There's an interesting article which dwells on the interactions between
gold price and the price of oil, as well as on the consequences
that the oil resources are finite and production is likely to peak in these
days - if they didn't peak already.
As it turns out, oil price and gold price are linked in several
ways: For example a high oil price could trigger inflation,
which will lead to a preference for gold. A very high oil
price would also weaken the US economy, which could lead
to a process that oil-producing countries could prefer
some other payment than the dollar.
Then, there is a very interesting remark that astonished
me. To cite:
"The answer to that question begins with the historical desire of Arab producers to receive gold in exchange for their oil. This dates back to 1933 when King Ibn Saud demanded payment in gold for the original oil concession in Saudi Arabia. In addition, Islamic law forbids the use of a promise of payment, such as the US dollar, as a medium of exchange. There is growing dissention among religious fundamentalists in Saudi Arabia regarding the exchange of oil for US dollars."
The full text is here:
http://www.gold-eagle.com/editorials_05/barisheff042205.html
[To be true, I believe but I am not completely sure that this
is the original source - there are numerous references and
unattributed copies of this text on the web.]
What is stunning for me is that fiat money in general and the dollar
in particular is seen as a payment _promise_. I bet that Bitcoin is
probably more seen as an asset that may have value or not; but
it does not depend on the goodwill or ability or trustworthiness
of the person paying with it, only on a diligent check on the
side of the receiver.
Its quite fascinating - and I don't say that ironically at all -
that bitcoin seems to be able to gain support from wildly
different partys. I am not a religious person but I think that
at least in THIS aspect islamic law might have very good
reasons which people from completely different political ends
might share.
I am writing this at the late evening of a day where a
collapse of the european currency became thinkable.
If this becomes reality, then it could be attributed to
a large part to the way how power is able to shift
perception of realities into outright denial, how a suffucient
amount of money turns a dedicated medium of exchange
into a literal Ponzi scheme.
I remind also that seemingly _each_ of the last important wars
has led governments to tinker with the value of
money. In Germany, it was the abolishment of
the Goldmark for war bounds during, and the payment of
reparations with money printing presses after
world war I. World war II was financed by a technique
which was called "silent war financing" (geräuschlose
Kriegsfinanzierung) - basically, banks were forced
to sign war bounds because people had no interest in them.
In the US, the end of the dollar's gold backing was not
by mere coincidence during the vietnam war. I think
about the economical consequences of the Iraq/Afghanistan
wars everyone has his own picture.
It's certainly a truly naive and innocent wish but
it would be too beautiful if bitcoin could contribute
to a world with fewer wars....
But what do you think about this? Many people
have pointed out that bitcoin seems to have
compatibility with the Hawala System (http://en.wikipedia.org/wiki/Hawala).
Might it be compatible to some important aspects of arabic culture?
My personal feeling is yes.
- Joise
P.S.
Another text on the topic of dollar-oil-gold and the expected
peak of oil production:
http://www.monacorarecoins.com/rare-coin-news/article/the-us-dollar-oil-gold-relationship/
