should it happen) lowers risk.

3. Not many are taking this backwardation seriously. People are fools. The day the curtain falls, it's over. Then no more 1000oz bars can be bought. Then minting projects are cancelled and paid back after 6 months in dollars. Capital controls everywhere. Silver in transit may be subject to freeze (confiscation). Small silver and gold will be "buyer's market": I mean nobody will part with their metal except by purchasing something needed with it.

I think our lead time is so long that this should be taken into account more in prices. To sell this low (talking about me) is foolish. Risk and reward don't meet...

You are correct! And I will be announcing an idea here how to deal with this coming threat. In fact, rpietila you were correct since many months ago when you were saying the only way to deal with this threat is to create a completely fungible system at a higher price. When you see the details of my idea in the next post, please let me know if you think it derives from your work, as I think it does.


Also the following post is relevant to this discussion, because people are viscerally drawn to high liquidity systems.

http://goldwetrust.up-with.com/goldwetrustcom-f1/libertysilverorg-libertysilverse-is-now-live-t55.htm#566

THE SOLUTION

The following proposed solution if implemented, would be immediately available to everyone in the world. This will not be hindered by physical delivery barriers to the degree that my GoldWeTrust.com and other physical dealers are.

The Problem

First let me explain the problem.

The prior posts in this thread explain why due to the recently developing gold & silver backwardation (hyperdeflation), which will eventually close the gold & silver window at Comex, rendering the national bonds & currencies worthless (hyperinflation), then only physical trading of gold & silver in your locale will become possible (disintegration). But this local trading will not help you.

The world economy is interconnected. If goods can only be produced and traded locally, then life will become nearly impossible. We won't even be able to produce locally, because critical inputs to local production will be unavailable locally. For example, gasoline is not pumped out of the ground and refined in your locale. Extend that to food inputs, manufactured necessities, etc.. For example, most seeds now are genetically engineered, and won't produce plants with re-useable seeds. Some where in the chain of products you depend on, there is a non-local critical input. Unless you expect to be adopted by the Amish, the prospect of local gold & silver trading is bleak, especially when you factor in the fact that anyone who tries to spend gold & silver locally in this envisioned crisis, will no longer be safe in their own home. Word will spread of who has some. If you can't spend it, what is the point of having it?

The world not only faces this financial system disintegration crisis, but also an epic global demographic re-balancing crisis, some nations on the deflation (workforce reduction) side and others on the inflation (workforce expansion) side.

Note, that there is 17 billion oz of silverware which would only come to market if silver were to rise into the hundreds of dollars per oz, or make that $1000s per oz once the dollar devalues (hyperinflates). And much of that is heirlooms that won't come to market until the owners can not otherwise survive. Even at $1,000 per silver oz with all 17 billion oz trading as currency, that would still mean the 2007 global GDP of $65,000 billion would need to shrink by 75% and Velocity of Money decrease to 1. But if metals go into hiding, we could see Velocity of Money fall to epic lows, maybe even 0.1 as it perhaps was in Dark Ages, so then we would need $10,000 per oz silver to limit the GDP shrinkage to 75%.

Of course the key people pulling the strings of the world financial system (aka "cabal") know all of this. Their plan is so obvious now. Once all of the key useful assets (e.g. gold in the vaults, banking branches) have been transferred to a few largest banks, then the dollar & bond bubble can be allowed to crash, sending gold & silver to the moon, but making trading of gold & silver dangerously unhelpful. The world economy will implode, there will be mayhem. Out of this mayhem, eventually the key assets will be used to offer the world a new "gold credits" trading (financial) system. The plan for for world domination via a world currency will be nearly complete. This "gold credits" system will be infinitely more liquid than physical gold & silver barter, humans viscerally move to the most liquid form of money, and thus such a "gold credits" system will soak up all the remaining physical gold & silver, as people will need to join the trading system in order to survive.

The Solution

I am publishing this, because if only one person is working on the technical solution, then the solution could be stopped or lost by discrediting, attacking, or death of that one person. I do not need anonymity, because there are many smart people who can implement this technical solution, but only if they are aware of this article (most technical people have no clue this solution is needed). Only the trusted parties that use the solution will need the option for anonymity.

