Lots of people have said that the World should go back to the Gold Standard; that's a no-brainer. What does take brains is figuring out how to do it. It's easier said than done.

Consider first how tremendously devalued all currencies have become. The U.S. dollar, once fixed at 20/oz, now fluctuates; it is currently at about 260/oz. The $ is also about the 4th or 5th most valuable currency in the World: only the new Euro (which doesn't even exist yet except in bankers' imaginations) the British pound and currencies indexed to the pound are worth more. All other currencies are worth much less. One dollar in gold would be about 1/260 oz., or approximately 1/9 gram. How can we carry around useful amounts of the stuff when it's like that?

The answer I always get is, "Oh, no one will actually carry gold, our paper money will just be indexed to it, that's all." Uh-Uh: I don't trust indexing. I want the actual stuff in my hand, and if I can't have it, well, I might as well have electrons in plastic. The only kind of gold that matters - the only kind of anything that matters - is what you can hold in your hand. Virtual riches don't count. After all, what happens when the computers (or just the phone lines) go down? When you don't have an ATM handy? When your card gets wiped somehow? Besides which, indexing just means devaluation later, so it's just as bad as no metal at all. No thanks bubba; I'll take metal over magic any day.

So, how d'ya carry amounts of metal that ain't too small to handle?

One way is to use other metals. Silver, for example, is almost as good as gold and costs a lot less per oz. - about $5 lately. That would make a solid silver coin equivalent to a dollar about the size of a nickel; $10 would be about the size of the old silver dollar but thicker. British pounds, of course, would be more.

Silver doesn't work for lesser currencies though; it's way too valuable. When you look at the exchange rate of some currencies and realize that here are people who get paid in those terrible units, you realize how outrageously billions of individuals are being ripped off by the criminals that issue such worthless paper. You also realize how cheap everything in our modern world really is: when it's at all possible to buy things with Turkish lire, to cite the most egregious example, well, that's cheap! Of course, it is only possible because everyone in Turkey is forced to accept lire.

Some disgusted libertarians have said the best way would be to just scrap the whole monopoly money system; just wipe out the print shops along with the govarmints who run them and declare it all (finally, honestly) worthless. Bank deposits, of course, would also be worthless. All debt would be essentially wiped out, valued as it is in worthless paper units. And billions of innocent people, who have nothing of value except that paper, would then have nothing of value at all. The World economy would collapse.

As Douglas Casey rightly points out in his book, Crisis Investing for The Rest Of The 90s, a collapse doesn't destroy any real wealth, it just changes the ownership of that wealth. True, but ... what about those who don't possess any wealth? They have nothing to live on but their own labor. When the unit their labor is valued in vanishes, they have nothing to tide them over until another unit replaces it, which takes a while. What happens to them?

Starvation. Robbery. Slavery. Death.

So, it is vital to ensure those currencies retain what little nominal value they have, even if only to exchange them for some sort of metal. What sort of metal is cheap enough to make decent-sized coins from currencies like the Turkish lire?

Every morning when I read The Dispatch, I always look at the metal and currency quotes. On Wednesday, June 16, 1999 AD (11999 HE) the following prices were quoted:

    Zinc (Zn) - 0.515/lb
Aluminum (Al) - 0.602/lb
  Copper (Cu) - 0.630/lb
  Silver (Ag) - 5.090/oz
    Gold (Au) - 260.1/oz
Platinum (Pt) - 356.2/oz

These prices can be a bit confusing. Not only are some in pounds and others in ounces, but the ounces are troy ounces, while the pounds are avoirdupois, which is our usual, standard pound in the English system. The troy system has always been used to measure "precious" metals such as gold and silver, and for little else. Personally, I'd like to see everything measured in the metric system. Not only would that standardize measurements, it would also be easier to measure things once we move into outer space, with its varying gravity conditions.

To convert avoirdupois (av-WAR-doo-PWAH) pounds to grams is easy; just press a few buttons on a calculator that has that function (what, yours doesn't?). One pound = 453.59237 grams. In case you're interested, there are 16 ounces to the avoirdupois pound, so 1 oz = 28.34952313g.

