The Conservative Cave
Current Events => General Discussion => Topic started by: rich_t on November 19, 2009, 06:03:59 PM
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I saw a post on another thread here that prompts me to ask the question.
What economic harm, if any, would result from backing up our current paper currency with hard currency such as gold, silver etc... The paper currency being redeemable on demand for hard currency of intrinsic.
I still have a few old silver certificate dollars that I got from my grandfather.
Back in his day the paper dollar was actually backed up by something that had intrinsic value.
I admit that I am not an ecomomist, therefore I look forward to hearing what others think about the issue.
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There's really not enough gold (currently available) to back the currency, so the economy would likely collapse. But hell, it's happening anyway, so let's just tear the band-aid off faster and get on with the solid recovery!
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What would it matter, really? Gold is only worth what it will buy, intrinsically it's pretty damned useless. Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well.
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There's really not enough gold (currently available) to back the currency, so the economy would likely collapse. But hell, it's happening anyway, so let's just tear the band-aid off faster and get on with the solid recovery!
That's how I feel about it too. The ecomonic failure is coming, it is merely a matter of time.
I'd rather be on the front lines than forcing it upon my grandkids.
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I saw a post on another thread here that prompts me to ask the question.
What economic harm, if any, would result from backing up our current paper currency with hard currency such as gold, silver etc... The paper currency being redeemable on demand for hard currency of intrinsic.
I still have a few old silver certificate dollars that I got from my grandfather.
Back in his day the paper dollar was actually backed up by something that had intrinsic value.
I admit that I am not an ecomomist, therefore I look forward to hearing what others think about the issue.
You might find this article provides an interesting discussion of gold and fiat money> (http://www.kwaves.com/fiat.htm)
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What would it matter, really? Gold is only worth what it will buy, intrinsically it's pretty damned useless. Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well.
Well gold and silver has had intrinsic value in all of recorded history, as have certain precious and semi-precious jewels.
I suspect this is due to rarity of the item. That whole suppy and demand issue perhaps?
What is the dollar currently backed with? The amount of ink and tree pulp it takes to print it?
Or is it more complex? Is the value of the dollar now tied to the slave labor value of those yearning to earn more, while the printing presses continue to make it worth less?
What is the buying power of the dollar now compared to the buying power of the dollar when it was backed by gold or silver?
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You might find this article provides an interesting discussion of gold and fiat money> (http://www.kwaves.com/fiat.htm)
That is an excellent link.
I've been well aware of the current fiat money concept in current use for quite some time. Hopefully others here will benefit from your link.
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What would it matter, really? Gold is only worth what it will buy, intrinsically it's pretty damned useless. Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well.
It wasn't that long ago that most other world currencies were pegged to the US dollar. All currency is pegged to something seen of value to those using the standard of the day.
The US dollar is badly slipping as the "standard" and has been for decades.
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What would it matter, really? Gold is only worth what it will buy, intrinsically it's pretty damned useless. Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well.
technically, the dollar has no intrinsic value either. :-)
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technically, the dollar has no intrinsic value either. :-)
Quite correct.
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The people currently running our economy remind me of the Golgafrinchans who made leaves their currency when they first crashed into the earth tens of thousands of years ago.
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What would it matter, really? Gold is only worth what it will buy, intrinsically it's pretty damned useless. Pegging the dollar to a definite gold value would wreck one of them, possibly even both, unless all the other important world currencies were fixed to something as well.
I am not sure how you could do it today as there was a fixed/oz price of 20.00.
Since it is commodity traded now and worth what someone will pay as an investment vehicle how would one get back to it having a finite value?
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From the link supplied.....http://www.kwaves.com/fiat.htm
A good barometer of the size of a currency's leverage is the percentage of total Debt to GDP (Gross Domestic Product). Currently, that percentage (299%) is higher than the level the nation experienced during the depression era 1930's. With budget deficits projected for 2003 and 2004, the US will soon exceed this already inflated level.
Sooooooo...If that was true then(2003/4), what does that mean for 2010 and 2011?
Tighten your seatbelt, the ride is gonna get bumpy.
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Gold, as always, is a very interesting topic to ruminate about on a rainy day.
First and foremost I am not a gold bug but there are plenty out there. That said, like many others I do wonder about the future price of gold and its implications for out economic well being. Maybe it is time to put on a gold leaf helmet an take a look at some other facets of this fascinating issue. :tinfoil:
Why do we (or do we) still have enormous reserves of gold? Try looking at a couple articles addressing this issue but keeping that helmet ready at all times. There are all types out there including FreeStaters, Paulistas, anti FedFolk, the list goes on an on.
Doc 100.0.5.2..........10 of 37...
About Fort Knox Gold: http://www.fgmr.com/article-archive.html
In the 1970's a very courageous gentleman named Edward Durrell claimed that
substantially all of the US Gold Reserve being stored at Ft. Knox was gone.
Only 1,000 tonnes or so of the 8,500 tonnes supposedly being stored there
remained. The rest had been secretly taken from Ft. Knox and shipped to
London in 1967 and early 1968 for sale by President Johnson in an ill-fated
attempt to keep the price of Gold at $35 per ounce.
About Fort Knox Gold link> (http://www.apfn.net/doc-100_bankruptcy10.htm)
In an attempt to be bipartisan we also have this:
Washington Post / Big Money:
Buried in the Treasury's International Reserve Position report is an intriguing bit of math. The document details the total amount, by weight, of the Treasury's gold reserves, plus a dollar value for said metal. But some fast division reveals something interesting: The Treasury marks the value of its gold at $42 an ounce, the price settled on in 1973...
Link to Huffy Post article> (http://www.huffingtonpost.com/2009/11/08/us-treasurys-gold-valued-_n_350134.html)
Interesting don't ya think?? Heck maybe later we can look at the early origins, the Alchemists.
ETA Tag / link fix