Gold is an asset based currency, thus it represents payment in full where as fiat currency is a debt based currency that represents a claim in the system. In this light, the ‘preservation of wealth’ simply means - he who holds gold has already been paid.Simple yet powerful, Ender explains the basic difference between equity and debt in monetary terms. This is not a new idea. These thoughts have been held by generational wealth for many centuries.
As Another pointed out, currencies are always competing for usage. They do this so as to expand the base from which they can gather taxes through inflation. Inflation is KEY.Understanding inflation as the key to a modern functioning currency is not just a post, it's a series of posts, but most people can understand that a fiat monetary system is based in essence upon infinitely expanding debt (where bubbles are born) and infinitely expanding debt can only be managed through inflation. More needs to be explained, perhaps in a Summer post.
Remember that the larger the currency base, the larger the inflation can be without being detected. The politicians love this because now their policies can stretch as far at the dollar can reach – anywhere in the world. Military bases can be built and maintained off that inflationary tax. Influence can be bought. Deals can be made off ‘tax payer’s money.’A somewhat colloquial explanation of Triffin's dilemma, as seen by Jacques Rouffe, under the backdrop of "depth of usage" as the true conundrum. I have always enjoyed Ender's perspective. His tag line could be "it's all about the currencies". Indeed, which currency functions best to insure the flow of oil and gold, and the other essentials that nations wish to trade for, a.k.a. "the flow of value". This was written in September of 2008. Much has changed since then. The world is a mighty Titanic and it turns slowly even when the most formidable iceberg lies dead ahead.
Competition with other states becomes easier because you can outspend them. All the while, because the dollar has found function in THEIR country, you have reduced their political will to a size smaller then what their economy should support. Thus, in the effort to compete with the dollar – politically, other currencies look pathetically weak and price inflation runs rampant in these smaller economies.
Over the years top politicians and bankers have stated that the US has abused it’s rights with regards to how it’s used the ‘privilege’ of being the world reserve currency. The dollar has crippled the political will in other countries because of the way it gets it’s strength. This is… imperialistic. It undermines the sovereignty of nations. It simply will not be tolerated any longer but no one can fight against it openly. It must be made to look like it died of it’s own causes.
Another came along to let us know that, in time, the world would not grant ANYONE – any political entity – the right to abuse others the same way. Never again would there be a strong currency policy held over the globe. Another was around to see the ‘checkmate’ that gold provided. We are around to see the transition and gold reintroduction into the monetary system.
These teasers are your invitation to explore Ender's actual comments in their entirety from that particularly interesting time in the Fall of 2008. Another interesting time approaches. Some do see the current situation as "all is hopeless, nothing can be done". But as more and more see the timeless function of gold as the answer to what can be done, their understanding and the actions they take, will force the function of gold.