I think the cat is out of the bag. There is no way to go back without some catastrophic world situations.
US Money...
- Thread starter jks9199
- Start date
GBlues
Purple Belt
Well, to begin with, there are right now, an elite few that run everything. THey make the decisions on who were going to war with, how much our money's worth etc, etc. If you truly believe that the president or congress, or any other office in government has any real power then in my mind your crazy. That being said. The gold standard is not a bad way to go. IT does give value to your dollar. THe commodities, the manufacturing and such, is not so good. Look at America how, much manufacturing are we actually doing, as compared to the 1940's? Nowhere near as much. So placing a dollar amount to your services is ok....but if I don't think that your services are worth 100 bucks I'm not going to use your services. I'll buy them for 20 yen, or pesos, from the guy that will do it cheaper. RIght?
So it's a way to keep the dollar in constant flux with the commodities standard. Countries don't make any money if they aren't making anything.
Now, the founders of the constitution did not want us to have a separate centralized bank. The reason being is that he who makes the gold makes the rules. THey are then able to basically hold the government hostage, and get there way. Kind of like these bailouts that are going on now. If wer had let them fall, yeah, we'd of had really hard times. But businesses that go bankrupt do the same things that they always did before they went bankrupt, and that is nothing. SOmeone always steps in to fill there shoes. What we need is an American Currency, that is printed on our own presses. THe Federal Reserve is not apart of the Federal Government. It is it's own separate entity. It prints it's own money, but it has nothing to be backed up with, not gold, not commodities not anything. THey print, and they print, more and more money. That is why the value of the dollar keeps dropping. PErsonal Opinion. That's what I think. Get rid of the Federal Reserve and print our own National money. Then we would have control of our government again. Until then the rich and elite will always have it, because of greed. Because they control basically whether you eat or not, pay your bills or not, cause they control the MONEY. It's actually very sad when you begin to think about it.
So it's a way to keep the dollar in constant flux with the commodities standard. Countries don't make any money if they aren't making anything.
Now, the founders of the constitution did not want us to have a separate centralized bank. The reason being is that he who makes the gold makes the rules. THey are then able to basically hold the government hostage, and get there way. Kind of like these bailouts that are going on now. If wer had let them fall, yeah, we'd of had really hard times. But businesses that go bankrupt do the same things that they always did before they went bankrupt, and that is nothing. SOmeone always steps in to fill there shoes. What we need is an American Currency, that is printed on our own presses. THe Federal Reserve is not apart of the Federal Government. It is it's own separate entity. It prints it's own money, but it has nothing to be backed up with, not gold, not commodities not anything. THey print, and they print, more and more money. That is why the value of the dollar keeps dropping. PErsonal Opinion. That's what I think. Get rid of the Federal Reserve and print our own National money. Then we would have control of our government again. Until then the rich and elite will always have it, because of greed. Because they control basically whether you eat or not, pay your bills or not, cause they control the MONEY. It's actually very sad when you begin to think about it.
Gold: The Zimbabwean example shows the extreme case of printing money without backing for it. The finance minister there has explicitly threatened to keep printing money until his country pulls out because of it or sanctions against the country are dropped.
In theory the gold (or similar) standard protects against that. In practice...how much gold would we need to have to literally back up every dollar?
In theory the gold (or similar) standard protects against that. In practice...how much gold would we need to have to literally back up every dollar?
There is a lot of truth in that, Brian.
That is why it would have to be a global decision by the developed world and one in which the governments take back the power of the money supply away from the financial system that has held them hostage for nearly a century.
America on her own probably couldn't do it because, as I've said before, a lot of her 'wealth' is illusion because it is actually debt, the servicing of the majority of which is held by other countries. The 'Most Powerful Country In The World' (TM) has been on borrowed time, pun intended, for quite a while. This makes it well nigh impossible for her to leverage her economic weight to push a change through.
In the end tho', it will come to a decision between which is the least painful was to get through economic collapse and build a more sustainable future.
Absolutely, the value of the shiny stuff is distinct and real. The "stuff" that gets traded on the stock market most likely doesn't even exist. The Comex Gold market is paper based. When you buy it, you are buying gold that exists in the future. It's more paper.
People who put money into the market to buy gold are throwing it imaginary gold. Gold in hand is the best.
The interesting thing about all of this is that the market for REAL gold is very tight. You can hardly get it at all. In fact, in October, the presses that made real gold coins all over the world had to shut down because they didn't have any left.
The "real" price of gold is probably two to three times what it is traded for on the market. It's interesting how once you know the difference between gold and paper, you can see how the market forces really know the difference.
Any amount is fine. The question isn't how much gold, it's how much value. Right now we have NOTHING of value backing our currency and we are creating it as fast as we possibly can.
When you assign "value" to currency, you limit the amount that can exist and thus stabilize the currency. This eventually stabilizes the economy if the government leaves the amount of value alone.