No solution can survive if it relies on trust of a KNOWN entity (e.g. GoldMoney.com), as the "cabal" can attack the known entity. So any solution will need to offer optional anonymity, so that users of the solution can continue operating and building trust, without being persecuted. If entity providing the gold & silver is publicly known, then that entity may not be able to escape persecution.

The solution is to build a system that provides "gold & silver credits" before the "cabal" does, when it is most needed (i.e. starting 2009 or 2010?). And provide the credits in a competitive free market that allows anyone to offer the credits, and to provide technology for these trusted entities to be both anonymous, yet still build trust by proving they can deliver the physical gold & silver when the credits are redeemed.

Imagine a system where everyone can buy, sell, and trade unforgeable, anonymous, trustable digital gold & silver certificates ("credits"). If feasible, this is Achilles' heel of the "cabal" plan. This would enable the world trade to grow seamlessly while the national currencies become worthless.

There are many details that need to be explained, as the digital certificates must be known to be backed by real metal, else the system will fail, just as every fiat system has. So I must explain how such trust can be proved, while still maintaining the anonymity necessary to avoid persecution.

I will get a bit technical now on the bottom-up inner details of such a solution, and this might not seem relevant if you are coming at this from a top-down thinking, where you are trying to visualize how this will work in terms of using it on a daily basis. We first need to explain the key inner technical details that can enable the anonymity, free market participation, proveable trust and unforgeability.

There are two key technical concepts that need to be employed in this solution system.

1. Public-key encryption means the public-key can become the identity (name) of the user in the system. Anyone could create a private-key and public-key pair, and generate digital certificates. All actions and trust earned in the system, will be associated with that public-key. Any digital certificate can be mathematically verified to be associated with the public-key. There is no need for certificate authority, because we want the identity of the person associated with the public-key to remain anonymous (optional, as the creator can choose to reveal their identity if they want to). The system only needs to associate all trust earned (good or bad) with that public-key.
   
   If a key's prime number is sufficiently long, then it is mathematically proveable that even the government's supercomputers can not crack it in reasonable time. The RSA has been sponsoring a competition to see if anyone could develop a way to crack prime number keys faster, and so far even harnessing the power of huge networks of computers, there is always a sufficiently long key length that is uncrackable in reasonable time. To limit the time that could be spent trying to crack a key, it is important that the system has a means for periodically replacing the public-key, using the original public-key to verify that the replacement command is not forged. It is important that such replacement commands be cached in the network, so client programs can retrieve them when they connect.
   
   
2. Since the system will be a public data share, then end-to-end encryption (between only two trusted parties) is not applicable. Fortunately, the MUTE privacy model for peer-to-peer networking, coupled with my suggested algorithm improvement to motivate economic peer cooperation, enables nearly anonymous communication. In other words, it becomes statistically unlikely for any one to associate IP addresses as the source or consumer of particular data in the system, especially if someone only connects for a very short time and consistently changes their connection IP (e.g. use a different WiFi node each time you need to do a transaction in the system and disconnect after you complete your transaction). I have also developed an improvement, where the data itself is split into minimal chunks which are commonly used by numerous different maps, and then a separate map to those chunks is traded in the network. The maps are cached by the client peer program even between connection sessions, and then the peer network routing hashtable is also virtualized so that any client can alter their position in the hashtable such that all requests for a map (and other maps in the same hash bucket) come to that client (and other clients in same hash bucket), thus making it unproveable whether that map was acquired and cached in a prior session (at a different IP) on behalf of another peer. In this way, it becomes a statistical impossibility to associate any IP address as being the source or the consumer of map (digital certificate, trust data, or other data used in the system). Numerous peers, which were not the source nor consumer of the digital certificate (or associated data), will have a copy of it's map.
   

It is impossible for me to explain in the space limitation of this essay, how those above technical concepts can be used in every aspect of a full working solution trading system. Astute technically capable readers (programmers, mathematicians, and monetary theorists, especially those with all 3 talents) will be able to deduce the integration and system design. Let me now explain a few key top-down concepts for such a solution system. Note that the following concepts would not be presented to the user in such a technical fashion, rather they would be simple forms with submit buttons. And realize that free market search for offered trades (like eBay or GoldWeTrust.com) user interface could be put on top of this, so that people just point and click on what they want. And ultimately these trades could be not only trading fiat for metal, or metal-for-metal, but also metal for real goods. Thus completely replacing the current financial system, while also eliminating the income tax, copyrights, patents, government bloat, and all other forms of statism. This solution could accomplish algorithmically what the US Constitution was intended to do contractually.

