About
Content
Store
Forum

Rebirth of Reason
War
People
Archives
Objectivism

Commentary

A Method of Transferring Fractional Ounces of Physical Gold, with Confidence, from Person to Person.
by Paul Hibbert

  

Objectivists, libertarians and free market advocates are all strong believers in gold as a medium of exchange. Such luminaries as Alan Greenspan ("Gold and Economic Freedom", The Objectivist, July 1996 and "Capitalism: The Unknown Ideal"), Murray N. Rothbard, F.A. Hayek, Ludwig von Mises and many others have shown that precious metals are the only viable vehicles of wealth — and gold is the preeminent one among them. There are many dissertations on why fiat money cannot compete with gold and I will not repeat them here except to cite, "The Case for a Genuine Gold Dollar" at http://www.mises.org/fullstory.asp?control=1503

E-Gold has been gaining some prominence lately as a medium of exchange but it doesn't give the owner physical possession of it as it is only certificates for gold retained in a central vault that are exchanged. The traders must have trust in the company that stores the gold.  The company acts as an agent in the exchange, for which it exacts a commission. This can be valid for large transactions where it may not be desirable to exchange physical gold but when one goes to the grocery store one doesn't want to be involved in such a complicated transaction.

Therefore, I have invented a means of conveniently exchanging physical gold, in small amounts, with complete confidence. This innovation in the public domain, as I have no hope of realizing any benefits in my lifetime from patenting it. There is no expectation that the Federal Reserve will overturn its monopoly, but I am presenting this as a viable option for trading in the hypothetical Capitalist Covenantry of Freeland. http://solohq.com/Articles/Hibbert/Cutting_the_Gordian_Knot_-_A_Hypothetical_Press_Conference_with_Donald_Trump.shtml

To understand the invention it is necessary to review the pertinent characteristics of gold. They are:


  • Scarcity
  • High value per unity weight
  • Resistance to corrosion
  • Readily recognizable
  • Historical and mythical record as a store of value
  • Divisibility
  • Pleasing appearance

Silver has some of these characteristics, but not to the same degree, although it has more resistance to abrasion. Gold is the most ductile of all the elements and a grain of gold (0.002 ounce, or 0.065 gram) can be drawn into a wire 0.00002 inch (0.00005 centimeter) in diameter and more than a mile (1.6 kilometers) long. It can be beaten into gold leaf that is only several atoms thick and at this thickness it is translucent.

Conversion Factors and Physical Characteristics


1 Gram  
0.00220462 pound avoirdupois,
0.0352739 ounce avoirdupois,
0.0321507 ounce troy or apothecary.
1 Inch
 2.540005 centimeter
1 pennyweight 
0.05 oz.
Density
19.33 gm/cc
Credit Card Size
3.375 “x 2.11”  = 8.57cm x 5.36 cm
1 gram gold 
1/19.33 = 0.051733 cm**3
0.0321507 troy oz.
0.0321507 oz  x  370 $US/oz = $11.90 US
for a wire 8.57 cm long
0.051733 = pi * r**2 * 8.57
r**2 = 0.051733/(3.14 * 8.57) = 0.0019224
r= .0439 cm.
d = .0875 cm. i.e. pretty close to a millimeter
Resistivity (microhm-centimeters) of the best 5 conducting metal elements
Silver              1.59
Copper           1.72
Gold               2.44
Aluminum        2.82
Magnesium     4.60



The Invention



A credit card size plastic sheet has one or more strands of gold wire embedded in a transparent area near the lower edge. The wires go completely through from one side to the other so that the wire is exposed at each edge. The electrical conductivity of the gold wire can thus be easily measured and its characteristic color can be observed. These two features provide a unique impediment to counterfeiting.

Thus, a gram of gold embedded in the credit card size sheet would be 0.0875 cm in diameter and be 8.57 cm. long and have a value of about $11.90 at today’s gold price of about $370 US.

There is no impediment to embedding more than one strand of gold wire in the Gram card although I would recommend that 0.0875 cm diameter be the largest size for reasons of compactness. Thinner wires will allow smaller denominations and also improve the defense against counterfeiting by making any attempt to do so more expensive. The cost of production of smaller wires would, of course, be somewhat higher.

At one time I had thought that gold leaf would be a preferred approach to the gold wire but I quickly found out that the cost of manufacturing leaf would overshadow the value of the commodity and thus would be impractical. However, because of the thinness of the leaf it would be even more difficult to counterfeit.

Counterfeit Protection

 

In order for a counterfeiter to duplicate the conductivity of the gold wire he would have to combine elements of both higher and lower conductivities than gold, e.g. silver and aluminum or copper and magnesium while maintaining a color approximating that of gold. Copper is the only one close to the color of gold but combining it with any of the others would dilute the color.

Alternatively, a counterfeiter could try to coat an inferior metal with gold but that would be evident when observing the cross section of the wire at its ends. Also, it would be difficult to do because it would have to be done after the wire was drawn. It would seem that the effort in counterfeiting wouldn't be worth the effort. It would not be difficult to develop a machine to allow cards to be automatically run through it, make electrical connections at the ends of the cards and verify the conductivity of the wires.

To my knowledge there is no other practical way to transfer small amounts of gold.  Wafers and so on require a cumbersome authentication.

I would love to be able to call this card a “gRand”, in honor of Ayn Rand, with the “g” standing for either “gold” or “gram”, however the “Rand” is the currency of South Africa and “grand” is slang for $1,000. Another possibility would be “Ucurr” for Universal Currency. In keeping with Rand’s penchant for taking a negative connotation and turning it to a positive, e.g. “Midas” Mulligan, the “Lucre” could be considered. I propose that it merely be called the “Gram”, but secretly I'd plump for the "Lucre".


Links

http://orlingrabbe.com/dmt_guide.htm

http://www.norfed.org/

http://www.newciv.org/ncn/moneyteam.html

http://www.bananagold.com/

http://tril.tunes.org/e-gold/links.html

http://www.transaction.net/money/community/

Sanctions: 11Sanctions: 11Sanctions: 11 Sanction this ArticleEditMark as your favorite article

Discuss this Article (20 messages)