| | A METHOD OF TRANSFERRING FRACTIONAL OUNCES OF PHYSICAL GOLD, WITH CONFIDENCE, FROM PERSON TO PERSON
By Paul Hibbert
Feb. 7, 2003
A credit card size plastic sheet has one or more strands of gold wire embedded in a transparent area near the lower edge. The wires go completely through from one side to the other so that the wire is exposed at each edge. The electrical conductivity of the gold wire can thus be easily measured and its characteristic color can be observed. These two features provide a unique impediment to counterfeiting.
PHYSICAL CHARACTERISTICS AND CONVERSION FACTORS
Gram = .00220462 pound avoirdupois, .0352739 ounce avoirdupois, 0.0321507 ounce troy or apothecary.
inch = 2.540005 centimeter
1 = pennyweight = .05 oz.
gold, wrought density 19.33 gm/cc
Credit Card Size 3.375 “x 2.11” = 8.57cm x 5.36 cm = 18.08cm**2
1 gram gold = 1/19.33 = 0.051733 cm**3
1 gram gold = 0.0321507 troy oz.
1 gram gold = .0321507 oz x 370 $US/oz = $11.90 US
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for a wire 8.57 cm long:
0.051733 = pi * r**2 * 8.57
r**2 = 0.051733/(3.14 * 8.57) = 0.0019224
r= .0439 cm.
d = .0875 cm. i.e. pretty close to a millimetre
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Resistivity (microhm-centimeters) of the best 5 conducting metal elements
Silver 1.59
Copper 1.72
Gold 2.44
Aluminum 2.82
Magnesium 4.60
Thus, a gram of gold embedded in the credit card size sheet would be .0875 cm in diameter and be 8.57 cm. long and have a value of about $11.90 US at today’s gold price of about $370 US.
Gold is the most ductile of all the elements and a grain of gold (0.002 ounce, or 0.065 gram) can be drawn into a wire 0.00002 inch (0.00005 centimeter) in diameter and more than a mile (1.6 kilometers) long. It can be beaten into gold leaf that is only several atoms thick and at this thickness it is translucent.
COUNTERFEIT PROTECTION
In order for a counterfeiter to duplicate the conductivity of the gold wire he would have to combine elements of both higher and lower conductivities than gold, e.g. silver and aluminum or copper and magnesium while maintaining a color approximating that of gold. Copper is the only one close to the color of gold and combining it with any of the others would dilute the color.
Alternatively, a counterfeiter could try to coat an inferior metal with gold but that would be evident when observing the cross section of the wire at its ends. Also, it would be difficult to do because it would have to be done after the wire was drawn. It would seem that the effort in counterfeiting wouldn’t be worth the effort.
To my knowledge there is no practical way to transfer small amounts of physical gold. “Wafers” and so on require a cumbersome authentication.
CONFLICT WITH THE FEDERAL RESERVE BOARD
As you know, the Fed will resist any attempt to introduce any competition to its paper money, hence this must not pretend to be anything other than another form of non-monetary gold. I would love to be able to call this card a “gRand”, in honor of Ayn Rand, with the “g” standing for either “gold” or “gram” however the “Rand” is the currency of South Africa and “grand” is slang for $1,000. Another possibility if we weren’t constrained by the Fed would be “Ucurr” for Universal Currency. In keeping with Rand’s penchant for taking a negative connotation and turning it to a positive, e.g. “Midas” Mulligan, the “Lucre” could be considered. As those names are out of bounds I propose that it merely be called the “Gram”.
DISCUSSION
The US has missed a big opportunity in establishing a viable currency in Iraq by not creating a gold backed currency there.
Greenspan has repudiated his professed earlier beliefs in gold as an objective standard.
A "backed" paper currency is still a fiat standard, whether fractionally backed, or 100% backed. Only 100% gold transfer is exempt from government whim.
If any of the above enterprises gains acceptance I would expect that the advocates of Grams would barter them for goods and services. If the bartering reaches a significant degree there would inevitably be some sort of confrontation with the Fed and could become a hot legal or political issue.
There is a phenomenon in Canada where there is an active numismatic trade in “Canadian Tire Money”. Canadian Tire is a large chain of hardware stores that issues paper “money” coupons as a percentage of purchases. These coupons may then be redeemed for future purchases.
http://www.nunetcan.net/ctccc/ctccc.html
It would not be a stretch of the imagination to foresee the same kind of action with collecting the various forms that the Gram might take.
Another site of interest is:
http://www.norfed.org/
that describes the issuing of warehouse receipts for precious metals. In my opinion this approach doesn’t compare favorably with the proposed Gram but demonstrates an attempt get gold into circulation in one way or another.
There is no impediment to embedding more than one strand of gold wire in the Gram card although I would recommend that .0875 cm diameter be the largest size for reasons of compactness. Thinner wires will allow smaller denominations and also improve the defense against counterfeiting by making any attempt to do so more expensive. The cost of production of smaller wires would, of course, be somewhat higher. Wires could be run in the short direction of the card for smaller denominations.
At one time I had thought that gold leaf would be a preferred approach to the gold wire but I quickly found out that the cost of manufacturing leaf would overshadow the value of the commodity itself and thus would be impractical. However, because of the thinness of the leaf it would be even more difficult to counterfeit.
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