• Someone has 1000oz silver bars they want to sell into the system. Perhaps they decide to offer their digital certificates in 1 gram granularity (31,103 separate certificates, 1 for each gram of the 1000oz bar). The certificate will include the public-key, quantity & type of metal, the size of bar that must be redeemed, and any delivery details for redemption, including any % premium. The certificates are digitally signed with the private-key so forgery is mathematically impossible.
  
• The certificates are traded (from the creator in prior step) to some other public-key (other anonymous person) in the system, by the creator's program using the receiving public-key to encrypt the certificate. Only the intended receiver will be able to decrypt the digital certificate with the receiver's private-key. The receiver then stores this privately as proof of ownership, or can re-trade this again.
  
• At some point, some owner has enough certificates that they want to redeem for the actual metal bar. So they encrypt a message with the public-key in the certificates and send it through the system. Only the creator of the digital certificates will be able decrypt the message. The creator can then respond on how to physically redeem. I envision that during times of intense persecution threats, these bars might be pre-placed and the redeemer will be given sort of a treasure map to go retrieve the bar. In more sane times, the bar may simply be shipped to the redeemer. Note that most people will never need to redeem physically, they will simply use their certificates as money.
  
• When a bar is or attempted to be physically redeemed, then both the redeemer and the creator will have the right to submit proof to the trust record associated with their public-key, which is a floating data in the system. By reviewing these trust data, traders can ascertain the reputation of a digital certificates' creator. These reports can be mathematically verified to not be forgeries, because they will include, the public-key of the reporter and be signed with the private-key of the reporter, plus a copy of the digital certificate, which can be verified mathematically was generated by the creator's public-key attached to the trust record (at this point the digital certificate has been redeemed or proven to be worthless by it's owner/redeemer, so no need to keep it private).
  
• Note I didn't specify how and what gets traded for a digital certificate. The system should have a means for publishing trade (buy/sell/barter) offers as digital certificates. Also, encrypted messages between public-keys are enabled. And external systems (e.g. websites purchases) could be integrated through an API to this system. There is no theoretical limit on what can be done. I could even visualize financial accounts and cash registers around the world, hooked into the system, by using some kind of VPN to connect non-fixed, random IPs when entering the greater internet.
  

It is too late for the "powers-that-be" to take down the internet. The internet was a key component of their plan for world domination:

http://grep.law.harvard.edu/articles/03/06/06/1441247.shtml

Creator of PGP wrote:...I think the biggest threat to privacy is Moore's law. The human population does not double every eighteen months but the ability to keep track of us does. This may be a prescription for an omniscient government...

It would be very helpful if you could show the process map for the flow of;

a. the movement of the metal in one direction
b. the movement of the money(?)/credits(?) in the other direction and how would I "spend" this money/credits in the grocery store?

From private email:


> I have been reading your (and others) posts in the forum, trying to grasp
> what you guys are all talking about.

...

> I
> certainly follow the concept of a total economic meltdown, but don't
> understand your discussion about destruction of cash and bonds,


Ultimately, cash and bonds will move opposite in price (value) to gold & silver. They are the antithesis (opposite) of each other, when society moves down Exter's pyramid. For now the bulge is at the cash & bond level on the pyramid, but soon it will move lower to gold & silver.


> gold
> credits, (is this like Turks company?),

No. I mentioned Turk's GoldMoney.com in my last post, and imho his company will be attacked (persecuted) by the "cabal" eventually, because it is not anonymous and can be tracked by the govt.


>a fungible system at a higher
> price,

The most important quality of money for people, is that money be liquid and fungible. That means they want to be able to spend it every where, any time, without prejudice to non-denominational markings (images) on the money. The price of the money is not as important as it being liquid, with low spread (meaning buy and selling the money does not incur a huge loss). Imagine high spreads and then after spending and earning the money a few times per year, then you lose a large chunk to the spread. That is why low spreads are more important than price, when we are referring to money (not to goods or commodities).


> etc, etc.. Nor do I expect you to take the time to explain it all to me,


I prefer to reply in public for the benefit of others so my scarce time is put to maximum benefit for all, when the subject matter is not personal or private in nature, as is the case here. Your name has not been shared.



