Freeing Value from the Physical
In the unique position the world has found itself in this past year, the perception of “value,” which is value itself, has gone into a state of flux and shrunk. One can imagine that there is less value in the world today than one year ago. Big chunks of value have disappeared.
But the price of gold has soared. Value and gold are unconnected; no one gets paid in pieces of eight – we get a direct deposit from our employer’s bank, a slide of value from a column in one bank to a column in another bank. Gold’s price is shooting up nevertheless.
It’s clearer than ever that value is a common perception: it is what the greater community – global at this point– agrees it is.
The perceived intrinsic value of silver crashed and warped out of history. Silver is great for jewelry and fine utensils, tea sets – bridal gifts. Gold’s industrial value has grown with the Technology Age. Like silver it is more useful than ever – as a mineral commodity.
But the gold hoarders now busily driving up its price are living in the past, and they’re living in a fool’s world. Gold’s value was at one time based on its scarcity, beauty, and desirability. The hoarders are competing with motherboard makers for a commodity.
We’re perceiving an artificially-propped bubble, like the infamous tulip bubble in the Netherlands in the 1600s – it’s ready to collapse at any moment. The intrinsic value of gold is much, much lower than what the gold markets say. The metal is useful to industry and jewelers, but not at $1,000 an ounce. That has nothing to do with circuit boards or wedding rings. That’s religion, not science, not business.
Gold’s price will come down again, sooner rather than later. Some will profit off the transfer of value to gold and back again to pure value, when the global economy rights itself and starts to grow once more. Most gold-hoarders will not profit – they will lose value.
Value Runs Free
Value exists outside of gold, freed for its usefulness in ways unforeseen by Egyptian god-king worshippers and Roman coin-stampers and the Gold Standard-bearers of the 1800s, and the prospectors with their picks and burros. We can do more with free value than ever, and will continue to find more uses for it.
We’re looking straight in the eye at a breakthrough for value. Value flows freely around the world, especially on the Internet, and through many banking instruments, credit being the most important. Value is everywhere and accessible all the time. And it wants to be free.
The pervasiveness of value together with ubiquitous access is the breakthrough combination yearning to be free. The breakthrough is to free value from cash, from paper money as well as a bar of bullion, from physical boxes – an object sequestered in a vault, transported by armored trucks, wrapped in bundles.
Today paper money is being printed by the US Treasury to pay for stimulus programs that are starting from thin air, and the “cash” paying for the programs is backed by thin air. The value of the new administration’s incentives to restart the economy is based on a shared perception – the perception held by the world that America has value. That’s what’s backing our money, and our turnaround. A perception. Value is held in common by those who agree upon what it is worth at any time.
Lake Valley
There’s an old silver mine in Lake Valley, New Mexico called the Bridal Chamber. Prospectors opened the shaft in the 1880s, removed millions of ounces of silver, and then the price dropped out of the silver market, the miners went away, and the Bridal Chamber was closed.
The shaft drove level and true into a vein of native silver taller than a man, 100%, so pure a miner could shave curls of metal off the walls with his thumbnail. They’d stumbled across a marvel of nature. The monumental vein was just five or six feet under the desert surface, a freak phenomenon of the earth’s crust. Miners ran rails right into the colossal vein glowing just underground. They carved a room into it, and would push a mining cart right in, pick off pure silver and chunk it in the cart and roll it to the nearest railhead.
Lake Valley today is a ghost town. There’s a shadow of a street and broken-down buildings, rusty signs creaking in the dry breeze, sun-scoured wood siding split and browned. On the naked hills surrounding the town you can see the cobbled tailings of old mining operations. One of those is the Bridal Chamber.
Fine Silver
Fine silver is very soft – you have to melt it down and mix it with copper, 75 parts to 925 parts silver, to get the useful alloy we call sterling. Sterling silver takes a hard polish and stands up to use as jewelry, or silverware and a tea service, vessels and serving platters. Yet sterling tarnishes and needs constant polishing, limiting its usefulness.
Silver was long a monetary standard and in the 1800s as a backer of paper money was held equally as solid as gold. Silver prospectors in the 1870s, 80s and 90s explored the mineral-mountain West including the region of Lake Valley, fought off bears and the Chiricahua Apache whose home it was, discovered the enormous vein and dug out the hundreds of smaller claims that pepper the hillsides. Then the silver market collapsed in the 1890s depression and never came back.
The value of silver fell to commodity level. The prospectors packed up their burros and moved along, leaving behind their empty boomtowns, memories, and the richest silver mines anyone had ever seen. The same thing happened all over the rugged mountains and backcountry of Colorado, Nevada and California.
