RIP Fiat

RIP Fiat

Where have all the currencies gone
Long time passing
Where have all the currencies gone
Long time ago
Where have all the currencies gone
Gone to graveyards every one
When will they ever learn
Oh when will we ever learn

An Ode to Fallen Money

A new currency was born this week. Its sponsors travelled to Bethlehem for the occasion.

The US SUN:

Mystery as gold cube worth $11.7million “pops up” in NYC’s Central Park — and it has its own security guards.

The cube, composed of 186 kilograms of pure 24-karat gold, was rolled out in front of a snowy Naumburg Bandshell at 5am in the morning surrounded by photographers and NYPD officers.

The hollow gold block is the creation of 43-year-old German artist Niclas Castello, who has branded it the “Castello Cube.”

And here is where it gets interesting:

The 410-pound work is not for sale but was used as publicity for the launch of accompanying cryptocurrency, the Castello Coin.

With gold currently priced at $1,788 per ounce, it is worth up to $11.7 million if it were to be put up for sale.

But wait…

“The cube can be seen as a sort of communiqué between an emerging 21st-century cultural ecosystem based on crypto and the ancient world where gold reigned supreme,” Viennese gallerist Lisa Kandlhofer added to ArtNet. 

The Castello Coin is being traded as $CAST and is trading at an initial price of $0.44.

Is that cool, or what? We’ll find out.

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To axe and rot

It costs almost nothing to launch a crypto coin…and nothing to add more of them. So however much people buy the coin…it’s almost pure profit to the creator. Cool.

But…but…the Germans must have a word for this…it’s the grim, uncontrollable need to look into the future…and weep. You see your new car…rusting away in a junkyard. You get a puppy…and see a cross on the edge of the garden where the old, faithful dog is buried. And that oak tree you just planted; you know it will eventually rot and fall to the woodsman’s axe.

Yes, we’re still cogitating about yesterday…today…and tomorrow. We have a smattering of information about yesterday. And today is all around us. But tomorrow?

One day, we stayed up until after midnight to try to catch a glimpse of tomorrow. But there we were. Our eyes closed. The bell tolled 12 times; we counted them. And then when we opened our eyes. And we missed it; it was already today again.

One of the problems with new forms of money is that tomorrow, they are gone. You open your eyes, and they’re not there anymore. Hundreds — thousands — of new currencies have been born over the years.

Now, they’re almost all dead. Sniff. Sniff. At least, let us bow our heads in remembrance of them.

DollarDaze.com did a study of 775 ‘fiat’ currencies. A fiat currency is simply one that is declared — by decree — to be the lawful currency of a country by its rulers. It found that the average one had a life expectancy of just 27 years. Like the soldiers at Colleville-sur-Mer, they were cut down in the prime of life.

And where are their graves? The assignats, the Chinese ‘flying money’, the French livre…the French franc, the German papiermark…the German reichsmark…or just the plain old German mark?

Unmarked! No widows grieve before them. No grandchildren come to see them. They are just forgotten.

But let’s not think of them mouldering in dark graves. Let us try to remember them as they were…so happy, optimistic, and lively. They lived yesterday, remember…when it was all upside. Downside always comes tomorrow.

How charming their money heaven must be…with so many hopeful currencies — the confederate ‘grayback’…the Roman denarius…the Mexican silver peso…the Moroccan franc…the Romanian silver leu…the Maryland shilling…the 1924 Estonia marka…the Japanese oban…the Hungarian bilpengoe…the Brazilian crusado novo…the Argentine austral…the Ukrainian karbovanetz…the Serbian reformed dinar…

What fun they must have frolicking in their Valhalla…cavorting one with another…forever counting and exchanging — two to one…five to one…50,000 to one…or like the Zimbabwe dollar…one hundred-trillion to one!

And all totally worthless.

Staying power

Many years ago, we possessed a display of defunct currencies. They hung on our office wall…a monetary memento mori…reminding us of the Way of All Paper.

But wait…what about the cryptos? What about the newly minted Castello Coin? It is not paper. It is not a ‘fiat’ currency. It’s something new.

If gold represents 50 centuries of relative monetary stability in the ‘ancient world’, will this new coin provide us with 5,000 years of purchasing power in the new ‘cultural ecosystem’?

Or should we prepare the black crepe and sympathy cards already, knowing that it will soon be gone? Already, more than a thousand cryptos have passed away. How long will the Castello Coin last?

We don’t know. But our guess is that the golden cube will last a lot longer.

Regards,

Dan Denning Signature

Bill Bonner,
For The Daily Reckoning Australia

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