Re:The Value of Money

GRABOW_GEOFFREY@tandem.com asked:

>Didn't Nixon take the U.S. off of the gold standard?
>

Sort of.  The market made him do it. Any real bankers out there can answer
this better than I can.  The way I remember it, the Bretton Woods agreement
made the "dollar as good as gold", which was intended to stabilize the
postwar economy and back up the Marshall plan, I think.  In the late '60s
and early '70s, the european economy was good enough that people (Charles
DeGaulle's government in France, among them) started to call the US
Treasury's bluff, and cash in dollars for gold.

I believe Nixon made two changes.  First, he decoupled the dollar from the
price of gold, thus making the dollar more explicitly a part of the
floating exchange rate mechanism (or more so, anyway).  Second, he started
making it legal for americans to own gold again, something FDR outlawed
during the depression.

Moving it more towards crypto here. . .

IMO, someday there *will* be a strictly digital, anonymous, liquid medium
of exchange, a currency, simply because computer transmissions are just
another means to transmit promises, like metal and paper.  However, the
next real step in that direction is to develop "securities" like money
market instruments, which are denominated in an existing currency, but are
"traded" not by institutions, but by people and/or business on the
internet, in order to meet very real needs, like selling software,
information, entertainment, etc.

I guess that's why I subscribed to this list, and why I'm somewhere in the
middle of the stream cypher section of Schneier's book. :-).

Bob

-----------------
Robert Hettinga                       "There is no difference between someone
Shipwright Development Corporation      eats too little and sees Heaven and
44 Farquhar Street                      someone who drinks too much and sees
Boston, MA 02313 USA                    snakes." -- Bertrand Russell
(617) 323-7923

>However, the
>next real step in that direction is to develop "securities" like money
>market instruments, which are denominated in an existing currency, but are
>"traded" not by institutions, but by people and/or business on the
>internet, in order to meet very real needs, like selling software,
>information, entertainment, etc.

Your Fidelity Mutual Fund account is denominated in dollars, held in
stocks, and clears through the ACH system.  Sounds pretty close to me.
Right now Fidelity nominally sells your stock when you withdraw and
buys more when you deposit (in practice they net their customers
against each other, I'm sure).  Suppose you write a 'check' (it's not
_really_ a check, just very close to one) on your Fidelity account and
someone else deposits it to their Fidelity account.  Fidelity can do
an "on-us" clearing of the check and it never leaves Fidelity's hands.
Only some accounting records have changed reflecting a change in the
distribution in funds.

Make this kind of transfer fully electronic and you have the
beginnings of a fully private currency.

Eric