The Bridal Chamber closed – the vein is still there, thick, dense, Godlike, a singularity under a rattler-infested hill. The thin roof caved in and the silver room filled with water. A conglomerate in New York owns it and all the other mines and claims in Lake Valley and the surrounding hills. A caretaker chases off antique-hunters and hikers – they don’t want the curious dropping into an open shaft and drowning in the groundwater that has seeped in through the hard rock over 100 years.
The Value of Industrial Metal
Today copper is mined massively just a few miles from Lake Valley in open pits you can easily spot on Google’s satellite maps. Giant yellow trucks the size of two-story houses crawl around and around the dusty pits, hauling copper-bearing rock out to be crushed, fired and smelted.
Copper is more valuable for industrial use than silver. While silver has the highest electrical conductivity of any metal, copper’s electrical conductivity is superb compared with its relative abundance, ease of extraction, ease of use and low price. Copper is highly ductile, easy to draw into wire. Silver tarnishes. It’s too soft as mined, especially that pure stuff from Lake Valley – it costs too much to blend with other metals to make it useful for wire and electrical goods. Silver is vulnerable to oxidation and is used mainly as a precious metal, for jewelry and tableware. Its limited industrial uses include photography, watch batteries, and increasingly, medicinal solutions
Gold as Sacred as the Sun
Gold has industrial uses like copper and silver. Gold doesn’t tarnish. Ever. It doesn’t oxidize. It’s ductile and easy to work, a little softer than silver. Gold is highly conductive to electricity – because it doesn’t oxidize, it’s very desirable for electronic connections: it will carry the digital signal with no impedance and no loss, always, forever.
Gold out of a mountain stream is always pure, 24 karat. You can work it immediately – pound it into a leaf so thin you can see through it, and it is so ductile it will still hold together. Mixed with copper, silver, platinum and other metals, gold becomes tough, but retains its desirable qualities. The alloys strengthen the gold without affecting its ductility, its resistance to oxidation, and its beauty.
Forever the human race has placed a special value on gold and silver, especially gold, for its beauty and scarcity. The ancients recognized very early that once formed and polished, gold would stay shiny, lustrous as the noonday sun, forever. It signifies the eternal and is eternal. Treasure hunters and scientists dig up gold trinkets and objects constantly, hordes of Roman coins, offerings in sacred grottoes, masks for royal mummies, earrings and nose-rings for the noble dead, finely-wrought crowns of ancient kings and queens. It’s forever bright, shiny as the day it was formed, sun-like, glinting out of the earth of an archaeological dig, or under the farmer’s plow as he turns over a horde in his field.
There’s something of the sacred about gold: the eternal. People treat gold with a supernatural reverence that lives on. In Asia, visitors to temples buy gold leaf and lay it on statues of the Buddha, adding to generations of deep gold sheaves that blur the image’s details. Christianity’s communion chalice is made of gold or lined with gold, the consecrated bread and wine coming in contact only with the most eternal of materials. Gold is the sun, it is God-like.
Gold and Silver Solidified Value
Humans placed the value of gold above all things, including silver, and have used it and silver as the symbols of value, the substance of value, for 3,000 years. Gold and silver equal wealth, the precious metals are value. This is as true today for many people as it was for the ancients.
But modern international money systems have unlinked value from the yellow metal, allowing value to run free in the marketplace. After all, value has always been an abstract.
Gold and silver have forever been a symbol, an agent of transfer of value – not the value itself, which is abstract. The perception of gold and silver’s value is basic, their intrinsic worth based on scarcity and beauty but coupled with quasi-religious reverence.
Naked Value
Linking the concept of universally-accepted value to gold and silver became un-useful in a bigger world linked by fast international travel and instant communications – the clipper ship, the telegraph, telephone, radio, the jet airplane, the Internet. Silver was the original money standard. Not long ago gold was the standard of trade that backed the currency of nations, international credit and a nation’s worth, its vaults laden with stacks of gold and silver bullion.
Today money markets intersect in global webs of trade and commerce. Value is traded like soybeans. Value needs to run free, be fluid, flexible, fast, mobile, to create the Modern world and to serve it usefully. The metals are clunky, static, and limiting. Value itself has become a commodity.
Change Is Coming
In the perfect storm of the 2008-2009 Recession-Depression, the potential of the Internet outmatches the fumbling, greedy-panicky mismanagement of big banking. The world is moving away from physical symbols of value, physical mediums of transfer. Value is transferred constantly worldwide electronically, no gold and no folding money anywhere. The pure thing, Fine, unalloyed, un-representable.
Our future is as apparent as a mountain. How do we pay with pure value? How do I hold value? How do I, an individual, move value around? What can I do to free value from clunky, meaningless transfer carriers, gold bullion or paper money?
The Internet is always on, always everywhere, if you have the systems to access it. It’s our task, at this time, our historical moment, to let value be value, and to foster and launch the systems that enable value to run free and serve us more directly and efficiently.