This appeared in my local paper a few days ago and has been on my mind as I read this thread:
ARTHUR FOULKES: Message to the Fed: Printing money doesn’t create lasting economic growth
ARTHUR FOULKES: Message to the Fed: Printing money doesn’t create lasting economic growth
Well, an estimated range is that there are something like five to ten billion ounces of gold that have been mined so far in the world.
The amount of paper/electronic dollars there are has never been published to my knowledge - that's telling to me as an economist in and of itself
.So that makes it hard to do an actual equivalence calculation.
The point is that going to a Gold Standard type of system would involve an arbitrary re-setting of the fiscal clock rather than trying to weld the old system to the new.
The real problem has always been the fractional reserve method of fictional money creation (especially married to currency speculation) - it's only conclusion can be falling/wildly fluctuating currency values and inflationary/deflationary spirals.
If the money supply does not bear some concrete relation to the value of goods and services, in the end, in the words of the song "there may be trouble ahead".
EDIT: Arni posted a link to nice, clear, newspaper article on the matter whilst I was posting.
Fractional Reserve EDIT {:lol:}: Here's a link with some relevance to Arni's question - http://www.dailyreckoning.com.au/dollars-gold/2006/12/04/
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The one good thing about this nations military is that if we assumed a "defensive" posture, we could probably pull off converting to the gold standard. Other countries would have to follow suit because Americans would literally be able to buy up anything of value in their nations. It would piss off the financial interests and I'm sure they would call in all of their proxies within the nation and throughout the world to throw down any government that decided to do this, but I think a well informed public could defend against that.
The interesting thing about all of this is the parallel between the UK 100 years ago and the US today. The Bank of England had inflated the Pound so much so the British could maintain their empire that they were facing an extreme depression and possible breakdown of society. Thus, the BOE worked through its proxy central banks around the world and inflated the rest of the worlds currencies FASTER then the pound which transferred the wealth of those nations to the BOE. The same thing is happening now except that the BOE and the Federal Reserve have formed an incestuous relationship. By controlling the money supply, a small group of elite hope to maintain anglo-american dominance on the rest of the world.
All of this is prevented by the Gold Standard. All of this was made possible in 1913 when the Federal Reserve Act was passed and our government forced its people to accept banker's paper instead of items of real value for trade.
That's the real purpose of legal tender laws.
The USD has been off the Gold Standard since the Nixon Administration.
The Euro standardized itself when it came out against the USD, and then trading and markerts went from there based upon economies GNP, import versus Export rations.
The Chinese Yuan, is worth the value the Chinese Government says it is worth. They choose a value against the USD and have set their value.
I am not sure any country could go back to a "Gold Standard". It is just too intertwined into the World Economy, unless we all (* all countries *) go back together. Read Social Contract. As we have a social contract today with the existing currancies, we would have to have one as well with any new form.
That is why I think it is out of the bag and undesirable at this point.
I will ask an interesting question right now? What current economic powerhouse is on the gold standard?
This number and your link are what I was looking for! I was going to make the comparison like this: Round up the price of gold to $1000 per ounce for convenience. At ten billion ounces of gold above ground, that would mean that if the U.S. owned all the gold in the world and wanted to keep the dollar initially at its current value, there could be only 10 million dollars in circulation--bad news for Bill Gates.
From the link:
Apropos of nothing, a Yugoslavian 10 billion note:
Attachments
Ah, I finally found the WSJ article I have been searching for:
Mackerel Economics in Prison Leads to Appreciation for Oily Fillets
Packs of Fish Catch On as Currency, Former Inmates Say; Officials Carp
Mackerel Economics in Prison Leads to Appreciation for Oily Fillets
Packs of Fish Catch On as Currency, Former Inmates Say; Officials Carp
Another site mentioned:
You could set the ratio of dollars to gold at just about anything. The point is to create a fixed amount of currency based on the value of real items. This would end the boom and bust economics that we currently experience as money is created and destroyed from nothing to nothing.
The only advantage that fiat money gives is the ability for people in power to control the economy...to a limited degree.
Bill Gates could keep his money on the gold standard. He would have to earn more in a more conservative fashion, however. The days of sitting around and doing nothing and literally making billions would be over.
BTW - I love the fact that Tesla is on the 10,000,000,000 note. He was one of the first to actually realize that our concept of economic value was tied to energy. Let me see if I can find what he wrote about that. It's interesting because it links physics and economics.
This was one of the major ways he and JP Morgan crossed swords. He wanted to set up a system that would allow anyone with an antenna to obtain electricity. And he correctly predicted that Bankers would resist this because...
a. You can't put a meter on that.
b. It would undermine the value of any paper currency.
He wrote that value was based on energy and he noted that all paper had a hidden exchange rate in joules. By giving people easy access to nearly free energy, he correctly predicted that everyone around the world would be enriched. This was one of the reasons why he kept so many secrets from his financial backers. He work would take away their power.
a. You can't put a meter on that.
b. It would undermine the value of any paper currency.