> I have a lot of small denomination silver (dimes, quarters, halves,
> maples,
> Amer. Eagles, rounds), as well as 50 or so 100 oz bars, and 3 -1000 oz
> bars. Is there some reason (regarding this holocaust you see coming) that
> I
> should not own 1000 oz bars, even 3, to pass down to my kids?


If the cabal achieves their plan (assuming the plan I stated is their plan), then large quantities of precious metals will be like hanging a death warrant around your head (unless you never tell anyone, never spend any, act like you are as poor as everyone else and eat garbage every day, etc). In my theory, the only way you will ever dispose of them is to sell them back to the big banks when they institute their "gold credits" world/regional currency. So in that scenario, the smallest units of silver are the best. Dimes would be the best, and they should be selling for 200% premiums right now, once people realize this. Next best after 90% coins, is 1oz rounds. 40% coins might be okay, but then you carry unnecessary bulk.

Now if my "THE SOLUTION" gets implemented and is successful, or if the plan of the cabal is not as I stated, then it won't matter what granularity your silver is in. You would be just as flexible trading a 1000oz silver bar in my proposed system, because you can break it down into what ever granularity (even 31,103 certificates of 1 gram each) of digital certificates that you decide.


> I
> understand
> that they are not as easy to handle, but is there a valid reason to trade
> them in to smaller denomination coins besides the ease of handling?

Also you can't run very fast when you go to grocery store (or from the mob chasing you) with 70 lbs bar in your pocket.

With anonymous, unforgeable, trustable, redeemable electronic digital certificates that won't matter, but will my proposed system become a reality?

I would hedge my bets if I were you.

I should let you know that 3 of my 11 Comex silver bars were apparently stolen by FedEx driver on Dec. 6.. Nine (9) of these were being shipped from First State Depository to the Mint I am using to manufacture 1oz rounds. We are in the process of sorting it out, and I think the insurance will replace them within 30 days, but it just goes to show how risky it is, and the bad times haven't even really begun yet.

Apparently the 70 lbs bars make it too obvious what is inside the package. Of course, addressing mine to the Mint, probably also made it even more obvious.

I have added this diagram:



To the prior essay:

http://goldwetrust.up-with.com/precious-metals-f6/how-will-we-physically-trade-gold-silver-at-5000-500-t61.htm#568

See the prior post that I added a diagram.

Do we want to be like the winning Buffalo or the cowardly humans?

http://www.escapistmagazine.com/articles/view/editorials/gamedesignsketchbook/4882-Game-Design-Sketchbook-Police-Brutality
http://www.youtube.com/watch?v=L3cigThe2jE&feature=related
http://en.wikipedia.org/wiki/University_of_Florida_Taser_incident

I am now trying (phone calls, emails) to mobilize young (energetic, probably unaware of the danger) very talented programmers and mathematicians. The "powers that be" can be defeated by just 5 talented people. Please pray for my success.

Btw, I don't see this derailing GoldWeTrust.com, nor LibertySilver, nor rpietila's dealership. Actually this could provide another avenue for us to deal, build reputations, promote, and increase our liquidity.

I made improvements and submitted it for publishing to gold-eagle.com and financialsense.com. Hopefully it will appear on Monday. I can't imagine that I am the only person (programmer) out of 6 billion people, who has the solution in mind. I can't imagine the entire world would be resting on my shoulders. So I am hoping the others will contact me after my publication spreads.

I know it is difficult for you all to visualize how you could trust these digital certificates, and why they would be more secure than say GoldMoney.com. Technologically it can be. And marketing will be tackled later. First I need to gather the programming man-power to get it done.

Gold & silver are going to become so valuable in future, that at some critical time periods, it isn't going to make sense to ship them or carry them physically. The digital certificates will be easy to market when they are needed, because there won't be any other choice. Also I think they might even gain popularity before the crisis gets catastrophic, simply because it would be a payment system that avoids all taxation. (note consult your own tax advisor, I disclaim everything).

It may not yet be the end times after all...

So these certificates would become a metal backed currency, if I understand correctly. Wouldn't the government look at these as a competing currency? I guess that is why the network is to be anonymous?

http://capitalistleague.blogspot.com/2007/11/fbi-raids-liberty-dollar-steals-gold.html

Very important. I am in touch with Jason Rohrer, who wrote MUTE and he said that he is very busy programming games, but that he might be available for paid consultancy. He apparently didn't yet read this thread and is not aware of the threat mankind is facing.

