I think the cat is out of the bag. There is no way to go back without some catastrophic world situations.
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I think the cat is out of the bag. There is no way to go back without some catastrophic world situations.
With regard to the fluctuation of 'gold' noted above, just for clarity, you have to distingish between Gold, the real, yellow, shiny stuff and what is traded on the commodities markets. That difference is why Stock Market Gold was not the safe haven people thought it would be when the current crisis bit.
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?
When the Fed creates large new quantities of money to push down interest rates, this leads to an artificial boom in economic activity. However, because the is boom is based on printed money and not actual savings, the boom must eventually end in a bust. In this way, government monetary policy is responsible for the familiar boom-bust cycle we all have come to see as “normal.”
In a free market with commodity money, such as gold, only increases in real savings would drive down interest rates. When interest rates are driven down artificially, it creates the illusion that consumers are saving more than they are.
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.
I think the cat is out of the bag. There is no way to go back without some catastrophic world situations.
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.
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.
What does this mean? We don't know, exactly. But our guess is that the incremental dollar could be worth less than people think... and the incremental ounce of gold a bit more.
Another site mentioned:When Larry Levine helped prepare divorce papers for a client a few years ago, he got paid in mackerel. Once the case ended, he says, "I had a stack of macks."
Mr. Levine and his client were prisoners in California's Lompoc Federal Correctional Complex. Like other federal inmates around the country, they found a can of mackerel -- the "mack" in prison lingo -- was the standard currency.
"It's the coin of the realm," says Mark Bailey, who paid Mr. Levine in fish.
The word "salary," and the expression "being worth one's salt," derive from the word "salt," which was once a commodity form of money.
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:
The hard part about this is that the case can already be made so compelling thing with a simple google search of Ron Paul and Gold Standard or even just the Gold Standard.
Look, Paul, even wondering where money comes from is like looking at the rabbit hole.
Here's a great book that will trace the History of Banking.
You may or may not agree with his Jeffersonian/Libertarian viewpoint that he is taking, but I think that ANYONE can learn a thing or two about banking from this book.
Paul, I'm going to tell you this, the framers of our constitution felt so strongly that our money should be backed by something of real value that they wrote it into out constitution.
Check some of the stuff that has already been posted on MT and some of the stuff that I've cross linked into this thread. It'll change your mind. Or at least help you understand where money really comes from.
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.
I will ask an interesting question right now? What current economic powerhouse is on the gold standard?![]()
Gold: The Zimbabwean example shows the extreme case of printing money without backing for it.
there could be only 10 million dollars in circulation