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The Gold ATM


It appears technology has moved the world one small step closer to a sound money. On Wednesday, a hotel in Abu Dhabi unveiled the GOLD To Go ATM, a gold dispensing vending machine created by a German firm. The machine dispenses 24-carat gold bars in 1, 5, and 10 gram sizes as well as gold coins. A computer inside the machine keeps track of the gold price in real time and updates it every ten seconds but maintains the price for a given buyer for ten minutes. The machine itself sports a gold leaf finish. There are plans to install 200 more machines in Austria, Germany, and Switzerland. It is noteworthy that the technology of tracking the gold price in real time could be adapted to tracking the gold-silver exchange rate thus reducing the transactions costs and facilitating the development of gold and silver parallel standards. Silver coins would be much more convenient than gold coins for everyday transactions. At current prices, a 1 gram silver bar would have a purchasing power of about $.70 and a 5 gram bar of about $3.50. “Small change” would be provided by bearer vouchers printed on base metal or on paper notes issued by nationnwide merchants like Walmart, McDonald’s, Best Buy etc. which would not be claims directly redeemable in gold or silver money but redeemable in their merchandise (like mall or store gift certificates). As long as these vouchers were not issued in excess they would be readily acceptable as small change in exchange.

Joseph Salerno is academic vice president of the Mises Institute, professor of economics at Pace University, and editor of the Quarterly Journal of Austrian Economics.

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