I am going to need to start a request for donations to help fund the development of this. How many of you will be willing to donate say $100 to this effort? I know many of you gave $100s to the Ron Paul campaign, which I warned was a waste of time. Now I am presenting a real solution, but I can't fund this all by myself. I have added a POLL to the top of this thread and please vote to indicate whether you are possibly willing to donate, or not. Scroll to top of this thread to find the poll:

http://goldwetrust.up-with.com/precious-metals-f6/how-will-we-physically-trade-gold-silver-at-5000-500-t61.htm

I suppose I could structure this as a small corporation, then everyone who donates would receive a share of the company. That way if ever the project gained a profit (i.e. I can visualize profit models, even while making the solution free and anonymous), then you would stand some chance of profiting. More importantly you get the system you will need to survive.

cdavport wrote:So these certificates would become a metal backed currency, if I understand correctly. Wouldn't the government look at these as a competing currency? I guess that is why the network is to be anonymous?

http://capitalistleague.blogspot.com/2007/11/fbi-raids-liberty-dollar-steals-gold.html

The whole point is that as long as the "powers that be" who control the govt with their money creation engine (FED), then they always have a monopoly on money and thus they continually aggregate a higher % of the world's wealth. You will never know who these people are, but we know they are the families of Rothschild, Rockefeller, Morgan, etc.. We know they control all of the major media, 50% of the world's industry, 95% of the world's financial system, etc. They are $trillionaires and they are pulling the strings behind the scenes in ways that are hard to see, because of their secrecy and the 1000s of non-profit corps they use to obscure their activities.

And we know they are planning an epic world power grab over the next few years, their "manufactured crisis" is accelerating as we speak...

So in order to break the monopoly on money, then we must have a system which:

1. Can't be shut down by anyone, even if they have the social power, it technically can't be shut down. It is a like a good virus that lives on billions of computers (at the willingness and awareness of it's users, not like a bad virus), the authorities can never destroy every copy.
   
2. It is anonymous so participants can't be persecuted by that monopoly social power
   
3. It is unforgeable so that trust earned (good or bad) by a participant, can only be associated with that participant and can't be altered or erased. It is also unforgeable so that the digital certificates can be mathematically guaranteed to match the public-key identity.
   
4. System must be designed for robustness (redundancy), so that it is like having millions of servers and copies of the database. So it becomes impossible to have data loss.
   
5. It won't be one single digital currency (not like GoldMoney.com, which is vulnerable), but rather a system which enables many different competing digital currencies. The participants will earn trust as participants post their experiences about each other. Those who provide the best trust results (always deliver upon redemption), will rise to the top of trust. Realize that only someone who is redeeming (has the unforgeable certificate), and the creator of the certificate, can make a trust post about that creator. So both parties to the redemption get to tell their story, over and over again and all these stories will be permanently stored in the system. Any one can become a creator, just click a button to generate a public-key and private-key pair. But only public-key identities which consistently deliver upon redemption, will gain trust.
   
6. Realize that once such a system is introduced into the wild, then it won't take any more investment by us to keep it going. It will then have a life of it's own, like a GOOD virus. Others will support it's protocol, investment and development will occur spontaneously and distributed in a free market nature... It is just getting over that initial investment hump that is our hurdle right now, and doing it soon enough that the system will be ready in time to handle the IMMINENT crisis at hand.
   
7. The reason I need help, is because it is too much work for one man to do in a short period of time. Also I need several intelligient people analyzing the system design, to make sure the protocol can't be subverted once in the wild. I have the talent to do this, but it wouldn't be wise to attempt it all by myself.
   

ADD:

A critical robustness design feature is the breaking down of data into widely re-used chunks and having a map data to reconstruct a complete data record. In this way, users of the system won't be able to purge data from their copy of the system database, because each chunk may have a domino effect on some data that user needs in the system. Of course the unwanted maps could be deleted by each user, but each person who has a vested interest in a data map, will cache it and re-inject it periodically-- the map being much smaller than the data itself. The nature of trust is that popular records must have a long life, which is about what you want ideally.

This version is slightly improved from what I wrote in this thread above:

http://www.gold-eagle.com/editorials_08/moore121408.html