Troy is a little more difficult. No calculator that I know of has troy units, so you just have to know them yourself. One troy ounce = 31.1 grams - it's actually 31.107-something grams, but since the fourth digit is a zero everything after that is insignificant.

For the record, there are 12 troy ounces in a troy pound; thus, while troy ounces are bigger than regular ounces, troy pounds are smaller than regular pounds. Do you see now why I like metric?

Converting to the much more sensible metric system, we get these values for the six metals:

    Zinc (Zn) - 0.001135380
Aluminum (Al) - 0.001327182
  Copper (Cu) - 0.001388912
  Silver (Ag) - 0.163665595
    Gold (Au) - 8.363344051
Platinum (Pt) - 11.45337621

As you can see, all of the base metals are worth only about 1/10 cent per gram, which makes them well-suited for the re-valuing of crappy-assed fiat paper.

In my theoretical replacement of fiat paper with valuable (even infinitesimally valuable!) metal, I have assumed that exchange rates will be adhered to, but loosely, so as to make the coins in even gram weights. All rates of exchange are for U.S. dollars on Wednesday, June 16 1999 (11999). Bank accounts are to be converted at the precise calculated rate, not the same gross rate as paper. In this there will be a change in banking practices of calculating everything to the last significant digit, rather than rounding off. This follows the practice of E-Gold in their virtual metal exchange. It is orders of magnitude more accurate and affords much more honest returns for everyone involved. It also eliminates the fractional float by which banks make billions of quatloos per year rounding off people's interest payments.

So much for the math. How can such a radical change be implemented? It's not likely all 230-some odd governments in the World will just spontaneously and simultaneously decide to stop ripping off their captives. Since I'm fantasizing here anyway, I've presumed to be Emperor Of The World and thus the One Authority who can make it happen.

As you peruse the table below, you'll notice that no currencies have been converted into gold or platinum. This is because there can be no coins of any practical size made in those metals. Even the British pound is only 10 grams of silver; the dollar is about 6 grams. This means that, although all currencies have been converted to metal, there is still no "Gold Standard." While that may bother some people, I find it a fresh opportunity to convert to a pure, unadulterated Gold Standard: since no fiat currency is fixed to gold, any conversion to gold breaks all connection to that bad, old fiat paper.

CURRENCIES IN ORDER OF VALUE BY METAL:

                       units per    grams of metal
COUNTRY     Currency   US dollar    per paper unit
--------------------------------------------------

-- silver group --
BRITAIN     Pound      1.5926        9.73        .
JORDAN      Dinar      1.4104        8.61        .
IRELAND     Punt       1.3218        8.07        .
ECU         Euro       1.0425        6.36        .
ARGENTINA   Peso       1.0005        6.11        .
USA         Dollar     1             6.11        .
CANADA      Dollar     0.6839        4.17        .
AUSTRALIA   Dollar     0.6639        4.05        .
SWITZERLAND Franc      0.6531        3.99        .
SINGAPORE   Dollar     0.5853        3.57        .
BRAZIL      Real       0.5598        3.42        .
NEW ZEALAND Dollar     0.534         3.26        .
GERMANY     Mark       0.533         3.25        .
NETHERLANDS Guilder    0.4724        2.88        .
PERU        Nueva Sol  0.2995        1.82        .
EGYPT       Pound      0.2930        1.79        .
U.A.E.      Dirham     0.2724        1.66        .
SAUDIARABIA Riyal      0.2666        1.62        .
MALAYSIA    Ringgit    0.2632        1.6         .
POLAND      Zloty      0.2538        1.55        .
ISRAEL      Shekel     0.2453        1.49        .
FINLAND     Markka     0.1751        1.07        .
SUD AFRICA  Rand       0.1643        1           .
FRANCE      Franc      0.1589        0.97        .
DENMARK     Krone      0.14          0.85        .
HONG KONG   Dollar     0.1289        0.78        .
NORWAY      Krone      0.1271        0.77        .
CHINA       Yuan       0.1208        0.73        .
SWEDEN      Krona      0.1178        0.72        .
MEXICO      Peso       0.105         0.64        .
URUGUAY     New Peso   0.0889        0.54        .
AUSTRIA     Schilling  0.0757        0.46        .
DOMIN. REP. Peso       0.0636        0.38        .
RUSSIA      Ruble      0.0412        0.25        .
TAIWAN      Dollar     0.0309        0.19        .
CZECH REP.  Koruna     0.0281        0.17        .
THAILAND    Baht       0.027         0.16        .
PHILIPPINES Peso       0.0265        0.16        .
BELGIUM     Franc      0.0258        0.15        .
SLOVAK REP. Koruna     0.0228        0.14        .
PAKISTAN    Rupee      0.0193        0.12        .

