That was a great editorial about gold (T.N.M., Feb.19-25/01). Not quite enough about its potential as a store of value, however — a role gold has filled for hundreds of centuries.
The other day when the Royal Canadian Mounted Police had a press conference about the phoney $8.2 billion U.S. bearer bonds, the American Treasury representative mentioned that such counterfeiting existed principally in Asia. No one followed it up, but I wondered that if Asians can counterfeit U.S. bonds and treasury bills, why can’t they counterfeit U.S. dollars? They counterfeit credit cards and other financial instruments.
There are billions of U.S. paper dollars floating all over the world, and they are the main means of settling accounts when the local currency is not used, or isn’t trusted.
How many of these paper U.S. dollars are fake? Also, how many British pounds or euros are fake? Or any other strong currency?
If the legitimacy of these currencies started to be questioned, would holders try to ascertain their holdings’ legitimacy or get rid of them just in case? Wouldn’t they convert their paper dollars, etc., into gold or some other known store of value just in case their holdings are fake? Wouldn’t this put downwards pressure on the strong currencies? Could we not have a run on the U.S. and other currencies as more and more owners switch to real stores of value?
Maybe The Northern Miner could ask the U.S., Canada, Great Britain and others how they deal with counterfeit money, and if they have an estimate of how much is out there. They probably wouldn’t admit that there are fakes of their paper money, but it might be worthwhile asking. It might even help the gold producers as gold returns to an accountable store of value.
Guy Fortier
Gloucester, Ont.
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