Gresham's law - how do we get around it?

[freedomordeath]

My views on gold and silver has evolved somewhat. Gold/silver simply holds its value over time, as simple as that. It does not create wealth, it merely stores wealth created by a persons labour and talents.

sure some poeple make money buying and selling hitting the peaks and troughs just right, but if you don't know what you doing then you will burn your fingers.

For me what sets gold and silver apart from anything else is its use as a currency. The Kruger Rand had a copper alloy mix to make it hardy for everyday use.

What I want to know is how would a community get around Gresham's law, would a like minded community opt-in to a system of only exchanging in gold and silver.

Would this community have to offer unique specialist services that would overcome the difficulties of gold conversions for outsiders. Eg no one will buy bread from them in silver if they can go down the road, but if they have excellent medical facilties or good private schools etc

would this community have to set up private (more then one for competition) exchanges where gold was sold in exchange for cash to poeple outside the community to enable to buy from that community. Obvioulsy the community would need some USD to buy materials they cannot create themselves.

What can go wrong, can Grishams Law play a role here, I feel that stacking silver in vaults is a waste of time when it should be used as a currency. Many states are passing laws enabling gold to be used.

 

[Petar]

No one wants to lug around gold for everyday use as a currency. Ron Paul once said that it could be made electronic, and he was right, but then you get into the issue of unallocated funds, and leveraging. Gold's sound money characteristics become compromised in those types of markets. Bitcoin, on the other hand, cannot exist in an unallocated format (assuming that one takes precautions against double spend hacks), so my belief is that it is a much more sound system of currency. At least as long as we have an internet, and some semblance of freedom to go along with it.

 

[freedomordeath]

I'm not a bitcoin naysayer like some are, but coming from Africa I totally agree with comments from Ron Paul and Misses institute when they say it can go wrong if you can't physically hold it. In Africa things can go wrong, with the internet they can hack your computer, they can literally bomb main communications hubs, very easily done (was former Telco Tech). One link in a gold chain bought you a bus ride in Germany during hyper-inflation.

The focus of this thread is not if gold should be used or not, but how to practically implement it. Example if a shop sold stuff in USD or gold/silver, would Greshams law take effect, would a community have to make a decision not to use USD. There is nothing wrong with digital gold, without the con of deposit insurance, the poeple will take alot of care to use reputable sources. There is no difference whatsoever relatively speaking to digital cash and digital gold. I feel Libertarians need to start these communites and demonstrate to others that it works.