He wrote that value was based on energy and he noted that all paper had a hidden exchange rate in joules. By giving people easy access to nearly free energy, he correctly predicted that everyone around the world would be enriched. This was one of the reasons why he kept so many secrets from his financial backers. He work would take away their power.
Cruentus
Grandmaster
lol... Let's not assume that I 'don't know' where money comes from or that I don't understand the financial markets because I don't think the case is compelling enough to warrant a switch to the gold standard.
At least, I haven't been convinced yet that this is the solution to our problem.And I do realize that there are some people that have tried to make the argument, particularly Ron Paul who received some popularity in the last primary. However, I simply don't find these arguments compelling, and Ron Paul in particular seems to take an overly simplistic view on the economy.
Thanks for the book link though, and I will continue reading responses and learning more about the subject.
I believe Rich's comment is correct. I am generally more libertarian leaning myself, which ironically is exactly why I am not compelled to believe the gold standard is something we should try to do. This is Ironic because many libertarians want a gold standard due to a general distrust of government regulating bodies, like a central bank. While I understand and have similar concerns, the alternative of moving back to a commodity based system would create the sort of social contracts that percisely violate my libertarian values.
Right now we have a system based on a mixture off capitalism (not just the banking system, but a financial marketplace where things can be bought and sold through the markets, albiet commodities, currencies, stocks, or what have you) and government regulation through the federal reserve/central banking system. The marriage of the two acts as a check and balance that would prevent total corruption or economic instability.
Currency is not just arbitrarily printed, but is done so based on an 'elastic currency' principle where printing is decided based in goals of financial stability, employment, stable prices, moderate long term interest rates, and stable growth. Printing is regulated based on reserve requirements, trade, GDP, and many other factors.
It is a complex system that the everyday joe doesn't understand. But because joe doesn't understand it, that doesn't mean that there isn't a check and balanced method in place to regulate the printing and worth of money. And it certainly doesn't mean that an evil illuminati is sinisterly using the FR/CB system to plot for their own interests at our expense.
Our system is not perfect right now, and there is potential for problems. These might be solved through a review of the Federal Reserve and Central Banking System and our systems and policies. However, our system, as it stands right now is still better then the "social contract" that would be required for all countries to move to a gold standard, and USD moving to that standard would be a push in that direction. That direction is that of an unchecked World Market ran by governments (read worldwide socialism) where countries lose their individuality, setting the stage for a "New World Order" scenario based on curruption and lose of financial and civil liberties. I personally would take our current system over that, despite our existing problems.
One final thing, Brian asked an excellent question, and Arnisador brought up the interesting point re: Zimbabway:
I will ask an interesting question right now? What current economic powerhouse is on the gold standard?
There is NO GOVERNMENT that currently uses the gold standard; all use a Fiat currency. The active examples of a gold standard we have might be some private investments that might be backed by a commodity, but these don't provide a model of the standard to be used in todays currency markets.
The Fiat system can pose a huge problem for 3rd world countries that don't or aren't allowed to trade in the world marketplace, like with the Zimbabway example. Without regulation, a currupt government can decide to arbitrarily print money that has no intrinsic value. We, however, are not a 3rd world country. Therefore, we do have a formula and a regulatory body that controls the printing and backing of the USD that is checked/balanced by the economy and the free markets in which trade occurs.
Interesting discussion, and interesting things to think about on all sides.
C.
PS. On a lighter note, I would be an advocate of going to a weapons/munitions standard to back our money. Then I could better justify my recent weapons purchases as investments!
Cruentus
Grandmaster
Wikipedia answers Arnisador's question earlier re: how much gold vs. dollar:
http://en.wikipedia.org/wiki/Gold_standard#External_links
The total amount of gold that has ever been mined has been estimated at around 142,000 tons.[12] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. This is less than the value of circulating money in the U.S. alone, where more than $7.6 trillion is in circulation or in deposit (although international banking currently practices fractional reserves).[13]
This is a good article that I came across on the topic as well:
http://www.pkarchive.org/cranks/goldbug.html
http://en.wikipedia.org/wiki/Gold_standard#External_links
The total amount of gold that has ever been mined has been estimated at around 142,000 tons.[12] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. This is less than the value of circulating money in the U.S. alone, where more than $7.6 trillion is in circulation or in deposit (although international banking currently practices fractional reserves).[13]
This is a good article that I came across on the topic as well:
http://www.pkarchive.org/cranks/goldbug.html
Oops, of course that's 10 trillion dollars--but the point is, compared to the U.S. annual budget or national debt or stock market total value or real estate total value, that's not that much money. It would mean an effective devaluing of people's holdings--which is of course the point!
EDIT: Ah, I see that Cruentus has already posted a more accurate value! Since he has financial training, I defer to him.
