ATM Salvation - Gold Vending Comes to the US By George F. Smith
- July 3, 2010
Would you buy a gold bar from a vending
machine? If the ATM were located in a secure area, and the
bars carried an acceptable premium over the current spot
price and could be purchased in units as small as one gram
or as large as an ounce, would you consider swapping your
unbacked paper money for an authenticated 24-karat gold
bar?
There are entrepreneurs who are betting
you would. Thomas Geissler, managing director of the German
company GOLD to go, installed a gold vending machine in
the lounge of the three-billion-dollar Emirates Palace Hotel
in Abu Dhabi earlier this month. His company is able to
produce fifty gold ATMs a month that he plans to install
in places where "the machine will be liked by the audience,"
which so far doesn’t include the U.S. Another firm
debuted a similar gold vending machine in Las Vegas a few
weeks ago.
But gold is not yet money again. Why would
people buy gold from a vending machine when all they could
do is hoard it or give it away? To Austrians, the answer
is the same for buying gold anywhere: to prepare for the
ultimate rainy day – the Flood, for those who like
biblical references. Bernanke may not want to shower the
world with dollars, but history suggests politicians will
gladly do the job and blame the disaster on speculators
(and now Asians, given their current economic position).
If enough people have gold bars and coins in their possession,
the government will have trouble imposing a new paper money
standard to replace the one it destroyed. Hyperinflation
would be bad enough, but to allow government to lay the
foundation for another monetary disaster would be an act
of supreme treason to mankind.
Gold ATMs would be a convenient way of getting
civilization’s choice for money to the general public.
Let Krugman and other statists howl about how senseless
it would be to return to the "barbarous relic"
and how Keynes would be rolling over in his grave. People
are still wise enough to know a con game when they see it.
The bailout mania of recent times has shredded the slick
wrapper on government’s fraudulent monetary scheme.
People see the massive corruption but not necessarily where
it’s taking us. They don’t see the endgame of
monetary inflation. Thus, the run on gold and silver has
not happened yet. Can a run be modulated with technology?
The ATMs’ novelty and very presence will alert people
to the seriousness of the crumbling monetary order and induce
them to act now.
If gold-buying is limited to a relatively
few who understand the monetary turmoil to come, the majority
of the public will be vulnerable to the usual barrage of
controls, edicts, and accusations that accompany high inflation
and hyperinflations. But if most people have gold (and silver)
in their possession, they will have a potential exchange
alternative to the wallpaper the government cranks out.
They will learn that the precious metals preserve their
wealth, while the government’s imposed money drains
it. As the dollar falls ever closer to zero in purchasing
power, their gold and silver holdings will turn from being
keepsakes to items they could exchange for real goods. ATMs
that now accept fiat paper for gold could be joined by machines
that exchange gold for silver or copper, for use in smaller
transactions.
Mises said for gold to become cash people
must have it touch their senses. In his words (pdf),
Gold must be in the cash holdings of everybody.
Everybody must see gold coins changing hands, must be
used to having gold coins in his pockets, to receiving
gold coins when he cashes his pay check, and to spending
gold coins when he buys in a store.
Very few on planet earth
today have had this experience. As a start, gold-dispensing
ATMs could get those coins into pockets and purses.
As more gold went into more hands through
gold ATMs people would begin to appreciate the value of
saving. In 1966 Alan Greenspan wrote: "In the absence
of the gold standard, there is no way to protect savings
from confiscation through inflation. There is no safe store
of value." Since 1976 matters have improved somewhat.
Government makes us accept its inflated paper, but it doesn’t
forbid us to use an alternative. Not directly. It penalizes
gold with sales and capital gains taxes. Still, using an
ATM to get rid of dollars for gold and silver would be a
convenient way for Main Street to build insulation from
government "monetary policy."
Gold and silver ATMs would teach valuable
lessons to our youth. They already know the metals are rare
and highly-prized. And as any parent could testify, kids
of all ages love vending machines. As they fed depreciating
paper money into the machines and pulled 24K gold bars from
the chute in exchange, it might occur to them they were,
in effect, snubbing the tyrants. They would be taking a
step, however small, towards putting their future in their
own hands rather than leaving it to the whims of Washington
bureaucrats.
Government officials could always find ways
to stop or cripple the emerging gold ATM movement, but doing
so would be self-defeating. As parasites, they have a vested
interest in the prosperity of others. We can always hope
they have enough self-interest to step aside and let the
market prevail.