-- copper group
JAPAN       Yen        0.008306      5.98        .
SPAIN       Peseta     0.006257      4.5         .
PORTUGAL    Escudo     0.005192      3.73        .
HUNGARY     Forint     0.0042        3.02        .
GREECE      Drachma    0.003215      2.31        .
CHILE       Peso       0.002         1.44        .

-- aluminum group --
SOUTH KOREA Won        0.000858      0.64        .
LEBANON     Pound      0.000663      0.49        .
COLOMBIA    Peso       0.000593      0.44        .
ITALY       Lire       0.000538      0.40        .
INDONESIA   Rupiah     0.000138      0.10        .

-- zinc group --
ECUADOR     Sucre      0.000094      0.083       .
TURKEY      Lire       0.00000243    0.0021      .

---------------------------------------------------

Notice that I've grouped the old fiat currencies by the number of zeroes to the right of the decimal after conversion to $. Since copper and aluminum are so similar in price I may want to merge those groups. Note also that I have left out other potential metals such as tin and nickel. I will not consider iron because it rusts, nor lead because it is too soft and heavy.

It may be a bit alarming to you to see such miniscule amounts of metal for currencies like the Sucre and Turkish Lire; rest assured that nobody would ever have to deal with anything that small. There really is no such thing as one Turkish Lire; it is too small to actually exist. I don't know, but I'd suspect the smallest unit in Turkey is about 5,000 Lire, and that would be a little more than our penny.

Remember also, in case I didn't make it clear above, that I am NOT talking about issuing coins in these amounts denominated in the old fiat currencies! The purpose here is to replace those currencies with metal measured solely in mass units, not perpetuate their silliness.

The way I would probably do it is with a bank holiday. A "bank holiday" isn't a time to celebrate, it's a time (usually) to worry. It means the banks are closed by the government, usually because they're close to being broken. In this case, the banks would all be shut down around the World so the switchover could be sprung on the People all at once, everywhere. Probably Leap Day Weekend in 12000 would be best: that's a 3-day weekend in the middle of summer, and it gives us 72 hours to do it in.

It would be done like this: first, every bank closes at midnight Friday in its own respective time zone. All banks are closed by midnight Saturday on the Global Date Line. We do the switch -- accounts are revalued in metal at the posted rate, and fiat currencies are replaced with metal coins in even metric weights. At 00:00 on Monday, 3 days later (remember that Leap Day comes between Saturday June 30 and Sunday July 1) the banks re-open and people learn what we've done. Now all banks give out only metal, and all fiat currencies are instantly converted to metal when turned in to the banks. The banks deliver the fiat paper to my Imperial Government (read My Empire if you haven't already) and get more metal. Eventually all the paper is retired, and so are the units it counted.

Naturally the people who get stuck with the base metals will want to convert them into something better right away. Even those who get silver will want gold. The reasons I specifically did not revalue anything in gold are that 1) no fiat currency can be carried in gold unless it is huge numbers of units and 2) I want gold to find its own price relative to the rest. I will release all the gold in government vaults, of course -- and it will be in metric coins just like the rest. Same with platinum and any other metals held by the Former Regimes.

I really doubt the base metal coins will last; within a year, most people will have converted to silver and gold. Their purpose is merely to give ordinary people in countries with really worthless currencies something to hold onto - literally. Of course, with so much better metal to hold onto, they'll soon part with their zinc and aluminum.